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The British retreat: 1760-1770 Norris, John MacKenzie 1949

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The B r i t i s h R e t r e a t ; 1760-1770. by John  Mackenzie  Norris.  ABSTRACT of a t h e s i s s u b m i t t e d i n p a r t i a l  fulfilment  of t h e requirements f o r t h e degree o f MASTER OF ARTS i n t h e department o f HISTORY  U n i v e r s i t y o f B r i t i s h Columbia September, 1949.  • THe B r i t i s h Retreat: 1763-1770^ by  John  g&efewrale  Morris.  iiBB2R&GT i thesis submitted  in partial fulfilment  of the requireaients f o r the degree o f BASTKS. of  mis  in the department of rnmmm  0M v a r s i t y of B r i t i s h Columbia September, 194d«  The  B r i t i s h Retreat:  1760-1770.  ABSTRACT. I n t h e y e a r s b e t w e e n 1760 and 1770 t h e B r i t i s h n a t i o n and e m p i r e u n d e r w e n t a p r o f o u n d change i n s t r u c t u r e and f u n c t i o n . Some o f t h e change was made n e c e s s a r y b y t h e s u r v i v a l o f o l d i n s t i t u t i o n s and o f o l d f o r m s o f s t i l l beyond t h e p o i n t  vital  of obsolescence, while  of contemporary d i s r u p t i o n i n the l i f e  institutions  some came a s a r e s u l t of the nation.  O b s o l e s c e n c e was p a r t i c u l a r i l y a p p a r e n t i n t h e administrative  s t r u c t u r e o f the Empire, the s o - c a l l e d  m e r c a n t i l i s t system.  The b i l i e f s o f m e r c a n t i l i s m  i n h e r i t e d from t h e e c c l e s i a s t i c a l Thus, w h i l e in  s o c i e t y o f t h e M i d d l e Ages.  i n d i v i d u a l i s m and n a t i o n a l i s m  the s i x t e e n t h century,  were l a r g e l y  triumphed over Church  t h e i d e a o f r e g u l a t i o n , now a d o p t e d  by t h e n a t i o n a l s t a t e , c o n t i n u e d t o s u p p r e s s e c o n o m i c ualism the  f o r two c e n t u r i e s  longer.  Imperial  individ-  s e l f - s u f f i c i e n c y was  i d e a l o f t h e m e r c a n t i l i s t t h e o r i s t s , and i n an a t t e m p t t o  a c h i e v e t h i s end, d i r e c t c o n t r o l by t h e m o t h e r c o u n t r y o f t h e p o l i t i c a l and e c o n o m i c a c t i v i t i e s o f a l l p a r t s o f t h e E m p i r e was i n s t i t u t e d .  As t h e E m p i r e e x p a n d e d , h o w e v e r , i t became  i n c r e a s i n g l y more d i f f i c u l t l o c a l complications,  to maintain t h i s c o n t r o l .  particularily  I n d i a , aggravated the problem.  i n t h e c a s e s o f I r e l a n d and  Finally,  the challenge  p o l i t i c a l and e c o n o m i c i n d e p e n d e n c e i n A m e r i c a was i n f r i n g i n g t o a n end t h e o l d i m p e r i a l In t h e mother c o u n t r y p u b l i c l i f e Revolution ed.  Special  successful  system. was d o m i n a t e d b y t h e  S e t t l e m e n t o f 1688, a n d needed r e f o r m s were  P a r l i a m e n t was u n r e p r e s e n t a t i v e  of  of the majority  neglect-  of the  n a t i o n and l o c a l g o v e r n m e n t and l o c a l i n t e r e s t s were f a r t o o p o w e r f u l i n r e l a t i o n t o n a t i o n a l government and n a t i o n a l interests. in  I n p o l i t i c s , p a r t y d i f f e r e n c e s h a d been d i s s o l v e d  1688 a s a r e s u l t o f t h e nation&s need" f o r t r a n q u i l i t y ,  political life  became a s t r u g g l e , n o t f o r p r i n c i p l e s , b u t f o r  2.  p a t r o n a g e and Whig P a r t y .  place, The  between f a c t i o n s o f the  corruption  in politics  without precedent i n E n g l i s h  now-predominant  at t h i s j u n c t u r e  history.  I n a d d i t i o n t o t h e s e f a c t o r s o f o b s o l e s c e n c e and t i i e r e were a number o f d i s r u p t i v e i n f l u e n c e s the  t r a n q u i l r e f o r m and  monarch was  successful  change o f  the  decay,  which prevented  institutions.  A  f o r a time i n s u b v e r t i n g  i n s t i t u t i o n of responsible  determined  the  new  government t h r o u g h c a b i n e t .  classes  economic r e v o l u t i o n o f the  the  e x h a u s t i o n o f the  War,  aggravated the The  the  increase  t e c h n i q u e s and scale.  system.  The  the  a new  of population  the  p r i c e s y s t e m s and  i n any  two  improved  The  In  also  in  expansion the  the  i n d u s t r y was  individualist not  only  era,  new  however,  r e s p o n s i b i l i t y o f the i n f l u e n c e was  l i f e of the  t i m e s as  of  beginning of achieve.  and  with  this  s h i f t e d northwards. the  a  the larger By  industrialism, capitalism  e c o n o m i c p h i l o s o p h y was  c o n t r o l by  of  communication  o l d system c o u l d  to i n d u s t r y ,  of  f o r f a r m i n g on  c a s e , expanded m a r k e t s demanded a  applied  a  adoption  f a c t o r y s y s t e m , were w i d e s p r e a d i n t h e n a t i o n .  rejected  of  addition,  o l d domestic system  p r i n c i p a l phenomena o f  l o c a t i o n of  new  an  been d i s i n t e g r a t i n g s i n c e  m a c h i n e r y was  The  forced  economic s t r u c t u r e  s c a l e of p r o d u c t i o n than the the  was  In a g r i c u l t u r e , the  industrial revolution.  c e n t u r y , and,  a new  of the n a t i o n  c h i e f e c o n o m i c phenomenon o f t h e  i n d u s t r y had  the  eighteenth century.  T h i s e x p a n s i o n , i n t u r n , made n e c e s s a r y  m a r k e t i n g and  and  New  disruption.  economic o r g a n i z a t i o n  m a r k e t s and  1770,  nine-  n a t i o n , r e s u l t i n g from the Seven Years'  s t a t e o f dynamic change.  large  of  were a r i s i n g t o s e i z e p o l i t i c a l power, as a r e s u l t  the  was  Out  c o n f u s i o n thus caused, the p o l i t i c a l p a r t i e s o f the  t e e n t h c e n t u r y were s i m u l t a n e o u s l y b e i n g d e v e l o p e d .  new  was  s t a t e , but  i n d i v i d u a l to the  application Moreover,  developing, also  which  the  community as  r e f l e c t e d i n such v a r i o u s  Power  a whole.  aspects of  taxation policy, parliamentary  the  reform,  3 .  t h e law., t r a d e .Its  u n i o n i s m , t h e f a c t o r y s y s t e m and t h e p o o r l a w .  most a l a r m i n g r e s u l t was t h e p r o f o u n d s o c i a l s c h i s m  created  - i n the nation.  :  In her empire, i n her p u b l i c l i f e  a n d i n h e r economy,  B r i t a i n was a t a c r o s s r o a d s i n t h e f i r s t o f George I I I .  decade o f t h e r e i g n  I f t h e t r a n s i t i o n was t o be s u c c e s s f u l  n e e d e d p e a c e , p r o s p e r i t y and o r d e r .  The d e c a d e , h o w e r e r ,  one o f s t r u g g l e , d e p r e s s i o n and d i s r u p t i o n . retreat i n British public  life.  she was  The r e s u l t was a  Argument In the years between 1760 and 1770 the B r i t i s h nation and empire declined i n strength and at the close of the decade was already set on the path which l e d to Yorktown and the Peace of V e r s a i l l e s .  Many of the root causes of t h i s  decline are to be found i n the empire i t s e l f , and these causes have been emphasized  i n studies of the period, to the  disregard of those factors of disruption to be found i n the mother country.  A study of these l a t t e r factors, i n con-  junction with an examination of the breakdown i n the adminis t r a t i o n of the empire as a whole, i s the purpose of t h i s thesis. The basic system of imperial administration of the time was mercantilism. A study of t h i s system i s neoessary to an understanding of the eighteenth century decline of the empire.  The main burden of government was centred i n the  mother country, and as the empire grew, so d i d the weight o f government.  In the f i r s t decade of the reign of George I I I ,  t h i s weight.became too great f o r the mother country to support, and her collapse was hastened by p o l i t i c a l , economic and s o c i a l dislocations at home.  The struggle between t h e  royal executive and the forces of popular representative government was i n i t s f i n a l stage, with the royal executive temporarily i n the ascendant.  The a g r i c u l t u r a l and i n d u s t r i a l  revolutions were i n t h e i r primary, or e s s e n t i a l l y disruptive  stage, and t h e i r long-term benefits had not yet begun to make themselves f e l t .  F i n a l l y , a schism was developing  between the various classes of English society, l a r g e l y as a result of the two preceding f a c t o r s .  Thus a general retreat  was forced upon t h e B r i t i s h people i n t h i s decade.  TABLE OF  CONTENTS  . P a r t A.  .  Page  The M e r c a n t i l i s t E m p i r e  Chapter I .  4.  The T h e o r y a n d S t r u c t u r e Mercantilism  of 36.  C h a p t e r I I . The B r e a k d o w n o f t h e M e r c a n t i l i s t Empire: 1760-1770 P a r t B.  The P o l i t i c a l C r i s i s :  1760-1770  34. 149.  Chapter I I I .  S e t t i n g the Stage:  Chapter IV.  The R o y a l P r e r o g a t i v e  210.  C h a p t e r V.  The P o p u l a r P o w e r  235.  Chapter VI.  Transition i n Parties  266.  Economic and S o c i a l D i s r u p t i o n  336.  P a r t C.  Chapter V I I .  The R e v o l u t i o n  1 7 6 0 - 1 7 6 3 ...  i n Agriculture  and T r a n s p o r t a t i o n C h a p t e r V I I I . The R e v o l u t i o n  i n Industry  Chapter IX.  i n Economic  The R e v o l u t i o n  151.  337. 365. Philo-  . s o p h y a n d t h e S o c i a l S c h i s m ....  387.  Conclusion  430.  Bibliography  437.  1.  THE BRITISH RETREAT:  1760-1770  When one has been used to glory under Mr. P i t t , I sigh to think how he and we are f a l l e n ! We a r e . a f r a i d to meddle even i n Corsica, though the French have so woefully miscarried there; and we enjoy h a l f the empire of the Mogul only to t r a f f i c on India stock! We are no. longer great any way.. We have no great men; no great orators, writers or poets. One would think they had a l l been k i l l e d i n the l a s t war. Nay, our very actors are uncommonly bad. I saw a new tragedy the other night, that was worse played, though at Drury Lane, than by any s t r o l l e r s I ever beheld; and yet they are good enough f o r the new pieces ( l ) . So spoke Horace Walpole, barely s i x years a f t e r the victorious Peace of P a r i s , at which B r i t a i n had been confirmed i n the p o s i t i o n she had won War  during the Seven Years'  as the most powerful nation i n the world.  armies had stood everywhere on conquered s o i l .  In 1763  her  Half a  continent had been subdued through the leadership of P i t t ' s "Young Men."  In the East, C l i v e had set her on the road to  the subjugation of India, and i t s wealth began to pour into the B r i t i s h Treasury.  The French West Indies, Cuba and  the  Philippines had a l l been wrested from the withered hand of the Bourbon A l l i a n c e .  William P i t t presided, as the  war  l o r d par excellence, over an empire that had never seemed so r i c h and powerful and so secure as then. Yet, s i x years l a t e r , Walpole, i n t h i s case at least a r e l i a b l e witness, declares: way  ..."I  "We  are no longer great any  The decline was apparent.  The heritage of P i t t  (1) Walpole, Horace, L e t t e r s . (Toynbee ed.) Vol.VII, p.250.  2.  appeared  t o have been wasted and P i t t h i m s e l f had d e c l i n e d  into p a r t i a l insanity.  The l e a d e r s h i p o f Rockinghans and  G r a f t o n s c o u l d not f i l l t h e p l a c e o f t h e "Great  Commoner.*  Yet t h e age was not b a r r e n o f l e a d e r s , though t h e y seemed powerless t o c o n t r o l events.  And the events and f o r c e s ?  What were these which, i n s i x s h o r t y e a r s , had reduced t h e most powerful o f n a t i o n s t o moral and s o c i a l bankruptcy, and were t o reduce her s t i l l  further?  I t w i l l b e t h e purpose o f t h i s study t o o u t l i n e some of  these f o r c e s and t o show how, i n t h e t h i r d q u a r t e r o f t h e  e i g h t e e n t h c e n t u r y , B r i t a i n was s e t upon t h e path t h a t l e d t o the worst d e f e a t i n h e r h i s t o r y . Many o f the.causes o f t h i s d e c l i n e were t o be found i n the method o f governing the empire, under t h e m e r c a n t i l i s t system, which was then t h e b a s i c p a t t e r n o f i m p e r i a l stration. of  admini-  The system i n v o l v e d e s s e n t i a l l y a c e n t r a l i z a t i o n  c o n t r o l , which, t o g e t h e r w i t h weaknesses, i n h e r e n t and  i n h e r i t e d , g r a d u a l l y made the burden o f government unbearable for  t h e mother c o u n t r y .  Yet weaknesses i n t h e p u b l i c l i f e o f  the mother country were a l s o c o n t r i b u t i n g f a c t o r s .  Politically,  a d e c l i n e was hastened by the s t r u g g l e between p o p u l a r power and t h e r o y a l e x e c u t i v e , w i t h t h e l a t t e r t e m p o r a r i l y i n t h e ascendent. tilist  E c o n o m i c a l l y , t h e complacent  domestic  p a t t e r n o f mercan-  economics was b e i n g s h a t t e r e d by t h e Indus-  t r i a l and A g r i c u l t u r a l R e v o l u t i o n s , i n t h e i r i n i t i a l , and e s s e n t i a l l y d i s r u p t i v e stages.  S o c i a l l y , a schism was widen-  3.  i n g between the various classes of the English, people, and the process was to continue and increase i n scope.  4.  Part A.  The M e r c a n t i l i s t Empire  Adam Smith's c r i t i c i s m o f the m e r c a n t i l i s t system i n the fourth book of the Wealth of Nations established the nature of i t s commercial aspects f o r a long time as e s s e n t i a l l y gold-getting and gold-keeping.  The animadversions  cast on the system*s c o l o n i a l aspects by nineteenth century l i b e r a l s , l i v i n g i n an easier age of deadly c e r t a i n t i e s , are even more notorious.  Both Smith and the " L i t t l e Inglanders"  received the doubtful t r i b u t e of having t h e i r errors perpetuated i n the thinking of succeeding generations of scholars. Fortunately, i n the interest of fairness and h i s t o r i c a l accuracy, economic historians have imposed extensive modif i c a t i o n s on the picture of mercantilism i n i t s economic aspects.  Yet the old c o l o n i a l empire s t i l l remains, f o r many  p o l i t i c a l h i s t o r i a n s , as the embodiment of a l l that i s e v i l i n imperial administration. The dominance of American n a t i o n a l i s t historians i n the f i e l d i s probably the chief reason f o r t h i s s i t u a t i o n .  Prominent B r i t i s h and continental  h i s t o r i a n s , however, without the obvious demands of making a case f o r t h e i r own nations, have to a great extent f a i l e d to revise the standard conclusions i n the l i g h t of recent modifieations i n imperial theory. Mercantilism was not the epitome of narrow-minded power p o l i t i c s that i t has often been pictured, l o r was i t  the ultimate sophistication of economic and s o c i a l development which i t s contemporary supporters declared i t to he. I t was e s s e n t i a l l y a way of l i f e and a method of d i r e c t i n g the e f f o r t s of the community to what was supposed to be i t s greater welfare.  I t possessed a moral foundation to a f a r  greater degree than the succeeding system of l a i s s e z - f a i r e . I t s mistakes grew l a r g e l y out of the times i n which i t flourished, and i t s triumphs were no l e s s triumphs because they were achieved i n the name of national aggrandizement.  6.  Chapter I . The Theory and S t r u c t u r e o f M e r c a n t i l i s m "For where your t r e a s u r y i s , t h e r e w i l l your h e a r t be a l s o . " Matthew. V I , 21.  M e r c a n t i l i s m , though i t i m p l i e d i n many o f i t s a s p e c t s a conscious  c o n t r o l over t h e a c t i v i t i e s o f the i n d i v i d u a l ,  cannot be s a i d t o have had a conscious body o f d o c t r i n e  (2).  The p h i l o s o p h y u n d e r l y i n g i t , however, was a d m i t t e d l y o n e o f c e n t r a l i z a t i o n , and was t h e c h i e f h e r i t a g e from t h e M i d d l e Ages to t h e commercial e r a . The f i r s t major i n h e r i t a n c e from t h e M i d d l e Ages was the n a t i o n a l s t a t e .  The c r e a t i o n and growth o f the s t a t e ,  i n f a c t , p a r a l l e l e d t h a t o f commercial p o l i c y and i t was s i g n i f i c a n t f o r t h e f u t u r e o f m e r c a n t i l i s m t h a t the o r i g i n a l form o f the s t a t e was an a b s o l u t e monarchy.  A c t u a l l y , the  degree t o which m e r c a n t i l i s m was devoted t o t h e cause o f (2)  The d i s c o v e r y o f t h e e x i s t e n c e of a body o f merc a n t i l i s t b e l i e f was made i n t h e e i g h t e e n t h century by men who found s e c u r i t y f o r t h e i r own f a i t h i n a system of n a t u r a l law. The bond o f mutual sympathy among these o b s e r v e r s was c r e a t e d f a r l e s s by any s i m i l a r i t y i n t h e i r p r a c t i c a l recommendations than by t h e i r common d i s t r u s t o f t h e c u r r e n t expedients o f s t a t e c r a f t i n Western Europe ... I t was perhaps o n l y n a t u r a l t h a t they should seek t o strengthen the o u t l i n e s o f t h e i r own proposals by s y s t e m a t i z i n g t h e t h e o r i e s which they d i s c o v e r e d l u r k i n g behind the i n s t i t u t i o n s t h a t came under t h e i r f i r e . Judges, A.V., "The i d e a o f t h e m e r c a n t i l e s t a t e , " T r a n s a c t i o n s of the R o y a l H i s t o r i c a l S o c i e t y . 4 t h s e r i e s , V o l . XXI, p.4£.  7.  national u n i f i c a t i o n was l i m i t e d , and almost e n t i r e l y unconscious.  The lack of organization i n economic matters at the  close of the Middle Ages was apparent, and the mediaeval c e n t r a l i z i n g influences were adopted as a r e s u l t of habit. During Tudor times, the r e a l commercial p o l i c y was formulated i n the Navigation Acts, commencing with t h a t of 1540.  On the domestic scene, the Statute of A r t i f i c e r s of  1563 and the Elizabethan Poor Law supported Industry and maintained a labour force f o r i t .  I t was of importance,  however, i n the character of mercantilism i n the future, that such measures were i n s t i t u t e d at the high point of monarchial absolutism i n England. The national administrative machinery also developed, evolving outwards and downwards from the Crown to the Council, to Parliament, and to the f i r s t representatives of modern l o c a l government, the j u s t i c e s of the peace. both the economic and p o l i t i c a l aspects of the new  Thus, age,  beginning at the same s t a r t i n g point, evolved i n d i f f e r e n t d i r e c t i o n s , the one inwardly, the other outwardly.  As the  scope of p o l i t i c a l government control widened, the necessity f o r delegation of power became apparent.  Economic govern-  ment, however, and with i t the administration of the overseas empire, was subject to the demands of r i v a l r i e s among the states of Europe, and c e n t r a l i z a t i o n became all-important. Economically, Inter-state r e l a t i o n s were the primary concern of the mercantilists, and these had repercussions i n  8.  domestic and imperial p o l i c y .  I t was to be the f a t a l weak-  ness of the imperial administration that, considering the weakening force of geographic d i f f u s i o n , no recognition of the necessity to delegate authority, such as had been r e a l i z e d i n the national p o l i t i c a l sphere, was or could be successfully made i n the imperial or economic spheres. As l a t e as the end of the fourteenth century, the comprehensible world f o r Europeans consisted of t h e i r continent, with the fringes of A f r i c a and A s i a .  own  Outside  t h i s was the misty, half-legendary realm of the t a l e s of Marco Polo and Prester John.  Then, as the latent energy of  mediaevalism burst into ithe f u l l flower of the Renaissance, Europe broke i t s bounds.  Henry the Navigator and h i s  Portuguese pirate-explorers l i k e Diaz and da Gama, pioneered the long route around A f r i c a to India.  The A t l a n t i c became  a part of the world, as Columbus, Cabot, Yerrazzano, Cabral and t h e i r successors followed i n the tracks of numberless and nameless Norse and Breton mariners to the "New"  world.  The Far East was discovered again, and the riches of both Indies poured i n to give the Iberian peninsula a f l e e t i n g prosperity, and a l l western Europe a new commercial outlook; and l a t e r , i n the seventeenth century, with commerce, came empire and the imperial idea. For England, the creation of the Board of Trade and Plantations i n 1696 marks the t r a n s i t i o n from a national to an imperial system.  By that date England possessed an  9.  empire, small i n area, but spread i n the form of coastal settlements almost around the globe.  The power of the old  absolute monarchy had declined, and the new settlement of the "Glorious Revolution" had brought t r a n q u i l i t y to the nation and transferred the r e a l power of the state into the hands of a parliamentary oligarchy. Yet the old mores of centralized absolutism continued to influence imperial p o l i c y f o r another h a l f century. Another heritage from the Middle -Ages was, the o r i g i n of the commercial idea i t s e l f .  of course,  From the end of  the Middle Ages, the twin foundations of commerce, money and credit, had been developing to replace the old l i m i t e d barter trade.  More and larger goodf,better transportation  and a new supply of precious metals, a l l combined to increase the volume of trade and introduce the new system.  Banks and  exchanges developed as i n t e r n a t i o n a l trade grew, and i n England the change was marked by the t r a n s i t i o n of the nation from passive to a c t i v e trading. With t h i s change there came a new r e a l i z a t i o n of economic nationalism, which was translated, eventually and haphazardly,  into government action.  The merchant, moving among foreigners as he does, require.8 organized assistance more than the farmer or landowner.  In addition, trade i s s o c i a l i n i t s nature, r e q u i r i n g  the intercommunication  of peoples, while agriculture begins  and ends with s e l f - s u f f i c i e n c y .  Trade must therefore be  much more the subject of l e g i s l a t i o n .  The urban trading  10.  element i s almost always over-represented i n government, and long a f t e r the m e r c a n t i l i s t system passes into discard, i t continues to dominate governmental economic a c t i v i t y . In addition to a c t i v i t y by the state, trade was pushed abroad by the survivals of i t s mediaeval predecessors, the guilds, and newer organizations, such as the Merchant Adventurers and the chartered monopolies became active f o r t h i s purpose.  F i n a l l y , the ultimate complexity and anchor  of the m e r c a n t i l i s t trading system, the Staple, was developed. The regulation of trade also owed much to mediaeval precedents.  There had been an orderly control of the small-  scale trade of that era through the precepts of Canon Law. The so-called "just p r i c e " placed a l i m i t on p r o f i t , and under the Great Summa, usury was forbidden and the t h e o r e t i c a l guide f o r a l l contracts was moral j u s t i f i c a t i o n .  This l e f t  a heritage of order and control i n trade matters, which the mercantilist system very quickly adopted.  ' A Staple or Magasin f o r f o r r a i g h Corn, Indigo, ~ Spices, Raw-silks, Cotton wool or any other.commodity whatsoever, to be imported w i l l increase Shipping, Trade, Treasure, and the King's eustomes, by exporting them again where need s h a l l require, which course of Trading, hath been the chief mean to r a i s e Venice, Genoa, the low Countreys, with some others; and f o r such a purpose England stands most commodiously, wanting nothing to t h i s performance but our own d i l i g e n c e and endeavour. Mun, Thomas, England's treasure by f o r r a i g n trade. (1664), p. 13.  11.  Under the new regime, problems were discussed r a t i o n a l l y , without reference to r e l i g i o u s t r a d i t i o n , and the d i s t i n c t i o n between e t h i c a l and economic considerations c l e a r l y drawn.  was  The obsessions of the eighteenth century were  with property, contract, trade and p r o f i t s .  Locke, the chief  philosopher of the age, saw the main purpose of government as being the protection of property, but h i s d e f i n i t i o n of "property" included l i f e and l i b e r t y as w e l l as worldly goods, and was not narrowed to that m a t e r i a l i s t p r o f i t protecting concept of nineteenth century t h e o r i s t s . The c o l l e c t i o n of interest on loans, without  restriction,  was now accepted, the moral p r o h i b i t i o n oa usury having no application to the necessity of p r o f i t .  The mercantilist,  however, s t i l l looked to a higher authority to set the r a t e of i n t e r e s t .  Unlike the supporter of l a i s s e z - f a i r e i n the  next age, but l i k e the mediaevalist, the m e r c a n t i l i s t did not believe i n a "predetermined harmony i n the nature of  U) economic phenomena."  There was no guarantee that unre-  gulated trade would promote the best i n t e r e s t s of the state, and i t might lead to chaos.  Attempts at regulation were  often i l l - f o u n d e d , but the m e r c a n t i l i s t believed that the desirable economy could be achieved i f the proper steps were taken.  When mistakes were made, the conclusion drawn was  not that there had been too much regulation, but that the (A)  * ' Heckscher, E l i P., Mercantilism. V o l . I I , p.318.  12.  regulation had been inadequate or badly d i r e c t e d . Externally, the guiding p r i n c i p l e behind the management of foreign trade was a favourable balance of trade.  The  c l a s s i c expression of t h i s canon Is that of Thomas Mun i h the seventeenth  century.  The ordinary means ... to increase our wealth and treasure i s by Forraign Trade. wherein wee must ever observe t h i s rule; to s e l l more to strangers yearly than wee consume of theirs i n value ... because that part of our stock which i s not returned to us i n wares must n e c e s s a r i l y be brought home i n treasure ( 5 ) . Dazzled by the huge flow of b u l l i o n to Spain and Portugal, monarchs were prepared to accept the advice of those experts who  c a l l e d f o r a high t a r i f f p o l i c y to ensure  a favourable balance of trade.  Very early i n the seven-  teenth century, p r o h i b i t i o n s were enforced on the export of a r t i c l e s considered to be of paramount importance i n the nation's b i d f o r economic power, among them b u l l i o n , naval stores and raw wool.  Bounties were l a i d on the export of  corn and of c e r t a i n manufactures, and duties were imposed on certain f o r e i g n and exotic products which were considered expensive luxuries.  English shipping was protected by the  Navigation Acts which ensured s p e c i a l p r i v i l e g e s to English ships i n English ports, a monopoly i n the Indian and c o l o n i a l trades, and the exclusive English composition of the crews of English ships ( 6 ) . (5) Mun. England's treasure by forraign trade, p. 7 . (6) The value of our exportation likewise may be much - - advanced when we perform i t ourselves i n our own ships, for then we get not only the p r i c e of our wares as they  Colonization was encouraged f o r national gain, as expressed i n many of the c o l o n i a l charters.  Prestige was  one motive f o r t h i s expansion, but the expectation of f i n d ing new sources of supply i n the colonies must be regarded as the most potent argument offered i n favour of English colonization (7). C e r t a i n l y i n regard to naval stores, s a l t sugar, tobacco, spices and dyestuffs, there was a great urge to obtain control of the source of supply, hitherto i n cont i n e n t a l or Levantine hands.  I n the eighteenth century  t h i s purpose was carried into effect with the great overseas conquests, but the desire f o r these exotic products remained, and those colonies which d i d not supply them were l a r g e l y neglected, or discriminated against. For England the need f o r new markets was also pressing, since her manufacturing industry, especially i n the case of woollens, was increasing at a time when the frequency of continental wars made her regular markets especially precarious.  By the eighteenth century, t h i s need too was  approaching s a t i s f a c t i o n , but commercial greed outlasted the considerations of high p o l i c y , and there was s t i l l a very r e a l appreciation of the value of empire i n the trade structure. (6) cont'd. are worth here, but also the Merchant gains the charges of ensurance and f r a i g h t to carry them beyond the ^seas. Mun, England*s ^ ___ treasure by f o r r a i g n trade, n  (7) - Knorr, K.E., B r i t i s h c o l o n i a l theories, p. 55.  s  14.  Previous to 1660,  the p o l i t i c a l and economic t h e o r i s t s  i n England placed the chief emphasis on over-population as a reason f o r colonization. The drain of excess population to the colonies was not only accepted, hut encouraged.  With  the i n f l u x of large supplies of precious metals from the American continents, there was widespread misery among the labouring classes, while the wage-levels  lagged i n adjustment.  The consequent unemployment was therefore a major factor i n emphasizing the b e l i e f i n over-population (8).  The current  horror of unemployment, and especially of the s o c i a l unrest a r i s i n g therefrom, c e r t a i n l y inspired many of the c o l o n i zation schemes of the period.  I t was only with the C i v i l  War that doubts as to the s u f f i c i e n c y of the English popul a t i o n seemed to acquire any substantial support.  Fifty  years l a t e r the fears of under-population dominated a l l c o l o n i a l theories.  S i r William Petty even urged the return  of the population of New England to the mother country (9). The b e l i e f had grown up that maximum production required a maximum producing population, and that since there was a labour shortage i n B r i t a i n , c o l o n i a l settlement should be discouraged.  Other m e r c a n t i l i s t s , however, s u c c e s s f u l l y  urged that the overseas population should be employed i n the national interest, thereby eliminating the undesirable aspects of migration. ( )  Knorr, B r i t i s h c o l o n i a l theories, p. 45.  ^  Petty, S i r William, Economic writings. (Hull ed.), Vol. I , p.301.  8  15.  Internally, once the stagnation of the Middle Ages had been overcome, the prices and q u a l i t y of goods could not longer be c l o s e l y regulated i n the widespread domestic Industry.  O f f i c e r s of search and inspection were s t i l l  employed, however.  Labour was subject to the Statute of  A r t i f i c e r s , which regulated wages, u s u a l l y at a subsistence level.  The Elizabethan Poor Law, i n support of the doctrine  of production f o r the nation, declared the o b l i g a t i o n of the able-bodied to engage i n productive labour, and provision was made f o r t r a i n i n g under the Statute of Apprentices.  In  addition, spasmodic attempts were made to control consumption (10).  I n t h i s connection, t a r i f f l e g i s l a t i o n was  used to r e s t r a i n a taste f o r foreign l u x u r i e s .  The establish-  ment of p o l i t i c a l l i b e r t y among the upper classes, those who were the greatest consumers of such l u x u r i e s , made the administration of the regulations impossible.  There was,  however, a higher degree of success i n the colonies i n t h i s connection.  there i s exported communibus annis of our own native commodities f o r the value of twenty two hundred pounds s t e r l i n g , or somewhat more; so that i f we were not too much affected t o Pride, monstrous Fashions, and Riot, above a l l other Nations, one m i l l i o n and a h a l f of pounds might p l e n t i f u l l y supply our unnecessary wants (as I may term them) of S i l k s , Sugars, Spices, F r u i t s and others; so that seven hundred thousand pounds might be yearly treasured up i n money t o make the Kingdome exceeding r i c h and powerful i n a short time. Mun, England's treasure by f o r r a i g n trade, pp.98-99.  16.  A study of the amorphous body of philosophy which has been c a l l e d the doctrine of mercantilism must necessarily view i t s b e l i e f s from their three points of a p p l i c a t i o n , namely:  the control of foreign trade, the regulation of the  domestic economy, and the management of the c o l o n i a l empire. The three, of course, were i n t e r r e l a t e d .  The control of the  domestic economy was advocated, not only as a s u r v i v a l of the mediaeval concern f o r a well-balanced  s o c i a l and economic  structure, but also to a s s i s t i n the promotion of f o r e i g n trade.  Encouragement of c o l o n i a l ventures was a c o r o l l a r y  of the other aspects, since such colonies were intended  to  a s s i s t and strengthen the mother country i n i t s drive f o r economic and commercial dominance. M e r c a n t i l i s t theory on foreign trade begins with the b u l l i o n i s t school.  This school held to the elementary notion  that precious metals meant wealth and that the accumulation thereof increased the national prosperity and power.  As early  as the reign of Henry YI, the government required gold to be paid into the Mint whenever payment was abroad (11).  received f o r a sale  There was also a general p o l i c y of support for  those trades which brought b u l l i o n i n t o the nation. By the end of the sixteenth century, the growing complexity of i n t e r n a t i o n a l trade had introduced the system of exchange as a major f a c t o r i n trade. (11)  The f l u c t u a t i o n of  Buck, The -politics of mercantilism, p.  22.  such exchanges, however, introduced a complication which caused Gerard de Malynes and others to urge the necessity of management of the exchanges by the state, f o r the protection of the nation's b u l l i o n hoard.  They were answered  by Edward Misselden, i n The c i r c l e of commerce and other pamphlets, i n which he declared that the nation should manage the general balance of trade but not i n t e r f e r e with exchanges.  This was s u b s t a n t i a l l y Mun's view also and  received further support from such l a t e r economists as S i r William Temple, and S i r James Steuart  (12)*  The n a t i o n a l i s t c h a r a c t e r i s t i c s which the doctrine came to assume, demanded the use of t a r i f f s , bounties, proh i b i t i o n s and enumerations, and eventually the extensive control of domestic manufacture and raw materials. S i r James S t e u a r t s declaration of t h i s argument i s t y p i c a l of 1  the eighteenth century attitude to the enlarged scope of controls.  Both Mun and Misselden were connected with the East India Company, and i t was i n defence of the Company's spice trade that they wrote. That organization had adopted the hitherto unprecedented practice of paying i n gold f o r I t s products, being assured that t h e i r sale i n Europe would bring considerably more than the value of the gold exported and that u l t i m a t e l y the ba-lance i n "Treasure" would be i n favour of England. This chief tenet of the new "Balance of Trade School" i s outlined i n the fourth chapter of England's treasure by f o r r a i g n trade.  18.  The whole purport of t h i s plan i s to point out the operation of three very easy p r i n c i p l e s . The f i r s t , That i n a country e n t i r e l y taken up with the object of promoting foreign trade, no competition should be allowed to come from abroad for a r t i c l e s of the f i r s t necessity, and p r i n c i p a l l y f o r food, so as to r a i s e prices beyond a c e r t a i n standard. The second, That no domestic competition should be allowed a r t i c l e s of superf l u i t y , so as to r a i s e prices beyond a c e r t a i n standard. The t h i r d , That when these standards cannot be preserved, and that from natural causes, prices get above them, public money must be thrown into the scale to bring p r i c e s to the l e v e l of those exportations (13). The barometer of prosperity f o r t h i s new school of mercant i l i s t s , therefore, was the balance of trade rather than mere gain i n treasure. Treasure i t s e l f was,  however, important as the chief  asset i n time of war, furnishing the means of provisioning the armed forces at short notice.  In peacetime, gold and  s i l v e r constituted a f a r larger proportion of the currency base than they do at present.  Precious metals, outside the  framework of exchange, were regarded as factors of production, y i e l d i n g interest as land y i e l d s rent.  The greater the  quantity i n the country, the lower the i n t e r e s t r a t e .  Inside  the exchange structure, however, increased quantity meant increased c i r c u l a t i o n , and unless the productive l e v e l rose, there would be a general r i s e i n the price l e v e l .  Such high  prices were recognized as stimuli to trade, though they l i m i t e d the f l u i d i t y of exports.  Treasure to the m e r c a n t i l i s t ,  Steuart, S i r James, P r i n c i p l e s of p o l i t i c a l economy. (1767), Y o l . I, p.270.  therefore, was a useful index of the national economic welfare.  Mun  even saw i n i t s a c q u i s i t i o n the chief determinant  of domestic land values (14). The development of the balance of trade theory, moreover, was l i m i t e d to some degree by the b e l i e f that there was only a fixed amount of trade i n the world and that the nation must gain as large a share as possible f o r i t s e l f . Thus, S i r William Temple declares: ... i t seems to be with trade, as with the sea ( i t s element) that has a c e r t a i n p i t c h above which i t never r i s e s i n the highest t i d e s , and begins to ebb, as soon as ever i t ceases to flow; and even loses ground i n one place, proportionable to what i t gains i n another (15). Trade, the l a t e r m e r c a n t i l i s t s believed, was the only true source of national wealth and the chief yardstick of a nation's economic welfare.  Yet the proper regulation of  trade was impossible without the regulation of the nation's domestic economy. The regulation of the domestic economy was an extremely complicated undertaking, since i t involved a more d i r e c t contact with the bulk rather than with a section of the people, and was, moreover, i n unfavourable contrast to the steady progression toward p o l i t i c a l l i b e r t y .  In addition,  a wide v a r i e t y of schemes had to be evolved to control such aspects of the national l i f e as industry, labour, a g r i c u l t u r e , and the domestic consumption. (14) Mun,  England's treasure by forraign trade, pp. 29-30.  (15) Temple, Works. (1757), Y o l . I , p.203.  20.  Externally, industry was assisted by the imposition of t a r i f f s , as trade had been directed by such imposition. Protection for home industry and the p r o h i b i t i o n of c e r t a i n foreign imports was the goal.  There was a b e l i e f that  exports should be, as f a r as possible, manufactures, both because manufactures; by reason of the value of the labour put into them, were supposedly of greater value t nan  raw  materials (16), and because the export of raw materials provided r i v a l s with the means of production. In addition, raw materials were to be secured as e a s i l y and advantageously  as possible, and convenient home  industries, which might hold a near-monopoly i n production, were to be protected at a l l costs.  Of such a type was  the  English woollen industry. Much of the controversy of the e a r l i e r years Of mercantilism centred around woollen manufacture. bidden.  The exportation of raw wool was continuously f o r Despite these regulations, however, a l u c r a t i v e  smuggling trade grew up i n wool, and i t was calculated that by 1760, nearly h a l f the wool crop of England was smuggled abroad  (17).  being  Such a l o s s caused the orthodox mer-  c a n t i l i s t grave concern, and i t was  even urged that the  atrociously neglected I r i s h woollen industry should be cont r o l l e d and protected i n the i n t e r e s t s of the E n g l i s h manufacturer. (16)  Steuart, P o l i t i c a l economy. Y o l . I , p. 336.  (17)  Gipson, Lawrehce, The B r i t i s h empire before the American-revolution. Y o l . I . Great B r i t a i n ancPTreland, p. 52.  21. Besides encouraging export, the m e r c a n t i l i s t wished to preserve the home market f o r home producers, and throughout the eighteenth century writers condemned the entrance of foreign t e x t i l e s to England, e s p e c i a l l y those from India. The s i l k weavers were at a constant disadvantage, since the French and I t a l i a n products were superior i n q u a l i t y and cheaper i n p r i c e .  Other industries, such as leather, t i n and  iron, also sought, at d i f f e r e n t times, to come under the wing of the protective t a r i f f system.  Foreign imports were to be  marked f o r re-exportation wherever possible.  This general  a t t i t u d e toward protection was a part of the h i s t o r i c a l sequence of attitudes toward commodities, Professor Heckscher.  as outlined by  The merchant desires mere exchange,  while the consumer wishes access to an ample supply and the producer favours r e s t r i c t i o n .  In h i s t o r i c a l sequence, these  are represented by the staple and provision p o l i c i e s (charact e r i z e d by the p r o h i b i t i o n on the export of corn) of the Middle Ages;  and by the protective p o l i c y (the l i m i t a t i o n  on imports) which comes as mediaevalism decays,and i s the dominant feature of mercantilism - "the fear of goods," as Heckscher c a l l s i t (18). The mercantilists urged the state to action, not only with respect to those industries already existing, but also to those to be created or to be revived.  I n the f i s h i n g  industry, so v i t a l to the maritime dominance of England, the ( ) 18  Heckscher, Mercantilism. V o l . I I , p.57.  22.  Dutch, had long maintained a lead. set  I t was often proposed to  the unemployed to work i n the industry, though l i t t l e  was done i n t h i s respect, the hard, uncomfortable  l i f e of a  fisherman being