Book V, Chapter III, 7

In the foreign commerce that the different colonies conduct with Great Britain, gold and silver are used in precisely the measure in which they are needed. Where those metals are unnecessary, they seldom appear; where they are necessary, they are generally found.

In trade between Great Britain and the tobacco colonies, British goods are generally supplied to the colonists on fairly long credit and afterward paid for in tobacco, valued at an agreed price. It is more convenient for the colonists to pay in tobacco than in gold and silver. Any merchant would find it more convenient to pay for goods sold to him by his correspondents with some other kind of goods in which he happens to deal, rather than with money. Such a merchant would have no need to keep any part of his stock idle, in ready money, to meet occasional demands. He could always hold more goods in his shop or warehouse, and trade on a larger scale. But it is seldom convenient for all a merchant’s correspondents to accept payment for the goods they sell him in another kind of goods that he happens to deal in. The British merchants who trade with Virginia and Maryland happen to be a particular group of correspondents for whom it is more convenient to receive tobacco in payment for the goods they sell those colonies than gold and silver. They expect to make a profit on the sale of tobacco; they could make none on the sale of gold and silver. Gold and silver, therefore, very seldom appear in trade between Great Britain and the tobacco colonies. Maryland and Virginia have as little need for those metals in their foreign commerce as in their domestic commerce. Accordingly, they are said to have less gold and silver money than any other colonies in America. They are nevertheless regarded as flourishing, and consequently as rich, as any of their neighbors.

In the northern colonies—Pennsylvania, New York, New Jersey, the four governments of New England, etc.—the value of their own produce exported to Great Britain does not equal that of the manufactured goods they import for their own use and for the use of some other colonies for which they act as carriers. A balance must therefore be paid to the mother country in gold and silver, and they generally find that balance.

In the sugar colonies, the value of the produce exported annually to Great Britain far exceeds that of all the goods imported from there. If the sugar and rum sent each year to the mother country were paid for in those colonies, Great Britain would have to send out a very large balance in money every year; and a certain kind of politician would consider trade with the West Indies extremely disadvantageous. But many of the principal owners of the sugar plantations happen to live in Great Britain. Their rents are remitted to them in sugar and rum, the produce of their estates. The sugar and rum that West India merchants buy in those colonies on their own account are worth less than the goods they sell there each year. A balance, therefore, must necessarily be paid to them in gold and silver, and this balance, too, is generally found.

The difficulty and irregularity of payment from the different colonies to Great Britain have borne no relation to the size of the balances respectively due from them. Payments have generally been more regular from the northern colonies than from the tobacco colonies, though the former have generally paid a fairly large balance in money, while the latter have paid either no balance or a much smaller one. The difficulty of obtaining payment from our different sugar colonies has varied less with the size of their respective balances than with the amount of uncultivated land they contained: that is, with the greater or smaller temptation for planters to trade beyond their means, or to settle and plant more waste land than their capitals could support. For this reason the returns from the great island of Jamaica, where much land remains uncultivated, have generally been more irregular and uncertain than those from the smaller islands of Barbadoes, Antigua, and St. Christopher’s. These have been fully cultivated for many years and have therefore offered less scope for the planter’s speculations. The new acquisitions of Grenada, Tobago, St. Vincent’s, and Dominica have opened a new field for speculations of this kind; and returns from those islands have lately been as irregular and uncertain as those from the great island of Jamaica.

It is not, then, the poverty of the colonies that causes the present scarcity of gold and silver money in most of them. Their great demand for active and productive stock makes it advantageous to hold as little idle stock as possible and leads them to make do with an instrument of commerce cheaper, though less convenient, than gold and silver. They can thereby turn the value of that gold and silver into the instruments of trade, the materials for clothing, household furniture, and the ironwork needed to build and extend their settlements and plantations. In those branches of business that cannot be conducted without gold and silver money, it appears that they can always find the necessary quantity of those metals. If they frequently fail to find it, that failure is generally the result not of unavoidable poverty but of needless and excessive enterprise. Their payments are irregular and uncertain not because they are poor, but because they are too eager to become exceedingly rich. Even if all the proceeds of colonial taxes beyond what was needed to meet the expense of their own civil and military establishments had to be remitted to Great Britain in gold and silver, the colonies have ample means to purchase the necessary quantity of those metals. They would, in that case, have to exchange for idle stock some of the surplus produce with which they now buy active and productive stock. In conducting their domestic business, they would have to employ a costly rather than a cheap instrument of commerce; and the cost of purchasing that instrument might somewhat damp the vigor and ardor of their excessive enterprise in improving land. It might not, however, be necessary to remit any part of the American revenue in gold and silver. It could be remitted in bills drawn on, and accepted by, particular merchants or companies in Great Britain to whom part of America’s surplus produce had been consigned. After receiving its value in goods themselves, they would pay the American revenue into the treasury in money; and the entire transaction could often be conducted without exporting a single ounce of gold or silver from America.

It is not unjust for both Ireland and America to contribute toward paying off Great Britain’s public debt. That debt was contracted to support the government established by the Revolution—a government to which the Protestants of Ireland owe not only all the authority they now enjoy in their own country, but every security they possess for their liberty, property, and religion; a government to which several American colonies owe their present charters, and consequently their present constitutions, and to which all the American colonies owe the liberty, security, and property they have enjoyed ever since. That public debt was contracted in defense not of Great Britain alone, but of all the different provinces of the empire. The immense debt contracted in the late war in particular, and a great part of the debt contracted in the preceding war, were both properly incurred in defense of America.

By uniting with Great Britain, Ireland would gain, besides freedom of trade, other advantages far more important, which would more than compensate for any increase in taxes accompanying that union. Through the union with England, the middle and lower ranks of people in Scotland gained complete deliverance from the power of an aristocracy that had always oppressed them before. Through a union with Great Britain, most people of every rank in Ireland would gain an equally complete deliverance from a far more oppressive aristocracy: one founded not, like Scotland’s, on the natural and respectable distinctions of birth and fortune, but on the most odious distinctions of all, those of religious and political prejudice. More than any others, these distinctions inflame both the arrogance of the oppressors and the hatred and indignation of the oppressed, and commonly make the inhabitants of one country more hostile to one another than the inhabitants of different countries ever are. Without a union with Great Britain, the inhabitants of Ireland are unlikely, for many ages, to regard themselves as one people.

No oppressive aristocracy has ever prevailed in the colonies. Even so, they too would gain considerably in happiness and tranquility from a union with Great Britain. It would at least free them from the bitter and virulent factions inseparable from small democracies, factions that have so often divided the loyalties of their people and disturbed the tranquility of their governments, whose form is so nearly democratic. In the event of a complete separation from Great Britain, which seems very likely unless prevented by such a union, these factions would become ten times more virulent than ever. Before the present disturbances began, the mother country’s coercive power had always been able to prevent those factions from erupting into anything worse than gross brutality and insult. If that coercive power were entirely removed, they would probably soon erupt into open violence and bloodshed. In all large countries united under one uniform government, the spirit of party generally prevails less in remote provinces than at the center of the empire. Their distance from the capital, the principal arena of the great scramble for factional advantage and ambition, makes them less involved in the designs of any contending party and more detached and impartial spectators of the conduct of all. The spirit of party prevails less in Scotland than in England. Under a union it would probably prevail less in Ireland than in Scotland; and the colonies would probably soon enjoy a degree of concord and unanimity now unknown in any part of the British empire. Both Ireland and the colonies would, it is true, be subject to heavier taxes than any they now pay. Yet if public revenue were diligently and faithfully applied to paying off the national debt, most of those taxes need not last long, and Great Britain’s public revenue could soon be reduced to what was needed to maintain a moderate peacetime establishment.

The territorial acquisitions of the East India Company, which belong by unquestionable right to the Crown—that is, to the state and people of Great Britain—might become another source of revenue, perhaps more abundant than all those already mentioned. Those countries are described as more fertile and extensive than Great Britain, and, in proportion to their extent, much richer and more populous. To draw a large revenue from them, it would probably be unnecessary to introduce any new system of taxation into countries already sufficiently, indeed more than sufficiently, taxed. It might be more proper to lighten rather than increase the burden on those unfortunate countries, and to seek revenue from them not by imposing new taxes, but by preventing the embezzlement and misuse of most of the taxes they already pay.

If Great Britain should prove unable to draw any considerable increase in revenue from the resources mentioned above, her only remaining recourse is to reduce her expenditure. In both the collection and the expenditure of public revenue, though there may still be room for improvement in each, Great Britain seems at least as economical as any of her neighbors. The military establishment she maintains for her own defense in peacetime is more moderate than that of any European state able to rival her in either wealth or power. None of these expenses, therefore, seems open to any considerable reduction. The expense of the colonies’ peacetime establishment was very considerable before the present disturbances began, and it is an expense that can, and, if no revenue can be drawn from them, certainly should, be eliminated altogether. Yet this constant peacetime expense, great as it is, is insignificant beside what the defense of the colonies has cost us in war. The last war, undertaken entirely on account of the colonies, cost Great Britain, as already observed, upwards of ninety millions. The Spanish war of 1739 was undertaken chiefly on their account; in it and in the French war that followed, Great Britain spent upwards of forty millions, a great part of which should justly be charged to the colonies. In those two wars the colonies cost Great Britain much more than twice the sum of the national debt before the first war began. Without those wars, that debt might, and probably would by now, have been completely paid off; and without the colonies, the first of those wars might not, and the second certainly would not, have been undertaken. This expense was incurred on their behalf because the colonies were supposed to be provinces of the British empire. But countries that contribute neither revenue nor military force to sustain the empire cannot be considered provinces. They may perhaps be considered appendages, a kind of splendid and showy equipage of the empire. But if the empire can no longer bear the expense of maintaining this equipage, it should certainly put it aside; and if it cannot increase its revenue in proportion to its expense, it should at least bring its expense into line with its revenue. If the colonies, despite refusing to submit to British taxes, are still to be considered provinces of the British empire, their defense in some future war may cost Great Britain as much as it has in any past war. For more than a century, the rulers of Great Britain have entertained the people with the notion that they possessed a great empire on the western side of the Atlantic. This empire, however, has so far existed only in the imagination. It has been not an empire but the project of an empire; not a gold mine but the project of a gold mine—a project that has cost, still costs, and, if pursued as it has been, is likely to cost immense sums without bringing any profit. For, as has been shown, the effects of the monopoly of colonial trade amount to a mere loss rather than a profit for the great body of the people. Surely it is now time for our rulers either to make this golden dream a reality—the dream in which they, perhaps, as well as the people, have been indulging—or to wake from it themselves and try to wake the people. If the project cannot be completed, it should be abandoned. If any provinces of the British empire cannot be made to contribute to the support of the whole empire, it is surely time for Great Britain to free herself from the expense of defending those provinces in war and supporting any part of their civil or military establishment in peace, and to adjust her future aims and designs to the true modesty of her circumstances.

In trade between Great Britain and its different colonies, people use gold and silver more or less according to how much they need them. Where they do not need these metals, they rarely appear. Where they do need them, they can usually find them.

In the trade between Great Britain and the tobacco colonies, British merchants usually give the colonists quite a long time to pay for goods. The colonists later pay in tobacco, valued at a set price. Paying in tobacco is easier for them than paying in gold and silver. Any merchant would find it easier to pay for goods supplied by his trading partners with other goods he happens to sell, rather than with money. He would not have to keep part of his stock idle as ready cash to meet occasional demands. He could always have more goods in his shop or warehouse and do more business. But a merchant's trading partners rarely all find it convenient to accept payment in the other goods he sells. The British merchants who trade with Virginia and Maryland are a particular group of trading partners. They find it easier to accept tobacco for the goods they sell to those colonies than to accept gold and silver. They expect to make a profit by selling the tobacco, but they could make none by selling gold and silver. So gold and silver rarely appear in trade between Great Britain and the tobacco colonies. Maryland and Virginia have as little need for these metals in foreign trade as in trade at home. Accordingly, they are said to have less gold and silver money than any other colonies in America. Yet they are considered as prosperous, and therefore as rich, as any of their neighbors.

In the northern colonies—Pennsylvania, New York, New Jersey, the four governments of New England, etc.—the value of their own produce exported to Great Britain falls short of the value of the manufactured goods they import. They import these goods both for themselves and for some other colonies, to which they carry them. They therefore owe the mother country a balance in gold and silver, and they generally manage to find it.

In the sugar colonies, the yearly value of produce exported to Great Britain is much greater than the value of all goods imported from there. If Great Britain paid for the sugar and rum sent each year to the mother country in the colonies themselves, it would have to send out a very large amount of money each year to settle the balance. A certain kind of politician would then see trade with the West Indies as extremely harmful. But many leading owners of sugar plantations live in Great Britain. They receive their rents in sugar and rum produced on their estates. The sugar and rum that West India merchants buy in those colonies for themselves are worth less than the goods they sell there each year. The merchants must therefore receive the balance in gold and silver, and they generally do.

The difficulty and irregularity of payments from the different colonies to Great Britain have not depended on how large or small the balances owed by each colony were. In general, payments from the northern colonies have been more regular than those from the tobacco colonies. Yet the northern colonies have usually paid quite a large balance in money, while the tobacco colonies have paid either no balance or a much smaller one. The difficulty of collecting payments from our different sugar colonies has depended less on the size of their balances than on how much uncultivated land they contained. More uncultivated land meant more temptation for planters to trade beyond their means, or to settle and plant more unused land than their capital allowed. For this reason, payments from the large island of Jamaica, which still has much uncultivated land, have generally been more irregular and uncertain than payments from the smaller islands of Barbadoes, Antigua, and St. Christopher’s. Those islands have been fully cultivated for many years, leaving planters less room for such ventures. The new acquisitions of Grenada, Tobago, St. Vincent’s, and Dominica have opened up new opportunities for such ventures. Lately, payments from these islands have been as irregular and uncertain as payments from the large island of Jamaica.

So poverty is not what causes the current shortage of gold and silver money in most of the colonies. They have a great need for active, productive stock, so it makes sense for them to hold as little idle stock as possible. They are therefore willing to use a cheaper means of trade, even though it is less convenient than gold and silver. This lets them put the value of that gold and silver into trading equipment, materials for clothing, household furniture, and the ironwork needed to build and expand their settlements and plantations. In kinds of business that require gold and silver money, they seem always able to find the amount they need. If they often fail to find it, the reason is usually not unavoidable poverty but excessive, unnecessary enterprise. Their payments are irregular and uncertain not because they are poor, but because they are too eager to become extremely rich. Suppose that all the revenue from colonial taxes beyond what was needed to pay for the colonies' own civil and military establishments had to be sent to Great Britain in gold and silver. The colonies have more than enough resources to buy the required amount of those metals. They would, however, have to exchange some of the surplus produce they now use to buy active, productive stock for idle stock. In their domestic business, they would have to use an expensive means of trade instead of a cheap one. The cost of buying it might somewhat cool their excessive eagerness to improve land. But it might not be necessary to send any American tax revenue in gold and silver. The money could be sent by bills drawn on particular merchants or companies in Great Britain and accepted by them. Some of America's surplus produce would be consigned to these merchants or companies. Once they had received its value in goods, they would pay the American revenue into the treasury in money. The entire transaction could often take place without exporting a single ounce of gold or silver from America.

It would not be unjust for both Ireland and America to help pay off Great Britain's public debt. This debt was incurred to support the government established by the Revolution. The protestants of Ireland owe that government not only all the authority they now have in their own country, but also every guarantee they have of their liberty, property, and religion. Several American colonies owe it their present charters and therefore their present constitutions. All the American colonies owe it the liberty, security, and property they have enjoyed ever since. The public debt was incurred to defend not just Great Britain but all the provinces of the empire. In particular, the enormous debt from the recent war, and much of the debt from the preceding war, were both incurred to defend America.

A union with Great Britain would give Ireland freedom of trade and other, much more important benefits. These would more than make up for any tax increases accompanying the union. The union with England freed Scotland's middle and lower ranks completely from the power of an aristocracy that had always oppressed them. A union with Great Britain would likewise free most people of every rank in Ireland from an even more oppressive aristocracy. Unlike Scotland's aristocracy, it does not rest on the natural and respectable differences of birth and wealth. It rests on the most hateful differences of all: religious and political prejudices. More than any other differences, these stir up the arrogance of oppressors and the hatred and anger of the oppressed. They commonly make people within one country more hostile to one another than people from different countries ever are. Without union with Great Britain, the people of Ireland are unlikely to think of themselves as one people for many ages.

No oppressive aristocracy has ever ruled the colonies. Even so, a union with Great Britain would greatly improve their happiness and peace. At least it would free them from the bitter and hostile factions that are inseparable from small democracies. These factions have often divided their people's loyalties and disturbed the peace of their governments, whose form comes so close to democracy. If the colonies separated completely from Great Britain, as seems very likely unless such a union prevents it, the factions would become ten times more hostile than ever. Before the present disturbances began, the mother country's power to restrain them had always kept their behavior from going beyond gross brutality and insults. If that power disappeared altogether, they would probably soon turn to open violence and bloodshed. In every large country united under one government, factional feeling is usually weaker in distant provinces than at the center of the empire. Those provinces are far from the capital, the main center of the struggle for power and political advantage. This makes them less caught up in any competing party's plans, and more indifferent and impartial when judging what all the parties do. Factional feeling is weaker in Scotland than in England. With a union, it would probably be weaker in Ireland than in Scotland. The colonies, too, would probably soon enjoy a degree of harmony and agreement now unknown anywhere in the British empire. Ireland and the colonies would, of course, face heavier taxes than they currently pay. But if public revenue were carefully and faithfully used to pay off the national debt, most of those taxes might not last long. Great Britain's public revenue could soon be reduced to the amount needed to maintain a moderate peacetime establishment.

The East India Company's territorial acquisitions belong without question to the Crown, meaning the state and people of Great Britain. They could become another source of revenue, perhaps more plentiful than all the sources already mentioned. Those territories are said to be more fertile and more extensive than Great Britain, and richer and more populous for their size. To get substantial revenue from them, it would probably not be necessary to introduce a new tax system in countries that are already taxed enough, or more than enough. It might be better to ease those unfortunate countries' burden rather than increase it. Revenue could instead be obtained by preventing the theft and misuse of most of the taxes they already pay.

If Great Britain cannot substantially increase its revenue from any of the sources mentioned above, its only remaining option is to cut its expenses. It may still be able to improve how it collects and spends public revenue. Even so, Great Britain seems at least as economical in both respects as any of its neighbors. In peacetime, it keeps a smaller military establishment for its own defense than any European state that can rival it in wealth or power. So none of these areas seems to offer substantial savings. Before the present disturbances began, the peacetime cost of maintaining the colonies was very large. This cost can be eliminated altogether and certainly should be if no revenue can be obtained from them. Yet large as this constant peacetime expense is, it is insignificant beside what defending the colonies has cost us in wartime. As already noted, the last war, fought entirely on account of the colonies, cost Great Britain upwards of ninety millions. The Spanish war of 1739 was fought mainly on their account. In that war and the French war that followed it, Great Britain spent upwards of forty millions. A large part of that expense should fairly be charged to the colonies. In these two wars, the colonies cost Great Britain much more than twice the entire national debt before the first war began. Without these wars, that debt could have been, and probably would by now have been, paid off completely. Without the colonies, the first war might not have been fought, and the second certainly would not have been. This money was spent on the colonies because they were supposed to be provinces of the British Empire. But countries that contribute neither revenue nor military forces to support the empire cannot be considered provinces. They might be called accessories: a kind of splendid, showy display for the empire. But if the empire can no longer afford to maintain this display, it certainly ought to give it up. If it cannot increase revenue to match expenses, it should at least bring expenses into line with revenue. If the colonies are still to be considered provinces of the British empire despite their refusal to accept British taxes, defending them in a future war may cost Great Britain as much as it has in any past war. For more than a century, Great Britain's rulers have entertained the people with the idea that they possess a great empire west of the Atlantic. But so far this empire has existed only in their imaginations. It has not been an empire, but a plan for an empire; not a gold mine, but a plan for a gold mine. The plan has cost, continues to cost, and, if pursued as before, is likely to cost an immense amount, with no likely profit. As has been shown, the monopoly on colonial trade brings the great majority of people only loss, not profit. Surely it is time for our rulers either to make this golden dream real—a dream they may have indulged in as much as the people have—or to wake up from it and try to wake up the people. If the plan cannot be completed, it should be abandoned. If any provinces of the British empire cannot be made to help support the whole empire, it is surely time for Great Britain to stop paying to defend them in wartime and to maintain any part of their civil or military establishments in peacetime. It should adjust its future aims and plans to its actual, modest resources.