CHAPTER III WARS, POLITICS, AND INDUSTRY
§ 1. England’s industrial advantages in 1763
In the first place, England had seriously crippled her powerful commercial rival, France, both in her Indian and American possessions. By the Seven Years’ War we had gained Canada, Florida, and all the French possessions east of the Mississippi River (except New Orleans); while in India our influence had become supreme, owing to the victories of Clive. French influence in India and America was practically annihilated. Spain, the faithful ally of France, lost with her friend her place as the commercial rival of England in foreign trade. Germany was {168} again being ravaged by the dynastic struggles in which Frederick the Great bore so prominent a part, between the reigning houses of Austria and Prussia. Holland was similarly torn by internal dissensions under the Stadtholder William V., which gave the rival sovereigns of Prussia and Austria a chance of making matters worse by their interference. By 1790 the United Provinces had thus sunk into utter insignificance. Sweden, Norway, and Italy were of no account in European politics, and Russia had only begun to come to the front. Hence England alone had the chance of “the universal empire of a sole market.” The supply of this market, especially in our American colonies, was in the hands of English manufacturers and English workmen. The great inventions which came, as we saw, after 1763 were thus at once called into active employment, and our mills and mines were able to produce wealth as fast as they could work without fear of foreign competition.
§ 2. The mistake of the Mercantile Theory
[48] See note 15, p. [249,] on this point.
§ 3. The loss of the American colonies
Nevertheless the American colonists evaded the regulations that forbade them to trade with any but the mother-country, and did, for instance, a considerable trade with South America. But in George III.’s reign, Grenville, a Whig minister, was foolish enough to try and stop this. Moreover, he sought to raise money wherewith to pay for the American portion of the Seven Years’ War by taxing the colonists upon the stamps on legal papers (Stamp Act, 1765). The idea that the colonists should pay part of the expenses of the war undertaken in their defence was just enough; but that these expenses should be defrayed by a {171} system of taxation in which they had no voice was exactly the reverse. It is to the credit of Pitt that he protested against this taxation without representation, and exerted his influence for the repeal of this Act (1766). Thus the feelings of the colonists were soothed for a time, and in 1770 Lord North took off all taxes except that on tea. The colonists refused to buy tea: the East India Company, whose trade naturally suffered, tried to force their tea into America, and matters culminated in the celebrated emptying of a shipload of it into Boston harbour by the citizens of that port (1773). North tried to punish the Bostonians by decreeing that their port should be closed, and that the charter of Massachusetts, their colony, should be annulled. Of course war was now imminent. We need not here go into the details of that unfortunate conflict, though we must mention the heroic endeavours of Pitt, now Lord Chatham, to make England give full redress to her offspring. His efforts were in vain. France eagerly took the opportunity of assisting the Americans against the English, and England had to pay very dearly for her adherence to the Mercantile Theory.
§ 4. The outbreak of the great Continental War
[49] See my Commerce in Europe, p. [177.]