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     Both these kinds of monopolies derange more or less the

natural distribution of the stock of the society; but they do not

always derange it in the same way。

     Monopolies of the first kind always attract to the

particular trade in which they are established a greater

proportion of the stock of the society than what would go to that

trade of its own accord。

     Monopolies of the second kind may sometimes attract stock

towards the particular trade in which they are established; and

sometimes repel it from that trade according to different

circumstances。 In poor countries they naturally attract towards

that trade more stock than would otherwise go to it。 In rich

countries they naturally repel from it a good deal of stock which

would otherwise go to it。

     Such poor countries as Sweden and Denmark; for example;

would probably have never sent a single ship to the East Indies

had not the trade been subjected to an exclusive company。 The

establishment of such a company necessarily encourages

adventurers。 Their monopoly secures them against all competitors

in the home market; and they have the same chance for foreign

markets with the traders of other nations。 Their monopoly shows

them the certainty of a great profit upon a considerable quantity

of goods; and the chance of a considerable profit upon a great

quantity。 Without such extraordinary encouragement; the poor

traders of such poor countries would probably never have thought

of hazarding their small capitals in so very distant and

uncertain an adventure as the trade to the East Indies must

naturally have appeared to them。

     Such a rich country as Holland; on the contrary; would

probably; in the case of a free trade; send many more ships to

the East Indies than it actually does。 The limited stock of the

Dutch East India Company probably repels from that trade many

great mercantile capitals which would otherwise go to it。 The

mercantile capital of Holland is so great that it is; as it were;

continually overflowing; sometimes into the public funds of

foreign countries; sometimes into loans to private traders and

adventurers of foreign countries; sometimes into the most

round…about foreign trades of consumption; and sometimes into the

carrying trade。 All near employments being completely filled up;

all the capital which can be placed in them with any tolerable

profit being already placed in them; the capital of Holland

necessarily flows towards the most distant employments。 The trade

to the East Indies; if it were altogether free; would probably

absorb the greater part of this redundant capital。 The East

Indies offer a market for the manufactures of Europe and for the

gold and silver as well as for several other productions of

America greater and more extensive than both Europe and America

put together。

     Every derangement of the natural distribution of stock is

necessarily hurtful to the society in which it takes place;

whether it be by repelling from a particular trade the stock

which would otherwise go to it; or by attracting towards a

particular trade that which would not otherwise come to it。 If;

without any exclusive company; the trade of Holland to the East

Indies would be greater than it actually is; that country must

suffer a considerable loss by part of its capital being excluded

from the employment most convenient for that part。 And in the

same manner; if; without an exclusive company; the trade of

Sweden and Denmark to the East Indies would be less than it

actually is; or; what perhaps is more probable; would not exist

at all; those two countries must likewise suffer a considerable

loss by part of their capital being drawn into an employment

which must be more or less unsuitable to their present

circumstances。 Better for them; perhaps; in their present

circumstances; to buy East India goods of other nations; even

though they should pay somewhat dearer; than to turn so great a

part of their small capital to so very distant a trade; in which

the returns are so very slow; in which that capital can maintain

so small a quantity of productive labour at home; where

productive labour is so much wanted; where so little is done; and

where so much is to do。

     Though without an exclusive company; therefore; a particular

country should not be able to carry on any direct trade to the

East Indies; it will not from thence follow that such a company

ought to be established there; but only that such a country ought

not in these circumstances to trade directly to the East Indies。

That such companies are not in general necessary for carrying on

the East India trade is sufficiently demonstrated by the

experience of the Portuguese; who enjoyed almost the whole of it

for more than a century together without any exclusive company。

     No private merchant; it has been said; could well have

capital sufficient to maintain factors and agents in the

different ports of the East Indies; in order to provide goods for

the ships which he might occasionally send thither; and yet;

unless he was able to do this; the difficulty of finding a cargo

might frequently make his ships lose the season for returning;

and the expense of so long a delay would not only eat up the

whole profit of the adventure; but frequently occasion a very

considerable loss。 This argument; however; if it proved anything

at all; would prove that no one great branch of trade could be

carried on without an exclusive company; which is contrary to the

experience of all nations。 There is no great branch of trade in

which the capital of any one private merchant is sufficient for

carrying on all the subordinate branches which must be carried

on; in order to carry on the principal one。 But when a nation is

ripe for any great branch of trade; some merchants naturally turn

their capitals towards the principal; and some towards the

subordinate branches of it; and though all the different branches

of it are in this manner carried on; yet it very seldom happens

that they are all carried on by the capital of one private

merchant。 If a nation; therefore; is ripe for the East India

trade; a certain portion of its capital will naturally divide

itself among all the different branches of that trade。 Some of

its merchants will find it for their interest to reside in the

East Indies; and to employ their capitals there in providing

goods for the ships which are to be sent out by other merchants

who reside in Europe。 The settlements which different European

nations have obtained in the East Indies; if they were taken from

the exclusive companies to which they at present belong and put

under the immediate protection of the sovereign; would render

this residence both safe and easy; at least to the merchants of

the particular nations to whom those settlements belong。 If at

any particular time that part of the capital of any country which

of its own accord tended and inclined; if I may say so; towards

the East India trade; was not sufficient for carrying on all

those different branches of it; it would be a proof that; at that

particular time; that country was not ripe for that trade; and

that it would do better to buy for some time; even at a higher

price; from other European nations; the East India goods it had

occasion for; than to import them itself directly from the East

Indies。 What it might lose by the high price of those goods could

seldom be equal to the loss which it would sustain by the

distraction of a large portion of its capital from other

employments more necessary; or more useful; or more suitable to

its circumstances and situation; than a direct trade to the East

Indies。

     Though the Europeans possess many considerable settlements

both upon the coast of Africa and in the East Indies; they have

not yet established in either of those countries such numerous

and thriving colonies as those in the islands and continent of

America。 Africa; however; as well as several of the countries

comprehended under the general name of the East Indies; are

inhabited by barbarous nations。 But those nations were by no

means so weak and defenceless as the miserable and helpless

Americans; and in proportion to the natural fertility of the

countries which they inhabited; they were besides much more

populous。 The most barbarous nations either of Africa or of the

East Indies were shepherds; even the Hottentots were so。 But the

natives of every part of America; except Mexico and Peru; were

only hunters; and the difference is very great between the number

of shepherds and that of hunters whom the same extent of equally

fertile territory can maintain。 In Africa and the East Indies;

therefore; it was more difficult to displace the natives; and to

extend the European plantations over the greater part of the

lands of the original inhabitants。 The genius of exclusive

companies; besides; is unfavourable; it has already been

observed; to the growth of new colonies; and has probably been

the principal cause of the little progress which they have made

in the East Indies。 The Portuguese carried on the trade both to

Africa and the East Indies without any exclusive companies; and

their settlements at Congo; Angola; and Benguela on the coast of

Africa; and at Goa in the East Indies; though much depressed by

superstition and every sort of bad government; yet bear some

faint resemblance to the colonies of America; and are partly

inhabited by Portuguese who have been established there for

several generations。 The Dutch settlements at the Cape of Good

Hope and at Batavia are at present the most considerable colonies

which the Europeans have established either in Africa or in the

East Indies; and both these settlements are peculiarly fortunate

in their situation。 The Cape of Good Hope was inhabited by a race

of people almost as barbarous and quite as incapable of defending

themselves as the natives of America。 It is besides the halfway

house; if one may say so; between Europe and the East Indies; at

which almost every European ship makes some stay; both in going

and

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