Economic Conditions for Future Defense

FROM the humblest peasant to the mightiest empire humanity is waging a ceaseless and pitiless struggle for existence in which the unfit perish. This struggle is maintained with every weapon and by every artifice, and success is attained not only by endurance and sagacity, but by cunning and ferocity. Chief, however, among the faculties which have given superiority, must rank the martial quality, for history teaches us that nothing can compensate a community for defeat in battle. War is competition in its fiercest form.

To illustrate this truth no phenomenon of our own time is so striking as the social revolution which has been in progress in Great Britain for about a generation, and which tends to culminate in an effort to consolidate the empire by a renunciation of free-trade.

Last June Mr. Chamberlain expressed his conviction that the empire could only “ be held together” by a system of preferential tariffs with the Colonies; for though the facts upon which he based his conclusion have long been patent to foreigners, they have but lately penetrated the minds of Englishmen. All know that Mr. Balfour has since adhered to Mr. Chamberlain’s doctrine, that his cabinet and his party are split, and that a contest is raging which promises not only to overthrow the accepted economic convictions of nearly a century, but to modify radically the commercial relations of the world.

Whatever opinion may be held of Mr. Chamberlain as a statesman, no one is likely to question either his intellectual power or his sincerity in this controversy. In breaking with the national policy of free-trade Mr. Chamberlain has little to gain and much to lose, for he is now old, and he has attained, against bitter resistance, both political advancement and social position. Also the weight of his opinion in such a matter is undeniable. Beside him his colleagues rank as amateurs. He has had a long and successful business life, as well as experience in public office, and he knows America and the Colonies. His mind, therefore, is comparatively free from that insularity which has been a disadvantage to British statesmen.

A man must have intellectual force to emancipate himself when over sixty from the preventions of his youth, and Mr. Chamberlain was probably educated among the strictest sect of Adam Smith and Cobden ; his conversion, therefore, marks an epoch, and, perhaps, no study to which Americans could address themselves would aid them more to comprehend the emergencies which may await them, than an examination of the events which have shaped the fortunes of England. Indeed, in these events we have played the chief part, for the unity of the British economic system hung upon the war of the Revolution and of 1812. The dogmas of free-trade are not pure delusions ; like other a priori theories, moulded by circumstances, they are suited to certain social conditions ; but that they are not universally applicable to nations considered as units struggling for survival, and not as fractions of humanity to be sacrificed to some abstract general good, could have been demonstrated by history at the outset, had men been minded to arrive at truth, and not at an expedient by which they thought to profit.

Free-trade means the survival of the fittest in a peaceful environment, or, in other words, the elimination of the martial qualities as a factor in competition. Rome exemplified the process. Under the Roman Emperors free-trade flourished, more or less perfectly, for several centuries, over a large area in Europe, Africa, and Asia. Apparently the circumstances were favorable, but the result was that the Western provinces including Italy began to decay almost as soon as consolidation had taken place. The reason for this decay is obvious.

The Roman Empire was an administrative system resting on converging highways, running, generally, east and west. Like other such organisms it consisted of three sections, a base, a vent, and a central market, or capital. After Augustus crushed opposition at Actium the Roman base lay in Egypt and Asia, the vent, chiefly, in Gaul and Spain, and the market in Italy. As between the base and the vent, Egypt and Asia supplied most of the manufactures, the luxuries, and the food, all of which ranked as necessaries in the West toward the Christian era, while Europe produced nothing which Orientals would take in exchange for their wares but the metals, preferably gold and silver. Accordingly gold and silver flowed from West to East, the extent of the movement having been gauged by Latin economists. These had no difficulty in predicting disaster, and they were justified by the event. After the hoards gathered by conquest had been exhausted, prosperity continued as long as existing mines yielded abundantly, or as long as expansion uncovered fresh deposits of ore. When these resources failed contraction set in, agriculture became unprofitable, insolvency followed, and at length depopulation supervened. All this is common knowledge. Even the precise point when serious contraction began may be fixed pretty certainly. It was the panic which occurred under Tiberius in the year 33 A. D. Augustus perceived the necessity of expansion, and undertook the reduction of Germany. In the year 12 B. c. he ordered Drusus to the Rhine, and Drusus, in a series of able campaigns, marched to the Elbe, and then began the regular fortification of strategic points, which always formed the foundation of Roman administration. In the year 9 B. C. Drusus died from an accident, and then came the turning point in Rome’s destiny. Augustus made the capital error of his life in sending Varus to take command, for Varus was incompetent. Despising his enemy, Varus allowed himself to be drawn into the forests in the direction of Paderborn, and was there cut off with his whole army. The defeat fell in the year 9 A. D., and Augustus, who comprehended its significance, was prostrated by the shock. At first he thought the disaster might be repaired, and he appointed Tiberius. Subsequently Tiberius planned a comprehensive campaign, but it had to be abandoned. Roman vitality had already ebbed too low. The Rhine became the frontier, the German minerals remained undisturbed, exhaustion went on unchecked, and within a few years a large proportion of the Senate went into insolvency.

These facts relating to Rome illuminate the history of every succeeding economic system. In the sixteenth century, after the discovery of America and of the sea passage to India, the evolution of modern empires began. In the reign of Elizabeth four communities were struggling among themselves to become the seat of exchanges between the East and West; these communities were Spain, then at war with Holland, Holland itself, France, and England. Each nation early succeeded in obtaining a foothold both in Asia and in America, but the crisis of the conflict came in the Seven Years’ War, when England won the advantage. For a period during the middle of the eighteenth century Pitt held a substantial dictatorship ; and probably Pitt may deserve to rank with Cromwell as one of the two great administrators whom England has produced since the Middle Ages. Indeed, Pitt has had scant justice done him for his most remarkable qualities. Oratory and the like are plenty enough, but Pitt comprehended international exchanges, and built up the British Empire on what might have been a scientific basis, had the materials he left to his successors been handled with skill.

The conception of a self-sufficing organism which has of late possessed Mr. Chamberlain is not new. Not to recur to the Romans, those familiar with the writers of the seventeenth and eighteenth centuries know that the problems of commercial exchanges were then deeply studied, and it may happen that the old theories will ultimately be found to be nearer the truth than the doctrines which afterward displaced them. Joshua Gee, for example, reasoning precisely as Mr. Chamberlain reasons, arrived at similar conclusions. Gee explained that the object of statesmanship should be to make a kingdom self-sufficing, that is to say, “capable of raising within itself and its Colonies materials for employing all our poor in those manufactures, which we now import from such of our neighbors who refuse admission to ours.” To that end, following the example of Rome, Great Britain sought to establish a base, a central market, and a vent. Certainly Pitt did not direct the campaigns of Clive which led to the victory of Plassey in 1757, and decided the destiny of Hindustan, but he saw the relation which India bore to America; that infinite “ double market,” as he called it, “the market of consumption and the market of supply.”

Like other nations, the United States is the creation of physical conditions. The central valley of the Mississippi, separated from the coast by the Alleghanies, is easily reached by the St. Lawrence ; the tributaries of the Mississippi being only divided from the Great Lakes by an almost imperceptible watershed. By easy portages to the Wabash, the Illinois, and the Wisconsin, the French early penetrated into this region, and even fortified strategic points, but it was not until the spring of 1753 that the Marquis of Duquesne sent out an expedition to occupy the upper Ohio. Meanwhile the English, who had settled upon the coast, slowly spread out to the base of the mountains, and moving along the path of least resistance, ascended the Potomac to Cumberland, and thence crossed to the streams which meet above Pittsburg. There the highways followed by the French and English converged, and there the war for supremacy began.

When Dinwiddie, the acting governor of Virginia, heard of Duquesne’s encroachment on what he considered his territory, he ordered Washington to visit the French commander and bid him to retire. For answer Duquesne fortified the fork where Pittsburg stands, and thereupon Washington made his advance to Great Meadows, which opened the Seven Years’ War. That war began with a series of humiliations for England, one of which was Braddock’s defeat. Therein Pitt saw his opportunity. “ My Lord,” said he to the Duke of Devonshire, “ I am sure that I can save this country, and that nobody else can.” Judging by what happened after his downfall, his boast was justified.

The expulsion of the French from the interior opened the valley of the Mississippi to English emigration, and from that moment the centralization of the original Colonies became certain. Powers equivalent to those which were afterward vested in the Federal government by the Constitution had of necessity to be exercised somewhere ; the doubt to be solved was whether the seat of energy should lie in Europe or in America.

A numerous population expanding across the mountains could not flourish without a central administration capable of regulating commerce, especially with foreign nations, of policing the roads and dispensing justice, to say nothing of providing for the common defense. Indeed, long before the capture of Quebec the old methods had proved inadequate. The waste of life and money in the French campaigns, induced by local jealousies, was infamous ; the evil was grave enough to make men of sense like Washington and Franklin hot for consolidation. The abuses of the Colonial fiscal administration, which engendered the Stamp Act, and afterward led up to the Revolution, are less dramatic and, perhaps, less familiar. Nevertheless, a failure to regulate economic competition created the United States, afterward evolved the theories of free-trade, and has finally brought civilization to the point where Mr. Chamberlain is convinced that free-trade has miscarried.

In 1760 Great Britain, having conquered her base and her vent, addressed herself to organization. Trade is to society what the circulation of the blood is to the body; therefore for an economic system to operate efficiently the members must bear a certain relation to the heart.

Pitt explained the mechanism to Parliament, and stated the principles on which an entire should rest. “ Trade is an extended and complicated consideration : it reaches as far as ships can sail or winds can blow : it is a great and various machine. To regulate the numberless movements of its several parts, and combine them into effect, for the good of the whole, requires the superintending wisdom and energy of the supreme power. . . . As an American I would recognize to England her supreme right of regulating commerce and navigation ; as an Englishman ... I recognize to the Americans their supreme inalienable right in their property.”

Such was Pitt’s theory, but in attempting to reduce theory to practice Parliament broke down. Cromwell and those who succeeded him sought to organize an economic system substantially like the Roman, excepting that being subject to strenuous competition they protected themselves. The base of the Cromwellian organism being in the East, and the vent in America, the Protector essayed to make “ this kingdom a staple ” by the Navigation Act of 1651. His great achievement was the occupation of Jamaica. The Navigation Laws were conceived on the theory that exchanges between East and West should be made to centre in England, by restricting the commerce of the East India Company and of the Colonies to ports in Great Britain. The statute was considerably elaborated under Charles, and in practice it was not rigorously enforced. Trade was always practically free between the American continent and the West Indies, and very nearly so between the Colonies and Spain and some other countries. On the whole, however, Americans bought almost exclusively in England, and Englishmen were content. Sir Josiah Child, for example, though he thought New Englanders dangerous competitors to the mother country, summed up the situation thus : “ I must confess, that though we lose by their unlimited trade with our foreign plantations, yet we are very great gainers by their direct trade to and from Old England; our yearly exportations of English manufactures, . . . amounting, in my opinion, to ten times the value of what is imported from thence. . . . Therefore, whenever a reformation of our correspondency in trade with that people shall be thought on, it will, in my poor judgment, require great tenderness and very serious circumspection.”

Child, who was one of the ablest financiers Europe ever produced, died in 1699, and shortly afterward the empire reached the stage of growth where the varied interests of the different Provinces began to struggle for favors. Perhaps the wealthiest, and probably the greediest, were the West India planters, and it was in the attempt to pacify these that trouble began. In 1731 and 1732 the West India planters not only succeeded in acquiring liberty to export their sugar to all parts of the world, but they also obtained protection against the French islands. By the 6 Geo. 2, c. 13, among other duties, 6d. a gallon was laid on all molasses of foreign manufacture imported into the Continental Colonies. For nearly a generation slight attention seems to have been paid to this enactment, save in so far as revenue officers used it to extort fees, but gradually the sugar growers of Jamaica and Barbadoes grew restive, and pressed upon the Lords of Trade in London their claim to have a statute, passed in their favor, enforced. The agitation was doubtless also aided by the illicit traffic with the enemy which was carried on from New England during the Seven Years’ War. It was said that Governor Hopkins, and Governor Bernard also, took bribes to issue permits to trade with the French, and the abuse reached a pass where Pitt issued peremptory instructions, in 1760, to the Royal Governors in North America, “ to put the most speedy and effectual Stop to such flagitious Practices, so utterly subversive of all law, and so highly repugnant to the Honour and Well-being of this Kingdom.” ¹

Just at this juncture Francis Bernard succeeded Pownall as Governor of Massachusetts, and what with the trade with the enemy and the pressure to enforce the Molasses Act, he found the Colony disturbed. Molasses entered into many of the Massachusetts industries such as distilling and the fisheries, and Jamaica could only furnish a fixed quantity. On the other hand 6d. a gallon was prohibitive, if enforced, as the price averaged about 1s. Probably Bernard took most of his ideas from Hutchinson, since he admitted “ that trade is a science, which I have had little opportunity to study,” and Hutchinson was, perhaps, the ablest man of business in the Province, but at all events Bernard wrote a series of very sensible letters to London, explaining the situation, and recommending changes in the tariff: —

“ The publication of the orders for the strict execution of the Molasses Act has caused a greater alarm in this country than the taking of Fort William Henry did in 1757. . . . The merchants say, There is an end of the trade in this Province ; that it is sacrificed to the West India Planters ; that it is time for every prudent man to get out of debt with Great Britain as fast as he can, and betake himself to husbandry, and be content with such coarse manufactures as this country will produce. ... It is certain, that whatever detriment the continuation and strict execution of the Molasses Act will bring to the trade of North America ... it will soon come home to Great Britain. . . . For nothing is more plain, than that if the exports of North America are diminished . .. her imports from Great Britain must be lessened in the same proportion. To apply this to a fact; last year were imported into this Province 15,000 hogsheads of molasses, all of which, except less than 500, came from Ports which are now Foreign. The value of this, at Is. 4d. a gallon (which is a middling price . . .) is 100,000 pounds sterling; to purchase which, fish and lumber of near the same value must be sent from hence. Now suppose this trade prohibited (for a duty of 50 per cent, amounts to a prohibition) the consequences must be, that this Province must import 100,000 pounds less of British goods. ... If this valuable trade, which takes from us what no other markets will receive, and returns to us what ultimately centres in Great Britain, should, by making experiments, be destroyed ; would it not be the case of the man whose curiosity (or expectation of extraordinary present gain) killed the goose who laid him golden eggs ? ”²

Massachusetts resisted a policy inimical to her interests, and the royal officials sympathized with her economic views, but the form which her resistance took struck at the vitals of the empire. No centralized administration can exist where an individual can nullify the edict of the whole as represented by the command of the sovereign. It matters not whether that sovereign be a king, an aristocracy, as in this case, or a republic, as occurred when South Carolina undertook to nullify acts of Congress. When, therefore, Massachusetts advanced the doctrine that British legislation did not bind her against her own consent, she dissolved the British economic system. The controversy thus engendered came to a head in 17 61, in the case of the Writs of Assistance.

By the statutes of the 13 and 14 Car. 2, the English Court of Exchequer had been empowered to issue writs enabling custom house officers to apply to sheriffs and constables for aid in searching private buildings for contraband goods. A Massachusetts act of 1699 had conferred on the Superior Court the jurisdiction of the Exchequer. Under this authority writs had been issued in Massachusetts, the first upon the prayer of Charles Paxton in 1755. Thereafter most of the chief revenue officials of the Province obtained them. Prior to 1760 no one seriously disputed their legality, but early in 1761 all Writs of Assistance expired because of the demise of George II., in October,

1760, and then the great contention began.

Thomas Lechmere, the Surveyor General, filed a memorial in February Term, 1761, praying the’Court for writs to " be granted to him and his officers as usual.” On the other side a number of Boston merchants asked for a hearing in opposition, since the issue of such writs made smuggling more difficult, and retained James Otis as counsel. Thus it appears that the litigation arose over the enforcement of a fiscal regulation in which the mother country had no interest, save as the arbitrator between two Colonies. It was substantially a contest between the continent and the West India Islands; yet the principle involved went to the heart of the British organism, for Otis resisted the issuance of the writs on the ground of the nullity of an act of Parliament which the Province of Massachusetts disliked. A decision for the government became, therefore, of moment, and the exigency brought Thomas Hutchinson to the bench, Stephen Sewall, the former Chief Justice, having died six weeks before King George. On Hutchinson, Bernard could rely.

Hutchinson had remarkable qualities. Born in 1711, and a descendant of Anne Hutchinson, the Antinomian, his family had been wealthy and distinguished. He himself had financial talent. Before coming of age, by his own speculations, he had made between four and five hundred pounds sterling, a sum at least equal to $20,000 now. He afterward led in restoring the Massachusetts currency to a specie basis. He had quickness and application, and, though not bred to the law, and only taking his seat on January 27,1761, just in time to preside over the fiercest controversy ever waged in a Massachusetts court, he not only bore himself well in the face of counsel as powerful as James Otis, but succeeded in controlling his brethren, who were inclined to flinch. He secured a unanimous decision, which he failed not afterward to urge in London as a reason for compensation for his losses in the Stamp Act riots.

He wrote in 1765 : “ In the year 1761 application was made by the officers of customs to the Superior Court, of which I was then Chief Justice, for Writs of Assistance. Great opposition was made by some who professed themselves friends to liberty, and by others who favored illicit trade, and the court seemed inclined to refuse to grant them ; but I prevailed with my brethren to continue the cause until the next term, . . . and the like writs have ever since been granted here.”

In this cause Hutchinson did the British government a service, for, though the enforcement of the Molasses Act mattered little to England, the systematic smuggling throughout the Provinces amounted to a defiance of law bordering upon revolution. Otis, like enough, was not far wrong when he declared, that " if the King of Great Britain in person were encamped on Boston Common, at the head of twenty thousand men, with all his navy on our coast, he would not be able to execute these laws. They would be resisted or eluded.”

Yet if Otis were right an empty decision would profit England little ; and the Lords of Trade were accordingly confronted with the problem of how they were to enforce the decrees of their courts. Certainly the empire could not be administered on the basis proposed by Pitt, if a single province could set aside regulations devised for the benefit of the whole. General Jackson is said to have proposed to hang Mr. Calhoun upon very similar provocation. England, however, had not the means at hand o£ which Jackson could dispose, for not only had she no sufficient army in America, but she had a disloyal Civil Service, because she did not pay her own servants. Her officials either received salaries from local assemblies, or drew a precarious living from seizures which they could seldom make. The more lucrative course was to extract an income from smuggling by compounding with felony.

Governor Bernard’s salary was nominally £1000, but he was poor, had a large family, and needed money. He was vehemently suspected of complicity in smuggling. John Temple became Surveyor General, probably, in 1760, and in 1764 Temple visited Salem and removed Cockle from office for compounding for duties, and “ above all for the insult offered me by you in the tender of a bribe.” Cockle was Bernard’s righthand man, and the Governor eagerly defended him, asserting that the Surveyor was actuated by “ a most extreme and haughty jealousy ; ” but in the end Bernard had to admit that “ in truth, if conniving at foreign sugar and molasses, and Portugal wines and fruit is to be reckoned corruption, there was never, I believe, an uncorrupt Custom House Officer in America.”

In Rhode Island conditions were worse. Bernard declared in 1761 that nothing could be done toward enforcing the laws till “ Rhode Island is reduced to the subjection of the British Empire ; of which at present it is no more a part than the Bahama Islands were, when they were inhabited by the Buccaneers.” If a ship were seized “ it signified nothing ” for a rescue followed, and in one case the vessel was “known to belong to one of the Superior Court Judges.”

Bernard further asseverated that the Governor of Rhode Island “said publickly that the Parliament of Great Britain had no more right to make laws for them than they had for the Mohawks.” Under such conditions it was clear that if trade regulations were to be enforced, the Civil Service must be paid by the sovereign; on this the royal governors were united, and on this Bernard and Hutchinson insisted to the last. Almost at the end Hutchinson wrote: “ The officers of the Crown are very few, and are therefore the more easily provided for without burdening the people. . . . And such provision I look upon as necessary to the restoration and support of the King’s authority.”

To provide a certain fund for this purpose, and at the same time mollify the Province, Hutchinson suggested turning the Molasses Act from a prohibitive into a revenue statute, by lowering the duty to a penny or three half-pence a gallon, when smuggling would not pay; and Bernard wrote to London, “ another argument ” for reduction “ is, that it will be a very popular measure.” Accordingly the ministry did reduce the tax to threepence, of which, in practice, about half was collected ; thereafter this grievance played no great figure.

The capital phenomenon in all this history is the inexorable sequence of cause and effect which led to war, as the only means of determining sovereignty, and thereby settling methods of commercial competition. Our ancestors descanted upon “ natural justice,” and upon the indissoluble relation between taxation and representation. In fact, they sought their own material advantage. On this point Franklin’s testimony before Parliament is decisive. But, furthermore, few would now pretend that methods of levying taxes involve other considerations than convenience. Our forefathers taxed unmarried women, when they held property, without compunction, and the population of the District of Columbia to-day, which is about as large as was that of Massachusetts in 1765, is taxed arbitrarily, and would resist restitution of political privileges, because it can do better under a commission appointed by the President. Lastly George Grenville had no objection to considering a proposition for Colonial representation in Parliament ; but the colonists repudiated the idea. They would accept no compromise which would leave them in a probable minority. That, they considered, would be worse than “ taxation, even without their consent, grievous as it is.”

In 1764, therefore, matters had come to a deadlock. Most Americans, probably, would have preferred independence even from an earlier date. They felt certain that, as Dickinson explained, England would always favor herself at their cost, and that they, as Andrew Eliot wrote, would have to “ maintain in luxury sycophants, court parasites, and hungry dependents, who will be sent over to watch and oppress those who support them.” In other words, Americans would be excluded from the patronage of a service which they could not control. On this point the whole jaeople were united. They would have no independent officials. Nothing exasperated Massachusetts more than the acceptance by Hutchinson of a salary from England ; and they finally impeached Chief Justice Oliver for the same crime, after they had intimidated his associates into declining the provision offered them.

Approached thus, it becomes evident that the Stamp Act was no accident, but an inevitable effect of causes which had been in operation for generations. The Lords of Trade had long meditated such a scheme, and had proposed it to Pitt. Pitt declined to consider it because he thought it impracticable ; but Pitt was an administrative genius, and even he would, at last, have been forced to the alternative of conceding the autonomy which has produced the conditions from which Mr. Chamberlain recoils, or of having recourse to such coercion as the North exerted in regard to the South when the South declined to recognize the national sovereignty.

The Stamp Act formed one branch of a scheme for the regulation of imperial exchanges, which, as a whole, was based on mutual concessions. Those concessions were unsatisfactory to Americans, but Grenville professed to be flexible. On sovereignty only was he fixed.

Grenville proposed abandoning the English whale fishery to America, by giving up the bounty then paid to English fishers, and relieving Americans from discrimination. The trade was valued at £300,000 annually. Furthermore he announced that if the colonists thought " any other mode of taxation more convenient ” than the Stamp Act, he would consider their wishes. When the London merchants expressed alarm because they found the American debts came to £4,000,000, Grenville pacified them by saying that, if one bounty as an offset to the proposed taxation “ will not do, I will add two ; if two will not do, I will add three ; ” one thing only is essential to establish “ the authority of the British legislature in all cases whatsoever.” This could not be done without an army on the spot, so Grenville framed a budget to provide for ten thousand men. As Charles Townsend afterward put it, “ An American army, and consequently an American revenue, are essential; but I am willing to have both in the manner most easy to the people.”

Grenville’s error lay not so much in his theory as in trying to put his policy in operation without a competent force. The colonists, being the stronger, ridiculed Grenville, nullified his law, and made an example of Hutchinson. Hutchinson’s crime had not been complicity in planning the Stamp Act, but interference, in his judicial capacity, with smuggling. The mob, therefore, destroyed his house, and would, perhaps, have killed him, had they caught him. The government could make no arrests, as the police were disaffected ; but the next day, a town meeting of Boston, held in the Old South, which was largely attended by “ those who were the immediate actors in, as well as . . . those who had been abettors of, those violent proceedings,” unanimously resolved that the magistrates should suppress such disorders in the future.

The weak spot of English society has always been the tendency toward amateur politicians and amateur soldiers, and this failing has been conspicuous in regard to America. Englishmen have rarely seriously studied administration and war as professions. Not so Pitt, who understood his business. It was at this juncture that Pitt intervened. Stripped of its rhetoric Pitt’s argument amounted to this: The American continent is the most valuable asset you own; it yields you an income of £2,000,000 a year, and it is this income which has raised the value of your real estate, and which carried you through the Seven Years’ War. Here is a possession with which you cannot afford to trifle, more especially as you have not the power to coerce. You are convinced that an American army would be “ a wild and lawless banditti,” and that fifteen thousand Englishmen could march from end to end of the country, “ without scarcely the appearance of interruption ; ” but you err. You cannot conquer America; the proof is that our armies in the last war did their utmost, and yet it cost Amherst a long and laborious campaign to expel five thousand Frenchmen from Canada. You have now to deal with one hundred and fifty thousand Americans, beside the whole power of “the House-of Bourbon.” The imbecility of the Foreign Office roused him to frenzy. As late as 1777 the King’s Speech actually asserted that foreign powers were disposed “ to be pacific and friendly.” Two years earlier Pitt had told the Commons that “ foreign war is hanging over your heads by a slight and brittle thread,” and that France and Spain were on the watch, — possibly even before Franklin had hinted to him that the French minister was “ extremely curious,” and had suggested that France “ would like very well... to blow up the coals between Britain and her Colonies.” Pitt himself took no pains to disguise his contempt for the ability of his contemporaries. He told the huge parliamentary majority, as represented by the Treasury, that their conduct had been “ one continued series of weakness, temerity, despotism, ignorance, futility, negligence,” and the “ most notorious incapacity.” Undeniably, as an administi’ative effort, the work of successive cabinets, for the five-and-tweuty years subsequent to 1760, cannot rank high.

The root of the failure seems to have been that a succession of country gentlemen, or adventurers like Townsend, relied on a professional Civil Service and a military staff, both unfit for their places. The soldiers, especially, were grossly ignorant of the conditions they were called upon to face, from Braddock to Cornwallis.

Pitt, who knew his craft, had no delusions. In a debate, where he sought to obtain the repeal of the Stamp Act, he might say as a sop to wounded pride, “We may bind their trade, confine their manufactures, and exercise every power whatsoever, except that of taking money out of their pockets without their consent,” but in his heart Pitt knew well enough that trade could not be bound without coercion, and that to coerce implied money and, consequently, taxation. To do him justice, Grenville, dull as he was, did not seek a revenue from America to spend in England ; what he aimed at was to secure administrative efficiency in the Colonies.

Pitt saw that this could not be done without a war, in which England, at that time, could not advantageously engage. He would, therefore, have temporized ; possibly, in the end, he might have been driven to concede a decentralized empire such as has since existed, and developed a state of affairs which Mr. Chamberlain judges to be intolerable. Yet whatever he did, he certainly would not have provoked a conflict with an inadequate army, with insufficient resources, and with a powerful foreign foe ready to spring. Perhaps no act of equal folly has been committed by any great nation of modern times, which had a choice fairly open to it.

The most impressive phenomenon was the obtuseness of Parliament. They could not see the danger, even in defeat. The Stamp Act had to be repealed since it could not be enforced. There was no reliable police in America, and even with troops the towns of the interior were beyond reach. The whole country was in insurrection, and yet, in the face of declared insubordination, Englishmen did not first accumulate a resistless army and then adopt a policy which would divide the Colonies by favoring one Province at the cost of another; they passed resolutions which, though inoperative, served to consolidate the adversary. In 1667 Charles Townsend, amidst general enthusiasm, brought in his famous bill for raising a revenue by taxing, among other things, tea. At the same time he provided for a Board of Commissioners who should enforce the law.

Like Grenville, instead of sending regiments, he tried petty bribery. The duty on tea in England stood at 1s. the pound. Townsend remitted this impost and substituted 3d. payable in America. Thus England lost in any event, for she could have collected cheaply and certainly in London before reëxport. The 3d. duty paid abroad raised the price slightly above the cost at which the Dutch could smuggle, and left the English dealer with tainted wares which were also undersold.

Before, however, any effort could be made to levy the tax on tea the preliminary question had to be determined as to whether the Commissioners would be permitted to exercise their functions at all. A question which was practically decided in the negative, within a few months, in the case of the sloop Liberty.

In March, 1764, Parliament had laid duties on Madeira wine, with heavy penalties for evasion. As the duties were not thought oppressive, and as the statute, so far as it went, was a relaxation of the Navigation Acts, since it sanctioned direct trade, the tax had sometimes been paid, and sometimes not, according to the feelings of the importer. What touched Massachusetts, however, was the substantial freedom of the port. The people cared little about the theory of an imperial policy. The Commissioners might take what was given them, but they could not be permitted to use force.

On November 5, 1767, the Board arrived at Boston, and for some months kept quiet, but in March, 1768, a cargo of Madeira was landed and carted through the streets under so strong a guard that no revenue officer cared to interfere. Thereupon the Commissioners decided to assert themselves. On May 9, John Hancock’s sloop Liberty came into port with a cargo of one hundred and twenty-seven pipes of Madeira, worth £30 a pipe. The duty was £7 the ton. Hancock declared a few hogsheads, smuggled a hundred or more, and began reloading. On June 10, the Comptroller, Hallowell, obtained a force of marines from the Romney, man-of-war, in the harbor, and seized the vessel. There was resistance enough to make the guard threaten to fire, but finally the sailors cut the sloop loose and towed her under the guns of the ship. Then a riot broke out, the mob pursued the Comptroller and Inspector to their homes, broke their windows, and burned their boat. The Commissioners fled for protection to the Romney, and afterward moved to the Castle. The case of the Liberty came up the following January, and was defended by John Adams, largely on the ground of the nullity of parliamentary legislation passed without consent. Finally the government obtained judgment, and the sloop was sold and then commissioned as a revenue cutter. She afterward made some captures, which exasperated the people, and the mob at Newport on July 19,1769, scuttled and burned her. Bernard was completely intimidated. The next time he had to make a seizure he took care to leave the ship where she could be rescued, and then wrote to Hillsborough that “ every seizure made or attempted to be made on land in Boston, for three years past, before these two instances, has been violently rescued or prevented.”

The Commissioners explained their helplessness to the Treasury in London and asked for protection. Two regiments had already been ordered to Boston, numbering, possibly, a thousand men, and when the news of the seizure of the Liberty arrived, two more were added. The whole formed a contemptible force, but inadequate as it was, the 64th and 65th were sent to Halifax by the beginning of July, 1769, leaving a mere handful to overawe the hostile town. The result is well known. The citizens expelled them. On March 5, 1770, a sentry at the Custom House having been attacked, the guard, in self-defense, fired on the rioters. The facts were established at the subsequent trial. Nevertheless Hutchinson quailed before the threat of violence, and removed the garrison, which, indeed, was useless, and in danger of being massacred.

The defeat of the Commissioners and the feebleness of the administration checked much desire to enforce the clauses of the Townsend Act, under which the returns should have been large, for Americans drank tea freely. Hutchinson put the annual consumption in the Colonies at above 19,200 chests, and Burke estimated the trade to be worth £300,000 a year " at the least farthing.” Hutchinson computed the loss of revenue at about £30,000 per annum, but assured the Treasury at the same time, that though “ the Custom House officers on shore have strong inducements to do their duty,” they are “really afraid of the rage of the people.” This statement was doubtless true, since the Commissioners collected the first year only £295. Under these circumstances Hutchinson could think of nothing better to advise than for Great Britain to accept the situation and undersell the Dutch ; for it seemed to him certain that so long as Boston remained substantially a free port, the British East India Company could only hope to keep the market by inducements to buyers: —

“ If the India Company had continued the sale of their teas at 2s. 2d, to 2s. 4d. . . . the Dutch trade would have been over by this time.” But “ I cannot help repeating to your Lordship that unless the East India Company bring the price of their teas so near to the price in Holland as to make the profit of importing teas from thence not equal to the risk, in a short time there will be scarce any teas imported from England.” ³ “I am very sure not one in a hundred ” smuggled chests “ has been seized.”

Meanwhile financiers in London saw that the congestion of trade must be relieved, or the India Company might go bankrupt. Townsend’s Act, though nullified in the Colonies, had closed America as a vent to English exports of tea and much other Eastern merchandise, and had consequently dislocated exchanges. Upwards of 17,000,000 pounds of tea lay unsold in London, with the effect thus described by Franklin : —

“ The [India] Company have accepted bills, which they find themselves unable to pay, though they have the value of two millions in tea and other India goods in their stores perishing under a want of demand ; their credit thus suffering, and their stock falling one hundred and twenty per cent, whereby the government will lose the four hundred thousand pounds per annum, it having been stipulated that it should no longer be paid, if the dividend fell to that mark. And, although it is known that the American market is lost by continuing the duty on tea, and that we are supplied by the Dutch, . . . yet the honour of government is supposed to forbid the repeal of the American tea duty ; while the amount of all the duties goes on decreasing, so that the balance of this year does not . . . exceed eighty pounds, after paying the collection; not reckoning the immense expense of guardacostas, &c. ” ⁴

In this predicament the East India directors adopted Hutchinson’s recommendation, and proposed to Lord North to cut their price in the Colonies, if he would allow them to dispense with middle-men, and trade at first hand. By statute the corporation had been required to sell its teas at auction in London ; the directors now asked for leave to suppress the auction, and forward cargoes to their own agents. Lastly the directors begged that the government would collect the duty in England before reëxport, and abolish the American tariff ; under such conditions they assured Lord North that they could pay a larger impost than 3d. and still compete with the Dutch.

Here came the final parting of the ways, and once more the British Cabinet blundered. They undertook again to administer without the force to coerce. The Americans insisted that their ports should be free; North proposed to so consign what amounted to being government goods, that a duty would certainly be collected, and evasion would no longer be possible. No one had objected to his tax on tea so long as the payment remained optional, and the Dutch article could be purchased by those who preferred. Yet any capable minister would have recognized that a system under which the government itself should compete in the market, and collect its own revenue, would be trebly offensive ; first, in indirectly aiming to suppress smuggling ; second, in providing a revenue for the payment of officials ; and third, in injuring native merchants, by official consignments.

Oblivious of the fate of the Stamp Act, of the Commissioners, and of the soldiers, North accomplished his destiny. Every child knows the sequel. The India Company sent the tea to its own agents, among whom were Hutchinson’s sons. On its arrival Samuel Adams organized what would now be called a Committee of Safety, and thrust the royal government aside. He demanded the immediate return to London of the tea. Hutchinson then made his capital error and refused the ships the permit to pass the fort, without unloading ; whereupon Adams’s men sacked the vessels.

Nothing further could be done, for the government could make no arrests. Hutchinson, therefore, gave notice to the Earl of Dartmouth that process could not be served, and that revolution had supervened : —

“There is no prospect of any notice of the late extravagances in the town of Boston, the Grand Jurors . . . being persons who were among the principal promoters of the meetings which occasioned the destruction of the tea, and were undoubtedly selected to prevent any prosecutions.” He added that no one would support him in enforcing the law, unless “ they could be sure of protection. . . . Matters, they say, are now carried to such a length, that either order will be restored to the government by the interposition of the authority in England, or we shall take it for granted they intend to yield to the demands of the leaders of the people here, and suffer the independency they lay claim to.” ⁵

For many years after the rupture of her empire England did not suffer, because she did not lose her vent. First, she was protected in her market by the imperfect cohesion of the United States which left them at her mercy ; second, she long retained a considerable industrial advantage because of her compact territory and the advantageous position of her mines. By 1790, when the career of the United States as a consolidated power began, Great Britain had, substantially, finished her canal system, which enabled her to put her manufactures on the market at prices which defied competition.

Perhaps America reached her lowest point in the struggle for existence during the years immediately after the peace, before external pressure had overcome the repulsion among the parts. Then for a period England seemed likely to win by hostile tariffs a victory which she had lost in war. Even Washington, who was a good man of business, and no alarmist, thought us on the point of fulfilling the “ predictions of our enemies,” who said, “' Leave them to themselves, and their governments will soon dissolve.’ ”

As long as this method of attack promised success the English saw little merit in the doctrines of Adam Smith, although they were then, probably, in a position to dominate international exchanges as completely as at any subsequent epoch. On the contrary, the United Kingdom waged such an unrelenting war upon American commerce and industry that all men of practical good sense were convinced that the States must consolidate, so as to defend themselves, or perish. Washington lamented daily the binding power of tradition, which made us fear centralization ; therefore “ our brightest prospects, and that high expectation, which was entertained of us by the wondering world, are turned into astonishment; and, from the high ground on which we stood, we are descending into the vale of confusion and darkness.”

In 1789 the instinct of self-preservation induced the revolted Colonies to do what Franklin had despaired of. In 1760 he thought, " their jealousy of each other ” was too great for union. And he intimated that as they hated each other more than they hated the mother country, it was unlikely they would unite against her. In a general way, Franklin was right. The cohesion of the United States has been the effect of the unsuccessful attack of England. The results of her policy can be traced from the outset. One of the first financial documents of importance issued under Washington was the celebrated Report on Manufactures by Hamilton, which began thus : —

“ The expediency of encouraging manufactures in the United States, which was not long since deemed very questionable, appears at this time to be pretty generally admitted.”" The restrictive regulations, which, in foreign markets, abridge the vent of the increasing surplus of our agricultural produce, serve to beget an earnest desire that a more extensive demand for that surplus may be created at home,” and also a hope that by protection to manufactures there may be " an accession of resources, favorable to national independence and safety.”

Yet infinite patience and self-denial are required of a people who would turn themselves voluntarily from an agricultural into an industrial community ; and, not impossibly, America might still be the vent of the British economic system, buying manufactures and selling raw material to a dominant market, had not Great Britain, herself, stopped the possibility of importation. When trade restrictions failed of their effect, the United Kingdom once again tried war. Her policy toward Mr. Jefferson admits of no other interpretation. Jefferson had a passion for peace ; to keep peace he would submit to any humiliation, undergo any insult or hardship ; but he could not placate his adversary. The more he cringed, the more he disarmed, the more aggressive Great Britain grew. No outrage was ever more wanton than the capture of the Chesapeake by the Leopard, and though that outrage was in a manner disowned, it made war inevitable. Then the purpose for which the war was waged was avowedly for the dismemberment of the Union. Not only was this purpose declared dally in the press, but the dismemberment of the Union was demanded as terms of peace at Ghent. Lord Castlereagh insisted on the cession of the larger part of the Mississippi Yalley and the whole shore of the Lakes. Also there is reason to believe that in this, as in the Revolutionary war, Great Britain might have succeeded had the military staff been better educated.

As we contemplate Mr. Madison’s administration we marvel how the United States survived ; for the national life, at one moment, seemed flickering.

Franklin’s premonition appeared to be verified ; the States did hate one another more than they hated the common foe. Jefferson’s embargo prostrated New England’s commerce, therefore Massachusetts prepared for secession, and refusing to aid the government with militia or money, determined to renounce her allegiance. Madison was helpless ; a population of 7,000,000 could not keep 30,000 men in the field, and the handful of national soldiers who defended the Northern frontier were abandoned in the face of a superior enemy. In 1814 Major General Brown of the regular army won the brilliant actions of Lundy’s Lane and Fort Erie. At the crisis of the campaign, four days after the repulse of Drummond’s assault at Erie, this officer wrote to the Secretary of War : “I very much doubt if a parallel can be found for the state of things existing on this frontier’. A gallant little army struggling with the enemies of their country, and devoting their lives for its honor and its safety, left by that country to struggle alone, and that within sight and within hearing.”

When we seek the cause of America’s safety we find it disclosed in Wellington’s letter to Castlereagh of November 9, 1814. Therein he gave his opinion that the king could not demand a cession of territory because his Northern army had not forced the American lines, and because his navy had not established a " superiority on the Lakes.”

That the British invasion failed was not due therefore to the energy or to the patriotism of the civil population, for no historical fact is better established than that, in this emergency, the civil population was either apathetic or disaffected. It was due altogether to the national army and navy which Mr. Jefferson had not succeeded in destroying. Hence it would seem to be demonstrated that, up to 1815, the organization of a national armament had been the most important achievement of the people, since, but for that, the national functions would have collapsed. With the peace of 1815 an era closed. Great Britain admitted defeat, and thereafter abandoned the hostile policy which she had persisted in for forty years. Nevertheless, so far as her own interests were concerned, the mischief had been done. Between 1808 and 1815 America had no choice but to manufacture for herself. She then adopted Hamilton’s system, which she never abandoned.

In the words of Professor Taussig: " During the war, intercourse with England was prohibited, and all import duties were doubled.”⁶ It is sufficient here to note that the restrictive legislation of 1808—1815 wras, for the time being, equivalent to extreme protection. The consequent rise of a considerable class of manufacturers, whose success depended largely on the continuance of protection, formed the basis of a strong movement for more decided limitation of foreign competition.

By 1830 both the cotton and woolen industries were firmly rooted, and by 1840 anthracite had been utilized for smelting. In 1831 Massachusetts had 340,000 spindles, in 1845 over 800,000. In 1840 America produced 300,000 tons of pig, in 1846, 650,000.

If the free-trade movement in England be allowed to have set in with the reformed Parliament of 1833 which remodeled the East India Company and opened the Eastern trade, and to have culminated with the repeal of the Corn Laws in 1846, it appears that the rise of American industry corresponds precisely with the advent of Cobden, the peace party, and the Manchester school. In 1842 Cobden declared that cotton and “ironmongery ” had fallen thirty per cent in less than ten years, and yet the “ ironmonger is to take his goods and to exchange them ” for food “ at the present high price of corn.” He clamored for cheap sugar and bread as the only means by which England could make head against competition. The vent having been partially closed by the American tariff, the margin of profit narrowed, and to make good the deficiency to the industrial community the agriculturists were deliberately sacrificed.

Another generation passed, and the effects had become plain to all save Englishmen. Steadily, as the United States became more self-sufficing, England’s Food Bill rose, and the profit from her sales of manufactures relatively declined, until she has reached a position which Mr. Chamberlain thinks untenable. Also with the destruction of the rural population the well-known symptoms of physical decay began, which were observed as long ago as the age of Augustus. As Chatham said in his speech on the Port Bill: “ Trade increases the wealth and glory of a country ; but its real strength and stamina are to be looked for among the cultivators of the land.” The deduction from these premises is that the English Empire, like the Roman, failed to achieve its full development through defeat in war.

Experience, apparently, shows that economic systems grow automatically by adhesion, like other cohesive masses, until, in the process of absorption, they meet a resistance not to be overcome. Nothing in the universe is stationary, and when expansion ends disintegration begins. Ordinarily the check has come through insufficient military energy when it has been necessary for the common welfare to extend the central administration over an outlying region. These inferences admit of application to the United States.

The United States has aimed, like all empires, at being self-sufficing. She has met with unusual success because, while steadily expanding, she has reduced the cost of manufactures to a parity with the cost elsewhere. She has succeeded, not by lowering the scale of living of her population, but by increasing their efficiency. She has accelerated the social movement, and has carried consolidation to unparalleled intensity. Perhaps the best measure of that intensity may be steel architecture. We concentrate in the steel cage of four-and-twenty stories the energy which a decade since was diffused over a short street; and through this concentration comes economy in space, in time, and in energy. By equivalent methods in railways, foundries, and farms, we cause labor to produce more here than abroad. If the scale of the modern building be applied it would be from four to six fold.

The result may suffice, but it has been attained by changing our building material from wood, brick, or stone, to steel, and by this change we have altered the conditions upon which competition has heretofore existed. Cheap steel in quantities equal to brick and stone is now the basis of Western civilization. We may smelt approximately 20,000,000 tons of pig annually ; should our progress last we shall consume from 80,000,000 to 100,000,000 tons within fifty years. No one can foretell how long our mines will yield such amounts without a rise in the price of ore ; but, in any event, an alternative seems likely to be presented to us. Either our mines will fail and we shall, like the Romans, have to seek minerals beyond our borders, or our abundance will constrain Europeans to do the like. If they find cheaper beds than ours we shall be undersold, and mines which are undersold are, practically, exhausted. Hence the control of the most advantageous raw material is likely, in the future, to assume the importance between nations which it now has between rival corporations in the United States. Nevertheless, as among nations, there is but one way in which the possession of prizes of this nature can be determined, and that is by force. Arbitration can only serve where strength is equally balanced, and the matter in dispute is not worth the price of the conflict. So far as we now know the district in which iron can be produced cheapest and in unlimited volume is Northern China. Russia is, at present, massing several hundred thousand men in Eastern Asia preparatory to an attempt to crush Japan and absorb this region. Each citizen can judge for himself what attitude befits the United States in this emergency.

Furthermore, as industries acquire momentum the necessity for a vent grows imperative ; Germany feels this necessity. Germany and Russia form together an overland economic system stretching from the Pacific to the North Sea. In the main the interests of the two empires are identical. Meeting in Central Europe, the adjoining ends of these empires are fixed, but the extremities are free, and thus Russia expands toward Pekin, and Germany seeks to enter South America. But South America is the last continent at once rich, vacant, in the path of exchanges, and accessible. Also South America is the only certain vent for our surplus in the future, as Asia is the only certain base from whence we can draw raw material. Should Russia absorb Northern China, and by means of German capital and talent establish an industrial centre there, and should Germany occupy South America and develop it with Chinese steel, the overland economic system would girdle the world, and the United States would suffocate. Both base and vent would be closed.

Dreams of peace have always allured mankind to their undoing. Human destiny has been wrought out through war. The United States is an illustration. Little of the soil which now acknowledges the sovereignty of the Union has not been subdued by arms. The first settlers slew the Indians, or were themselves slain ; next the Americans and English conquered the French ; afterward the Americans turned on the English and, with the aid of France, ejected them. In 1812 we again fought the English to defend the national unity, and subsequently took California from Mexico by the sword. To consolidate an homogeneous empire we crushed the social system of the South, and lastly we cast forth Spain. The story is written in blood, and common sense teaches us that as the past has been, so will be the future. Nature has decreed that animals shall compete for life, or, in other words, destroy or be destroyed. We can hope for no exemption from the common lot.

As the economic system, of which the Union forms the heart, stretches across oceans toward other continents, in obedience to its law of being, it must encounter rivals also seeking treasure. At the points where the roads converge there will almost certainly be conflicts, as there was at Pittsburg between the French and English, and then he who recoils is lost. Victory in such cases usually means high fortune, and defeat signifies ruin. It is the lesson of Wolfe and Montcalm, or of Adams and Hutchinson.

In these crucial moments races either develop genius or sink into imbecility, and the time when the people of the United States may be again tried is uncertain. Now they can arm and be ready, or they can elect the placid life which leaves the future to chance. Inertia blasted Rome under Augustus, and an easy self-complacency fostered those delusions as to the power of England which bewildered Townsend and Lord North.

The tale of Rome is threadbare ; that of England is still new. If our people would know the price which Great Britain is now paying for defeats a century old, they may learn it in Mr. Chamberlain’s manifestoes, or in the report of the Inspector General of Recruiting on the degeneracy of the British army.

Brooks Adams.