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.

The motives for first settling the different European colonies in America and the West Indies were not quite as clear and distinct as those behind the colonies 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.

All the states of ancient Greece had very small territories. When the population of any state grew beyond what its territory could easily support, some people were sent to find a new home in a distant part of the world. Warlike neighbours surrounded each state, making it difficult to expand much at home. The colonies of the Dorians went chiefly to Italy and Sicily. Before Rome was founded, barbarous and uncivilized nations inhabited those lands. The Ionians and Aeolians, the two other great tribes of the Greeks, sent their colonies to Asia Minor and the islands of the Aegean sea. At that time, the inhabitants of those places seem to have been in much the same state as those of Sicily and Italy. The mother city regarded its colony as a child, always entitled to great favour and assistance and owing much gratitude and respect in return. But it regarded the colony as a child freed from its control. The mother city claimed no direct authority or jurisdiction over the colony. The colony established its own government, made its own laws, and elected its own magistrates. It made peace or war with its neighbours as an independent state, without waiting for the mother city's approval or consent. Nothing could be clearer or more distinct than the interest that guided each such settlement.

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.

Rome, like most other ancient republics, was originally founded on an agrarian law. This law divided public land in fixed proportions among the citizens of the state. In the normal course of human affairs, marriage, inheritance, and sales inevitably disrupted this original division. Land allotted to support many families often came into the possession of a single person. To remedy this disorder, as it was thought to be, a law limited each citizen to five hundred jugera, or about 350 English acres. We read that this law was enforced once or twice. But otherwise it was neglected or evaded, and inequality of wealth continued to grow. Most citizens had no land. Without land, a freeman found it difficult to maintain his independence under the manners and customs of those times. Today, a poor man without land may have a little capital. If so, he can either farm someone else's land or run a small retail business. If he has no capital, he may find work as a farm laborer or a craftsman. But among the ancient Romans, slaves cultivated all the land of the rich, under an overseer who was also a slave. A poor freeman therefore had little chance of finding work as either a farmer or a laborer. Slaves of the rich also carried on all trades and manufacturing, even retail trade, for the benefit of their masters. Their masters' wealth, authority, and protection made it difficult for a poor freeman to compete with them. Citizens without land therefore had scarcely any means of support other than gifts from candidates in the annual elections. When the tribunes wanted to stir up the people against the rich and powerful, they reminded them of the ancient divisions of land. They presented the law limiting this kind of private property as the fundamental law of the republic. The people demanded land loudly, and we may believe that the rich and powerful were determined to give them none of their own. To satisfy the people to some extent, the rich and powerful often proposed sending out a new colony. But Rome was a conquering power. Even on such occasions, it had no need to send its citizens out, so to speak, into the wide world to seek their fortune without knowing where to settle. Rome generally assigned them land in the conquered provinces of Italy. These provinces were within the republic's territories, so the colonists could never form an independent state. At best, a colony was a kind of corporation. It could make bylaws for its own government, but remained subject to the correction, jurisdiction, and legislative authority of the mother city. Sending out such a colony not only gave the people some satisfaction. It also often established a kind of garrison in a newly conquered province, whose obedience might otherwise have been doubtful. A Roman colony was therefore altogether different from a Greek one. This was true both of the establishment itself and of the reasons for founding it. Accordingly, the words for these different establishments in the original languages have very different meanings. The Latin word (colonia) simply means a plantation. The Greek word (apoixia), by contrast, means a separation of dwelling, a departure from home, or a going out of the house. But although Roman colonies differed from Greek ones in many respects, the interest that prompted their establishment was equally plain and distinct. Both institutions arose either from irresistible necessity or from clear and obvious usefulness.

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 European colonies in America and the West Indies were not established out of necessity. Although they have brought great benefits, those benefits are not entirely clear or obvious. Their benefits were not understood when the colonies were first established. They were not the reason for establishing the colonies or for the discoveries that led to them. Even today, perhaps the nature, extent, and limits of those benefits are not well understood.

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.

During the fourteenth and fifteenth centuries, the Venetians carried on a highly profitable trade in spices and other East India goods. They distributed these goods among the other nations of Europe. They bought them chiefly in Egypt, which was then ruled by the Mamelukes. The Mamelukes and the Venetians were both enemies of the Turks. This shared interest, supported by Venice’s money, created a relationship that gave the Venetians almost a monopoly on 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.

The great profits of the Venetians stirred the Portuguese desire for wealth. Throughout the fifteenth century, the Portuguese had been trying to find a sea route to the countries where the Moors obtained ivory and gold dust. The Moors brought these goods to the Portuguese across the desert. The Portuguese discovered the Madeiras, the Canaries, the Azores, and the Cape de Verd islands. They also discovered the coasts of Guinea, Loango, Congo, Angola, and Benguela, and finally the Cape of Good Hope. They had long wanted a share of the Venetians’ profitable trade. The discovery of the Cape gave them a likely chance to gain one. In 1497, Vasco de Gamo sailed from Lisbon with a fleet of four ships. After a voyage of eleven months, he reached the coast of Indostan. He thus completed a series of discoveries pursued with great determination and very little interruption for nearly a century.

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.

Some years earlier, Europe was waiting to see whether the Portuguese plans would succeed. Their success still seemed doubtful. Meanwhile, a Genoese pilot formed an even bolder plan: to sail west to the East Indies. Europeans then knew very little about the location of those countries. The few European travelers who had been there had exaggerated the distance. Perhaps this was through simplicity and ignorance. A distance that was truly very great seemed almost endless to people who could not measure it. Or perhaps they wanted to make their adventures in visiting regions so far from Europe seem even more extraordinary. Columbus quite rightly concluded that the longer the route east, the shorter the route west would be. He therefore proposed sailing west, believing it to be both the shortest and the surest route. He had the good fortune to convince Isabella of Castile that his plan was likely to succeed. He sailed from the port of Palos in August 1492, nearly five years before Vasco de Gamo's expedition left Portugal. After a voyage of between two and three months, he first discovered some of the small Bahama or Lucyan islands. He then discovered 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.

The countries Columbus discovered on this voyage and his later voyages were nothing like those he had sought. He had expected the wealth, cultivation, and dense population of China and Indostan. Instead, in St. Domingo and every other part of the new world he visited, he found only land covered with forest. It was uncultivated and inhabited only by some tribes of naked and miserable savages. Still, he was reluctant to believe that these were not some of the countries Marco Polo had described. Marco Polo was the first European to visit China or the East Indies, or at least to leave a description of them. Even a very slight resemblance was often enough to make Columbus return to his favored belief, despite the clearest evidence. One such resemblance was between Cibao, the name of a mountain in St. Domingo, and Cipange, mentioned by Marco Polo. In his letters to Ferdinand and Isabella, Columbus called the countries he had discovered the Indies. He had no doubt that they were the outermost parts of the countries Marco Polo had described. He also believed they were not far from the Ganges or the countries Alexander had conquered. Even when finally convinced that they were different countries, he still hoped that those rich lands were not far away. On a later voyage, he therefore searched for them along the coast of Terra Firma and toward 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.

Because of Columbus’s mistake, the name “the Indies” has stuck to those unfortunate countries ever since. Eventually, people clearly understood that the new Indies were entirely different from the old Indies. The new Indies were then called the West Indies, to distinguish them from the old Indies, 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.

However, Columbus needed to present the countries he had discovered, whatever they were, as very important to the court of Spain. But at the time, their animal and plant products could hardly justify such a claim. These products are the real wealth of every country.

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 cori was a creature somewhere between a rat and a rabbit. Mr Buffon believed it was the same as the aperea of Brazil. It was the largest four-legged animal in St. Domingo that gave birth to live young. The species seems never to have been very numerous. The Spaniards’ dogs and cats are said to have nearly wiped it out long ago, along with some other, even smaller species. These animals, however, together with a fairly large lizard called the ivana or iguana, made up most of the animal food the land provided.

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 inhabitants’ plant food was not very abundant because they lacked industry, though it was not quite so scarce. It consisted of Indian corn, yams, potatoes, bananas, and other plants then completely unknown in Europe. These plants have never since been highly valued there. Nor have Europeans thought them as nourishing as the common grains and legumes cultivated in Europe since time immemorial.

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.

The cotton plant did provide the raw material for a very important industry. At the time, it was undoubtedly the most valuable of all the plants on those islands to Europeans. By the end of the fifteenth century, muslins and other cotton goods from the East Indies were highly prized throughout Europe. But cotton goods were not manufactured anywhere in Europe. So even cotton could not have seemed very important to Europeans at that time.

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.

Columbus found nothing among the animals or plants of the newly discovered countries that he could describe as highly valuable. So he turned his attention to their minerals. He convinced himself that their mineral riches fully compensated for the insignificance of their animals and plants. The inhabitants decorated their clothing with small pieces of gold. Columbus was told that they often found these in streams and torrents flowing down from the mountains. This was enough to convince him that the mountains were full of the richest gold mines. St. Domingo was therefore described as a country abundant in gold. For that reason, it was seen as an inexhaustible source of real wealth for the crown and kingdom of Spain. This reflected the prejudices of both those times and our own. When Columbus returned from his first voyage, he was presented to the sovereigns of Castile and Arragon with a kind of triumphal ceremony. The main products of the countries he had discovered were carried before him in a solemn procession. The only valuable items were some small gold bands, bracelets, and other ornaments, along with some bales of cotton. The rest were merely objects of popular wonder and curiosity. They included some unusually large reeds, some birds with very beautiful plumage, and some stuffed skins of the huge alligator and manati. Six or seven of the wretched natives went before all these objects. Their unusual color 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.

After hearing Columbus’s reports, the council of Castile decided to take possession of the countries whose inhabitants were clearly unable to defend themselves. The pious aim of converting them to Christianity made the unjust plan seem holy. But the hope of finding gold there was the only reason for undertaking it. To give this motive greater weight, Columbus proposed that half of all the gold and silver found there should belong to the crown. The council approved his proposal.

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.

As long as the first adventurers got all or most of the gold they brought to Europe by simply plundering the defenceless natives, paying even this heavy tax was perhaps not very difficult. But eventually the natives were stripped of everything they had. In St. Domingo and all the other countries discovered by Columbus, this was done completely within six or eight years. To find more gold, the adventurers then had to dig for it in mines. Once mining became necessary, they could no longer pay the tax. Strict enforcement of the tax, it is said, first caused the mines of St. Domingo to be abandoned entirely. They have never been worked since. The tax was therefore soon reduced to a third of the gross output of the gold mines. It was then reduced to a fifth, later to a tenth, and finally to a twentieth. The tax on silver remained at a fifth of gross output for a long time. It was reduced to a tenth only during the present century. But the first adventurers do not seem to have been very interested in 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.

All the other Spanish expeditions to the New World after Columbus seem to have been driven by the same motive. The sacred thirst for gold brought Ovieda, Nicuessa, and Vasco Nugnes de Balboa to the Isthmus of Darien. It brought Cortes to Mexico, and Almagro and Pizarro to Chili and Peru. Whenever these adventurers arrived on an unknown coast, they always asked first whether gold could be found there. Based on the information they received about gold, they decided whether to leave the country or settle there.

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.

Of all the expensive and uncertain ventures that bankrupt most of the people who undertake them, perhaps none is more completely ruinous than searching for new silver and gold mines. It is perhaps the worst lottery in the world. In no other lottery do the winners gain so little compared with what the losers lose. The prizes are few and the losing tickets many. Yet the usual price of a ticket is the entire fortune of a very rich man. Mining ventures usually consume both the capital invested in them and the profit it would ordinarily earn. They do not repay either. A prudent lawmaker who wanted to increase the nation’s capital would therefore be least likely to give mining ventures special encouragement. Nor would such a lawmaker seek to direct more capital toward them than would go there on its own. In fact, almost all men have such absurd confidence in their own good fortune that too much capital tends to go into mining ventures on its own wherever there is even the slightest chance of success.

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.

But although sober reason and experience have always judged such projects extremely unfavorably, human greed has usually judged them quite differently. The same passion led many people to believe in the absurd idea of the philosopher’s stone. It led others to believe in the equally absurd idea of immensely rich gold and silver mines. They did not consider that, in every age and nation, these metals have been valuable chiefly because they are scarce. They are scarce because nature has deposited very small quantities of them in any one place. Almost everywhere, nature has surrounded those small quantities with hard materials that are difficult to work. As a result, reaching the metals everywhere requires labor and expense. Yet people persuaded themselves that many places might contain veins of these metals as large and abundant as those commonly found of lead, copper, tin, or iron. Sir Waiter Raleigh’s dream of El Dorado, the golden city and country, shows that even wise men can fall prey to such strange delusions. More than a hundred years after that great man’s death, the Jesuit Gumila was still convinced that this wonderful country existed. He spoke with great warmth, and, I dare say, great sincerity, of how happy he would be to bring the light of the gospel to its people. They could reward their missionary’s pious labors so well.

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.

In the countries first discovered by the Spaniards, no known gold or silver mines are now thought worth working. The quantities of those metals that the first adventurers reportedly found there were probably greatly exaggerated. So was the richness of the mines worked soon after the first discovery. Even so, the reports of what the adventurers found were enough to inflame the greed of all their countrymen. Every Spaniard who sailed to America expected to find an El Dorado. Fortune, too, did something she has done on very few other occasions. She partly fulfilled the extravagant hopes of her followers. The discovery and conquest of Mexico and Peru happened about thirty and forty years, respectively, after Columbus’s first expedition. There, Fortune presented the Spaniards with something not very unlike the abundance of precious metals they sought.

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.

A plan to trade with the East Indies therefore led to the first discovery of the West. A plan of conquest led to all the settlements the Spaniards established in those newly discovered countries. They were driven to conquer by the prospect of gold and silver mines. A series of accidents that no human wisdom could have foreseen made the venture far more successful than its backers could reasonably have expected.

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.

The first adventurers from all the other European nations who tried to settle in America had similar fanciful hopes. But they were not equally successful. More than a hundred years passed after the first settlement of the Brazils before silver, gold, or diamond mines were discovered there. None have yet been discovered in the English, French, Dutch, or Danish colonies. At least, none are currently thought worth working. The first English settlers in North America, however, offered the king a fifth of all the gold and silver found there. They hoped this would persuade him to grant them their patents. The patents granted to Sir Waiter Raleigh, the London and Plymouth companies, the council of Plymouth, and others accordingly reserved this fifth for the crown. The first settlers also expected to find a north-west passage to the East Indies, as well as gold and silver mines. So far, they have been disappointed in both hopes.

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.

A colony of a civilized nation may take possession of unoccupied land or land so sparsely inhabited that the natives easily make way for the new settlers. Such a colony grows in wealth and greatness faster 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.

Colonists bring with them knowledge of agriculture and other useful skills. This knowledge is superior to what can develop on its own among savage and barbarous nations over many centuries. They also bring the habit of obeying authority. They have some idea of the orderly government in their own country, the laws that support it, and the regular administration of justice. Naturally, they establish something similar in their new settlement. But among savage and barbarous nations, law and government develop naturally even more slowly than skills do. Skills develop faster once law and government are established enough to protect them. Every colonist gets more land than he could possibly cultivate. He pays no rent and hardly any taxes. No landlord takes a share of his produce, and the sovereign’s share is usually very small. So he has every reason to produce as much as possible, since almost all of it will be his. But his land is usually so extensive that he can seldom produce a tenth of what it could yield. This is true despite all his own work and that of everyone else he can employ. He is therefore eager to recruit workers from everywhere and pay them very generous wages. But those generous wages, together with the abundance and cheapness of land, soon lead his workers to leave him. They go off to become landowners themselves and pay other workers equally generous wages. Those workers soon leave them for the same reason they left their first employer. The generous rewards of labour encourage marriage. Children are well fed and properly cared for during their early years. When they grow up, the value of their labour more than repays the cost of their maintenance. Once they reach maturity, high wages and cheap land allow them to establish themselves just 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.

In other countries, rent and profit eat up wages, and the two upper classes oppress the lower class. But in new colonies, the interests of the two upper classes require them to treat the lower class more generously and humanely. This is true, at least, where the lower class is not in slavery. Uncultivated land of the greatest natural fertility can be bought for very little. The owner, who is always the one who develops it, expects to earn more income by improving the land. This increase is his profit, and in these circumstances it is usually very large. But he cannot make this large profit without employing others to clear and cultivate the land. In new colonies, there is usually a great deal of land and a small population. This makes it difficult for him to find workers. He therefore does not bargain over wages, but is willing to employ workers at any price. High wages encourage population growth. Good land is cheap and plentiful, which encourages its improvement and enables the owner to pay high wages. These wages make up almost the whole price of the land. Though the wages are high as payment for labor, they are low as the price of something so valuable. Whatever encourages population growth and improvement also encourages the growth 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.

Many ancient Greek colonies therefore seem to have become wealthy and powerful very quickly. Within a century or two, several appear to have rivaled or even surpassed their mother cities. By all accounts, Syracuse and Agrigentum in Sicily, Tarentum and Locri in Italy, and Ephesus and Miletus in Lesser Asia appear to have been at least equal to any city in ancient Greece. Though founded later, these colonies seem to have cultivated the refined arts, philosophy, poetry, and eloquence just as early as the mother country. They also seem to have developed them just as highly. Remarkably, the schools of the two oldest Greek philosophers, Thales and Pythagoras, were established outside ancient Greece. One was in an Asiatic colony, the other in an Italian colony. All these colonies had settled in countries inhabited by savage and barbarous nations, who easily gave way to the new settlers. The colonists had plenty of good land. They were also completely independent of their mother cities. They were therefore free to manage their affairs in the way they judged best for their own interests.

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.

The history of the Roman colonies is far less impressive. Some of them, such as Florence, grew into significant states. But this took many centuries and happened after the fall of Rome, the city that founded them. None of the colonies seems ever to have grown very quickly. All were established in conquered provinces, most of which were already fully inhabited. Each colonist was seldom given much land. And because the colonies were not independent, the colonists could not always manage their affairs as they thought best.

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 European colonies in America and the West Indies have abundant good land, like the colonies of ancient Greece. In fact, they have far more. In their dependence on their mother countries, they resemble the colonies of ancient Rome. But their great distance from Europe has eased the effects of this dependence in all of them, to varying degrees. Their location has kept them less visible to their mother countries and less within their power. The colonies have pursued their interests in their own way. On many occasions, their actions have been overlooked because people in Europe did not know about or understand them. On other occasions, their actions have simply been tolerated because their distance made them difficult to restrain. Even Spain's harsh and arbitrary government has often had to withdraw or soften its orders for governing its colonies. It has done so for fear of a general uprising. As a result, all the European colonies have made great progress in wealth, population, and improvement.

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.

From the moment its colonies were established, the crown of Spain received revenue from its share of their gold and silver. This kind of revenue also stirred human greed to the most extravagant hopes of even greater riches. The Spanish colonies therefore attracted much attention from their mother country from the start. The colonies of other European nations, however, were largely neglected for a long time. The former did not perhaps thrive any better because of this attention, nor the latter any worse because of this neglect. The Spanish colonies occupy, to some extent, a vast area. Yet, in proportion to that area, they are considered less populous and prosperous than those of almost any other European nation. Even so, their growth in population and development has certainly been very rapid and very great. The city of Lima was founded after the conquest. Ulloa reported that it had fifty thousand inhabitants nearly thirty years ago. The same author reported that Quito, once only a miserable hamlet of Indians, was equally populous in his time. Gemel i Carreri reported that the city of Mexico had a hundred thousand inhabitants. He is said to have been a mere pretender to the title of traveller. Yet he seems everywhere to have written from exceptionally good information. Despite all the exaggerations of Spanish writers, this population was probably more than five times what it had been in Montezuma's time. These numbers greatly exceed those of Boston, New York, and Philadelphia, the three largest cities in the English colonies. Before the Spanish conquest, neither Mexico nor Peru had cattle suitable for pulling loads. The llama was their only beast of burden, and it seems to have been much weaker than an ordinary donkey. They did not know the plough or how to use iron. They had no coined money or any other established means of trade. They traded by barter. Their principal farming tool was a kind of wooden spade. They used sharp stones as knives and hatchets for cutting. They used fish bones and the tough sinews of certain animals as needles for sewing. These seem to have been their principal tools for work. Given these conditions, neither empire seems likely to have been as developed or as well cultivated as it is today. Both now have plentiful supplies of all kinds of European cattle. The use of iron, the plough, and many European arts have also been introduced among them. But every country's population must be in proportion to its level of development and cultivation. Despite the cruel destruction of the natives that followed the conquest, these two great empires are probably more populous now than ever before. And the people are certainly very different. For we must, I think, acknowledge 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.

After the Spanish settlements, the Portuguese settlement in Brazil is the oldest European settlement in America. But for a long time after its discovery, no gold or silver mines were found there. Because Brazil brought the crown little or no revenue, it was largely neglected for many years. During this neglect, it grew into a great and powerful colony. While Portugal was under Spanish rule, the Dutch attacked Brazil. They seized seven of its fourteen provinces and expected soon to conquer the other seven. Then Portugal regained its independence when the Braganza family came to the throne. The Dutch were enemies of the Spaniards, so they became friends of the Portuguese, who were also enemies of the Spaniards. The Dutch therefore agreed to leave the part of Brazil they had not conquered to the king of Portugal. In turn, the king agreed to leave the conquered part to them. He did not think it worth disputing with such good allies. But the Dutch government soon began to oppress the Portuguese colonists. Instead of merely complaining, the colonists took up arms against their new masters. Through their own courage and determination, they drove the Dutch out of Brazil. Portugal allowed this to happen, but gave no open assistance. The Dutch found it impossible to keep any part of the country. They were therefore content to let it be entirely restored to the crown of Portugal. This colony is said to have more than six hundred thousand people. They are Portuguese or descended from Portuguese, creoles, mulattoes, and a mixed race of Portuguese and Brazilians. No other colony in America is thought to contain so many people of European descent.

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.

Toward the end of the fifteenth century and through most of the sixteenth, Spain and Portugal were the two great ocean-going naval powers. Venice traded with every part of Europe, but its fleet had hardly ever sailed beyond the Mediterranean. Because the Spaniards had discovered America first, they claimed all of it as their own. They could not stop Portugal, another great naval power, from settling in Brazil. But the Spaniards were so feared that most other European nations were afraid to settle anywhere else on that great continent. The French who tried to settle in Florida were all murdered by the Spaniards. But Spain's naval power declined after the defeat or failure of what the Spaniards called their invincible armada. This happened toward the end of the sixteenth century. Spain could no longer prevent other European nations from establishing settlements. During the seventeenth century, the English, French, Dutch, Danes, and Swedes therefore all tried to establish settlements in the new world. These were all the great nations with ports on the ocean.

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 Swedes settled in New Jersey. The number of Swedish families still living there shows that the colony would likely have prospered if Sweden had protected it. But Sweden neglected the colony, and it was soon absorbed by the Dutch colony of New York. In 1674, New York in turn came under English rule.

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 small islands of St. Thomas and Santa Cruz are the only places in the New World the Danes have ever possessed. These little settlements were also governed by a company with exclusive trading rights. The company alone could buy the colonies' surplus produce and supply them with goods they wanted from other countries. In both its buying and selling, the company therefore had not only the power to oppress the colonies, but also the strongest temptation to do so. Government by a company of merchants with exclusive trading rights is perhaps the worst possible government for any country. Even so, it could not stop these colonies from progressing altogether, though it made their progress slower and weaker. The late king of Denmark dissolved the company, and since then the colonies have prospered greatly.

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 Dutch settlements in the West, like those in the East Indies, were originally governed by an exclusive company. Some of them made considerable progress compared with almost any country that had long been settled and established. Even so, their progress was sluggish and slow compared with that of most new colonies. The colony of Surinam is very substantial, but it still falls short of most sugar colonies belonging to other European nations. The colony of Nova Belgia is now divided into the two provinces of New York and New Jersey. It would probably have soon become substantial too, even if it had remained under Dutch rule. Good land is so plentiful and cheap that even the worst government can hardly prevent it from bringing prosperity. The colony’s great distance from the mother country would also allow colonists to use smuggling to evade, at least partly, the company’s monopoly over their trade. The company now allows all Dutch ships to trade with Surinam. They must pay two and a half percent of the value of their cargo for a license. The company reserves for itself only the direct trade from Africa to America, which consists almost entirely of the slave trade. This easing of the company’s exclusive privileges is probably the main reason for the prosperity the colony now enjoys. Curacoa and Eustatia, the two principal islands belonging to the Dutch, are free ports, open to ships of all nations. Other, better colonies around them have ports open to ships of only one nation. This freedom has been the main cause of the prosperity of these 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.

For most of the last century and part of this one, the French colony of Canada was governed by an exclusive company. Under such unfavorable management, the colony necessarily grew very slowly compared with other new colonies. But its growth became much faster after the company was dissolved following the collapse of what is called the Mississippi scheme. When the English took possession of Canada, they found nearly twice as many inhabitants as Father Charlevoix had estimated twenty to thirty years earlier. The Jesuit had traveled throughout the country and had no inclination to portray it as less significant 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.

The French colony of St. Domingo was founded by pirates and freebooters. For a long time, they neither needed France’s protection nor recognized its authority. Eventually, these outlaws became enough like citizens to recognize French authority. But for a long time, France had to exercise that authority very gently. During this period, the colony’s population and development grew very quickly. For a time, St. Domingo was subject to the oppression of an exclusive company, like all the other French colonies. This oppression undoubtedly slowed its progress, but it could not stop it altogether. The colony began to prosper again as soon as it was freed from that oppression. It is now the most important sugar colony in the West Indies. Its output is said to be greater than that of all the English sugar colonies combined. The other French sugar colonies are generally all thriving.

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

But no colonies have progressed more rapidly than the English colonies 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.

Two main causes seem to explain the prosperity of all new colonies. They have plenty of good land and the freedom to manage their own affairs as they choose.

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.

The English colonies of North America undoubtedly have plenty of good land. But they have less than the colonies of the Spaniards and Portuguese. They have no more than some of the colonies the French held before the recent war. But the political institutions of the English colonies have done more to encourage the improvement and cultivation of this land. They have been more favorable 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.

First, the accumulation of uncultivated land has not been prevented altogether. But it has been more restricted in the English colonies than in any other colonies. Colonial law requires every landowner to improve and cultivate a certain proportion of their land within a limited time. If a landowner fails to do so, the neglected land can be granted to someone else. Although this law has perhaps not been enforced very strictly, it has nevertheless 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.

Secondly, Pennsylvania has no right of primogeniture. Land, like movable property, is divided equally among all the children in a family. In three of the New England provinces, the oldest child receives only a double share, as under the law of Moses. So even if one person sometimes acquires too much land in those provinces, it will likely be divided sufficiently again within a generation or two. In the other English colonies, the right of primogeniture applies, as it does under English law. But in all the English colonies, the form of land tenure makes land easier to transfer. All land is held by free soccage. A person granted a large tract generally finds it in his interest to transfer most of it as quickly as possible, keeping only a small quit-rent. In the Spanish and Portuguese colonies, the right called majorazzo governs the inheritance of all large estates with a title of honor attached. Such estates pass undivided to one person and are effectively entailed and cannot be transferred. The French colonies, on the other hand, are subject to the custom of Paris. This custom is much more favorable to younger children than English law when land is inherited. But in the French colonies, some land is held under the noble tenure of chivalry and homage. If any part of such an estate is transferred, it remains subject to a right of redemption for a limited time. This right belongs either to the heir of the superior lord or to the heir of the family. All the largest estates in the country are held under such noble tenures, which necessarily make transfers difficult. But in a new colony, a large uncultivated estate is likely to be divided much faster through transfer than through inheritance. As already noted, the abundance and low price of good land are the main causes of a new colony's rapid prosperity. The concentration of land in a few hands effectively destroys this abundance and low price. It is also the greatest obstacle to improving uncultivated land. Yet the labor used to improve and cultivate land provides society with the greatest and most valuable produce. In this case, the produce of labor pays not only its own wages and the profit on the capital that employs it, but also the rent of the land. Labor in the English colonies is therefore more often used to improve and cultivate land. It is likely to produce more, and more valuable goods, than labor in the colonies of any of the other three nations. In those colonies, the concentration of land diverts labor to other occupations to a greater or lesser extent.

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.

Thirdly, the labor of the English colonists is likely to produce not only more goods, but more valuable ones. Because their taxes are moderate, the colonists also keep a greater share of what they produce. They can save this share and use it to put even more labor to work. The English colonists have never contributed anything toward defending the mother country or supporting its civil government. On the contrary, they have so far been defended almost entirely at the mother country’s expense. Fleets and armies cost far more than the necessary expenses of civil government. The cost of the colonies’ own civil government has always been very moderate. It has generally been limited to reasonable salaries for the governor, judges, and some other public officials. It has also paid for the maintenance of a few of the most useful public works. Before the present disturbances began, the civil government of Massachusetts Bay cost only about £18,000 a year. New Hampshire and Rhode Island each spent £3,500. Connecticut spent £4,000. New York and Pennsylvania each spent £4,500. New Jersey spent £1,200. Virginia and South Carolina each spent £8,000. The civil governments of Nova Scotia and Georgia are partly supported by an annual grant from Parliament. Even so, Nova Scotia pays about £7,000 a year toward its public expenses, and Georgia about £2,500. In short, before the present disturbances began, all the civil governments in North America cost their inhabitants no more than £64,700 a year. This total excludes Maryland and North Carolina, for which no exact figures are available. It is a remarkable example of how cheaply three million people can be governed, and governed well. The most important government expense, however, has always fallen on the mother country. That expense is defense and protection. The colonies’ civil ceremonies are sufficiently dignified, whether for receiving a new governor, opening a new assembly, or other occasions. But they involve no costly pomp or parade. Their church government is equally frugal. Tithes are unknown among them, and their clergy are far from numerous. The clergy are supported either by modest salaries or by voluntary contributions from the people. By contrast, the power of Spain and Portugal is partly supported by taxes on their colonies. France, it is true, has never drawn much revenue from its colonies. The taxes it collects from them are generally spent there. But all three nations govern their colonies on a much larger scale and with much more expensive ceremony. The sums spent receiving a new viceroy of Peru, for example, have often been enormous. Such ceremonies are actual taxes that wealthy colonists pay on those occasions. But they also encourage habits of vanity and spending among the colonists on all other occasions. They are not only very burdensome occasional taxes. They also help establish permanent taxes of the same kind, which are even more burdensome. These are the ruinous taxes of private luxury and extravagance. Church government is also extremely oppressive in the colonies of all three nations. Tithes are collected in all of them, and with the utmost rigor in those of Spain and Portugal. All these colonies are also burdened by a great number of begging friars. Their begging is not only permitted but made sacred by religion. It is a most burdensome tax on poor people, who are carefully taught that giving is a duty. They are also taught that refusing the friars charity is a very great sin. On top of all this, the clergy are the largest holders of land in all these colonies.

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.

Fourth, the English colonies have had a greater advantage in selling their surplus produce, the amount beyond their own consumption. They have been allowed access to a larger market than the colonies of any other European nation. Every European nation has tried, to some extent, to monopolize trade with its colonies. For that reason, each has forbidden foreign ships from trading with its colonies. Each has also forbidden its colonies from importing European goods from any foreign nation. But nations have exercised this monopoly in very different ways.

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.

Some nations have handed over all trade with their colonies to a single company with exclusive rights. The colonists had to buy all the European goods they wanted from that company. They also had to sell all their surplus produce to it. The company therefore had an interest in selling European goods as dearly as possible and buying surplus produce as cheaply as possible. But even at that low price, it also had an interest in limiting its purchases. It would buy only as much produce as it could sell at a very high price in Europe. The company had an interest in keeping down the value of the colony's surplus produce in every case. In many cases, it also had an interest in discouraging and restraining the natural growth of the quantity produced. Of all the methods that could be devised to stunt the natural growth of a new colony, an exclusive company is undoubtedly the most effective. This has been Holland's policy, although its company has stopped exercising its exclusive privilege in many respects during the present century. It was also Denmark's policy until the reign of the late king. France has occasionally followed the same policy. Recently, since 1755, Portugal has adopted it, at least in two of the principal provinces of Brazil, Pernambucco and Marannon. Portugal adopted it after all other nations had abandoned it because of its absurdity.

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, without establishing an exclusive company, restricted all trade with their colonies to a particular port in the mother country. Ships could sail from that port only in a fleet at a particular season, or individually with a special license. In most cases, the license was very expensive. This policy did open colonial trade to all natives of the mother country. But they had to trade from the proper port, at the proper season, and in the proper vessels. Merchants pooled their funds to equip the licensed vessels, and they would find it in their interest to cooperate. Trade conducted in this way would therefore necessarily follow much the same principles as trade by an exclusive company. The merchants’ profits would be almost equally excessive and oppressive. The colonies would be poorly supplied and forced to buy at very high prices and sell at very low ones. Until a few years ago, however, this had always been Spain’s policy. Accordingly, the price of all European goods in the Spanish West Indies is said to have been enormous. Ulloa tells us that in Quito, a pound of iron sold for about 4 shillings and 6 pence sterling. A pound of steel sold for about 6 shillings and 9 pence. But the colonies part with their own produce chiefly to buy European goods. The more they pay for those goods, the less they really receive for their produce. High prices for European goods therefore amount to low prices for colonial produce. In this respect, Portugal’s policy toward all its colonies is the same as Spain’s former policy, except in Pernambucco and Marannon. For those two colonies, Portugal has recently adopted an even worse policy.

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.

Other nations allow all their subjects to trade with their colonies. These subjects may trade from any port in the mother country. They need no license beyond the usual customs papers. Because the traders are numerous and spread across different places, they cannot form a general agreement to control trade. Their competition is enough to prevent them from making excessive profits. Under such a liberal policy, the colonies can sell their produce and buy European goods at reasonable prices. This has always been England’s policy since the dissolution of the Plymouth company, when our colonies were still in their infancy. It has generally been France’s policy too. It has been France’s consistent policy since the dissolution of what is commonly called their Mississippi company in England. The profits France and England make from trade with their colonies are therefore by no means excessive. No doubt those profits are somewhat higher than they would be if all other nations were free to compete. Accordingly, European goods are not extravagantly expensive in most colonies of either nation.

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.

When exporting their own surplus produce, Great Britain’s colonies are restricted to the mother country’s market for only certain goods. These goods were listed in the Navigation Act and some later acts. For that reason, they are called enumerated commodities. The rest are called non-enumerated commodities and may be exported directly to other countries. But they must be carried in British or colonial ships whose owners and three-fourths of the sailors 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.

Non-enumerated goods include some of the most important products of America and the West Indies. These include all kinds of grain, lumber, salted 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.

Grain is naturally the first and main crop grown in all new colonies. By giving the colonies a very large market for grain, the law encourages them to grow far more than their small populations can consume. In this way, they provide an ample food supply in advance for a continually growing 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 completely covered with forests, timber has little or no value. The main obstacle to improving the land is therefore the cost of clearing it. The law gives the colonies access to a very large market for their lumber. By raising the price of lumber that would otherwise have little value, the law seeks to make improvement easier. It allows the colonies to make some profit from what would otherwise be a 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.

In a country where less than half the land is settled or cultivated, cattle naturally multiply beyond the inhabitants’ needs. As a result, they are often worth little or nothing. But as already shown, cattle prices must bear a certain proportion to grain prices before most land can be improved. By giving American cattle, dead or alive and in all forms, access to a very large market, the law seeks to raise their value. A high price for cattle is essential to improvement. However, the good effects of this freedom must be somewhat reduced by the 4th of Geo. III. c. 15. This law puts hides and skins among the enumerated commodities, thereby tending 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.

The legislature seems to have almost always aimed to increase Great Britain’s shipping and naval power by expanding its colonies’ fisheries. For this reason, those fisheries have had all the encouragement that freedom can give them. They have flourished as a result. Before the recent disturbances, the New England fishery in particular was perhaps one of the most important in the world. In Great Britain, whaling achieves so little, despite a lavish bounty, that many people believe its total output barely exceeds the value of the bounties paid for it each year. I do not, however, claim that this belief is correct. In New England, by contrast, whaling is carried on to a very great extent without any bounty. Fish is one of the main goods 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.

Sugar was originally an enumerated commodity, which could be exported only to Great Britain. But in 1751, after sugar planters petitioned, they were allowed to export it anywhere in the world. However, restrictions on this freedom, together with the high price of sugar in Great Britain, have made it largely ineffective. Great Britain and her colonies remain almost the sole market for all sugar produced on British plantations. Their consumption is growing rapidly. Over the past twenty years, sugar imports have increased greatly as Jamaica and the ceded islands have become more developed. Yet exports to foreign countries are said to be little 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.

Rum is a very important item in American trade with the coast of Africa. In return, Americans bring back negro slaves.

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.

Suppose all of America’s surplus grain of every kind, salt provisions, and fish had been added to the list of enumerated goods. They would then have been forced into the Great British market, where they would have competed too much with goods produced by our own people. These important goods were probably left off the list more from fear of that competition than from concern for America’s interests. For the same reason, the law normally prohibited the importation into Great Britain of all grain except rice, and of all salt provisions.

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.

Non-enumerated goods could originally be exported anywhere in the world. Lumber and rice were once added to the list of enumerated goods. When they were later removed, their exports to Europe were restricted to countries south of Cape Finisterre. Under the 6th of George III, chapter 52, all non-enumerated goods became subject to the same restriction. The parts of Europe south of Cape Finisterre are not manufacturing countries. We are therefore less wary of colonial ships bringing home manufactured goods from there that could compete 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 listed commodities are of two kinds. The first kind includes goods peculiar to America, or goods that cannot be produced, or at least are not produced, in the mother country. These include molasses, coffee, cocoa-nuts, tobacco, pimento, ginger, whalefins, raw silk, cotton, wool, beaver and other American furs, indigo, fustic, and other dyeing woods. The second kind includes goods that are not peculiar to America and that can be, and are, produced in the mother country. But they are not produced there in quantities large enough to supply most of its demand. That demand is supplied mainly by foreign countries. These goods include all naval stores, such as masts, yards, bowsprits, tar, pitch, and turpentine. They also include pig iron and bar iron, copper ore, hides and skins, and potash and pearl ash. Even the largest imports of the first kind could not discourage the production or interfere with the sale of goods produced in the mother country. By restricting these imports to the home market, it was expected that our merchants could buy them more cheaply in the colonies. They could therefore sell them at home for a better profit. The merchants could also establish a profitable carrying trade between the colonies and foreign countries. Great Britain would necessarily be the center of that trade, as the European country into which the goods had to be imported first. It was also supposed that imports of the second kind could be managed without interfering with sales of similar goods produced at home. Instead, they would interfere with sales of goods imported from foreign countries. With suitable duties, colonial goods could always be made somewhat more expensive than home-produced goods, yet much cheaper than foreign imports. Restricting these goods to the home market was therefore intended to discourage production not in Great Britain, but in certain foreign countries. The balance of trade with those countries was believed to be unfavorable 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.

The colonies were forbidden to export masts, yards, bowsprits, tar, pitch, and turpentine to any country except Great Britain. This ban naturally tended to lower timber prices in the colonies. As a result, it increased the cost of clearing land, the main obstacle to improving it. But in 1703, near the beginning of the present century, Sweden’s pitch and tar company tried to raise its prices for Great Britain. It barred exports except in its own ships, at its own price, and in quantities it chose. To counter this notable piece of trade policy, Great Britain offered a bounty on naval stores imported from America. It also hoped to become as independent as possible, not only of Sweden, but of all the other northern powers. The bounty raised timber prices in America much more than restricting sales to the home market could lower them. Both measures were enacted at the same time. Together, they encouraged rather than discouraged 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.

Pig iron and bar iron have also been placed among the enumerated commodities. But when imported from America, they are exempt from substantial duties imposed on imports from any other country. The exemption therefore does more to encourage the building of furnaces in America than the enumeration does to discourage it. No manufacturing operation consumes as much wood as a furnace. Nor can any do as much to clear a country overgrown with trees.

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.

Perhaps the legislature neither intended nor understood that some of these regulations would raise the value of timber in America. This made it easier to clear the land. Although these beneficial effects were accidental, they were no 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.

Completely free trade is allowed between the British colonies of America and the West Indies. This applies to both enumerated and non-enumerated goods. These colonies have become so populous and prosperous that each finds a large market for all its produce in some of the others. Together, they form a large internal market for one another’s produce.

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.

England’s generosity toward colonial trade, however, has been limited mainly to providing a market for colonial products. These products are either raw or in what might be called the very first stage of manufacturing. British merchants and manufacturers prefer to keep more advanced or refined manufacturing for themselves, even when it uses colonial products. They have persuaded the legislature to prevent such manufacturing from developing in the colonies. The legislature has done this sometimes through high duties and sometimes through outright bans.

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.

For example, Muscovado sugar from the British plantations pays an import duty of only 6s:4d. per hundredweight. White sugar pays £1:1:1. Refined sugar in loaves, whether double or single refined, pays £4:2:5 8/20ths. When these high duties were imposed, Great Britain was the only market to which British colonial sugar could be exported. It is still the principal market. The duties therefore originally amounted to a ban on claying or refining sugar for any foreign market. They now amount to a ban on claying or refining it for the market that takes perhaps more than nine-tenths of the entire crop. As a result, sugar claying and refining have flourished in all the French sugar colonies but received little attention in any English colony. The English colonies have produced clayed or refined sugar mainly for their own markets. While Grenada was under French control, almost every plantation had at least one refinery for claying sugar. Since the English took control, almost all these works have been abandoned. I am assured that, at present (October 1773), no more than two or three remain on the island. Now, however, the customs authorities allow clayed or refined sugar to be commonly imported as Muscovado if the loaves are reduced to powder.

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.

Great Britain encourages the production of pig and bar iron in America. It exempts them from duties charged on the same goods imported from other countries. Yet it absolutely forbids the building of steel furnaces and slit-mills in any of its American colonies. It will not allow its colonies to make these more refined products, even for their own use. Instead, it insists that they buy all the goods of this kind they need from its merchants and manufacturers.

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.

She prohibits the shipment of American-made hats, wool, and woollen goods by water from one province to another. She also prohibits carrying them by land on horseback or in a cart. This regulation effectively prevents colonists from making these goods for sale in distant markets. It confines their industry in these goods to coarse and household manufactures. These are the kinds of goods a family commonly makes for its own use or for 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.

However, it is a clear violation of the most sacred rights of mankind to forbid a great people from making the most of every part of what they produce. It is also a violation to forbid them from using their capital and labor as they think best for themselves. Yet, unjust as these bans may be, they have not so far done the colonies much harm. Land is still so cheap in the colonies, and labor consequently so expensive, that they can import almost all more refined or advanced manufactured goods from the mother country more cheaply than they could make them themselves. Even if the colonists had not been forbidden to establish such manufacturing, their own interests would probably have kept them from doing so at their present stage of development. At this stage, the bans may not limit the colonists’ work or keep them from any occupation they would otherwise have pursued. Perhaps they are only insulting badges of slavery, imposed without sufficient reason by the groundless jealousy of the mother country’s merchants and manufacturers. At a more advanced stage, the bans might become truly oppressive and unbearable.

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.

Great Britain restricts some of the colonies’ most important products to its own market. In compensation, it gives some of those products an advantage in that market. Sometimes it does this by imposing higher duties on similar products imported from other countries. At other times, it pays bounties on imports from the colonies. Through higher duties, Britain gives colonial sugar, tobacco, and iron an advantage in its home market. Through bounties, it favors colonial raw silk, hemp, flax, indigo, naval stores, and building timber. As far as I have been able to learn, this second method of encouraging colonial products is unique to Great Britain. The first is not. Portugal does not merely impose higher duties on tobacco imported from any other country. It prohibits those imports 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.

England has also allowed its colonies more freedom to import goods from Europe than any other nation has.

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.

Great Britain refunds part of the duty paid on imported foreign goods when they are exported to another country. The refund is almost always at least half the duty, generally more, and sometimes the whole amount. It was easy to foresee that no independent foreign country would accept the goods if they still carried those heavy duties. Almost all foreign goods are subject to heavy duties when imported into Great Britain. Unless some of those duties were refunded on export, the carrying trade would therefore come to an end. The mercantile system favored this trade greatly.

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.

Our colonies, however, are by no means independent foreign countries. Great Britain claimed the exclusive right to supply them with all goods from Europe. It could therefore have forced the colonies to accept those goods with all the same duties charged in the mother country. Other countries had done the same to their colonies. But until 1763, most foreign goods exported to our colonies received the same duty refunds as goods exported to any independent foreign country. In 1763, however, the 4th of Geo. III. c. 15 greatly reduced this concession. The law stated: “No part of the duty called the old subsidy shall be refunded on goods grown, produced, or manufactured in Europe or the East Indies and exported from this kingdom to any British colony or plantation in America. Wines, white calicoes, and muslins are excepted.” Before this law, many kinds of foreign goods could be bought more cheaply in the plantations than in the mother country. Some may still be bought more cheaply there.

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.

The merchants who conduct the colony trade have been the chief advisers on most regulations governing it. We should not be surprised, then, that many of these regulations favor their interests over those of the colonies or the mother country. The merchants had the exclusive right to supply the colonies with all the goods they needed from Europe. They also had the exclusive right to buy any surplus colonial produce that would not compete with their own trades at home. These privileges sacrificed the colonies’ interests to those of the merchants. Other regulations sacrificed the mother country’s interests to those of the merchants, even by the standards of mercantile thinking. Most European and East India goods re-exported to the colonies received the same duty refunds, or drawbacks, as goods re-exported to any independent country. The merchants benefited by paying as little as possible for foreign goods sent to the colonies. They therefore wanted to recover as much as possible of the duties they had paid when importing those goods into Great Britain. This would allow them either to sell the same quantity in the colonies at a greater profit or to sell more at the same profit. Either way, they would gain. The colonies also benefited from getting all such goods as cheaply and abundantly as possible. But this might not always benefit the mother country. It could often lose revenue by refunding much of the duties paid when the goods were imported. Its manufactures could also suffer because the drawbacks made it cheaper to bring foreign manufactured goods to the colonies. Foreign goods could therefore be sold at lower prices than British goods in the colonial market. It is commonly said that the drawbacks on German linen re-exported to the American colonies have considerably slowed the growth of Great Britain’s linen industry.

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.

Great Britain’s policy on trade with its colonies has been driven by the same commercial spirit as that of other nations. Yet, on the whole, it has been less restrictive and oppressive than the policies of any of those nations.

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.

Except in foreign trade, the English colonists have complete freedom to manage their own affairs as they choose. Their freedom is equal in every respect to that of their fellow citizens at home. It is secured in the same way, by an assembly of the people's representatives. The assembly claims the sole right to impose taxes to support the colony's government. Its authority keeps the executive power in check. As long as a colonist obeys the law, even the humblest or most disliked has nothing to fear from the governor's resentment. Nor does any such colonist have anything to fear from the resentment of another civil or military officer in the province. Like the House of Commons in England, the colonial assemblies do not always represent the people equally. Yet they come closer to doing so. The executive power either lacks the means to corrupt them or has no need to do so, because it receives support from the mother country. Perhaps, then, the assemblies are generally more influenced by the wishes of their constituents. The councils in colonial legislatures correspond to the House of Lords in Great Britain. But they are not made up of hereditary nobles. In some colonies, including three New England governments, the people's representatives choose the councils instead of the king appointing them. None of the English colonies has a hereditary nobility. In all of them, as in all other free countries, a descendant of an old colonial family is more respected than an upstart of equal merit and fortune. But he is only more respected. He has no privileges that allow him to trouble his neighbours. Before the present disturbances began, the colonial assemblies had not only legislative power but also some 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 their respective assemblies. Those officers were directly responsible to the assemblies. There is therefore more equality among the English colonists than among the inhabitants of the mother country. Their manners are more republican. Their governments, particularly those of three New England provinces, have until now 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.

By contrast, Spain, Portugal, and France govern their colonies as absolute rulers. Such governments commonly give their lower officials discretionary powers. Because the colonies are so far away, those powers are naturally exercised with more than ordinary violence. Under all absolute governments, there is more liberty in the capital than anywhere else in the country. The sovereign himself can never have any interest or desire to pervert justice or oppress the great body of the people. In the capital, his presence keeps all his lower officials in check to some degree. In the more distant provinces, people’s complaints are less likely to reach him. There, officials can exercise their tyranny much more safely. But the European colonies in America are farther away than the most distant provinces of the greatest empires ever known before. The government of the English colonies is perhaps the only one in history that could give complete security to the inhabitants of such a distant province. The French colonies, however, have always been governed much more gently and moderately than the Spanish and Portuguese colonies. This better conduct suits the character of the French nation. It also suits the nature of its government, which shapes the character of every nation. French government is arbitrary and violent compared with that of Great Britain, but legal and free compared 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.

However, the superiority of English policy is most apparent in the progress of the North American colonies. France’s sugar colonies have progressed at least as much as most of England’s, and perhaps more. Yet England’s sugar colonies enjoy a free government much like that of its North American colonies. But unlike England’s sugar colonies, France’s are not discouraged from refining their own sugar. More importantly, the nature of their government naturally leads to 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.

In all European colonies, sugar cane is grown by negro slaves. People suppose that those born in Europe’s temperate climate could not endure digging under the burning sun of the West Indies. At present, sugar cane is cultivated entirely by hand, though many believe a drill plough could be introduced with great advantage. The profit and success of cultivation using cattle depend greatly on how well the cattle are managed. Similarly, the profit and success of cultivation using slaves must depend equally on how well the slaves are managed. I think it is generally agreed that French planters manage their slaves better than English planters do. The law gives slaves some weak protection against their masters’ violence. This law is likely to be enforced better in a colony with a largely arbitrary government than in one with a wholly free government. In every country where the unfortunate law of slavery exists, a magistrate who protects a slave interferes to some extent in the management of the master’s private property. In a free country, the master may be a member of the colonial assembly or a voter who elects such a member. The magistrate therefore dares to interfere only with the greatest caution. The respect he must show the master makes it harder for him to protect the slave. But under a largely arbitrary government, magistrates commonly interfere even in the management of individuals’ private property. They may send the owners a lettre de cachet if they do not manage their property to the magistrates’ liking. It is therefore much easier for a magistrate to give a slave some protection, and common humanity naturally inclines him to do so. The magistrate’s protection makes the slave less contemptible in his master’s eyes. The master is therefore inclined to show him more regard and treat him more gently. Gentle treatment makes a slave not only more faithful but also more intelligent, and therefore more useful on both counts. He comes closer to the condition of a free servant. He may have some degree of integrity and concern for his master’s interests. These virtues often belong to free servants. But they can never belong to a slave 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.

I believe the history of all ages and nations supports the view that a slave is better off under an arbitrary government than under a free one. In Roman history, we first read of a magistrate intervening to protect a slave from his master’s violence under the emperors. In the presence of Augustus, Vidius Pollio ordered a slave who had committed a minor fault to be cut into pieces. Pollio wanted the slave thrown into his fishpond to feed his fish. Outraged, the emperor ordered Pollio to free not only that slave immediately, but all his other slaves as well. Under the republic, no magistrate would have had enough authority to protect the slave, much less 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.

It is worth noting that the capital used to develop France’s sugar colonies, especially the great colony of St Domingo, came almost entirely from their gradual improvement and cultivation. It came almost entirely from the produce of the soil and the labor of the colonists, or, what amounts to the same thing, the money earned from that produce. Through good management, this capital was gradually accumulated and used to produce even more. But much of the capital used to develop and cultivate England’s sugar colonies was sent from England. It was by no means entirely the produce of the soil and the labor of the colonists. The prosperity of the English sugar colonies was largely due to England’s great wealth, some of which overflowed, one might say, into those colonies. But the prosperity of France’s sugar colonies was entirely due to the good conduct of the colonists. Their conduct must therefore have been in some respects superior to that of the English colonists. This superiority was most noticeable in their good management of their slaves.

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

These have been the general outlines of the different European nations' policies toward 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.

European policy, therefore, has little to boast about in the founding of the American colonies. Nor can it claim much credit for their later prosperity, as far as their internal government is concerned.

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.

Folly and injustice seem to have guided the original plan to establish those colonies. The folly was the search for gold and silver mines. The injustice was the desire to possess a country whose harmless natives had never harmed the people of Europe. On the contrary, the natives had welcomed the first adventurers with every sign 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 adventurers who founded some of the later settlements did have other motives besides the fanciful hope of finding gold and silver mines. These motives were more reasonable and more admirable. But even they reflect little credit on European policy.

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.

The English puritans faced restrictions at home, so they fled to America in search of freedom. There they established the four governments of New England. The English catholics, who were treated far more unjustly, established the government of Maryland. The quakers established the government of Pennsylvania. The Portuguese Jews were persecuted by the inquisition, stripped of their fortunes, and banished to Brazil. By their example, they brought some order and industry to the transported criminals and prostitutes who originally populated the colony. They also taught them how to grow sugar cane. In all these cases, it was not the wisdom and policies of European governments that populated and cultivated America. It was their disorder and injustice.

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.

In carrying out some of the most important of these establishments, Europe’s governments deserved as little credit as they did for planning them. The conquest of Mexico was planned not by the council of Spain, but by a governor of Cuba. It was carried out through the courage of the bold adventurer entrusted with it. The governor soon regretted having trusted such a person and did everything he could to thwart the conquest. The conquerors of Chili, Peru, and almost all the other Spanish settlements on the American continent received no other public encouragement than general permission to make settlements and conquests in the name of the king of Spain. The adventurers undertook all these ventures at their own risk and expense. The Spanish government contributed hardly anything to any of them. The English government contributed as little to establishing 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.

Once these colonies were established and had grown large enough to attract the mother country's attention, it began to regulate them. Its first regulations always aimed to secure a monopoly over their trade. They restricted the colonies' market and expanded the mother country's market at their expense. As a result, these regulations tended to slow and discourage the colonies' prosperity rather than promote it. The different ways European nations exercised this monopoly are among the most important differences in their colonial policies. England's policy, the best of them all, is only somewhat less restrictive and oppressive than any of the others.

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.

How, then, has Europe’s policy helped to establish the colonies of America or contributed to their present grandeur? It has helped a great deal in one way, and in one way only. Mother of great men! Europe raised and shaped the men capable of such great deeds and of laying the foundation of so great an empire. No other part of the world has policies capable of shaping such men, or has ever actually shaped them. The colonies owe to Europe’s policy the education and grand vision of their active and enterprising founders. As for their internal government, some of the largest and most important colonies owe it almost nothing else.

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

These are the advantages the American colonies have gained from Europe's policies.

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

What did Europe gain 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.

Those advantages may be divided into two kinds. First, there are the general advantages Europe as a whole has gained from those great events. Second, there are the particular advantages each colonizing country has gained from its own colonies because of its authority 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.

Europe, viewed as one great country, has gained two general benefits from the discovery and colonization of America. First, it has more things to enjoy. Second, its industry has grown.

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.

Surplus produce imported from America gives the people of Europe a variety of goods they could not otherwise have. Some are convenient or useful, some give pleasure, and some serve as ornaments. These goods add to their enjoyment.

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.

The discovery and colonization of America have, as everyone will readily agree, increased industry in two groups of countries. First, they have increased industry in all countries that trade directly with America, such as Spain, Portugal, France, and England. Second, they have increased industry in all countries that send their own goods to America through other countries, without trading directly with it. These include Austrian Flanders and some provinces of Germany. Through the countries mentioned above, Austrian Flanders and these German provinces send considerable quantities of linen and other goods to America. All these countries have clearly gained a larger market for their surplus goods. They must therefore have been encouraged to produce more of them.

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.

But it may not be so obvious that those great events also encouraged industry in countries such as Hungary and Poland. Perhaps neither country ever sent a single product of its own to America. Yet there can be no doubt that those events encouraged their industry. Hungary and Poland consume some American products, and there is some demand there for sugar, chocolate, and tobacco from that new part of the world. But those goods must be bought with products of Hungarian and Polish industry. Or they must be bought with something purchased with some of those products. The American goods are new items of value, brought into Hungary and Poland to be exchanged for the countries' surplus products. By bringing those goods there, traders create a new and larger market for the surplus. This raises its value and so encourages increased production. Though none of that surplus may ever reach America, it may be sent to other countries. Those countries buy it with part of their share of America's surplus products. In this way, the surplus may find a market through the flow of trade originally set in motion by America's surplus products.

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.

Those great events may even have increased the enjoyment and industry of countries that never traded goods with America. Such countries may have received more goods from countries whose surplus production had grown through American trade. This greater abundance must have increased their enjoyment and encouraged their industry. They must have had more goods of various kinds to exchange for the surplus products of their own industry. A larger market must have opened up for those surplus products, raising their value and encouraging greater production. Each year, goods entered the great circle of European commerce and passed through various channels to all the nations within it. The total amount of these goods must have increased by the whole surplus production of America. Each of those nations was therefore likely to have received a larger share of this greater supply, increasing its enjoyment and encouraging its 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 mother countries' exclusive control of trade tends to reduce both enjoyment and industry throughout all these nations, especially the American colonies. At the very least, it keeps them below the levels they would otherwise reach. It is a dead weight on one of the great forces that drive much of human business. By making colonial goods more expensive in all other countries, exclusive trade reduces their consumption. This restricts industry in the colonies and reduces both enjoyment and industry in all other countries. Those countries enjoy less when they pay more for what they enjoy. They also produce less when they receive less for what they produce. By making goods from all other countries more expensive in the colonies, exclusive trade likewise restricts industry in all other countries. It also reduces both enjoyment and industry in the colonies. For the supposed benefit of a few particular countries, this restriction hinders the pleasures and industry of all other countries. It burdens the colonies more than any others. It not only keeps all other countries out of one particular market as much as possible. It also confines the colonies to one particular market as much as possible. There is a great difference between being excluded from one market while all others are open, and being confined to one market while all others are closed. Yet the colonies' surplus goods are the original source of all the increased enjoyment and industry Europe gains from America's discovery and colonization. The mother countries' exclusive trade tends to make 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.

Each colonizing country gains two kinds of advantages from its own colonies. First, it gains the common advantages every empire receives from the provinces under its rule. Second, it gains the special advantages supposed to come from provinces as unusual 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.

Every empire usually gains two advantages from the provinces under its rule. First, the provinces provide military forces for its defense. Second, they provide revenue to support its civil government. The Roman colonies occasionally provided both. The Greek colonies sometimes provided military forces, but rarely any revenue. They rarely acknowledged that they were under the rule of their mother city. They were generally its allies in war, but very rarely its 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 European colonies in America have never provided military forces to defend their mother countries. Their own forces have never been sufficient to defend themselves. In the various wars fought by the mother countries, defending the colonies has generally drawn away a considerable part of their military forces. In this respect, therefore, all European colonies, without exception, have weakened rather than strengthened 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.

Only the colonies of Spain and Portugal have contributed revenue to defend their home countries or support their civil governments. Taxes collected from the colonies of other European nations, especially England, have rarely covered their expenses in peacetime. They have never been enough to cover the expenses those colonies caused in wartime. These colonies have therefore been a source of expense, not revenue, for their respective home 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.

The benefits of such colonies to their respective mother countries consist entirely of the special advantages supposedly provided by provinces as unusual as the European colonies of America. And it is acknowledged that exclusive trade is the sole source of all those special 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.

Because of this exclusive trade, certain goods from the English colonies can be sent only to England. These goods are the part of the colonies' surplus produce known as enumerated commodities. Other countries must then buy them from England. They must therefore be cheaper in England than anywhere else. As a result, they must add more to England's enjoyments than to those of any other country. They must also do more to encourage English industry. England exchanges some of its own surplus produce for these enumerated commodities. For that produce, it must get a better price than other countries get for similar goods exchanged for the same commodities. For example, English manufactured goods will buy more sugar and tobacco from English colonies than similar goods from other countries. When both are exchanged for colonial sugar and tobacco, this better price gives English manufacturers an advantage. Manufacturers in other countries cannot enjoy that advantage under these circumstances. Exclusive trade with colonies therefore reduces, or at least holds back, both the enjoyments and the industry of other countries. In this way, it gives countries with exclusive colonial trade a clear advantage over those without it.

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.

However, this advantage may be relative rather than absolute. It may give the country that enjoys it an edge mainly by reducing industry and production in other countries. It may do so rather than raising that country’s own industry and production above the levels they would naturally reach under 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.

England has a monopoly on tobacco from Maryland and Virginia. As a result, it certainly gets that tobacco more cheaply than France does. England commonly sells a considerable part of it to France. But suppose France and all other European countries had always been allowed to trade freely with Maryland and Virginia. By now, tobacco from those colonies might have become cheaper for all those countries and for England too. A much larger market than any the colonies have had so far might have greatly increased tobacco production. It probably would have done so by now. This might have reduced profits from a tobacco plantation to their natural level, equal to those of a corn plantation. Tobacco profits are thought to be still somewhat higher. The price of tobacco might, and probably would, have fallen somewhat below its present level. The same quantity of goods from England or those other countries might have bought more tobacco in Maryland and Virginia than it can now. Those goods would therefore have sold there for a better price. Cheap and abundant tobacco can increase enjoyment or encourage industry in England and other countries. To the extent that it can do so, it would probably have had somewhat greater effects under free trade than it does now. England, of course, would not have had any advantage over other countries in this case. It might have bought its colonies' tobacco somewhat more cheaply and therefore sold some of its own goods at somewhat higher prices. But it could not have bought tobacco more cheaply or sold its goods at higher prices than any other country could. England might perhaps have gained an absolute advantage, but it would certainly have lost a relative one.

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.

To gain this relative advantage in the colonial trade, England pursued a hateful and malicious plan. It sought to exclude other nations from any share in that trade as far as possible. There are strong reasons to believe that England sacrificed some of the absolute advantage it could have gained from the trade, as could every other nation. England also put itself at both an absolute and 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.

When England claimed a monopoly on trade with the colonies through the Navigation Act, foreign capital previously invested in that trade had to be withdrawn. English capital had previously carried on only part of the trade. Now it had to carry on all of it. Previously, English capital had supplied the colonies with only some of the goods they wanted from Europe. Now it was the only capital available to supply all those goods. But English capital could not supply them all. The goods it did supply therefore had to be sold at very high prices. Previously, English capital had bought only part of the colonies’ surplus produce. Now it was the only capital available to buy all of it. But English capital could not buy all the surplus at anything close to the old price. So whatever it did buy, it had to buy very cheaply. In a trade where merchants sold at very high prices and bought very cheaply, profits must have been very great. They must have been much higher than ordinary profits in other branches of trade. These higher profits in the colony trade were bound to draw some capital away from other branches of trade. This shift of capital must have gradually increased competition among investors in the colony trade. At the same time, it must have gradually reduced that competition in all the other branches. As competition gradually lowered profits in the colony trade, it must have gradually raised profits in the others. Eventually, profits in all branches must have reached a new level, different from and somewhat higher than 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.

This monopoly had two effects when it was first established. It drew capital away from all other trades and raised profit rates somewhat higher than they otherwise would have been in all trades. The monopoly has continued to have both effects ever since.

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

First, this monopoly has continually drawn capital away from all other trades and into trade with 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.

Although Great Britain’s wealth has grown greatly since the Navigation Act was established, it has certainly not grown as fast as the wealth of the colonies. But a country’s foreign trade naturally grows in proportion to its wealth. Its surplus produce also grows in proportion to its total produce. Great Britain had taken almost all of what could be called the colonies’ foreign trade for itself. Yet its capital had not grown as fast as that trade. So Britain could not carry on the colonial trade without continually withdrawing some capital from other branches of trade. It also had to withhold much more capital that would otherwise have gone into those branches. Since the Navigation Act was established, colonial trade has therefore continually grown, while many other branches of foreign trade have declined. Trade with other parts of Europe has suffered in particular. Before the act, most of our manufactured goods for foreign sale were suited to the nearby European market. They were also suited to the more distant market of the countries around the Mediterranean Sea. Since the act, most have been adapted to the even more distant colonial market. They have been adapted to the market where Britain has a monopoly, rather than one where it has many competitors. Sir Matthew Decker and other writers have looked for the causes of decline in other branches of foreign trade. They have sought them in excessive and improper taxation, high labor costs, the growth of luxury, and other such factors. All these causes may be found in the excessive growth of colonial trade. Great Britain’s commercial capital is very large, but it is not unlimited. It has grown greatly since the Navigation Act, but not as fast as colonial trade. So Britain could not possibly carry on that trade without withdrawing some capital from other branches. As a result, those other branches had to decline to some extent.

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.

England, it must be noted, was a great trading country with vast commercial capital. That capital was likely to grow larger every day. This was true before the Navigation Act established a monopoly on the corn trade, and even before that trade became very large. During the Dutch war under Cromwell, England’s navy was stronger than Holland’s. In the war that broke out early in Charles II’s reign, England’s navy was at least equal, and perhaps superior, to the combined navies of France and Holland. Its superiority today would perhaps hardly seem greater. That is, at least, if the Dutch navy were as large in proportion to Dutch commerce now as it was then. But the Navigation Act could not have been responsible for England’s great naval power in either war. During the first war, the act had only just been planned. Before the second war broke out, it had been fully enacted. But no part of it could have had time to produce any considerable effect. This was especially true of the part that established exclusive trade with the colonies. Both the colonies and their trade were small then compared with what they are now. Jamaica was an unhealthy wilderness, with few inhabitants and even less land under cultivation. New York and New Jersey belonged to the Dutch, and half of St. Christopher’s belonged to the French. Antigua, the two Carolinas, Pennsylvania, Georgia, and Nova Scotia had not been settled. Virginia, Maryland, and New England had been settled, and they were thriving colonies. Yet perhaps no one in Europe or America then foresaw or even suspected their rapid growth in wealth, population, and development. Barbadoes, in short, was the only important British colony whose condition then resembled its condition today. Even for some time after the Navigation Act, England enjoyed only part of the colonies’ trade. The act was not enforced very strictly until several years after it was passed. At that time, colonial trade could not have caused England’s great trade or the great naval power that trade supported. The trade that supported England’s naval power then was with Europe and the countries around the Mediterranean Sea. But Great Britain’s present share of that trade could not support such a great naval power. If the growing colonial trade had been left open to all nations, Great Britain would probably have gained a very considerable share. Whatever share it gained would have been added to the great trade it already possessed. Because of the monopoly, the growth of colonial trade has not so much added to Great Britain’s previous trade as completely changed 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.

Second, this monopoly has necessarily kept profit rates higher in all branches of British trade. They would naturally have been lower if all nations had been allowed to trade freely with 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.

The monopoly of colonial trade drew more British capital into that trade than would have gone there on its own. But it also excluded all foreign capital. This necessarily reduced the total capital invested in colonial trade below what it would naturally have been under free trade. By reducing competition among investors in colonial trade, the monopoly necessarily raised the rate of profit there. It also reduced competition among British investors in all other branches of trade. This necessarily raised the rate of British profit in all those branches. Since the establishment of the Act of Navigation, British mercantile capital has varied in its condition and size. Whatever its condition or size at any given time, the monopoly of colonial trade must have raised the ordinary rate of British profit above what it otherwise would have been. It did so both in colonial trade and in all other branches of British trade. The ordinary rate of British profit has certainly fallen considerably since the Act of Navigation was established. But it must have fallen still lower if the monopoly established by that act had not helped 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.

But anything that raises a country's usual rate of profit above what it would otherwise be puts that country at a disadvantage. The country necessarily faces both an absolute and a relative disadvantage in every branch of trade it does not monopolize.

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 puts the country at an absolute disadvantage. In those branches of trade, its merchants can earn this greater profit only by charging higher prices. They must charge more for both the foreign goods they import and the domestic goods they export. The country must both buy and sell at higher prices. It must buy less and sell less. It must also enjoy less and produce less than it otherwise would.

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.

It puts her at a relative disadvantage. In those branches of trade, other countries do not face the same absolute disadvantage. As a result, they are either further ahead of her or less far behind her than they otherwise would be. They can enjoy and produce more in proportion to what she enjoys and produces. Their superiority becomes greater, or their inferiority becomes less, than it otherwise would be. It raises the price of her goods above what it otherwise would be. This allows merchants from other countries to sell their goods more cheaply in foreign markets. They can thereby push her out of almost all branches of trade over which she does not have a 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.

Our merchants often blame high British wages when their manufactured goods are sold at lower prices abroad. But they say nothing about the high profits earned on British capital. They complain about other people's excessive gains, but say nothing about their own. Yet high profits on British capital may raise the price of British manufactured goods as much as high wages do. In some cases, they may raise prices even more.

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.

In this way, it is fair to say that Great Britain's capital has partly been drawn and partly driven away from most branches of trade in which it has no monopoly. This is especially true of trade with Europe and the countries around 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 drawn from those branches of trade by the higher profits of colonial trade. Colonial trade kept growing, and the capital used to carry it on one year was never enough for 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.

It has partly been driven out of them because Great Britain's high profit rate gives other countries an advantage. This advantage applies to all branches of trade that Great Britain does not monopolize.

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 monopoly on colonial trade has drawn some British capital away from other branches of trade. Otherwise, that capital would have been invested in them. At the same time, the monopoly has forced much foreign capital into those other branches. It would never have gone there if it had not been excluded from colonial trade. In those other branches, the monopoly has reduced competition among British investors. It has therefore raised British profit rates above what they otherwise would have been. Conversely, it has increased competition among foreign investors. It has therefore lowered foreign profit rates below what they otherwise would have been. In both ways, the monopoly must clearly have placed Great Britain at 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.

It may be argued, however, that trade with the colonies benefits Great Britain more than any other trade. The monopoly has forced more of Great Britain's capital into that trade than would otherwise have gone there. In doing so, it has put that capital to a use more beneficial to the country than any other available use.

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.

The most advantageous use of capital for its home country is the one that supports the most productive labor there. It also increases the country’s annual output from land and labor the most. But capital invested in foreign trade for consumption supports productive labor in exact proportion to how often it returns. This was shown in the second book. For example, suppose £1,000 is invested in foreign trade for consumption and returns regularly once a year. It can keep as much productive labor constantly employed in its home country as £1,000 can support there for a year. If the capital returns twice or three times a year, it can keep more productive labor constantly employed. It can keep as much employed as £2,000 or £3,000 can support there for a year. For this reason, foreign trade for consumption with a neighboring country is generally more advantageous than trade with a distant country. For the same reason, direct foreign trade for consumption is generally more advantageous than trade that takes an indirect route. This, too, was shown in the second book.

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.

But wherever the monopoly of colonial trade has affected the use of Great Britain’s capital, it has diverted some of that capital from foreign trade in goods for consumption with a nearby country to such trade with a more distant country. In many cases, it has also diverted capital from direct foreign trade in goods for consumption to a more indirect trade.

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.

First, the monopoly on colonial trade has always diverted some of Great Britain's capital from trade in consumer goods with a nearby country to trade in consumer goods 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.

In every case, it has diverted some capital away from trade with Europe and countries around the Mediterranean Sea. That capital has gone instead to trade with the more distant regions of America and the West Indies. Returns from that trade are necessarily less frequent. This is due not only to the greater distance, but also to the particular circumstances of those countries. As already noted, new colonies always lack sufficient capital. They always have much less than they could profitably use to improve and cultivate their land. They therefore have a constant demand for more capital than they possess. To make up the shortfall, they try to borrow as much as they can from the mother country. As a result, they are always in debt to it. The colonies sometimes take on this debt by borrowing under bond from wealthy people in the mother country. But more often, they fall behind on payments to their correspondents who supply them with European goods. They fall as far behind as those correspondents will allow. Their annual payments often amount to no more than a third of what they owe, and sometimes even less. As a result, the full amount of capital their correspondents advance is seldom returned to Britain in under three years. Sometimes it takes four or five years. Consider, for example, a British capital of a thousand pounds that returns to Great Britain only once every five years. It can keep only one fifth as much British industry constantly employed as it could if it returned every year. Instead of keeping as much industry employed as a thousand pounds could maintain for a year, it can constantly employ only as much as two hundred pounds could maintain for a year. The planter no doubt makes up for all the loss his correspondent suffers from this delay. He probably more than makes up for it. He does this through the high prices he pays for European goods and the interest on bills payable at distant dates. He also pays a commission to renew bills payable at earlier dates. But although he makes up for his correspondent's loss, he cannot make up for Great Britain's loss. A merchant may make as much or more profit in a trade with very delayed returns as in one with frequent and prompt returns. But the benefit to his country must always be much less. Less productive labour will be constantly maintained there, and the annual produce of its land and labour will be smaller. Returns from trade with America, and still more from trade with the West Indies, generally take longer to come back. They are also more irregular and uncertain than returns from trade with any part of Europe or even countries around the Mediterranean Sea. I imagine everyone with experience of these different branches of trade will readily agree.

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.

Secondly, the monopoly on colonial trade has often forced some British capital away from direct foreign trade for consumption. Instead, it has forced that capital into less direct foreign trade for consumption.

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.

Some of the listed goods that can be sent only to Great Britain arrive in quantities far greater than Britain consumes. Therefore, some must be exported to other countries. But this cannot be done without forcing some British capital into an indirect foreign trade for consumption. Maryland and Virginia, for example, send more than ninety-six thousand hogsheads of tobacco to Great Britain each year. British consumption is said to be no more than fourteen thousand hogsheads. More than eighty-two thousand hogsheads must therefore be exported to other countries. These include France, Holland, and the countries around the Baltic and Mediterranean seas. Some British capital brings those eighty-two thousand hogsheads to Great Britain and re-exports them to those countries. It then brings goods or money back to Great Britain in return. This capital is engaged in an indirect foreign trade for consumption. It is necessarily forced into this trade to dispose of the great surplus. To calculate how many years it will take for all this capital to return to Great Britain, we must add two periods. We must add the time taken for returns from America to the time taken for returns from the other countries. In our direct foreign trade for consumption with America, all the capital employed often takes at least three or four years to return. In the indirect trade, all the capital employed is unlikely to return in less than four or five years. Suppose the direct trade can keep only a third or a fourth as much domestic industry constantly employed as capital returned once a year could maintain. Then the indirect trade can keep only a fourth or a fifth as much constantly employed. At some outports, credit is commonly given to the foreign correspondents who receive the tobacco exports. At the port of London, however, tobacco is commonly sold for cash. The rule is Weigh and pay. At London, therefore, the final returns from the whole indirect trade take longer than the returns from America only by the time the goods remain unsold in the warehouse. Sometimes, however, they may remain there long enough. But if the colonies had not been restricted to the British market for their tobacco, very little more would probably have come to Britain than was needed for consumption at home. Great Britain now uses the great surplus of tobacco it exports to other countries to buy goods for its own consumption. Instead, it would probably have bought those goods with the direct produce of its own industry or with some of its own manufactured goods. These products and manufactures would probably have been suited to many smaller markets, rather than almost entirely to one large market, as they are now. Instead of one large indirect foreign trade for consumption, Great Britain would probably have carried on many small direct trades of the same kind. Because the returns would have been more frequent, part of the capital now used in the large indirect trade might have been enough to carry on all the small direct trades. That part would probably have been small, perhaps no more than a third or a fourth of the capital now used. It might have kept an equal amount of British industry constantly employed. It might also have supported the annual produce of Great Britain's land and labour equally well. All the purposes of this trade would thus have been served by much less capital. A large amount of capital would have been left for other purposes. It could have improved the land, increased manufacturing, and extended Great Britain's commerce. At least, it could have competed with other British capital used in all these different ways. This would have reduced the rate of profit in all of them. It would thereby have given Great Britain an even greater advantage over other countries in all of them than it now 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 monopoly on colonial trade has also forced some of Great Britain’s capital out of foreign trade in goods for consumption and into the carrying trade. As a result, this capital no longer supports British industry to any degree. Instead, it is used entirely to support the industries of the colonies and 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.

For example, Great Britain re-exports a large surplus of eighty-two thousand hogsheads of tobacco each year. Not all the goods bought with this tobacco each year are consumed in Great Britain. Some, such as linen from Germany and Holland, are sent back to the colonies for their own consumption. But some of Great Britain's capital is used to buy the tobacco that is later exchanged for this linen. That capital is necessarily withdrawn from supporting British industry. Instead, it is used entirely to support the industry of the colonies and of the countries that pay for the tobacco with their own industrial products.

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?

The monopoly over colonial trade forced much more of Great Britain's capital into that trade than would naturally have gone there. In doing so, it seems to have completely upset the natural balance that would otherwise have existed among British industries. Instead of serving many small markets, British industry has been shaped mainly to serve one large market. Instead of flowing through many small channels, British commerce has been directed mainly through one great channel. But this has made the whole system of industry and commerce less secure. It has also made the whole body politic less healthy than it would otherwise have been. Great Britain now resembles an unhealthy body in which some vital organs have grown too large. Such a body is prone to many dangerous disorders that rarely affect bodies whose parts are better proportioned. The great blood vessel has been artificially swollen beyond its natural size. An unnaturally large share of the country's industry and commerce has been forced to flow through it. Even a small blockage in this vessel is very likely to cause the most dangerous disorders throughout the body politic. The prospect of a rupture with the colonies has therefore frightened the people of Great Britain more than a Spanish armada or a French invasion ever did. This fear, whether justified or not, made the repeal of the stamp act popular, at least among merchants. Most merchants imagined that complete exclusion from the colonial market would bring their trade to a total stop, even if it lasted only a few years. Most master manufacturers imagined it would entirely ruin their businesses, and most workers imagined it would end their employment. A rupture with any of our neighbors on the continent would also likely stop or interrupt the work of some people in each of these groups. Yet the prospect of such a rupture causes no comparable general alarm. When blood stops flowing through some of the smaller vessels, it easily drains into the larger ones without causing any dangerous disorder. But when blood stops flowing through any of the larger vessels, convulsions, apoplexy, or death are the immediate and unavoidable consequences. Some industries have been artificially raised to an unnatural size, either through bounties or through monopoly control of the home and colonial markets. If even one of these overgrown industries suffers a small stoppage or interruption in its work, it often causes mutiny and disorder. This alarms the government and even hinders the deliberations of the legislature. How great, then, people thought, would be the disorder and confusion necessarily caused by a sudden and complete stoppage of work among 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.

The laws give Great Britain exclusive rights to trade with the colonies. A moderate, gradual easing of these laws could make that trade largely free. This seems to be the only way to protect Great Britain from this danger in the future. It could enable or even force Great Britain to withdraw some capital from this overgrown trade. That capital could then be put to other uses, though with less profit. The colonial trade would gradually shrink, while all other branches of industry would gradually grow. In time, this could restore every branch of industry to its natural, healthy, and proper proportion. Perfect freedom necessarily establishes this balance, and only perfect freedom can preserve it. Opening colonial trade to all nations at once might cause more than temporary inconvenience. It might also cause a great permanent loss to most people whose labor or capital is now engaged in it. Great Britain imports 82,000 hogsheads of tobacco beyond what it consumes. Even the sudden loss of work for the ships that import this surplus could be felt very severely. These are the unfortunate effects of all the regulations of the mercantile system. They not only introduce very dangerous disorders into the body politic. They also introduce disorders that are often difficult to remedy without causing still greater disorders, at least for a time. How, then, should colonial trade be gradually opened? Which restrictions should be removed first, and which last? How should the natural system of perfect freedom and justice gradually be restored? We must leave these questions to the wisdom of future statesmen and legislators.

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.

Five unforeseen and unexpected events have fortunately occurred together. They have kept Great Britain from feeling the loss of an important branch of the colony trade as keenly as expected. That branch was its trade with the twelve associated provinces of North America. Great Britain has now been completely excluded from this trade for more than a year, since December 1, 1774. First, the colonies prepared for their non-importation agreement by buying up all British goods suited to their markets. Second, the Spanish flota's extraordinary demand this year has drained Germany and northern Europe of many goods, especially linen. These goods had competed with British manufactures, even in the British market. Third, peace between Russia and Turkey has created extraordinary demand in the Turkish market. That market had been poorly supplied during the country's distress and while a Russian fleet cruised in the Archipelago. Fourth, northern Europe's demand for British manufactures has been increasing from year to year for some time. Fifth, the recent partition of Poland and the resulting peace have opened the market of that great country. This year, Poland's extraordinary demand has added to the growing demand from northern Europe. All these events, except the fourth, are temporary and accidental. If exclusion from such an important branch of the colony trade should unfortunately continue much longer, it may still cause some distress. But because this distress will come gradually, it will be felt much less severely than if it had come all at once. Meanwhile, the country's industry and capital may find new work and new directions. This may prevent the distress from ever becoming considerable.

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.

The monopoly on colonial trade has drawn a greater share of Great Britain’s capital into that trade than would otherwise have gone there. In every case, it has redirected that capital from foreign trade for consumption with a nearby country to such trade with a more distant country. In many cases, it has redirected capital from direct foreign trade for consumption to trade by a more roundabout route. In some cases, it has redirected capital away from foreign trade for consumption altogether and into the carrying trade. In every case, therefore, the monopoly has redirected capital from a use that would have supported more productive labor to one that can support much less. The monopoly has also geared so much of Great Britain’s industry and commerce to a single market. As a result, industry and commerce as a whole are more precarious and less secure than if their products had been suited 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.

We must carefully distinguish between the effects of trade with the colonies and the effects of a monopoly on that trade. Trade with the colonies is always and necessarily beneficial. The monopoly is always and necessarily harmful. But trade with the colonies is so beneficial that, even under a harmful monopoly, it is still greatly beneficial overall. It is, however, much less beneficial than it would otherwise 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.

In its natural, free state, the colony trade opens a large but distant market for the products of British industry. This market takes whatever exceeds demand in the markets closer to home, in Europe and the countries around the Mediterranean sea. The free colony trade takes none of the products previously sent to those markets. Instead, it encourages Great Britain to keep increasing its surplus by continually offering new goods to exchange for it. The free colony trade tends to increase the amount of productive labour in Great Britain. But it does not change how any of the labour previously employed there is directed. In a free colony trade, competition from all other nations would keep profits from rising above the usual rate. This would be true both in the new market and in the new line of business. Without taking anything from the old market, the new market would, one might say, create new products to supply itself. Those new products would form new capital for the new line of business. In the same way, this capital would draw nothing from the old line of business.

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.

By contrast, the monopoly on colonial trade excludes competition from other nations. It thereby raises the profit rate in both the new market and the new line of business. This draws goods away from the old market and capital away from its former use. The stated purpose of the monopoly is to increase our share of colonial trade beyond what it would otherwise be. If our share were no greater with the monopoly than without it, there would have been no reason to establish it. But colonial trade brings slower and more distant returns than most other trades. The monopoly forces more of a country’s capital into this trade than would go there of its own accord. This necessarily reduces the total productive labor supported each year and the country’s total annual output from land and labor. It keeps the inhabitants’ income below the level it would naturally reach, and so reduces their ability to accumulate wealth. The monopoly not only always prevents their capital from supporting as much productive labor as it otherwise would. It also prevents their capital from growing as fast as it otherwise would, and consequently from supporting still more productive labor.

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.

The natural benefits of the colony trade, however, more than outweigh the harm the monopoly causes Great Britain. Even with the monopoly, the trade as it is now conducted is not merely advantageous, but greatly advantageous. The new market and employment opened by the colony trade are much greater than the old market and employment lost because of the monopoly. The colony trade has, if one may say so, created new produce and capital. These support more productive labor in Great Britain than can have been put out of work by shifting capital away from trades with more frequent returns. The colony trade, even as it is now conducted, is advantageous to Great Britain. But it is advantageous in spite of the monopoly, not because of it.

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.

The colonial trade opens a new market mainly for Europe’s manufactured goods, rather than its raw produce. Agriculture is the natural occupation of all new colonies. Cheap land makes farming more profitable there than any other occupation. The colonies therefore have plenty of raw produce from the land. Instead of importing it from other countries, they generally have a large surplus to export. In new colonies, agriculture either draws workers away from all other occupations or keeps them from taking up other work. Few workers are left to make necessary goods, and none to make luxury goods. The colonies find it cheaper to buy most goods of both kinds from other countries than to make them themselves. The colonial trade indirectly encourages European agriculture chiefly by encouraging European manufacturing. The European manufacturers employed because of that trade create a new market for the produce of the land. This is the most advantageous market of all. Trade with America thus greatly expands the home market for Europe’s grain and cattle, bread and meat.

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.

But Spain and Portugal clearly show that a monopoly on trade with populous and prosperous colonies is not enough. It cannot by itself establish or even maintain manufacturing in a country. Spain and Portugal were manufacturing countries before they had any substantial colonies. Since acquiring the richest and most fertile colonies in the world, both have ceased to be manufacturing countries.

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 Spain and Portugal, the harmful effects of the monopoly have been made worse by other causes. Together, they have perhaps nearly outweighed the natural benefits of trade with the colonies. These other causes seem to include monopolies of various kinds and the lower value of gold and silver than in most other countries. Inappropriate export taxes also shut these countries out of foreign markets. Even more inappropriate taxes on transporting goods within each country narrow the home market. Above all, justice is administered inconsistently and unfairly. This often protects rich and powerful debtors from creditors they have wronged. It also makes the industrious part of the nation afraid to prepare goods for these proud and powerful men. They dare not refuse to sell to them on credit, yet they have no certainty of being repaid.

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.

In England, by contrast, the natural benefits of colonial trade, helped by other factors, have largely overcome the harmful effects of the monopoly. One factor is the general freedom of trade. Despite some restrictions, this freedom is at least equal to, and perhaps greater than, that in any other country. Another is the freedom to export almost all goods produced by domestic industry duty free to almost any foreign country. Perhaps more important still is the unlimited freedom to transport these goods anywhere within our own country. No one must report such shipments to a public office or face questions or inspections of any kind. Above all, there is the equal and impartial administration of justice. This makes the rights of even the humblest British subject worthy of respect from the greatest. By securing every man the fruits of his own labor, it gives the strongest and most effective encouragement to every kind 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 colonial trade has certainly advanced manufacturing in Great Britain. But it has done so despite the monopoly on that trade, not because of it. The monopoly has not increased the quantity of goods manufactured in Great Britain. Instead, it has changed the nature and form of some of those goods. It has adapted them to a market where returns are slow and distant. Otherwise, they would have been adapted to a market where returns are frequent and close at hand. As a result, the monopoly has diverted some of Great Britain's capital from a use that would have supported more manufacturing industry. It has diverted that capital to a use that supports much less. The monopoly has therefore reduced, rather than increased, the total amount of manufacturing industry supported 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 on colonial trade is like all the other petty and harmful schemes of the mercantile system. It therefore weakens industry in all other countries, especially in the colonies. But it does not increase industry at all in the country it is meant to favor. On the contrary, it weakens industry there too.

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.

The monopoly prevents the country’s capital from supporting as much productive labor as it otherwise would, whatever its size at any given time. It also prevents that capital from providing as much income to the country’s industrious inhabitants. But capital can grow only through savings from income. By reducing that income, the monopoly necessarily slows the growth of capital. As a result, it also prevents capital from supporting even more productive labor and providing even more income to the country’s industrious inhabitants. The monopoly must therefore always have reduced one major original source of income, the wages of labor.

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.

By raising commercial profits, monopoly discourages land improvement. The profit from improvement depends on the difference between what land produces now and what it could produce with a certain investment. If that difference yields more profit than an equal investment in any commercial activity, land improvement will draw capital from all commercial activities. If it yields less profit, commercial activities will draw capital away from land improvement. Anything that raises commercial profits therefore either reduces the advantage of investment in land improvement or increases its disadvantage. In the first case, it prevents capital from going into land improvement. In the second, it draws capital away from it. By discouraging land improvement, monopoly necessarily slows the natural growth of another great original source of income, land rent. By raising the rate of profit, monopoly also necessarily keeps the market interest rate higher than it would otherwise be. The price of land relative to its rent is commonly expressed as the number of years of rent paid for it. This price necessarily falls as the interest rate rises and rises as the interest rate falls. Monopoly therefore harms landlords in two ways. It slows the natural growth of their rent and of the price they could get for their land relative to that rent.

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.

The monopoly does raise the rate of commercial profit, increasing our merchants’ gains somewhat. But it also obstructs the natural growth of capital. So it tends to reduce rather than increase the country’s total income from profits on capital. A small profit on a large amount of capital generally brings more income than a large profit on a small amount. The monopoly raises the rate of profit, but it keeps total profits from rising as high as they otherwise would.

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.

The monopoly reduces all the original sources of income: wages, land rent, and profits from invested capital. To advance the petty interest of one small group in one country, it harms everyone else in that country. It also harms everyone 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.

Monopoly has benefited, or could benefit, any particular group of people only by raising the usual rate of profit. But a higher rate of profit necessarily has all the harmful effects on the country already mentioned. It has one more effect, perhaps more fatal than all the others combined. If experience is any guide, this effect is inseparable from high profits. High profits seem everywhere to destroy the thrift that is otherwise natural to merchants. When profits are high, that sober virtue seems unnecessary. Costly luxury seems more suited to the merchant’s wealth. But the owners of great merchant fortunes necessarily lead and direct all the industry of every nation. Their example influences the habits of all working people much more than that of any other group. If an employer is careful and thrifty, the worker is very likely to be so too. But if the master is extravagant and undisciplined, the servant will follow his example in life, just as he follows his master’s instructions at work. In this way, those naturally most inclined to accumulate wealth are prevented from doing so. The funds set aside to support productive labor receive no increase from the income of those who naturally ought to increase them most. Instead of growing, the country’s capital gradually dwindles away. The amount of productive labor it supports grows less and less every day. Have the excessive profits of the merchants of Cadiz and Lisbon increased the capital of Spain and Portugal? Have they relieved the poverty or promoted the industry of those two poor countries? Merchants in those two trading cities have spent so lavishly that their excessive profits seem hardly enough to maintain the capital that produced them, let alone increase the country’s capital as a whole. Foreign capital is intruding, if I may say so, more and more into the trade of Cadiz and Lisbon every day. Spanish and Portuguese capital grows less and less sufficient to carry on that trade. Yet the Spaniards and Portuguese try every day to tighten the galling restraints of their absurd monopoly, in order to drive out foreign capital. Compare the habits of merchants in Cadiz and Lisbon with those in Amsterdam. You will see how differently high and low rates of profit affect merchants’ conduct and character. The merchants of London have not yet generally become as grand as the lords of Cadiz and Lisbon. But neither are they generally as careful and thrifty as the citizens of Amsterdam. Many London merchants are believed to be much richer than most merchants of Cadiz and Lisbon, though not quite so rich as many merchants of Amsterdam. Yet their rate of profit is usually much lower than that of the former and considerably higher than that of the latter. Easy come, easy go, says the proverb. Everywhere, ordinary spending seems to be governed less by people’s actual ability to spend than by how easily they think they can get 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.

Thus, the benefit a monopoly gives to one group of people harms the general interest of the country in many ways.

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.

To build a great empire solely to create a population of customers may seem, at first, a project fit only for a nation of shopkeepers. In fact, it is entirely unfit for a nation of shopkeepers, but extremely fit for a nation whose government is influenced by them. Only such statesmen could imagine gaining an advantage by spending their fellow citizens’ blood and treasure to build and maintain such an empire. Suppose you say to a shopkeeper: Buy me a good estate, and I will always buy my clothes at your shop, even if I pay somewhat more than I would elsewhere. You will not find him eager to accept your proposal. But suppose someone else buys you such an estate. The shopkeeper will be very grateful to your benefactor if he requires you to buy all your clothes at his shop. England bought a great estate in a distant country for some of her subjects who were unhappy at home. The price was very small. Land at that time normally cost thirty years’ income from it. But England paid little more than the cost of the expeditions that first discovered the country, explored its coast, and took fictitious possession of it. The land was good and extensive, and its cultivators had plenty of good ground to work. For a time, they were free to sell their produce wherever they pleased. As a result, in little more than thirty or forty years, between 1620 and 1660, they became so numerous and prosperous that England’s shopkeepers and other traders wanted a monopoly over their trade. The traders did not claim to have paid any part of the original purchase price or the later cost of improving the land. Nevertheless, they petitioned Parliament to require America’s cultivators to deal only with them in future. First, the cultivators would have to buy from them all the goods they wanted from Europe. Second, they would have to sell them any of their own produce that the traders found it convenient to buy. The traders did not find it convenient to buy every kind of produce. Some goods imported into England might have competed with trades they themselves carried on at home. They were therefore willing to let the colonists sell those goods wherever they could, the farther away the better. For that reason, they proposed limiting their market to countries south of Cape Finisterre. A clause in the famous Navigation Act made this truly shopkeeper proposal 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.

Maintaining this monopoly has so far been the main purpose of Great Britain's rule over its colonies. Perhaps, more accurately, it has been the only purpose. Exclusive trade is supposed to be the great advantage of these provinces. They have never yet provided revenue or military force to support the civil government or defend the mother country. The monopoly is the chief mark of their dependence. It is also the only benefit that has so far been gained from it. Whatever Great Britain has spent maintaining this dependence has really been spent supporting the monopoly. Before the present disturbances began, the colonies' ordinary peacetime establishment included the pay of twenty infantry regiments. It also included the cost of artillery, stores, and extraordinary provisions needed to supply them. In addition, a very large naval force was constantly maintained. It guarded the vast coast of North America and our West Indian islands against smugglers from other nations. The whole cost of this peacetime establishment was charged to Great Britain's revenue. Yet it was the smallest part of what ruling the colonies has cost the mother country. To find the total, we must add the interest on other sums to the annual cost of this peacetime establishment. These are the sums Great Britain has spent on the colonies' defence on various occasions. It spent them because it regarded the colonies as provinces under its rule. In particular, we must add the whole cost of the recent war and much of the cost of the preceding war. The recent war was entirely a colonial dispute. Its whole cost should fairly be charged to the colonies, wherever the money was spent, whether in Germany or the East Indies. It amounted to more than ninety million pounds sterling. That included not only the new debt incurred, but also the additional land tax of two shillings per pound. It also included the sums borrowed each year from the sinking fund. The war with Spain that began in 1739 was chiefly a colonial dispute. Its main aim was to prevent the search of colonial ships trading in contraband with the Spanish Main. All this expense is really a subsidy given to support a monopoly. Its supposed purpose was to encourage British manufacturing and increase British trade. But its real effect has been to raise merchants' profit rates. It has also enabled our merchants to invest more of their capital than they otherwise would have in a particular branch of trade. That trade brings returns more slowly and from farther away than most other trades. If a subsidy could have prevented these two effects, it might perhaps have been well worth giving.

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

Under the current system of management, therefore, Great Britain gains nothing but losses from its control over its 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.

To propose that Great Britain voluntarily give up all authority over her colonies would be to propose an unprecedented measure. No nation in the world has ever adopted such a measure, and none ever will. Under it, the colonies would be free to elect their own officials, make their own laws, and decide on peace and war as they saw fit. No nation has ever voluntarily given up control of a province, however troublesome it was to govern. This holds true even when the revenue it provided was very small compared with the expense it caused. Such sacrifices might often serve a nation’s interests, but they always wound its pride. And, perhaps more importantly, they always go against the private interests of those who govern it. Giving up a province would deprive rulers of the power to grant many positions of trust and profit. It would also deprive them of many opportunities to gain wealth and distinction. Even the most turbulent province, and the least profitable to the great body of the people, seldom fails to offer such rewards. Even the most visionary enthusiasts would hardly propose this measure with any serious hope that it would ever be adopted. If Great Britain did adopt it, however, she would immediately be freed from the entire annual cost of maintaining the colonies in peacetime. She could also make a trade agreement with them that would effectively secure free trade for her. Free trade would benefit the great body of the people more than her present monopoly does, though it would benefit merchants less. If they parted as friends in this way, the colonies’ natural affection for the mother country would quickly return. Perhaps our recent disputes have almost extinguished that affection. Once revived, it might lead the colonies to respect their trade agreement with us for centuries. It might also lead them to favor us in war as well as in trade. Instead of being turbulent and divided subjects, they might become our most faithful, affectionate, and generous allies. The parental affection and filial respect that once existed between the colonies of ancient Greece and their mother cities might also return between Great Britain and her colonies.

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.

For any province to benefit the empire it belongs to, it must provide sufficient public revenue in peacetime. This revenue should cover the entire cost of its own peacetime administration. It should also contribute the province's share of the cost of the empire's general government. Every province necessarily increases that cost to some degree. If a province does not pay its share, some other part of the empire must bear an unequal burden. The same reasoning applies to the additional public revenue each province provides in wartime. A province's share of the empire's additional wartime revenue should match its share of ordinary peacetime revenue. It will readily be acknowledged that the revenue Great Britain receives from her colonies meets neither standard. Some have supposed that the monopoly makes up for the colonies' lack of public revenue. According to this view, it raises the private incomes of the people of Great Britain, enabling them to pay more taxes. But I have tried to show that the monopoly places a very heavy tax on the colonies. It may increase the incomes of one particular class of people in Great Britain. But it reduces, rather than increases, the incomes of the great majority. Consequently, it reduces, rather than increases, their ability to pay taxes. Moreover, the people whose incomes the monopoly increases form a particular class. It is absolutely impossible to tax this class at a higher rate than other classes. It would also be extremely unwise even to try, as I shall try to show in the following book. No special source of revenue can therefore be drawn from this class.

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

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.

It seems unlikely that the colonial assemblies could never be managed well enough to raise sufficient public revenue from their constituents. They would need to raise enough not only to maintain their own civil and military establishments at all times, but also to pay their proper share of the expense of governing the British empire as a whole. Even the parliament of England was directly under the sovereign’s eye. Yet it took a long time to bring parliament under such a system of management. It also took a long time to make parliament sufficiently generous in funding even its own country’s civil and military establishments. Such a system could be established only by giving individual members of parliament a large share of the offices in those establishments, or the power to appoint people to them. But the colonial assemblies were far from the sovereign’s eye. They were numerous and scattered, and they had different constitutions. These factors would make them very difficult to manage in the same way, even if the sovereign had the same means of doing so. And those means were lacking. It would be absolutely impossible to give all the leading members of all the colonial assemblies a sufficient share of the offices arising from the general government of the British empire, or the power to appoint people to them. Such rewards would have to persuade the members to sacrifice their popularity at home and tax their constituents to support that government. Almost all the benefits of that government, however, would be divided among people who were strangers to them. Besides, the government would inevitably be ignorant of the relative importance of the different members of those different assemblies. In trying to manage them this way, the government would frequently give offense and constantly make blunders. These difficulties seem to make such a system of management altogether impracticable for the colonial assemblies.

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.

Moreover, colonial assemblies cannot be expected to judge what is necessary to defend and support the whole empire. They are not responsible for its defense and support. It is not their business, and they have no regular way of getting information about it. A provincial assembly, like a parish vestry, may be well qualified to judge its own district’s affairs. But it has no proper way to judge the affairs of the whole empire. It cannot even judge its own province’s share of the empire. Nor can it properly judge the province’s wealth and importance compared with other provinces. That is because those other provinces are not under its oversight. Only the assembly that oversees the affairs of the whole empire can judge what is necessary for its defense and support. Only that assembly can judge what share each part should contribute.

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.

It has therefore been proposed that the colonies be taxed by requisition. The parliament of Great Britain would determine how much each colony should pay. Each provincial assembly would then assess and collect the tax in the way best suited to its province. Matters concerning the whole empire would thus be decided by the assembly that oversees its affairs. Each colony’s own assembly could still regulate its provincial affairs. Under this arrangement, the colonies would have no representatives in the British parliament. Yet, judging by experience, there is no reason to think Parliament’s requisitions would be unreasonable. The parliament of England has never shown the slightest inclination to overtax those parts of the empire without parliamentary representation. The islands of Guernsey and Jersey have no way to resist Parliament’s authority. Yet they are taxed more lightly than any part of Great Britain. Parliament has tried to exercise its supposed right to tax the colonies, whether that right is well founded or not. So far, it has never demanded anything close to a fair share of what their fellow subjects at home paid. Moreover, the colonies’ contribution could rise or fall in proportion to the land tax. In that case, Parliament could not tax the colonies without also taxing its own constituents. The colonies might then be considered 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.

There are many examples of empires where, if I may put it this way, the provinces are not taxed as a single whole. Instead, the sovereign determines how much each province must pay. In some provinces, the sovereign assesses and collects that sum as he sees fit. In others, he leaves it to each province’s own states to decide how to assess and collect it. In some provinces of France, the king not only imposes the taxes he wants, but also assesses and collects them as he sees fit. From other provinces, he demands a certain sum. But he leaves it to each province’s states to assess and collect that sum as they see fit. Under the scheme of taxation by requisition, the parliament of Great Britain would have much the same relationship with the colonial assemblies. It would be like the relationship between the king of France and the states of those provinces that still have states of their own. These French provinces are thought 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.

Under this plan, the colonies would have no just reason to fear paying more than their fair share of public costs compared with their fellow citizens at home. But Great Britain might have just reason to fear that they would never pay their fair share. For some time, the British Parliament has not had the same established authority in the colonies that the French king has in those French provinces that still have their own provincial assemblies. The colonial assemblies might not be very cooperative. Unless they are managed more skillfully than they have ever been so far, they are unlikely to be cooperative. They might still find many excuses to evade or reject Parliament's most reasonable requests. Suppose a war with France breaks out. Ten million pounds must be raised immediately to defend the center of the empire. This sum must be borrowed against a fund established by Parliament and pledged to pay the interest. Parliament proposes to raise part of the fund through a tax in Great Britain. It proposes to raise the rest by asking all the colonial assemblies in America and the West Indies to contribute. Would people readily lend money against such a fund? Part of it would depend on the goodwill of all those assemblies. They are far from the center of the war and may sometimes think its outcome does not greatly concern them. Lenders would probably advance no more against the fund than the tax in Great Britain could be expected to cover. In this way, the entire burden of the war debt would fall on Great Britain, as it always has so far. It would fall on one part of the empire, rather than on the whole empire. Great Britain is perhaps the only state since the world began that has expanded its empire and increased its expenses without ever increasing its resources. Other states have generally shifted the largest part of the cost of defending the empire onto their subject and subordinate provinces. Great Britain has so far allowed her subject and subordinate provinces to shift almost the entire cost onto her. Under the plan to tax the colonies through parliamentary requests, Parliament must have some way to make those requests immediately effective if the colonial assemblies try to evade or reject them. This seems necessary to put Great Britain on an equal footing with her own colonies, which the law has so far treated as subject and subordinate. But it is not very easy to imagine what those means might be, and they have 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.

If the parliament of Great Britain were ever to establish a full right to tax the colonies without their assemblies' consent, those assemblies would lose their importance. So would all the leading men of British America. Men desire a share in managing public affairs chiefly because it gives them importance. The stability and duration of every system of free government depend on the power of most leading men to preserve or defend their own importance. These men are the natural aristocracy of every country. They continually attack one another's importance and defend their own. This is the whole play of domestic faction and ambition. The leading men of America, like those of every other country, desire to preserve their own importance. They are fond of calling their assemblies parliaments and regarding them as equal in authority to the parliament of Great Britain. They feel, or imagine, that their own importance would largely end if those assemblies were degraded. This would happen if the assemblies became mere servants and executive officers of the British parliament. They have therefore rejected the proposal that they be taxed by parliamentary requisition. Like other ambitious and high-spirited men, they have chosen instead to take up arms in defense 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.

Near the end of the Roman republic, Rome's allies demanded all the privileges of Roman citizens. They had borne the main burden of defending the state and extending the empire. When Rome refused, the Social War broke out. During that war, Rome granted those privileges to most of its allies, one by one, as they withdrew from the general alliance. The parliament of Great Britain insists on taxing the colonies. The colonies refuse to be taxed by a parliament in which they are not represented. Suppose Great Britain offered each colony that withdrew from the general alliance a number of representatives. This number would be proportional to what the colony contributed to the empire's public revenue. The colony would pay the same taxes as its fellow subjects at home. In return, it would enjoy the same freedom of trade. Its number of representatives would increase as its share of the revenue increased. This would give the leading men of each colony a new way to gain importance and a new, more dazzling goal for their ambition. They now compete for the small prizes offered by what might be called the petty raffle of colonial politics. Instead, they might hope to draw some of the great prizes sometimes offered by the grand state lottery of British politics. Men naturally have confidence in their own abilities and good fortune. Unless this or some other method is found to preserve the importance and satisfy the ambition of America's leading men, they are unlikely ever to submit to us willingly. No method seems more obvious than this one. We should also consider the blood that would have to be shed to force them to submit. Every drop would be the blood of people who are, or whom we wish to have as, our fellow citizens. Those who assure themselves that our colonies will now be easily conquered by force alone are very foolish. The people who now direct the decisions of what they call their continental congress feel an extraordinary sense of importance. Perhaps even the greatest subjects in Europe hardly feel its equal. Once shopkeepers, tradesmen, and attorneys, they have become statesmen and legislators. They are working out a new form of government for a vast empire. They flatter themselves that it will become one of the greatest and most formidable empires the world has ever known. Indeed, it seems very likely to do so. Perhaps five hundred people work directly under the continental congress in various capacities. Perhaps another five hundred thousand work under those five hundred. All feel a similar rise in their own importance, in proportion to their positions. Almost everyone in the governing party in America now imagines himself to hold a higher position than ever before. It is higher even than he ever expected to hold. Unless a new goal for ambition is offered to him or his leaders, he will die defending that position, if he has an ordinary man's spirit.

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.

President Heynaut remarks that we now enjoy reading accounts of many small events during the Ligue. When they happened, these events were perhaps not thought very important news. But everyone at the time, he says, imagined himself important. Countless memoirs have come down to us from those times. Most were written by people who enjoyed recording and exaggerating events in which they imagined they had played important roles. It is well known how stubbornly Paris defended itself on that occasion. The city endured a dreadful famine rather than submit to the best of all French kings, who later became the most beloved. Most citizens, or those who governed most of them, fought to defend their own importance. They foresaw that their importance would end whenever the old government was restored. Unless our colonies can be persuaded to agree to a union, they are very likely to defend themselves just as stubbornly against the best of all mother countries as 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.

The idea of representation was unknown in ancient times. When people from one state gained citizenship in another, they could exercise that right in only one way. They had to come together to vote and deliberate with the people of the other state. Granting the privileges of Roman citizenship to most inhabitants of Italy completely ruined the Roman republic. It was no longer possible to distinguish Roman citizens from those who were not citizens. No tribe could identify its own members. Any rabble could be brought into the people's assemblies and drive out the real citizens. They could then decide the affairs of the republic as if they were citizens themselves. But even if America sent fifty or sixty new representatives to parliament, the doorkeeper of the house of commons could easily tell who was a member and who was not. The union of Rome with the allied states of Italy necessarily ruined the Roman constitution. Yet there is not the least probability that a union of Great Britain with her colonies would harm the British constitution. On the contrary, the union would complete the constitution, which seems imperfect without it. The assembly that deliberates and decides on the affairs of every part of the empire should certainly have representatives from every part. Only then can it be properly informed. I do not claim, however, that this union could be brought about easily, or that it would not face great difficulties. Still, I have heard of none that seem impossible to overcome. The chief difficulties perhaps arise not from the nature of things, but from people's prejudices and opinions on both sides 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.

Those of us on this side of the water fear that too many American representatives would upset the constitutional balance. They might increase either the influence of the crown or the power of democracy too much. But suppose the number of American representatives were proportional to the revenue from American taxes. The number of people to be managed would then grow exactly in proportion to the means of managing them. And the means of managing them would grow in proportion to their number. After the union, the monarchical and democratic parts of the constitution would have exactly the same relative power as 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 people on the other side of the water fear that their distance from the seat of government might expose them to many abuses. But their representatives in parliament could easily protect them from all oppression. From the beginning, those representatives should be considerable in number. Distance would not greatly weaken a representative’s dependence on the voters. The representative would still feel indebted to their goodwill for a seat in parliament and all the importance that came with it. Representatives would therefore have an interest in maintaining that goodwill. They could do so by using their authority as members of the legislature to complain about every outrage committed by civil or military officers in those remote parts of the empire. Moreover, the natives of America might hope, with some reason, that their country would not remain far from the seat of government for very long. America has so far advanced rapidly in wealth, population, and development. In little more than a century, perhaps, American taxes might raise more than British taxes. The seat of the empire would then naturally move to the part that contributed most to the defense 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.

The discovery of America and of a route to the East Indies by the Cape of Good Hope are the two greatest and most important events recorded in human history. Their consequences have already been great. But only two or three centuries have passed since these discoveries, too little time for their full consequences to become clear. No human wisdom can foresee what benefits or misfortunes these great events may yet bring to mankind. These discoveries have united the most distant parts of the world to some degree. They have enabled those places to meet one another’s needs, increase one another’s enjoyment, and encourage one another’s industry. Their overall tendency would therefore seem to be beneficial. For the natives of both the East and West Indies, however, any commercial benefits have been overwhelmed and lost in the terrible misfortunes these events caused. These misfortunes, however, seem to have arisen from chance rather than from anything inherent in the events themselves. At the time of these discoveries, Europeans happened to have such superior force that they could commit every kind of injustice in those distant countries without punishment. In the future, perhaps the natives of those countries may grow stronger, or the people of Europe may grow weaker. The inhabitants of all the different parts of the world may then achieve equal courage and strength. Only this equality can inspire the mutual fear needed to restrain the injustice of independent nations and make them show some respect for one another’s rights. And nothing seems more likely to establish this equality of strength than the mutual exchange of knowledge and all kinds of improvements. Extensive commerce between all countries naturally, or rather necessarily, brings this exchange 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.

Meanwhile, one major effect of those discoveries has been to bring the mercantile system a splendour and glory it could never otherwise have achieved. That system aims to enrich a great nation through trade and manufacturing rather than through improving and cultivating land. It favours the industry of towns over that of the countryside. Before those discoveries, Europe’s commercial towns manufactured and carried goods for only a very small part of the world. That region included the Atlantic coast of Europe and the countries around the Baltic and Mediterranean seas. But as a result of the discoveries, those towns now manufacture goods for the numerous and thriving farmers of America. They also carry goods for almost all the different nations of Asia, Africa, and America, and in some respects manufacture goods for them too. Two new worlds have opened to their industry. Each is much larger and more extensive than the old one, and the market of one grows larger 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.

The countries that possess colonies in America and trade directly with the East Indies enjoy all the outward show and splendor of this great trade. Yet other countries often enjoy a greater share of its real benefits, despite all the unfair restrictions intended to exclude them. For example, the colonies of Spain and Portugal encourage industry in other countries more than they do in Spain and Portugal. Linen alone is said to account for more than three million pounds sterling a year in consumption by those colonies. I cannot vouch for that figure. But France, Flanders, Holland, and Germany supply almost all of this linen. Spain and Portugal supply only a small part. The capital that supplies the colonies with this vast quantity of linen is distributed each year among the inhabitants of those other countries, providing them with income. Only the profits are spent in Spain and Portugal, where they help support the lavish spending 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.

Even the regulations each nation uses to secure exclusive trade with its own colonies often do more harm to that nation than to the countries they are meant to restrict. The unjust suppression of other countries’ industry falls back, if I may say so, on the heads of the oppressors. It crushes their industry more than it crushes that of the other countries. For example, these regulations force a Hamburg merchant to send linen bound for the American market to London. He must also bring tobacco bound for the German market back from London. He can neither send the linen directly to America nor bring the tobacco directly from there. This restriction probably forces him to sell the linen somewhat cheaper and buy the tobacco somewhat dearer than he otherwise could. It probably reduces his profits somewhat. Even so, in this trade between Hamburg and London, he certainly gets back his invested capital much faster than he could in direct trade with America. This would be true even if payments from America were as prompt as those from London, though that is by no means the case. The regulations therefore confine the Hamburg merchant to a trade in which his capital can keep far more German industry constantly employed than it could in the trade from which he is excluded. So, although this trade may be less profitable for him, it cannot be less advantageous to his country. The trade into which the monopoly naturally draws the London merchant’s capital, if I may say so, is quite different. It may be more profitable for him than most other uses of his capital. But because his capital returns slowly, this trade 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.

Every country in Europe has therefore tried unjustly to keep all the benefits of its own colonies’ trade for itself. Yet no country has managed to keep anything for itself except the cost of maintaining its oppressive authority over those colonies in peacetime and defending it in wartime. Every country has kept all the burdens of possessing its colonies for itself. But it has been forced to share the benefits of their trade 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.

At first sight, a monopoly on the vast trade with America naturally seems an acquisition of the highest value. To the uncritical eye of reckless ambition, it naturally appears dazzling amid the confused scramble of politics and war. It seems an object well worth fighting for. Yet the very thing that makes it dazzling, the immense size of the trade, also makes the monopoly harmful. This trade is necessarily less advantageous to the country than most other uses of capital. But the monopoly makes it absorb a much larger share of the country's capital than it otherwise would.

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.

As shown in the second book, every country’s commercial capital naturally seeks, so to speak, the use most advantageous to that country. If it is used in the carrying trade, the country becomes a trading center for the goods of all the countries it trades with. But the owner of that capital naturally wants to sell as many of those goods as possible at home. By doing so, he saves himself the trouble, risk, and expense of exporting them. For that reason, he will gladly sell them at home for a much lower price and even a somewhat smaller profit than he might expect abroad. He therefore naturally tries as much as possible to turn his carrying trade into foreign trade for domestic consumption. If his capital is used in foreign trade for domestic consumption, he will, for the same reason, gladly sell at home as many as possible of the domestic goods he collects for export. In this way, he will try as much as possible to turn his foreign trade for domestic consumption into domestic trade. In this way, every country’s commercial capital naturally seeks nearby opportunities and avoids distant ones. It naturally seeks uses that bring frequent returns and avoids those that bring delayed and slow returns. It naturally seeks uses that can support the greatest amount of productive labor in the country where the capital belongs or its owner lives. It avoids uses that can support the least productive labor there. It naturally seeks the use that is ordinarily most advantageous to that country and avoids the use that is ordinarily least advantageous.

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.

But suppose profits rise in one of those distant employments, which are ordinarily less advantageous to the country. They might rise high enough to overcome the natural preference for nearer employments. If so, the higher profit will draw capital away from nearer employments, until all profits return to their proper level. This higher profit, however, shows that, in the society’s actual circumstances, too little capital is invested in distant employments compared with other employments. It shows that the society’s capital is not distributed in the best way among its different employments. It shows that something is being bought too cheaply or sold too expensively. It also shows that some particular class of citizens is suffering to some degree. Its members either pay more or receive less than is consistent with the equality that ought to exist, and naturally does exist, among all the different classes of citizens. The same capital will never support as much productive labor in a distant employment as in a near one. Yet a distant employment may be just as necessary to society’s welfare. The goods it deals in may be needed to carry on many of the nearer employments. But if profits on those goods are above their proper level, the goods will be sold too expensively, or somewhat above their natural price. The high price will burden everyone engaged in the nearer employments to some degree. Their interest therefore requires that some capital be withdrawn from those nearer employments and directed toward the distant one. This would bring its profits down to their proper level and its goods down to their natural price. In this extraordinary case, the public interest requires that some capital be withdrawn from employments that are ordinarily more advantageous. It should be directed toward one that is ordinarily less advantageous to the public. In this extraordinary case, people’s natural interests and inclinations coincide just as exactly with the public interest as they do in all other ordinary cases. They lead people to withdraw capital from nearer employments and direct it toward distant ones.

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.

In this way, people’s private interests and passions naturally lead them to invest their capital in activities that usually benefit society most. But they may invest too much in these activities because of this natural preference. If they do, profits fall in those activities and rise in all others. This immediately encourages people to correct the imbalance. So, without any intervention by law, people’s private interests and passions naturally lead them to distribute society’s capital among all its different activities. They distribute it as nearly as possible in the proportions that best serve the interests of society as a whole.

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.

All the regulations of the mercantile system disrupt the natural and most advantageous distribution of capital to some degree. But those governing trade with America and the East Indies perhaps disrupt it more than any others. This is because trade with those two great continents absorbs more capital than any other two branches of trade. However, the regulations that cause this disruption are not quite the same in both branches. Monopoly is the main instrument in both, but it takes a different form in each. Indeed, monopoly of one kind or another seems to be the only instrument 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.

In trade with America, every nation tries to control as much as possible of its own colonies’ entire market. It does so by completely excluding all other nations from direct trade with those colonies. For most of the sixteenth century, the Portuguese tried to control trade with the East Indies in the same way. They claimed the sole right to sail in the Indian seas because they had first discovered the route there. The Dutch still exclude all other European nations from direct trade with their spice islands. Monopolies of this kind are clearly established against all other European nations. Those nations are excluded from trade in which they might find it useful to invest some of their capital. They must also pay somewhat more for the goods involved than if they could import them directly from the countries that 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.

Since Portugal’s power declined, no European nation has claimed the exclusive right to sail in the Indian seas. Their principal ports are now open to ships from all European nations. Yet in every European country, trade with the East Indies has been reserved for an exclusive company. Portugal is the exception, and France has become one within the last few years. Monopolies of this kind are, in effect, established against the very nation that creates them. Most people in that nation are excluded from a trade in which they might wish to invest some of their capital. They must also pay somewhat more for the goods traded than they would if the trade were open to all their countrymen. Take the English East India company, for example. Since its establishment, the other inhabitants of England have been excluded from the trade. They must also have paid more for the East India goods they consumed. In those prices, they paid not only for all the extraordinary profits the company may have made through its monopoly. They also paid for all the extraordinary waste that fraud and abuse must have caused. Such fraud and abuse are inseparable from managing the affairs of so large a company. The absurdity of this second kind of monopoly is therefore much more obvious 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.

Both kinds of monopolies disrupt the natural distribution of society’s capital to some extent. But they do not always disrupt 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 first kind always draw more of society’s capital into a trade than would otherwise go there.

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.

Monopolies of the second kind may attract capital to the trade in which they exist, or drive it away. The effect depends on the circumstances. In poor countries, these monopolies naturally attract more capital to the trade than would otherwise go there. In rich countries, they naturally drive away a good deal of capital that would otherwise go to the trade.

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.

Poor countries such as Sweden and Denmark would probably never have sent a single ship to the East Indies without an exclusive trading company. Establishing such a company necessarily encourages people to take risks. Its monopoly protects them from all competitors in their home market. They also have the same chance as traders from other nations in foreign markets. The monopoly assures them of a large profit on a considerable quantity of goods. It also gives them the chance of a considerable profit on a large quantity. Without such extraordinary encouragement, the poor traders of such poor countries would probably never have risked their small amounts of capital. Trade with the East Indies must naturally have seemed to them a very distant and uncertain venture.

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.

A rich country like Holland, by contrast, would probably send many more ships to the East Indies under free trade than it actually does. The limited capital of the Dutch East India company probably keeps many large merchant investors out of that trade. Otherwise, they would invest in it. Holland’s merchant capital is so great that it is continually overflowing, so to speak. Sometimes it flows into foreign government securities, sometimes into loans to foreign traders and entrepreneurs. Sometimes it goes into highly indirect foreign trades in goods for consumption, and sometimes into the carrying trade. All opportunities closer to home are fully occupied. All the capital that can earn a reasonable profit in them has already been invested there. Holland’s capital therefore necessarily flows toward the most distant opportunities. If trade with the East Indies were entirely free, it would probably absorb most of this surplus capital. The East Indies offer a larger and wider market than Europe and America combined. This market is open to European manufactured goods, gold and silver, and the various other products of America.

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.

Any disruption of the natural distribution of capital necessarily harms the society where it happens. This is true whether it drives capital away from a trade it would otherwise enter or draws capital into a trade it would otherwise avoid. Without an exclusive company, Holland’s trade with the East Indies might be greater than it is. If so, the country must suffer a considerable loss because some of its capital is excluded from the most suitable use for it. Similarly, without an exclusive company, Sweden and Denmark might trade less with the East Indies than they do. Or, perhaps more likely, they might not trade with the East Indies at all. If so, those two countries must also suffer a considerable loss. Some of their capital is drawn into a use that must be more or less unsuitable to their present circumstances. Perhaps, in their present circumstances, they would do better to buy East India goods from other nations, even at somewhat higher prices. That would be better than devoting so much of their small capital to such distant trade. Returns from that trade are very slow, and the capital invested in it can support very little productive labor at home. Yet productive labor is badly needed there, where so little is done and so much remains to be done.

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.

A country might be unable to trade directly with the East Indies without a company that holds exclusive trading rights. But that does not mean it should establish such a company. It means only that, in these circumstances, the country should not trade directly with the East Indies. The experience of the Portuguese shows clearly enough that such companies are not generally necessary for trade with the East Indies. For more than a century, the Portuguese enjoyed almost the whole of that trade 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.

It has been argued that no private merchant could have enough capital to keep agents in the different ports of the East Indies. These agents would provide goods for the ships the merchant might occasionally send there. Yet without them, a ship might often have difficulty finding a cargo and miss the season for its return. The cost of such a long delay would wipe out all the profit from the venture. It would often cause a very considerable loss as well. But if this argument proves anything, it proves that no major branch of trade could operate without a company with exclusive trading rights. The experience of all nations shows otherwise. In no major branch of trade does any one private merchant have enough capital to carry on every supporting activity needed for the main trade. But when a nation is ready for a major trade, some merchants naturally invest in the main trade and others in the supporting activities. In this way, all the different branches are carried on. Yet it is very rare for one private merchant's capital to finance them all. If a nation is ready for the East India trade, some of its capital will naturally be divided among its different branches. Some merchants will find it profitable to live in the East Indies and invest their capital in providing goods. These goods will supply ships sent by other merchants living in Europe. Different European nations have settlements in the East Indies that now belong to companies with exclusive trading rights. If these settlements were taken from the companies and placed under the sovereign's direct protection, living there would be safe and easy. This would be true at least for merchants from the nations to which the settlements belong. At any given time, a country's capital naturally drawn toward the East India trade might not be enough to support all its different branches. If so, that would prove the country was not yet ready for the trade. For a time, it would do better to buy the East India goods it needed from other European nations, even at a higher price. That would be better than importing the goods directly from the East Indies. The loss from paying higher prices would seldom equal the loss from diverting a large share of its capital from other uses. Those uses would be more necessary, more useful, or better suited to the country's circumstances and situation than direct trade with 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.

Although Europeans have many substantial settlements on the coast of Africa and in the East Indies, they have not established colonies there as numerous and prosperous as those in the islands and continent of America. Africa, like several countries included under the general name of the East Indies, is inhabited by barbarous nations. But those nations were by no means as weak and defenseless as the miserable and helpless Americans. They were also much more populous, relative to the natural fertility of the countries they inhabited. The most barbarous nations of Africa and the East Indies were shepherds. Even the Hottentots were shepherds. But the natives of every part of America, except Mexico and Peru, were only hunters. The same area of equally fertile land can support far more shepherds than hunters. In Africa and the East Indies, therefore, it was harder to displace the natives. It was also harder to extend European plantations over most of the original inhabitants' lands. As already noted, the nature of exclusive companies is also unfavorable to the growth of new colonies. It has probably been the main reason for the limited progress of colonies in the East Indies. The Portuguese traded with both Africa and the East Indies without any exclusive companies. Their settlements at Congo, Angola, and Benguela on the coast of Africa, and at Goa in the East Indies, were held back by superstition and every kind of bad government. Yet they bear some resemblance to the colonies of America. They are partly inhabited by Portuguese who have been settled there for several generations. The Dutch settlements at the Cape of Good Hope and at Batavia are now the most substantial European colonies in either Africa or the East Indies. Both settlements are especially fortunate in their location. The Cape of Good Hope was inhabited by a race of people almost as barbarous and just as incapable of defending themselves as the natives of America. It is also, one might say, the halfway house between Europe and the East Indies. Almost every European ship stops there on both the outward and return journeys. Supplying those ships with all kinds of fresh provisions, fruit, and sometimes wine, provides a very large market for the colony's surplus produce. 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 on the busiest route from Indostan to China and Japan, nearly halfway along it. Almost all ships sailing between Europe and China also stop at Batavia. Beyond all this, Batavia is the center and principal market of what is called the country trade of the East Indies. This includes not only the trade carried on by Europeans, but also that carried on by native Indians. Ships sailed by the inhabitants of China and Japan, Tonquin, Malacca, Cochin-China, and the island of Celebes are often seen in its port. These advantageous locations have enabled both colonies to overcome any obstacles that the oppressive nature of an exclusive company may at times have placed in the way of their growth. They have enabled Batavia to overcome the additional disadvantage of perhaps the most unhealthy 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.

The English and Dutch companies have established no substantial colonies except the two mentioned above. Both, however, have made substantial conquests in the East Indies. The way they govern their new subjects reveals the true nature of a company with exclusive trading rights. In the spice islands, the Dutch are said to burn any spices from a fertile season that exceed what they expect to sell in Europe at a profit they consider sufficient. On islands where they have no settlements, they pay people to gather the young blossoms and green leaves of the clove and nutmeg trees that grow there naturally. This savage policy is said to have almost completely wiped out the trees. Even on islands where they have settlements, the Dutch are said to have greatly reduced the number of trees. They suspect that, if their own islands produced much more than their market could absorb, the natives might find ways to carry some of it to other nations. They therefore believe the best way to secure their monopoly is to ensure that no more grows than they themselves take to market. Through various forms of oppression, they have reduced the population of several of the Moluccas. Only enough people remain to supply their own insignificant garrisons with fresh food and other necessities. They also supply the Dutch ships that occasionally come for a cargo of spices. Yet even under Portuguese rule, those islands are said to have been reasonably well populated. The English company has not yet had time to establish such a thoroughly destructive system in Bengal. Its plan of government, however, has had exactly the same tendency. I am reliably informed that it has not been uncommon for a chief to order a peasant to plough up a rich field of poppies and sow it with rice or another grain. The chief is the first clerk of a trading post. The excuse was to prevent a shortage of food. But the real reason was to let the chief sell a large quantity of opium he happened to have on hand at a better price. At other times, the order was reversed. A rich field of rice or another grain was ploughed up to make room for poppies, when the chief foresaw that opium was likely to bring extraordinary profits. The company's servants have, on several occasions, tried to secure monopolies for themselves over some of the country's most important trades. These included not only foreign trade but also trade within the country. Had they been allowed to continue, they could not have failed, sooner or later, to try to restrict production of the goods whose trade they had seized. They would have limited production not only to the quantity they themselves could buy, but also to the quantity they expected to sell at a profit they considered sufficient. In this way, over a century or two, the English company's policy would probably have proved as completely destructive as the Dutch company's.

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.

Nothing, however, could be more directly opposed to the real interests of these companies as rulers of the countries they have conquered than this destructive plan. In almost all countries, the ruler’s revenue comes from the people’s revenue. The more revenue the people have, the more they can afford to pay the ruler. Their revenue grows as their land and labor produce more each year. It is therefore in the ruler’s interest to increase that annual production as much as possible. This is in every ruler’s interest, but especially in the interest of a ruler whose revenue comes chiefly from land rent. The ruler of Bengal is one such ruler. The rent must be proportional to both the quantity and the value of the produce. Both depend on the size of the market. The quantity produced will always match, more or less closely, the consumption of those who can afford to pay for it. The price they pay will always depend on how eagerly they compete with one another. It is therefore in such a ruler’s interest to open the widest possible market for the country’s produce. The ruler should allow the greatest possible freedom of trade, to increase the number of buyers and the competition among them as much as possible. For this reason, the ruler should abolish not only all monopolies but also all restrictions on transporting domestic produce from one part of the country to another. The ruler should also abolish all restrictions on exporting it to foreign countries or importing goods of any kind that can be exchanged for it. In this way, the ruler is most likely to increase both the quantity and value of the produce. As a result, the ruler will also increase his own share of it, or 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 a company of merchants seems unable to think of itself as sovereign, even after it has become one. Its members still regard trade, buying in order to sell again, as their main business. In a strange absurdity, they regard their role as sovereign as merely an addition to their role as merchants. They think sovereignty should serve their trade. It should help them buy more cheaply in India and sell at a greater profit in Europe. For this purpose, they try to keep as many competitors as possible out of the markets of the countries they govern. As a result, they try to reduce at least some of the surplus produce of those countries. They reduce it to just enough to supply their own demand. That is, they limit it to what they expect to sell in Europe at a profit they consider reasonable. Their trading habits lead them almost inevitably, though perhaps without their noticing, to favor monopoly profits on ordinary occasions. These profits are small and temporary, unlike the great and lasting revenue they could earn as sovereigns. Their habits would gradually lead them to treat the countries they govern much as the Dutch treat the Moluccas. As sovereigns, the East India company has an interest in selling European goods as cheaply as possible in its Indian territories. It also has an interest in getting the best possible price there for the Indian goods brought from those territories. But as merchants, its interest is the opposite. As sovereigns, its interest is exactly the same as that of the country it governs. As merchants, its interest is directly opposed to that of the country.

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.

But if this government is fundamentally, and perhaps incurably, flawed even in its direction in Europe, its administration in India is still more flawed. The administration must consist of a council of merchants. Their profession is undoubtedly highly respectable. But in no country does it carry the kind of authority that naturally inspires awe and commands willing obedience without force. Such a council can command obedience only through the military force accompanying it. Its government must therefore be military and despotic. The merchants’ proper business, however, is trade. On their employer’s account, they sell the European goods sent to them. In return, they buy Indian goods for the European market. Their business is to sell the first as dearly and buy the second as cheaply as possible. They must therefore exclude rivals as much as possible from the particular market where they keep their shop. In the company’s trade, then, the administration operates on the same principles as the directors. It tends to make government serve the interests of monopoly. As a result, it tends to limit the natural growth of at least some of the country’s surplus produce, leaving barely enough to meet the company’s demand.

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.

Besides, all the members of the administration trade to some extent on their own account. It is useless to forbid them from doing so. Nothing could be more foolish than to expect clerks in a great trading house, 10,000 miles away and almost entirely out of sight, to stop all private trading simply because their masters order it. They would have to abandon forever all hope of making a fortune, though they have the means at hand. They would have to be content with the modest salaries their masters pay them. Modest as those salaries are, they can seldom be increased. They are usually as large as the real profits of the company’s trade can support. In these circumstances, a ban on private trading can hardly do more than empower the company’s senior employees to oppress their subordinates. They can do this under the pretense of carrying out their masters’ orders, targeting those unlucky enough to have offended them. The employees naturally try to secure the same monopoly for their private trade as the company enjoys in its public trade. If allowed to do as they wish, they will establish this monopoly openly and directly. They will simply forbid everyone else from trading in the goods they choose to deal in. This is perhaps the best and least oppressive way to establish it. But if an order from Europe forbids them to do this, they will still try to establish the same kind of monopoly secretly and indirectly. This is much more destructive to the country. They will use the full authority of government and corrupt the administration of justice. Their aim is to harass and ruin anyone who competes with them in any branch of trade they choose to pursue through agents. These agents may be hidden, or at least not publicly acknowledged. But the employees’ private trade will naturally cover a much wider variety of goods than the company’s public trade. The company’s public trade goes no further than trade with Europe. It includes only part of the country’s foreign trade. But the employees’ private trade may extend to every branch of the country’s domestic and foreign trade. The company’s monopoly can only tend to stunt the natural growth of that part of the surplus produce that would be exported to Europe under free trade. The employees’ monopoly tends to stunt the natural growth of every kind of produce they choose to trade in. This includes produce intended for consumption at home as well as produce intended for export. It consequently tends to diminish cultivation throughout the country and reduce its population. Whenever the employees choose to trade in any kind of produce, even the necessities of life, their monopoly tends to reduce its quantity. It reduces the quantity to what they can afford to buy and expect to sell at a profit that satisfies 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.

Their position also makes the servants more likely than their masters to defend their own interests with ruthless severity against those of the country they govern. The country belongs to their masters, who cannot help having some regard for its interests. But it does not belong to the servants. Their masters' real interests, if they understood them, are the same as the country's interests. {The interest of every owner of India stock, however, is by no means the same as that of the country whose government his vote gives him some influence over. See book v, chap. 1, part ii.} The masters oppress the country chiefly because of ignorance and the narrow prejudices of merchants. But the servants' real interests are by no means the same as the country's. Even perfect knowledge would not necessarily put an end to their oppression. The regulations sent from Europe have often been weak, but most have been well intentioned. Those established by the servants in India have sometimes shown more intelligence and perhaps less good intention. It is a very peculiar government in which every member of the administration wants to leave the country, and therefore the government, as soon as possible. Once a member has left and taken his whole fortune with him, his interests would be completely unaffected if the whole country were swallowed up by an earthquake the next day.

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.

Nothing I have said here is meant to cast a hateful accusation on the general character of the East India company’s servants. Still less do I mean to accuse any particular person. I mean to criticize the system of government and the position in which they are placed, not the character of those who have served in it. They acted as their position naturally led them to act. Those who have complained most loudly about them would probably have done no better themselves. In war and negotiation, the councils of Madras and Calcutta have on several occasions shown resolve and decisive wisdom. Their conduct would have honored the senate of Rome in the republic’s best days. Yet the members of those councils had been trained for professions very different from war and politics. Their position alone, without education, experience, or even an example to follow, seems to have given them all at once the great qualities it demanded. It seems to have inspired them with abilities and virtues they themselves could hardly have known they possessed. If their position has sometimes inspired them to acts of generosity and courage that could hardly have been expected, we should not be surprised if, at other times, it has prompted them to deeds of a somewhat 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.

Such exclusive companies are therefore harmful in every respect. They always cause some inconvenience to the countries where they are established. They are destructive to countries unfortunate enough to fall under their rule.