An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader with highlighter txt) 📖

from importing European goods from any

foreign nation. But the manner in which this monopoly has been

exercised in different nations, has been very different.

 

Some nations have given up the whole commerce of their colonies

to an exclusive company, of whom the colonists were obliged to

buy all such European goods as they wanted, and to whom they were

obliged to sell the whole of their surplus produce. It was the

interest of the company, therefore, not only to sell the former

as dear, and to buy the latter as cheap as possible, but to buy

no more of the latter, even at this low price, than what they

could dipose of for a very high price in Europe. It was their

interest not only to degrade in all cases the value of the

surplus produce of the colony, but in many cases to discourage

and keep down the natural increase of its quantity. Of all the

expedients that can well be contrived to stunt the natural growth

of a new colony, that of an exclusive company is undoubtedly the

most effectual. This, however, has been the policy of Holland,

though their company, in the course of the present century, has

given up in many respects the exertion of their exclusive

privilege. This, too, was the policy of Denmark, till the reign

of the late king. It has occasionally been the policy of France ;

and of late, since 1755, after it had been abandoned by all other

nations on account of its absurdity, it has become the policy of

Portugal, with regard at least to two of the principal provinces

of Brazil, Pernambucco, and Marannon.

 

Other nations, without establishing an exclusive company, have

confined the whole commerce of their colonies to a particular

port of the mother country, from whence no ship was allowed to

sail, but either in a fleet and at a particular season, or, if

single, in consequence of a particular license, which in most

cases was very well paid for. This policy opened, indeed, the

trade of the colonies to all the natives of the mother country,

provided they traded from the proper port, at the proper season,

and in the proper vessels. But as all the different merchants,

who joined their stocks in order to fit out those licensed

vessels, would find it for their interest to act in concert, the

trade which was carried on in this manner would necessarily be

conducted very nearly upon the same principles as that of an

exclusive company. The profit of those merchants would be almost

equally exorbitant and oppressive. The colonies would be ill

supplied, and would be obliged both to buy very dear, and to sell

very cheap. This, however, till within these few years, had

always been the policy of Spain; and the price of all European

goods, accordingly, is said to have been enormous in the Spanish

West Indies. At Quito, we are told by Ulloa, a pound of iron sold

for about 4s:6d., and a pound of steel for about 6s:9d. sterling.

But it is chiefly in order to purchase European goods that the

colonies part with their own produce. The more, therefore, they

pay for the one, the less they really get for the other, and the

dearness of the one is the same thing with the cheapness of the

other. The policy of Portugal is, in this respect, the same as

the ancient policy of Spain, with regard to all its colonies,

except Pernambucco and Marannon; and with regard to these it has

lately adopted a still worse.

 

Other nations leave the trade of their colonies free to all their

subjects, who may carry it on from all the different ports of the

mother country, and who have occasion for no other license than

the common despatches of the custom-house. In this case the

number and dispersed situation of the different traders renders

it impossible for them to enter into any general combination, and

their competition is sufficient to hinder them from making very

exorbitant profits. Under so liberal a policy, the colonies are

enabled both to sell their own produce, and to buy the goods of

Europe at a reasonable price; but since the dissolution of the

Plymouth company, when our colonies were but in their infancy,

this has always been the policy of England. It has generally,

too, been that of France, and has been uniformly so since the

dissolution of what in England is commonly called their

Mississippi company. The profits of the trade, therefore, which

France and England carry on with their colonies, though no doubt

somewhat higher than if the competition were free to all other

nations, are, however, by no means exorbitant ; and the price of

European goods, accordingly, is not extravagantly high in the

greater past of the colonies of either of those nations.

 

In the exportation of their own surplus produce, too, it is only

with regard to certain commodities that the colonies of Great

Britain are confined to the market of the mother country. These

commodities having been enumerated in the act of navigation, and

in some other subsequent acts, have upon that account been called

enumerated commodities. The rest are called non-enumerated, and

may be exported directly to other countries, provided it is in

British or plantation ships, of which the owners and three

fourths of the mariners are British subjects

 

Among the non-enumerated commodities are some of the most

important productions of America and the West Indies, grain of

all sorts, lumber, salt provisions, fish, sugar, and rum.

 

Grain is naturally the first and principal object of the culture

of all new colonies. By allowing them a very extensive market for

it, the law encourages them to extend this culture much beyond

the consumption of a thinly inhabited country, and thus to

provide beforehand an ample subsistence for a continually

increasing population.

 

In a country quite covered with wood, where timber consequently

is of little or no value, the expense of clearing the ground is

the principal obstacle to improvement. By allowing the colonies a

very extensive market for their lumber, the law endeavours to

facilitate improvement by raising the price of a commodity which

would otherwise be of little value, and thereby enabling them to

make some profit of what would otherwise be mere expense.

 

In a country neither half peopled nor half cultivated, cattle

naturally multiply beyond the consumption of the inhabitants, and

are often, upon that account, of little or no value. But it is

necessary, it has already been shown, that the price of cattle

should bear a certain proportion to that of corn, before the

greater part of the lands of any country can be improved. By

allowing to American cattle, in all shapes, dead and alive, a

very extensive market, the law endeavours to raise the value of a

commodity, of which the high price is so very essential to

improvement. The good effects of this liberty, however, must be

somewhat diminished by the 4th of Geo. III. c. 15, which puts

hides and skins among the enumerated commodities, and thereby

tends to reduce the value of American cattle.

 

To increase the shipping and naval power of Great Britain by the

extension of the fisheries of our colonies, is an object which

the legizslature seems to have had almost constantly in view.

Those fisheries, upon this account, have had all the

encouragement which freedom can give them, and they have

flourished accordingly. The New England fishery, in particular,

was, before the late disturbances, one of the most important,

perhaps, in the world. The whale fishery which, notwithstanding

an extravagant bounty, is in Great Britain carried on to so

little purpose, that in the opinion of many people ( which I do

not, however, pretend to warrant), the whole produce does not

much exceed the value of the bounties which are annually paid for

it, is in New England carried on, without any bounty, to a very

great extent. Fish is one of the principal articles with which

the North Americans trade to Spain, Portugal, and the

Mediterranean.

 

Sugar was originally an enumerated commodity, which could only be

exported to Great Britain; but in 1751, upon a representation of

the sugar-planters, its exportation was permitted to all parts of

the world. The restrictions, however, with which this liberty was

granted, joined to the high price of sugar in Great Britain, have

rendered it in a great measure ineffectual. Great Britain and her

colonies still continue to be almost the sole market for all

sugar produced in the British plantations. Their consumption

increases so fast, that, though in consequence of the increasing

improvement of Jamaica, as well as of the ceded islands, the

importation of sugar has increased very greatly within these

twenty years, the exportation to foreign countries is said to be

not much greater than before.

 

Rum is a very important article in the trade which the Americans

carry on to the coast of Africa, from which they bring back negro

slaves in return.

 

If the whole surplus produce of America, in grain of all sorts,

in salt provisions, and in fish, had been put into the

enumeration, and thereby forced into the market of Great Britain,

it would have interferred too much with the produce of the

industry of our own people. It was probably not so much from any

regard to the interest of America, as from a jealousy of this

interference, that those important commodities have not only been

kept out of the enumeration, but that the importation into Great

Britain of all grain, except rice, and of all salt provisions,

has, in the ordinary state of the law, been prohibited.

 

The non-enumerated commodities could originally be exported to

all parts of the world. Lumber and rice having been once put into

the enumeration, when they were afterwards taken out of it, were

confined, as to the European market, to the countries that lie

south of Cape Finisterre. By the 6th of George III. c. 52, all

non-enumerated commodities were subjected to the like

restriction. The parts of Europe which lie south of Cape

Finisterre are not manufacturing countries, and we are less

jealous of the colony ships carrying home from them any

manufactures which could interfere with our own.

 

The enumerated commodities are of two sorts ; first, such as are

either the peculiar produce of America, or as cannot be produced,

or at least are not produced in the mother country. Of this kind

are molasses, coffee, cocoa-nuts, tobacco, pimento, ginger,

whalefins, raw silk, cotton, wool, beaver, and other peltry of

America, indigo, fustick, and other dyeing woods; secondly, such

as are not the peculiar produce of America, but which are, and

may be produced in the mother country, though not in such

quantities as to supply the greater part of her demand, which is

principally supplied from foreign countries. Of this kind are all

naval stores, masts, yards, and bowsprits, tar, pitch, and

turpentine, pig and bar iron, copper ore, hides and skins, pot

and pearl ashes. The largest importation of commodities of the

first kind could not discourage the growth, or interfere with the

sale, of any part of the produce of the mother country. By

confining them to the home market, our merchants, it was

expected, would not only be enabled to buy them cheaper in the

plantations, and consequently to sell them with a better profit

at home, but to establish between the plantations and foreign

countries an advantageous carrying trade, of which Great Britain

was necessarily to be the centre or emporium, as the European

country into which those commodities were first to be imported.

The importation of commodities of the second kind might be so

managed too, it was supposed, as to interfere, not with the sale

of those of the same kind which were produced