Thecolonyassemblies，besides，cannotbesupposedtheproperjudgesofwhatisnecessaryforthedefenceandsupportofthewholeempire。Thecareofthatdefenceandsupportisnotentrustedtothem。Itisnottheirbusiness，andtheyhavenoregularmeansofinformationconcerningit。Theassemblyofaprovince，likethevestryofaparish，mayjudgeveryproperlyconcerningtheaffairsofitsownparticulardistrict;butcanhavenopropermeansofjudgingconcerningthoseofthewholeempire。Itcannotevenjudgeproperlyconcerningtheproportionwhichitsownprovincebearstothewholeempire;orconcerningtherelativedegreeofitswealthandimportancecomparedwiththeotherprovinces;becausethoseotherprovincesarenotundertheinspectionandsuperintendencyoftheassemblyofaparticularprovince。Whatisnecessaryforthedefenceandsupportofthewholeempire，andinwhatproportioneachpartoughttocontribute，canbejudgedofonlybythatassemblywhichinspectsandsuperintendstheaffairsofthewholeempire。
Ithasbeenproposed，accordingly，thatthecoloniesshouldbetaxedbyrequisition，theParliamentofGreatBritaindeterminingthesumwhicheachcolonyoughttopay，andtheprovincialassemblyassessingandlevyingitinthewaythatsuitedbestthecircumstancesoftheprovince。Whatconcernedthewholeempirewouldinthiswaybedeterminedbytheassemblywhichinspectsandsuperintendstheaffairsofthewholeempire;
andtheprovincialaffairsofeachcolonymightstillberegulatedbyitsownassembly。ThoughthecoloniesshouldinthiscasehavenorepresentativesintheBritishParliament，yet，ifwemayjudgebyexperience，thereisnoprobabilitythattheParliamentaryrequisitionwouldbeunreasonable。TheParliamentofEnglandhasnotuponanyoccasionshownthesmallestdispositiontooverburdenthosepartsoftheempirewhicharenotrepresentedinParliament。TheislandsofGuernseyandJersey，withoutanymeansofresistingtheauthorityofParliament，aremorelightlytaxedthananypartofGreatBritain。Parliamentinattemptingtoexerciseitssupposedright，whetherwellorillgrounded，oftaxingthecolonies，hasneverhithertodemandedofthemanythingwhichevenapproachedtoajustproportiontowhatwaspaidbytheirfellowsubjectsathome。Ifthecontributionofthecolonies，besides，wastoriseorfallinproportiontotheriseorfallofthelandtax，Parliamentcouldnottaxthemwithouttaxingatthesametimeitsownconstituents，andthecoloniesmightinthiscasebeconsideredasvirtuallyrepresentedinParliament。
Examplesarenotwantingofempiresinwhichallthedifferentprovincesarenottaxed，ifImaybeallowedtheexpression，inonemass;butinwhichthesovereignregulatesthesumwhicheachprovinceoughttopay，andinsomeprovincesassessesandleviesitashethinksproper;whileinothers，heleavesittobeassessedandleviedastherespectivestatesofeachprovinceshalldetermine。InsomeprovincesofFrance，thekingnotonlyimposeswhattaxeshethinksproper，butassessesandleviestheminthewayhethinksproper。Fromothershedemandsacertainsum，butleavesittothestatesofeachprovincetoassessandlevythatsumastheythinkproper。
Accordingtotheschemeoftaxingbyrequisition，theParliamentofGreatBritainwouldstandnearlyinthesamesituationtowardsthecolonyassembliesastheKingofFrancedoestowardsthestatesofthoseprovinceswhichstillenjoytheprivilegeofhavingstatesoftheirown，theprovincesofFrancewhicharesupposedtobethebestgoverned。
Butthough，accordingtothisscheme，thecoloniescouldhavenojustreasontofearthattheirshareofthepublicburdensshouldeverexceedtheproperproportiontothatoftheirfellow—citizensathome;GreatBritainmighthavejustreasontofearthatitneverwouldamounttothatproperproportion。TheParliamentofGreatBritainhasnotforsometimepasthadthesameestablishedauthorityinthecolonies，whichtheFrenchkinghasinthoseprovincesofFrancewhichstillenjoytheprivilegeofhavingstatesoftheirown。Thecolonyassemblies，iftheywerenotveryfavourablydisposed（andunlessmoreskilfullymanagedthantheyeverhavebeenhitherto，theyarenotverylikelytobeso）mightstillfindmanypretencesforevadingorrejectingthemostreasonablerequisitionsofParliament。A
Frenchwarbreaksout，weshallsuppose;tenmillionsmustimmediatelyberaisedinordertodefendtheseatoftheempire。
ThissummustbeborroweduponthecreditofsomeParliamentaryfundmortgagedforpayingtheinterest。PartofthisfundParliamentproposestoraisebyataxtobeleviedinGreatBritain，andpartofitbyarequisitiontoallthedifferentcolonyassembliesofAmericaandtheWestIndies。Wouldpeoplereadilyadvancetheirmoneyuponthecreditofafund，whichpartlydependeduponthegoodhumourofallthoseassemblies，fardistantfromtheseatofthewar，andsometimes，perhaps，thinkingthemselvesnotmuchconcernedintheeventofit？UponsuchafundnomoremoneywouldprobablybeadvancedthanwhatthetaxtobeleviedinGreatBritainmightbesupposedtoanswerfor。Thewholeburdenofthedebtcontractedonaccountofthewarwouldinthismannerfall，asitalwayshasdonehitherto，uponGreatBritain;uponapartoftheempire，andnotuponthewholeempire。GreatBritainis，perhaps，sincetheworldbegan，theonlystatewhich，asithasextendeditsempire，hasonlyincreaseditsexpensewithoutonceaugmentingitsresources。
Otherstateshavegenerallydisburdenedthemselvesupontheirsubjectandsubordinateprovincesofthemostconsiderablepartoftheexpenseofdefendingtheempire。GreatBritainhashithertosufferedhersubjectandsubordinateprovincestodisburdenthemselvesuponherofalmostthiswholeexpense。InordertoputGreatBritainuponafootingofequalitywithherowncolonies，whichthelawhashithertosupposedtobesubjectandsubordinate，itseemsnecessary，upontheschemeoftaxingthembyParliamentaryrequisition，thatParliamentshouldhavesomemeansofrenderingitsrequisitionsimmediatelyeffectual，incasethecolonyassembliesshouldattempttoevadeorrejectthem;andwhatthosemeansare，itisnotveryeasytoconceive，andithasnotyetbeenexplained。
ShouldtheParliamentofGreatBritain，atthesametime，beeverfullyestablishedintherightoftaxingthecolonies，evenindependentoftheconsentoftheirownassemblies，theimportanceofthoseassemblieswouldfromthatmomentbeatanend，andwithit，thatofalltheleadingmenofBritishAmerica。
Mendesiretohavesomeshareinthemanagementofpublicaffairschieflyonaccountoftheimportancewhichitgivesthem。Uponthepowerwhichthegreaterpartoftheleadingmen，thenaturalaristocracyofeverycountry，haveofpreservingordefendingtheirrespectiveimportance，dependsthestabilityanddurationofeverysystemoffreegovernment。Intheattackswhichthoseleadingmenarecontinuallymakingupontheimportanceofoneanother，andinthedefenceoftheirown，consiststhewholeplayofdomesticfactionandambition。TheleadingmenofAmerica，likethoseofallothercountries，desiretopreservetheirownimportance。Theyfeel，orimagine，thatiftheirassemblies，whichtheyarefondofcallingparliaments，andofconsideringasequalinauthoritytotheParliamentofGreatBritain，shouldbesofardegradedastobecomethehumbleministersandexecutiveofficersofthatParliament，thegreaterpartoftheirownimportancewouldbeatend。Theyhaverejected，therefore，theproposalofbeingtaxedbyParliamentaryrequisition，andlikeotherambitiousandhigh—spiritedmen，haveratherchosentodrawtheswordindefenceoftheirownimportance。
TowardsthedeclensionoftheRomanrepublic，thealliesofRome，whohadbornetheprincipalburdenofdefendingthestateandextendingtheempire，demandedtobeadmittedtoalltheprivilegesofRomancitizens。Uponbeingrefused，thesocialwarbrokeout。Duringthecourseofthatwar，Romegrantedthoseprivilegestothegreaterpartofthemonebyone，andinproportionastheydetachedthemselvesfromthegeneralconfederacy。TheParliamentofGreatBritaininsistsupontaxingthecolonies;andtheyrefusetobetaxedbyaParliamentinwhichtheyarenotrepresented。Iftoeachcolony，whichshoulddetachitselffromthegeneralconfederacy，GreatBritainshouldallowsuchanumberofrepresentativesassuitedtheproportionofwhatiscontributedtothepublicrevenueoftheempire，inconsequenceofitsbeingsubjectedtothesametaxes，andincompensationadmittedtothesamefreedomoftradewithitsfellow—subjectsathome;thenumberofitsrepresentativestobeaugmentedastheproportionofitscontributionmightafterwardsaugment;anewmethodofacquiringimportance，anewandmoredazzlingobjectofambitionwouldbepresentedtotheleadingmenofeachcolony。Insteadofpiddlingforthelittleprizeswhicharetobefoundinwhatmaybecalledthepaltryraffleofcolonyfaction;theymightthenhope，fromthepresumptionwhichmennaturallyhaveintheirownabilityandgoodfortune，todrawsomeofthegreatprizeswhichsometimescomefromthewheelofthegreatstatelotteryofBritishpolities。Unlessthisorsomeothermethodisfallenupon，andthereseemstobenonemoreobviousthanthis，ofpreservingtheimportanceandofgratifyingtheambitionoftheleadingmenofAmerica，itisnotveryprobablethattheywillevervoluntarilysubmittous;andweoughttoconsiderthatthebloodwhichmustbeshedinforcingthemtodosois，everydropofit，bloodeitherofthosewhoare，orofthosewhomwewishtohaveforourfellowcitizens。
Theyareveryweakwhoflatterthemselvesthat，inthestatetowhichthingshavecome，ourcolonieswillbeeasilyconqueredbyforcealone。ThepersonswhonowgoverntheresolutionsofwhattheycalltheirContinentalCongress，feelinthemselvesatthismomentadegreeofimportancewhich，perhaps，thegreatestsubjectsinEuropescarcefeel。Fromshopkeepers，tradesmen，andattornies，theyarebecomestatesmenandlegislators，andareemployedincontrivinganewformofgovernmentforanextensiveempire，which，theyflatterthemselves，willbecome，andwhich，indeed，seemsverylikelytobecome，oneofthegreatestandmostformidablethateverwasintheworld。Fivehundreddifferentpeople，perhaps，whoindifferentwaysactimmediatelyundertheContinentalCongress;andfivehundredthousand，perhaps，whoactunderthosefivehundred，allfeelinthesamemanneraproportionableriseintheirownimportance。AlmosteveryindividualofthegoverningpartyinAmericafills，atpresentinhisownfancy，astationsuperior，notonlytowhathehadeverfilledbefore，buttowhathehadeverexpectedtofill;andunlesssomenewobjectofambitionispresentedeithertohimortohisleaders，ifhehastheordinaryspiritofaman，hewilldieindefenceofthatstation。
ItisaremarkofthepresidentHenaut，thatwenowreadwithpleasuretheaccountofmanylittletransactionsoftheLigue，whichwhentheyhappenedwerenotperhapsconsideredasveryimportantpiecesofnews。Buteverymanthen，sayshe，fanciedhimselfofsomeimportance;andtheinnumerablememoirswhichhavecomedowntousfromthosetimes，were，thegreaterpartofthem，writtenbypeoplewhotookpleasureinrecordingandmagnifyingeventsinwhich，theyflatteredthemselves，theyhadbeenconsiderableactors。HowobstinatelythecityofParisuponthatoccasiondefendeditself，whatadreadfulfamineitsupportedratherthansubmittothebestandafterwardstothemostbelovedofalltheFrenchkings，iswellknown。Thegreaterpartofthecitizens，orthosewhogovernedthegreaterpartofthem，foughtindefenceoftheirownimportance，whichtheyforesawwastobeatanendwhenevertheancientgovernmentshouldbere—established。Ourcolonies，unlesstheycanbeinducedtoconsenttoaunion，areverylikelytodefendthemselvesagainstthebestofallmothercountriesasobstinatelyasthecityofParisdidagainstoneofthebestofkings。
Theideaofrepresentationwasunknowninancienttimes。
Whenthepeopleofonestatewereadmittedtotherightofcitizenshipinanother，theyhadnoothermeansofexercisingthatrightbutbycominginabodytovoteanddeliberatewiththepeopleofthatotherstate。TheadmissionofthegreaterpartoftheinhabitantsofItalytotheprivilegesofRomancitizenscompletelyruinedtheRomanrepublic。ItwasnolongerpossibletodistinguishbetweenwhowasandwhowasnotaRomancitizen。
Notribecouldknowitsownmembers。Arabbleofanykindcouldbeintroducedintotheassembliesofthepeople，coulddriveouttherealcitizens，anddecideupontheaffairsoftherepublicasiftheythemselveshadbeensuch。ButthoughAmericaweretosendfiftyorsixtynewrepresentativestoParliament，thedoorkeeperoftheHouseofCommonscouldnotfindanygreatdifficultyindistinguishingbetweenwhowasandwhowasnotamember。ThoughtheRomanconstitution，therefore，wasnecessarilyruinedbytheunionofRomewiththealliedstatesofItaly，thereisnottheleastprobabilitythattheBritishconstitutionwouldbehurtbytheunionofGreatBritainwithhercolonies。Thatconstitution，onthecontrary，wouldbecompletedbyit，andseemstobeimperfectwithoutit。Theassemblywhichdeliberatesanddecidesconcerningtheaffairsofeverypartoftheempire，inordertobeproperlyinformed，oughtcertainlytohaverepresentativesfromeverypartofitThatthisunion，however，couldbeeasilyeffectuated，orthatdifficultiesandgreatdifficultiesmightnotoccurintheexecution，Idonotpretend。Ihaveyetheardofnone，however，whichappearinsurmountable。Theprincipalperhapsarise，notfromthenatureofthings，butfromtheprejudicesandopinionsofthepeoplebothonthisandontheothersideoftheAtlantic。
We，onthissideofthewater，areafraidlestthemultitudeofAmericanrepresentativesshouldoverturnthebalanceoftheconstitution，andincreasetoomucheithertheinfluenceofthecrownontheonehand，ortheforceofthedemocracyontheother。ButifthenumberofAmericanrepresentativesweretobeinproportiontotheproduceofAmericantaxation，thenumberofpeopletobemanagedwouldincreaseexactlyinproportiontothemeansofmanagingthem;andthemeansofmanagingtothenumberofpeopletobemanaged。Themonarchicalanddemocraticalpartsoftheconstitutionwould，aftertheunion，standexactlyinthesamedegreeofrelativeforcewithregardtooneanotherastheyhaddonebefore。
Thepeopleontheothersideofthewaterareafraidlesttheirdistancefromtheseatofgovernmentmightexposethemtomanyoppressions。ButtheirrepresentativesinParliament，ofwhichthenumberoughtfromthefirsttobeconsiderable，wouldeasilybeabletoprotectthemfromalloppression。Thedistancecouldnotmuchweakenthedependencyoftherepresentativeupontheconstituent，andtheformerwouldstillfeelthatheowedhisseatinParliament，andalltheconsequenceswhichhederivedfromit，tothegoodwillofthelatter。Itwouldbetheinterestoftheformer，therefore，tocultivatethatgoodwillbycomplaining，withalltheauthorityofamemberofthelegislature，ofeveryoutragewhichanycivilormilitaryofficermightbeguiltyofinthoseremotepartsoftheempire。ThedistanceofAmericafromtheseatofgovernment，besides，thenativesofthatcountrymightflatterthemselves，withsomeappearanceofreasontoo，wouldnotbeofverylongcontinuance。
Suchhashithertobeentherapidprogressofthatcountryinwealth，population，andimprovement，thatinthecourseoflittlemorethanacentury，perhaps，theproduceofAmericanmightexceedthatofBritishtaxation。Theseatoftheempirewouldthennaturallyremoveitselftothatpartoftheempirewhichcontributedmosttothegeneraldefenceandsupportofthewhole。
ThediscoveryofAmerica，andthatofapassagetotheEastIndiesbytheCapeofGoodHope，arethetwogreatestandmostimportanteventsrecordedinthehistoryofmankind。Theirconsequenceshavealreadybeenverygreat;but，intheshortperiodofbetweentwoandthreecenturieswhichhaselapsedsincethesediscoveriesweremade，itisimpossiblethatthewholeextentoftheirconsequencescanhavebeenseen。Whatbenefitsorwhatmisfortunestomankindmayhereafterresultfromthosegreatevents，nohumanwisdomcanforesee。Byuniting，insomemeasure，themostdistantpartsoftheworld，byenablingthemtorelieveoneanother’swants，toincreaseoneanother’senjoyments，andtoencourageoneanother’sindustry，theirgeneraltendencywouldseemtobebeneficial。Tothenativeshowever，bothoftheEastandWestIndies，allthecommercialbenefitswhichcanhaveresultedfromthoseeventshavebeensunkandlostinthedreadfulmisfortuneswhichtheyhaveoccasioned。Thesemisfortunes，however，seemtohavearisenratherfromaccidentthanfromanythinginthenatureofthoseeventsthemselves。Attheparticulartimewhenthesediscoveriesweremade，thesuperiorityofforcehappenedtobesogreatonthesideoftheEuropeansthattheywereenabledtocommitwithimpunityeverysortofinjusticeinthoseremotecountries。Hereafter，perhaps，thenativesofthosecountriesmaygrowstronger，orthoseofEuropemaygrowweaker，andtheinhabitantsofallthedifferentquartersoftheworldmayarriveatthatequalityofcourageandforcewhich，byinspiringmutualfear，canaloneoverawetheinjusticeofindependentnationsintosomesortofrespectfortherightsofoneanother。Butnothingseemsmorelikelytoestablishthisequalityofforcethanthatmutualcommunicationofknowledgeandofallsortsofimprovementswhichanextensivecommercefromallcountriestoallcountriesnaturally，orrathernecessarily，carriesalongwithit。
Inthemeantimeoneoftheprincipaleffectsofthosediscoverieshasbeentoraisethemercantilesystemtoadegreeofsplendourandglorywhichitcouldneverotherwisehaveattainedto。Itistheobjectofthatsystemtoenrichagreatnationratherbytradeandmanufacturesthanbytheimprovementandcultivationofland，ratherbytheindustryofthetownsthanbythatofthecountry。But，inconsequenceofthosediscoveries，thecommercialtownsofEurope，insteadofbeingthemanufacturersandcarriersforbutaverysmallpartoftheworld（thatpartofEuropewhichiswashedbytheAtlanticOcean，andthecountrieswhichlieroundtheBalticandMediterraneanseas），havenowbecomethemanufacturersforthenumerousandthrivingcultivatorsofAmerica，andthecarriers，andinsomerespectsthemanufacturerstoo，foralmostallthedifferentnationsofAsia，Africa，andAmerica。Twonewworldshavebeenopenedtotheirindustry，eachofthemmuchgreaterandmoreextensivethantheoldone，andthemarketofoneofthemgrowingstillgreaterandgreatereveryday。
ThecountrieswhichpossessthecoloniesofAmerica，andwhichtradedirectlytotheEastIndies，enjoy，indeed，thewholeshowandsplendourofthisgreatcommerce。Othercountries，however，notwithstandingalltheinvidiousrestraintsbywhichitismeanttoexcludethem，frequentlyenjoyagreatershareoftherealbenefitofit。ThecoloniesofSpainandPortugal，forexample，givemorerealencouragementtotheindustryofothercountriesthantothatofSpainandPortugal。Inthesinglearticleoflinenalonetheconsumptionofthosecoloniesamounts，itissaid，butIdonotpretendtowarrantthequantity，tomorethanthreemillionssterlingayear。ButthisgreatconsumptionisalmostentirelysuppliedbyFrance，Flanders，Holland，andGermany。SpainandPortugalfurnishbutasmallpartofit。Thecapitalwhichsuppliesthecolonieswiththisgreatquantityoflinenisannuallydistributedamong，andfurnishesarevenuetotheinhabitantsof，thoseothercountries。TheprofitsofitonlyarespentinSpainandPortugal，wheretheyhelptosupportthesumptuousprofusionofthemerchantsofCadizandLisbon。
Eventheregulationsbywhicheachnationendeavourstosecuretoitselftheexclusivetradeofitsowncoloniesarefrequentlymorehurtfultothecountriesinfavourofwhichtheyareestablishedthantothoseagainstwhichtheyareestablished。
Theunjustoppressionoftheindustryofothercountriesfallsback，ifImaysayso，upontheheadsoftheoppressors，andcrushestheirindustrymorethanitdoesthatofthoseothercountries。Bythoseregulationsforexample，themerchantofHamburgmustsendthelinenwhichhedestinesfortheAmericanmarkettoLondon，andhemustbringbackfromthencethetobaccowhichhedestinesfortheGermanmarket，becausehecanneithersendtheonedirectlytoAmericanorbringbacktheotherdirectlyfromthence。Bythisrestraintheisprobablyobligedtoselltheonesomewhatcheaper，andtoselltheonesomewhatcheaper，andtobuytheothersomewhatdearerthanheotherwisemighthavedone;andhisprofitsareprobablysomewhatabridgedbymeansofit。Inthistrade，however，betweenHamburgandLondon，hecertainlyreceivesthereturnsofhiscapitalmuchmorequicklythanhecouldpossiblyhavedoneinthedirecttradetoAmerica，eventhoughweshouldsuppose，whatisbynomeansthecase，thatthepaymentsofAmericawereaspunctualasthoseofLondon。Inthetrade，therefore，towhichthoseregulationsconfinethemerchantofHamburg，hiscapitalcankeepinconstantemploymentamuchgreaterquantityofGermanindustrythanitpossiblycouldhavedoneinthetradefromwhichheisexcluded。
Thoughtheoneemployment，therefore，maytohimperhapsbelessprofitablethantheother，itcannotbelessadvantageoustohiscountry。Itisquiteotherwisewiththeemploymentintowhichthemonopolynaturallyattracts，ifImaysayso，thecapitaloftheLondonmerchant。Thatemploymentmay，perhaps，bemoreprofitabletohimthanthegreaterpartofotheremployments，but，onaccountoftheslownessofthereturns，itcannotbemoreadvantageoustohiscountry。
Afteralltheunjustattempts，therefore，ofeverycountryinEuropetoengrosstoitselfthewholeadvantageofthetradeofitsowncolonies，nocountryhasyetbeenabletoengrossitselfanythingbuttheexpenseofsupportingintimeofpeaceandofdefendingintimeofwartheoppressiveauthoritywhichitassumesoverthem。Theinconvenienciesresultingfromthepossessionofitscolonies，everycountryhasengrossedtoitselfcompletely。Theadvantagesresultingfromtheirtradeithasbeenobligedtosharewithmanyothercountries。
Atfirstsight，nodoubt，themonopolyofthegreatcommerceofAmericanaturallyseemstobeanacquisitionofthehighestvalue。Totheundiscerningeyeofgiddyambition，itnaturallypresentsitselfamidsttheconfusedscrambleofpoliticsandwarasaverydazzlingobjecttofightfor。Thedazzlingsplendouroftheobject，however，theimmensegreatnessofthecommerce，istheveryqualitywhichrendersthemonopolyofithurtful，orwhichmakesoneemployment，initsownnaturenecessarilylessadvantageoustothecountrythanthegreaterpartofotheremployments，absorbamuchgreaterproportionofthecapitalofthecountrythanwhatwouldotherwisehavegonetoit。
Themercantilestockofeverycountry，ithasbeenshowninthesecondbook，naturallyseeks，ifonemaysayso，theemploymentmostadvantageoustothatcountry。Ifitisemployedinthecarryingtrade，thecountrytowhichitbelongsbecomestheemporiumofthegoodsofallthecountrieswhosetradethatstockcarrieson。Buttheownerofthatstocknecessarilywishestodisposeofasgreatapartofthosegoodsashecanathome。
Hetherebysaveshimselfthetrouble，risk，andexpenseofexportation，andhewilluponthataccountbegladtosellthemathome，notonlyforamuchsmallerprice，butwithsomewhatasmallerprofitthanhemightexpecttomakebysendingthemabroad。Henaturally，therefore，endeavoursasmuchashecantoturnhiscarryingtradeintoaforeigntradeofconsumption。Ifhisstock，again，isemployedinaforeigntradeofconsumption，hewill，forthesamereason，begladtodisposeofathomeasgreatapartashecanofthehomegoods，whichhecollectsinordertoexporttosomeforeignmarket，andhewillthusendeavour，asmuchashecan，toturnhisforeigntradeofconsumptionintoahometrade。Themercantilestockofeverycountrynaturallycourtsinthismannerthenear，andshunsthedistantemployment;naturallycourtstheemploymentinwhichthereturnsarefrequent，andshunsthatinwhichtheyaredistantandslow;naturallycourtstheemploymentinwhichitcanmaintainthegreatestquantityofproductivelabourinthecountrytowhichitbelongs，orinwhichitsownerresides，andshunsthatinwhichitcanmaintaintherethesmallestquantity。
Itnaturallycourtstheemploymentwhichinordinarycasesismostadvantageous，andshunsthatwhichinordinarycasesisleastadvantageoustothatcountry。
Butifinanyofthosedistantemployments，whichinordinarycasesarelessadvantageoustothecountry，theprofitshouldhappentorisesomewhathigherthanwhatissufficienttobalancethenaturalpreferencewhichisgiventoneareremployments，thissuperiorityofprofitwilldrawstockfromthoseneareremployments，tilltheprofitsofallreturntotheirproperlevel。Thissuperiorityofprofit，however，isaproofthat，intheactualcircumstancesofthesociety，thosedistantemploymentsaresomewhatunderstockedinproportiontootheremployments，andthatthestockofthesocietyisnotdistributedintheproperestmanneramongallthedifferentemploymentscarriedoninit。Itisaproofthatsomethingiseitherboughtcheaperorsolddearerthanitoughttobe，andthatsomeparticularclassofcitizensismoreorlessoppressedeitherbypayingmoreorbygettinglessthanwhatissuitabletothatequalitywhichoughttotakeplace，andwhichnaturallydoestakeplaceamongallthedifferentclassesofthem。Thoughthesamecapitalneverwillmaintainthesamequantityofproductivelabourinadistantasinanearemployment，yetadistantemploymentmaybeasnecessaryforthewelfareofthesocietyasanearone;thegoodswhichthedistantemploymentdealsinbeingnecessary，perhaps，forcarryingonmanyoftheneareremployments。Butiftheprofitsofthosewhodealinsuchgoodsareabovetheirproperlevel，thosegoodswillbesolddearerthantheyoughttobe，orsomewhatabovetheirnaturalprice，andallthoseengagedintheneareremploymentswillbemoreorlessoppressedbythishighprice。Theirinterest，therefore，inthiscaserequiresthatsomestockshouldbewithdrawnfromthoseneareremployments，andturnedtowardsthatdistantone，inordertoreduceitsprofitstotheirproperlevel，andthepriceofthegoodswhichitdealsintotheirnaturalprice。Inthisextraordinarycase，thepublicinterestrequiresthatsomestockshouldbewithdrawnfromthoseemploymentswhichinordinarycasesaremoreadvantageous，andturnedtowardsonewhichinordinarycasesislessadvantageoustothepublic;andinthisextraordinarycasethenaturalinterestsandinclinationsofmencoincideasexactlywiththepublicinterestasinallotherordinarycases，andleadthemtowithdrawstockfromthenear，andtoturnittowardsthedistantemployment。
Itisthusthattheprivateinterestsandpassionsofindividualsnaturallydisposethemtoturntheirstockstowardstheemploymentswhichinordinarycasesaremostadvantageoustothesociety。Butiffromthisnaturalpreferencetheyshouldturntoomuchofittowardsthoseemployments，thefallofprofitinthemandtheriseofitinallothersimmediatelydisposethemtoalterthisfaultydistribution。Withoutanyinterventionoflaw，therefore，theprivateinterestsandpassionsofmennaturallyleadthemtodivideanddistributethestockofeverysocietyamongallthedifferentemploymentscarriedoninitasnearlyaspossibleintheproportionwhichismostagreeabletotheinterestofthewholesociety。
Allthedifferentregulationsofthemercantilesystemnecessarilyderangemoreorlessthisnaturalandmostadvantageousdistributionofstock。ButthosewhichconcernthetradetoAmericaandtheEastIndiesderangeitperhapsmorethananyother，becausethetradetothosetwogreatcontinentsabsorbsagreaterquantityofstockthananytwootherbranchesoftrade。Theregulations，however，bywhichthisderangementiseffectedinthosetwodifferentbranchesoftradearenotaltogetherthesame。Monopolyisthegreatengineofboth;butitisadifferentsortofmonopoly。Monopolyofonekindoranother，indeed，seemstobethesoleengineofthemercantilesystem。
InthetradetoAmericaeverynationendeavourstoengrossasmuchaspossiblethewholemarketofitsowncoloniesbyfairlyexcludingallothernationsfromanydirecttradetothem。
Duringthegreaterpartofthesixteenthcentury，thePortugueseendeavouredtomanagethetradetotheEastIndiesinthesamemanner，byclaimingthesolerightofsailingintheIndianseas，onaccountofthemeritofhavingfirstfoundouttheroadtothem。TheDutchstillcontinuetoexcludeallotherEuropeannationsfromanydirecttradetotheirspiceislands。MonopoliesofthiskindareevidentlyestablishedagainstallotherEuropeannations，whoaretherebynotonlyexcludedfromatradetowhichitmightbeconvenientforthemtoturnsomepartoftheirstock，butareobligedtobuythegoodswhichthattradedealsinsomewhatdearerthaniftheycouldimportthemthemselvesdirectlyfromthecountrieswhichproducethem。
ButsincethefallofthepowerofPortugal，noEuropeannationhasclaimedtheexclusiverightofsailingintheIndianseas，ofwhichtheprincipalportsarenowopentotheshipsofallEuropeannations。ExceptinPortugal，however，andwithinthesefewyearsinFrance，thetradetotheEastIndieshasineveryEuropeancountrybeensubjectedtoanexclusivecompany。
Monopoliesofthiskindareproperlyestablishedagainsttheverynationwhicherectsthem。Thegreaterpartofthatnationaretherebynotonlyexcludedfromatradetowhichitmightbeconvenientforthemtoturnsomepartoftheirstock，butareobligedtobuythegoodswhichthattradedealssomewhatdearerthanifitwasopenandfreetoalltheircountrymen。SincetheestablishmentoftheEnglishEastIndiaCompany，forexample，theotherinhabitantsofEngland，overandabovebeingexcludedfromthetrade，musthavepaidinthepriceoftheEastIndiagoodswhichtheyhaveconsumed，notonlyforalltheextraordinaryprofitswhichthecompanymayhavemadeuponthosegoodsinconsequenceoftheirmonopoly，butforalltheextraordinarywastewhichthefraudandabuse，inseparablefromthemanagementoftheaffairsofsogreatacompany，mustnecessarilyhaveoccasioned。Theabsurdityofthissecondkindofmonopoly，therefore，ismuchmoremanifestthanthatofthefirst。
Boththesekindsofmonopoliesderangemoreorlessthenaturaldistributionofthestockofthesociety;buttheydonotalwaysderangeitinthesameway。
Monopoliesofthefirstkindalwaysattracttotheparticulartradeinwhichtheyareestablishedagreaterproportionofthestockofthesocietythanwhatwouldgotothattradeofitsownaccord。
Monopoliesofthesecondkindmaysometimesattractstocktowardstheparticulartradeinwhichtheyareestablished，andsometimesrepelitfromthattradeaccordingtodifferentcircumstances。Inpoorcountriestheynaturallyattracttowardsthattrademorestockthanwouldotherwisegotoit。Inrichcountriestheynaturallyrepelfromitagooddealofstockwhichwouldotherwisegotoit。
SuchpoorcountriesasSwedenandDenmark，forexample，wouldprobablyhaveneversentasingleshiptotheEastIndieshadnotthetradebeensubjectedtoanexclusivecompany。Theestablishmentofsuchacompanynecessarilyencouragesadventurers。Theirmonopolysecuresthemagainstallcompetitorsinthehomemarket，andtheyhavethesamechanceforforeignmarketswiththetradersofothernations。Theirmonopolyshowsthemthecertaintyofagreatprofituponaconsiderablequantityofgoods，andthechanceofaconsiderableprofituponagreatquantity。Withoutsuchextraordinaryencouragement，thepoortradersofsuchpoorcountrieswouldprobablyneverhavethoughtofhazardingtheirsmallcapitalsinsoverydistantanduncertainanadventureasthetradetotheEastIndiesmustnaturallyhaveappearedtothem。
SucharichcountryasHolland，onthecontrary，wouldprobably，inthecaseofafreetrade，sendmanymoreshipstotheEastIndiesthanitactuallydoes。ThelimitedstockoftheDutchEastIndiaCompanyprobablyrepelsfromthattrademanygreatmercantilecapitalswhichwouldotherwisegotoit。ThemercantilecapitalofHollandissogreatthatitis，asitwere，continuallyoverflowing，sometimesintothepublicfundsofforeigncountries，sometimesintoloanstoprivatetradersandadventurersofforeigncountries，sometimesintothemostround—aboutforeigntradesofconsumption，andsometimesintothecarryingtrade。Allnearemploymentsbeingcompletelyfilledup，allthecapitalwhichcanbeplacedinthemwithanytolerableprofitbeingalreadyplacedinthem，thecapitalofHollandnecessarilyflowstowardsthemostdistantemployments。ThetradetotheEastIndies，ifitwerealtogetherfree，wouldprobablyabsorbthegreaterpartofthisredundantcapital。TheEastIndiesofferamarketforthemanufacturesofEuropeandforthegoldandsilveraswellasforseveralotherproductionsofAmericagreaterandmoreextensivethanbothEuropeandAmericaputtogether。
Everyderangementofthenaturaldistributionofstockisnecessarilyhurtfultothesocietyinwhichittakesplace;
whetheritbebyrepellingfromaparticulartradethestockwhichwouldotherwisegotoit，orbyattractingtowardsaparticulartradethatwhichwouldnototherwisecometoit。If，withoutanyexclusivecompany，thetradeofHollandtotheEastIndieswouldbegreaterthanitactuallyis，thatcountrymustsufferaconsiderablelossbypartofitscapitalbeingexcludedfromtheemploymentmostconvenientforthatpart。Andinthesamemanner，if，withoutanexclusivecompany，thetradeofSwedenandDenmarktotheEastIndieswouldbelessthanitactuallyis，or，whatperhapsismoreprobable，wouldnotexistatall，thosetwocountriesmustlikewisesufferaconsiderablelossbypartoftheircapitalbeingdrawnintoanemploymentwhichmustbemoreorlessunsuitabletotheirpresentcircumstances。Betterforthem，perhaps，intheirpresentcircumstances，tobuyEastIndiagoodsofothernations，eventhoughtheyshouldpaysomewhatdearer，thantoturnsogreatapartoftheirsmallcapitaltosoverydistantatrade，inwhichthereturnsaresoveryslow，inwhichthatcapitalcanmaintainsosmallaquantityofproductivelabourathome，whereproductivelabourissomuchwanted，wheresolittleisdone，andwheresomuchistodo。
Thoughwithoutanexclusivecompany，therefore，aparticularcountryshouldnotbeabletocarryonanydirecttradetotheEastIndies，itwillnotfromthencefollowthatsuchacompanyoughttobeestablishedthere，butonlythatsuchacountryoughtnotinthesecircumstancestotradedirectlytotheEastIndies。
ThatsuchcompaniesarenotingeneralnecessaryforcarryingontheEastIndiatradeissufficientlydemonstratedbytheexperienceofthePortuguese，whoenjoyedalmostthewholeofitformorethanacenturytogetherwithoutanyexclusivecompany。