Book IV, Chapter VII, 4

Thirdly, English colonial labor is likely not only to produce more and better goods: because taxes are moderate, a larger share of that produce remains with the colonists themselves. They can accumulate it and employ it to set still more labor in motion. The English colonists have never yet contributed anything to the defense of the mother country or the support of its civil government. On the contrary, their own defense has hitherto been paid for almost entirely by the mother country; and fleets and armies cost vastly more than civil government need cost. The expense of the colonies' own civil government has always been very modest. It has generally covered only adequate salaries for the governor, judges, and certain other officers of police, and the upkeep of a few particularly useful public works. Before the present disturbances began, the civil establishment of Massachusetts Bay cost only about £18;000 a-year; New Hampshire and Rhode Island, £3500 each; Connecticut, £4000; New York and Pennsylvania, £4500 each; New Jersey, £1200; Virginia and South Carolina, £8000 each. The civil establishments of Nova Scotia and Georgia receive partial support from an annual parliamentary grant. Nova Scotia also contributes about £7000 a-year to its public expenses, and Georgia about £2500 a-year. In short, before the present disturbances began, all the civil establishments of North America together, excluding Maryland and North Carolina, for which no precise figures have been obtained, cost their inhabitants no more than £64,700 a-year. This is an ever memorable example of how three millions of people can be governed, and governed well, at so little expense. The most important governmental expense, to be sure—defense and protection—has consistently fallen on the mother country. Even the ceremonies of colonial civil government, on the arrival of a new governor or opening of a new assembly, etc., are sufficiently dignified without costly pomp or display. Church government follows an equally frugal plan. Tithes are unknown, and the clergy, far from numerous, are supported either by moderate stipends or by voluntary contributions from the people. By contrast, taxes on the colonies provide some support to the power of Spain and Portugal. France, admittedly, has never drawn much revenue from its colonies, since the taxes it raises there are generally spent there. But the colonial governments of all three nations operate on a much larger scale and attend to far more expensive ceremonies. The sums spent on the reception of a new viceroy of Peru, for example, have often been enormous. Such ceremonies are not merely actual taxes borne by wealthy colonists on those particular occasions: they also cultivate habits of vanity and expense on every other occasion. Beyond being severe occasional taxes, they help establish perpetual and still more severe ones of the same sort—the ruinous taxes of private luxury and extravagance. Church government in the colonies of all three nations is likewise exceedingly oppressive. All have tithes, exacted with the utmost rigor in the Spanish and Portuguese colonies. All are further burdened by numerous mendicant friars. Their begging, not merely permitted but sanctified by religion, is an especially severe tax on the poor, who are carefully taught that giving them charity is a duty and refusing it a very great sin. Beyond all this, the clergy in each of these countries are the greatest engrossers of land.

Fourthly, in selling their surplus produce—what remains beyond their own consumption—the English colonies have enjoyed more favorable treatment and access to a wider market than any other European nation's colonies. Every European nation has sought, in some measure, to monopolize its colonies' trade. It has accordingly barred foreign ships from trading with them and forbidden them to import European goods from foreign nations. But nations have exercised this monopoly in very different ways.

Some nations have granted all their colonies' commerce to an exclusive company, from which colonists had to buy every European good they needed and to which they had to sell all their surplus produce. The company thus had an interest not only in selling the former as dearly and buying the latter as cheaply as possible, but in buying no more produce, even at that low price, than it could sell at a very high price in Europe. Its interest lay in reducing the value of colonial surplus produce in every instance and, in many instances, in discouraging and suppressing the natural growth of its quantity. Of all measures that can readily be devised to stunt a new colony's natural growth, an exclusive company is undoubtedly the most effective. Yet this has been the policy of Holland, though during the present century its company has in many respects ceased to exercise its exclusive privilege. It was also Denmark's policy until the late king's reign. France has occasionally adopted it; and, more recently, since 1755, Portugal has adopted it for at least two leading Brazilian provinces, Pernambucco and Marannon, after every other nation had abandoned it as absurd.

Other nations, without creating an exclusive company, have restricted all colonial commerce to one port in the mother country. From that port a ship could sail only with a fleet at a specified season or, if sailing alone, under a special license, usually obtained at considerable expense. This policy did open colonial trade to all subjects of the mother country, provided they traded from the proper port, at the proper season, and in the proper vessels. But the various merchants who pooled their stocks to equip those licensed vessels would have an interest in acting together. Trade conducted this way would therefore necessarily follow nearly the same principles as trade conducted by an exclusive company. Their profits would be nearly as exorbitant and oppressive. The colonies would be poorly supplied, compelled to buy very dear and sell very cheap. Until a few years ago, this had always been Spain's policy; the prices of all European goods in the Spanish West Indies are accordingly said to have been enormous. Ulloa tells us that in Quito a pound of iron sold for about 4s:6d., and a pound of steel for about 6s:9d. sterling. Yet it is chiefly to buy European goods that the colonies part with their own produce. The more they pay for those goods, therefore, the less they really receive for their produce: making the one dear is equivalent to making the other cheap. In this respect Portugal's policy toward all its colonies except Pernambucco and Marannon is the same as Spain's old policy; for these two it has lately adopted a still worse one.

Still other nations leave colonial trade open to all their subjects, who may conduct it from any port of the mother country and need no license beyond ordinary customs-house papers. The number and scattered situation of these traders make a general combination impossible; their competition keeps profits from becoming very exorbitant. Under such a liberal policy colonies can sell their produce and buy European goods at reasonable prices. Since the dissolution of the Plymouth company, when our colonies were still in their infancy, this has always been England's policy. It has generally been France's policy too, and has invariably been so since the dissolution of the company commonly called its Mississippi company in England. Though profits on the colonial trade of France and England are doubtless somewhat higher than they would be if merchants of all nations could compete, they are by no means exorbitant. Accordingly, European goods are not extravagantly expensive in the greater part of either nation's colonies.

Moreover, only certain goods in the British colonies' surplus produce are restricted for export to the mother-country market. Because these goods are listed in the act of navigation and some later acts, they are called enumerated commodities. The rest are called non-enumerated and may be exported directly to other countries, provided they travel in British or plantation ships whose owners and three fourths of whose mariners are British subjects.

The non-enumerated commodities include some of the most important products of America and the West Indies: every kind of grain, lumber, salt provisions, fish, sugar, and rum.

Grain is naturally the first and principal crop cultivated in every new colony. By giving the colonies a very wide market for it, the law encourages them to grow far more than a thinly populated country can consume, thus securing abundant food in advance for a continually increasing population.

Where a country is entirely wooded, timber is consequently worth little or nothing, and the cost of clearing land is the chief obstacle to improvement. By giving the colonies a broad market for lumber, the law seeks to promote improvement. It raises the value of a commodity otherwise worth little, allowing them to profit to some extent from what would otherwise be mere expense.

In a country less than half populated and less than half cultivated, cattle naturally multiply beyond what its inhabitants can consume and are often worth little or nothing as a result. But, as has already been shown, cattle must command a certain price relative to grain before most of any country's land can be improved. By allowing a very extensive market for American cattle in every form, dead and alive, the law seeks to raise the value of a commodity whose high price is so essential to improvement. The beneficial effects of this freedom must, however, have been somewhat reduced by the 4th of Geo. III. c. 15, which classifies hides and skins as enumerated commodities and thereby tends to lower the value of American cattle.

Increasing Great Britain's shipping and naval strength by expanding the colonial fisheries appears to have been an almost constant aim of the legislature. The fisheries have accordingly received all the encouragement freedom can offer and have flourished. The New England fishery in particular was, before the late disturbances, perhaps among the most important in the world. In Great Britain, despite an extravagant bounty, whaling accomplishes so little that, in many people's opinion—which I do not profess to endorse—the entire catch barely exceeds the value of the bounties paid for it each year. In New England it is carried on extensively without any bounty. Fish is one of the chief articles with which North Americans trade to Spain, Portugal, and the Mediterranean.

Sugar was originally enumerated and could be exported only to Great Britain. In 1751, however, following representations by sugar planters, permission was given to export it anywhere in the world. The restrictions attached to 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 only market for all the sugar produced on British plantations. Their consumption is rising so fast that, although increasing cultivation in Jamaica and the ceded islands has greatly increased sugar imports during these twenty years, exports to foreign countries are said to be little greater than before.

Rum is a very important article of American trade with the African coast, from which the Americans bring back enslaved Black people in exchange.

If all America's surplus grain of every kind, salt provisions, and fish had been enumerated and thus forced into Great Britain's market, they would have competed too much with the products of our own people's industry. Probably it was less concern for America's interests than fear of such competition that kept these important commodities off the list and, under the ordinary law, prohibited the importation into Great Britain of all grain except rice and of all salt provisions.

Originally non-enumerated commodities could be exported anywhere in the world. Lumber and rice were once enumerated; when later removed from the list, their European markets were restricted to countries south of Cape Finisterre. The 6th of George III. c. 52 imposed the same restriction on all non-enumerated goods. The European regions south of Cape Finisterre are not manufacturing countries, so we are less afraid that colonial ships will bring back from them manufactured goods that could compete with ours.

Thirdly, the English colonists’ labor is likely to produce more, and more valuable, output. Because their taxes are moderate, they also keep a larger share of that output. They can save it and use it to employ still more labor. English colonists have never contributed anything toward defending the mother country or supporting its civil government. Instead, the mother country has so far paid for almost all of their defense. Fleets and armies, however, cost vastly more than ordinary civil government. The colonies’ own civil governments have always been very inexpensive. Their costs have generally covered adequate salaries for governors, judges, and a few other officials charged with maintaining order, along with a few of the most useful public works. Before the present disturbances began, the civil government of Massachusetts Bay used to cost only about £18;000 a-year. New Hampshire and Rhode Island each cost £3500; Connecticut, £4000; New York and Pennsylvania, £4500 each; New Jersey, £1200; and Virginia and South Carolina, £8000 each. Parliament’s annual grants partly pay for civil government in Nova Scotia and Georgia. Nova Scotia also contributes about £7000 a-year toward its own public expenses, and Georgia about £2500 a-year. In short, before the present disturbances began, all the civil governments in North America together cost their inhabitants no more than £64,700 a-year, apart from Maryland and North Carolina, for which exact figures are unavailable. It is a memorable example of how three millions of people can be governed, and governed well, at so little cost. The mother country has, of course, consistently paid the largest part of government costs: defense and protection. Colonial civil ceremonies, such as welcoming a new governor or opening a new assembly, are proper enough but involve no costly show or display. Their church governments are equally economical. They have no tithes, and their relatively few clergy live on modest salaries or voluntary contributions. By contrast, the governments of Spain and Portugal get some financial support from taxes on their colonies. France has never received much revenue from its colonies: the taxes it collects there are generally spent there. But all three countries run their colonial governments on a much larger scale, with far more expensive ceremonies. The sums spent to welcome a new viceroy of Peru, for example, have often been enormous. Rich colonists pay for these ceremonies as real taxes on those occasions. The ceremonies also teach them to spend extravagantly on appearances at all other times. Besides being very burdensome one-time taxes, they help establish still more burdensome, continuing taxes of the same kind: the ruinous cost of private luxury and extravagance. Church government is also extremely oppressive in all three nations’ colonies. All collect tithes, and the Spanish and Portuguese colonies collect them with the greatest severity. All are further burdened with large numbers of begging friars. Religion not only permits their begging but makes it sacred. It places a very heavy burden on poor people, who are carefully taught that giving to the friars is a duty and refusing them charity a very great sin. On top of this, the clergy are the largest accumulators of land in all these colonies.

Fourthly, the English colonies have had more favorable treatment and access to a wider market than any other European nation’s colonies when selling the produce left over after their own consumption. Every European nation has tried, to some extent, to keep its colonies’ commerce for itself. Each has therefore barred foreign ships from trading with its colonies and barred its colonies from buying European goods from foreign nations. But nations have enforced these monopolies in very different ways.

Some countries have handed all their colonial commerce to an exclusive company. Colonists had to buy every European good they needed from that company and sell it all their surplus produce. The company therefore had an interest in charging as much as possible for the goods and paying as little as possible for the produce. Even at its low buying price, it had an interest in buying only as much produce as it could sell at a very high price in Europe. It benefited both from lowering the value of the colonies’ surplus produce in every case and, in many cases, from holding down the natural growth of its quantity. If you wanted to stunt a new colony’s natural growth, you could hardly devise a more effective method than an exclusive company. The Dutch followed this policy, although during the present century their company has given up the exercise of many of its exclusive rights. Denmark followed it until the reign of its late king. France has followed it at times. And since 1755 Portugal has adopted it for at least two of Brazil’s chief provinces, Pernambucco and Marannon, even after every other nation had abandoned it as absurd.

Other countries did not set up an exclusive company but restricted all colonial commerce to one port in the mother country. Ships could leave that port only with a fleet in a designated season or, if sailing alone, with a special license that usually cost a great deal. This system did allow anyone from the mother country to trade with the colonies, as long as they used the right port, season, and vessels. But the various merchants combining their stocks to equip licensed vessels would find it profitable to cooperate. Their trade would therefore operate on much the same principles as an exclusive company’s. Their profit would be nearly as excessive and oppressive. Colonists would receive inadequate supplies and would have to buy at very high prices and sell at very low ones. Until a few years ago, Spain always followed this policy. Accordingly, European goods were said to cost enormous amounts in the Spanish West Indies. Ulloa tells us that in Quito a pound of iron sold for about 4s:6d. and a pound of steel for about 6s:9d. sterling. But the colonies sell their own produce mainly to buy European goods. The more they pay for those goods, the less they actually receive for their produce. Expensive European goods have the same effect as cheap colonial produce. Except in Pernambucco and Marannon, Portugal’s policy for all its colonies is in this respect the same as Spain’s old policy. For those two provinces it has recently adopted an even worse one.

Still other countries let any of their subjects trade with the colonies from any port in the mother country. Traders need no license beyond the ordinary customs-house clearance papers. With so many traders scattered across different ports, they cannot form one general alliance. Competition prevents them from earning excessively high profits. This more open policy lets colonists sell their produce and buy European goods at reasonable prices. England has always followed it since the Plymouth company was dissolved, when our colonies were still in their infancy. France has generally done so too, and has done so consistently since the dissolution of what England commonly calls its Mississippi company. Profits on French and English colonial trade are surely somewhat higher than they would be if every other nation could compete. But they are far from excessive. Consequently, European goods are not extravagantly expensive in most of either nation’s colonies.

When exporting their own surplus produce, British colonies are restricted to the mother country’s market only for certain goods. These are listed in the act of navigation and several later acts, so they are called enumerated commodities. The others are called non-enumerated commodities. Colonists may export them directly to other countries, provided they use British or plantation ships whose owners and three fourths of the mariners are British subjects.

The non-enumerated commodities include some of America’s and the West Indies’ most important products: grain of all sorts, lumber, salt provisions, fish, sugar, and rum.

Grain is naturally the first and main crop in any new colony. By allowing colonists a very large market for it, the law encourages them to grow much more than a sparsely inhabited country needs. They can thus provide ample food in advance for a steadily growing population.

In a country entirely covered with trees, timber has little or no value. The cost of clearing land is therefore the main obstacle to developing it. By providing a very large market for colonial lumber, the law tries to make development easier. It raises the price of otherwise nearly worthless timber and lets colonists earn something from what would otherwise be a pure expense.

Where a country is not even half populated or half cultivated, cattle naturally multiply beyond what the inhabitants can use. They are therefore often worth little or nothing. But as already shown, cattle must reach a certain price relative to grain before most of a country’s land can be improved. By allowing a very large market for American cattle, dead or alive and in all forms, the law tries to increase the value of an animal whose high price is so important to developing the land. This freedom’s benefits must, however, be somewhat reduced by the 4th of Geo. III. c. 15. It adds hides and skins to the enumerated commodities and thus tends to lower the value of American cattle.

The lawmakers seem to have kept one aim almost constantly in mind: increasing Great Britain’s shipping and naval strength by expanding our colonies’ fisheries. They have therefore given these fisheries all the encouragement that freedom can provide, and the fisheries have flourished. Before the late disturbances, New England’s fishery in particular was perhaps one of the most important in the world. Great Britain pays an extravagant bounty for whaling, yet achieves so little that many people think the entire catch is worth hardly more than the bounties paid each year. I cannot vouch for that opinion. New England, by contrast, carries on a very large whale fishery without any bounty. Fish is one of the chief goods North Americans trade to Spain, Portugal, and the Mediterranean.

Sugar was originally an enumerated commodity that could be exported only to Great Britain. In 1751, after sugar planters made their case, they were allowed to export it anywhere in the world. But restrictions on this permission, together with the high price of sugar in Great Britain, have made it largely ineffective. Great Britain and her colonies are still almost the only market for sugar from British plantations. Consumption there is growing so fast that exports to foreign countries are said to be little greater than before. That remains true even though sugar imports have risen greatly within these twenty years as Jamaica and the ceded islands have been developed further.

Rum is very important in the Americans’ trade with the African coast, where they exchange it for enslaved Black people whom they bring back.

If all America’s surplus grain, salt provisions, and fish had been placed on the enumerated list and forced into Great Britain’s market, they would have competed too much with goods produced by our own people. Probably it was fear of that competition, rather than concern for America’s interests, that kept these important goods off the list. For the same reason, the law ordinarily prohibits imports into Great Britain of all grain except rice and of all salt provisions.

Originally, colonists could export non-enumerated commodities anywhere in the world. Lumber and rice were later put on the enumerated list and then removed. After their removal, their European market was restricted to countries south of Cape Finisterre. Under the 6th of George III. c. 52, all non-enumerated commodities came under the same restriction. The parts of Europe south of Cape Finisterre do not produce manufactured goods, so we are less worried that colonial ships will bring back manufactures from there that compete with our own.