Adam Smith's Simplified Wealth of Nations, Book 4, Chapter 7c: English Colonies
Chapter 7c: English Colonies
37The English colonies in North America have progressed the fastest.
"Plenty of good land, and liberty to manage their own affairs their own way, seem to be the two great causes of the prosperity of all new colonies."
39 In the plenty of good land, the English colonies of North America are inferior to the colonies of Spain and Portugal.
The English colonies are not superior in land to some French colonies before the late war.
"But the political institutions of the English colonies have been more favourable to the improvement and cultivation of this land than those of any of the other three nations."
The engrossing of uncultivated land was more restrained in the English colonies than in any other.
Though the engrossing was not prevented altogether.
The colony law imposes on every proprietor the obligation of improving and cultivating a proportion of his lands, within a limited time.
In case of failure, it declares those neglected lands grantable to any other person.
Though it has not been very strictly executed, it has, however, had some effect.
Secondly, in Pennsylvania there is no right of primogeniture.
Lands, like movables, are divided equally among all the children of the family.
In three of the provinces of New England, the oldest has only a double share, as in the Mosaical law.
Even if too great a quantity of land should be engrossed by an individual in those provinces, it is likely for it to be sufficiently divided again in a generation or two .
In other English colonies, the right of primogeniture takes place, as in the law of England.
But in all English colonies, the tenure of lands are all held by free socage.
It facilitates alienation
The grantee of any great land generally finds it for his interest to alienate most of it as fast as he can, reserving only a small quit-rent.
In the Spanish and Portuguese colonies, the right of Majorazzo takes place in the succession of all those great estates.
Such estates all go to one person.
They are are in effect entailed and unalienable.
The French colonies are subject to the custom of Paris.
It is much more favourable to the younger children in the inheritance of land than the law of England.
But in the French colonies, if any part of an estate held by the noble tenure of chivalry and homage is alienated, it is subject to the right of redemption by the heir of the superior or the heir of the family for a limited time.
All the largest estates of the country are held by such noble tenures.
They embarrass alienation.
"But in a new colony a great uncultivated estate is likely to be much more speedily divided by alienation than by succession."
The plenty and cheapness of good land are the principal causes of the rapid prosperity of new colonies.
"The engrossing of land, in effect, destroys this plenty and cheapness."
"The engrossing of uncultivated land, besides, is the greatest obstruction to its improvement."
But the labour employed in land improvement and cultivation affords the greatest and most valuable produce to
In this case, the produce of labour pays:
its own wages
the profit of the stock which employs it
the rent of the land where it is employed.
The labour of the English colonists are more employed in the improvement and cultivation of land.
It is likely to afford a greater and more valuable produce than any colony of the other three nations.
The labour in those other colonies are diverted towards other employments by the engrossing of land.
The labour of the English colonists is likely to afford a greater and more valuable produce.
Because of the moderation of their taxes, more of this produce belongs to themselves, which they may store up and employ in putting into motion a still greater quantity of labour.
The English colonists have never yet contributed:
to the defence of England
to the support of England's civil government.
On the contrary, they were defended almost entirely at England's cost.
But the cost of fleets and armies is greater than the cost of civil government.
The cost of the civil government of the colonies has always been very moderate.
It was confined to what was necessary for:
paying the salaries to the governor, judges, and police officers
maintaining a few of the most useful public works
The cost of the civil establishment of Massachusett's Bay before the start of the present disturbances, was about £18,000 a year.
The cost of New Hampshire and Rhode Island was £3,500 a year each.
The cost of Connecticut was £4,000 a year.
The cost of New York and Pennsylvania was £4,500 a year each.
The cost of New Jersey was £1,200 a year.
The cost of Virginia and South Carolina was £8,000 each.
The civil establishments of Nova Scotia and Georgia are partly supported by an annual grant of parliament.
But Nova Scotia pays about £7,000 a year towards the colony's public expences.
Georgia pays about £2,500 a year.
Before the present disturbances, all the civil establishments in North America did not cost their people above £64,700 a year.
This excludes the cost of Maryland and North Carolina, of which no exact account has been got.
This is an ever-memorable example of how small an expence of 3 million people may not only be governed, but well governed.
The most important part of the expence of government is defence and protection.
It has constantly fallen on the mother country.
The ceremonies of the civil government in the colonies are decent and inexpensive:
The reception of a new governor
The opening of a new assembly, etc.
Their ecclesiastical government is equally frugal.
Tithes are unknown among them.
Their clergy are not numerous.
They are maintained by moderate stipends or by the voluntary contributions of the people.
The power of Spain and Portugal, on the contrary, is supported by taxes on their colonies.
France has never drawn any big revenue from its colonies.
The taxes it levies on them are generally spent among the colonies.
But the colony government of all these three nations is conducted with a much more expensive ceremonial.
For example, enormous sums were frequently spent on the reception of a new viceroy of Peru.
Such ceremonials are real taxes paid by the rich colonists on those occasions.
They introduce the habit of vanity and expence on all other occasions.
They are very grievous occasional taxes.
They contribute to establish perpetual and ruinous taxes of private luxury and extravagance which are still more grievous.
In the colonies of all those three nations, the ecclesiastical government is extremely oppressive.
Tithes take place in all of them.
They are levied with the utmost rigour in Spanish and Portuguese colonies.
All of them are oppressed with many mendicant friars.
Their beggary is consecrated by religion.
It is a most grievous tax on the poor people.
They are taught that:
it is their duty to give
it is a very great sin to refuse charity to the friars
Over and above all this, the clergy are the greatest engrossers of land in all those colonies.
Fourthly, the English colonies have been more favoured in the disposal of their surplus produce.
They were allowed a more extensive market than any other European nation.
Every European nation endeavoured to monopolize to itself the commerce of its colonies.
They prohibited foreign ships from trading to their own colonies.
They prohibited their own colonies from importing European goods from any foreign nation.
How this monopoly was exercised in different nations has been very different.
44 Some nations gave up the whole commerce of their colonies to an exclusive company.
The colonists were obliged to buy all European goods from such a company.
They were obliged to sell their own surplus produce to the company.
It was the interest of the company to sell the European goods as dear, and to buy the surplus produce of the colonies as cheap as possible.
The company bought no more of this surplus produce at this low price than what they could sell at a very high price in Europe.
It was their interest to:
Degrade the value of the surplus produce of the colony.
Discourage and keep down the natural increase of its quantity.
The exclusive company is undoubtedly the most effective expedient in stunting the natural growth of a new colony.
This was the policy of Holland.
In the present century, their company gave up their exclusive privilege.
This was the policy of Denmark till the reign of the recent king.
It was occasionally the policy of France.
Since 1755, it was abandoned by all other nations because of its absurdity.
It became the policy of Portugal in Fernambuco and Marannon, two of the principal provinces of Brazil.
45 Other nations did not establish an exclusive company.
They instead confined the commerce of their colonies to a port of the mother country.
The only ships allowed to sail to such a port were:
ships in a fleet at a particular season
ships with an expensive licence
This policy opened the trade of the colonies to the mother country provided they traded:
from the proper port
at the proper season
in the proper vessels
But all merchants who joined their stocks to fit out those licensed vessels, would find it for their interest to act in concert.
Such a trade would be conducted very nearly on the same principles of an exclusive company.
Their profit would be almost equally exorbitant and oppressive.
The colonies would be ill-supplied.
They would be obliged to buy very dear and to sell very cheap.
This was always the policy of Spain.
The price of all European goods was enormous in the Spanish West Indies.
At Quito, Ulloa tells us that a pound of iron sold for about 4 and 6-pence.
A pound of steel sold for about 6 and 9-pence sterling.
But the colonies sell their own produce chiefly to purchase European goods.
The more they pay for the European goods, the less they get for their own produce.
The dearness of the European goods is the same thing with the cheapness of their own produce.
The Portugal's policy regarding its colonies, except Fernambuco and Marannon, is the same as the ancient policy of Spain.
Portugal has recently adopted a worse policy for those two colonies.
46 Other nations leave their colony trade free to all their subjects who carry it from the ports of the mother country.
The only licences required are the common dispatches of the custom-house.
In this case, the number and dispersed situation of the traders makes it impossible for them to combine.
Their competition hinders them from making exorbitant profits.
Under so liberal a policy, the colonies can sell their own produce and buy European goods at a reasonable price.
This was always England's policy since the dissolution of the Plymouth company when our colonies were at infancy.
It was France's policy since the dissolution of their Mississippi company.
The profits of the colony trade of France and England was higher than if the competition was free to other nations.
Their profits however are not exorbitant.
The price of European goods is not extravagantly high in most French and English colonies.