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Gold¡¡and¡¡silver¡¡had¡¡been¡¡a¡¡rare¡¡commodity¡¡in¡¡the¡¡middle

ages¡£¡¡The¡¡average¡¡man£»¡¡as¡¡I¡¡have¡¡told¡¡you£»¡¡never¡¡saw¡¡a¡¡gold

piece¡¡as¡¡long¡¡as¡¡he¡¡lived¡£¡¡Only¡¡the¡¡inhabitants¡¡of¡¡the¡¡large

cities¡¡were¡¡familiar¡¡with¡¡silver¡¡coin¡£¡¡The¡¡discovery¡¡of¡¡America

and¡¡the¡¡exploitation¡¡of¡¡the¡¡Peruvian¡¡mines¡¡changed¡¡all¡¡this¡£

The¡¡centre¡¡of¡¡trade¡¡was¡¡transferred¡¡from¡¡the¡¡Mediterranean¡¡to

the¡¡Atlantic¡¡seaboard¡£¡¡The¡¡old¡¡¡®¡®commercial¡¡cities''¡¡of¡¡Italy¡¡lost

their¡¡financial¡¡importance¡£¡¡New¡¡¡®¡®commercial¡¡nations''¡¡took

their¡¡place¡¡and¡¡gold¡¡and¡¡silver¡¡were¡¡no¡¡longer¡¡a¡¡curiosity¡£



Through¡¡Spain¡¡and¡¡Portugal¡¡and¡¡Holland¡¡and¡¡England£»

precious¡¡metals¡¡began¡¡to¡¡find¡¡their¡¡way¡¡to¡¡Europe¡¡The¡¡sixteenth

century¡¡had¡¡its¡¡own¡¡writers¡¡on¡¡the¡¡subject¡¡of¡¡political

economy¡¡and¡¡they¡¡evolved¡¡a¡¡theory¡¡of¡¡national¡¡wealth¡¡which

seemed¡¡to¡¡them¡¡entirely¡¡sound¡¡and¡¡of¡¡the¡¡greatest¡¡possible

benefit¡¡to¡¡their¡¡respective¡¡countries¡£¡¡They¡¡reasoned¡¡that¡¡both

gold¡¡and¡¡silver¡¡were¡¡actual¡¡wealth¡£¡¡Therefore¡¡they¡¡believed

that¡¡the¡¡country¡¡with¡¡the¡¡largest¡¡supply¡¡of¡¡actual¡¡cash¡¡in¡¡the

vaults¡¡of¡¡its¡¡treasury¡¡and¡¡its¡¡banks¡¡was¡¡at¡¡the¡¡same¡¡time¡¡the

richest¡¡country¡£¡¡And¡¡since¡¡money¡¡meant¡¡armies£»¡¡it¡¡followed

that¡¡the¡¡richest¡¡country¡¡was¡¡also¡¡the¡¡most¡¡powerful¡¡and¡¡could

rule¡¡the¡¡rest¡¡of¡¡the¡¡world¡£



We¡¡call¡¡this¡¡system¡¡the¡¡¡®¡®mercantile¡¡system£»''¡¡and¡¡it¡¡was

accepted¡¡with¡¡the¡¡same¡¡unquestioning¡¡faith¡¡with¡¡which¡¡the

early¡¡Christians¡¡believed¡¡in¡¡Miracles¡¡and¡¡many¡¡of¡¡the¡¡present¡­

day¡¡American¡¡business¡¡men¡¡believe¡¡in¡¡the¡¡Tariff¡£¡¡In¡¡practice£»

the¡¡Mercantile¡¡system¡¡worked¡¡out¡¡as¡¡follows£º¡¡To¡¡get¡¡the

largest¡¡surplus¡¡of¡¡precious¡¡metals¡¡a¡¡country¡¡must¡¡have¡¡a

favourable¡¡balance¡¡of¡¡export¡¡trade¡£¡¡If¡¡you¡¡can¡¡export¡¡more¡¡to

your¡¡neighbour¡¡than¡¡he¡¡exports¡¡to¡¡your¡¡own¡¡country£»¡¡he¡¡will

owe¡¡you¡¡money¡¡and¡¡will¡¡be¡¡obliged¡¡to¡¡send¡¡you¡¡some¡¡of¡¡his

gold¡£¡¡Hence¡¡you¡¡gain¡¡and¡¡he¡¡loses¡£¡¡As¡¡a¡¡result¡¡of¡¡this¡¡creed£»

the¡¡economic¡¡program¡¡of¡¡almost¡¡every¡¡seventeenth¡¡century

state¡¡was¡¡as¡¡follows£º



1¡£¡¡Try¡¡to¡¡get¡¡possession¡¡of¡¡as¡¡many¡¡precious¡¡metals

as¡¡you¡¡can¡£



2¡£¡¡Encourage¡¡foreign¡¡trade¡¡in¡¡preference¡¡to¡¡domestic

trade¡£



3¡£¡¡Encourage¡¡those¡¡industries¡¡which¡¡change¡¡raw¡¡materials

into¡¡exportable¡¡finished¡¡products¡£



4¡£¡¡Encourage¡¡a¡¡large¡¡population£»¡¡for¡¡you¡¡will¡¡need¡¡workmen

for¡¡your¡¡factories¡¡and¡¡an¡¡agricultural¡¡community

does¡¡not¡¡raise¡¡enough¡¡workmen¡£



5¡£¡¡Let¡¡the¡¡State¡¡watch¡¡this¡¡process¡¡and¡¡interfere¡¡whenever

it¡¡is¡¡necessary¡¡to¡¡do¡¡so¡£





Instead¡¡of¡¡regarding¡¡International¡¡Trade¡¡as¡¡something

akin¡¡to¡¡a¡¡force¡¡of¡¡nature¡¡which¡¡would¡¡always¡¡obey¡¡certain¡¡natural

laws¡¡regardless¡¡of¡¡man's¡¡interference£»¡¡the¡¡people¡¡of¡¡the

sixteenth¡¡and¡¡seventeenth¡¡centuries¡¡tried¡¡to¡¡regulate¡¡their

commerce¡¡by¡¡the¡¡help¡¡of¡¡official¡¡decrees¡¡and¡¡royal¡¡laws¡¡and¡¡financial

help¡¡on¡¡the¡¡part¡¡of¡¡the¡¡government¡£



In¡¡the¡¡sixteenth¡¡century¡¡Charles¡¡V¡¡adopted¡¡this¡¡Mercantile

System¡¡£¨which¡¡was¡¡then¡¡something¡¡entirely¡¡new£©¡¡and¡¡introduced

it¡¡into¡¡his¡¡many¡¡possessions¡£¡¡Elizabeth¡¡of¡¡England

flattered¡¡him¡¡by¡¡her¡¡imitation¡£¡¡The¡¡Bourbons£»¡¡especially¡¡King

Louis¡¡XIV£»¡¡were¡¡fanatical¡¡adherents¡¡of¡¡this¡¡doctrine¡¡and¡¡Colbert£»

his¡¡great¡¡minister¡¡of¡¡finance£»¡¡became¡¡the¡¡prophet¡¡of¡¡Mercantilism

to¡¡whom¡¡all¡¡Europe¡¡looked¡¡for¡¡guidance¡£



The¡¡entire¡¡foreign¡¡policy¡¡of¡¡Cromwell¡¡was¡¡a¡¡practical

application¡¡of¡¡the¡¡Mercantile¡¡System¡£¡¡It¡¡was¡¡invariably¡¡directed

against¡¡the¡¡rich¡¡rival¡¡Republic¡¡of¡¡Holland¡£¡¡For¡¡the¡¡Dutch

shippers£»¡¡as¡¡the¡¡common¡­carriers¡¡of¡¡the¡¡merchandise¡¡of¡¡Europe£»

had¡¡certain¡¡leanings¡¡towards¡¡free¡­trade¡¡and¡¡therefore¡¡had

to¡¡be¡¡destroyed¡¡at¡¡all¡¡cost¡£



It¡¡will¡¡be¡¡easily¡¡understood¡¡how¡¡such¡¡a¡¡system¡¡must¡¡affect

the¡¡colonies¡£¡¡A¡¡colony¡¡under¡¡the¡¡Mercantile¡¡System¡¡became

merely¡¡a¡¡reservoir¡¡of¡¡gold¡¡and¡¡silver¡¡and¡¡spices£»¡¡which¡¡was

to¡¡be¡¡tapped¡¡for¡¡the¡¡benefit¡¡of¡¡the¡¡home¡¡country¡£¡¡The¡¡Asiatic£»

American¡¡and¡¡African¡¡supply¡¡of¡¡precious¡¡metals¡¡and¡¡the¡¡raw

materials¡¡of¡¡these¡¡tropical¡¡countries¡¡became¡¡a¡¡monopoly¡¡of

the¡¡state¡¡which¡¡happened¡¡to¡¡own¡¡that¡¡particular¡¡colony¡£¡¡No

outsider¡¡was¡¡ever¡¡allowed¡¡within¡¡the¡¡precincts¡¡and¡¡no¡¡native

was¡¡permitted¡¡to¡¡trade¡¡with¡¡a¡¡merchant¡¡whose¡¡ship¡¡flew¡¡a

foreign¡¡flag¡£



Undoubtedly¡¡the¡¡Mercantile¡¡System¡¡encouraged¡¡the¡¡development

of¡¡young¡¡industries¡¡in¡¡certain¡¡countries¡¡where¡¡there

never¡¡had¡¡been¡¡any¡¡manufacturing¡¡before¡£¡¡It¡¡built¡¡roads

and¡¡dug¡¡canals¡¡and¡¡made¡¡for¡¡better¡¡means¡¡of¡¡transportation¡£

It¡¡demanded¡¡greater¡¡skill¡¡among¡¡the¡¡workmen¡¡and¡¡gave¡¡the

merchant¡¡a¡¡better¡¡social¡¡position£»¡¡while¡¡it¡¡weakened¡¡the¡¡power

of¡¡the¡¡landed¡¡aristocracy¡£



On¡¡the¡¡other¡¡hand£»¡¡it¡¡caused¡¡very¡¡great¡¡misery¡£¡¡It¡¡made

the¡¡natives¡¡in¡¡the¡¡colonies¡¡the¡¡victims¡¡of¡¡a¡¡most¡¡shameless

exploitation¡£¡¡It¡¡exposed¡¡the¡¡citizens¡¡of¡¡the¡¡home¡¡country¡¡to¡¡an

even¡¡more¡¡terrible¡¡fate¡£¡¡It¡¡helped¡¡in¡¡a¡¡great¡¡measure¡¡to¡¡turn

every¡¡land¡¡into¡¡an¡¡armed¡¡camp¡¡and¡¡divided¡¡the¡¡world¡¡into¡¡little

bits¡¡of¡¡territory£»¡¡each¡¡working¡¡for¡¡its¡¡own¡¡direct¡¡benefit£»

while¡¡striving¡¡at¡¡all¡¡times¡¡to¡¡destroy¡¡the¡¡power¡¡of¡¡its¡¡neighbours

and¡¡get¡¡hold¡¡of¡¡their¡¡treasures¡£¡¡It¡¡laid¡¡so¡¡much¡¡stress

upon¡¡the¡¡importance¡¡of¡¡owning¡¡wealth¡¡that¡¡¡®¡®being¡¡rich''¡¡came

to¡¡be¡¡regarded¡¡as¡¡the¡¡sole¡¡virtue¡¡of¡¡the¡¡average¡¡citizen¡£¡¡Economic

systems¡¡come¡¡and¡¡go¡¡like¡¡the¡¡fashions¡¡in¡¡surgery¡¡and

in¡¡the¡¡clothes¡¡of¡¡women£»¡¡and¡¡during¡¡the¡¡nineteenth¡¡century¡¡the

Mercantile¡¡System¡¡was¡¡discarded¡¡in¡¡favor¡¡of¡¡a¡¡system¡¡of¡¡free

and¡¡open¡¡competition¡£¡¡At¡¡least£»¡¡so¡¡I¡¡have¡¡been¡¡told¡£







THE¡¡AMERICAN¡¡REVOLUTION



AT¡¡THE¡¡END¡¡OF¡¡THE¡¡EIGHTEENTH¡¡CENTURY

EUROPE¡¡HEARD¡¡STRANGE¡¡REPORTS¡¡OF

SOMETHING¡¡WHICH¡¡HAD¡¡HAPPENED¡¡IN

THE¡¡WILDERNESS£»¡¡OF¡¡THE¡¡NORTH¡¡AMERICAN

CONTINENT¡£¡¡THE¡¡DESCENDANTS

OF¡¡THE¡¡MEN¡¡WHO¡¡HAD¡¡PUNISHED¡¡KING

CHARLES¡¡FOR¡¡HIS¡¡INSISTENCE¡¡UPON¡¡HIS

¡®¡®DIVINE¡¡RIGHTS''¡¡ADDED¡¡A¡¡NEW¡¡CHAPTER

TO¡¡THE¡¡OLD¡¡STORY¡¡OF¡¡THE¡¡STRUGGLE

FOR¡¡SELF¡­GOVERNMENT





FOR¡¡the¡¡sake¡¡of¡¡convenience£»¡¡we¡¡ought¡¡to¡¡go¡¡back¡¡a

few¡¡centuries¡¡and¡¡repeat¡¡the¡¡early¡¡history¡¡of¡¡the¡¡great

struggle¡¡for¡¡colonial¡¡possessions¡£



As¡¡soon¡¡as¡¡a¡¡number¡¡of¡¡European¡¡nations¡¡had¡¡been

created¡¡upon¡¡the¡¡new¡¡basis¡¡of¡¡national¡¡or¡¡dynastic¡¡interests£»

that¡¡is¡¡to¡¡say£»¡¡during¡¡and¡¡immediately¡¡after¡¡the¡¡Thirty

Years¡¡War£»¡¡their¡¡rulers£»¡¡backed¡¡up¡¡by¡¡the¡¡capital¡¡of

their¡¡merchants¡¡and¡¡the¡¡ships¡¡of¡¡their¡¡trading¡¡companies£»

continued¡¡the¡¡fight¡¡for¡¡more¡¡territory¡¡in¡¡Asia£»¡¡Africa¡¡and¡¡America¡£



The¡¡Spaniards¡¡and¡¡the¡¡Portuguese¡¡had¡¡been¡¡exploring¡¡the

Indian¡¡Sea¡¡and¡¡the¡¡Pacific¡¡Ocean¡¡for¡¡more¡¡than¡¡a¡¡century¡¡ere

Holland¡¡and¡¡England¡¡appeared¡¡upon¡¡the¡¡stage¡£¡¡This¡¡proved

an¡¡advantage¡¡to¡¡the¡¡latter¡£¡¡The¡¡first¡¡rough¡¡work¡¡had¡¡already

been¡¡done¡£¡¡What¡¡is¡¡more£»¡¡the¡¡earliest¡¡navigators¡¡had¡¡so¡¡often

made¡¡themselves¡¡unpopular¡¡with¡¡the¡¡Asiatic¡¡and¡¡American¡¡and

African¡¡natives¡¡that¡¡both¡¡the¡¡English¡¡and¡¡the¡¡Dutch¡¡were

welcomed¡¡as¡¡friends¡¡and¡¡deliverers¡£¡¡We¡¡cannot¡¡claim¡¡any

superior¡¡virtues¡¡for¡¡either¡¡of¡¡these¡¡two¡¡races¡£¡¡But¡¡they¡¡were

merchants¡¡before¡¡everything¡¡else¡£¡¡They¡¡never¡¡allowed¡¡religious

considerations¡¡to¡¡interfere¡¡with¡¡their¡¡practical¡¡common¡¡sense¡£

During¡¡their¡¡first¡¡relations¡¡with¡¡weaker¡¡races£»¡¡all¡¡European

nations¡¡have¡¡behaved¡¡with¡¡shocking¡¡brutality¡£¡¡The¡¡English¡¡and

the¡¡Dutch£»¡¡however£»¡¡knew¡¡better¡¡where¡¡to¡¡draw¡¡the¡¡dine¡£¡¡Provided

they¡¡got¡¡their¡¡spices¡¡and¡¡their¡¡gold¡¡and¡¡silver¡¡and¡¡their¡¡taxes£»

they¡¡were¡¡willing¡¡to¡¡let¡¡the¡¡native¡¡live¡¡as¡¡it¡¡best¡¡pleased¡¡him¡£



It¡¡was¡¡not¡¡very¡¡difficult¡¡for¡¡them¡¡therefore¡¡to¡¡establish

themselves¡¡in¡¡the¡¡richest¡¡parts¡¡of¡¡the¡¡world¡£¡¡But¡¡as¡¡soon¡¡as

this¡¡had¡¡been¡¡accomplished£»¡¡they¡¡began¡¡to¡¡fight¡¡each¡¡other¡¡for

still¡¡further¡¡possessions¡£¡¡Strangely¡¡enough£»¡¡the¡¡colonial¡¡wars

were¡¡never¡¡settled¡¡in¡¡the¡¡colonies¡¡themselves¡£¡¡They¡¡were¡¡decided

three¡¡thousand¡¡miles¡¡away¡¡by¡¡the¡¡navies¡¡of¡¡the¡¡contending

countries¡£¡¡It¡¡is¡¡one¡¡of¡¡the¡¡most¡¡interesting¡¡principles¡¡of¡¡ancient

and¡¡modern¡¡warfare¡¡£¨one¡¡of¡¡the¡¡few¡¡reliable¡¡laws¡¡of

history£©¡¡that¡¡¡®¡®the¡¡nation¡¡which¡¡commands¡¡the¡¡sea¡¡is¡¡also¡¡the

nation¡¡which¡¡commands¡¡the¡¡land¡£''¡¡So¡¡far¡¡this¡¡law¡¡has¡¡never

failed¡¡to¡¡work£»¡¡but¡¡the¡¡modern¡¡airplane¡¡may¡¡have¡¡changed¡¡it¡£

In¡¡the¡¡eighteenth¡¡century£»¡¡however£»¡¡there¡¡were¡¡no¡¡flying¡¡machines

and¡¡it¡¡was¡¡the¡¡

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