1828.] Mr. Huskisson's Colonial Trade BUI, 1825. 271 



have shewn to be so sufficient to answer all the purposes for which colo- 

 nies are established. 



But our objection to the colonial system, on the ground of its tendency 

 to produce an injurious distribution of the capital of the community, is 

 frequently met by the assertion of a fact, which, if true, would con- 

 siderably weaken its force. It is said, that so far from producing that 

 distribution, colonies only provide a field for the employment of capital, 

 which but for that field would lie idle and unproductive. It is among 

 that very erudite class of bipeds, called " practical men," that this is 

 principally put forth ; and were we to mete unto them the same measure 

 they mete to others, we might dispense with any examination of the 

 premises, by the quotation of an historical fact (and in their catechism 

 " facts are stubborn things"), proving most distinctly, that if those 

 premises were true, it is by no means a necessary conclusion, that the 

 possession of colonies would afford a remedy to the mischief. " Spain 

 and Portugal/' says Adam Smith, " were manufacturing countries before 

 they had any considerable colonies ; since they had the richest and 

 most fertile in the world, they both ceased to be so ! !" Our object, 

 however, is not to silence but to convince, and we shall, therefore, pro- 

 ceed to shew that this is no more than one of those popular errors into 

 which an ignorance of economical science is so constantly betraying 

 those who know no more of a commercial phenomenon than its appear- 

 ance. The mistake has arisen in an absence of discrimination between 

 a temporary effect and a permanent result. In every commercial state 

 of society errors of speculation incorrectness of information fluctua- 

 tions in fashion variations in natural circumstances, and a number of 

 causes occasionally occur to bring about a production disproportioned 

 to the demands of consumption. This disproportion of consumption is 

 termed a glut, and production in excess being, of its very essence, its 

 inseparable result is to relax the demand for capital which an average quan- 

 tity of production had created, and, consequently, to turn loose an excess 

 of capital, to choke up the money market, precisely in the same manner 

 that the excess of production was choking up the market of commodities. 

 But a period must arise when this excess of production, however large, 

 will become exhausted. The wants of the community will then require 

 the processes of production to begin afresh, and production will again 

 absorb the capital that had been thus temporarily thrown out of employ- 

 ment. But what is thus sound in principle is no less corroborated by 

 experience. A desire to pay interest for the use of capital is always 

 evidence of a capacity for its employment. Yet we should be glad to 

 know at what period of the history of this country there has been any 

 thing like a general or permanent cessation of borrowers ? Even in the 

 immediate re-action of its greatest panics capital has seldom lain for 

 any period without producing any interest at all, and it is certain that, at 

 the very moment at which we are writing, there are innumerable indi- 

 viduals in the country, who, with good solid acres to offer in security, 

 are willing to borrow money at four and even five per cent. 



So long as the purchasing powers of other countries is keeping pace 

 with the productive powers of our own, the supply of their wants will 

 always afford an expanding field for the employment of our industry. 

 It may be stated, as an example, that the emancipated states of South 

 America are daily widening their markets to the purchase of our pro- 

 ductions ; and it is an undoubted fact, that while their demand is expe- 

 riencing no relaxation, the consumption of our manufactures by the 



