Low Taxes in the English Colonies
Table of Contents
43 4. The English colonies had freer trade their surplus produce.
They were allowed a more extensive market than any other European nation.
Every European nation tried to monopolize to itself the commerce of its colonies.
They banned:
- foreign ships from trading to their own colonies.
- 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.