Book IV, Chapter VII, 5

The enumerated commodities fall into two kinds. First are goods either peculiar to America or impossible to produce, or at least 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, fustick, and other dye-woods. Secondly come goods not peculiar to America, which can be, and are, produced in the mother country, though not in sufficient quantities to meet most of her demand, which is chiefly supplied by foreign countries. These include every kind of naval store—masts, yards, and bowsprits; tar, pitch, and turpentine—pig and bar iron, copper ore, hides and skins, and pot and pearl ashes. Even the largest importation of the first kind could neither discourage the growth nor obstruct the sale of anything produced in the mother country. By restricting these goods to the home market, it was expected that our merchants could buy them more cheaply in the plantations and consequently sell them at home at a better profit. They could also establish a profitable carrying trade between the plantations and foreign countries, with Great Britain necessarily serving as its center or emporium, since she would be the first European country into which those goods were imported. Imports of the second kind, it was thought, could also be managed to compete not with sales of equivalent goods produced at home, but with sales of those imported from abroad. Suitable duties could keep the colonial goods somewhat dearer than the former yet considerably cheaper than the latter. Restricting such goods to the home market was therefore intended to discourage the production not of Great Britain, but of certain foreign countries with which the balance of trade was believed unfavorable to her.

Prohibiting the colonies from exporting masts, yards, and bowsprits, tar, pitch, and turpentine anywhere but Great Britain naturally tended to lower the price of timber in the colonies. It therefore tended to increase the cost of clearing their land, the main obstacle to improvement. But around the beginning of this century, in 1703, Sweden's pitch and tar company attempted to raise its prices to Great Britain by banning exports except on its own ships, at its own prices, and in such quantities as it chose. To counter this remarkable piece of mercantile policy and make herself as independent as possible not only of Sweden but of every other northern power, Great Britain offered a bounty on naval stores imported from America. The bounty raised American timber prices much more than restriction to the home market could lower them. Because the two measures were enacted at the same time, their combined effect was to encourage, rather than discourage, clearing land in America.

Pig and bar iron have also been placed among the enumerated commodities. Yet imports from America are exempt from considerable duties imposed on those from any other country. One part of the regulation thus does more to encourage building furnaces in America than the other does to discourage it. No manufacture consumes as much wood as a furnace or can do as much to clear a densely wooded country.

Perhaps the legislature neither intended nor understood that some of these regulations would raise the value of American timber and thereby make it easier to clear land. Accidental though their benefits in this respect may have been, they have been no less real.

The British colonies of America and the West Indies are allowed completely free trade with one another in both enumerated and non-enumerated commodities. They have now become so populous and prosperous that each finds among the others a large market for every part of its produce. Together they constitute a great internal market for one another's goods.

England's liberality toward colonial trade, however, has chiefly concerned markets for colonial produce in its raw condition or in what might be called the very first stage of manufacture. The merchants and manufacturers of Great Britain choose to reserve the more advanced or refined manufactures, even those made from colonial produce, for themselves. They have persuaded the legislature to prevent their establishment in the colonies, sometimes with high duties, sometimes with outright bans.

For example, Muscovado sugars from the British plantations pay only 6s:4d. the hundred weight on importation, while white sugars pay £1:1:1, and refined sugar, whether double or single, in loaves pays £4:2:5 ⁸⁄₂₀ths. When these high duties were imposed, Great Britain was the only market to which the British colonies could export sugar, and she remains their principal market. The duties therefore amounted at first to a ban on claying or refining sugar for any foreign market, and now to a ban on doing so for the market that takes perhaps more than nine-tenths of the total output. Consequently, although claying and refining sugar have flourished throughout the French sugar colonies, they have scarcely been practiced in the English colonies except to supply the colonies themselves. When Grenada belonged to France, almost every plantation had at least one refinery for claying sugar. Since it passed into English hands nearly all such works have closed; at present (October 1773), I am assured, no more than two or three remain on the island. Now, however, by indulgence of the custom-house, clayed or refined sugar ground from loaves into powder is commonly imported as Muscovado.

While Great Britain encourages the production of pig and bar iron in America by exempting them from duties imposed on comparable imports from every other country, she absolutely prohibits the building of steel furnaces and slit-mills in any of her American plantations. She will not allow the colonies to pursue those more refined manufactures even for their own consumption, insisting instead that they buy every good of this kind they need from her merchants and manufacturers.

She prohibits hats, wool, and woolen goods produced in America from being exported by water from one province to another, or even carried by land on horseback or in a cart. This effectively prevents any manufacture of such goods for sale at a distance, confining her colonists' work in these trades to the rough domestic manufacture a family ordinarily undertakes for its own use or that of neighbors in the same province.

To forbid a great people to make all they can of every part of their own produce, or to employ their stock and industry in the way they themselves judge most advantageous, is nevertheless a plain violation of humanity's most sacred rights. Unjust as these prohibitions are, they have not so far done much harm to the colonies. Land there is still so cheap, and labor consequently so dear, that the colonists can import almost every more refined or advanced manufactured good from the mother country more cheaply than they could make it themselves. Even without the prohibitions, therefore, their own interest would probably have deterred them from establishing such manufactures at their present stage of improvement. For now, rather than cramping their industry or diverting it from work it would otherwise pursue, these prohibitions may be only insolent badges of servitude, imposed without sufficient reason by the groundless jealousy of the mother country's merchants and manufacturers. At a more advanced stage, they could become genuinely oppressive and intolerable.

Great Britain, moreover, compensates for confining some of the colonies' most important products to her market by granting some of them advantages in that market. Sometimes she imposes higher duties on comparable products imported from other countries; sometimes she grants bounties on imports from the colonies. By the former means she favors her colonies' sugar, tobacco, and iron in her home market; by the latter, their raw silk, hemp and flax, indigo, naval stores, and building timber. So far as I have learned, this second means of encouraging colonial produce—import bounties—is peculiar to Great Britain. The first is not: Portugal not only imposes higher duties on tobacco imported from other countries but forbids its importation under the severest penalties.

England has likewise treated her colonies more liberally than any other nation regarding imports of European goods.

When foreign goods imported into Great Britain are exported onward to another foreign country, she allows part of the import duty to be refunded—almost always half, generally more, and sometimes all of it. It was easy to foresee that no independent foreign country would accept the goods if they arrived burdened with the heavy duties imposed on almost every foreign good entering Great Britain. Unless some of those duties were refunded upon export, then, the carrying trade would have ended—a trade so greatly favored by the mercantile system.

Our colonies, however, are by no means independent foreign countries. Having claimed for herself the exclusive right to supply them with all European goods, Great Britain might have forced them, as other countries have forced their colonies, to accept goods bearing all the duties paid in the mother country. Instead, until 1763, exports to our colonies of most foreign goods received the same duty refunds as exports to any independent foreign country. In 1763, however, this concession was considerably reduced by the 4th of Geo. III. c. 15, which 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 varieties of foreign goods could have been bought more cheaply on the plantations than in the mother country, and some still can.

It should be noted that merchants engaged in colonial trade have been the principal advisers on most regulations governing it. We should not be surprised, then, that many of those regulations give more weight to their interests than to those of either the colonies or the mother country. The merchants' exclusive privilege of supplying all European goods the colonies needed and buying all their surplus goods that would not compete with the merchants' trade at home sacrificed colonial interests to theirs. Even by mercantile notions of the mother country's interest, allowing the same duty refunds on re-exports of most European and East India goods to the colonies as on re-exports to an independent country sacrificed her interests to theirs. The merchants benefited from paying as little as possible for foreign goods they sent to the colonies and thus from recovering as much as possible of the duties they had advanced when importing them into Great Britain. They could then sell the same quantity in the colonies at a higher profit or a larger quantity at the same profit, and gain either way. It also benefited the colonies to obtain all such goods as cheaply and abundantly as possible. But that did not always benefit the mother country. She might often lose revenue by returning much of the duty paid when the goods entered, and her manufactures might suffer when foreign manufactures, brought to the colonial market on favorable terms through those refunds, undersold them. The refunds on German linen re-exported to the American colonies are commonly said to have considerably slowed the progress of Britain's linen manufacture.

Yet although Great Britain's policy on colonial trade has been inspired by the same mercantile spirit as other nations' policies, on the whole it has been less illiberal and oppressive than any of theirs.

Except in foreign trade, English colonists enjoy complete freedom to manage their affairs in their own way. Their liberty is in every respect equal to that of their fellow citizens at home, secured in the same manner by an assembly of popular representatives claiming the sole right to levy taxes to support the colonial government. This assembly holds the executive power in check. As long as he obeys the law, neither the poorest nor the most disliked colonist need fear the resentment of the governor or any other civil or military officer in the province. Like the house of commons in England, colonial assemblies do not always represent the people very equally; still, they come closer to doing so. And because the executive power either lacks the means to corrupt them or, with support from the mother country, has no need to, they are perhaps generally more responsive to their constituents' wishes. The councils corresponding to Great Britain's house of lords in the colonial legislatures do not consist of hereditary nobles. In some colonies, including three of the New England governments, these councils are chosen not by the king but by the people's representatives. No English colony has a hereditary nobility. Certainly, as in other free countries, descendants of old colonial families receive more respect than newcomers of equal merit and fortune; but respect is all they receive, not privileges enabling them to trouble their neighbors. Before the present disturbances began, colonial assemblies held not just legislative power but part of the executive power as well. In Connecticut and Rhode Island they elected the governor. In the other colonies they appointed the revenue officers who collected the taxes those assemblies imposed and were directly accountable to them. Thus there is greater equality among English colonists than among inhabitants of the mother country. Their manners are more republican, and their governments—particularly those of three New England provinces—have also hitherto been more republican.

Enumerated commodities fall into two groups. The first consists of products specific to America, or products that cannot be made, or at least are not made, in the mother country. These include molasses, coffee, cocoa-nuts, tobacco, pimento, ginger, whalefins, raw silk, cotton, wool, beaver and other American furs, indigo, fustick, and other woods used for dyeing. The second group consists of products that are not specific to America and can be produced in the mother country. But the mother country does not produce enough of them to meet most of its demand and mainly imports them from abroad. These include every kind of naval store: masts, yards, and bowsprits; tar, pitch, and turpentine; pig and bar iron; copper ore; hides and skins; and pot and pearl ashes. Even the largest imports of the first group could not discourage production or interfere with sales of anything produced in the mother country. It was expected that restricting these goods to the home market would let our merchants buy them more cheaply in the plantations and sell them at home for a better profit. It would also let them establish a profitable carrying trade between the plantations and foreign countries. Great Britain would necessarily be its center or trading hub, because it would be the first European country to receive those goods. It was thought that imports of the second group could also be managed so they did not compete with goods of the same kind produced at home, but instead competed with foreign imports. Suitable duties could always make the colonial goods somewhat more expensive than home-produced goods, yet considerably cheaper than foreign goods. Restricting the colonial goods to the home market was therefore meant to discourage production in certain foreign countries, not in Great Britain. Britain was believed to have an unfavorable balance of trade with those countries.

Barring the colonies from exporting masts, yards, bowsprits, tar, pitch, and turpentine to any country but Great Britain naturally tended to lower timber prices in the colonies. That in turn raised the cost of clearing their land, the main obstacle to its development. But around the start of the present century, in 1703, Sweden’s pitch and tar company tried to raise the prices it charged Great Britain. It banned exports except in its own ships, at its own prices, and in quantities it chose. To counter this remarkable piece of mercantile policy, and to free itself as far as possible from dependence on Sweden and every other northern power, Great Britain paid a bounty on imports of naval stores from America. The bounty raised American timber prices much more than the restriction to the home market lowered them. Since both measures took effect at the same time, their combined effect was to encourage rather than discourage land clearing in America.

Pig and bar iron are also enumerated commodities. But when imported from America, they are exempt from substantial duties charged on imports from any other country. The duty exemption therefore does more to encourage the building of furnaces in America than the export restriction does to discourage it. No other manufacturing operation uses as much wood as a furnace, or can do as much to clear a heavily wooded country.

Lawmakers may neither have intended nor understood that some of these rules would raise the value of American timber and make land clearing easier. But even if their beneficial effects in this respect were accidental, those effects were real.

Trade in both enumerated and non-enumerated commodities is completely free between the British colonies of America and the West Indies. These colonies have become so populous and prosperous that each finds a large market for every part of its output in some of the others. Taken together, they form a large internal market for one another’s products.

England’s generosity toward colonial trade, however, has mainly concerned markets for colonial produce in its raw form or at the very first stage of manufacture. Great Britain’s merchants and manufacturers want to keep more advanced or refined manufacturing for themselves, even when it uses colonial produce. They have persuaded lawmakers to prevent such industries from developing in the colonies, sometimes through high duties and sometimes through outright bans.

For example, Muscovado sugars imported from British plantations pay only 6s:4d. the hundred weight in duties. White sugars pay £1:1:1, and refined sugars in loaves, whether double or single, pay £4:2:5 ⁸⁄₂₀ths. When these high duties were imposed, Great Britain was the only market to which the British colonies could export sugar. She remains their main market. The duties therefore initially amounted to a ban on claying or refining sugar for any foreign market. Today they effectively ban claying or refining it for the market that takes perhaps more than nine-tenths of all the sugar produced. Accordingly, while claying and refining sugar have flourished in every French sugar colony, British colonies have done little of this work except for their own markets. When the French held Grenada, almost every plantation had at least one works for refining sugar by claying. Since the English took it, nearly all those works have closed. I am assured that no more than two or three remain on the island at present (October 1773). Customs officials now generally permit clayed or refined sugar to be imported as Muscovado if its loaves have been ground into powder.

Great Britain encourages Americans to make pig and bar iron by exempting those products from duties charged on the same goods from other countries. Yet she absolutely forbids the building of steel furnaces and slit-mills on any of her American plantations. She will not let her colonies make these more refined goods even for their own use. Instead, she requires them to buy every such good they need from her merchants and manufacturers.

She also prohibits the movement of American-made hats, wool, and woolen goods from one province to another by water, or even by land on horseback or in a cart. This effectively prevents colonists from making these goods for sale farther away. It limits their work to the rough household goods that a family ordinarily makes for itself or for neighbors in the same province.

But forbidding a great population to make the most of all its own produce, or to use its stock and labor in whatever way it judges most beneficial, plainly violates humanity’s most sacred rights. Unjust as these prohibitions are, they have not yet done the colonies much harm. Land is still so cheap there, and labor consequently so expensive, that the colonists can import almost every more refined or advanced manufactured good from the mother country for less than they could make it themselves. So even without these bans, concern for their own interests would probably have kept them from starting such industries at their current stage of development. At present, the prohibitions may not hamper their work or turn it away from anything it would otherwise do. They may only be needless marks of subjection imposed without adequate reason, because merchants and manufacturers in the mother country are suspicious without cause. At a later stage of development, though, they could become truly oppressive and unbearable.

Great Britain restricts some of the colonies’ most important products to her own market. In return, she gives some of them an advantage there. Sometimes she charges higher duties on similar goods imported from other countries; sometimes she pays bounties on imports from the colonies. The first method favors her colonies’ sugar, tobacco, and iron in the home market. The second favors their raw silk, hemp and flax, indigo, naval stores, and building timber. As far as I can learn, only Great Britain uses import bounties to encourage colonial produce. The first method is not hers alone. Portugal does more than charge higher duties on tobacco imports from other countries: she bans them under the harshest penalties.

England has also treated her colonies more generously than any other nation when they import goods from Europe.

Great Britain refunds part of the duty paid on imported foreign goods when they are exported again to a foreign country. She refunds almost always half, usually more, and sometimes all of it. It was easy to see that an independent foreign country would not accept these goods if they arrived bearing the heavy duties imposed on almost all foreign goods entering Great Britain. Without a partial refund upon export, the carrying trade would come to an end. The mercantile system strongly favors that trade.

Our colonies, though, are not independent foreign countries. Great Britain has claimed the exclusive right to supply them with all European goods. She could have forced them, as other nations have forced their colonies, to take those goods with all the duties paid in the mother country still included. Instead, until 1763, exporters received the same refunds on most foreign goods shipped to our colonies as they did on goods shipped to independent foreign countries. In 1763 the 4th of Geo. III. c. 15 greatly reduced this concession. It provided, “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 kinds of foreign goods could be bought more cheaply in the plantations than in the mother country. Some still can.

It is worth noting that the merchants who conduct colonial trade have been the chief advisers on most of its rules. We should not be surprised, then, that many rules have served their interests more than those of either the colonies or the mother country. The merchants received the exclusive right to supply the colonies with all their European goods. They also received the exclusive right to buy any surplus colonial produce that would not compete with the trades those merchants conducted at home. In both cases the colonies’ interests were sacrificed to theirs. Exporters were also allowed the same duty refunds when sending most European and East India goods to the colonies as when sending them to independent countries. Even by the mercantile system’s own understanding of the mother country’s interests, this sacrificed those interests to the merchants’. The merchants wanted to pay as little as possible for foreign goods sent to the colonies. So they wanted to recover as much as possible of the duties they had advanced when importing those goods into Great Britain. They could then sell the same quantity in the colonies at a higher profit, or sell a larger quantity at the same profit. Either way they would gain. The colonies, too, benefited from getting those goods as cheaply and abundantly as possible. But the mother country did not always benefit. Her revenue could suffer when she refunded a large share of the duties paid on the goods. Her manufacturers could also lose sales to cheaper foreign manufactures in colonial markets, because refunds made it cheaper to ship foreign goods there. People commonly say that refunds on German linen re-exported to the American colonies have considerably slowed the growth of Great Britain’s linen manufacturing.

Great Britain’s policy toward colonial trade has been driven by the same mercantile spirit as other nations’ policies. Overall, however, it has been less restrictive and oppressive than any of theirs.

Apart from foreign trade, English colonists have complete freedom to run their own affairs in their own way. Their freedom is in every respect equal to that of their fellow citizens at home. It has the same safeguard: an assembly of elected representatives claiming the sole right to levy taxes to support colonial government. This assembly keeps the executive authorities in check. As long as a colonist obeys the law, even the poorest or most disliked has nothing to fear from the governor’s anger or that of any other civil or military official in the province. Like England’s house of commons, the colonial assemblies do not always represent the people very equally. Yet they come closer to doing so. The executive authorities may lack the means to corrupt them or, because the mother country supports the executive, may have no need to do so. The assemblies may therefore generally follow their voters’ wishes more closely. Councils in colonial legislatures serve the role that the house of lords serves in Great Britain, but their members are not hereditary nobles. In some colonies, including three New England governments, the king does not appoint the councils; the people’s representatives elect them. None of the English colonies has a hereditary nobility. To be sure, as in every free country, a descendant of an old colonial family receives more respect than a newcomer with equal ability and wealth. But the descendant receives only respect, not privileges that would let him cause trouble for his neighbors. Before the present disturbances began, colonial assemblies exercised not only legislative authority but some executive authority. They elected the governor in Connecticut and Rhode Island. In the other colonies, they appointed the revenue officers who collected the taxes those assemblies had levied, and the officers answered directly to them. There is thus more equality among English colonists than among inhabitants of the mother country. Their ways are more republican, and their governments have so far been more republican too, especially those of three New England provinces.