An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader macos .TXT) 📕

torrents which fell from the mountains, were sufficient to

satisfy him that those mountains abounded with the richest gold

mines. St. Domingo, therefore, was represented as a country

abounding with gold, and upon that account (according to the

prejudices not only of the present times, but of those times), an

inexhaustible source of real wealth to the crown and kingdom of

Spain. When Columbus, upon his return from his first voyage, was

introduced with a sort of triumphal honours to the sovereigns of

Castile and Arragon, the principal productions of the countries

which he had discovered were carried in solemn procession before

him. The only valuable part of them consisted in some little

fillets, bracelets, and other ornaments of gold, and in some

bales of cotton. The rest were mere objects of vulgar wonder and

curiosity ; some reeds of an extraordinary size, some birds of a

very beautiful plumage, and some stuffed skins of the huge

alligator and manati ; all of which were preceded by six or seven

of the wretched natives, whose singular colour and appearance

added greatly to the novelty of the show.

In consequence of the representations of Columbus, the council of

Castile determined to take possession of the countries of which

the inhabitants were plainly incapable of defending themselves.

The pious purpose of converting them to Christianity sanctified

the injustice of the project. But the hope of finding treasures

of gold there was the sole motive which prompted to undertake it;

and to give this motive the greater weight, it was proposed by

Columbus, that the half of all the gold and silver that should be

found there, should belong to the crown. This proposal was

approved of by the council.

As long as the whole, or the greater part of the gold which the

first adventurers imported into Europe was got by so very easy a

method as the plundering of the defenceless natives, it was not

perhaps very difficult to ,pay even this heavy tax ; but when the

natives were once fairly stript of all that they had, which, in

St. Domingo, and in all the other countries discovered by

Columbus, was done completely in six or eight years, and when, in

order to find more, it had become necessary to dig for it in the

mines, there was no longer any possibility of paying this tax.

The rigorous exaction of it, accordingly, first occasioned, it is

said, the total abandoning of the mines of St. Domingo, which

have never been wrought since. It was soon reduced, therefore, to

a third; then to a fifth; afterwards to a tenth; and at last to a

twentieth part of the gross produce of the gold mines. The tax

upon silver continued for a long time to be a fifth of the gross

produce. It was reduced to a tenth only in the course of the

present century. But the first adventurers do not appear to have

been much interested about silver. Nothing less precious than

gold seemed worthy of their attention.

All the other enterprizes of the Spaniards in the New World,

subsequent to those of Columbus, seem to have been prompted by

the same motive. It was the sacred thirst of gold that carried

Ovieda, Nicuessa, and Vasco Nugnes de Balboa, to the Isthmus of

Darien ; that carried Cortes to Mexico, Almagro and Pizarro to

Chili and Peru. When those adventurers arrived upon any unknown

coast, their first inquiry was always if there was any gold to be

found there ; and according to the information which they

received concerning this particular, they determined either to

quit the country or to settle in it.

Of all those expensive and uncertain projects, however, which

bring bankruptcy upon the greater part of the people who engage

in them, there is none, perhaps, more perfectly ruinous than the

search after new silver and gold mines. It is, perhaps, the most

disadvantageous lottery in the world, or the one in which the

gain of those who draw the prizes bears the least proportion to

the loss of those who draw the blanks; for though the prizes are

few, and the blanks many, the common price of a ticket is the

whole fortune of a very rich man. Projects of mining, instead of

replacing the capital employed in them, together with the

ordinary profits of stock, commonly absorb both capital and

profit. They are the projects, therefore, to which, of all

others, a prudent lawgiver, who desired to increase the capital

of his nation, would least choose to give any extraordinary

encouragement, or to turn towards them a greater share of that

capital than what would go to them of its own accord. Such, in

reality, is the absurd confidence which almost all men have in

their own good fortune, that wherever there is the least

probability of success, too great a share of it is apt to go to

them of its own accord.

But though the judgment of sober reason and experience concerning

such projects has always been extremely unfavourable, that of

human avidity has commonly been quite otherwise. The same passion

which has suggested to so many people the absurd idea of the

philosopher’s stone, has suggested to others the equally absurd

one of immense rich mines of gold and silver. They did not

consider that the value of those metals has, in all ages and

nations, arisen chiefly from their scarcity, and that their

scarcity has arisen from the very small quantities of them which

nature has anywhere deposited in one place, from the hard and

intractable substances with which she has almost everywhere

surrounded those small quantities, and consequently from the

labour and expense which are everywhere necessary in order to

penetrate, and get at them. They flattered themselves that veins

of those metals might in many places be found, as large and as

abundant as those which are commonly found of lead, or copper, or

tin, or iron. The dream of Sir Waiter Raleigh, concerning the

golden city and country of El Dorado, may satisfy us, that even

wise men are not always exempt from such strange delusions. More

than a hundred years after the death of that great man, the

Jesuit Gumila was still convinced of the reality of that

wonderful country, and expressed, with great warmth, and, I dare

say, with great sincerity, how happy he should be to carry the

light of the gospel to a people who could so well reward the

pious labours of their missionary.

In the countries first discovered by the Spaniards, no gold and

silver mines are at present known which are supposed to be worth

the working. The quantities of those metals which the first

adventurers are said to have found there, had probably been very

much magnified, as well as the fertility of the mines which were

wrought immediately after the first discovery. What those

adventurers were reported to have found, however, was sufficient

to inflame the avidity of all their countrymen. Every Spaniard

who sailed to America expected to find an El Dorado. Fortune,

too, did upon this what she has done upon very few other

occasions. She realized in some measure the extravagant hopes of

her votaries; and in the discovery and conquest of Mexico and

Peru (of which the one happened about thirty, and the other about

forty, years after the first expedition of Columbus), she

presented them with something not very unlike that profusion of

the precious metals which they sought for.

A project of commerce to the East Indies, therefore, gave

occasion to the first discovery of the West. A project of

conquest gave occasion to all the establishments of the Spaniards

in those newly discovered countries. The motive which excited

them to this conquest was a project of gold and silver mines; and

a course of accidents which no human wisdom could foresee,

rendered this project much more successful than the undertakers

had any reasonable grounds for expecting.

The first adventurers of all the other nations of Europe who

attempted to make settlements in America, were animated by the

like chimerical views; but they were not equally successful. It

was more than a hundred years after the first settlement of the

Brazils, before any silver, gold, or diamond mines, were

discovered there. In the English, French, Dutch, and Danish

colonies, none have ever yet been discovered, at least none that

are at present supposed to be worth the working. The first

English settlers in North America, however, offered a fifth of

all the gold and silver which should be found there to the king,

as a motive for granting them their patents. In the patents of

Sir Waiter Raleigh, to the London and Plymouth companies, to the

council of Plymouth, etc. this fifth was accordingly reserved to

the crown. To the expectation of finding gold and silver mines,

those first settlers, too, joined that of discovering a

north-west passage to the East Indies. They have hitherto been

disappointed in both.

PART II.

Causes of the Prosperity of New Colonies.

The colony of a civilized nation which takes possession either of

a waste country, or of one so thinly inhabited that the natives

easily give place to the new settlers, advances more rapidly to

wealth and greatness than any other human society.

The colonies carry out with them a knowledge of agriculture and

of other useful arts, superior to what can grow up of its own

accord, in the course of many centuries, among savage and

barbarous nations. They carry out with them, too, the habit of

subordination, some notion of the regular government which takes

place in their own country, of the system of laws which support

it, and of a regular administration of justice; and they

naturally establish something of the same kind in the new

settlement. But among savage and barbarous nations, the natural

progress of law and government is still slower than the natural

progress of arts, after law and government have been so far

established as is necessary for their protection. Every colonist

gets more land than he can possibly cultivate. He has no rent,

and scarce any taxes, to pay. No landlord shares with him in its

produce, and, the share of the sovereign is commonly but a

trifle. He has every motive to render as great as possible a

produce which is thus to be almost entirely his own. But his land

is commonly so extensive, that, with all his own industry, and

with all the industry of other people whom he can get to employ,

he can seldom make it produce the tenth part of what it is

capable of producing. He is eager, therefore, to collect

labourers from all quarters, and to reward them with the most

liberal wages. But those liberal wages, joined to the plenty and

cheapness of land, soon make those labourers leave him, in order

to become landlords themselves, and to reward with equal

liberality other labourers, who soon leave them for the same

reason that they left their first master. The liberal reward of

labour encourages marriage. The children, during the tender years

of infancy, are well fed and properly taken care of ; and when

they are grown up, the value of their labour greatly overpays

their maintenance. When arrived at maturity, the high price of

labour, and the low price of land, enable them to establish

themselves in the same manner as their fathers did before them.

In other countries, rent and profit eat up wages, and the two

superior orders of people oppress the inferior one ; but in new

colonies, the interest of the two superior orders obliges them to

treat the inferior one with more generosity and humanity, at

least where that inferior one is not in a state of slavery. Waste

lands,