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hardly possible to conceive a method of commerce more prejudicial to wealth.

Besides, corporations and privileged companies give to circulation a constant and uniform motion, which is not easily changed and in proved. They opposc an insuperable obstacle to the progress of knowledge, to the reflections of experience, and to the discoveries of genius. Every individual is condemned to perform the task which he has learnt; and it is only with great difficulty that he can quit the sphere of the knowledge he has acquired. Science becomes an obstacle to science, and arts advance to old age without emerging from infancy.

Finally, the profits which the right of selling dear and purchasing cheap insures to corporations and privileged companies, attract to that kind of labour larger capitals than what would have gone to them of their own accord, and reduce the quantity of those which would have been employed in other branches of labour. The excess of capitals in privileged employments, and their scarcity in other labours, necessarily raises their profits, and the high rate of profit of stock is fatal to the progress of industry and wealth.

“ Besides all these bad effects," says Adam Smith, necessarily resulting from a high rate of profit, there is one more fatal, perhaps, than all these put together. The high rate of profit seems every-where to destroy that parsimony which in other circumstances is natural to the character of the merchant. When profits are high, that sober virtuc seems to be superfluous, and expensive luxury to suit better the

affluence of his situation. The owners of the great mercantile capitals are necessarily the leaders and conductors of the whole industry of every nation ; and their example has a much greater influence upon the manners of the whole industrious part of it, than that of any other order of men." *

Thus every thing contributes to demonstrate, that the circulation of the produce of general labour is defective when it is effected by corporations and privileged companies.

A modern French writer thinks, that the privilege of a company is justifiable when it is the means of opening a new trade with distant or barbarous nations. It then becomes a sort of patent, the advantage of which covers all the risks of a hazardous undertaking and the costs of a first experiment. The consumers cannot complain of the dearness of the produce of those distant countries; were it not for the monopoly, it would be much dearer, or it could not be had at all. But, like patents, the privilege ought to last only for the time required completely to indemnify the undertakers for their advances and risks. This time once elapsed, such a privilege would be nothing but a wanton gift made to the privileged individuals at the expence of their fellow-citizens, who hold from nature the right of providing themselves with commodities wherever they can, and at the lowest price possible." of

This exception appears at first sight plausible, advantageous, and no-wise inimical to the principles of com

* Wealth of Nations, vol. ii. page 482.
* Traité d'Economie Politique, par Say, livre i. chap. 2.



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But when examined more closely, it will be seen that there is not any branch of foreign trade that, if this doctrine were admitted, would be secure against a monopoly, and the privilege of which might not easily be justified. Indeed this kind of privileges is almost always founded upon the advantage of opening a new trade with distant nations, upon the risks of a hazardous undertaking, or upon the necessity of an indemnity. All privileges therefore would be just and necessary: but in such cases, it is not the interest of the privileged individuals that ought to be considered; it is the interest of the circulation of the produce of labour. But this circulation is essentially endangered by any kind of privilege. It is checked alike by the low price of the produce and the dearness of the consumption, by the higher rate of profit, and every obstacle by which it may be obstructed.

Should it however happen, that one or several individuals had opened, at their own risk, a road unknown to commerce and of evident utility; it would be proper for government to grant them not only an indemnity, but a reward proportioned to their services. This measure, conformable to justice and to the spirit of civilized societies, would afford useful encouragements, turn to the advantage of commerce, and be free from the inconvenience of exclusive privileges.

Before the guardian principles of commerce were ascertained, the immense extent of capital required for certain commercial enterprizes, the necessity of harmonizing their various branches, the permanent establishments which they demanded, the risks to which they were exposed, and the slowness of the

returns, served as pretences for the creation of a number of privileges, and have since protected them against the blows which have been aimed at them. It is on such a foundation that almost all European nations have created monopolies or exclusive companies for the trade of the East Indies, of Africa, America, and of the East and North of Europe.

But experience has long since manifested the inutility of these privileges; and it is now generally known, that any trade carried on by a company may be carried on much more advantageously by private individuals. It is particularly with regard to the trade with the East Indies that this truth has been made most evident. The proofs have been accumulated in a vast number of separate tracts; and among all those which I could quote, I shall appeal to the evidence of a member of the French board of trade, a man deeply learned on those subjects.

“ It is notorious," said Mr. de Gournai, “ that, the direction of a company being very costly and burthened with many expences foreign to trade, a company can only engage in trades that yield high profits, such as cent. per cent, or eighty per cent. All trades whose profits are less, are neglected by trading companies ; they cannot undertake them. But as nothing restricts commerce more than a high rate of profit, it is not surprizing that countries so extensive as China and the East Indies, do scarcely employ annually twenty vessels of the East-India Company.**

* Menoires de l'Abbé Morallet sur la Compagnie des Indes en 1769.

Let us therefore conclude, that privileges for the circulation of any branch of national and fcreign produce, is contrary both to the true principles of political economy and to the progress of wealth.


Of Modern Colonies.

Modern colonies, in whatever light they may be viewed, have nothing common with the colonies of the ancients but the name.

The Greeks and Romans had no other object in establishing colonies, than to open a vent to an overincreased population, the wants of which exceeded the means of the society, and which, soured by misery, might become an instrument of disorder, favour civil commotions, and endanger the tranquillity and safety of the state. The object of these colonies was therefore to avoid poverty, which is always fatal to the tranquillity and power of states.

Modern colonies have a totally different object. They are an extension of the territory of the mothercountry, the means of increasing its population, wealth, and power ; and they accomplish this important end by the fertility of their soil, and the variety and novelty of their productions, which render them universally desirable, and, above all, by their abundance and cheapness, which place them within the reach of every one.

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