COLONIAL PROVISION TRADE

579

All this concern about naval stores was partly due to the growing recognition of the fact that in the years following the Peace of Utrecht it was becoming more and more difficult to maintain that commercial equilibrium in the colonies which mercantilist principles demanded. The northern colonies were not responding to the policy of the Board of Trade, and that through no fault of their own. They were developing rapidly, and yet their direct trade with the mother country was comparatively small because, as already shown, they could not produce commodities which Great Britain would admit. The temptation to set up their own industries in order to limit the demand for British manufactures was particularly strong. To bribe them not to do so by spending large sums of money on stimulating the production of naval stores was really beyond the means of the mother country; and in view of the resources of the colonies it would have been wasteful. There remained the possibility of allowing them to concentrate on the provision trade. As far as they supplied the needs of the southern colonies and the British West Indies this was compatible with the mercantile system. It was better that Great Britain should send manufactured goods to the colonies than that she should send provisions. Cheap and abundant supplies of provisions were as important to the sugar and tobacco colonies as cheap labour; in fact, they gave the same result when costs of production came to be estimated. There was, however, a limit to this policy. The northern colonies would not continue to send cattle, timber and provisions to the others if they found that the market was over-supplied, and if there were opportunities of sale elsewhere at a higher price. Such opportunities did in fact offer themselves. "Soon after the Peace of Utrecht", according to Postlethwayt,1 "a pernicious commerce began to show itself, between the British northern colonies and the French sugar colonies, which began with bartering the lumber of the former for French sugar and molasses.

In theory, the British and French colonies should have been of exclusive advantage to their respective mother countries, but the only way to make sure of this would have been to prevent one group from dealing with the other. Both Great Britain and France had continental and island colonies, and each country would have preferred a system of self-sufficiency. A treaty of neutrality had in fact been agreed to by England and France in 16862 under the terms of which neither Power was to trade with the other's possessions. As matters stood, however, it was impossible or the French settlements in Canada and Louisiana to supply what the French West Indies required: it was also becoming increasingly obvious that the British northern colonies could produce more than the British West Indies

1 Postlethwayt, Malachy, Britain's Commercial Interest explained and improved (1757), I, 485. 2 Dumont, J., Corps universel diplomatique, vol. ví, рt п, pp. 141 seqq.

wanted. The natural course was for the northern colonies to send what they could not profitably dispose of within the British system to supply what was lacking in the French system. To this the British mercantilists opposed a twofold objection. It would assist in the economic development of the French sugar colonies, and it would hamper that of the British, giving the former the means to increase the area under cultivation and depriving the latter of cheap cattle, timber and provisions.

The problems which the Board of Trade had to face owing to the development in the sugar trade were sufficiently bewildering. In the closing decades of the seventeenth century England had enjoyed the leading place as the purveyor of sugar to the European countries. She greatly valued the benefits arising from the import and re-export of raw and refined sugar. As an enumerated article it had to be exported in the first instance either to England or to one of her colonies; in the one case it paid import duties and in the other the Plantation duties on export. The yield of these duties was a direct contribution to the revenue which the State did not want to forgo. But it was strongly represented in the years immediately following the Peace of Utrecht that sugar was so burdened by these charges that it was losing the foreign market. That there had been a steady decline in the reexport of sugar was beyond question. The Board of Trade had to explore the causes of this decline. The merchants who were consulted pointed out that there had been a great increase of home consumption of sugar and consequently there was not the same surplus available for re-export. This was undoubtedly true; but it did not explain why European countries were not offering high prices for what they could get. Sugar was not dear on the continent because foreign sugar plantations-Dutch, French and Portuguese-were now producing it at lower cost than the British could. Their main advantage would seem to have been that the soil they were using was less exhausted. The West Indian interest contended that British sugar bore heavier charges than foreign, and demanded the right of direct export to the continent, i.e. the removal of sugar from the list of enumerated articles. To this the Board of Trade was opposed, and in 1724 it recommended that the principle of enumeration should be maintained. The arguments in favour of this seemed conclusive from the British point of view. Direct export from the West Indies to the continent, if it took place on a large scale, would mean that less sugar would enter this country, and since the British demand was unlikely to decline-for the consumption of tea and coffee was increasing year by year-consumers would have to pay more for their sugar and the revenue would also suffer. There was the additional danger that, if sugar were shipped direct to the continent, it would be impossible to prevent the influx of foreign manufactures into the West Indies as return cargoes.

WEST INDIAN SUGAR-BRITISH AND FOREIGN

581

Now that the British West Indies had serious competitors, it became of some significance that the principle of enumeration merely governed the question of the first destination of exported sugar. Great Britain had as a matter of fact bestowed substantial preference on British West Indian sugar, but no general law restricted either the mother country or the colonies as to what sugar they should import. Each colony was free to adopt what course it pleased. There was, indeed, the general bar on trade with French Plantations contained in the treaty of neutrality of 1686, which has already been noticed. When the West Indian planters in 1714 complained of the effects of the trade between the northern colonies and foreign possessions, the Board of Trade drew attention to this treaty. Three years later it advised the colonial governors that such trade was illegal and that the terms of the treaty ought to be observed. But legal opinion was sought and gave an interpretation of the treaty which made it practically useless as an instrument for suppressing trade between British and French colonies. The treaty, it was held, did not empower either of the contracting parties to seize and confiscate the ships and goods of their own subjects for contravening its articles; had it been intended to do this, confirmation of the treaty either by Act of Parliament in Great Britain or by acts of Assembly in the colonies would have been necessary. Before this ruling the treaty had not been seriously regarded; it now became a virtual dead-letter, because the French, who wished to take advantage of such trade, were not likely to seize British ships for trading with their Plantations in defiance of the treaty. The British planters asserted indeed that it was "a traffic not taken up casually or by chance but the result of a well weighed plan formed or at least approved by the Court of France...and intended to be steadily and regularly pursued".1 In any case the treaty of neutrality did not apply to trade between the British Plantations and those of European countries other than France, though the supply of provisions to the Dutch and Danish islands gave rise to the same objections.

The position was complicated by the fact that the practice of importing foreign sugar was not confined to the continental colonies. The British West Indies bought sugar in the foreign Plantations and sent it to Great Britain as though it were their own production. Barbados, for instance, carried on a considerable trade for this purpose with Martinique prior to 1715, when a local act was passed which placed prohibitive duties on the importation of French goods. Merchants were buying French sugar cheaply and getting it into Great Britain at half rates as a British product, thus defrauding the revenue and augmenting the supply to such an extent as to lower prices. This tendency naturally alarmed the planters, and the policy

1 Memorial of Sugar Planters, Merchants and others.... See Pitman, F. W., The Development of the British West Indies, 1700-1763, App. xi.

of prohibition was adopted in their interest.1 But they gained little from it, because the Act of 1715, in so far as it was enforced, raised the price of Barbados sugar and consequently made it less attractive to buyers in the continental colonies. Still the planters clung to the policy of maintaining prices, and there was a demand that similar prohibitive legislation should be adopted in the Leeward Islands. Antigua passed an act in 1716 which prohibited the importation of any foreign sugar, rum or molasses. The planters did not realise that it was futile to attempt to keep up prices unless they could control the supply of sugar. The exclusion of French sugar from the British West Indies merely drove it to other markets where it had easy access because it was cheap. Taking all the circumstances into consideration the Board of Trade advised the Privy Council that the Antigua law should be disallowed. This was done by Order in Council of 26 May 1719.2 Two years later an act of the Jamaica legislature to prohibit trade between that island and San Domingo was similarly set aside.

If it was difficult to reconcile the interests of merchants and planters in the West Indies, it was still more difficult to deal with the problems raised by the growing trade between the northern colonies and the foreign sugar islands. On the one hand, there were factors which tended to make British sugar dear-the increasing costs of production, the restrictive policy of the planters, and the Plantation duties which had to be paid on an enumerated article if shipped to another British colony. On the other hand, foreign sugar was produced at low costs, the area under cultivation was rapidly extending, and foreign planters were anxious to secure provisions and other supplies from the mainland. In particular the French Plantations were able to offer molasses at a low price because its export to France was discouraged in the interests of the home production of brandy. It was natural, therefore, that the British colonies, where the distillation of molasses into rum was a rising industry, should be ready to buy up these supplies, and this meant that the continental colonies found a market for their timber, provisions and live-stock outside the British system. The economic bonds between New England, New York and Pennsylvania and Guadeloupe and Martinique in particular were drawn close in the decade following the Treaty of Utrecht; the political boundaries to which both British and French mercantilists attached so much importance were overstepped and a great contraband trade sprang up. This trade was to the mutual advantage of the continental colonies and the foreign Plantations, but it was a clear challenge to the principles on which the colonial system was based. The British West Indies appealed to the mother country to intervene in their behalf, and the Board of Trade recognised that the

1 See report of Charles Dunbar, surveyor-general of customs for Barbados and the Leeward Islands, 24 Dec. 1717, Pitman, op. cit. pp. 229-30.

2 A.P.C., Col. 11, 387.

COMPETITIVE WEAKNESS OF BRITISH SUGAR 583

trade was a very great discouragement to the sugar planters in the British islands. But it had also to be admitted that the northern colonies could not find an adequate market for their goods within the Empire. The Board of Trade had no better solution to offer than the old one of encouraging the production of naval stores, because "the northern colonies would be thereby enabled to pay their balance to England without lying under the necessity of carrying on a trade to foreign ports in some respect detrimental to their mother country".1

The case against the trade between the continental colonies and the French West Indies was politico-economic. The mercantilists could not reconcile themselves to the fact that it contributed to the development of the French Plantations and to that extent was what they would designate as pernicious. They also set a high value on the sugar trade and were greatly concerned about the relative decline of the British interest in it. In the earlier phase of the colonial system Great Britain had imported enough sugar to meet her requirements and to maintain a dominant position on the continent by the re-export of the surplus. Re-export, however, depended on monopoly or the underselling of competitors. In the face of cheap foreign supplies monopoly was out of the question, and competition was admittedly difficult. There seemed to be three possible ways of strengthening the competitive power of British sugar. (i) The duties on the commodity could be reduced; (ii) sugar could be removed from the list of enumerated articles and its direct export to foreign countries permitted; or (iii) costs of production could be lowered by enabling the British West Indies to secure necessaries at a cheaper rate. The first proposal involved a probable loss to the Exchequer, the second would jeopardise the gains from shipping, and the third meant the imposing of restrictions on the trade of the continental colonies. Barbados endeavoured to bring matters to an issue in 1730 by sending two petitions to the King on the question of inter-colonial trade. These were referred by the Privy Council to the Board of Trade. Counter petitions were received from the northern colonies. In the following year, however, the West Indian interest adopted an interesting change in tactics; they asked for leave to withdraw their petitions and placed their case before the House of Commons. The members of the Board of Trade had already shown that they appreciated the contentions of the northern colonists and recognised that it was their duty to consider the interests of the Empire as a whole. But in the House of Commons a strongly organised party could employ methods which might secure the victory for a sectional interest. Moreover, if an Act of Parliament restricting trade with the foreign Plantations were passed, it would be a weapon much

1 Representation to H.M. on the State of the Plantations in America, 8 Sept. 1721, printed in New York Col. Docs. v, 591–630.