After showing that the gold and silver mines of their colonial empires had neither augmented the capital nor promoted the industry of the two “beggarly countries” of Spain and Portugal, he carefully distinguishes between the natural advantages of a colonial trade and the artificial disadvantages caused by the policy of monopoly, that is by the endeavours of the mother country to restrict that trade to her own merchants. If the governments of Europe had been content to found colonies, and see that they were well and justly administered, the full benefit of opening up new countries, and of interchanging their products, would have been felt. But unhappily every country that had acquired foreign possessions sought to engross their trade, thus injuring its own people and the colonial or subject race by checking the natural growth of commerce, and forcing it into unnatural channels. This so-called mercantilist policy was therefore just as disastrous to commerce as to morals. “To found a great empire for the sole purpose of raising up a people of customers, may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers; but extremely fit for a nation whose government is influenced by shopkeepers. Such statesmen, and such statesmen only, are capable of fancying that they will find some advantage in employing the blood and treasure of their fellow-citizens, to found and maintain such an empire.” Far worse in their results than the regular conquests of government, were the irregular acquisitions of companies formed for trading purposes; and one of the masterly chapters added to the third edition of his book (1784) traces the misery, injustice, and commercial failure which had attended the rule of the East India Company. “It is a very singular government, in which every member of the administration wishes to get out of the country, and consequently to have done with the government, as soon as he can, and to whose interest, the day after he has left it, and carried his whole fortune with him, it is perfectly indifferent though the whole country was swallowed up by an earthquake.” What, then, was the practical policy which Smith recommended to the British Government? It had two main ends in view. First, to pay off the debt; secondly, to lessen and gradually remove all taxes which raised the prices of articles consumed by the labouring classes, or interfered with the free course of trade. Writing as he did, in 1775, on the eve of war, his thoughts naturally turned to the colonies, then so rich and prosperous, which had contributed nothing to the income but so heavily to the expenditure and debt of the British crown.