FEEE TEADE NO COLONIES. A LETTER ADDRESSED TO THE RIGHT HON. LORD JOHN RUSSELL, Longum iUr cst tier precepla,^ WILLIAM BLACKWOOD AND SONS, EDINBURGH AND LONDON. June 10, 1848. My Lord, Our colonial policy has of late years undergone so radical a change, and the results have already been so important and instructive, that the time appears to have now arrived when the wisdom of that policy and its probable consequences may be fairly made the subject of investigation. In considering this subject, your Lordship is well aware that no assistance can be derived from the experience of other nations, whether ancient or modern; for, as our recent policy has been altogether peculiar and unprecedented, its wisdom must be tested solely by its own results. The principle upon which our colonial, and indeed the whole of our recent commercial legislation is based, is new in the history of civilised states. The doctrine of free exchange or unrestrained competition between nations, may be said to constitute the entire basis of that legislation. It has long been maintained by a certain section of the modem school of political economy, that this principle of universal competition is the true path to the material prosperity of nations; and after much contention this principle has been adopted by the British Legislature. If, therefore, it is right, it must necessarily admit of receiving full effect; if it is wrong, the farther it is carried out the more disastrous must be the results. Now, it is obvious that this principle of competition is one A 2 derived from the notion of self-reliance or self-dependence. The state which adopts it necessarily presupposes that it is at least on a footing of equality with all others; for we cannot ima^ne any nation deliberately to expose itself to the rivalry of a neighbour its superior in all the great branches of industry. No nation will, in fact, adopt it unless it expects to derive immediate advantage from the change; because the commercial spirit, which necessarily directs the legislator upon this point, is the one of all others which looks to speedy results. And this consideration ought amply to account for the rejection of our Free-Trade principle by the statesmen both of Europe and America. Our legislators considered, whether justly or not I shall not now stop to inquire, that we had nothing to lose and everything to gain by a free competition with foreign states, while they seem to think that they have much to lose and nothing to gain by a free competition with us. The same principle of freedom has been applied to our colonial as to our foreign commercial policy, and this circum¬ stance leads me to the point upon which I have been induced to address your Lordship. If we examine, however cursorily, the colonial systems of all modern European states, wo shall find that the connection between the mother country and its foreign settlements has been founded on the observance of a totally different principle. That connection has had its foundation on a system of mutual dependence and support, The very notion, indeed, of a modern colony implies depen¬ dence, while that of the parent state implies support, as well in a political as in a commercial sense: and under the colonial system of Great Britain a trade of reciprocity between the foreign dependency and the parent state was a natural result. Let us suppose that under that system the British North American provinces exchange their raw produce for the manufactured produce of the mother country; although such a trade, from its exclusive nature, may be liable to speculative objections, it is still, upon the whole, as Adam Smith has 5 expressed it, “greatly advantageous” to the parent state.* It is true, indeed, that England might be able to obtain her corn and timber from a cheaper market, but the loss which may arise from this circumstance is more than compensated by the gain she derives from the exclusive possession of the colony trade. Abolish the colonial system, and introduce in its place the principle of free competition, and a great change necessarily takes -place. England finds that she can obtain her corn and timber at less cost from the Baltic than from America; and the Canadian provinces, in their turn, may find that they can buy their manufactures cheaper in Virginia than at Manchester. In such a case, supposing the free principle to be in full operation, it is obvious that the import and export trade between the colony and the parent state would greatly diminish, if it did not entirely cease. The colony trade would, in fact, be exchanged for a foreign trade; and this would be attended with a double result; for, in the first place, the more certain would be abiindoned for the less certain market; and secondly, we should retain the responsi¬ bilities of our colonial sovereignty without its commercial advantages. Without participating, to any beneficial extent, in the trade of the colony, wo should still be oalled upon to contribute to the expense of its maintenance in time of peace, and to defend it in time of war. If it is alleged that, from our superiority in manufactures, or from any other cause, the case adduced is not likely to occur, I reply that that is no sufiicient answer, because, if the universal freedom of trade is the true principle of com¬ merce, we are bound to follow that principle through all its legitimate consequences. In the foregoing case, however, I have assumed that the industry and commerce of the British colony have not suffered from foreign competition; I have only assumed that they have found a different channel. But, to take 6 a further illustration from existing circumstances, it is now a matter of certainty that the British colonies in the West Indies are unable, in their present condition, to compete in the produc¬ tion of sugar with Cuba and Brazil. Carry out the free system to its full extent, and in all probability the cultivation, in a commercial sense, of these colonies, must very shortly cease. The most ardent advocates of that system are now led to this too palpable conclusion. Struck^ indeed, by the impending destruction of so great an amount of capital, but unwilling to question the truth of their theory, they boldly assume that the ruin of our sugar colonies was inevitable; but, while they are eloquent upon the subject of past impru¬ dence, they have failed to enlighten us as to the future; they have failed to inform us whether the burden of maintaining these showy, but profitless appendages, is to fall upon the mother country; and yet, if we pursue our present course, there seems to be no choice between this bitter alternative and unconditional abandonment. While upon the subject of these unfortunate colonies I cannot refrain from noticing a popular error, which may be said to have formed the groundwork of our recent West Indian legislation. It was asserted, on the authority of certain economists, that free labour is cheaper than slave labour, and that our colonists had therefore nothing to fear from the competition of the latter. This opinion may be traced to Adam Smith, who, in one portion of his work, states his reasons generally for entertaining it. In another, however, he cites an example in proof of this opinion, by referring to a statement of Montesquieu, to the effect that the Hungarian mines were tvrought at less expense by free men than the Turkish mines, on the neighbouring frontier, by slaves.* There seems to be no reason for questioning the truth of this statement; but general conclusions can seldom be safely drawn 7 from isolated facts. We have now for the last ten years had a continued trial of free labour in our East Indian dominions, where it is both cheap and abundant; but that which may be • true on the banks of the Danube has not been proved to be true on the banks of the Ganges ; for the planter of Bengal is unable to compete in the production of sugar with the slave-owner of Brazil. Again, if we look to the West Indies, we find that the island of Barbadoes, although for a long period in a state of high cultivation, and plentifully supplied with labour, is equally unable to compete with the neighbouring island of Cuba. The opinion in question, therefore, has not been proved to be correct; and if we were to investigate the cause of the apparent inconsistency of the experience of Montes¬ quieu with our own. we should most probably find it in the simple fact that the Turk is a more humane taskmaster than the Brazilian or the Spaniard. Nor can the partial success of free labour in Porto Rico be referred to as at all conclusive of the truth of Adam Smith’s theory. By far the greater portion of that island being occupied by small proprietors of European descent, who cultivate their plantations in many instances with their own hands, the state of society in that island is so totally different from that of the neighbouring British colonies that no satisfactory comparison can be drawn between them.* Judg¬ ing, therefore, from the experience of the present age, it is impossible to resist the melancholy conclusion, that the balance of testimony is decidedly against the truth of the proposition contended for by Adam Smith, and relied upon by a great portion of liis followers. But to return to our new commercial system, it is obvious that, supposing it to be in full operation, no trade will be carried on between England and her colonies unless the advantages to be derived from that trade are more immediate and direct than those which would be derived from an inter¬ course with foreign states. And as there are few articles of British colonial growth which cannot be obtained at less cost from foreign states, it follows that the commercial ties between the colonies and the mother country must become rapidly weakened, and liable to be snapped asunder at any time when cheaper markets may be discovered. I do not think, my Lord, that I have over-stated the pro¬ bable consequences of ourrecent legislation. It would, indeed, be an easy matter to fill pages with startling evidence of Canadian disaifection and West Indian despair—to dwell on the vast importance, at the present time, of emigration, and to point out the mighty augmentation of imperial power which colonial dominion has brought to England. But as the whole of our recent commercial policy has been based on a certain defined course of action, I prefer tracing that principle to its source, in order to ascertain, if possible, whether it is just in theory, although it may have hitherto proved unsatisfactory in practice. On the occasion of the introduction of the budget for the present session of parliament, your Lordship took occasion to state, more than once, in order apparently to silence all objection, that our new commercial policy had been adopted in accordance with the opinions of Adam Smith. But your Lordship is well aware that that philosopher is not infallible; and there are strong reasons for believing that, in our recent commercial changes, we have generally rejected his opinions when they happen to be right, and adopted them when they happen to he wrong. In confirmation of this assertion, I do not allude to his well- known opinion on the navigation laws, which are now imder the consideration of the Legislature. I allude more parti¬ cularly to his opinion upon a matter of even more fundiimental importance, and which, in fact, goes directly to the root of the whole doctrine of free trade. 9 Adam Smith states that the home trade is twice as advaii- tageoiiSj in a national point of view, as the foreign trade; and as the proposition is one, in an economic sense, of the very highest importance, I shall give it in his own words:— “ The capital which is employed in purchasing in one part of the country, in order to sell in another the produce of the industry of that country, generally replaces, by every such operation, two distinct capitals that had both been employed in the agriculture or manufactures of that country, and thereby enables them to continue that employment. When it sends out from the residence of the merchant a certain value of commodities, it generally brings back in return at least an equal value of other commodities. When both are the produce of domestic industry, it necessarily replaces, by every such operation, two distinct capitals which had both been employed in supporting productive labour, and thereby enables them to continue that support. The capital which sends Scotch manu¬ factures to London, and brings back English corn and manufactures to Edinburgh, necessarily replaces, by every such operation, hoo British capitals w'hich had both been employed in the agriculture or manufactures of Great Britain. “ The capital employed in purchasing foreign goods for home consumption, when this purchase is made with the produce of domestic industry, replaces also, by every such operation, boo distinct capitals, but one of them only is employed in supporting domestic industry. The capital which sends British goods to Portugal, and brings back Portuguese goods to Great Britain, replaces, by every such operation, only one British capital: the other is a Portuguese one. Though the returns, therefore, of the foreign trade of consumption should he as quick as those of the home trade, the capital employed in it will give but one halfoi the encourage¬ ment to the industry or productive labour of the country.”* * Vol. ii. book ii. chap. v. p. 02. 10 It is remarkable that the researches of the most eminent of the French economists have led him to precisely the same Conclusion. Z7ia British Government" observes M. Say, “ seems not to have perceived that the most profitable sales to a nation are those made by one individual to anotlier within the nation, for these latter imply a national pro¬ duction of two values, the value sold and that given in exchange."* How far this remark may be applicable to the recent commercial policy of the British Government I shall leave your Lordship to determine; but it is almost superfluous to observe that the opinions of these two autho¬ rities—and hone higher can be produced in their respective countries—are obviously and necessarily inconsistent with the principle of free trade, or universal competition. If the home trade is more advantageous than the foreign, why .allow the latter, in any instance, to displace the former 2 for even if foreign nations, as was predicted, were to reciprocate with us, which they do not, the free exchange of our produce with theirs would, according to the opinions of Smith and Say, be only half as advantageous as if an exchange took place within the nation itself. In further corroboration of his opinion, M. Say, in another place, makes the following remarks:— “The most productive employment of capital for the country in general, after that laid put on the land, is that of manufactures and the home trade; because it puts in activity an industry of which the profits are gained in the country, while those capitals, which are employed in foreign com¬ merce make the industry and lands of all countries to be pro¬ ductive without distinction," f Again, these views entirely coincide with those of Adam Smith, while treating of the different employments of capital. * Say^s Works, translated by-Prinsep, vol. i. p. 248. + See « Political Economy,” by Ricardo, who cites this passage, p. 492, 11 “ After agriculture,” he says, “ the capital employed in manufactures puts into motion the greatest quantity of pro¬ ductive labour, and adds the greatest value to the annual produce. That which is employed in the trade of exporta¬ tion has the least effect of any of the three.'’ * * * § It will be observed, therefore, that the commercial legisla¬ tion of the last six years has been mainly directed to the increase of that branch of industry which Adam Smith considered the least advantageous to the state. Adam Smith does not indeed appear to have perceived that the inferences to be drawn from his opinion, as to the compa¬ rative advantageousness of the home and foreign trade, were at variance with other portions of his work. But later writers, observing that they stood directly opposed to the universal freedom of trade which they advocated, were compelled to question the doctrine of Smith and Say upon this fundamental point. Mr. Eicardo has accordingly constructed an argument to show that that doctrine is erroneous.! He found it neces¬ sary to overthrow the theory of Smith and Say, before he established the truth of his own; but he has entirely failed in the attempt. Any one who will examine his argument, will,find that it is based upon a palpable fallacy, which it is surprising should have escaped so acute a reasouer.J Mr. M‘Culloch has since.come to his aid, and assailed the position of the two great economists, but with no better success than • Vol. it p. 58. t Ricardo’s " Political Economy,” p. 444. J: See "Principles of Political Economy,” by William Atkinson, wliere tins fallacy has been ably e.vposed, p. 17. § See IPCulloeh’s " Commerce,” p. 13, et seq. In a former work Mr. JPCul- ■ loch stated broadly tliat the qnestion admitted of " no satisfactory solution.”— Prin. of Pol. Economy, p. 147. In the work first cited, however, he qualifies tills assertion by stating tliat the question “ docs not, perhaps, admit of any very satisfactory solution.” We need not be surprised to find, therefore, that the arguments he has brought forward to ovcrtlmow the position of Smitii and Say 12 The question, then, remains precisely where it was left by Smith and Say; and if their opinion is correct, there is an end of the so-called doctrine of “ free trade.” If it is erro¬ neous, it is incumbent upon the advocates of the latter system to show it to be so. With all submission to your Lordship, therefore, I maintain that we have not adopted the more matured opinions of Adam Smith and the better informed economists; we have become the disciples of a newer and a bolder school, and allowed our policy to be guided by the theories of legislators who dream of never- failing markets and eternal peace. I do not, indeed, maintain that our old commercial system was incapable of improvement; but our object has been, not to amend, but to destroy. We have thrown away the substance for the shadow'. We are deliberately ruining our colonial, in the mere hope of extending our foreign trade ; we are encouraging the continental artisan at the expense of our own. Nor is it difficult to account for the temporary success of this national delusion. It was addressed as well to the selfish passions of the many, as to the more elevated sentiments of the few; for while the capitalist and the trader anticipated a speedy increase of their profits, the philanthropist contemplated with satisfaction the idea of a vast union of civilised nations, bound by the peaceful ties of eommercial brotherhood. Of the mode in which these capti¬ vating doctrines obtained their temporary triumph—of itine¬ rant agitation and political apostacy—I shall not speak; biit of all the gross delusions to which they have given rise, none surpassed the assumption that they would ameliorate the condition of the labouring class. It is evident that, of all classes, they are the most exposed to foreign competition; and it is a significant fact, that the localities in which the greatest amount of destitution at present prevails, are those which may be supposed to suffer most from the importation of commodities from abroad. There is. more distress, com¬ paratively speaking, in London and in Nottingham, than in 13 Manchester and Liverpool. If we refer to the actual condition of national industry, as exhibited by the last published returns of the Board of Trade, we find that during the month ending the 5th of May, there was a falling off in the gross value of our exports, of 1,483,04!6Z. as compared with the same period in 1847.* This enormous diminution of our export trade may, no doubt, be accounted for in a great measure from the present unsettled state of Europe. But the same cause ought to affect our imports; yet of these there has been a large and general inerease. In the article of silk manufaeturesf alone, the imports, during the period referred to, nearly double those of 1847. What precise effect these increased importations may have on our domestic industry, I shall not take upon myself to determine; but it is well worthy of remark that the classes most likely to be injured by them, and who, not two years since, were ardent supporters of the free trade movement, are now beginning to demand protection against the foreign producer.]: It is to be observed, that the first victims of free trade are the weaker and more dependent interests of the state—viz., our working elasses at home and our colonists abroad. But the evil cannot rest there, for, in the political, as in the phy¬ sical frame, the serious injury of a part must affect the whole; and it is not difficult to foresee the war of conflicting interests which we are still destined to witness. It has, indeed, been customary of late to treat the question of free trade as settled, and to thrust aside its opponents as bigots who would vote back the Stuarts or restore the Heptarchy. But it is neither probable nor desirable that the manufacturing interest * Sec the city .wticle of tlio “ Times ” of June 9, 1848. + Siik manufactures for home consumption, in 1847, 39,688 lbs.; in 1848, 72,670 lbs. See " Times ” of the same date. J An account of the proceedings at a meeting of tile arlisans of London, pub¬ lished in the "Daily News” of the 27th of April last, and the resolution that was passed respecting foreign competition. 14 should retain its present influence in the councils of the nation; and there are symptoms of reaction and resistance now abroad which promise its speedy diminution. There is no truth of history more satisfactorily:established by the unvarying expe¬ rience of all countries and all ages, than that manufacturing prosperity is variable and ephemeral, when compared with that derived from the cultivation of the land. Yet it is for the supposed aggrandisement of this one interest that, the whole of our recent policy has been directed. But a few months more and the British agriculturist will be exposed to the competition of the Eussian serf, as our colonist now is to that of the blood-stained slave of Cuba. But a few years more, and the mill-owners of Lancashire may find themselves en¬ gaged in a struggle of life and death with the manufacturers of the United States. Before that time arrives, however, the nation may have awakened from its delusion. We may have discovered that a moderate restrietion upon the importation of foreign grain may have the effect, not only of preserving our agriculture, but of increasing a falling revenue, with¬ out materially enhancing the price of corn. We may have discovered the value of our colonial empire, which the presumptuous quackeries of a pretended science have placed in jeopardy. And last, not least, the working classes of the nation may hare spoken in a voice that will be heard against this all-devouring spirit of free trade, which the genius of our great dramatist seems almost to have typified in the following words:— " Then everything resolves itself in power, Power into will, will into appetite, And appetite an nniversal wolf Must make perforce an nniversal sway. And last eat up himself.” But, to return to the more immediate subject of this letter, I need scarcely remind your Lordship that, independent of all recent legislation, the home administration of colonial 15 affairs has long been a matter of just complaint. I mean no flattery when I say that, during the last twenty years, no minister has conducted the business of that department mth greater success than your Lordship ; no one, therefore, can be better aware of the general inefficiency of the system, and the necessity that exists for some important alteration in the management of our colonial empire. It is to he observed that our colonies have two interests which are essentially distinct; the one is local, and oonflded to the representative assembly, or if it does not enjoy that privilege, to the executive government of the colony; the other is imperial, and confided to the general legislature and the executive government of the empire; and it is to the latter that I now venture to draw your Lordship’s attention. I assume, therefore—for it would be a waste of time to prove the fact—that the imperial interests of the colonies do not receive that degree of attention from the home govern¬ ment which their great importance deserves. At the present time, in particular, when the subject of systematic colonis¬ ation is forcing itself upon the public mind, the want of some organised means of effecting that desired object is pow¬ erfully felt. With the double object, therefore, of obtaining justice to the colonies, and at the same time of rendering their resources most available to the mother country, I have to suggest one of two remedies. The first is to enlarge both the administrative power and the responsibility of the Colonial Office; the second, and more effective plan is, to allow the colonies the right of direct representation in the imperial Parliament. Your Lordship is doubtless aware that the scheme of direct colonial representation was strongly advocated by Adam Smith, and as resolutely opposed by Burke. “ There is not the least probability,” observes the former, “that the British constitution would be hurt by the union of Great Britain with her colonies. That constitution, on the 16 contrary, would be completed by it, and seems to be imperfect without it. The assembly which deliberates and decides cmtceming the affairs of every part of the empire, hi order to be properly informed, ougla certainly to have representatives from every part of it. That this union, however, could be easily efifectuated, or that difficulties, and great difficulties, might not occur in the execution, 1 do not pretend. I have yet heard of none, however, which appear insurmountablo." * The objections of Mr. Burke to this scheme are principally founded on the distance of the colonies from England, and on the unavoidable difficulties and delays which would occur in the election and return of members to the seat of government.f It is scarcely necessary to observe, however, that circum¬ stances have very materially altered since these confficting opinions were expressed. The principal, and in fact the only valid objection of Burke, can hardly be said now to exist, at least with reference to our American possessions—and he has confined his argument to them. A voyage from Boston or Halifax can now be performed in as short a time as a journey from the north of Scotland or the west of Ireland in the days of Burke; and throughout the year the West Indies are probably more accessible than the Shetland Islands. In pro¬ portion, therefore, as the force of Mr. Burke’s objections has been .diminished by circumstances, the reasons adduced by Adam Smith in favour of colonial representation have received additional strength. And there is another circumstance tp be considered, which, although for obvious reasons he has not directly referred to it, could scarcely have failed to operate on the mind of Burke, while treating of this important question. At the period when he wrote, the close boroughs afibrded a ready means of representation to the colonies; a means which no longer exists. Practically speaking, therefore, the colonies were represented in the imperial legislature in his • Vol. u. p. 473. t Burke's Works, vol. i. Observations on .v late state of the nation. 17 day, although not so efficiently as if they had been allowed to send their own representatives direct to Parliament. In order to avoid the possibility of contested elections, and the great delays that would necessarily attend them, the colonial legislatures, wliich must still remain, might be em¬ powered to send members to Parliament in the same manner as the separate legislatures of the United States send members to Congress. As direct imperial representation must necessarily imply imperial taxation, those colonies only would send members to Parliament which could afford to contribute to the revenue of the mother country, in some proportion to the expense of their maintenance. The smaller colonies, therefore, and those generally which have no local assemblies, would remain governed as they now are, although they too would derive great advantage from the presence in Parliament of men who might bo personally acquainted with their actual condition and resources. If your Lordship asks for a precedent for so important an innovation, I fear, indeed, that none can be furnished, either from the history of this country or of any other. As the idea of representation was unknown to the ancients, we cannot look to them for information. Among the maritime states of the middle ages, however, we may perceive the necessities that sometimes existed for colonial representation at the seat of government. During the fourteenth century, a colony* of Venice claimed the right of sending deputies to the great council of the Eepublic, but this privilege was denied by the exclusive legislators of St. Mark.f During the grandeur of the Spanish monarchy in the sixteenth century, the gi’eat foreign dependencies of the crown were repre¬ sented at Madrid by a separate council or hoard, which appears to have superintended the affairs of the dominions • The island of Candia. Comewall Lenis on the " Goveiranent of Depen- 18 committed to their care, without the intei-vention of the Cortes. Even this would be an improvement upon our loose and changeful system of colonial management; but no remedy would appear to be so efficient, so constitutional, and at the same time so conducive to the strength and stability of the whole empire as the one already suggested.* . And if no historical precedent can be adduced in favour of this proposed measure, it is also to be borne in mind that the circumstances of the case have no parallel in the annals of mankind. With an overflowing population at home, and a boundless extent of colonial territory abroad, it is the obvious destiny of this nation to employ its indomitable energies for centuries to come, in civilising and peopling those vast regions of the earth which Providence has committed to our care. Such, in spite of the temporary triumph of theory over reason and justice, is our inevitable course. Nor would anything more facilitate the accomplishment of this great work, by diffusing just notions of the wants and capabilities of our colonial dominions, than the presence of their representatives in England. If it is asked how they would affect the delibera¬ tions of the supreme legislature, it may be safely replied that ♦ The following extract from a speech delivered on the flth of Fehmary last, by an influential memher of the legislature of New Brunswick, is worthy of attcn- tion at the present time: Let the voice of the colonial subject be heard within the balls of her Imperial Legislature. It was love for the venerable institu¬ tions of their forefathers which prompted him to speak so plainly. If they saw a friend about to take a road which they knew to be beset with danger, would they not warn him to beware of the path which he was about to pui'sue ? Was it not, then, his duty, and the duty of that house, if they saw danger in the policy of Great Britain, to warn her of the dangers which surrounded her colonial empire ? Did they not see the whole of the noble colonies of the "West Indies laid prostrate by the policy which brought the produce of foreign islands and slave labour into' competition with them in the Bntisli market ? and if they believed as he did, tliat the same policy, if persisted in, would pro¬ duce similar effects in this colony, would they stand quietly by until the evil day had arrived, which would throw them helpless and ruined into the arms of foreign states?” See speech of Mr. R. D. Wilmot in "The Colonial Advo- cate ” of tlie 17tb February last This language is ominous, and reminds us of that held by the colonists of the United States before their separation. 19 tliey would add generally to their interest and utility ; because under the plan proposed the ablest men only would be returned. From their education and their habits there is also every reason to believe that they would cherish a firm attach¬ ment to the constitution of their forefathers, and thus, in addition to the increased intelligence which they would bring to Parliament, they would form an important element of resistance to that destructive spirit now abroad, which, whether under the attractive guise of a popular league, or the bolder front of Chartism or Repeal, aims really at the destruc¬ tion of our institutions and the subversion of society. I have the honour to remain, My Lord, Your Lordship’s most obedient servant, COSMOPOLITE.