The Wealth of Nations

F COLONIES.

PART I. Of the Motives for Establishing New Colonies.

The interest which occasioned the first settlement of the different
European colonies in America and the West Indies, was not altogether so
plain and distinct as that which directed the establishment of those of
ancient Greece and Rome.

All the different states of ancient Greece possessed, each of them, but a
very small territory; and when the people in anyone of them multiplied
beyond what that territory could easily maintain, a part of them were sent
in quest of a new habitation, in some remote and distant part of the
world; the warlike neighbours who surrounded them on all sides, rendering
it difficult for any of them to enlarge very much its territory at home.
The colonies of the Dorians resorted chiefly to Italy and Sicily, which,
in the times preceding the foundation of Rome, were inhabited by barbarous
and uncivilized nations; those of the Ionians and Aeolians, the two other
great tribes of the Greeks, to Asia Minor and the islands of the Aegean
sea, of which the inhabitants sewn at that time to have been pretty much
in the same state as those of Sicily and Italy. The mother city, though
she considered the colony as a child, at all times entitled to great
favour and assistance, and owing in return much gratitude and respect, yet
considered it as an emancipated child, over whom she pretended to claim no
direct authority or jurisdiction. The colony settled its own form of
government, enacted its own laws, elected its own magistrates, and made
peace or war with its neighbours, as an independent state, which had no
occasion to wait for the approbation or consent of the mother city.
Nothing can be more plain and distinct than the interest which directed
every such establishment.

Rome, like most of the other ancient republics, was originally founded
upon an agrarian law, which divided the public territory, in a certain
proportion, among the different citizens who composed the state. The
course of human affairs, by marriage, by succession, and by alienation,
necessarily deranged this original division, and frequently threw the
lands which had been allotted for the maintenance of many different
families, into the possession of a single person. To remedy this disorder,
for such it was supposed to be, a law was made, restricting the quantity
of land which any citizen could possess to five hundred jugera; about 350
English acres. This law, however, though we read of its having been
executed upon one or two occasions, was either neglected or evaded, and
the inequality of fortunes went on continually increasing. The greater
part of the citizens had no land; and without it the manners and customs
of those times rendered it difficult for a freeman to maintain his
independency. In the present times, though a poor man has no land of his
own, if he has a little stock, he may either farm the lands of another, or
he may carry on some little retail trade; and if he has no stock, he may
find employment either as a country labourer, or as an artificer. But
among the ancient Romans, the lands of the rich were all cultivated by
slaves, who wrought under an overseer, who was likewise a slave; so that a
poor freeman had little chance of being employed either as a farmer or as
a labourer. All trades and manufactures, too, even the retail trade, were
carried on by the slaves of the rich for the benefit of their masters,
whose wealth, authority, and protection, made it difficult for a poor
freeman to maintain the competition against them. The citizens, therefore,
who had no land, had scarce any other means of subsistence but the
bounties of the candidates at the annual elections. The tribunes, when
they had a mind to animate the people against the rich and the great, put
them in mind of the ancient divisions of lands, and represented that law
which restricted this sort of private property as the fundamental law of
the republic. The people became clamorous to get land, and the rich and
the great, we may believe, were perfectly determined not to give them any
part of theirs. To satisfy them in some measure, therefore, they
frequently proposed to send out a new colony. But conquering Rome was,
even upon such occasions, under no necessity of turning out her citizens
to seek their fortune, if one may so, through the wide world, without
knowing where they were to settle. She assigned them lands generally in
the conquered provinces of Italy, where, being within the dominions of the
republic, they could never form any independent state, but were at best
but a sort of corporation, which, though it had the power of enacting
bye-laws for its own government, was at all times subject to the
correction, jurisdiction, and legislative authority of the mother city.
The sending out a colony of this kind not only gave some satisfaction to
the people, but often established a sort of garrison, too, in a newly
conquered province, of which the obedience might otherwise have been
doubtful. A Roman colony, therefore, whether we consider the nature of the
establishment itself, or the motives for making it, was altogether
different from a Greek one. The words, accordingly, which in the original
languages denote those different establishments, have very different
meanings. The Latin word (colonia) signifies simply a plantation. The
Greek word (apoixia), on the contrary, signifies a separation of dwelling,
a departure from home, a going out of the house. But though the Roman
colonies were, in many respects, different from the Greek ones, the
interest which prompted to establish them was equally plain and distinct.
Both institutions derived their origin, either from irresistible
necessity, or from clear and evident utility.

The establishment of the European colonies in America and the West Indies
arose from no necessity; and though the utility which has resulted from
them has been very great, it is not altogether so clear and evident. It
was not understood at their first establishment, and was not the motive,
either of that establishment, or of the discoveries which gave occasion to
it; and the nature, extent, and limits of that utility, are not, perhaps,
well understood at this day.

The Venetians, during the fourteenth and fifteenth centuries, carried on a
very advantageous commerce in spiceries and other East India goods, which
they distributed among the other nations of Europe. They purchased them
chiefly in Egypt, at that time under the dominion of the Mamelukes, the
enemies of the Turks, of whom the Venetians were the enemies; and this
union of interest, assisted by the money of Venice, formed such a
connexion as gave the Venetians almost a monopoly of the trade.

The great profits of the Venetians tempted the avidity of the Portuguese.
They had been endeavouring, during the course of the fifteenth century, to
find out by sea a way to the countries from which the Moors brought them
ivory and gold dust across the desert. They discovered the Madeiras, the
Canaries, the Azores, the Cape de Verd islands, the coast of Guinea, that
of Loango, Congo, Angola, and Benguela, and, finally, the Cape of Good
Hope. They had long wished to share in the profitable traffic of the
Venetians, and this last discovery opened to them a probable prospect of
doing so. In 1497, Vasco de Gamo sailed from the port of Lisbon with a
fleet of four ships, and, after a navigation of eleven months, arrived
upon the coast of Indostan; and thus completed a course of discoveries
which had been pursued with great steadiness, and with very little
interruption, for near a century together.

Some years before this, while the expectations of Europe were in suspense
about the projects of the Portuguese, of which the success appeared yet to
be doubtful, a Genoese pilot formed the yet more daring project of sailing
to the East Indies by the west. The situation of those countries was at
that time very imperfectly known in Europe. The few European travellers
who had been there, had magnified the distance, perhaps through simplicity
and ignorance; what was really very great, appearing almost infinite to
those who could not measure it; or, perhaps, in order to increase somewhat
more the marvellous of their own adventures in visiting regions so
immensely remote from Europe. The longer the way was by the east, Columbus
very justly concluded, the shorter it would be by the west. He proposed,
therefore, to take that way, as both the shortest and the surest, and he
had the good fortune to convince Isabella of Castile of the probability of
his project. He sailed from the port of Palos in August 1492, near five
years before the expedition of Vasco de Gamo set out from Portugal; and,
after a voyage of between two and three months, discovered first some of
the small Bahama or Lucyan islands, and afterwards the great island of St.
Domingo.

But the countries which Columbus discovered, either in this or in any of
his subsequent voyages, had no resemblance to those which he had gone in
quest of. Instead of the wealth, cultivation, and populousness of China
and Indostan, he found, in St. Domingo, and in all the other parts of the
new world which he ever visited, nothing but a country quite covered with
wood, uncultivated, and inhabited only by some tribes of naked and
miserable savages. He was not very willing, however, to believe that they
were not the same with some of the countries described by Marco Polo, the
first European who had visited, or at least had left behind him any
description of China or the East Indies; and a very slight resemblance,
such as that which he found between the name of Cibao, a mountain in St.
Domingo, and that of Cipange, mentioned by Marco Polo, was frequently
sufficient to make him return to this favourite prepossession, though
contrary to the clearest evidence. In his letters to Ferdinand and
Isabella, he called the countries which he had discovered the Indies. He
entertained no doubt but that they were the extremity of those which had
been described by Marco Polo, and that they were not very distant from the
Ganges, or from the countries which had been conquered by Alexander. Even
when at last convinced that they were different, he still flattered
himself that those rich countries were at no great distance; and in a
subsequent voyage, accordingly, went in quest of them along the coast of
Terra Firma, and towards the Isthmus of Darien.

In consequence of this mistake of Columbus, the name of the Indies has
stuck to those unfortunate countries ever since; and when it was at last
clearly discovered that the new were altogether different from the old
Indies, the former were called the West, in contradistinction to the
latter, which were called the East Indies.

It was of importance to Columbus, however, that the countries which he had
discovered, whatever they were, should be represented to the court of
Spain as of very great consequence; and, in what constitutes the real
riches of every country, the animal and vegetable productions of the soil,
there was at that time nothing which could well justify such a
representation of them.

The cori, something between a rat and a rabbit, and supposed by Mr Buffon
to be the same with the aperea of Brazil, was the largest viviparous
quadruped in St. Domingo. This species seems never to have been very
numerous; and the dogs and cats of the Spaniards are said to have long ago
almost entirely extirpated it, as well as some other tribes of a still
smaller size. These, however, together with a pretty large lizard, called
the ivana or iguana, constituted the principal part of the animal food
which the land afforded.

The vegetable food of the inhabitants, though, from their want of
industry, not very abundant, was not altogether so scanty. It consisted in
Indian corn, yams, potatoes, bananas, etc., plants which were then
altogether unknown in Europe, and which have never since been very much
esteemed in it, or supposed to yield a sustenance equal to what is drawn
from the common sorts of grain and pulse, which have been cultivated in
this part of the world time out of mind.

The cotton plant, indeed, afforded the material of a very important
manufacture, and was at that time, to Europeans, undoubtedly the most
valuable of all the vegetable productions of those islands. But though, in
the end of the fifteenth century, the muslins and other cotton goods of
the East Indies were much esteemed in every part of Europe, the cotton
manufacture itself was not cultivated in any part of it. Even this
production, therefore, could not at that time appear in the eyes of
Europeans to be of very great consequence.

Finding nothing, either in the animals or vegetables of the newly
discovered countries which could justify a very advantageous
representation of them, Columbus turned his view towards their minerals;
and in the richness of their productions of this third kingdom, he
flattered himself he had found a full compensation for the insignificancy
of those of the other two. The little bits of gold with which the
inhabitants ornamented their dress, and which, he was informed, they
frequently found in the rivulets and torrents which fell from the
mountains, were sufficient to satisfy him that those mountains abounded
with the richest gold mines. St. Domingo, therefore, was represented as a
country abounding with gold, and upon that account (according to the
prejudices not only of the present times, but of those times), an
inexhaustible source of real wealth to the crown and kingdom of Spain.
When Columbus, upon his return from his first voyage, was introduced with
a sort of triumphal honours to the sovereigns of Castile and Arragon, the
principal productions of the countries which he had discovered were
carried in solemn procession before him. The only valuable part of them
consisted in some little fillets, bracelets, and other ornaments of gold,
and in some bales of cotton. The rest were mere objects of vulgar wonder
and curiosity; some reeds of an extraordinary size, some birds of a very
beautiful plumage, and some stuffed skins of the huge alligator and
manati; all of which were preceded by six or seven of the wretched
natives, whose singular colour and appearance added greatly to the novelty
of the show.

In consequence of the representations of Columbus, the council of Castile
determined to take possession of the countries of which the inhabitants
were plainly incapable of defending themselves. The pious purpose of
converting them to Christianity sanctified the injustice of the project.
But the hope of finding treasures of gold there was the sole motive which
prompted to undertake it; and to give this motive the greater weight, it
was proposed by Columbus, that the half of all the gold and silver that
should be found there, should belong to the crown. This proposal was
approved of by the council.

As long as the whole, or the greater part of the gold which the first
adventurers imported into Europe was got by so very easy a method as the
plundering of the defenceless natives, it was not perhaps very difficult
to pay even this heavy tax; but when the natives were once fairly stript
of all that they had, which, in St. Domingo, and in all the other
countries discovered by Columbus, was done completely in six or eight
years, and when, in order to find more, it had become necessary to dig for
it in the mines, there was no longer any possibility of paying this tax.
The rigorous exaction of it, accordingly, first occasioned, it is said,
the total abandoning of the mines of St. Domingo, which have never been
wrought since. It was soon reduced, therefore, to a third; then to a
fifth; afterwards to a tenth; and at last to a twentieth part of the gross
produce of the gold mines. The tax upon silver continued for a long time
to be a fifth of the gross produce. It was reduced to a tenth only in the
course of the present century. But the first adventurers do not appear to
have been much interested about silver. Nothing less precious than gold
seemed worthy of their attention.

All the other enterprizes of the Spaniards in the New World, subsequent to
those of Columbus, seem to have been prompted by the same motive. It was
the sacred thirst of gold that carried Ovieda, Nicuessa, and Vasco Nugnes
de Balboa, to the Isthmus of Darien; that carried Cortes to Mexico,
Almagro and Pizarro to Chili and Peru. When those adventurers arrived upon
any unknown coast, their first inquiry was always if there was any gold to
be found there; and according to the information which they received
concerning this particular, they determined either to quit the country or
to settle in it.

Of all those expensive and uncertain projects, however, which bring
bankruptcy upon the greater part of the people who engage in them, there
is none, perhaps, more perfectly ruinous than the search after new silver
and gold mines. It is, perhaps, the most disadvantageous lottery in the
world, or the one in which the gain of those who draw the prizes bears the
least proportion to the loss of those who draw the blanks; for though the
prizes are few, and the blanks many, the common price of a ticket is the
whole fortune of a very rich man. Projects of mining, instead of replacing
the capital employed in them, together with the ordinary profits of stock,
commonly absorb both capital and profit. They are the projects, therefore,
to which, of all others, a prudent lawgiver, who desired to increase the
capital of his nation, would least choose to give any extraordinary
encouragement, or to turn towards them a greater share of that capital
than what would go to them of its own accord. Such, in reality, is the
absurd confidence which almost all men have in their own good fortune,
that wherever there is the least probability of success, too great a share
of it is apt to go to them of its own accord.

But though the judgment of sober reason and experience concerning such
projects has always been extremely unfavourable, that of human avidity has
commonly been quite otherwise. The same passion which has suggested to so
many people the absurd idea of the philosopher’s stone, has suggested to
others the equally absurd one of immense rich mines of gold and silver.
They did not consider that the value of those metals has, in all ages and
nations, arisen chiefly from their scarcity, and that their scarcity has
arisen from the very small quantities of them which nature has anywhere
deposited in one place, from the hard and intractable substances with
which she has almost everywhere surrounded those small quantities, and
consequently from the labour and expense which are everywhere necessary in
order to penetrate, and get at them. They flattered themselves that veins
of those metals might in many places be found, as large and as abundant as
those which are commonly found of lead, or copper, or tin, or iron. The
dream of Sir Waiter Raleigh, concerning the golden city and country of El
Dorado, may satisfy us, that even wise men are not always exempt from such
strange delusions. More than a hundred years after the death of that great
man, the Jesuit Gumila was still convinced of the reality of that
wonderful country, and expressed, with great warmth, and, I dare say, with
great sincerity, how happy he should be to carry the light of the gospel
to a people who could so well reward the pious labours of their
missionary.

In the countries first discovered by the Spaniards, no gold and silver
mines are at present known which are supposed to be worth the working. The
quantities of those metals which the first adventurers are said to have
found there, had probably been very much magnified, as well as the
fertility of the mines which were wrought immediately after the first
discovery. What those adventurers were reported to have found, however,
was sufficient to inflame the avidity of all their countrymen. Every
Spaniard who sailed to America expected to find an El Dorado. Fortune,
too, did upon this what she has done upon very few other occasions. She
realized in some measure the extravagant hopes of her votaries; and in the
discovery and conquest of Mexico and Peru (of which the one happened about
thirty, and the other about forty, years after the first expedition of
Columbus), she presented them with something not very unlike that
profusion of the precious metals which they sought for.

A project of commerce to the East Indies, therefore, gave occasion to the
first discovery of the West. A project of conquest gave occasion to all
the establishments of the Spaniards in those newly discovered countries.
The motive which excited them to this conquest was a project of gold and
silver mines; and a course of accidents which no human wisdom could
foresee, rendered this project much more successful than the undertakers
had any reasonable grounds for expecting.

The first adventurers of all the other nations of Europe who attempted to
make settlements in America, were animated by the like chimerical views;
but they were not equally successful. It was more than a hundred years
after the first settlement of the Brazils, before any silver, gold, or
diamond mines, were discovered there. In the English, French, Dutch, and
Danish colonies, none have ever yet been discovered, at least none that
are at present supposed to be worth the working. The first English
settlers in North America, however, offered a fifth of all the gold and
silver which should be found there to the king, as a motive for granting
them their patents. In the patents of Sir Waiter Raleigh, to the London
and Plymouth companies, to the council of Plymouth, etc. this fifth was
accordingly reserved to the crown. To the expectation of finding gold and
silver mines, those first settlers, too, joined that of discovering a
north-west passage to the East Indies. They have hitherto been
disappointed in both.

PART II. Causes of the Prosperity of New Colonies.

The colony of a civilized nation which takes possession either of a waste
country, or of one so thinly inhabited that the natives easily give place
to the new settlers, advances more rapidly to wealth and greatness than
any other human society.

The colonies carry out with them a knowledge of agriculture and of other
useful arts, superior to what can grow up of its own accord, in the course
of many centuries, among savage and barbarous nations. They carry out with
them, too, the habit of subordination, some notion of the regular
government which takes place in their own country, of the system of laws
which support it, and of a regular administration of justice; and they
naturally establish something of the same kind in the new settlement. But
among savage and barbarous nations, the natural progress of law and
government is still slower than the natural progress of arts, after law
and government have been so far established as is necessary for their
protection. Every colonist gets more land than he can possibly cultivate.
He has no rent, and scarce any taxes, to pay. No landlord shares with him
in its produce, and, the share of the sovereign is commonly but a trifle.
He has every motive to render as great as possible a produce which is thus
to be almost entirely his own. But his land is commonly so extensive,
that, with all his own industry, and with all the industry of other people
whom he can get to employ, he can seldom make it produce the tenth part of
what it is capable of producing. He is eager, therefore, to collect
labourers from all quarters, and to reward them with the most liberal
wages. But those liberal wages, joined to the plenty and cheapness of
land, soon make those labourers leave him, in order to become landlords
themselves, and to reward with equal liberality other labourers, who soon
leave them for the same reason that they left their first master. The
liberal reward of labour encourages marriage. The children, during the
tender years of infancy, are well fed and properly taken care of; and when
they are grown up, the value of their labour greatly overpays their
maintenance. When arrived at maturity, the high price of labour, and the
low price of land, enable them to establish themselves in the same manner
as their fathers did before them.

In other countries, rent and profit eat up wages, and the two superior
orders of people oppress the inferior one; but in new colonies, the
interest of the two superior orders obliges them to treat the inferior one
with more generosity and humanity, at least where that inferior one is not
in a state of slavery. Waste lands, of the greatest natural fertility, are
to be had for a trifle. The increase of revenue which the proprietor, who
is always the undertaker, expects from their improvement, constitutes his
profit, which, in these circumstances, is commonly very great; but this
great profit cannot be made, without employing the labour of other people
in clearing and cultivating the land; and the disproportion between the
great extent of the land and the small number of the people, which
commonly takes place in new colonies, makes it difficult for him to get
this labour. He does not, therefore, dispute about wages, but is willing
to employ labour at any price. The high wages of labour encourage
population. The cheapness and plenty of good land encourage improvement,
and enable the proprietor to pay those high wages. In those wages consists
almost the whole price of the land; and though they are high, considered
as the wages of labour, they are low, considered as the price of what is
so very valuable. What encourages the progress of population and
improvement, encourages that of real wealth and greatness.

The progress of many of the ancient Greek colonies towards wealth and
greatness seems accordingly to have been very rapid. In the course of a
century or two, several of them appear to have rivalled, and even to have
surpassed, their mother cities. Syracuse and Agrigentum in Sicily,
Tarentum and Locri in Italy, Ephesus and Miletus in Lesser Asia, appear,
by all accounts, to have been at least equal to any of the cities of
ancient Greece. Though posterior in their establishment, yet all the arts
of refinement, philosophy, poetry, and eloquence, seem to have been
cultivated as early, and to have been improved as highly in them as in any
part of the mother country. The schools of the two oldest Greek
philosophers, those of Thales and Pythagoras, were established, it is
remarkable, not in ancient Greece, but the one in an Asiatic, the other in
an Italian colony. All those colonies had established themselves in
countries inhabited by savage and barbarous nations, who easily gave place
to the new settlers. They had plenty of good land; and as they were
altogether independent of the mother city, they were at liberty to manage
their own affairs in the way that they judged was most suitable to their
own interest.

The history of the Roman colonies is by no means so brilliant. Some of
them, indeed, such as Florence, have, in the course of many ages, and
after the fall of the mother city, grown up to be considerable states. But
the progress of no one of them seems ever to have been very rapid. They
were all established in conquered provinces, which in most cases had been
fully inhabited before. The quantity of land assigned to each colonist was
seldom very considerable, and, as the colony was not independent, they
were not always at liberty to manage their own affairs in the way that
they judged was most suitable to their own interest.

In the plenty of good land, the European colonies established in America
and the West Indies resemble, and even greatly surpass, those of ancient
Greece. In their dependency upon the mother state, they resemble those of
ancient Rome; but their great distance from Europe has in all of them
alleviated more or less the effects of this dependency. Their situation
has placed them less in the view, and less in the power of their mother
country. In pursuing their interest their own way, their conduct has upon
many occasions been overlooked, either because not known or not understood
in Europe; and upon some occasions it has been fairly suffered and
submitted to, because their distance rendered it difficult to restrain it.
Even the violent and arbitrary government of Spain has, upon many
occasions, been obliged to recall or soften the orders which had been
given for the government of her colonies, for fear of a general
insurrection. The progress of all the European colonies in wealth,
population, and improvement, has accordingly been very great.

The crown of Spain, by its share of the gold and silver, derived some
revenue from its colonies from the moment of their first establishment. It
was a revenue, too, of a nature to excite in human avidity the most
extravagant expectation of still greater riches. The Spanish colonies,
therefore, from the moment of their first establishment, attracted very
much the attention of their mother country; while those of the other
European nations were for a long time in a great measure neglected. The
former did not, perhaps, thrive the better in consequence of this
attention, nor the latter the worse in consequence of this neglect. In
proportion to the extent of the country which they in some measure
possess, the Spanish colonies are considered as less populous and thriving
than those of almost any other European nation. The progress even of the
Spanish colonies, however, in population and improvement, has certainly
been very rapid and very great. The city of Lima, founded since the
conquest, is represented by Ulloa as containing fifty thousand inhabitants
near thirty years ago. Quito, which had been but a miserable hamlet of
Indians, is represented by the same author as in his time equally
populous. Gemel i Carreri, a pretended traveller, it is said, indeed, but
who seems everywhere to have written upon extreme good information,
represents the city of Mexico as containing a hundred thousand
inhabitants; a number which, in spite of all the exaggerations of the
Spanish writers, is probably more than five times greater than what it
contained in the time of Montezuma. These numbers exceed greatly those of
Boston, New York, and Philadelphia, the three greatest cities of the
English colonies. Before the conquest of the Spaniards, there were no
cattle fit for draught, either in Mexico or Peru. The lama was their only
beast of burden, and its strength seems to have been a good deal inferior
to that of a common ass. The plough was unknown among them. They were
ignorant of the use of iron. They had no coined money, nor any established
instrument of commerce of any kind. Their commerce was carried on by
barter. A sort of wooden spade was their principal instrument of
agriculture. Sharp stones served them for knives and hatchets to cut with;
fish bones, and the hard sinews of certain animals, served them with
needles to sew with; and these seem to have been their principal
instruments of trade. In this state of things, it seems impossible that
either of those empires could have been so much improved or so well
cultivated as at present, when they are plentifully furnished with all
sorts of European cattle, and when the use of iron, of the plough, and of
many of the arts of Europe, have been introduced among them. But the
populousness of every country must be in proportion to the degree of its
improvement and cultivation. In spite of the cruel destruction of the
natives which followed the conquest, these two great empires are probably
more populous now than they ever were before; and the people are surely
very different; for we must acknowledge, I apprehend, that the Spanish
creoles are in many respects superior to the ancient Indians.

After the settlements of the Spaniards, that of the Portuguese in Brazil
is the oldest of any European nation in America. But as for a long time
after the first discovery neither gold nor silver mines were found in it,
and as it afforded upon that account little or no revenue to the crown, it
was for a long time in a great measure neglected; and during this state of
neglect, it grew up to be a great and powerful colony. While Portugal was
under the dominion of Spain, Brazil was attacked by the Dutch, who got
possession of seven of the fourteen provinces into which it is divided.
They expected soon to conquer the other seven, when Portugal recovered its
independency by the elevation of the family of Braganza to the throne. The
Dutch, then, as enemies to the Spaniards, became friends to the
Portuguese, who were likewise the enemies of the Spaniards. They agreed,
therefore, to leave that part of Brazil which they had not conquered to
the king of Portugal, who agreed to leave that part which they had
conquered to them, as a matter not worth disputing about, with such good
allies. But the Dutch government soon began to oppress the Portuguese
colonists, who, instead of amusing themselves with complaints, took arms
against their new masters, and by their own valour and resolution, with
the connivance, indeed, but without any avowed assistance from the mother
country, drove them out of Brazil. The Dutch, therefore, finding it
impossible to keep any part of the country to themselves, were contented
that it should be entirely restored to the crown of Portugal. In this
colony there are said to be more than six hundred thousand people, either
Portuguese or descended from Portuguese, creoles, mulattoes, and a mixed
race between Portuguese and Brazilians. No one colony in America is
supposed to contain so great a number of people of European extraction.

Towards the end of the fifteenth, and during the greater part of the
sixteenth century, Spain and Portugal were the two great naval powers upon
the ocean; for though the commerce of Venice extended to every part of
Europe, its fleet had scarce ever sailed beyond the Mediterranean. The
Spaniards, in virtue of the first discovery, claimed all America as their
own; and though they could not hinder so great a naval power as that of
Portugal from settling in Brazil, such was at that time the terror of
their name, that the greater part of the other nations of Europe were
afraid to establish themselves in any other part of that great continent.
The French, who attempted to settle in Florida, were all murdered by the
Spaniards. But the declension of the naval power of this latter nation, in
consequence of the defeat or miscarriage of what they called their
invincible armada, which happened towards the end of the sixteenth
century, put it out of their power to obstruct any longer the settlements
of the other European nations. In the course of the seventeenth century,
therefore, the English, French, Dutch, Danes, and Swedes, all the great
nations who had any ports upon the ocean, attempted to make some
settlements in the new world.

The Swedes established themselves in New Jersey; and the number of Swedish
families still to be found there sufficiently demonstrates, that this
colony was very likely to prosper, had it been protected by the mother
country. But being neglected by Sweden, it was soon swallowed up by the
Dutch colony of New York, which again, in 1674, fell under the dominion of
the English.

The small islands of St. Thomas and Santa Cruz, are the only countries in
the new world that have ever been possessed by the Danes. These little
settlements, too, were under the government of an exclusive company, which
had the sole right, both of purchasing the surplus produce of the
colonies, and of supplying them with such goods of other countries as they
wanted, and which, therefore, both in its purchases and sales, had not
only the power of oppressing them, but the greatest temptation to do so.
The government of an exclusive company of merchants is, perhaps, the worst
of all governments for any country whatever. It was not, however, able to
stop altogether the progress of these colonies, though it rendered it more
slow and languid. The late king of Denmark dissolved this company, and
since that time the prosperity of these colonies has been very great.

The Dutch settlements in the West, as well as those in the East Indies,
were originally put under the government of an exclusive company. The
progress of some of them, therefore, though it has been considerable in
comparison with that of almost any country that has been long peopled and
established, has been languid and slow in comparison with that of the
greater part of new colonies. The colony of Surinam, though very
considerable, is still inferior to the greater part of the sugar colonies
of the other European nations. The colony of Nova Belgia, now divided into
the two provinces of New York and New Jersey, would probably have soon
become considerable too, even though it had remained under the government
of the Dutch. The plenty and cheapness of good land are such powerful
causes of prosperity, that the very worst government is scarce capable of
checking altogether the efficacy of their operation. The great distance,
too, from the mother country, would enable the colonists to evade more or
less, by smuggling, the monopoly which the company enjoyed against them.
At present, the company allows all Dutch ships to trade to Surinam, upon
paying two and a-half per cent. upon the value of their cargo for a
license; and only reserves to itself exclusively, the direct trade from
Africa to America, which consists almost entirely in the slave trade. This
relaxation in the exclusive privileges of the company, is probably the
principal cause of that degree of prosperity which that colony at present
enjoys. Curacoa and Eustatia, the two principal islands belonging to the
Dutch, are free ports, open to the ships of all nations; and this freedom,
in the midst of better colonies, whose ports are open to those of one
nation only, has been the great cause of the prosperity of those two
barren islands.

The French colony of Canada was, during the greater part of the last
century, and some part of the present, under the government of an
exclusive company. Under so unfavourable an administration, its progress
was necessarily very slow, in comparison with that of other new colonies;
but it became much more rapid when this company was dissolved, after the
fall of what is called the Mississippi scheme. When the English got
possession of this country, they found in it near double the number of
inhabitants which father Charlevoix had assigned to it between twenty and
thirty years before. That jesuit had travelled over the whole country, and
had no inclination to represent it as less inconsiderable than it really
was.

The French colony of St. Domingo was established by pirates and
freebooters, who, for a long time, neither required the protection, nor
acknowledged the authority of France; and when that race of banditti
became so far citizens as to acknowledge this authority, it was for a long
time necessary to exercise it with very great gentleness. During this
period, the population and improvement of this colony increased very fast.
Even the oppression of the exclusive company, to which it was for some
time subjected with all the other colonies of France, though it no doubt
retarded, had not been able to stop its progress altogether. The course of
its prosperity returned as soon as it was relieved from that oppression.
It is now the most important of the sugar colonies of the West Indies, and
its produce is said to be greater than that of all the English sugar
colonies put together. The other sugar colonies of France are in general
all very thriving.

But there are no colonies of which the progress has been more rapid than
that of the English in North America.

Plenty of good land, and liberty to manage their own affairs their own
way, seem to be the two great causes of the prosperity of all new
colonies.

In the plenty of good land, the English colonies of North America, though
no doubt very abundantly provided, are, however, inferior to those of the
Spaniards and Portuguese, and not superior to some of those possessed by
the French before the late war. But the political institutions of the
English colonies have been more favourable to the improvement and
cultivation of this land, than those of the other three nations.

First, The engrossing of uncultivated land, though it has by no means been
prevented altogether, has been more restrained in the English colonies
than in any other. The colony law, which imposes upon every proprietor the
obligation of improving and cultivating, within a limited time, a certain
proportion of his lands, and which, in case of failure, declares those
neglected lands grantable to any other person; though it has not perhaps
been very strictly executed, has, however, had some effect.

Secondly, In Pennsylvania there is no right of primogeniture, and lands,
like moveables, are divided equally among all the children of the family.
In three of the provinces of New England, the oldest has only a double
share, as in the Mosaical law. Though in those provinces, therefore, too
great a quantity of land should sometimes be engrossed by a particular
individual, it is likely, in the course of a generation or two, to be
sufficiently divided again. In the other English colonies, indeed, the
right of primogeniture takes place, as in the law of England: But in all
the English colonies, the tenure of the lands, which are all held by free
soccage, facilitates alienation; and the grantee of an extensive tract of
land generally finds it for his interest to alienate, as fast as he can,
the greater part of it, reserving only a small quit-rent. In the Spanish
and Portuguese colonies, what is called the right of majorazzo takes place
in the succession of all those great estates to which any title of honour
is annexed. Such estates go all to one person, and are in effect entailed
and unalienable. The French colonies, indeed, are subject to the custom of
Paris, which, in the inheritance of land, is much more favourable to the
younger children than the law of England. But, in the French colonies, if
any part of an estate, held by the noble tenure of chivalry and homage, is
alienated, it is, for a limited time, subject to the right of redemption,
either by the heir of the superior, or by the heir of the family; and all
the largest estates of the country are held by such noble tenures, which
necessarily embarrass alienation. But, in a new colony, a great
uncultivated estate is likely to be much more speedily divided by
alienation than by succession. The plenty and cheapness of good land, it
has already been observed, are the principal causes of the rapid
prosperity of new colonies. The engrossing of land, in effect, destroys
this plenty and cheapness. The engrossing of uncultivated land, besides,
is the greatest obstruction to its improvement; but the labour that is
employed in the improvement and cultivation of land affords the greatest
and most valuable produce to the society. The produce of labour, in this
case, pays not only its own wages and the profit of the stock which
employs it, but the rent of the land too upon which it is employed. The
labour of the English colonies, therefore, being more employed in the
improvement and cultivation of land, is likely to afford a greater and
more valuable produce than that of any of the other three nations, which,
by the engrossing of land, is more or less diverted towards other
employments.

Thirdly, The labour of the English colonists is not only likely to afford
a greater and more valuable produce, but, in consequence of the moderation
of their taxes, a greater proportion of this produce belongs to
themselves, which they may store up and employ in putting into motion a
still greater quantity of labour. The English colonists have never yet
contributed any thing towards the defence of the mother country, or
towards the support of its civil government. They themselves, on the
contrary, have hitherto been defended almost entirely at the expense of
the mother country; but the expense of fleets and armies is out of all
proportion greater than the necessary expense of civil government. The
expense of their own civil government has always been very moderate. It
has generally been confined to what was necessary for paying competent
salaries to the governor, to the judges, and to some other officers of
police, and for maintaining a few of the most useful public works. The
expense of the civil establishment of Massachusetts Bay, before the
commencement of the present disturbances, used to be but about £18;000
a-year; that of New Hampshire and Rhode Island, £3500 each; that of
Connecticut, £4000; that of New York and Pennsylvania, £4500 each; that of
New Jersey, £1200; that of Virginia and South Carolina, £8000 each. The
civil establishments of Nova Scotia and Georgia are partly supported by an
annual grant of parliament; but Nova Scotia pays, besides, about £7000
a-year towards the public expenses of the colony, and Georgia about £2500
a-year. All the different civil establishments in North America, in short,
exclusive of those of Maryland and North Carolina, of which no exact
account has been got, did not, before the commencement of the present
disturbances, cost the inhabitants above £64,700 a-year; an ever memorable
example, at how small an expense three millions of people may not only be
governed but well governed. The most important part of the expense of
government, indeed, that of defence and protection, has constantly fallen
upon the mother country. The ceremonial, too, of the civil government in
the colonies, upon the reception of a new governor, upon the opening of a
new assembly, etc. though sufficiently decent, is not accompanied with any
expensive pomp or parade. Their ecclesiastical government is conducted
upon a plan equally frugal. Tithes are unknown among them; and their
clergy, who are far from being numerous, are maintained either by moderate
stipends, or by the voluntary contributions of the people. The power of
Spain and Portugal, on the contrary, derives some support from the taxes
levied upon their colonies. France, indeed, has never drawn any
considerable revenue from its colonies, the taxes which it levies upon
them being generally spent among them. But the colony government of all
these three nations is conducted upon a much more extensive plan, and is
accompanied with a much more expensive ceremonial. The sums spent upon the
reception of a new viceroy of Peru, for example, have frequently been
enormous. Such ceremonials are not only real taxes paid by the rich
colonists upon those particular occasions, but they serve to introduce
among them the habit of vanity and expense upon all other occasions. They
are not only very grievous occasional taxes, but they contribute to
establish perpetual taxes, of the same kind, still more grievous; the
ruinous taxes of private luxury and extravagance. In the colonies of all
those three nations, too, the ecclesiastical government is extremely
oppressive. Tithes take place in all of them, and are levied with the
utmost rigour in those of Spain and Portugal. All of them, besides, are
oppressed with a numerous race of mendicant friars, whose beggary being
not only licensed but consecrated by religion, is a most grievous tax upon
the poor people, who are most carefully taught that it is a duty to give,
and a very great sin to refuse them their charity. Over and above all
this, the clergy are, in all of them, the greatest engrossers of land.

Fourthly, In the disposal of their surplus produce, or of what is over and
above their own consumption, the English colonies have been more favoured,
and have been allowed a more extensive market, than those of any other
European nation. Every European nation has endeavoured, more or less, to
monopolize to itself the commerce of its colonies, and, upon that account,
has prohibited the ships of foreign nations from trading to them, and has
prohibited them from importing European goods from any foreign nation. But
the manner in which this monopoly has been exercised in different nations,
has been very different.

Some nations have given up the whole commerce of their colonies to an
exclusive company, of whom the colonists were obliged to buy all such
European goods as they wanted, and to whom they were obliged to sell the
whole of their surplus produce. It was the interest of the company,
therefore, not only to sell the former as dear, and to buy the latter as
cheap as possible, but to buy no more of the latter, even at this low
price, than what they could dispose of for a very high price in Europe. It
was their interest not only to degrade in all cases the value of the
surplus produce of the colony, but in many cases to discourage and keep
down the natural increase of its quantity. Of all the expedients that can
well be contrived to stunt the natural growth of a new colony, that of an
exclusive company is undoubtedly the most effectual. This, however, has
been the policy of Holland, though their company, in the course of the
present century, has given up in many respects the exertion of their
exclusive privilege. This, too, was the policy of Denmark, till the reign
of the late king. It has occasionally been the policy of France; and of
late, since 1755, after it had been abandoned by all other nations on
account of its absurdity, it has become the policy of Portugal, with
regard at least to two of the principal provinces of Brazil, Pernambucco,
and Marannon.

Other nations, without establishing an exclusive company, have confined
the whole commerce of their colonies to a particular port of the mother
country, from whence no ship was allowed to sail, but either in a fleet
and at a particular season, or, if single, in consequence of a particular
license, which in most cases was very well paid for. This policy opened,
indeed, the trade of the colonies to all the natives of the mother
country, provided they traded from the proper port, at the proper season,
and in the proper vessels. But as all the different merchants, who joined
their stocks in order to fit out those licensed vessels, would find it for
their interest to act in concert, the trade which was carried on in this
manner would necessarily be conducted very nearly upon the same principles
as that of an exclusive company. The profit of those merchants would be
almost equally exorbitant and oppressive. The colonies would be ill
supplied, and would be obliged both to buy very dear, and to sell very
cheap. This, however, till within these few years, had always been the
policy of Spain; and the price of all European goods, accordingly, is said
to have been enormous in the Spanish West Indies. At Quito, we are told by
Ulloa, a pound of iron sold for about 4s:6d., and a pound of steel for
about 6s:9d. sterling. But it is chiefly in order to purchase European
goods that the colonies part with their own produce. The more, therefore,
they pay for the one, the less they really get for the other, and the
dearness of the one is the same thing with the cheapness of the other. The
policy of Portugal is, in this respect, the same as the ancient policy of
Spain, with regard to all its colonies, except Pernambucco and Marannon;
and with regard to these it has lately adopted a still worse.

Other nations leave the trade of their colonies free to all their
subjects, who may carry it on from all the different ports of the mother
country, and who have occasion for no other license than the common
despatches of the custom-house. In this case the number and dispersed
situation of the different traders renders it impossible for them to enter
into any general combination, and their competition is sufficient to
hinder them from making very exorbitant profits. Under so liberal a
policy, the colonies are enabled both to sell their own produce, and to
buy the goods of Europe at a reasonable price; but since the dissolution
of the Plymouth company, when our colonies were but in their infancy, this
has always been the policy of England. It has generally, too, been that of
France, and has been uniformly so since the dissolution of what in England
is commonly called their Mississippi company. The profits of the trade,
therefore, which France and England carry on with their colonies, though
no doubt somewhat higher than if the competition were free to all other
nations, are, however, by no means exorbitant; and the price of European
goods, accordingly, is not extravagantly high in the greater past of the
colonies of either of those nations.

In the exportation of their own surplus produce, too, it is only with
regard to certain commodities that the colonies of Great Britain are
confined to the market of the mother country. These commodities having
been enumerated in the act of navigation, and in some other subsequent
acts, have upon that account been called enumerated commodities. The rest
are called non-enumerated, and may be exported directly to other
countries, provided it is in British or plantation ships, of which the
owners and three fourths of the mariners are British subjects.

Among the non-enumerated commodities are some of the most important
productions of America and the West Indies, grain of all sorts, lumber,
salt provisions, fish, sugar, and rum.

Grain is naturally the first and principal object of the culture of all
new colonies. By allowing them a very extensive market for it, the law
encourages them to extend this culture much beyond the consumption of a
thinly inhabited country, and thus to provide beforehand an ample
subsistence for a continually increasing population.

In a country quite covered with wood, where timber consequently is of
little or no value, the expense of clearing the ground is the principal
obstacle to improvement. By allowing the colonies a very extensive market
for their lumber, the law endeavours to facilitate improvement by raising
the price of a commodity which would otherwise be of little value, and
thereby enabling them to make some profit of what would otherwise be mere
expense.

In a country neither half peopled nor half cultivated, cattle naturally
multiply beyond the consumption of the inhabitants, and are often, upon
that account, of little or no value. But it is necessary, it has already
been shown, that the price of cattle should bear a certain proportion to
that of corn, before the greater part of the lands of any country can be
improved. By allowing to American cattle, in all shapes, dead and alive, a
very extensive market, the law endeavours to raise the value of a
commodity, of which the high price is so very essential to improvement.
The good effects of this liberty, however, must be somewhat diminished by
the 4th of Geo. III. c. 15, which puts hides and skins among the
enumerated commodities, and thereby tends to reduce the value of American
cattle.

To increase the shipping and naval power of Great Britain by the extension
of the fisheries of our colonies, is an object which the legislature seems
to have had almost constantly in view. Those fisheries, upon this account,
have had all the encouragement which freedom can give them, and they have
flourished accordingly. The New England fishery, in particular, was,
before the late disturbances, one of the most important, perhaps, in the
world. The whale fishery which, notwithstanding an extravagant bounty, is
in Great Britain carried on to so little purpose, that in the opinion of
many people ( which I do not, however, pretend to warrant), the whole
produce does not much exceed the value of the bounties which are annually
paid for it, is in New England carried on, without any bounty, to a very
great extent. Fish is one of the principal articles with which the North
Americans trade to Spain, Portugal, and the Mediterranean.

Sugar was originally an enumerated commodity, which could only be exported
to Great Britain; but in 1751, upon a representation of the
sugar-planters, its exportation was permitted to all parts of the world.
The restrictions, however, with which this liberty was granted, joined to
the high price of sugar in Great Britain, have rendered it in a great
measure ineffectual. Great Britain and her colonies still continue to be
almost the sole market for all sugar produced in the British plantations.
Their consumption increases so fast, that, though in consequence of the
increasing improvement of Jamaica, as well as of the ceded islands, the
importation of sugar has increased very greatly within these twenty years,
the exportation to foreign countries is said to be not much greater than
before.

Rum is a very important article in the trade which the Americans carry on
to the coast of Africa, from which they bring back negro slaves in return.

If the whole surplus produce of America, in grain of all sorts, in salt
provisions, and in fish, had been put into the enumeration, and thereby
forced into the market of Great Britain, it would have interfered too much
with the produce of the industry of our own people. It was probably not so
much from any regard to the interest of America, as from a jealousy of
this interference, that those important commodities have not only been
kept out of the enumeration, but that the importation into Great Britain
of all grain, except rice, and of all salt provisions, has, in the
ordinary state of the law, been prohibited.

The non-enumerated commodities could originally be exported to all parts
of the world. Lumber and rice having been once put into the enumeration,
when they were afterwards taken out of it, were confined, as to the
European market, to the countries that lie south of Cape Finisterre. By
the 6th of George III. c. 52, all non-enumerated commodities were
subjected to the like restriction. The parts of Europe which lie south of
Cape Finisterre are not manufacturing countries, and we are less jealous
of the colony ships carrying home from them any manufactures which could
interfere with our own.

The enumerated commodities are of two sorts; first, such as are either the
peculiar produce of America, or as cannot be produced, or at least are not
produced in the mother country. Of this kind are molasses, coffee,
cocoa-nuts, tobacco, pimento, ginger, whalefins, raw silk, cotton, wool,
beaver, and other peltry of America, indigo, fustick, and other dyeing
woods; secondly, such as are not the peculiar produce of America, but
which are, and may be produced in the mother country, though not in such
quantities as to supply the greater part of her demand, which is
principally supplied from foreign countries. Of this kind are all naval
stores, masts, yards, and bowsprits, tar, pitch, and turpentine, pig and
bar iron, copper ore, hides and skins, pot and pearl ashes. The largest
importation of commodities of the first kind could not discourage the
growth, or interfere with the sale, of any part of the produce of the
mother country. By confining them to the home market, our merchants, it
was expected, would not only be enabled to buy them cheaper in the
plantations, and consequently to sell them with a better profit at home,
but to establish between the plantations and foreign countries an
advantageous carrying trade, of which Great Britain was necessarily to be
the centre or emporium, as the European country into which those
commodities were first to be imported. The importation of commodities of
the second kind might be so managed too, it was supposed, as to interfere,
not with the sale of those of the same kind which were produced at home,
but with that of those which were imported from foreign countries;
because, by means of proper duties, they might be rendered always somewhat
dearer than the former, and yet a good deal cheaper than the latter. By
confining such commodities to the home market, therefore, it was proposed
to discourage the produce, not of Great Britain, but of some foreign
countries with which the balance of trade was believed to be unfavourable
to Great Britain.

The prohibition of exporting from the colonies to any other country but
Great Britain, masts, yards, and bowsprits, tar, pitch, and turpentine,
naturally tended to lower the price of timber in the colonies, and
consequently to increase the expense of clearing their lands, the
principal obstacle to their improvement. But about the beginning of the
present century, in 1703, the pitch and tar company of Sweden endeavoured
to raise the price of their commodities to Great Britain, by prohibiting
their exportation, except in their own ships, at their own price, and in
such quantities as they thought proper. In order to counteract this
notable piece of mercantile policy, and to render herself as much as
possible independent, not only of Sweden, but of all the other northern
powers, Great Britain gave a bounty upon the importation of naval stores
from America; and the effect of this bounty was to raise the price of
timber in America much more than the confinement to the home market could
lower it; and as both regulations were enacted at the same time, their
joint effect was rather to encourage than to discourage the clearing of
land in America.

Though pig and bar iron, too, have been put among the enumerated
commodities, yet as, when imported from America, they are exempted from
considerable duties to which they are subject when imported front any
other country, the one part of the regulation contributes more to
encourage the erection of furnaces in America than the other to discourage
it. There is no manufacture which occasions so great a consumption of wood
as a furnace, or which can contribute so much to the clearing of a country
overgrown with it.

The tendency of some of these regulations to raise the value of timber in
America, and thereby to facilitate the clearing of the land, was neither,
perhaps, intended nor understood by the legislature. Though their
beneficial effects, however, have been in this respect accidental, they
have not upon that account been less real.

The most perfect freedom of trade is permitted between the British
colonies of America and the West Indies, both in the enumerated and in the
non-enumerated commodities Those colonies are now become so populous and
thriving, that each of them finds in some of the others a great and
extensive market for every part of its produce. All of them taken
together, they make a great internal market for the produce of one
another.

The liberality of England, however, towards the trade of her colonies, has
been confined chiefly to what concerns the market for their produce,
either in its rude state, or in what may be called the very first stage of
manufacture. The more advanced or more refined manufactures, even of the
colony produce, the merchants and manufacturers of Great Britain chuse to
reserve to themselves, and have prevailed upon the legislature to prevent
their establishment in the colonies, sometimes by high duties, and
sometimes by absolute prohibitions.

While, for example, Muscovado sugars from the British plantations pay,
upon importation, only 6s:4d. the hundred weight, white sugars pay £1:1:1;
and refined, either double or single, in loaves, £4:2:5 ⁸⁄₂₀ths. When
those high duties were imposed, Great Britain was the sole, and she still
continues to be, the principal market, to which the sugars of the British
colonies could be exported. They amounted, therefore, to a prohibition, at
first of claying or refining sugar for any foreign market, and at present
of claying or refining it for the market which takes off, perhaps, more
than nine-tenths of the whole produce. The manufacture of claying or
refining sugar, accordingly, though it has flourished in all the sugar
colonies of France, has been little cultivated in any of those of England,
except for the market of the colonies themselves. While Grenada was in the
hands of the French, there was a refinery of sugar, by claying, at least
upon almost every plantation. Since it fell into those of the English,
almost all works of this kind have been given up; and there are at present
(October 1773), I am assured, not above two or three remaining in the
island. At present, however, by an indulgence of the custom-house, clayed
or refined sugar, if reduced from loaves into powder, is commonly imported
as Muscovado.

While Great Britain encourages in America the manufacturing of pig and bar
iron, by exempting them from duties to which the like commodities are
subject when imported from any other country, she imposes an absolute
prohibition upon the erection of steel furnaces and slit-mills in any of
her American plantations. She will not suffer her colonies to work in
those more refined manufactures, even for their own consumption; but
insists upon their purchasing of her merchants and manufacturers all goods
of this kind which they have occasion for.

She prohibits the exportation from one province to another by water, and
even the carriage by land upon horseback, or in a cart, of hats, of wools,
and woollen goods, of the produce of America; a regulation which
effectually prevents the establishment of any manufacture of such
commodities for distant sale, and confines the industry of her colonists
in this way to such coarse and household manufactures as a private family
commonly makes for its own use, or for that of some of its neighbours in
the same province.

To prohibit a great people, however, from making all that they can of
every part of their own produce, or from employing their stock and
industry in the way that they judge most advantageous to themselves, is a
manifest violation of the most sacred rights of mankind. Unjust, however,
as such prohibitions may be, they have not hitherto been very hurtful to
the colonies. Land is still so cheap, and, consequently, labour so dear
among them, that they can import from the mother country almost all the
more refined or more advanced manufactures cheaper than they could make
them for themselves. Though they had not, therefore, been prohibited from
establishing such manufactures, yet, in their present state of
improvement, a regard to their own interest would probably have prevented
them from doing so. In their present state of improvement, those
prohibitions, perhaps, without cramping their industry, or restraining it
from any employment to which it would have gone of its own accord, are
only impertinent badges of slavery imposed upon them, without any
sufficient reason, by the groundless jealousy of the merchants and
manufacturers of the mother country. In a more advanced state, they might
be really oppressive and insupportable.

Great Britain, too, as she confines to her own market some of the most
important productions of the colonies, so, in compensation, she gives to
some of them an advantage in that market, sometimes by imposing higher
duties upon the like productions when imported from other countries, and
sometimes by giving bounties upon their importation from the colonies. In
the first way, she gives an advantage in the home market to the sugar,
tobacco, and iron of her own colonies; and, in the second, to their raw
silk, to their hemp and flax, to their indigo, to their naval stores, and
to their building timber. This second way of encouraging the colony
produce, by bounties upon importation, is, so far as I have been able to
learn, peculiar to Great Britain: the first is not. Portugal does not
content herself with imposing higher duties upon the importation of
tobacco from any other country, but prohibits it under the severest
penalties.

With regard to the importation of goods from Europe, England has likewise
dealt more liberally with her colonies than any other nation.

Great Britain allows a part, almost always the half, generally a larger
portion, and sometimes the whole, of the duty which is paid upon the
importation of foreign goods, to be drawn back upon their exportation to
any foreign country. No independent foreign country, it was easy to
foresee, would receive them, if they came to it loaded with the heavy
duties to which almost all foreign goods are subjected on their
importation into Great Britain. Unless, therefore, some part of those
duties was drawn back upon exportation, there was an end of the carrying
trade; a trade so much favoured by the mercantile system.

Our colonies, however, are by no means independent foreign countries; and
Great Britain having assumed to herself the exclusive right of supplying
them with all goods from Europe, might have forced them (in the same
manner as other countries have done their colonies) to receive such goods
loaded with all the same duties which they paid in the mother country.
But, on the contrary, till 1763, the same drawbacks were paid upon the
exportation of the greater part of foreign goods to our colonies, as to
any independent foreign country. In 1763, indeed, by the 4th of Geo. III.
c. 15, this indulgence was a good deal abated, and it was enacted, “That
no part of the duty called the old subsidy should be drawn back for any
goods of the growth, production, or manufacture of Europe or the East
Indies, which should be exported from this kingdom to any British colony
or plantation in America; wines, white calicoes, and muslins, excepted.”
Before this law, many different sorts of foreign goods might have been
bought cheaper in the plantations than in the mother country, and some may
still.

Of the greater part of the regulations concerning the colony trade, the
merchants who carry it on, it must be observed, have been the principal
advisers. We must not wonder, therefore, if, in a great part of them,
their interest has been more considered than either that of the colonies
or that of the mother country. In their exclusive privilege of supplying
the colonies with all the goods which they wanted from Europe, and of
purchasing all such parts of their surplus produce as could not interfere
with any of the trades which they themselves carried on at home, the
interest of the colonies was sacrificed to the interest of those
merchants. In allowing the same drawbacks upon the re-exportation of the
greater part of European and East India goods to the colonies, as upon
their re-exportation to any independent country, the interest of the
mother country was sacrificed to it, even according to the mercantile
ideas of that interest. It was for the interest of the merchants to pay as
little as possible for the foreign goods which they sent to the colonies,
and, consequently, to get back as much as possible of the duties which
they advanced upon their importation into Great Britain. They might
thereby be enabled to sell in the colonies, either the same quantity of
goods with a greater profit, or a greater quantity with the same profit,
and, consequently, to gain something either in the one way or the other.
It was likewise for the interest of the colonies to get all such goods as
cheap, and in as great abundance as possible. But this might not always be
for the interest of the mother country. She might frequently suffer, both
in her revenue, by giving back a great part of the duties which had been
paid upon the importation of such goods; and in her manufactures, by being
undersold in the colony market, in consequence of the easy terms upon
which foreign manufactures could be carried thither by means of those
drawbacks. The progress of the linen manufacture of Great Britain, it is
commonly said, has been a good deal retarded by the drawbacks upon the
re-exportation of German linen to the American colonies.

But though the policy of Great Britain, with regard to the trade of her
colonies, has been dictated by the same mercantile spirit as that of other
nations, it has, however, upon the whole, been less illiberal and
oppressive than that of any of them.

In every thing except their foreign trade, the liberty of the English
colonists to manage their own affairs their own way, is complete. It is in
every respect equal to that of their fellow-citizens at home, and is
secured in the same manner, by an assembly of the representatives of the
people, who claim the sole right of imposing taxes for the support of the
colony government. The authority of this assembly overawes the executive
power; and neither the meanest nor the most obnoxious colonist, as long as
he obeys the law, has any thing to fear from the resentment, either of the
governor, or of any other civil or military officer in the province. The
colony assemblies, though, like the house of commons in England, they are
not always a very equal representation of the people, yet they approach
more nearly to that character; and as the executive power either has not
the means to corrupt them, or, on account of the support which it receives
from the mother country, is not under the necessity of doing so, they are,
perhaps, in general more influenced by the inclinations of their
constituents. The councils, which, in the colony legislatures, correspond
to the house of lords in Great Britain, are not composed of a hereditary
nobility. In some of the colonies, as in three of the governments of New
England, those councils are not appointed by the king, but chosen by the
representatives of the people. In none of the English colonies is there
any hereditary nobility. In all of them, indeed, as in all other free
countries, the descendant of an old colony family is more respected than
an upstart of equal merit and fortune; but he is only more respected, and
he has no privileges by which he can be troublesome to his neighbours.
Before the commencement of the present disturbances, the colony assemblies
had not only the legislative, but a part of the executive power. In
Connecticut and Rhode Island, they elected the governor. In the other
colonies, they appointed the revenue officers, who collected the taxes
imposed by those respective assemblies, to whom those officers were
immediately responsible. There is more equality, therefore, among the
English colonists than among the inhabitants of the mother country. Their
manners are more re publican; and their governments, those of three of the
provinces of New England in particular, have hitherto been more republican
too.

The absolute governments of Spain, Portugal, and France, on the contrary,
take place in their colonies; and the discretionary powers which such
governments commonly delegate to all their inferior officers are, on
account of the great distance, naturally exercised there with more than
ordinary violence. Under all absolute governments, there is more liberty
in the capital than in any other part of the country. The sovereign
himself can never have either interest or inclination to pervert the order
of justice, or to oppress the great body of the people. In the capital,
his presence overawes, more or less, all his inferior officers, who, in
the remoter provinces, from whence the complaints of the people are less
likely to reach him, can exercise their tyranny with much more safety. But
the European colonies in America are more remote than the most distant
provinces of the greatest empires which had ever been known before. The
government of the English colonies is, perhaps, the only one which, since
the world began, could give perfect security to the inhabitants of so very
distant a province. The administration of the French colonies, however,
has always been conducted with much more gentleness and moderation than
that of the Spanish and Portuguese. This superiority of conduct is
suitable both to the character of the French nation, and to what forms the
character of every nation, the nature of their government, which, though
arbitrary and violent in comparison with that of Great Britain, is legal
and free in comparison with those of Spain and Portugal.

It is in the progress of the North American colonies, however, that the
superiority of the English policy chiefly appears. The progress of the
sugar colonies of France has been at least equal, perhaps superior, to
that of the greater part of those of England; and yet the sugar colonies
of England enjoy a free government, nearly of the same kind with that
which takes place in her colonies of North America. But the sugar colonies
of France are not discouraged, like those of England, from refining their
own sugar; and what is still of greater importance, the genius of their
government naturally introduces a better management of their negro slaves.

In all European colonies, the culture of the sugar-cane is carried on by
negro slaves. The constitution of those who have been born in the
temperate climate of Europe could not, it is supposed, support the labour
of digging the ground under the burning sun of the West Indies; and the
culture of the sugar-cane, as it is managed at present, is all hand
labour; though, in the opinion of many, the drill plough might be
introduced into it with great advantage. But, as the profit and success of
the cultivation which is carried on by means of cattle, depend very much
upon the good management of those cattle; so the profit and success of
that which is carried on by slaves must depend equally upon the good
management of those slaves; and in the good management of their slaves the
French planters, I think it is generally allowed, are superior to the
English. The law, so far as it gives some weak protection to the slave
against the violence of his master, is likely to be better executed in a
colony where the government is in a great measure arbitrary, than in one
where it is altogether free. In every country where the unfortunate law
of slavery is established, the magistrate, when he protects the slave,
intermeddles in some measure in the management of the private property of
the master; and, in a free country, where the master is, perhaps, either a
member of the colony assembly, or an elector of such a member, he dares
not do this but with the greatest caution and circumspection. The respect
which he is obliged to pay to the master, renders it more difficult for
him to protect the slave. But in a country where the government is in a
great measure arbitrary, where it is usual for the magistrate to
intermeddle even in the management of the private property of individuals,
and to send them, perhaps, a lettre de cachet, if they do not manage it
according to his liking, it is much easier for him to give some protection
to the slave; and common humanity naturally disposes him to do so. The
protection of the magistrate renders the slave less contemptible in the
eyes of his master, who is thereby induced to consider him with more
regard, and to treat him with more gentleness. Gentle usage renders the
slave not only more faithful, but more intelligent, and, therefore, upon a
double account, more useful. He approaches more to the condition of a free
servant, and may possess some degree of integrity and attachment to his
master’s interest; virtues which frequently belong to free servants, but
which never can belong to a slave, who is treated as slaves commonly are
in countries where the master is perfectly free and secure.

That the condition of a slave is better under an arbitrary than under a
free government, is, I believe, supported by the history of all ages and
nations. In the Roman history, the first time we read of the magistrate
interposing to protect the slave from the violence of his master, is under
the emperors. When Vidius Pollio, in the presence of Augustus, ordered one
of his slaves, who had committed a slight fault, to be cut into pieces and
thrown into his fish-pond, in order to feed his fishes, the emperor
commanded him, with indignation, to emancipate immediately, not only that
slave, but all the others that belonged to him. Under the republic no
magistrate could have had authority enough to protect the slave, much less
to punish the master.

The stock, it is to be observed, which has improved the sugar colonies of
France, particularly the great colony of St Domingo, has been raised
almost entirely from the gradual improvement and cultivation of those
colonies. It has been almost altogether the produce of the soil and of the
industry of the colonists, or, what comes to the same thing, the price of
that produce, gradually accumulated by good management, and employed in
raising a still greater produce. But the stock which has improved and
cultivated the sugar colonies of England, has, a great part of it, been
sent out from England, and has by no means been altogether the produce of
the soil and industry of the colonists. The prosperity of the English
sugar colonies has been in a great measure owing to the great riches of
England, of which a part has overflowed, if one may say so, upon these
colonies. But the prosperity of the sugar colonies of France has been
entirely owing to the good conduct of the colonists, which must therefore
have had some superiority over that of the English; and this superiority
has been remarked in nothing so much as in the good management of their
slaves.

Such have been the general outlines of the policy of the different
European nations with regard to their colonies.

The policy of Europe, therefore, has very little to boast of, either in
the original establishment, or, so far as concerns their internal
government, in the subsequent prosperity of the colonies of America.

Folly and injustice seem to have been the principles which presided over
and directed the first project of establishing those colonies; the folly
of hunting after gold and silver mines, and the injustice of coveting the
possession of a country whose harmless natives, far from having ever
injured the people of Europe, had received the first adventurers with
every mark of kindness and hospitality.

The adventurers, indeed, who formed some of the latter establishments,
joined to the chimerical project of finding gold and silver mines, other
motives more reasonable and more laudable; but even these motives do very
little honour to the policy of Europe.

The English puritans, restrained at home, fled for freedom to America, and
established there the four governments of New England. The English
catholics, treated with much greater injustice, established that of
Maryland; the quakers, that of Pennsylvania. The Portuguese Jews,
persecuted by the inquisition, stript of their fortunes, and banished to
Brazil, introduced, by their example, some sort of order and industry
among the transported felons and strumpets by whom that colony was
originally peopled, and taught them the culture of the sugar-cane. Upon
all these different occasions, it was not the wisdom and policy, but the
disorder and injustice of the European governments, which peopled and
cultivated America.

In effectuation some of the most important of these establishments, the
different governments of Europe had as little merit as in projecting them.
The conquest of Mexico was the project, not of the council of Spain, but
of a governor of Cuba; and it was effectuated by the spirit of the bold
adventurer to whom it was entrusted, in spite of every thing which that
governor, who soon repented of having trusted such a person, could do to
thwart it. The conquerors of Chili and Peru, and of almost all the other
Spanish settlements upon the continent of America, carried out with them
no other public encouragement, but a general permission to make
settlements and conquests in the name of the king of Spain. Those
adventures were all at the private risk and expense of the adventurers.
The government of Spain contributed scarce any thing to any of them. That
of England contributed as little towards effectuating the establishment of
some of its most important colonies in North America.

When those establishments were effectuated, and had become so considerable
as to attract the attention of the mother country, the first regulations
which she made with regard to them, had always in view to secure to
herself the monopoly of their commerce; to confine their market, and to
enlarge her own at their expense, and, consequently, rather to damp and
discourage, than to quicken and forward the course of their prosperity. In
the different ways in which this monopoly has been exercised, consists one
of the most essential differences in the policy of the different European
nations with regard to their colonies. The best of them all, that of
England, is only somewhat less illiberal and oppressive than that of any
of the rest.

In what way, therefore, has the policy of Europe contributed either to the
first establishment, or to the present grandeur of the colonies of
America? In one way, and in one way only, it has contributed a good deal.
Magna virum mater! It bred and formed the men who were capable of
achieving such great actions, and of laying the foundation of so great an
empire; and there is no other quarter of the world; of which the policy is
capable of forming, or has ever actually, and in fact, formed such men.
The colonies owe to the policy of Europe the education and great views of
their active and enterprizing founders; and some of the greatest and most
important of them, so far as concerns their internal government, owe to it
scarce anything else.

PART III. Of the Advantages which Europe has derived From the Discovery of
America, and from that of a Passage to the East Indies by the Cape of Good
Hope.

Such are the advantages which the colonies of America have derived from
the policy of Europe.

What are those which Europe has derived from the discovery and
colonization of America?

Those advantages may be divided, first, into the general advantages which
Europe, considered as one great country, has derived from those great
events; and, secondly, into the particular advantages which each
colonizing country has derived from the colonies which particularly belong
to it, in consequence of the authority or dominion which it exercises over
them.

The general advantages which Europe, considered as one great country, has
derived from the discovery and colonization of America, consist, first, in
the increase of its enjoyments; and, secondly, in the augmentation of its
industry.

The surplus produce of America imported into Europe, furnishes the
inhabitants of this great continent with a variety of commodities which
they could not otherwise have possessed; some for conveniency and use,
some for pleasure, and some for ornament; and thereby contributes to
increase their enjoyments.

The discovery and colonization of America, it will readily be allowed,
have contributed to augment the industry, first, of all the countries
which trade to it directly, such as Spain, Portugal, France, and England;
and, secondly, of all those which, without trading to it directly, send,
through the medium of other countries, goods to it of their own produce,
such as Austrian Flanders, and some provinces of Germany, which, through
the medium of the countries before mentioned, send to it a considerable
quantity of linen and other goods. All such countries have evidently
gained a more extensive market for their surplus produce, and must
consequently have been encouraged to increase its quantity.

But that those great events should likewise have contributed to encourage
the industry of countries such as Hungary and Poland, which may never,
perhaps, have sent a single commodity of their own produce to America, is
not, perhaps, altogether so evident. That those events have done so,
however, cannot be doubted. Some part of the produce of America is
consumed in Hungary and Poland, and there is some demand there for the
sugar, chocolate, and tobacco, of that new quarter of the world. But those
commodities must be purchased with something which is either the produce
of the industry of Hungary and Poland, or with something which had been
purchased with some part of that produce. Those commodities of America are
new values, new equivalents, introduced into Hungary and Poland, to be
exchanged there for the surplus produce of these countries. By being
carried thither, they create a new and more extensive market for that
surplus produce. They raise its value, and thereby contribute to encourage
its increase. Though no part of it may ever be carried to America, it may
be carried to other countries, which purchase it with a part of their
share of the surplus produce of America, and it may find a market by means
of the circulation of that trade which was originally put into motion by
the surplus produce of America.

Those great events may even have contributed to increase the enjoyments,
and to augment the industry, of countries which not only never sent any
commodities to America, but never received any from it. Even such
countries may have received a greater abundance of other commodities from
countries, of which the surplus produce had been augmented by means of the
American trade. This greater abundance, as it must necessarily have
increased their enjoyments, so it must likewise have augmented their
industry. A greater number of new equivalents, of some kind or other, must
have been presented to them to be exchanged for the surplus produce of
that industry. A more extensive market must have been created for that
surplus produce, so as to raise its value, and thereby encourage its
increase. The mass of commodities annually thrown into the great circle of
European commerce, and by its various revolutions annually distributed
among all the different nations comprehended within it, must have been
augmented by the whole surplus produce of America. A greater share of this
greater mass, therefore, is likely to have fallen to each of those
nations, to have increased their enjoyments, and augmented their industry.

The exclusive trade of the mother countries tends to diminish, or at least
to keep down below what they would otherwise rise to, both the enjoyments
and industry of all those nations in general, and of the American colonies
in particular. It is a dead weight upon the action of one of the great
springs which puts into motion a great part of the business of mankind. By
rendering the colony produce dearer in all other countries, it lessens its
consumption, and thereby cramps the industry of the colonies, and both the
enjoyments and the industry of all other countries, which both enjoy less
when they pay more for what they enjoy, and produce less when they get
less for what they produce. By rendering the produce of all other
countries dearer in the colonies, it cramps in the same manner the
industry of all other colonies, and both the enjoyments and the industry
of the colonies. It is a clog which, for the supposed benefit of some
particular countries, embarrasses the pleasures and encumbers the industry
of all other countries, but of the colonies more than of any other. It not
only excludes as much as possible all other countries from one particular
market, but it confines as much as possible the colonies to one particular
market; and the difference is very great between being excluded from one
particular market when all others are open, and being confined to one
particular market when all others are shut up. The surplus produce of the
colonies, however, is the original source of all that increase of
enjoyments and industry which Europe derives from the discovery and
colonization of America, and the exclusive trade of the mother countries
tends to render this source much less abundant than it otherwise would be.

The particular advantages which each colonizing country derives from the
colonies which particularly belong to it, are of two different kinds;
first, those common advantages which every empire derives from the
provinces subject to its dominion; and, secondly, those peculiar
advantages which are supposed to result from provinces of so very peculiar
a nature as the European colonies of America.

The common advantages which every empire derives from the provinces
subject to its dominion consist, first, in the military force which they
furnish for its defence; and, secondly, in the revenue which they furnish
for the support of its civil government. The Roman colonies furnished
occasionally both the one and the other. The Greek colonies sometimes
furnished a military force, but seldom any revenue. They seldom
acknowledged themselves subject to the dominion of the mother city. They
were generally her allies in war, but very seldom her subjects in peace.

The European colonies of America have never yet furnished any military
force for the defence of the mother country. The military force has never
yet been sufficient for their own defence; and in the different wars in
which the mother countries have been engaged, the defence of their
colonies has generally occasioned a very considerable distraction of the
military force of those countries. In this respect, therefore, all the
European colonies have, without exception, been a cause rather of weakness
than of strength to their respective mother countries.

The colonies of Spain and Portugal only have contributed any revenue
towards the defence of the mother country, or the support of her civil
government. The taxes which have been levied upon those of other European
nations, upon those of England in particular, have seldom been equal to
the expense laid out upon them in time of peace, and never sufficient to
defray that which they occasioned in time of war. Such colonies,
therefore, have been a source of expense, and not of revenue, to their
respective mother countries.

The advantages of such colonies to their respective mother countries,
consist altogether in those peculiar advantages which are supposed to
result from provinces of so very peculiar a nature as the European
colonies of America; and the exclusive trade, it is acknowledged, is the
sole source of all those peculiar advantages.

In consequence of this exclusive trade, all that part of the surplus
produce of the English colonies, for example, which consists in what are
called enumerated commodities, can be sent to no other country but
England. Other countries must afterwards buy it of her. It must be
cheaper, therefore, in England than it can be in any other country, and
must contribute more to increase the enjoyments of England than those of
any other country. It must likewise contribute more to encourage her
industry. For all those parts of her own surplus produce which England
exchanges for those enumerated commodities, she must get a better price
than any other countries can get for the like parts of theirs, when they
exchange them for the same commodities. The manufactures of England, for
example, will purchase a greater quantity of the sugar and tobacco of her
own colonies than the like manufactures of other countries can purchase of
that sugar and tobacco. So far, therefore, as the manufactures of England
and those of other countries are both to be exchanged for the sugar and
tobacco of the English colonies, this superiority of price gives an
encouragement to the former beyond what the latter can, in these
circumstances, enjoy. The exclusive trade of the colonies, therefore, as
it diminishes, or at least keeps down below what they would otherwise rise
to, both the enjoyments and the industry of the countries which do not
possess it, so it gives an evident advantage to the countries which do
possess it over those other countries.

This advantage, however, will, perhaps, be found to be rather what may be
called a relative than an absolute advantage, and to give a superiority to
the country which enjoys it, rather by depressing the industry and produce
of other countries, than by raising those of that particular country above
what they would naturally rise to in the case of a free trade.

The tobacco of Maryland and Virginia, for example, by means of the
monopoly which England enjoys of it, certainly comes cheaper to England
than it can do to France to whom England commonly sells a considerable
part of it. But had France and all other European countries been at all
times allowed a free trade to Maryland and Virginia, the tobacco of those
colonies might by this time have come cheaper than it actually does, not
only to all those other countries, but likewise to England. The produce of
tobacco, in consequence of a market so much more extensive than any which
it has hitherto enjoyed, might, and probably would, by this time have been
so much increased as to reduce the profits of a tobacco plantation to
their natural level with those of a corn plantation, which it is supposed
they are still somewhat above. The price of tobacco might, and probably
would, by this time have fallen somewhat lower than it is at present. An
equal quantity of the commodities, either of England or of those other
countries, might have purchased in Maryland and Virginia a greater
quantity of tobacco than it can do at present, and consequently have been
sold there for so much a better price. So far as that weed, therefore,
can, by its cheapness and abundance, increase the enjoyments, or augment
the industry, either of England or of any other country, it would
probably, in the case of a free trade, have produced both these effects in
somewhat a greater degree than it can do at present. England, indeed,
would not, in this case, have had any advantage over other countries. She
might have bought the tobacco of her colonies somewhat cheaper, and
consequently have sold some of her own commodities somewhat dearer, than
she actually does; but she could neither have bought the one cheaper, nor
sold the other dearer, than any other country might have done. She might,
perhaps, have gained an absolute, but she would certainly have lost a
relative advantage.

In order, however, to obtain this relative advantage in the colony trade,
in order to execute the invidious and malignant project of excluding, as
much as possible, other nations from any share in it, England, there are
very probable reasons for believing, has not only sacrificed a part of the
absolute advantage which she, as well as every other nation, might have
derived from that trade, but has subjected herself both to an absolute and
to a relative disadvantage in almost every other branch of trade.

When, by the act of navigation, England assumed to herself the monopoly of
the colony trade, the foreign capitals which had before been employed in
it, were necessarily withdrawn from it. The English capital, which had
before carried on but a part of it, was now to carry on the whole. The
capital which had before supplied the colonies with but a part of the
goods which they wanted from Europe, was now all that was employed to
supply them with the whole. But it could not supply them with the whole;
and the goods with which it did supply them were necessarily sold very
dear. The capital which had before bought but a part of the surplus
produce of the colonies, was now all that was employed to buy the whole.
But it could not buy the whole at any thing near the old price; and
therefore, whatever it did buy, it necessarily bought very cheap. But in
an employment of capital, in which the merchant sold very dear, and bought
very cheap, the profit must have been very great, and much above the
ordinary level of profit in other branches of trade. This superiority of
profit in the colony trade could not fail to draw from other branches of
trade a part of the capital which had before been employed in them. But
this revulsion of capital, as it must have gradually increased the
competition of capitals in the colony trade, so it must have gradually
diminished that competition in all those other branches of trade; as it
must have gradually lowered the profits of the one, so it must have
gradually raised those of the other, till the profits of all came to a new
level, different from, and somewhat higher, than that at which they had
been before.

This double effect of drawing capital from all other trades, and of
raising the rate of profit somewhat higher than it otherwise would have
been in all trades, was not only produced by this monopoly upon its first
establishment, but has continued to be produced by it ever since.

First, This monopoly has been continually drawing capital from all other
trades, to be employed in that of the colonies.

Though the wealth of Great Britain has increased very much since the
establishment of the act of navigation, it certainly has not increased in
the same proportion as that or the colonies. But the foreign trade of
every country naturally increases in proportion to its wealth, its surplus
produce in proportion to its whole produce; and Great Britain having
engrossed to herself almost the whole of what may be called the foreign
trade of the colonies, and her capital not having increased in the same
proportion as the extent of that trade, she could not carry it on without
continually withdrawing from other branches of trade some part of the
capital which had before been employed in them, as well as withholding
from them a great deal more which would otherwise have gone to them. Since
the establishment of the act of navigation, accordingly, the colony trade
has been continually increasing, while many other branches of foreign
trade, particularly of that to other parts of Europe, have been
continually decaying. Our manufactures for foreign sale, instead of being
suited, as before the act of navigation, to the neighbouring market of
Europe, or to the more distant one of the countries which lie round the
Mediterranean sea, have the greater part of them, been accommodated to the
still more distant one of the colonies; to the market in which they have
the monopoly, rather than to that in which they have many competitors. The
causes of decay in other branches of foreign trade, which, by Sir Matthew
Decker and other writers, have been sought for in the excess and improper
mode of taxation, in the high price of labour, in the increase of luxury,
etc. may all be found in the overgrowth of the colony trade. The
mercantile capital of Great Britain, though very great, yet not being
infinite, and though greatly increased since the act of navigation, yet
not being increased in the same proportion as the colony trade, that trade
could not possibly be carried on without withdrawing some part of that
capital from other branches of trade, nor consequently without some decay
of those other branches.

England, it must be observed, was a great trading country, her mercantile
capital was very great, and likely to become still greater and greater
every day, not only before the act of navigation had established the
monopoly of the corn trade, but before that trade was very considerable.
In the Dutch war, during the government of Cromwell, her navy was superior
to that of Holland; and in that which broke out in the beginning of the
reign of Charles II., it was at least equal, perhaps superior to the
united navies of France and Holland. Its superiority, perhaps, would
scarce appear greater in the present times, at least if the Dutch navy
were to bear the same proportion to the Dutch commerce now which it did
then. But this great naval power could not, in either of those wars, be
owing to the act of navigation. During the first of them, the plan of that
act had been but just formed; and though, before the breaking out of the
second, it had been fully enacted by legal authority, yet no part of it
could have had time to produce any considerable effect, and least of all
that part which established the exclusive trade to the colonies. Both the
colonies and their trade were inconsiderable then, in comparison of what
they are how. The island of Jamaica was an unwholesome desert, little
inhabited, and less cultivated. New York and New Jersey were in the
possession of the Dutch, the half of St. Christopher’s in that of the
French. The island of Antigua, the two Carolinas, Pennsylvania, Georgia,
and Nova Scotia, were not planted. Virginia, Maryland, and New England
were planted; and though they were very thriving colonies, yet there was
not perhaps at that time, either in Europe or America, a single person who
foresaw, or even suspected, the rapid progress which they have since made
in wealth, population, and improvement. The island of Barbadoes, in short,
was the only British colony of any consequence, of which the condition at
that time bore any resemblance to what it is at present. The trade of the
colonies, of which England, even for some time after the act of
navigation, enjoyed but a part (for the act of navigation was not very
strictly executed till several years after it was enacted), could not at
that time be the cause of the great trade of England, nor of the great
naval power which was supported by that trade. The trade which at that
time supported that great naval power was the trade of Europe, and of the
countries which lie round the Mediterranean sea. But the share which Great
Britain at present enjoys of that trade could not support any such great
naval power. Had the growing trade of the colonies been left free to all
nations, whatever share of it might have fallen to Great Britain, and a
very considerable share would probably have fallen to her, must have been
all an addition to this great trade of which she was before in possession.
In consequence of the monopoly, the increase of the colony trade has not
so much occasioned an addition to the trade which Great Britain had
before, as a total change in its direction.

Secondly, This monopoly has necessarily contributed to keep up the rate of
profit, in all the different branches of British trade, higher than it
naturally would have been, had all nations been allowed a free trade to
the British colonies.

The monopoly of the colony trade, as it necessarily drew towards that
trade a greater proportion of the capital of Great Britain than what would
have gone to it of its own accord, so, by the expulsion of all foreign
capitals, it necessarily reduced the whole quantity of capital employed in
that trade below what it naturally would have been in the case of a free
trade. But, by lessening the competition of capitals in that branch of
trade, it necessarily raised the rate of profit in that branch. By
lessening, too, the competition of British capitals in all other branches
of trade, it necessarily raised the rate of British profit in all those
other branches. Whatever may have been, at any particular period since the
establishment of the act of navigation, the state or extent of the
mercantile capital of Great Britain, the monopoly of the colony trade
must, during the continuance of that state, have raised the ordinary rate
of British profit higher than it otherwise would have been, both in that
and in all the other branches of British trade. If, since the
establishment of the act of navigation, the ordinary rate of British
profit has fallen considerably, as it certainly has, it must have fallen
still lower, had not the monopoly established by that act contributed to
keep it up.

But whatever raises, in any country, the ordinary rate of profit higher
than it otherwise would be, necessarily subjects that country both to an
absolute, and to a relative disadvantage in every branch of trade of which
she has not the monopoly.

It subjects her to an absolute disadvantage; because, in such branches of
trade, her merchants cannot get this greater profit without selling dearer
than they otherwise would do, both the goods of foreign countries which
they import into their own, and the goods of their own country which they
export to foreign countries. Their own country must both buy dearer and
sell dearer; must both buy less, and sell less; must both enjoy less and
produce less, than she otherwise would do.

It subjects her to a relative disadvantage; because, in such branches of
trade, it sets other countries, which are not subject to the same absolute
disadvantage, either more above her or less below her, than they otherwise
would be. It enables them both to enjoy more and to produce more, in
proportion to what she enjoys and produces. It renders their superiority
greater, or their inferiority less, than it otherwise would be. By raising
the price of her produce above what it otherwise would be, it enables the
merchants of other countries to undersell her in foreign markets, and
thereby to justle her out of almost all those branches of trade, of which
she has not the monopoly.

Our merchants frequently complain of the high wages of British labour, as
the cause of their manufactures being undersold in foreign markets; but
they are silent about the high profits of stock. They complain of the
extravagant gain of other people; but they say nothing of their own. The
high profits of British stock, however, may contribute towards raising the
price of British manufactures, in many cases, as much, and in some perhaps
more, than the high wages of British labour.

It is in this manner that the capital of Great Britain, one may justly
say, has partly been drawn and partly been driven from the greater part of
the different branches of trade of which she has not the monopoly; from
the trade of Europe, in particular, and from that of the countries which
lie round the Mediterranean sea.

It has partly been drawn from those branches of trade, by the attraction
of superior profit in the colony trade, in consequence of the continual
increase of that trade, and of the continual insufficiency of the capital
which had carried it on one year to carry it on the next.

It has partly been driven from them, by the advantage which the high rate
of profit established in Great Britain gives to other countries, in all
the different branches of trade of which Great Britain has not the
monopoly.

As the monopoly of the colony trade has drawn from those other branches a
part of the British capital, which would otherwise have been employed in
them, so it has forced into them many foreign capitals which would never
have gone to them, had they not been expelled from the colony trade. In
those other branches of trade, it has diminished the competition of
British capitals, and thereby raised the rate of British profit higher
than it otherwise would have been. On the contrary, it has increased the
competition of foreign capitals, and thereby sunk the rate of foreign
profit lower than it otherwise would have been. Both in the one way and in
the other, it must evidently have subjected Great Britain to a relative
disadvantage in all those other branches of trade.

The colony trade, however, it may perhaps be said, is more advantageous to
Great Britain than any other; and the monopoly, by forcing into that trade
a greater proportion of the capital of Great Britain than what would
otherwise have gone to it, has turned that capital into an employment,
more advantageous to the country than any other which it could have found.

The most advantageous employment of any capital to the country to which it
belongs, is that which maintains there the greatest quantity of productive
labour, and increases the most the annual produce of the land and labour
of that country. But the quantity of productive labour which any capital
employed in the foreign trade of consumption can maintain, is exactly in
proportion, it has been shown in the second book, to the frequency of its
returns. A capital of a thousand pounds, for example, employed in a
foreign trade of consumption, of which the returns are made regularly once
in the year, can keep in constant employment, in the country to which it
belongs, a quantity of productive labour, equal to what a thousand pounds
can maintain there for a year. If the returns are made twice or thrice in
the year, it can keep in constant employment a quantity of productive
labour, equal to what two or three thousand pounds can maintain there for
a year. A foreign trade of consumption carried on with a neighbouring, is,
upon that account, in general, more advantageous than one carried on with
a distant country; and, for the same reason, a direct foreign trade of
consumption, as it has likewise been shown in the second book, is in
general more advantageous than a round-about one.

But the monopoly of the colony trade, so far as it has operated upon the
employment of the capital of Great Britain, has, in all cases, forced some
part of it from a foreign trade of consumption carried on with a
neighbouring, to one carried on with a more distant country, and in many
cases from a direct foreign trade of consumption to a round-about one.

First, The monopoly of the colony trade has, in all cases, forced some
part of the capital of Great Britain from a foreign trade of consumption
carried on with a neighbouring, to one carried on with a more distant
country.

It has, in all cases, forced some part of that capital from the trade with
Europe, and with the countries which lie round the Mediterranean sea, to
that with the more distant regions of America and the West Indies; from
which the returns are necessarily less frequent, not only on account of
the greater distance, but on account of the peculiar circumstances of
those countries. New colonies, it has already been observed, are always
understocked. Their capital is always much less than what they could
employ with great profit and advantage in the improvement and cultivation
of their land. They have a constant demand, therefore, for more capital
than they have of their own; and, in order to supply the deficiency of
their own, they endeavour to borrow as much as they can of the mother
country, to whom they are, therefore, always in debt. The most common way
in which the colonies contract this debt, is not by borrowing upon bond of
the rich people of the mother country, though they sometimes do this too,
but by running as much in arrear to their correspondents, who supply them
with goods from Europe, as those correspondents will allow them. Their
annual returns frequently do not amount to more than a third, and
sometimes not to so great a proportion of what they owe. The whole
capital, therefore, which their correspondents advance to them, is seldom
returned to Britain in less than three, and sometimes not in less than
four or five years. But a British capital of a thousand pounds, for
example, which is returned to Great Britain only once in five years, can
keep in constant employment only one-fifth part of the British industry
which it could maintain, if the whole was returned once in the year; and,
instead of the quantity of industry which a thousand pounds could maintain
for a year, can keep in constant employment the quantity only which two
hundred pounds can maintain for a year. The planter, no doubt, by the high
price which he pays for the goods from Europe, by the interest upon the
bills which he grants at distant dates, and by the commission upon the
renewal of those which he grants at near dates, makes up, and probably
more than makes up, all the loss which his correspondent can sustain by
this delay. But, though he make up the loss of his correspondent, he
cannot make up that of Great Britain. In a trade of which the returns are
very distant, the profit of the merchant may be as great or greater than
in one in which they are very frequent and near; but the advantage of the
country in which he resides, the quantity of productive labour constantly
maintained there, the annual produce of the land and labour, must always
be much less. That the returns of the trade to America, and still more
those of that to the West Indies, are, in general, not only more distant,
but more irregular and more uncertain, too, than those of the trade to any
part of Europe, or even of the countries which lie round the Mediterranean
sea, will readily be allowed, I imagine, by everybody who has any
experience of those different branches of trade.

Secondly, The monopoly of the colony trade, has, in many cases, forced
some part of the capital of Great Britain from a direct foreign trade of
consumption, into a round-about one.

Among the enumerated commodities which can be sent to no other market but
Great Britain, there are several of which the quantity exceeds very much
the consumption of Great Britain, and of which, a part, therefore, must be
exported to other countries. But this cannot be done without forcing some
part of the capital of Great Britain into a round-about foreign trade of
consumption. Maryland, and Virginia, for example, send annually to Great
Britain upwards of ninety-six thousand hogsheads of tobacco, and the
consumption of Great Britain is said not to exceed fourteen thousand.
Upwards of eighty-two thousand hogsheads, therefore, must be exported to
other countries, to France, to Holland, and, to the countries which lie
round the Baltic and Mediterranean seas. But that part of the capital of
Great Britain which brings those eighty-two thousand hogsheads to Great
Britain, which re-exports them from thence to those other countries, and
which brings back from those other countries to Great Britain either goods
or money in return, is employed in a round-about foreign trade of
consumption; and is necessarily forced into this employment, in order to
dispose of this great surplus. If we would compute in how many years the
whole of this capital is likely to come back to Great Britain, we must add
to the distance of the American returns that of the returns from those
other countries. If, in the direct foreign trade of consumption which we
carry on with America, the whole capital employed frequently does not come
back in less than three or four years, the whole capital employed in this
round-about one is not likely to come back in less than four or five. If
the one can keep in constant employment but a third or a fourth part of
the domestic industry which could be maintained by a capital returned once
in the year, the other can keep in constant employment but a fourth or a
fifth part of that industry. At some of the outports a credit is commonly
given to those foreign correspondents to whom they export them tobacco. At
the port of London, indeed, it is commonly sold for ready money: the rule
is Weigh and pay. At the port of London, therefore, the final returns of
the whole round-about trade are more distant than the returns from
America, by the time only which the goods may lie unsold in the warehouse;
where, however, they may sometimes lie long enough. But, had not the
colonies been confined to the market of Great Britain for the sale of
their tobacco, very little more of it would probably have come to us than
what was necessary for the home consumption. The goods which Great Britain
purchases at present for her own consumption with the great surplus of
tobacco which she exports to other countries, she would, in this case,
probably have purchased with the immediate produce of her own industry, or
with some part of her own manufactures. That produce, those manufactures,
instead of being almost entirely suited to one great market, as at
present, would probably have been fitted to a great number of smaller
markets. Instead of one great round-about foreign trade of consumption,
Great Britain would probably have carried on a great number of small
direct foreign trades of the same kind. On account of the frequency of the
returns, a part, and probably but a small part, perhaps not above a third
or a fourth of the capital which at present carries on this great
round-about trade, might have been sufficient to carry on all those small
direct ones; might have kept in constant employment an equal quantity of
British industry; and have equally supported the annual produce of the
land and labour of Great Britain. All the purposes of this trade being, in
this manner, answered by a much smaller capital, there would have been a
large spare capital to apply to other purposes; to improve the lands, to
increase the manufactures, and to extend the commerce of Great Britain; to
come into competition at least with the other British capitals employed in
all those different ways, to reduce the rate of profit in them all, and
thereby to give to Great Britain, in all of them, a superiority over other
countries, still greater than what she at present enjoys.

The monopoly of the colony trade, too, has forced some part of the capital
of Great Britain from all foreign trade of consumption to a carrying
trade; and, consequently from supporting more or less the industry of
Great Britain, to be employed altogether in supporting partly that of the
colonies, and partly that of some other countries.

The goods, for example, which are annually purchased with the great
surplus of eighty-two thousand hogsheads of tobacco annually re-exported
from Great Britain, are not all consumed in Great Britain. Part of them,
linen from Germany and Holland, for example, is returned to the colonies
for their particular consumption. But that part of the capital of Great
Britain which buys the tobacco with which this linen is afterwards bought,
is necessarily withdrawn from supporting the industry of Great Britain, to
be employed altogether in supporting, partly that of the colonies, and
partly that of the particular countries who pay for this tobacco with the
produce of their own industry.

The monopoly of the colony trade, besides, by forcing towards it a much
greater proportion of the capital of Great Britain than what would
naturally have gone to it, seems to have broken altogether that natural
balance which would otherwise have taken place among all the different
branches of British industry. The industry of Great Britain, instead of
being accommodated to a great number of small markets, has been
principally suited to one great market. Her commerce, instead of running
in a great number of small channels, has been taught to run principally in
one great channel. But the whole system of her industry and commerce has
thereby been rendered less secure; the whole state of her body politic
less healthful than it otherwise would have been. In her present
condition, Great Britain resembles one of those unwholesome bodies in
which some of the vital parts are overgrown, and which, upon that account,
are liable to many dangerous disorders, scarce incident to those in which
all the parts are more properly proportioned. A small stop in that great
blood-vessel, which has been artificially swelled beyond its natural
dimensions, and through which an unnatural proportion of the industry and
commerce of the country has been forced to circulate, is very likely to
bring on the most dangerous disorders upon the whole body politic. The
expectation of a rupture with the colonies, accordingly, has struck the
people of Great Britain with more terror than they ever felt for a Spanish
armada, or a French invasion. It was this terror, whether well or ill
grounded, which rendered the repeal of the stamp act, among the merchants
at least, a popular measure. In the total exclusion from the colony
market, was it to last only for a few years, the greater part of our
merchants used to fancy that they foresaw an entire stop to their trade;
the greater part of our master manufacturers, the entire ruin of their
business; and the greater part of our workmen, an end of their employment.
A rupture with any of our neighbours upon the continent, though likely,
too, to occasion some stop or interruption in the employments of some of
all these different orders of people, is foreseen, however, without any
such general emotion. The blood, of which the circulation is stopt in some
of the smaller vessels, easily disgorges itself into the greater, without
occasioning any dangerous disorder; but, when it is stopt in any of the
greater vessels, convulsions, apoplexy, or death, are the immediate and
unavoidable consequences. If but one of those overgrown manufactures,
which, by means either of bounties or of the monopoly of the home and
colony markets, have been artificially raised up to any unnatural height,
finds some small stop or interruption in its employment, it frequently
occasions a mutiny and disorder alarming to government, and embarrassing
even to the deliberations of the legislature. How great, therefore, would
be the disorder and confusion, it was thought, which must necessarily be
occasioned by a sudden and entire stop in the employment of so great a
proportion of our principal manufacturers?

Some moderate and gradual relaxation of the laws which give to Great
Britain the exclusive trade to the colonies, till it is rendered in a
great measure free, seems to be the only expedient which can, in all
future times, deliver her from this danger; which can enable her, or even
force her, to withdraw some part of her capital from this overgrown
employment, and to turn it, though with less profit, towards other
employments; and which, by gradually diminishing one branch of her
industry, and gradually increasing all the rest, can, by degrees, restore
all the different branches of it to that natural, healthful, and proper
proportion, which perfect liberty necessarily establishes, and which
perfect liberty can alone preserve. To open the colony trade all at once
to all nations, might not only occasion some transitory inconveniency, but
a great permanent loss, to the greater part of those whose industry or
capital is at present engaged in it. The sudden loss of the employment,
even of the ships which import the eighty-two thousand hogsheads of
tobacco, which are over and above the consumption of Great Britain, might
alone be felt very sensibly. Such are the unfortunate effects of all the
regulations of the mercantile system. They not only introduce very
dangerous disorders into the state of the body politic, but disorders
which it is often difficult to remedy, without occasioning, for a time at
least, still greater disorders. In what manner, therefore, the colony
trade ought gradually to be opened; what are the restraints which ought
first, and what are those which ought last, to be taken away; or in what
manner the natural system of perfect liberty and justice ought gradually
to be restored, we must leave to the wisdom of future statesmen and
legislators to determine.

Five different events, unforeseen and unthought of, have very fortunately
concurred to hinder Great Britain from feeling, so sensibly as it was
generally expected she would, the total exclusion which has now taken
place for more than a year (from the first of December 1774) from a very
important branch of the colony trade, that of the twelve associated
provinces of North America. First, those colonies, in preparing themselves
for their non-importation agreement, drained Great Britain completely of
all the commodities which were fit for their market; secondly, the extra
ordinary demand of the Spanish flota has, this year, drained Germany and
the north of many commodities, linen in particular, which used to come
into competition, even in the British market, with the manufactures of
Great Britain; thirdly, the peace between Russia and Turkey has occasioned
an extraordinary demand from the Turkey market, which, during the distress
of the country, and while a Russian fleet was cruizing in the Archipelago,
had been very poorly supplied; fourthly, the demand of the north of Europe
for the manufactures of Great Britain has been increasing from year to
year, for some time past; and, fifthly, the late partition, and
consequential pacification of Poland, by opening the market of that great
country, have, this year, added an extraordinary demand from thence to the
increasing demand of the north. These events are all, except the fourth,
in their nature transitory and accidental; and the exclusion from so
important a branch of the colony trade, if unfortunately it should
continue much longer, may still occasion some degree of distress. This
distress, however, as it will come on gradually, will be felt much less
severely than if it had come on all at once; and, in the mean time, the
industry and capital of the country may find a new employment and
direction, so as to prevent this distress from ever rising to any
considerable height.

The monopoly of the colony trade, therefore, so far as it has turned
towards that trade a greater proportion of the capital of Great Britain
than what would otherwise have gone to it, has in all cases turned it,
from a foreign trade of consumption with a neighbouring, into one with a
more distant country; in many cases from a direct foreign trade of
consumption into a round-about one; and, in some cases, from all foreign
trade of consumption into a carrying trade. It has, in all cases,
therefore, turned it from a direction in which it would have maintained a
greater quantity of productive labour, into one in which it can maintain a
much smaller quantity. By suiting, besides, to one particular market only,
so great a part of the industry and commerce of Great Britain, it has
rendered the whole state of that industry and commerce more precarious and
less secure, than if their produce had been accommodated to a greater
variety of markets.

We must carefully distinguish between the effects of the colony trade and
those of the monopoly of that trade. The former are always and necessarily
beneficial; the latter always and necessarily hurtful. But the former are
so beneficial, that the colony trade, though subject to a monopoly, and,
notwithstanding the hurtful effects of that monopoly, is still, upon the
whole, beneficial, and greatly beneficial, though a good deal less so than
it otherwise would be.

The effect of the colony trade, in its natural and free state, is to open
a great though distant market, for such parts of the produce of British
industry as may exceed the demand of the markets nearer home, of those of
Europe, and of the countries which lie round the Mediterranean sea. In its
natural and free state, the colony trade, without drawing from those
markets any part of the produce which had ever been sent to them,
encourages Great Britain to increase the surplus continually, by
continually presenting new equivalents to be exchanged for it. In its
natural and free state, the colony trade tends to increase the quantity of
productive labour in Great Britain, but without altering in any respect
the direction of that which had been employed there before. In the natural
and free state of the colony trade, the competition of all other nations
would hinder the rate of profit from rising above the common level, either
in the new market, or in the new employment. The new market, without
drawing any thing from the old one, would create, if one may say so, a new
produce for its own supply; and that new produce would constitute a new
capital for carrying on the new employment, which, in the same manner,
would draw nothing from the old one.

The monopoly of the colony trade, on the contrary, by excluding the
competition of other nations, and thereby raising the rate of profit, both
in the new market and in the new employment, draws produce from the old
market, and capital from the old employment. To augment our share of the
colony trade beyond what it otherwise would be, is the avowed purpose of
the monopoly. If our share of that trade were to be no greater with, than
it would have been without the monopoly, there could have been no reason
for establishing the monopoly. But whatever forces into a branch of trade,
of which the returns are slower and more distant than those of the greater
part of other trades, a greater proportion of the capital of any country,
than what of its own accord would go to that branch, necessarily renders
the whole quantity of productive labour annually maintained there, the
whole annual produce of the land and labour of that country, less than
they otherwise would be. It keeps down the revenue of the inhabitants of
that country below what it would naturally rise to, and thereby diminishes
their power of accumulation. It not only hinders, at all times, their
capital from maintaining so great a quantity of productive labour as it
would otherwise maintain, but it hinders it from increasing so fast as it
would otherwise increase, and, consequently, from maintaining a still
greater quantity of productive labour.

The natural good effects of the colony trade, however, more than
counterbalance to Great Britain the bad effects of the monopoly; so that,
monopoly and altogether, that trade, even as it is carried on at present,
is not only advantageous, but greatly advantageous. The new market and the
new employment which are opened by the colony trade, are of much greater
extent than that portion of the old market and of the old employment which
is lost by the monopoly. The new produce and the new capital which has
been created, if one may say so, by the colony trade, maintain in Great
Britain a greater quantity of productive labour than what can have been
thrown out of employment by the revulsion of capital from other trades of
which the returns are more frequent. If the colony trade, however, even as
it is carried on at present, is advantageous to Great Britain, it is not
by means of the monopoly, but in spite of the monopoly.

It is rather for the manufactured than for the rude produce of Europe,
that the colony trade opens a new market. Agriculture is the proper
business of all new colonies; a business which the cheapness of land
renders more advantageous than any other. They abound, therefore, in the
rude produce of land; and instead of importing it from other countries,
they have generally a large surplus to export. In new colonies,
agriculture either draws hands from all other employments, or keeps them
from going to any other employment. There are few hands to spare for the
necessary, and none for the ornamental manufactures. The greater part of
the manufactures of both kinds they find it cheaper to purchase of other
countries than to make for themselves. It is chiefly by encouraging the
manufactures of Europe, that the colony trade indirectly encourages its
agriculture. The manufacturers of Europe, to whom that trade gives
employment, constitute a new market for the produce of the land, and the
most advantageous of all markets; the home market for the corn and cattle,
for the bread and butcher’s meat of Europe, is thus greatly extended by
means of the trade to America.

But that the monopoly of the trade of populous and thriving colonies is
not alone sufficient to establish, or even to maintain, manufactures in
any country, the examples of Spain and Portugal sufficiently demonstrate.
Spain and Portugal were manufacturing countries before they had any
considerable colonies. Since they had the richest and most fertile in the
world, they have both ceased to be so.

In Spain and Portugal, the bad effects of the monopoly, aggravated by
other causes, have, perhaps, nearly overbalanced the natural good effects
of the colony trade. These causes seem to be other monopolies of different
kinds: the degradation of the value of gold and silver below what it is in
most other countries; the exclusion from foreign markets by improper taxes
upon exportation, and the narrowing of the home market, by still more
improper taxes upon the transportation of goods from one part of the
country to another; but above all, that irregular and partial
administration of justice which often protects the rich and powerful
debtor from the pursuit of his injured creditor, and which makes the
industrious part of the nation afraid to prepare goods for the consumption
of those haughty and great men, to whom they dare not refuse to sell upon
credit, and from whom they are altogether uncertain of repayment.

In England, on the contrary, the natural good effects of the colony trade,
assisted by other causes, have in a great measure conquered the bad
effects of the monopoly. These causes seem to be, the general liberty of
trade, which, notwithstanding some restraints, is at least equal, perhaps
superior, to what it is in any other country; the liberty of exporting,
duty free, almost all sorts of goods which are the produce of domestic
industry, to almost any foreign country; and what, perhaps, is of still
greater importance, the unbounded liberty of transporting them from one
part of our own country to any other, without being obliged to give any
account to any public office, without being liable to question or
examination of any kind; but, above all, that equal and impartial
administration of justice, which renders the rights of the meanest British
subject respectable to the greatest, and which, by securing to every man
the fruits of his own industry, gives the greatest and most effectual
encouragement to every sort of industry.

If the manufactures of Great Britain, however, have been advanced, as they
certainly have, by the colony trade, it has not been by means of the
monopoly of that trade, but in spite of the monopoly. The effect of the
monopoly has been, not to augment the quantity, but to alter the quality
and shape of a part of the manufactures of Great Britain, and to
accommodate to a market, from which the returns are slow and distant, what
would otherwise have been accommodated to one from which the returns are
frequent and near. Its effect has consequently been, to turn a part of the
capital of Great Britain from an employment in which it would have
maintained a greater quantity of manufacturing industry, to one in which
it maintains a much smaller, and thereby to diminish, instead of
increasing, the whole quantity of manufacturing industry maintained in
Great Britain.

The monopoly of the colony trade, therefore, like all the other mean and
malignant expedients of the mercantile system, depresses the industry of
all other countries, but chiefly that of the colonies, without in the
least increasing, but on the contrary diminishing, that of the country in
whose favour it is established.

The monopoly hinders the capital of that country, whatever may, at any
particular time, be the extent of that capital, from maintaining so great
a quantity of productive labour as it would otherwise maintain, and from
affording so great a revenue to the industrious inhabitants as it would
otherwise afford. But as capital can be increased only by savings from
revenue, the monopoly, by hindering it from affording so great a revenue
as it would otherwise afford, necessarily hinders it from increasing so
fast as it would otherwise increase, and consequently from maintaining a
still greater quantity of productive labour, and affording a still greater
revenue to the industrious inhabitants of that country. One great original
source of revenue, therefore, the wages of labour, the monopoly must
necessarily have rendered, at all times, less abundant than it otherwise
would have been.

By raising the rate of mercantile profit, the monopoly discourages the
improvement of land. The profit of improvement depends upon the difference
between what the land actually produces, and what, by the application of a
certain capital, it can be made to produce. If this difference affords a
greater profit than what can be drawn from an equal capital in any
mercantile employment, the improvement of land will draw capital from all
mercantile employments. If the profit is less, mercantile employments will
draw capital from the improvement of land. Whatever, therefore, raises the
rate of mercantile profit, either lessens the superiority, or increases
the inferiority of the profit of improvement: and, in the one case,
hinders capital from going to improvement, and in the other draws capital
from it; but by discouraging improvement, the monopoly necessarily retards
the natural increase of another great original source of revenue, the rent
of land. By raising the rate of profit, too, the monopoly necessarily
keeps up the market rate of interest higher than it otherwise would be.
But the price of land, in proportion to the rent which it affords, the
number of years purchase which is commonly paid for it, necessarily falls
as the rate of interest rises, and rises as the rate of interest falls.
The monopoly, therefore, hurts the interest of the landlord two different
ways, by retarding the natural increase, first, of his rent, and,
secondly, of the price which he would get for his land, in proportion to
the rent which it affords.

The monopoly, indeed, raises the rate of mercantile profit and thereby
augments somewhat the gain of our merchants. But as it obstructs the
natural increase of capital, it tends rather to diminish than to increase
the sum total of the revenue which the inhabitants of the country derive
from the profits of stock; a small profit upon a great capital generally
affording a greater revenue than a great profit upon a small one. The
monopoly raises the rate of profit, but it hinders the sum of profit from
rising so high as it otherwise would do.

All the original sources of revenue, the wages of labour, the rent of
land, and the profits of stock, the monopoly renders much less abundant
than they otherwise would be. To promote the little interest of one little
order of men in one country, it hurts the interest of all other orders of
men in that country, and of all the men in all other countries.

It is solely by raising the ordinary rate of profit, that the monopoly
either has proved, or could prove, advantageous to any one particular
order of men. But besides all the bad effects to the country in general,
which have already been mentioned as necessarily resulting from a higher
rate of profit, there is one more fatal, perhaps, than all these put
together, but which, if we may judge from experience, is inseparably
connected with it. The high rate of profit seems everywhere to destroy
that parsimony which, in other circumstances, is natural to the character
of the merchant. When profits are high, that sober virtue seems to be
superfluous, and expensive luxury to suit better the affluence of his
situation. But the owners of the great mercantile capitals are necessarily
the leaders and conductors of the whole industry of every nation; and
their example has a much greater influence upon the manners of the whole
industrious part of it than that of any other order of men. If his
employer is attentive and parsimonious, the workman is very likely to be
so too; but if the master is dissolute and disorderly, the servant, who
shapes his work according to the pattern which his master prescribes to
him, will shape his life, too, according to the example which he sets him.
Accumulation is thus prevented in the hands of all those who are naturally
the most disposed to accumulate; and the funds destined for the
maintenance of productive labour, receive no augmentation from the revenue
of those who ought naturally to augment them the most. The capital of the
country, instead of increasing, gradually dwindles away, and the quantity
of productive labour maintained in it grows every day less and less. Have
the exorbitant profits of the merchants of Cadiz and Lisbon augmented the
capital of Spain and Portugal? Have they alleviated the poverty, have they
promoted the industry, of those two beggarly countries? Such has been the
tone of mercantile expense in those two trading cities, that those
exorbitant profits, far from augmenting the general capital of the
country, seem scarce to have been sufficient to keep up the capitals upon
which they were made. Foreign capitals are every day intruding themselves,
if I may say so, more and more into the trade of Cadiz and Lisbon. It is
to expel those foreign capitals from a trade which their own grows every
day more and more insufficient for carrying on, that the Spaniards and
Portuguese endeavour every day to straiten more and more the galling bands
of their absurd monopoly. Compare the mercantile manners of Cadiz and
Lisbon with those of Amsterdam, and you will be sensible how differently
the conduct and character of merchants are affected by the high and by the
low profits of stock. The merchants of London, indeed, have not yet
generally become such magnificent lords as those of Cadiz and Lisbon; but
neither are they in general such attetitive and parsimonious burghers as
those of Amsterdam. They are supposed, however, many of them, to be a good
deal richer than the greater part of the former, and not quire so rich as
many of the latter: but the rate of their profit is commonly much lower
than that of the former, and a good deal higher than that of the latter.
Light come, light go, says the proverb; and the ordinary tone of expense
seems everywhere to be regulated, not so much according to the real
ability of spending, as to the supposed facility of getting money to
spend.

It is thus that the single advantage which the monopoly procures to a
single order of men, is in many different ways hurtful to the general
interest of the country.

To found a great empire for the sole purpose of raising up a people of
customers, may at first sight, appear a project fit only for a nation of
shopkeepers. It is, however, a project altogether unfit for a nation of
shopkeepers, but extremely fit for a nation whose government is influenced
by shopkeepers. Such statesmen, and such statesmen only, are capable of
fancying that they will find some advantage in employing the blood and
treasure of their fellow-citizens, to found and maintain such an empire.
Say to a shopkeeper, Buy me a good estate, and I shall always buy my
clothes at your shop, even though I should pay somewhat dearer than what I
can have them for at other shops; and you will not find him very forward
to embrace your proposal. But should any other person buy you such an
estate, the shopkeeper will be much obliged to your benefactor if he would
enjoin you to buy all your clothes at his shop. England purchased for some
of her subjects, who found themselves uneasy at home, a great estate in a
distant country. The price, indeed, was very small, and instead of thirty
years purchase, the ordinary price of land in the present times, it
amounted to little more than the expense of the different equipments which
made the first discovery, reconnoitered the coast, and took a fictitious
possession of the country. The land was good, and of great extent; and the
cultivators having plenty of good ground to work upon, and being for some
time at liberty to sell their produce where they pleased, became, in the
course of little more than thirty or forty years (between 1620 and 1660),
so numerous and thriving a people, that the shopkeepers and other traders
of England wished to secure to themselves the monopoly of their custom.
Without pretending, therefore, that they had paid any part, either of the
original purchase money, or of the subsequent expense of improvement, they
petitioned the parliament, that the cultivators of America might for the
future be confined to their shop; first, for buying all the goods which
they wanted from Europe; and, secondly, for selling all such parts of
their own produce as those traders might find it convenient to buy. For
they did not find it convenient to buy every part of it. Some parts of it
imported into England, might have interfered with some of the trades which
they themselves carried on at home. Those particular parts of it,
therefore, they were willing that the colonists should sell where they
could; the farther off the better; and upon that account proposed that
their market should be confined to the countries south of Cape Finisterre.
A clause in the famous act of navigation established this truly shopkeeper
proposal into a law.

The maintenance of this monopoly has hitherto been the principal, or more
properly, perhaps, the sole end and purpose of the dominion which Great
Britain assumes over her colonies. In the exclusive trade, it is supposed,
consists the great advantage of provinces, which have never yet afforded
either revenue or military force for the support of the civil government,
or the defence of the mother country. The monopoly is the principal badge
of their dependency, and it is the sole fruit which has hitherto been
gathered from that dependency. Whatever expense Great Britain has hitherto
laid out in maintaining this dependency, has really been laid out in order
to support this monopoly. The expense of the ordinary peace establishment
of the colonies amounted, before the commencement of the present
disturbances to the pay of twenty regiments of foot; to the expense of the
artillery, stores, and extraordinary provisions, with which it was
necessary to supply them; and to the expense of a very considerable naval
force, which was constantly kept up, in order to guard from the smuggling
vessels of other nations, the immense coast of North America, and that of
our West Indian islands. The whole expense of this peace establishment was
a charge upon the revenue of Great Britain, and was, at the same time, the
smallest part of what the dominion of the colonies has cost the mother
country. If we would know the amount of the whole, we must add to the
annual expense of this peace establishment, the interest of the sums
which, in consequence of their considering her colonies as provinces
subject to her dominion, Great Britain has, upon different occasions, laid
out upon their defence. We must add to it, in particular, the whole
expense of the late war, and a great part of that of the war which
preceded it. The late war was altogether a colony quarrel; and the whole
expense of it, in whatever part of the world it might have been laid out,
whether in Germany or the East Indies, ought justly to be stated to the
account of the colonies. It amounted to more than ninety millions
sterling, including not only the new debt which was contracted, but the
two shillings in the pound additional land tax, and the sums which were
every year borrowed from the sinking fund. The Spanish war which began in
1739 was principally a colony quarrel. Its principal object was to prevent
the search of the colony ships, which carried on a contraband trade with
the Spanish Main. This whole expense is, in reality, a bounty which has
been given in order to support a monopoly. The pretended purpose of it was
to encourage the manufactures, and to increase the commerce of Great
Britain. But its real effect has been to raise the rate of mercantile
profit, and to enable our merchants to turn into a branch of trade, of
which the returns are more slow and distant than those of the greater part
of other trades, a greater proportion of their capital than they otherwise
would have done; two events which, if a bounty could have prevented, it
might perhaps have been very well worth while to give such a bounty.

Under the present system of management, therefore, Great Britain derives
nothing but loss from the dominion which she assumes over her colonies.

To propose that Great Britain should voluntarily give up all authority
over her colonies, and leave them to elect their own magistrates, to enact
their own laws, and to make peace and war, as they might think proper,
would be to propose such a measure as never was, and never will be,
adopted by any nation in the world. No nation ever voluntarily gave up the
dominion of any province, how troublesome soever it might be to govern it,
and how small soever the revenue which it afforded might be in proportion
to the expense which it occasioned. Such sacrifices, though they might
frequently be agreeable to the interest, are always mortifying to the
pride of every nation; and, what is perhaps of still greater consequence,
they are always contrary to the private interest of the governing part of
it, who would thereby be deprived of the disposal of many places of trust
and profit, of many opportunities of acquiring wealth and distinction,
which the possession of the most turbulent, and, to the great body of the
people, the most unprofitable province, seldom fails to afford. The most
visionary enthusiasts would scarce be capable of proposing such a measure,
with any serious hopes at least of its ever being adopted. If it was
adopted, however, Great Britain would not only be immediately freed from
the whole annual expense of the peace establishment of the colonies, but
might settle with them such a treaty of commerce as would effectually
secure to her a free trade, more advantageous to the great body of the
people, though less so to the merchants, than the monopoly which she at
present enjoys. By thus parting good friends, the natural affection of the
colonies to the mother country, which, perhaps, our late dissensions have
well nigh extinguished, would quickly revive. It might dispose them not
only to respect, for whole centuries together, that treaty of commerce
which they had concluded with us at parting, but to favour us in war as
well as in trade, and instead of turbulent and factious subjects, to
become our most faithful, affectionate, and generous allies; and the same
sort of parental affection on the one side, and filial respect on the
other, might revive between Great Britain and her colonies, which used to
subsist between those of ancient Greece and the mother city from which
they descended.

In order to render any province advantageous to the empire to which it
belongs, it ought to afford, in time of peace, a revenue to the public,
sufficient not only for defraying the whole expense of its own peace
establishment, but for contributing its proportion to the support of the
general government of the empire. Every province necessarily contributes,
more or less, to increase the expense of that general government. If any
particular province, therefore, does not contribute its share towards
defraying this expense, an unequal burden must be thrown upon some other
part of the empire. The extraordinary revenue, too, which every province
affords to the public in time of war, ought, from parity of reason, to
bear the same proportion to the extraordinary revenue of the whole empire,
which its ordinary revenue does in time of peace. That neither the
ordinary nor extraordinary revenue which Great Britain derives from her
colonies, bears this proportion to the whole revenue of the British
empire, will readily be allowed. The monopoly, it has been supposed,
indeed, by increasing the private revenue of the people of Great Britain,
and thereby enabling them to pay greater taxes, compensates the deficiency
of the public revenue of the colonies. But this monopoly, I have
endeavoured to show, though a very grievous tax upon the colonies, and
though it may increase the revenue of a particular order of men in Great
Britain, diminishes, instead of increasing, that of the great body of the
people, and consequently diminishes, instead of increasing, the ability of
the great body of the people to pay taxes. The men, too, whose revenue the
monopoly increases, constitute a particular order, which it is both
absolutely impossible to tax beyond the proportion of other orders, and
extremely impolitic even to attempt to tax beyond that proportion, as I
shall endeavour to show in the following book. No particular resource,
therefore, can be drawn from this particular order.

The colonies may be taxed either by their own assemblies, or by the
parliament of Great Britain.

That the colony assemblies can never be so managed as to levy upon their
constituents a public revenue, sufficient, not only to maintain at all
times their own civil and military establishment, but to pay their proper
proportion of the expense of the general government of the British empire,
seems not very probable. It was a long time before even the parliament of
England, though placed immediately under the eye of the sovereign, could
be brought under such a system of management, or could be rendered
sufficiently liberal in their grants for supporting the civil and military
establishments even of their own country. It was only by distributing
among the particular members of parliament a great part either of the
offices, or of the disposal of the offices arising from this civil and
military establishment, that such a system of management could be
established, even with regard to the parliament of England. But the
distance of the colony assemblies from the eye of the sovereign, their
number, their dispersed situation, and their various constitutions, would
render it very difficult to manage them in the same manner, even though
the sovereign had the same means of doing it; and those means are wanting.
It would be absolutely impossible to distribute among all the leading
members of all the colony assemblies such a share, either of the offices,
or of the disposal of the offices, arising from the general government of
the British empire, as to dispose them to give up their popularity at
home, and to tax their constituents for the support of that general
government, of which almost the whole emoluments were to be divided among
people who were strangers to them. The unavoidable ignorance of
administration, besides, concerning the relative importance of the
different members of those different assemblies, the offences which must
frequently be given, the blunders which must constantly be committed, in
attempting to manage them in this manner, seems to render such a system of
management altogether impracticable with regard to them.

The colony assemblies, besides, cannot be supposed the proper judges of
what is necessary for the defence and support of the whole empire. The
care of that defence and support is not entrusted to them. It is not their
business, and they have no regular means of information concerning it. The
assembly of a province, like the vestry of a parish, may judge very
properly concerning the affairs of its own particular district, but can
have no proper means of judging concerning those of the whole empire. It
cannot even judge properly concerning the proportion which its own
province bears to the whole empire, or concerning the relative degree of
its wealth and importance, compared with the other provinces; because
those other provinces are not under the inspection and superintendency of
the assembly of a particular province. What is necessary for the defence
and support of the whole empire, and in what proportion each part ought to
contribute, can be judged of only by that assembly which inspects and
super-intends the affairs of the whole empire.

It has been proposed, accordingly, that the colonies should be taxed by
requisition, the parliament of Great Britain determining the sum which
each colony ought to pay, and the provincial assembly assessing and
levying it in the way that suited best the circumstances of the province.
What concerned the whole empire would in this way be determined by the
assembly which inspects and superintends the affairs of the whole empire;
and the provincial affairs of each colony might still be regulated by its
own assembly. Though the colonies should, in this case, have no
representatives in the British parliament, yet, if we may judge by
experience, there is no probability that the parliamentary requisition
would be unreasonable. The parliament of England has not, upon any
occasion, shewn the smallest disposition to overburden those parts of the
empire which are not represented in parliament. The islands of Guernsey
and Jersey, without any means of resisting the authority of parliament,
are more lightly taxed than any part of Great Britain. Parliament, in
attempting to exercise its supposed right, whether well or ill grounded,
of taxing the colonies, has never hitherto demanded of them anything which
even approached to a just proportion to what was paid by their fellow
subjects at home. If the contribution of the colonies, besides, was to
rise or fall in proportion to the rise or fall of the land-tax, parliament
could not tax them without taxing, at the same time, its own constituents,
and the colonies might, in this case, be considered as virtually
represented in parliament.

Examples are not wanting of empires in which all the different provinces
are not taxed, if I may be allowed the expression, in one mass; but in
which the sovereign regulates the sum which each province ought to pay,
and in some provinces assesses and levies it as he thinks proper; while in
others he leaves it to be assessed and levied as the respective states of
each province shall determine. In some provinces of France, the king not
only imposes what taxes he thinks proper, but assesses and levies them in
the way he thinks proper. From others he demands a certain sum, but leaves
it to the states of each province to assess and levy that sum as they
think proper. According to the scheme of taxing by requisition, the
parliament of Great Britain would stand nearly in the same situation
towards the colony assemblies, as the king of France does towards the
states of those provinces which still enjoy the privilege of having states
of their own, the provinces of France which are supposed to be the best
governed.

But though, according to this scheme, the colonies could have no just
reason to fear that their share of the public burdens should ever exceed
the proper proportion to that of their fellow-citizens at home, Great
Britain might have just reason to fear that it never would amount to that
proper proportion. The parliament of Great Britain has not, for some time
past, had the same established authority in the colonies, which the French
king has in those provinces of France which still enjoy the privilege of
having states of their own. The colony assemblies, if they were not very
favourably disposed (and unless more skilfully managed than they ever have
been hitherto, they are not very likely to be so), might still find many
pretences for evading or rejecting the most reasonable requisitions of
parliament. A French war breaks out, we shall suppose; ten millions must
immediately be raised, in order to defend the seat of the empire. This sum
must be borrowed upon the credit of some parliamentary fund mortgaged for
paying the interest. Part of this fund parliament proposes to raise by a
tax to be levied in Great Britain; and part of it by a requisition to all
the different colony assemblies of America and the West Indies. Would
people readily advance their money upon the credit of a fund which partly
depended upon the good humour of all those assemblies, far distant from
the seat of the war, and sometimes, perhaps, thinking themselves not much
concerned in the event of it? Upon such a fund, no more money would
probably be advanced than what the tax to be levied in Great Britain might
be supposed to answer for. The whole burden of the debt contracted on
account of the war would in this manner fall, as it always has done
hitherto, upon Great Britain; upon a part of the empire, and not upon the
whole empire. Great Britain is, perhaps, since the world began, the only
state which, as it has extended its empire, has only increased its
expense, without once augmenting its resources. Other states have
generally disburdened themselves, upon their subject and subordinate
provinces, of the most considerable part of the expense of defending the
empire. Great Britain has hitherto suffered her subject and subordinate
provinces to disburden themselves upon her of almost this whole expense.
In order to put Great Britain upon a footing of equality with her own
colonies, which the law has hitherto supposed to be subject and
subordinate, it seems necessary, upon the scheme of taxing them by
parliamentary requisition, that parliament should have some means of
rendering its requisitions immediately effectual, in case the colony
assemblies should attempt to evade or reject them; and what those means
are, it is not very easy to conceive, and it has not yet been explained.

Should the parliament of Great Britain, at the same time, be ever fully
established in the right of taxing the colonies, even independent of the
consent of their own assemblies, the importance of those assemblies would,
from that moment, be at an end, and with it, that of all the leading men
of British America. Men desire to have some share in the management of
public affairs, chiefly on account of the importance which it gives them.
Upon the power which the greater part of the leading men, the natural
aristocracy of every country, have of preserving or defending their
respective importance, depends the stability and duration of every system
of free government. In the attacks which those leading men are continually
making upon the importance of one another, and in the defence of their
own, consists the whole play of domestic faction and ambition. The leading
men of America, like those of all other countries, desire to preserve
their own importance. They feel, or imagine, that if their assemblies,
which they are fond of calling parliaments, and of considering as equal in
authority to the parliament of Great Britain, should be so far degraded as
to become the humble ministers and executive officers of that parliament,
the greater part of their own importance would be at an end. They have
rejected, therefore, the proposal of being taxed by parliamentary
requisition, and, like other ambitious and high-spirited men, have rather
chosen to draw the sword in defence of their own importance.

Towards the declension of the Roman republic, the allies of Rome, who had
borne the principal burden of defending the state and extending the
empire, demanded to be admitted to all the privileges of Roman citizens.
Upon being refused, the social war broke out. During the course of that
war, Rome granted those privileges to the greater part of them, one by
one, and in proportion as they detached themselves from the general
confederacy. The parliament of Great Britain insists upon taxing the
colonies; and they refuse to be taxed by a parliament in which they are
not represented. If to each colony which should detach itself from the
general confederacy, Great Britain should allow such a number of
representatives as suited the proportion of what it contributed to the
public revenue of the empire, in consequence of its being subjected to the
same taxes, and in compensation admitted to the same freedom of trade with
its fellow-subjects at home; the number of its representatives to be
augmented as the proportion of its contribution might afterwards augment;
a new method of acquiring importance, a new and more dazzling object of
ambition, would be presented to the leading men of each colony. Instead of
piddling for the little prizes which are to be found in what may be called
the paltry raffle of colony faction, they might then hope, from the
presumption which men naturally have in their own ability and good
fortune, to draw some of the great prizes which sometimes come from the
wheel of the great state lottery of British politics. Unless this or some
other method is fallen upon, and there seems to be none more obvious than
this, of preserving the importance and of gratifying the ambition of the
leading men of America, it is not very probable that they will ever
voluntarily submit to us; and we ought to consider, that the blood which
must be shed in forcing them to do so, is, every drop of it, the blood
either of those who are, or of those whom we wish to have for our fellow
citizens. They are very weak who flatter themselves that, in the state to
which things have come, our colonies will be easily conquered by force
alone. The persons who now govern the resolutions of what they call their
continental congress, feel in themselves at this moment a degree of
importance which, perhaps, the greatest subjects in Europe scarce feel.
From shopkeepers, trades men, and attorneys, they are become statesmen and
legislators, and are employed in contriving a new form of government for
an extensive empire, which, they flatter themselves, will become, and
which, indeed, seems very likely to become, one of the greatest and most
formidable that ever was in the world. Five hundred different people,
perhaps, who, in different ways, act immediately under the continental
congress, and five hundred thousand, perhaps, who act under those five
hundred, all feel, in the same manner, a proportionable rise in their own
importance. Almost every individual of the governing party in America
fills, at present, in his own fancy, a station superior, not only to what
he had ever filled before, but to what he had ever expected to fill; and
unless some new object of ambition is presented either to him or to his
leaders, if he has the ordinary spirit of a man, he will die in defence of
that station.

It is a remark of the President Heynaut, that we now read with pleasure
the account of many little transactions of the Ligue, which, when they
happened, were not, perhaps, considered as very important pieces of news.
But everyman then, says he, fancied himself of some importance; and the
innumerable memoirs which have come down to us from those times, were the
greater part of them written by people who took pleasure in recording and
magnifying events, in which they flattered themselves they had been
considerable actors. How obstinately the city of Paris, upon that
occasion, defended itself, what a dreadful famine it supported, rather
than submit to the best, and afterwards the most beloved of all the French
kings, is well known. The greater part of the citizens, or those who
governed the greater part of them, fought in defence of their own
importance, which, they foresaw, was to be at an end whenever the ancient
government should be re-established. Our colonies, unless they can be
induced to consent to a union, are very likely to defend themselves,
against the best of all mother countries, as obstinately as the city of
Paris did against one of the best of kings.

The idea of representation was unknown in ancient times. When the people
of one state were admitted to the right of citizenship in another, they
had no other means of exercising that right, but by coming in a body to
vote and deliberate with the people of that other state. The admission of
the greater part of the inhabitants of Italy to the privileges of Roman
citizens, completely ruined the Roman republic. It was no longer possible
to distinguish between who was, and who was not, a Roman citizen. No tribe
could know its own members. A rabble of any kind could be introduced into
the assemblies of the people, could drive out the real citizens, and
decide upon the affairs of the republic, as if they themselves had been
such. But though America were to send fifty or sixty new representatives
to parliament, the door-keeper of the house of commons could not find any
great difficulty in distinguishing between who was and who was not a
member. Though the Roman constitution, therefore, was necessarily ruined
by the union of Rome with the allied states of Italy, there is not the
least probability that the British constitution would be hurt by the union
of Great Britain with her colonies. That constitution, on the contrary,
would be completed by it, and seems to be imperfect without it. The
assembly which deliberates and decides concerning the affairs of every
part of the empire, in order to be properly informed, ought certainly to
have representatives from every part of it. That this union, however,
could be easily effectuated, or that difficulties, and great difficulties,
might not occur in the execution, I do not pretend. I have yet heard of
none, however, which appear insurmountable. The principal, perhaps, arise,
not from the nature of things, but from the prejudices and opinions of the
people, both on this and on the other side of the Atlantic.

We on this side the water are afraid lest the multitude of American
representatives should overturn the balance of the constitution, and
increase too much either the influence of the crown on the one hand, or
the force of the democracy on the other. But if the number of American
representatives were to be in proportion to the produce of American
taxation, the number of people to be managed would increase exactly in
proportion to the means of managing them, and the means of managing to the
number of people to be managed. The monarchical and democratical parts of
the constitution would, after the union, stand exactly in the same degree
of relative force with regard to one another as they had done before.

The people on the other side of the water are afraid lest their distance
from the seat of government might expose them to many oppressions; but
their representatives in parliament, of which the number ought from the
first to be considerable, would easily be able to protect them from all
oppression. The distance could not much weaken the dependency of the
representative upon the constituent, and the former would still feel that
he owed his seat in parliament, and all the consequence which he derived
from it, to the good-will of the latter. It would be the interest of the
former, therefore, to cultivate that good-will, by complaining, with all
the authority of a member of the legislature, of every outrage which any
civil or military officer might be guilty of in those remote parts of the
empire. The distance of America from the seat of government, besides, the
natives of that country might flatter themselves, with some appearance of
reason too, would not be of very long continuance. Such has hitherto been
the rapid progress of that country in wealth, population, and improvement,
that in the course of little more than a century, perhaps, the produce of
the American might exceed that of the British taxation. The seat of the
empire would then naturally remove itself to that part of the empire which
contributed most to the general defence and support of the whole.

The discovery of America, and that of a passage to the East Indies by the
Cape of Good Hope, are the two greatest and most important events recorded
in the history of mankind. Their consequences have already been great;
but, in the short period of between two and three centuries which has
elapsed since these discoveries were made, it is impossible that the whole
extent of their consequences can have been seen. What benefits or what
misfortunes to mankind may hereafter result from those great events, no
human wisdom can foresee. By uniting in some measure the most distant
parts of the world, by enabling them to relieve one another’s wants, to
increase one another’s enjoyments, and to encourage one another’s
industry, their general tendency would seem to be beneficial. To the
natives, however, both of the East and West Indies, all the commercial
benefits which can have resulted from those events have been sunk and lost
in the dreadful misfortunes which they have occasioned. These misfortunes,
however, seem to have arisen rather from accident than from any thing in
the nature of those events themselves. At the particular time when these
discoveries were made, the superiority of force happened to be so great on
the side of the Europeans, that they were enabled to commit with impunity
every sort of injustice in those remote countries. Hereafter, perhaps, the
natives of those countries may grow stronger, or those of Europe may grow
weaker; and the inhabitants of all the different quarters of the world may
arrive at that equality of courage and force which, by inspiring mutual
fear, can alone overawe the injustice of independent nations into some
sort of respect for the rights of one another. But nothing seems more
likely to establish this equality of force, than that mutual communication
of knowledge, and of all sorts of improvements, which an extensive
commerce from all countries to all countries naturally, or rather
necessarily, carries along with it.

In the mean time, one of the principal effects of those discoveries has
been, to raise the mercantile system to a degree of splendour and glory
which it could never otherwise have attained to. It is the object of that
system to enrich a great nation, rather by trade and manufactures than by
the improvement and cultivation of land, rather by the industry of the
towns than by that of the country. But in consequence of those
discoveries, the commercial towns of Europe, instead of being the
manufacturers and carriers for but a very small part of the world (that
part of Europe which is washed by the Atlantic ocean, and the countries
which lie round the Baltic and Mediterranean seas), have now become the
manufacturers for the numerous and thriving cultivators of America, and
the carriers, and in some respects the manufacturers too, for almost all
the different nations of Asia, Africa, and America. Two new worlds have
been opened to their industry, each of them much greater and more
extensive than the old one, and the market of one of them growing still
greater and greater every day.

The countries which possess the colonies of America, and which trade
directly to the East Indies, enjoy indeed the whole show and splendour of
this great commerce. Other countries, however, notwithstanding all the
invidious restraints by which it is meant to exclude them, frequently
enjoy a greater share of the real benefit of it. The colonies of Spain and
Portugal, for example, give more real encouragement to the industry of
other countries than to that of Spain and Portugal. In the single article
of linen alone, the consumption of those colonies amounts, it is said (but
I do not pretend to warrant the quantity ), to more than three millions
sterling a-year. But this great consumption is almost entirely supplied by
France, Flanders, Holland, and Germany. Spain and Portugal furnish but a
small part of it. The capital which supplies the colonies with this great
quantity of linen, is annually distributed among, and furnishes a revenue
to, the inhabitants of those other countries. The profits of it only are
spent in Spain and Portugal, where they help to support the sumptuous
profusion of the merchants of Cadiz and Lisbon.

Even the regulations by which each nation endeavours to secure to itself
the exclusive trade of its own colonies, are frequently more hurtful to
the countries in favour of which they are established, than to those
against which they are established. The unjust oppression of the industry
of other countries falls back, if I may say so, upon the heads of the
oppressors, and crushes their industry more than it does that of those
other countries. By those regulations, for example, the merchant of
Hamburg must send the linen which he destines for the American market to
London, and he must bring back from thence the tobacco which he destines
for the German market; because he can neither send the one directly to
America, nor bring the other directly from thence. By this restraint he is
probably obliged to sell the one somewhat cheaper, and to buy the other
somewhat dearer, than he otherwise might have done; and his profits are
probably somewhat abridged by means of it. In this trade, however, between
Hamburg and London, he certainly receives the returns of his capital much
more quickly than he could possibly have done in the direct trade to
America, even though we should suppose, what is by no means the case, that
the payments of America were as punctual as those of London. In the trade,
therefore, to which those regulations confine the merchant of Hamburg, his
capital can keep in constant employment a much greater quantity of German
industry than he possibly could have done in the trade from which he is
excluded. Though the one employment, therefore, may to him perhaps be less
profitable than the other, it cannot be less advantageous to his country.
It is quite otherwise with the employment into which the monopoly
naturally attracts, if I may say so, the capital of the London merchant.
That employment may, perhaps, be more profitable to him than the greater
part of other employments; but on account of the slowness of the returns,
it cannot be more advantageous to his country.

After all the unjust attempts, therefore, of every country in Europe to
engross to itself the whole advantage of the trade of its own colonies, no
country has yet been able to engross to itself any thing but the expense
of supporting in time of peace, and of defending in time of war, the
oppressive authority which it assumes over them. The inconveniencies
resulting from the possession of its colonies, every country has engrossed
to itself completely. The advantages resulting from their trade, it has
been obliged to share with many other countries.

At first sight, no doubt, the monopoly of the great commerce of America
naturally seems to be an acquisition of the highest value. To the
undiscerning eye of giddy ambition it naturally presents itself, amidst
the confused scramble of politics and war, as a very dazzling object to
fight for. The dazzling splendour of the object, however, the immense
greatness of the commerce, is the very quality which renders the monopoly
of it hurtful, or which makes one employment, in its own nature
necessarily less advantageous to the country than the greater part of
other employments, absorb a much greater proportion of the capital of the
country than what would otherwise have gone to it.

The mercantile stock of every country, it has been shown in the second
book, naturally seeks, if one may say so, the employment most advantageous
to that country. If it is employed in the carrying trade, the country to
which it belongs becomes the emporium of the goods of all the countries
whose trade that stock carries on. But the owner of that stock necessarily
wishes to dispose of as great a part of those goods as he can at home. He
thereby saves himself the trouble, risk, and expense of exportation; and
he will upon that account be glad to sell them at home, not only for a
much smaller price, but with somewhat a smaller profit, than he might
expect to make by sending them abroad. He naturally, therefore, endeavours
as much as he can to turn his carrying trade into a foreign trade of
consumption, If his stock, again, is employed in a foreign trade of
consumption, he will, for the same reason, be glad to dispose of, at home,
as great a part as he can of the home goods which he collects in order to
export to some foreign market, and he will thus endeavour, as much as he
can, to turn his foreign trade of consumption into a home trade. The
mercantile stock of every country naturally courts in this manner the
near, and shuns the distant employment: naturally courts the employment in
which the returns are frequent, and shuns that in which they are distant
and slow; naturally courts the employment in which it can maintain the
greatest quantity of productive labour in the country to which it belongs,
or in which its owner resides, and shuns that in which it can maintain
there the smallest quantity. It naturally courts the employment which in
ordinary cases is most advantageous, and shuns that which in ordinary
cases is least advantageous to that country.

But if, in any one of those distant employments, which in ordinary cases
are less advantageous to the country, the profit should happen to rise
somewhat higher than what is sufficient to balance the natural preference
which is given to nearer employments, this superiority of profit will draw
stock from those nearer employments, till the profits of all return to
their proper level. This superiority of profit, however, is a proof that,
in the actual circumstances of the society, those distant employments are
somewhat understocked in proportion to other employments, and that the
stock of the society is not distributed in the properest manner among all
the different employments carried on in it. It is a proof that something
is either bought cheaper or sold dearer than it ought to be, and that some
particular class of citizens is more or less oppressed, either by paying
more, or by getting less than what is suitable to that equality which
ought to take place, and which naturally does take place, among all the
different classes of them. Though the same capital never will maintain the
same quantity of productive labour in a distant as in a near employment,
yet a distant employment maybe as necessary for the welfare of the society
as a near one; the goods which the distant employment deals in being
necessary, perhaps, for carrying on many of the nearer employments. But if
the profits of those who deal in such goods are above their proper level,
those goods will be sold dearer than they ought to be, or somewhat above
their natural price, and all those engaged in the nearer employments will
be more or less oppressed by this high price. Their interest, therefore,
in this case, requires, that some stock should be withdrawn from those
nearer employments, and turned towards that distant one, in order to
reduce its profits to their proper level, and the price of the goods which
it deals in to their natural price. In this extraordinary case, the public
interest requires that some stock should be withdrawn from those
employments which, in ordinary cases, are more advantageous, and turned
towards one which, in ordinary cases, is less advantageous to the public;
and, in this extraordinary case, the natural interests and inclinations of
men coincide as exactly with the public interests as in all other ordinary
cases, and lead them to withdraw stock from the near, and to turn it
towards the distant employments.

It is thus that the private interests and passions of individuals
naturally dispose them to turn their stock towards the employments which
in ordinary cases, are most advantageous to the society. But if from this
natural preference they should turn too much of it towards those
employments, the fall of profit in them, and the rise of it in all others,
immediately dispose them to alter this faulty distribution. Without any
intervention of law, therefore, the private interests and passions of men
naturally lead them to divide and distribute the stock of every society
among all the different employments carried on in it; as nearly as
possible in the proportion which is most agreeable to the interest of the
whole society.

All the different regulations of the mercantile system necessarily derange
more or less this natural and most advantageous distribution of stock. But
those which concern the trade to America and the East Indies derange it,
perhaps, more than any other; because the trade to those two great
continents absorbs a greater quantity of stock than any two other branches
of trade. The regulations, however, by which this derangement is effected
in those two different branches of trade, are not altogether the same.
Monopoly is the great engine of both; but it is a different sort of
monopoly. Monopoly of one kind or another, indeed, seems to be the sole
engine of the mercantile system.

In the trade to America, every nation endeavours to engross as much as
possible the whole market of its own colonies, by fairly excluding all
other nations from any direct trade to them. During the greater part of
the sixteenth century, the Portuguese endeavoured to manage the trade to
the East Indies in the same manner, by claiming the sole right of sailing
in the Indian seas, on account of the merit of having first found out the
road to them. The Dutch still continue to exclude all other European
nations from any direct trade to their spice islands. Monopolies of this
kind are evidently established against all other European nations, who are
thereby not only excluded from a trade to which it might be convenient for
them to turn some part of their stock, but are obliged to buy the goods
which that trade deals in, somewhat dearer than if they could import them
themselves directly from the countries which produced them.

But since the fall of the power of Portugal, no European nation has
claimed the exclusive right of sailing in the Indian seas, of which the
principal ports are now open to the ships of all European nations. Except
in Portugal, however, and within these few years in France, the trade to
the East Indies has, in every European country, been subjected to an
exclusive company. Monopolies of this kind are properly established
against the very nation which erects them. The greater part of that nation
are thereby not only excluded from a trade to which it might be convenient
for them to turn some part of their stock, but are obliged to buy the
goods which that trade deals in somewhat dearer than if it was open and
free to all their countrymen. Since the establishment of the English East
India company, for example, the other inhabitants of England, over and
above being excluded from the trade, must have paid, in the price of the
East India goods which they have consumed, not only for all the
extraordinary profits which the company may have made upon those goods in
consequence of their monopoly, but for all the extraordinary waste which
the fraud and abuse inseparable from the management of the affairs of so
great a company must necessarily have occasioned. The absurdity of this
second kind of monopoly, therefore, is much more manifest than that of the
first.

Both these kinds of monopolies derange more or less the natural
distribution of the stock of the society; but they do not always derange
it in the same way.

Monopolies of the first kind always attract to the particular trade in
which they are established a greater proportion of the stock of the
society than what would go to that trade of its own accord.

Monopolies of the second kind may sometimes attract stock towards the
particular trade in which they are established, and sometimes repel it
from that trade, according to different circumstances. In poor countries,
they naturally attract towards that trade more stock than would otherwise
go to it. In rich countries, they naturally repel from it a good deal of
stock which would otherwise go to it.

Such poor countries as Sweden and Denmark, for example, would probably
have never sent a single ship to the East Indies, had not the trade been
subjected to an exclusive company. The establishment of such a company
necessarily encourages adventurers. Their monopoly secures them against
all competitors in the home market, and they have the same chance for
foreign markets with the traders of other nations. Their monopoly shows
them the certainty of a great profit upon a considerable quantity of
goods, and the chance of a considerable profit upon a great quantity.
Without such extraordinary encouragement, the poor traders of such poor
countries would probably never have thought of hazarding their small
capitals in so very distant and uncertain an adventure as the trade to the
East Indies must naturally have appeared to them.

Such a rich country as Holland, on the contrary, would probably, in the
case of a free trade, send many more ships to the East Indies than it
actually does. The limited stock of the Dutch East India company probably
repels from that trade many great mercantile capitals which would
otherwise go to it. The mercantile capital of Holland is so great, that it
is, as it were, continually overflowing, sometimes into the public funds
of foreign countries, sometimes into loans to private traders and
adventurers of foreign countries, sometimes into the most round-about
foreign trades of consumption, and sometimes into the carrying trade. All
near employments being completely filled up, all the capital which can be
placed in them with any tolerable profit being already placed in them, the
capital of Holland necessarily flows towards the most distant employments.
The trade to the East Indies, if it were altogether free, would probably
absorb the greater part of this redundant capital. The East Indies offer a
market both for the manufactures of Europe, and for the gold and silver,
as well as for the several other productions of America, greater and more
extensive than both Europe and America put together.

Every derangement of the natural distribution of stock is necessarily
hurtful to the society in which it takes place; whether it be by repelling
from a particular trade the stock which would otherwise go to it, or by
attracting towards a particular trade that which would not otherwise come
to it. If, without any exclusive company, the trade of Holland to the East
Indies would be greater than it actually is, that country must suffer a
considerable loss, by part of its capital being excluded from the
employment most convenient for that port. And, in the same manner, if,
without an exclusive company, the trade of Sweden and Denmark to the East
Indies would be less than it actually is, or, what perhaps is more
probable, would not exist at all, those two countries must likewise suffer
a considerable loss, by part of their capital being drawn into an
employment which must be more or less unsuitable to their present
circumstances. Better for them, perhaps, in the present circumstances, to
buy East India goods of other nations, even though they should pay
somewhat dearer, than to turn so great a part of their small capital to so
very distant a trade, in which the returns are so very slow, in which that
capital can maintain so small a quantity of productive labour at home,
where productive labour is so much wanted, where so little is done, and
where so much is to do.

Though without an exclusive company, therefore, a particular country
should not be able to carry on any direct trade to the East Indies, it
will not from thence follow, that such a company ought to be established
there, but only that such a country ought not, in these circumstances, to
trade directly to the East Indies. That such companies are not in general
necessary for carrying on the East India trade, is sufficiently
demonstrated by the experience of the Portuguese, who enjoyed almost the
whole of it for more than a century together, without any exclusive
company.

No private merchant, it has been said, could well have capital sufficient
to maintain factors and agents in the different ports of the East Indies,
in order to provide goods for the ships which he might occasionally send
thither; and yet, unless he was able to do this, the difficulty of finding
a cargo might frequently make his ships lose the season for returning; and
the expense of so long a delay would not only eat up the whole profit of
the adventure, but frequently occasion a very considerable loss. This
argument, however, if it proved any thing at all, would prove that no one
great branch of trade could be carried on without an exclusive company,
which is contrary to the experience of all nations. There is no great
branch of trade, in which the capital of any one private merchant is
sufficient for carrying on all the subordinate branches which must be
carried on, in order to carry on the principal one. But when a nation is
ripe for any great branch of trade, some merchants naturally turn their
capitals towards the principal, and some towards the subordinate branches
of it; and though all the different branches of it are in this manner
carried on, yet it very seldom happens that they are all carried on by the
capital of one private merchant. If a nation, therefore, is ripe for the
East India trade, a certain portion of its capital will naturally divide
itself among all the different branches of that trade. Some of its
merchants will find it for their interest to reside in the East Indies,
and to employ their capitals there in providing goods for the ships which
are to be sent out by other merchants who reside in Europe. The
settlements which different European nations have obtained in the East
Indies, if they were taken from the exclusive companies to which they at
present belong, and put under the immediate protection of the sovereign,
would render this residence both safe and easy, at least to the merchants
of the particular nations to whom those settlements belong. If, at any
particular time, that part of the capital of any country which of its own
accord tended and inclined, if I may say so, towards the East India trade,
was not sufficient for carrying on all those different branches of it, it
would be a proof that, at that particular time, that country was not ripe
for that trade, and that it would do better to buy for some time, even at
a higher price, from other European nations, the East India goods it had
occasion for, than to import them itself directly from the East Indies.
What it might lose by the high price of those goods, could seldom be equal
to the loss which it would sustain by the distraction of a large portion
of its capital from other employments more necessary, or more useful, or
more suitable to its circumstances and situation, than a direct trade to
the East Indies.

Though the Europeans possess many considerable settlements both upon the
coast of Africa and in the East Indies, they have not yet established, in
either of those countries, such numerous and thriving colonies as those in
the islands and continent of America. Africa, however, as well as several
of the countries comprehended under the general name of the East Indies,
is inhabited by barbarous nations. But those nations were by no means so
weak and defenceless as the miserable and helpless Americans; and in
proportion to the natural fertility of the countries which they inhabited,
they were, besides, much more populous. The most barbarous nations either
of Africa or of the East Indies, were shepherds; even the Hottentots were
so. But the natives of every part of America, except Mexico and Peru, were
only hunters and the difference is very great between the number of
shepherds and that of hunters whom the same extent of equally fertile
territory can maintain. In Africa and the East Indies, therefore, it was
more difficult to displace the natives, and to extend the European
plantations over the greater part of the lands of the original
inhabitants. The genius of exclusive companies, besides, is unfavourable,
it has already been observed, to the growth of new colonies, and has
probably been the principal cause of the little progress which they have
made in the East Indies. The Portuguese carried on the trade both to
Africa and the East Indies, without any exclusive companies; and their
settlements at Congo, Angola, and Benguela, on the coast of Africa, and at
Goa in the East Indies though much depressed by superstition and every
sort of bad government, yet bear some resemblance to the colonies of
America, and are partly inhabited by Portuguese who have been established
there for several generations. The Dutch settlements at the Cape of Good
Hope and at Batavia, are at present the most considerable colonies which
the Europeans have established, either in Africa or in the East Indies;
and both those settlements are peculiarly fortunate in their situation. The
Cape of Good Hope was inhabited by a race of people almost as barbarous,
and quite as incapable of defending themselves, as the natives of America.
It is, besides, the half-way house, if one may say so, between Europe and
the East Indies, at which almost every European ship makes some stay, both
in going and returning. The supplying of those ships with every sort of
fresh provisions, with fruit, and sometimes with wine, affords alone a
very extensive market for the surplus produce of the colonies. What the
Cape of Good Hope is between Europe and every part of the East Indies,
Batavia is between the principal countries of the East Indies. It lies
upon the most frequented road from Indostan to China and Japan, and is
nearly about mid-way upon that road. Almost all the ships too, that sail
between Europe and China, touch at Batavia; and it is, over and above all
this, the centre and principal mart of what is called the country trade of
the East Indies; not only of that part of it which is carried on by
Europeans, but of that which is carried on by the native Indians; and
vessels navigated by the inhabitants of China and Japan, of Tonquin,
Malacca, Cochin-China, and the island of Celebes, are frequently to be
seen in its port. Such advantageous situations have enabled those two
colonies to surmount all the obstacles which the oppressive genius of an
exclusive company may have occasionally opposed to their growth. They have
enabled Batavia to surmount the additional disadvantage of perhaps the
most unwholesome climate in the world.

The English and Dutch companies, though they have established no
considerable colonies, except the two above mentioned, have both made
considerable conquests in the East Indies. But in the manner in which they
both govern their new subjects, the natural genius of an exclusive company
has shewn itself most distinctly. In the spice islands, the Dutch are said
to burn all the spiceries which a fertile season produces, beyond what
they expect to dispose of in Europe with such a profit as they think
sufficient. In the islands where they have no settlements, they give a
premium to those who collect the young blossoms and green leaves of the
clove and nutmeg trees, which naturally grow there, but which this savage
policy has now, it is said, almost completely extirpated. Even in the
islands where they have settlements, they have very much reduced, it is
said, the number of those trees. If the produce even of their own islands
was much greater than what suited their market, the natives, they suspect,
might find means to convey some part of it to other nations; and the best
way, they imagine, to secure their own monopoly, is to take care that no
more shall grow than what they themselves carry to market. By different
arts of oppression, they have reduced the population of several of the
Moluccas nearly to the number which is sufficient to supply with fresh
provisions, and other necessaries of life, their own insignificant
garrisons, and such of their ships as occasionally come there for a cargo
of spices. Under the government even of the Portuguese, however, those
islands are said to have been tolerably well inhabited. The English
company have not yet had time to establish in Bengal so perfectly
destructive a system. The plan of their government, however, has had
exactly the same tendency. It has not been uncommon, I am well assured,
for the chief, that is, the first clerk or a factory, to order a peasant
to plough up a rich field of poppies, and sow it with rice, or some other
grain. The pretence was, to prevent a scarcity of provisions; but the real
reason, to give the chief an opportunity of selling at a better price a
large quantity of opium which he happened then to have upon hand. Upon
other occasions, the order has been reversed; and a rich field of rice or
other grain has been ploughed up, in order to make room for a plantation
of poppies, when the chief foresaw that extraordinary profit was likely to
be made by opium. The servants of the company have, upon several
occasions, attempted to establish in their own favour the monopoly of some
of the most important branches, not only of the foreign, but of the inland
trade of the country. Had they been allowed to go on, it is impossible
that they should not, at some time or another, have attempted to restrain
the production of the particular articles of which they had thus usurped
the monopoly, not only to the quantity which they themselves could
purchase, but to that which they could expect to sell with such a profit
as they might think sufficient. In the course of a century or two, the
policy of the English company would, in this manner, have probably proved
as completely destructive as that of the Dutch.

Nothing, however, can be more directly contrary to the real interest of
those companies, considered as the sovereigns of the countries which they
have conquered, than this destructive plan. In almost all countries, the
revenue of the sovereign is drawn from that of the people. The greater the
revenue of the people, therefore, the greater the annual produce of their
land and labour, the more they can afford to the sovereign. It is his
interest, therefore, to increase as much as possible that annual produce.
But if this is the interest of every sovereign, it is peculiarly so of one
whose revenue, like that of the sovereign of Bengal, arises chiefly from a
land-rent. That rent must necessarily be in proportion to the quantity and
value of the produce; and both the one and the other must depend upon the
extent of the market. The quantity will always be suited, with more or
less exactness, to the consumption of those who can afford to pay for it;
and the price which they will pay will always be in proportion to the
eagerness of their competition. It is the interest of such a sovereign,
therefore, to open the most extensive market for the produce of his
country, to allow the most perfect freedom of commerce, in order to
increase as much as possible the number and competition of buyers; and
upon this account to abolish, not only all monopolies, but all restraints
upon the transportation of the home produce from one part of the country
to another, upon its exportation to foreign countries, or upon the
importation of goods of any kind for which it can be exchanged. He is in
this manner most likely to increase both the quantity and value of that
produce, and consequently of his own share of it, or of his own revenue.

But a company of merchants, are, it seems, incapable of considering
themselves as sovereigns, even after they have become such. Trade, or
buying in order to sell again, they still consider as their principal
business, and by a strange absurdity, regard the character of the
sovereign as but an appendix to that of the merchant; as something which
ought to be made subservient to it, or by means of which they may be
enabled to buy cheaper in India, and thereby to sell with a better profit
in Europe. They endeavour, for this purpose, to keep out as much as
possible all competitors from the market of the countries which are
subject to their government, and consequently to reduce, at least, some
part of the surplus produce of those countries to what is barely
sufficient for supplying their own demand, or to what they can expect to
sell in Europe, with such a profit as they may think reasonable. Their
mercantile habits draw them in this manner, almost necessarily, though
perhaps insensibly, to prefer, upon all ordinary occasions, the little and
transitory profit of the monopolist to the great and permanent revenue of
the sovereign; and would gradually lead them to treat the countries
subject to their government nearly as the Dutch treat the Moluccas. It is
the interest of the East India company, considered as sovereigns, that the
European goods which are carried to their Indian dominions should be sold
there as cheap as possible; and that the Indian goods which are brought
from thence should bring there as good a price, or should be sold there as
dear as possible. But the reverse of this is their interest as merchants.
As sovereigns, their interest is exactly the same with that of the country
which they govern. As merchants, their interest is directly opposite to
that interest.

But if the genius of such a government, even as to what concerns its
direction in Europe, is in this manner essentially, and perhaps incurably
faulty, that of its administration in India is still more so. That
administration is necessarily composed of a council of merchants, a
profession no doubt extremely respectable, but which in no country in the
world carries along with it that sort of authority which naturally
overawes the people, and without force commands their willing obedience.
Such a council can command obedience only by the military force with which
they are accompanied; and their government is, therefore, necessarily
military and despotical. Their proper business, however, is that of
merchants. It is to sell, upon their master’s account, the European goods
consigned to them, and to buy, in return, Indian goods for the European
market. It is to sell the one as dear, and to buy the other as cheap as
possible, and consequently to exclude, as much as possible, all rivals
from the particular market where they keep their shop. The genius of the
administration, therefore, so far as concerns the trade of the company, is
the same as that of the direction. It tends to make government subservient
to the interest of monopoly, and consequently to stunt the natural growth
of some parts, at least, of the surplus produce of the country, to what is
barely sufficient for answering the demand of the company.

All the members of the administration besides, trade more or less upon
their own account; and it is in vain to prohibit them from doing so.
Nothing can be more completely foolish than to expect that the clerk of a
great counting-house, at ten thousand miles distance, and consequently
almost quite out of sight, should, upon a simple order from their master,
give up at once doing any sort of business upon their own account abandon
for ever all hopes of making a fortune, of which they have the means in
their hands; and content themselves with the moderate salaries which those
masters allow them, and which, moderate as they are, can seldom be
augmented, being commonly as large as the real profits of the company
trade can afford. In such circumstances, to prohibit the servants of the
company from trading upon their own account, can have scarce any other
effect than to enable its superior servants, under pretence of executing
their master’s order, to oppress such of the inferior ones as have had the
misfortune to fall under their displeasure. The servants naturally
endeavour to establish the same monopoly in favour of their own private
trade as of the public trade of the company. If they are suffered to act
as they could wish, they will establish this monopoly openly and directly,
by fairly prohibiting all other people from trading in the articles in
which they choose to deal; and this, perhaps, is the best and least
oppressive way of establishing it. But if, by an order from Europe, they
are prohibited from doing this, they will, notwithstanding, endeavour to
establish a monopoly of the same kind secretly and indirectly, in a way
that is much more destructive to the country. They will employ the whole
authority of government, and pervert the administration of Justice, in
order to harass and ruin those who interfere with them in any branch of
commerce, which by means of agents, either concealed, or at least not
publicly avowed, they may choose to carry on. But the private trade of the
servants will naturally extend to a much greater variety of articles than
the public trade of the company. The public trade of the company extends
no further than the trade with Europe, and comprehends a part only of the
foreign trade of the country. But the private trade of the servants may
extend to all the different branches both of its inland and foreign trade.
The monopoly of the company can tend only to stunt the natural growth of
that part of the surplus produce which, in the case of a free trade, would
be exported to Europe. That of the servants tends to stunt the natural
growth of every part of the produce in which they choose to deal; of what
is destined for home consumption, as well as of what is destined for
exportation; and consequently to degrade the cultivation of the whole
country, and to reduce the number of its inhabitants. It tends to reduce
the quantity of every sort of produce, even that of the necessaries of
life, whenever the servants of the country choose to deal in them, to what
those servants can both afford to buy and expect to sell with such a
profit as pleases them.

From the nature of their situation, too, the servants must be more
disposed to support with rigourous severity their own interest, against
that of the country which they govern, than their masters can be to
support theirs. The country belongs to their masters, who cannot avoid
having some regard for the interest of what belongs to them; but it does
not belong to the servants. The real interest of their masters, if they
were capable of understanding it, is the same with that of the country;
{The interest of every proprietor of India stock, however, is by no means
the same with that of the country in the government of which his vote
gives him some influence.—See book v, chap. 1, part ii.}and it is
from ignorance chiefly, and the meanness of mercantile prejudice, that
they ever oppress it. But the real interest of the servants is by no means
the same with that of the country, and the most perfect information would
not necessarily put an end to their oppressions. The regulations,
accordingly, which have been sent out from Europe, though they have been
frequently weak, have upon most occasions been well meaning. More
intelligence, and perhaps less good meaning, has sometimes appeared in
those established by the servants in India. It is a very singular
government in which every member of the administration wishes to get out
of the country, and consequently to have done with the government, as soon
as he can, and to whose interest, the day after he has left it, and
carried his whole fortune with him, it is perfectly indifferent though the
whole country was swallowed up by an earthquake.

I mean not, however, by any thing which I have here said, to throw any
odious imputation upon the general character of the servants of the East
India company, and touch less upon that of any particular persons. It is
the system of government, the situation in which they are placed, that I
mean to censure, not the character of those who have acted in it. They
acted as their situation naturally directed, and they who have clamoured
the loudest against them would probably not have acted better themselves.
In war and negotiation, the councils of Madras and Calcutta, have upon
several occasions, conducted themselves with a resolution and decisive
wisdom, which would have done honour to the senate of Rome in the best
days of that republic. The members of those councils, however, had been
bred to professions very different from war and politics. But their
situation alone, without education, experience, or even example, seems to
have formed in them all at once the great qualities which it required, and
to have inspired them both with abilities and virtues which they
themselves could not well know that they possessed. If upon some
occasions, therefore, it has animated them to actions of magnanimity which
could not well have been expected from them, we should not wonder if, upon
others, it has prompted them to exploits of somewhat a different nature.

Such exclusive companies, therefore, are nuisances in every respect;
always more or less inconvenient to the countries in which they are
established, and destructive to those which have the misfortune to fall
under their government.