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An Inquiry Into The Nature And Causes Of The Wealth Of Nations - Chapter 7, Part 1

1. Introduction And Plan Of The Work

2. Book 1, Chapter 1

3. Chapter 2

4. Chapter 3

5. Chapter 4

6. Chapter 5

7. Chapter 6

8. Chapter 7

9. Chapter 8

10. Chapter 8 continue

11. Chapter 9

12. Chapter 10

13. Chapter 10 continue

14. Chapter 11

15. Chapter 11 continue

16. Chapter 11 continue.

17. Chapter 11 continue..

18. Chapter 11 continue...

19. Conclusion of the Chapter 11

20. Book 2 Introduction

21. Chapter 1

22. Chapter II

23. Chapter II continue

24. Chapter II continue

25. Chapter 3

26. Chapter 4

27. Chapter 5

28. Book 3, Chapter 1

29. Chapter 2

30. Chapter 3

31. Chapter 4

32. Book 4, Chapter 1

33. Chapter 1 continue

34. Chapter 2

35. Chapter 3, Part 1

36. Chapter 3, Part 2

37. Chapter 4

38. Chapter 5

39. Chapter 5 continue

40. Chapter 6

41. Chapter 7, Part 1

42. Chapter 7, Part 2

43. Chapter 7, Part 3

44. Chapter 7, Part 3 continue

45. Chapter 8

46. Chapter 9

47. Book 5, Chapter 1, Part 1

48. Chapter 1, Part 2

49. Chapter 1, Part 3

50. Chapter 1, Part 3 continue

51. Chapter 1, Part 3 continue B

52. Chapter 1, Part 4

53. Chapter 2, Part 1

54. Chapter 2, Part 2

55. Chapter 2, Part 2 continue

56. Chapter 2, Part 2 continue B

57. Chapter 2, Part 2 continue C

58. Chapter 2, Part 2 continue D

59. Chapter 3

60. Chapter 3 continue

Chapter VII. Of Colonies.

PART I. Of the Motives for Establishing New Colonies.

The interest which occasioned the first settlement of the different
European colonies in America and the West Indies, was not altogether so
plain and distinct as that which directed the establishment of those of
ancient Greece and Rome.

All the different states of ancient Greece possessed, each of them, but
a very small territory; and when the people in anyone of them multiplied
beyond what that territory could easily maintain, a part of them were
sent in quest of a new habitation, in some remote and distant part of
the world; the warlike neighbours who surrounded them on all sides,
rendering it difficult for any of them to enlarge very much its
territory at home. The colonies of the Dorians resorted chiefly to Italy
and Sicily, which, in the times preceding the foundation of Rome, were
inhabited by barbarous and uncivilized nations; those of the Ionians and
Aeolians, the two other great tribes of the Greeks, to Asia Minor and
the islands of the Aegean sea, of which the inhabitants sewn at that
time to have been pretty much in the same state as those of Sicily and
Italy. The mother city, though she considered the colony as a child, at
all times entitled to great favour and assistance, and owing in return
much gratitude and respect, yet considered it as an emancipated child,
over whom she pretended to claim no direct authority or jurisdiction.
The colony settled its own form of government, enacted its own laws,
elected its own magistrates, and made peace or war with its neighbours,
as an independent state, which had no occasion to wait for the
approbation or consent of the mother city. Nothing can be more plain and
distinct than the interest which directed every such establishment.

Rome, like most of the other ancient republics, was originally founded
upon an agrarian law, which divided the public territory, in a certain
proportion, among the different citizens who composed the state. The
course of human affairs, by marriage, by succession, and by alienation,
necessarily deranged this original division, and frequently threw the
lands which had been allotted for the maintenance of many different
families, into the possession of a single person. To remedy this
disorder, for such it was supposed to be, a law was made, restricting
the quantity of land which any citizen could possess to five hundred
jugera; about 350 English acres. This law, however, though we read of
its having been executed upon one or two occasions, was either
neglected or evaded, and the inequality of fortunes went on continually
increasing. The greater part of the citizens had no land; and without
it the manners and customs of those times rendered it difficult for a
freeman to maintain his independency. In the present times, though a
poor man has no land of his own, if he has a little stock, he may either
farm the lands of another, or he may carry on some little retail trade;
and if he has no stock, he may find employment either as a country
labourer, or as an artificer. But among the ancient Romans, the lands of
the rich were all cultivated by slaves, who wrought under an overseer,
who was likewise a slave; so that a poor freeman had little chance
of being employed either as a farmer or as a labourer. All trades and
manufactures, too, even the retail trade, were carried on by the slaves
of the rich for the benefit of their masters, whose wealth, authority,
and protection, made it difficult for a poor freeman to maintain the
competition against them. The citizens, therefore, who had no land, had
scarce any other means of subsistence but the bounties of the candidates
at the annual elections. The tribunes, when they had a mind to animate
the people against the rich and the great, put them in mind of the
ancient divisions of lands, and represented that law which restricted
this sort of private property as the fundamental law of the republic.
The people became clamorous to get land, and the rich and the great,
we may believe, were perfectly determined not to give them any part
of theirs. To satisfy them in some measure, therefore, they frequently
proposed to send out a new colony. But conquering Rome was, even upon
such occasions, under no necessity of turning out her citizens to seek
their fortune, if one may so, through the wide world, without knowing
where they were to settle. She assigned them lands generally in the
conquered provinces of Italy, where, being within the dominions of the
republic, they could never form any independent state, but were at best
but a sort of corporation, which, though it had the power of enacting
bye-laws for its own government, was at all times subject to the
correction, jurisdiction, and legislative authority of the mother city.
The sending out a colony of this kind not only gave some satisfaction
to the people, but often established a sort of garrison, too, in a newly
conquered province, of which the obedience might otherwise have been
doubtful. A Roman colony, therefore, whether we consider the nature of
the establishment itself, or the motives for making it, was altogether
different from a Greek one. The words, accordingly, which in the
original languages denote those different establishments, have very
different meanings. The Latin word (colonia) signifies simply a
plantation. The Greek word (apoixia), on the contrary, signifies a
separation of dwelling, a departure from home, a going out of the house.
But though the Roman colonies were, in many respects, different from the
Greek ones, the interest which prompted to establish them was equally
plain and distinct. Both institutions derived their origin, either from
irresistible necessity, or from clear and evident utility.

The establishment of the European colonies in America and the West
Indies arose from no necessity; and though the utility which has
resulted from them has been very great, it is not altogether so clear
and evident. It was not understood at their first establishment, and
was not the motive, either of that establishment, or of the discoveries
which gave occasion to it; and the nature, extent, and limits of that
utility, are not, perhaps, well understood at this day.

The Venetians, during the fourteenth and fifteenth centuries, carried
on a very advantageous commerce in spiceries and other East India goods,
which they distributed among the other nations of Europe. They purchased
them chiefly in Egypt, at that time under the dominion of the Mamelukes,
the enemies of the Turks, of whom the Venetians were the enemies; and
this union of interest, assisted by the money of Venice, formed such a
connexion as gave the Venetians almost a monopoly of the trade.

The great profits of the Venetians tempted the avidity of the
Portuguese. They had been endeavouring, during the course of the
fifteenth century, to find out by sea a way to the countries from which
the Moors brought them ivory and gold dust across the desert. They
discovered the Madeiras, the Canaries, the Azores, the Cape de Verd
islands, the coast of Guinea, that of Loango, Congo, Angola, and
Benguela, and, finally, the Cape of Good Hope. They had long wished
to share in the profitable traffic of the Venetians, and this last
discovery opened to them a probable prospect of doing so. In 1497, Vasco
de Gamo sailed from the port of Lisbon with a fleet of four ships, and,
after a navigation of eleven months, arrived upon the coast of Indostan;
and thus completed a course of discoveries which had been pursued with
great steadiness, and with very little interruption, for near a century

Some years before this, while the expectations of Europe were in
suspense about the projects of the Portuguese, of which the success
appeared yet to be doubtful, a Genoese pilot formed the yet more daring
project of sailing to the East Indies by the west. The situation of
those countries was at that time very imperfectly known in Europe. The
few European travellers who had been there, had magnified the distance,
perhaps through simplicity and ignorance; what was really very great,
appearing almost infinite to those who could not measure it; or,
perhaps, in order to increase somewhat more the marvellous of their
own adventures in visiting regions so immensely remote from Europe.
The longer the way was by the east, Columbus very justly concluded, the
shorter it would be by the west. He proposed, therefore, to take that
way, as both the shortest and the surest, and he had the good fortune
to convince Isabella of Castile of the probability of his project. He
sailed from the port of Palos in August 1492, near five years before the
expedition of Vasco de Gamo set out from Portugal; and, after a voyage
of between two and three months, discovered first some of the small
Bahama or Lucyan islands, and afterwards the great island of St.

But the countries which Columbus discovered, either in this or in any of
his subsequent voyages, had no resemblance to those which he had gone in
quest of. Instead of the wealth, cultivation, and populousness of China
and Indostan, he found, in St. Domingo, and in all the other parts of
the new world which he ever visited, nothing but a country quite covered
with wood, uncultivated, and inhabited only by some tribes of naked and
miserable savages. He was not very willing, however, to believe that
they were not the same with some of the countries described by Marco
Polo, the first European who had visited, or at least had left behind
him any description of China or the East Indies; and a very slight
resemblance, such as that which he found between the name of Cibao, a
mountain in St. Domingo, and that of Cipange, mentioned by Marco
Polo, was frequently sufficient to make him return to this favourite
prepossession, though contrary to the clearest evidence. In his
letters to Ferdinand and Isabella, he called the countries which he had
discovered the Indies. He entertained no doubt but that they were the
extremity of those which had been described by Marco Polo, and that they
were not very distant from the Ganges, or from the countries which had
been conquered by Alexander. Even when at last convinced that they were
different, he still flattered himself that those rich countries were
at no great distance; and in a subsequent voyage, accordingly, went in
quest of them along the coast of Terra Firma, and towards the Isthmus of

In consequence of this mistake of Columbus, the name of the Indies has
stuck to those unfortunate countries ever since; and when it was at last
clearly discovered that the new were altogether different from the old
Indies, the former were called the West, in contradistinction to the
latter, which were called the East Indies.

It was of importance to Columbus, however, that the countries which he
had discovered, whatever they were, should be represented to the court
of Spain as of very great consequence; and, in what constitutes the real
riches of every country, the animal and vegetable productions of the
soil, there was at that time nothing which could well justify such a
representation of them.

The cori, something between a rat and a rabbit, and supposed by Mr
Buffon to be the same with the aperea of Brazil, was the largest
viviparous quadruped in St. Domingo. This species seems never to have
been very numerous; and the dogs and cats of the Spaniards are said
to have long ago almost entirely extirpated it, as well as some other
tribes of a still smaller size. These, however, together with a pretty
large lizard, called the ivana or iguana, constituted the principal part
of the animal food which the land afforded.

The vegetable food of the inhabitants, though, from their want of
industry, not very abundant, was not altogether so scanty. It consisted
in Indian corn, yams, potatoes, bananas, etc., plants which were then
altogether unknown in Europe, and which have never since been very much
esteemed in it, or supposed to yield a sustenance equal to what is drawn
from the common sorts of grain and pulse, which have been cultivated in
this part of the world time out of mind.

The cotton plant, indeed, afforded the material of a very important
manufacture, and was at that time, to Europeans, undoubtedly the most
valuable of all the vegetable productions of those islands. But though,
in the end of the fifteenth century, the muslins and other cotton goods
of the East Indies were much esteemed in every part of Europe, the
cotton manufacture itself was not cultivated in any part of it. Even
this production, therefore, could not at that time appear in the eyes of
Europeans to be of very great consequence.

Finding nothing, either in the animals or vegetables of the newly
discovered countries which could justify a very advantageous
representation of them, Columbus turned his view towards their minerals;
and in the richness of their productions of this third kingdom,
he flattered himself he had found a full compensation for the
insignificancy of those of the other two. The little bits of gold
with which the inhabitants ornamented their dress, and which, he was
informed, they frequently found in the rivulets and torrents which fell
from the mountains, were sufficient to satisfy him that those mountains
abounded with the richest gold mines. St. Domingo, therefore, was
represented as a country abounding with gold, and upon that account
(according to the prejudices not only of the present times, but of those
times), an inexhaustible source of real wealth to the crown and kingdom
of Spain. When Columbus, upon his return from his first voyage, was
introduced with a sort of triumphal honours to the sovereigns of Castile
and Arragon, the principal productions of the countries which he had
discovered were carried in solemn procession before him. The only
valuable part of them consisted in some little fillets, bracelets, and
other ornaments of gold, and in some bales of cotton. The rest were mere
objects of vulgar wonder and curiosity; some reeds of an extraordinary
size, some birds of a very beautiful plumage, and some stuffed skins
of the huge alligator and manati; all of which were preceded by six
or seven of the wretched natives, whose singular colour and appearance
added greatly to the novelty of the show.

In consequence of the representations of Columbus, the council of
Castile determined to take possession of the countries of which the
inhabitants were plainly incapable of defending themselves. The pious
purpose of converting them to Christianity sanctified the injustice of
the project. But the hope of finding treasures of gold there was the
sole motive which prompted to undertake it; and to give this motive the
greater weight, it was proposed by Columbus, that the half of all the
gold and silver that should be found there, should belong to the crown.
This proposal was approved of by the council.

As long as the whole, or the greater part of the gold which the first
adventurers imported into Europe was got by so very easy a method as the
plundering of the defenceless natives, it was not perhaps very difficult
to pay even this heavy tax; but when the natives were once fairly
stript of all that they had, which, in St. Domingo, and in all the other
countries discovered by Columbus, was done completely in six or eight
years, and when, in order to find more, it had become necessary to dig
for it in the mines, there was no longer any possibility of paying this
tax. The rigorous exaction of it, accordingly, first occasioned, it is
said, the total abandoning of the mines of St. Domingo, which have never
been wrought since. It was soon reduced, therefore, to a third; then to
a fifth; afterwards to a tenth; and at last to a twentieth part of the
gross produce of the gold mines. The tax upon silver continued for a
long time to be a fifth of the gross produce. It was reduced to a tenth
only in the course of the present century. But the first adventurers
do not appear to have been much interested about silver. Nothing less
precious than gold seemed worthy of their attention.

All the other enterprizes of the Spaniards in the New World, subsequent
to those of Columbus, seem to have been prompted by the same motive. It
was the sacred thirst of gold that carried Ovieda, Nicuessa, and Vasco
Nugnes de Balboa, to the Isthmus of Darien; that carried Cortes to
Mexico, Almagro and Pizarro to Chili and Peru. When those adventurers
arrived upon any unknown coast, their first inquiry was always if there
was any gold to be found there; and according to the information which
they received concerning this particular, they determined either to quit
the country or to settle in it.

Of all those expensive and uncertain projects, however, which bring
bankruptcy upon the greater part of the people who engage in them,
there is none, perhaps, more perfectly ruinous than the search after new
silver and gold mines. It is, perhaps, the most disadvantageous lottery
in the world, or the one in which the gain of those who draw the prizes
bears the least proportion to the loss of those who draw the blanks; for
though the prizes are few, and the blanks many, the common price of
a ticket is the whole fortune of a very rich man. Projects of mining,
instead of replacing the capital employed in them, together with the
ordinary profits of stock, commonly absorb both capital and profit.
They are the projects, therefore, to which, of all others, a prudent
lawgiver, who desired to increase the capital of his nation, would least
choose to give any extraordinary encouragement, or to turn towards them
a greater share of that capital than what would go to them of its own
accord. Such, in reality, is the absurd confidence which almost all
men have in their own good fortune, that wherever there is the least
probability of success, too great a share of it is apt to go to them of
its own accord.

But though the judgment of sober reason and experience concerning such
projects has always been extremely unfavourable, that of human avidity
has commonly been quite otherwise. The same passion which has suggested
to so many people the absurd idea of the philosopher's stone, has
suggested to others the equally absurd one of immense rich mines of gold
and silver. They did not consider that the value of those metals has, in
all ages and nations, arisen chiefly from their scarcity, and that their
scarcity has arisen from the very small quantities of them which nature
has anywhere deposited in one place, from the hard and intractable
substances with which she has almost everywhere surrounded those small
quantities, and consequently from the labour and expense which are
everywhere necessary in order to penetrate, and get at them. They
flattered themselves that veins of those metals might in many places
be found, as large and as abundant as those which are commonly found
of lead, or copper, or tin, or iron. The dream of Sir Waiter Raleigh,
concerning the golden city and country of El Dorado, may satisfy us,
that even wise men are not always exempt from such strange delusions.
More than a hundred years after the death of that great man, the Jesuit
Gumila was still convinced of the reality of that wonderful country, and
expressed, with great warmth, and, I dare say, with great sincerity,
how happy he should be to carry the light of the gospel to a people who
could so well reward the pious labours of their missionary.

In the countries first discovered by the Spaniards, no gold and silver
mines are at present known which are supposed to be worth the working.
The quantities of those metals which the first adventurers are said to
have found there, had probably been very much magnified, as well as the
fertility of the mines which were wrought immediately after the first
discovery. What those adventurers were reported to have found, however,
was sufficient to inflame the avidity of all their countrymen. Every
Spaniard who sailed to America expected to find an El Dorado. Fortune,
too, did upon this what she has done upon very few other occasions. She
realized in some measure the extravagant hopes of her votaries; and in
the discovery and conquest of Mexico and Peru (of which the one
happened about thirty, and the other about forty, years after the first
expedition of Columbus), she presented them with something not very
unlike that profusion of the precious metals which they sought for.

A project of commerce to the East Indies, therefore, gave occasion to
the first discovery of the West. A project of conquest gave occasion
to all the establishments of the Spaniards in those newly discovered
countries. The motive which excited them to this conquest was a project
of gold and silver mines; and a course of accidents which no human
wisdom could foresee, rendered this project much more successful than
the undertakers had any reasonable grounds for expecting.

The first adventurers of all the other nations of Europe who attempted
to make settlements in America, were animated by the like chimerical
views; but they were not equally successful. It was more than a hundred
years after the first settlement of the Brazils, before any silver,
gold, or diamond mines, were discovered there. In the English, French,
Dutch, and Danish colonies, none have ever yet been discovered, at least
none that are at present supposed to be worth the working. The first
English settlers in North America, however, offered a fifth of all the
gold and silver which should be found there to the king, as a motive for
granting them their patents. In the patents of Sir Waiter Raleigh, to
the London and Plymouth companies, to the council of Plymouth, etc.
this fifth was accordingly reserved to the crown. To the expectation of
finding gold and silver mines, those first settlers, too, joined that of
discovering a north-west passage to the East Indies. They have hitherto
been disappointed in both.

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