Book IV, Chapter VII, 3

The Spanish crown received some revenue from its colonies, through its share of their gold and silver, from the moment they were founded. Moreover, this was a kind of revenue likely to stir human greed to the most extravagant hopes of still greater wealth. From their first establishment, therefore, the Spanish colonies drew much attention from their mother country, while those of other European nations were long left largely neglected. The former perhaps prospered no more for this attention, nor the latter any less for the neglect. In relation to the extent of the country they occupy to some degree, the Spanish colonies are regarded as less populous and prosperous than those of almost any other European nation. Yet even their growth in population and improvement has certainly been both rapid and great. Ulloa describes Lima, founded since the conquest, as having fifty thousand inhabitants nearly thirty years ago. He describes Quito, once only a wretched Indian hamlet, as equally populous in his own time. Gemel i Carreri—allegedly a pretended traveler, though he appears everywhere to have written from remarkably good information—describes the city of Mexico as having a hundred thousand inhabitants. Despite all the exaggerations of Spanish writers, that is probably more than five times its population under Montezuma. These figures greatly exceed the populations of Boston, New York, and Philadelphia, the three largest cities in the English colonies. Before the Spanish conquest, neither Mexico nor Peru had cattle suited to drawing loads. The lama was their only beast of burden, and its strength appears to have been considerably less than a common ass's. They did not know the plow or the use of iron. They had neither coined money nor any established medium of commerce; their trade was conducted by barter. A kind of wooden spade was their chief agricultural tool. Sharp stones served as knives and hatchets for cutting; fish bones and the tough sinews of certain animals served as sewing needles. These appear to have been their chief implements of work. In such circumstances, it seems impossible that either empire was as improved or as well cultivated as it is now, when both have ample supplies of every kind of European cattle and have acquired the use of iron, the plow, and many European arts. A country's population, however, must be proportionate to its degree of improvement and cultivation. Despite the cruel destruction of native peoples following the conquest, these two great empires are probably more populous now than ever before. The people, to be sure, are very different; for I think we must acknowledge that the Spanish creoles are in many respects superior to the ancient Indians.

After the Spanish settlements, the Portuguese settlement in Brazil is the oldest made by any European nation in America. But for a long time after its discovery no gold or silver mines were found there, and consequently it yielded the crown little or no revenue. It was therefore largely neglected for many years; during that neglect it grew into a great and powerful colony. While Portugal was under Spanish dominion, the Dutch attacked Brazil and took seven of its fourteen provinces. They expected soon to conquer the other seven, when Portugal regained its independence through the elevation of the house of Braganza to the throne. The Dutch, being enemies of Spain, then became friends of the Portuguese, who were also Spain's enemies. They accordingly agreed to leave the unconquered part of Brazil to the king of Portugal; he agreed to leave their conquests to them, as a matter not worth disputing with such good allies. But the Dutch government soon began oppressing the Portuguese colonists. Instead of contenting themselves with complaints, the colonists took up arms against their new masters and, by their own courage and determination—with the mother country's tacit consent, indeed, but without its open help—drove them out of Brazil. Finding they could retain no part of the country, the Dutch accepted its complete restoration to the Portuguese crown. This colony is said to contain more than six hundred thousand people: Portuguese, people of Portuguese descent, creoles, mulattoes, and people of mixed Portuguese and Brazilian ancestry. No single colony in America is thought to contain so many people of European descent.

Toward the end of the fifteenth century and through most of the sixteenth, Spain and Portugal were the two great oceanic naval powers. Venice traded throughout Europe, but its fleet had scarcely sailed beyond the Mediterranean. By virtue of their first discovery the Spaniards claimed all America as their own. They could not prevent a naval power as great as Portugal from settling in Brazil, but their name then inspired such fear that most other European nations hesitated to settle anywhere else on that vast continent. The Spaniards murdered all the French who tried to settle in Florida. Toward the end of the sixteenth century, however, the defeat or failure of what the Spaniards called their invincible armada weakened their naval power so much that they could no longer obstruct settlements by other European nations. Thus in the seventeenth century the English, French, Dutch, Danes, and Swedes—all the major nations with ocean ports—attempted settlements in the new world.

The Swedes settled in New Jersey. The number of Swedish families still found there is sufficient evidence that this colony would very likely have prospered if its mother country had protected it. Neglected by Sweden, however, it was soon absorbed by the Dutch colony of New York, which in turn came under English dominion in 1674.

The small islands of St. Thomas and Santa Cruz are the only territories the Danes have ever held in the new world. These small settlements, too, were governed by an exclusive company, which alone had the right both to purchase the colonies' surplus produce and to supply the foreign goods they needed. In both buying and selling, then, it had not only the power to oppress them but the strongest temptation to do so. The government of an exclusive merchant company is perhaps the worst government any country can have. It could not altogether halt these colonies' progress, though it made that 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, like those in the East Indies, were originally placed under an exclusive company's government. Though the progress of some of them has been considerable beside that of almost any long-settled and populated country, it has been slow and weak beside that of most new colonies. Surinam, though a substantial colony, is still less developed than most other European nations' sugar colonies. Nova Belgia, now divided into the two provinces of New York and New Jersey, would probably soon have become substantial as well, even if it had remained under Dutch rule. Abundant cheap good land is so powerful a source of prosperity that even the worst government can scarcely suppress its effects altogether. The great distance from the mother country would also have allowed colonists, through smuggling, to evade the company's monopoly to some extent. The company now permits all Dutch ships to trade with Surinam upon payment of two and a-half per cent. of their cargo's value for a license. It reserves for itself only the direct trade from Africa to America, consisting almost entirely of the slave trade. This easing of its exclusive privileges is probably the principal cause of the prosperity the colony now enjoys. Curacoa and Eustatia, the Dutch's two chief islands, are free ports open to ships of every nation. Surrounded by better colonies whose ports admit ships of only one nation, these two barren islands owe much of their prosperity to that freedom.

For most of the last century and part of this one, the French colony of Canada was governed by an exclusive company. Under so unfavorable an administration its growth was necessarily very slow compared with other new colonies. But it became much faster when the company was dissolved after the collapse of the so-called Mississippi scheme. When the English took possession, they found nearly twice as many inhabitants as father Charlevoix had counted between twenty and thirty years earlier. That Jesuit had traveled throughout the country and had no reason to make it appear less substantial than it really was.

The French colony of St. Domingo was founded by pirates and freebooters who for a long time neither sought France's protection nor recognized its authority. When this band of outlaws became enough like citizens to acknowledge that authority, it long had to be exercised with great gentleness. During this period the colony's population and cultivation grew very rapidly. Even the oppression of the exclusive company to which it was subjected for a time, along with all France's other colonies, had only slowed its progress, not stopped it altogether. Its prosperity resumed as soon as that oppression was removed. It is now the most important sugar colony in the West Indies; its output is said to exceed that of all the English sugar colonies combined. France's other sugar colonies are generally flourishing as well.

No colonies, however, have advanced more rapidly than the English colonies in North America.

The two great causes of prosperity in all new colonies appear to be abundant good land and the freedom to manage their affairs in their own way.

Although the English colonies in North America certainly have very abundant good land, they have less than the Spanish and Portuguese colonies, and no more than some of the French colonies before the late war. But the political institutions of the English colonies have favored its improvement and cultivation more than those of the other three nations.

First, the engrossing of uncultivated land, though by no means entirely prevented, has been more limited in the English colonies than elsewhere. A colonial law requires each landowner to improve and cultivate a certain proportion of his land within a fixed period, failing which the neglected land becomes available for grant to someone else. Though perhaps not very strictly enforced, it has nevertheless had some effect.

Secondly, Pennsylvania has no right of primogeniture: land, like movable property, is divided equally among all the family's children. In three New England provinces, the eldest receives only a double portion, as under Mosaic law. Thus even when one person acquires too much land in those provinces, it is likely to be adequately divided again within a generation or two. In the other English colonies, admittedly, primogeniture applies as under English law. But throughout the English colonies, land is held by free soccage, a tenure that makes sale easier; the recipient of a large tract generally finds it profitable to sell most of it as quickly as possible, retaining only a small quit-rent. In the Spanish and Portuguese colonies, the so-called right of majorazzo governs inheritance of all the great estates carrying a title of honor. Each such estate passes undivided to one person and is effectively entailed and unsaleable. The French colonies, it is true, follow the custom of Paris, which favors younger children in the inheritance of land far more than English law does. Yet if any part of an estate held by the noble tenure of chivalry and homage is sold there, the heir of the superior or the heir of the family has, for a limited time, the right to buy it back. All the country's largest estates are held under such noble tenures, which necessarily obstruct sales. In a new colony, however, a large uncultivated estate is likely to be divided much sooner by sale than by inheritance. As already observed, the abundance and low price of good land are the chief causes of new colonies' swift prosperity. Engrossing land in effect abolishes that abundance and low price. Engrossing uncultivated land is, moreover, the greatest obstacle to its improvement, while the labor employed in improving and cultivating land yields society its greatest and most valuable produce. Here the produce of labor pays not only its own wages and the profit on the stock employing it, but also the rent of the land on which it works. English colonial labor, being more occupied in improving and cultivating land, is therefore likely to yield more abundant and valuable produce than the labor of the other three nations, which engrossment of land turns to some extent toward other employments.

From the very beginning of its colonies, the Spanish crown received revenue from its share of their gold and silver. This kind of revenue also stirred up extravagant hopes of even greater wealth in people eager for riches. So Spain paid a great deal of attention to its colonies from the start, while other European countries largely neglected theirs for a long time. Spain’s colonies may not have done better because of that attention, and the others may not have done worse because of that neglect. Compared with the amount of land they occupy, the Spanish colonies are considered less populous and prosperous than the colonies of almost any other European nation. Even so, their growth in population and the development of their land have certainly been very great and very fast. According to Ulloa, Lima, a city founded after the conquest, had fifty thousand inhabitants near thirty years ago. The same writer says Quito, once a miserable Indian hamlet, had just as many inhabitants in his day. Gemel i Carreri is said to have falsely claimed to be a traveler, but he seems to have drawn on excellent information everywhere. He says the city of Mexico had a hundred thousand inhabitants. Despite all the exaggeration by Spanish writers, that is probably more than five times its population under Montezuma. All these figures are far above the populations 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 lama was their only pack animal, and it seems to have been much weaker than an ordinary ass. They did not know the plow or the use of iron. They had no coins and no other standard medium of commerce. They traded by barter. Their main farming tool was a kind of wooden spade. They used sharp stones as knives and hatchets, and fish bones and the tough sinews of certain animals as sewing needles. These seem to have been their principal tools for their work. With such tools, it seems impossible that either empire could have developed and cultivated its land as much as it has today. They now have plenty of every kind of European cattle, as well as iron, the plow, and many European skills. But a country’s population must correspond to how far its land has been developed and cultivated. Despite the cruel destruction of native people after the conquest, these two great empires probably have more inhabitants now than ever before. The people are certainly very different, too. I think we must acknowledge that Spanish creoles are in many respects superior to the ancient Indians.

After the Spanish settlements, Portugal’s settlement in Brazil is the oldest established by a European nation in America. For a long time after its discovery, no gold or silver mines were found there. Because it brought little or no revenue to the crown, Portugal largely neglected it for many years. During this period of neglect it grew into a large and powerful colony. While Spain ruled Portugal, the Dutch attacked Brazil and captured seven of its fourteen provinces. They expected to take the other seven soon, but Portugal regained its independence when the family of Braganza took the throne. The Dutch were enemies of Spain and so became friends of Portugal, which was also Spain’s enemy. They agreed to leave the unconquered part of Brazil to Portugal’s king. He agreed to let them keep the part they had captured, since it seemed hardly worth quarreling about with such useful allies. But the Dutch government soon began to oppress the Portuguese colonists. Instead of merely complaining, the colonists took up arms against their new rulers. Through their own courage and determination, they drove the Dutch out of Brazil. Their home country quietly allowed this but gave them no openly acknowledged help. The Dutch saw they could not hold any of the country and accepted its complete return to Portugal’s crown. This colony is said to contain more than six hundred thousand people: Portuguese people and their descendants, creoles, mulattoes, and people of mixed Portuguese and Brazilian descent. No single colony in America is thought to contain as many people of European descent.

Toward the end of the fifteenth century and during most of the sixteenth, Spain and Portugal were the two great naval powers on the ocean. Venice traded throughout Europe, but its fleet had hardly ever sailed beyond the Mediterranean. Spain claimed all America on the grounds that it had discovered it first. It could not keep a great naval power like Portugal from settling in Brazil. But Spain’s name inspired such fear at the time that most other European nations were afraid to establish themselves anywhere else on that huge continent. The Spaniards murdered all the French who tried to settle in Florida. Then Spain’s naval power declined after the defeat or failure of the fleet it called its invincible armada, toward the end of the sixteenth century. It could no longer block other European settlements. During the seventeenth century, therefore, the English, French, Dutch, Danes, and Swedes—all the major nations with ocean ports—tried to establish settlements in the new world.

The Swedes settled in New Jersey. The Swedish families still found there are good evidence that the colony was likely to prosper if Sweden had protected it. Sweden neglected it instead, and the Dutch colony of New York soon absorbed it. New York itself came under English rule in 1674.

The small islands of St. Thomas and Santa Cruz are the only places in the new world the Danes have ever owned. An exclusive company governed these small settlements. It alone had the right to buy the colonies’ surplus produce and to supply the foreign goods they needed. It therefore had both the power and the strongest incentive to exploit the colonists when buying and selling. Government by an exclusive company of merchants may be the worst possible government for any country. Still, it did not stop these colonies from growing altogether, although it made their growth 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, like those in the East Indies, were originally governed by an exclusive company. Some of them made considerable progress compared with nearly any country settled long ago. But their progress was slow and weak compared with that of most new colonies. Surinam is an important colony, yet it remains smaller than most other European nations’ sugar colonies. Nova Belgia, now divided into New York and New Jersey, probably would soon have grown important even if it had stayed under Dutch rule. Abundant cheap good land is such a powerful source of prosperity that even the worst government can hardly prevent it from having some effect. The great distance from the mother country would also let colonists evade the company’s monopoly to some extent through smuggling. At present the company lets all Dutch ships trade with Surinam if they pay two and a-half per cent. of their cargo’s value for a license. It keeps only the direct trade from Africa to America for itself, almost all of which is the slave trade. This easing of its exclusive privileges is probably the main reason for the colony’s present degree of prosperity. Curacoa and Eustatia, the two main Dutch islands, are free ports open to every nation’s ships. That freedom has made these two barren islands prosper among better colonies whose ports are open to only one nation.

For most of the last century and part of this one, an exclusive company governed the French colony of Canada. Under such an unfavorable administration, it necessarily grew very slowly compared with other new colonies. Its growth became much faster when the company was dissolved after the collapse of the so-called Mississippi scheme. When the English took possession of Canada, they found nearly twice as many inhabitants as father Charlevoix had reported between twenty and thirty years earlier. That Jesuit had traveled throughout the country and had no desire to make it look less important than it really was.

Pirates and freebooters established the French colony of St. Domingo. For a long time they neither needed France’s protection nor recognized its authority. When these bandits became enough like citizens to recognize that authority, France still had to exercise it very gently for many years. During that period the colony’s population and development grew very quickly. An exclusive company later governed it for a time, along with all the other French colonies. Its oppression certainly slowed growth but could not stop it entirely. Prosperity resumed as soon as the colony was freed from that oppression. It is now the most important sugar colony in the West Indies, and its output is said to exceed that of all the English sugar colonies combined. The other French sugar colonies are generally very prosperous too.

No colonies, however, have grown faster than the English colonies in North America.

Plenty of good land and freedom to run their own affairs in their own way seem to be the two main causes of prosperity in every new colony.

The English colonies of North America certainly have plenty of good land. But they have less than the Spanish and Portuguese colonies, and no more than some colonies the French held before the late war. English colonial institutions, however, have done more to encourage the development and cultivation of that land than those of the other three nations.

First, English colonies have done more than any others to limit the accumulation of uncultivated land in a few hands, though they have not stopped it entirely. Colonial law requires every landowner to improve and cultivate a certain portion of the land within a set time. If an owner fails, someone else can be granted the neglected land. The law may not have been enforced very strictly, but it has had some effect.

Secondly, Pennsylvania does not give all inherited land to the firstborn child. Like movable property, land is divided equally among all the family’s children. In three New England provinces, the oldest child gets only a double share, as under Mosaic law. So even if someone in those provinces accumulates too much land, it will probably be divided up again in a generation or two. The other English colonies do follow the English rule favoring the firstborn. But throughout the English colonies, land is held by free soccage, a form of ownership that makes it easy to sell. Someone granted a large tract usually finds it profitable to sell most of it as soon as possible and keep only a small quit-rent. In the Spanish and Portuguese colonies, the rule called majorazzo governs the inheritance of all great estates tied to a title of honor. Each whole estate goes to one person and is effectively locked into the family, unable to be sold. French colonies follow the custom of Paris, which gives younger children a much better share of inherited land than English law does. But if any part of an estate held under the noble terms of chivalry and homage is sold in a French colony, the superior’s heir or the family’s heir has a right to buy it back for a limited period. All the country’s largest estates are held on these noble terms, which necessarily make sales harder. In a new colony, however, selling a large uncultivated estate is likely to divide it far more quickly than inheritance does. As already noted, abundant cheap good land is the principal cause of a new colony’s rapid prosperity. When people accumulate large holdings, they effectively take away that abundance and low price. The accumulation of uncultivated land also presents the greatest obstacle to improving it. Yet labor spent improving and cultivating land produces the greatest and most valuable output for society. Its output pays not just the workers’ wages and the profit on the stock that employs them, but rent on the land where they work as well. More English colonial labor is therefore spent improving and cultivating land. It is likely to produce a larger and more valuable output than labor in the colonies of the other three nations, where large landholdings divert it to other work to one degree or another.