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An Inquiry Into The Nature And Causes Of The Wealth Of Nations - Chapter 3 continue

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







The raising of the denomination of the coin has been the most usual
expedient by which a real public bankruptcy has been disguised under the
appearance of a pretended payment. If a sixpence, for example, should,
either by act of parliament or royal proclamation, be raised to the
denomination of a shilling, and twenty sixpences to that of a pound
sterling; the person who, under the old denomination, had borrowed
twenty shillings, or near four ounces of silver, would, under the new,
pay with twenty sixpences, or with something less than two ounces. A
national debt of about a hundred and twenty-eight millions, near the
capital of the funded and unfunded debt of Great Britain, might, in this
manner, be paid with about sixty-four millions of our present money.
It would, indeed, be a pretended payment only, and the creditors of the
public would really be defrauded of ten shillings in the pound of what
was due to them. The calamity, too, would extend much further than to
the creditors of the public, and those of every private person would
suffer a proportionable loss; and this without any advantage, but in
most cases with a great additional loss, to the creditors of the public.
If the creditors of the public, indeed, were generally much in debt to
other people, they might in some measure compensate their loss by paying
their creditors in the same coin in which the public had paid them. But
in most countries, the creditors of the public are, the greater part of
them, wealthy people, who stand more in the relation of creditors
than in that of debtors, towards the rest of their fellow citizens.
A pretended payment of this kind, therefore, instead of alleviating,
aggravates, in most cases, the loss of the creditors of the public; and,
without any advantage to the public, extends the calamity to a great
number of other innocent people. It occasions a general and most
pernicious subversion of the fortunes of private people; enriching,
in most cases, the idle and profuse debtor, at the expense of the
industrious and frugal creditor; and transporting a great part of
the national capital from the hands which were likely to increase and
improve it, to those who are likely to dissipate and destroy it. When
it becomes necessary for a state to declare itself bankrupt, in the same
manner as when it becomes necessary for an individual to do so, a fair,
open, and avowed bankruptcy, is always the measure which is both least
dishonourable to the debtor, and least hurtful to the creditor. The
honour of a state is surely very poorly provided for, when, in order to
cover the disgrace of a real bankruptcy, it has recourse to a juggling
trick of this kind, so easily seen through, and at the same time so
extremely pernicious.

Almost all states, however, ancient as well as modern, when reduced to
this necessity, have, upon some occasions, played this very juggling
trick. The Romans, at the end of the first Punic war, reduced the As,
the coin or denomination by which they computed the value of all their
other coins, from containing twelve ounces of copper, to contain only
two ounces; that is, they raised two ounces of copper to a denomination
which had always before expressed the value of twelve ounces. The
republic was, in this manner, enabled to pay the great debts which it
had contracted with the sixth part of what it really owed. So sudden and
so great a bankruptcy, we should in the present times be apt to imagine,
must have occasioned a very violent popular clamour. It does not appear
to have occasioned any. The law which enacted it was, like all other
laws relating to the coin, introduced and carried through the assembly
of the people by a tribune, and was probably a very popular law. In
Rome, as in all other ancient republics, the poor people were constantly
in debt to the rich and the great, who, in order to secure their votes
at the annual elections, used to lend them money at exorbitant interest,
which, being never paid, soon accumulated into a sum too great either
for the debtor to pay, or for any body else to pay for him. The debtor,
for fear of a very severe execution, was obliged, without any further
gratuity, to vote for the candidate whom the creditor recommended. In
spite of all the laws against bribery and corruption, the bounty of the
candidates, together with the occasional distributions of coin which
were ordered by the senate, were the principal funds from which, during
the latter times of the Roman republic, the poorer citizens derived
their subsistence. To deliver themselves from this subjection to their
creditors, the poorer citizens were continually calling out, either for
an entire abolition of debts, or for what they called new tables; that
is, for a law which should entitle them to a complete acquittance, upon
paying only a certain proportion of their accumulated debts. The law
which reduced the coin of all denominations to a sixth part of its
former value, as it enabled them to pay their debts with a sixth part
of what they really owed, was equivalent to the most advantageous new
tables. In order to satisfy the people, the rich and the great were,
upon several different occasions, obliged to consent to laws, both for
abolishing debts, and for introducing new tables; and they probably were
induced to consent to this law, partly for the same reason, and partly
that, by liberating the public revenue, they might restore vigour to
that government, of which they themselves had the principal direction.
An operation of this kind would at once reduce a debt of 128,000,000 to
21,333,333:6:8. In the course of the second Punic war, the As was still
further reduced, first, from two ounces of copper to one ounce,
and afterwards from one ounce to half an ounce; that is, to the
twenty-fourth part of its original value. By combining the three Roman
operations into one, a debt of a hundred and twenty-eight millions of
our present money, might in this manner be reduced all at once to a debt
of 5,333,333:6:8. Even the enormous debt of Great Britain might in this
manner soon be paid.

By means of such expedients, the coin of, I believe, all nations, has
been gradually reduced more and more below its original value, and the
same nominal sum has been gradually brought to contain a smaller and a
smaller quantity of silver.

Nations have sometimes, for the same purpose, adulterated the standard
of their coin; that is, have mixed a greater quantity of alloy in it. If
in the pound weight of our silver coin, for example, instead of eighteen
penny-weight, according to the present standard, there were mixed eight
ounces of alloy; a pound sterling, or twenty shillings of such coin,
would be worth little more than six shillings and eightpence of our
present money. The quantity of silver contained in six shillings and
eightpence of our present money, would thus be raised very nearly to the
denomination of a pound sterling. The adulteration of the standard has
exactly the same effect with what the French call an augmentation, or a
direct raising of the denomination of the coin.

An augmentation, or a direct raising of the denomination of the coin,
always is, and from its nature must be, an open and avowed operation. By
means of it, pieces of a smaller weight and bulk are called by the same
name, which had before been given to pieces of a greater weight and
bulk. The adulteration of the standard, on the contrary, has generally
been a concealed operation. By means of it, pieces are issued from the
mint, of the same denomination, and, as nearly as could be contrived,
of the same weight, bulk, and appearance, with pieces which had been
current before of much greater value. When king John of France, {See Du
Cange Glossary, voce Moneta; the Benedictine Edition.} in order to pay
his debts, adulterated his coin, all the officers of his mint were sworn
to secrecy. Both operations are unjust. But a simple augmentation is an
injustice of open violence; whereas an adulteration is an injustice of
treacherous fraud. This latter operation, therefore, as soon as it has
been discovered, and it could never be concealed very long, has always
excited much greater indignation than the former. The coin, after any
considerable augmentation, has very seldom been brought back to its
former weight; but after the greatest adulterations, it has almost
always been brought back to its former fineness. It has scarce ever
happened, that the fury and indignation of the people could otherwise be
appeased.

In the end of the reign of Henry VIII., and in the beginning of that of
Edward VI., the English coin was not only raised in its denomination,
but adulterated in its standard. The like frauds were practised in
Scotland during the minority of James VI. They have occasionally been
practised in most other countries.

That the public revenue of Great Britain can never be completely
liberated, or even that any considerable progress can ever be made
towards that liberation, while the surplus of that revenue, or what is
over and above defraying the annual expense of the peace establishment,
is so very small, it seems altogether in vain to expect. That
liberation, it is evident, can never be brought about, without either
some very considerable augmentation of the public revenue, or some
equally considerable reduction of the public expense.

A more equal land tax, a more equal tax upon the rent of houses, and
such alterations in the present system of customs and excise as those
which have been mentioned in the foregoing chapter, might, perhaps,
without increasing the burden of the greater part of the people, but
only distributing the weight of it more equally upon the whole, produce
a considerable augmentation of revenue. The most sanguine projector,
however, could scarce flatter himself, that any augmentation of this
kind would be such as could give any reasonable hopes, either of
liberating the public revenue altogether, or even of making such
progress towards that liberation in time of peace, as either to prevent
or to compensate the further accumulation of the public debt in the next
war.

By extending the British system of taxation to all the different
provinces of the empire, inhabited by people either of British or
European extraction, a much greater augmentation of revenue might be
expected. This, however, could scarce, perhaps, be done, consistently
with the principles of the British constitution, without admitting into
the British parliament, or, if you will, into the states-general of the
British empire, a fair and equal representation of all those different
provinces; that of each province bearing the same proportion to the
produce of its taxes, as the representation of Great Britain might
bear to the produce of the taxes levied upon Great Britain. The private
interest of many powerful individuals, the confirmed prejudices of great
bodies of people, seem, indeed, at present, to oppose to so great a
change, such obstacles as it may be very difficult, perhaps altogether
impossible, to surmount. Without, however, pretending to determine
whether such a union be practicable or impracticable, it may not,
perhaps, be improper, in a speculative work of this kind, to consider
how far the British system of taxation might be applicable to all the
different provinces of the empire; what revenue might be expected from
it, if so applied; and in what manner a general union of this kind
might be likely to affect the happiness and prosperity of the differrent
provinces comprehended within it. Such a speculation, can, at worst,
be regarded but as a new Utopia, less amusing, certainly, but no more
useless and chimerical than the old one.

The land-tax, the stamp duties, and the different duties of customs and
excise, constitute the four principal branches of the British taxes.

Ireland is certainly as able, and our American and West India
plantations more able, to pay a land tax, than Great Britain. Where the
landlord is subject neither to tythe nor poor's rate, he must certainly
be more able to pay such a tax, than where he is subject to both those
other burdens. The tythe, where there is no modus, and where it is
levied in kind, diminishes more what would otherwise be the rent of the
landlord, than a land tax which really amounted to five shillings in the
pound. Such a tythe will be found, in most cases, to amount to more than
a fourth part of the real rent of the land, or of what remains after
replacing completely the capital of the farmer, together with his
reasonable profit. If all moduses and all impropriations were taken
away, the complete church tythe of Great Britain and Ireland could not
well be estimated at less than six or seven millions. If there was no
tythe either in Great Britain or Ireland, the landlords could afford
to pay six or seven millions additional land tax, without being more
burdened than a very great part of them are at present. America pays
no tythe, and could, therefore, very well afford to pay a land tax.
The lands in America and the West Indies, indeed, are, in general,
not tenanted nor leased out to farmers. They could not, therefore, be
assessed according to any rent roll. But neither were the lands of Great
Britain, in the 4th of William and Mary, assessed according to any rent
roll, but according to a very loose and inaccurate estimation. The lands
in America might be assessed either in the same manner, or according to
an equitable valuation, in consequence of an accurate survey, like that
which was lately made in the Milanese, and in the dominions of Austria,
Prussia, and Sardinia.

Stamp duties, it is evident, might be levied without any variation, in
all countries where the forms of law process, and the deeds by which
property, both real and personal, is transferred, are the same, or
nearly the same.

The extension of the custom-house laws of Great Britain to Ireland and
the plantations, provided it was accompanied, as in justice it ought to
be, with an extension of the freedom of trade, would be in the highest
degree advantageous to both. All the invidious restraints which at
present oppress the trade of Ireland, the distinction between the
enumerated and non-enumerated commodities of America, would be entirely
at an end. The countries north of Cape Finisterre would be as open to
every part of the produce of America, as those south of that cape are
to some parts of that produce at present. The trade between all the
different parts of the British empire would, in consequence of this
uniformity in the custom-house laws, be as free as the coasting trade
of Great Britain is at present. The British empire would thus afford,
within itself, an immense internal market for every part of the produce
of all its different provinces. So great an extension of market would
soon compensate, both to Ireland and the plantations, all that they
could suffer from the increase of the duties of customs.

The excise is the only part of the British system of taxation, which
would require to be varied in any respect, according as it was applied
to the different provinces of the empire. It might be applied to Ireland
without any variation; the produce and consumption of that kingdom
being exactly of the same nature with those of Great Britain. In its
application to America and the West Indies, of which the produce and
consumption are so very different from those of Great Britain,
some modification might be necessary, in the same manner as in its
application to the cyder and beer counties of England.

A fermented liquor, for example, which is called beer, but which, as it
is made of molasses, bears very little resemblance to our beer, makes
a considerable part of the common drink of the people in America. This
liquor, as it can be kept only for a few days, cannot, like our beer,
be prepared and stored up for sale in great breweries; but every private
family must brew it for their own use, in the same manner as they cook
their victuals. But to subject every private family to the odious visits
and examination of the tax-gatherers, in the same manner as we subject
the keepers of ale-houses and the brewers for public sale, would be
altogether inconsistent with liberty. If, for the sake of equality, it
was thought necessary to lay a tax upon this liquor, it might be taxed
by taxing the material of which it is made, either at the place of
manufacture, or, if the circumstances of the trade rendered such an
excise improper, by laying a duty upon its importation into the colony
in which it was to be consumed. Besides the duty of one penny a-gallon
imposed by the British parliament upon the importation of molasses into
America, there is a provincial tax of this kind upon their importation
into Massachusetts Bay, in ships belonging to any other colony, of
eight-pence the hogshead; and another upon their importation from the
northern colonies into South Carolina, of five-pence the gallon. Or,
if neither of these methods was found convenient, each family might
compound for its consumption of this liquor, either according to the
number of persons of which it consisted, in the same manner as private
families compound for the malt tax in England; or according to the
different ages and sexes of those persons, in the same manner as several
different taxes are levied in Holland; or, nearly as Sir Matthew Decker
proposes, that all taxes upon consumable commodities should be levied
in England. This mode of taxation, it has already been observed, when
applied to objects of a speedy consumption, is not a very convenient
one. It might be adopted, however, in cases where no better could be
done.

Sugar, rum, and tobacco, are commodities which are nowhere necessaries
of life, which are become objects of almost universal consumption, and
which are, therefore, extremely proper subjects of taxation. If a union
with the colonies were to take place, those commodities might be taxed,
either before they go out of the hands of the manufacturer or grower;
or, if this mode of taxation did not suit the circumstances of those
persons, they might be deposited in public warehouses, both at the place
of manufacture, and at all the different ports of the empire, to which
they might afterwards be transported, to remain there, under the joint
custody of the owner and the revenue officer, till such time as
they should be delivered out, either to the consumer, to the
merchant-retailer for home consumption, or to the merchant-exporter;
the tax not to be advanced till such delivery. When delivered out for
exportation, to go duty-free, upon proper security being given, that
they should really be exported out of the empire. These are, perhaps,
the principal commodities, with regard to which the union with the
colonies might require some considerable change in the present system of
British taxation.

What might be the amount of the revenue which this system of taxation,
extended to all the different provinces of the empire, might produce,
it must, no doubt, be altogether impossible to ascertain with tolerable
exactness. By means of this system, there is annually levied in Great
Britain, upon less than eight millions of people, more than ten millions
of revenue. Ireland contains more than two millions of people,
and, according to the accounts laid before the congress, the twelve
associated provinces of America contain more than three. Those accounts,
however, may have been exaggerated, in order, perhaps, either to
encourage their own people, or to intimidate those of this country; and
we shall suppose, therefore, that our North American and West Indian
colonies, taken together, contain no more than three millions; or that
the whole British empire, in Europe and America, contains no more than
thirteen millions of inhabitants. If, upon less than eight millions of
inhabitants, this system of taxation raises a revenue of more than ten
millions sterling; it ought, upon thirteen millions of inhabitants,
to raise a revenue of more than sixteen millions two hundred and fifty
thousand pounds sterling. From this revenue, supposing that this system
could produce it, must be deducted the revenue usually raised in Ireland
and the plantations, for defraying the expense of the respective civil
governments. The expense of the civil and military establishment of
Ireland, together with the interest of the public debt, amounts, at a
medium of the two years which ended March 1775, to something less than
seven hundred and fifty thousand pounds a year. By a very exact account
of the revenue of the principal colonies of America and the West Indies,
it amounted, before the commencement of the present disturbances, to a
hundred and forty-one thousand eight hundred pounds. In this account,
however, the revenue of Maryland, of North Carolina, and of all our late
acquisitions, both upon the continent, and in the islands, is omitted;
which may, perhaps, make a difference of thirty or forty thousand
pounds. For the sake of even numbers, therefore, let us suppose that the
revenue necessary for supporting the civil government of Ireland and the
plantations may amount to a million. There would remain, consequently, a
revenue of fifteen millions two hundred and fifty thousand pounds, to be
applied towards defraying the general expense of the empire, and towards
paying the public debt. But if, from the present revenue of Great
Britain, a million could, in peaceable times, be spared towards the
payment of that debt, six millions two hundred and fifty thousand pounds
could very well be spared from this improved revenue. This great sinking
fund, too, might be augmented every year by the interest of the debt
which had been discharged the year before; and might, in this manner,
increase so very rapidly, as to be sufficient in a few years to
discharge the whole debt, and thus to restore completely the at-present
debilitated and languishing vigour of the empire. In the meantime, the
people might be relieved from some of the most burdensome taxes; from
those which are imposed either upon the necessaries of life, or upon the
materials of manufacture. The labouring poor would thus be enabled to
live better, to work cheaper, and to send their goods cheaper to market.
The cheapness of their goods would increase the demand for them, and
consequently for the labour of those who produced them. This increase in
the demand for labour would both increase the numbers, and improve the
circumstances of the labouring poor. Their consumption would increase,
and, together with it, the revenue arising from all those articles of
their consumption upon which the taxes might be allowed to remain.

The revenue arising from this system of taxation, however, might not
immediately increase in proportion to the number of people who were
subjected to it. Great indulgence would for some time be due to those
provinces of the empire which were thus subjected to burdens to which
they had not before been accustomed; and even when the same taxes
came to be levied everywhere as exactly as possible, they would not
everywhere produce a revenue proportioned to the numbers of the people.
In a poor country, the consumption of the principal commodities subject
to the duties of customs and excise, is very small; and in a thinly
inhabited country, the opportunities of smuggling are very great.
The consumption of malt liquors among the inferior ranks of people
in Scotland is very small; and the excise upon malt, beer, and ale,
produces less there than in England, in proportion to the numbers of
the people and the rate of the duties, which upon malt is different,
on account of a supposed difference of quality. In these particular
branches of the excise, there is not, I apprehend, much more smuggling
in the one country than in the other. The duties upon the distillery,
and the greater part of the duties of customs, in proportion to the
numbers of people in the respective countries, produce less in Scotland
than in England, not only on account of the smaller consumption of the
taxed commodities, but of the much greater facility of smuggling. In
Ireland, the inferior ranks of people are still poorer than in Scotland,
and many parts of the country are almost as thinly inhabited. In
Ireland, therefore, the consumption of the taxed commodities might, in
proportion to the number of the people, be still less than in Scotland,
and the facility of smuggling nearly the same. In America and the West
Indies, the white people, even of the lowest rank, are in much better
circumstances than those of the same rank in England; and their
consumption of all the luxuries in which they usually indulge
themselves, is probably much greater. The blacks, indeed, who make the
greater part of the inhabitants, both of the southern colonies upon
the continent and of the West India islands, as they are in a state of
slavery, are, no doubt, in a worse condition than the poorest people
either in Scotland or Ireland. We must not, however, upon that account,
imagine that they are worse fed, or that their consumption of articles
which might be subjected to moderate duties, is less than that even of
the lower ranks of people in England. In order that they may work well,
it is the interest of their master that they should be fed well, and
kept in good heart, in the same manner as it is his interest that
his working cattle should be so. The blacks, accordingly, have almost
everywhere their allowance of rum, and of molasses or spruce-beer, in
the same manner as the white servants; and this allowance would not
probably be withdrawn, though those articles should be subjected to
moderate duties. The consumption of the taxed commodities, therefore, in
proportion to the number of inhabitants, would probably be as great in
America and the West Indies as in any part of the British empire. The
opportunities of smuggling, indeed, would be much greater; America,
in proportion to the extent of the country, being much more thinly
inhabited than either Scotland or Ireland. If the revenue, however,
which is at present raised by the different duties upon malt and malt
liquors, were to be levied by a single duty upon malt, the opportunity
of smuggling in the most important branch of the excise would be almost
entirely taken away; and if the duties of customs, instead of being
imposed upon almost all the different articles of importation, were
confined to a few of the most general use and consumption, and if
the levying of those duties were subjected to the excise laws, the
opportunity of smuggling, though not so entirely taken away, would be
very much diminished. In consequence of those two apparently very simple
and easy alterations, the duties of customs and excise might probably
produce a revenue as great, in proportion to the consumption of the most
thinly inhabited province, as they do at present, in proportion to that
of the most populous.

The Americans, it has been said, indeed, have no gold or silver money,
the interior commerce of the country being carried on by a paper
currency; and the gold and silver, which occasionally come among them,
being all sent to Great Britain, in return for the commodities which
they receive from us. But without gold and silver, it is added, there is
no possibility of paying taxes. We already get all the gold and silver
which they have. How is it possible to draw from them what they have
not?

The present scarcity of gold and silver money in America, is not the
effect of the poverty of that country, or of the inability of the people
there to purchase those metals. In a country where the wages of labour
are so much higher, and the price of provisions so much lower than in
England, the greater part of the people must surely have wherewithal to
purchase a greater quantity, if it were either necessary or convenient
for them to do so. The scarcity of those metals, therefore, must be the
effect of choice, and not of necessity.

It is for transacting either domestic or foreign business, that gold or
silver money is either necessary or convenient.

The domestic business of every country, it has been shewn in the second
book of this Inquiry, may, at least in peaceable times, be transacted by
means of a paper currency, with nearly the same degree of conveniency as
by gold and silver money. It is convenient for the Americans, who could
always employ with profit, in the improvement of their lands, a greater
stock than they can easily get, to save as much as possible the expense
of so costly an instrument of commerce as gold and silver; and rather to
employ that part of their surplus produce which would be necessary for
purchasing those metals, in purchasing the instruments of trade, the
materials of clothing, several parts of household furniture, and the
iron work necessary for building and extending their settlements and
plantations; in purchasing not dead stock, but active and productive
stock. The colony governments find it for their interest to supply the
people with such a quantity of paper money as is fully sufficient, and
generally more than sufficient, for transacting their domestic business.
Some of those governments, that of Pennsylvania, particularly, derive a
revenue from lending this paper money to their subjects, at an interest
of so much per cent. Others, like that of Massachusetts Bay, advance,
upon extraordinary emergencies, a paper money of this kind for defraying
the public expense; and afterwards, when it suits the conveniency of the
colony, redeem it at the depreciated value to which it gradually falls.
In 1747, {See Hutchinson's History of Massachusetts Bay vol. ii. page
436 et seq.} that colony paid in this manner the greater part of its
public debts, with the tenth part of the money for which its bills had
been granted. It suits the conveniency of the planters, to save
the expense of employing gold and silver money in their domestic
transactions; and it suits the conveniency of the colony governments,
to supply them with a medium, which, though attended with some very
considerable disadvantages, enables them to save that expense. The
redundancy of paper money necessarily banishes gold and silver from the
domestic transactions of the colonies, for the same reason that it has
banished those metals from the greater part of the domestic transactions
in Scotland; and in both countries, it is not the poverty, but the
enterprizing and projecting spirit of the people, their desire of
employing all the stock which they can get, as active and productive
stock, which has occasioned this redundancy of paper money.

In the exterior commerce which the different colonies carry on with
Great Britain, gold and silver are more or less employed, exactly in
proportion as they are more or less necessary. Where those metals are
not necessary, they seldom appear. Where they are necessary, they are
generally found.

In the commerce between Great Britain and the tobacco colonies, the
British goods are generally advanced to the colonists at a pretty long
credit, and are afterwards paid for in tobacco, rated at a certain
price. It is more convenient for the colonists to pay in tobacco than in
gold and silver. It would be more convenient for any merchant to pay for
the goods which his correspondents had sold to him, in some other
sort of goods which he might happen to deal in, than in money. Such a
merchant would have no occasion to keep any part of his stock by him
unemployed, and in ready money, for answering occasional demands. He
could have, at all times, a larger quantity of goods in his shop or
warehouse, and he could deal to a greater extent. But it seldom happens
to be convenient for all the correspondents of a merchant to receive
payment for the goods which they sell to him, in goods of some other
kind which he happens to deal in. The British merchants who trade to
Virginia and Maryland, happen to be a particular set of correspondents,
to whom it is more convenient to receive payment for the goods which
they sell to those colonies in tobacco, than in gold and silver. They
expect to make a profit by the sale of the tobacco; they could make none
by that of the gold and silver. Gold and silver, therefore, very seldom
appear in the commerce between Great Britain and the tobacco colonies.
Maryland and Virginia have as little occasion for those metals in their
foreign, as in their domestic commerce. They are said, accordingly, to
have less gold and silver money than any other colonies in America. They
are reckoned, however, as thriving, and consequently as rich, as any of
their neighbours.

In the northern colonies, Pennsylvania, New York, New Jersey, the four
governments of New England, etc. the value of their own produce which
they export to Great Britain is not equal to that of the manufactures
which they import for their own use, and for that of some of the other
colonies, to which they are the carriers. A balance, therefore, must
be paid to the mother-country in gold and silver and this balance they
generally find.

In the sugar colonies, the value of the produce annually exported to
Great Britain is much greater than that of all the goods imported from
thence. If the sugar and rum annually sent to the mother-country were
paid for in those colonies, Great Britain would be obliged to send out,
every year, a very large balance in money; and the trade to the West
Indies would, by a certain species of politicians, be considered as
extremely disadvantageous. But it so happens, that many of the principal
proprietors of the sugar plantations reside in Great Britain. Their
rents are remitted to them in sugar and rum, the produce of their
estates. The sugar and rum which the West India merchants purchase in
those colonies upon their own account, are not equal in value to
the goods which they annually sell there. A balance, therefore, must
necessarily be paid to them in gold and silver, and this balance, too,
is generally found.

The difficulty and irregularity of payment from the different colonies
to Great Britain, have not been at all in proportion to the greatness
or smallness of the balances which were respectively due from them.
Payments have, in general, been more regular from the northern than from
the tobacco colonies, though the former have generally paid a pretty
large balance in money, while the latter have either paid no balance, or
a much smaller one. The difficulty of getting payment from our different
sugar colonies has been greater or less in proportion, not so much
to the extent of the balances respectively due from them, as to the
quantity of uncultivated land which they contained; that is, to the
greater or smaller temptation which the planters have been under of
over-trading, or of undertaking the settlement and plantation of greater
quantities of waste land than suited the extent of their capitals. The
returns from the great island of Jamaica, where there is still much
uncultivated land, have, upon this account, been, in general, more
irregular and uncertain than those from the smaller islands of
Barbadoes, Antigua, and St. Christopher's, which have, for these many
years, been completely cultivated, and have, upon that account, afforded
less field for the speculations of the planter. The new acquisitions of
Grenada, Tobago, St. Vincent's, and Dominica, have opened a new field
for speculations of this kind; and the returns front those islands have
of late been as irregular and uncertain as those from the great island
of Jamaica.

It is not, therefore, the poverty of the colonies which occasions, in
the greater part of them, the present scarcity of gold and silver money.
Their great demand for active and productive stock makes it convenient
for them to have as little dead stock as possible, and disposes them,
upon that account, to content themselves with a cheaper, though less
commodious instrument of commerce, than gold and silver. They are
thereby enabled to convert the value of that gold and silver into the
instruments of trade, into the materials of clothing, into household
furniture, and into the iron work necessary for building and extending
their settlements and plantations. In those branches of business which
cannot be transacted without gold and silver money, it appears, that
they can always find the necessary quantity of those metals; and if they
frequently do not find it, their failure is generally the effect, not
of their necessary poverty, but of their unnecessary and excessive
enterprise. It is not because they are poor that their payments are
irregular and uncertain, but because they are too eager to become
excessively rich. Though all that part of the produce of the colony
taxes, which was over and above what was necessary for defraying the
expense of their own civil and military establishments, were to
be remitted to Great Britain in gold and silver, the colonies have
abundantly wherewithal to purchase the requisite quantity of those
metals. They would in this case be obliged, indeed, to exchange a
part of their surplus produce, with which they now purchase active
and productive stock, for dead stock. In transacting their domestic
business, they would be obliged to employ a costly, instead of a cheap
instrument of commerce; and the expense of purchasing this costly
instrument might damp somewhat the vivacity and ardour of their
excessive enterprise in the improvement of land. It might not, however,
be necessary to remit any part of the American revenue in gold and
silver. It might be remitted in bills drawn upon, and accepted by,
particular merchants or companies in Great Britain, to whom a part of
the surplus produce of America had been consigned, who would pay into
the treasury the American revenue in money, after having themselves
received the value of it in goods; and the whole business might
frequently be transacted without exporting a single ounce of gold or
silver from America.

It is not contrary to justice, that both Ireland and America should
contribute towards the discharge of the public debt of Great Britain.
That debt has been contracted in support of the government established
by the Revolution; a government to which the protestants of Ireland owe,
not only the whole authority which they at present enjoy in their own
country, but every security which they possess for their liberty, their
property, and their religion; a government to which several of the
colonies of America owe their present charters, and consequently their
present constitution; and to which all the colonies of America owe the
liberty, security, and property, which they have ever since enjoyed.
That public debt has been contracted in the defence, not of Great
Britain alone, but of all the different provinces of the empire. The
immense debt contracted in the late war in particular, and a great part
of that contracted in the war before, were both properly contracted in
defence of America.

By a union with Great Britain, Ireland would gain, besides the freedom
of trade, other advantages much more important, and which would much
more than compensate any increase of taxes that might accompany that
union. By the union with England, the middling and inferior ranks of
people in Scotland gained a complete deliverance from the power of an
aristocracy, which had always before oppressed them. By a union with
Great Britain, the greater part of people of all ranks in Ireland
would gain an equally complete deliverance from a much more oppressive
aristocracy; an aristocracy not founded, like that of Scotland, in the
natural and respectable distinctions of birth and fortune, but in
the most odious of all distinctions, those of religious and political
prejudices; distinctions which, more than any other, animate both the
insolence of the oppressors, and the hatred and indignation of the
oppressed, and which commonly render the inhabitants of the same country
more hostile to one another than those of different countries ever are.
Without a union with Great Britain, the inhabitants of Ireland are not
likely, for many ages, to consider themselves as one people.

No oppressive aristocracy has ever prevailed in the colonies. Even
they, however, would, in point of happiness and tranquillity, gain
considerably by a union with Great Britain. It would, at least, deliver
them from those rancourous and virulent factions which are inseparable
from small democracies, and which have so frequently divided the
affections of their people, and disturbed the tranquillity of their
governments, in their form so nearly democratical. In the case of a
total separation from Great Britain, which, unless prevented by a union
of this kind, seems very likely to take place, those factions would
be ten times more virulent than ever. Before the commencement of the
present disturbances, the coercive power of the mother-country had
always been able to restrain those factions from breaking out into any
thing worse than gross brutality and insult. If that coercive power
were entirely taken away, they would probably soon break out into open
violence and bloodshed. In all great countries which are united under
one uniform government, the spirit of party commonly prevails less in
the remote provinces than in the centre of the empire. The distance of
those provinces from the capital, from the principal seat of the great
scramble of faction and ambition, makes them enter less into the views
of any of the contending parties, and renders them more indifferent and
impartial spectators of the conduct of all. The spirit of party prevails
less in Scotland than in England. In the case of a union, it would
probably prevail less in Ireland than in Scotland; and the colonies
would probably soon enjoy a degree of concord and unanimity, at
present unknown in any part of the British empire. Both Ireland and the
colonies, indeed, would be subjected to heavier taxes than any which
they at present pay. In consequence, however, of a diligent and faithful
application of the public revenue towards the discharge of the national
debt, the greater part of those taxes might not be of long continuance,
and the public revenue of Great Britain might soon be reduced to what
was necessary for maintaining a moderate peace-establishment.

The territorial acquisitions of the East India Company, the undoubted
right of the Crown, that is, of the state and people of Great Britain,
might be rendered another source of revenue, more abundant, perhaps,
than all those already mentioned. Those countries are represented as
more fertile, more extensive, and, in proportion to their extent, much
richer and more populous than Great Britain. In order to draw a great
revenue from them, it would not probably be necessary to introduce any
new system of taxation into countries which are already sufficiently,
and more than sufficiently, taxed. It might, perhaps, be more proper to
lighten than to aggravate the burden of those unfortunate countries, and
to endeavour to draw a revenue from them, not by imposing new taxes, but
by preventing the embezzlement and misapplication of the greater part of
those which they already pay.

If it should be found impracticable for Great Britain to draw any
considerable augmentation of revenue from any of the resources above
mentioned, the only resource which can remain to her, is a diminution
of her expense. In the mode of collecting and in that of expending the
public revenue, though in both there may be still room for improvement,
Great Britain seems to be at least as economical as any of her
neighbours. The military establishment which she maintains for her own
defence in time of peace, is more moderate than that of any European
state, which can pretend to rival her either in wealth or in power.
None of these articles, therefore, seem to admit of any considerable
reduction of expense. The expense of the peace-establishment of the
colonies was, before the commencement of the present disturbances, very
considerable, and is an expense which may, and, if no revenue can be
drawn from them, ought certainly to be saved altogether. This constant
expense in time of peace, though very great, is insignificant in
comparison with what the defence of the colonies has cost us in time
of war. The last war, which was undertaken altogether on account of the
colonies, cost Great Britain, it has already been observed, upwards of
ninety millions. The Spanish war of 1739 was principally undertaken on
their account; in which, and in the French war that was the consequence
of it, Great Britain, spent upwards of forty millions; a great part of
which ought justly to be charged to the colonies. In those two wars,
the colonies cost Great Britain much more than double the sum which the
national debt amounted to before the commencement of the first of them.
Had it not been for those wars, that debt might, and probably would
by this time, have been completely paid; and had it not been for the
colonies, the former of those wars might not, and the latter certainly
would not, have been undertaken. It was because the colonies were
supposed to be provinces of the British Empire, that this expense was
laid out upon them. But countries which contribute neither revenue nor
military force towards the support of the empire, cannot be considered
as provinces. They may, perhaps, be considered as appendages, as a sort
of splendid and shewy equipage of the empire. But if the empire can
no longer support the expense of keeping up this equipage, it ought
certainly to lay it down; and if it cannot raise its revenue in
proportion to its expense, it ought at least to accommodate its expense
to its revenue. If the colonies, notwithstanding their refusal to submit
to British taxes, are still to be considered as provinces of the British
empire, their defence, in some future war, may cost Great Britain as
great an expense as it ever has done in any former war. The rulers of
Great Britain have, for more than a century past, amused the people with
the imagination that they possessed a great empire on the west side of
the Atlantic. This empire, however, has hitherto existed in imagination
only. It has hitherto been, not an empire, but the project of an empire;
not a gold mine, but the project of a gold mine; a project which has
cost, which continues to cost, and which, if pursued in the same way as
it has been hitherto, is likely to cost, immense expense, without being
likely to bring any profit; for the effects of the monopoly of the
colony trade, it has been shewn, are to the great body of the people,
mere loss instead of profit. It is surely now time that our rulers
should either realize this golden dream, in which they have been
indulging themselves, perhaps, as well as the people; or that they
should awake from it themselves, and endeavour to awaken the people. If
the project cannot be completed, it ought to be given up. If any of the
provinces of the British empire cannot be made to contribute towards the
support of the whole empire, it is surely time that Great Britain should
free herself from the expense of defending those provinces in time of
war, and of supporting any part of their civil or military establishment
in time of peace; and endeavour to accommodate her future views and
designs to the real mediocrity of her circumstances.




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