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APPENDIX B: ‘Smith’s Thoughts on the State of the Contest with America, February 1778’ - Adam Smith, Glasgow Edition of the Works and Correspondence Vol. 6 Correspondence of Adam Smith 
Correspondence of Adam Smith, ed. E. C. Mossner and I. S. Ross, vol. VI of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1987).
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‘Smith’s Thoughts on the State of the Contest with America, February 1778’
In 1929 the William L. Clements Library, University of Michigan, Ann Arbor, acquired from a descendant of the heir of Alexander Wedderburn a collection of the latter’s papers. Among the 158 pieces of correspondence and documents in the Rosslyn MSS. or Wedderburn Collection is an item which G. H. Guttridge identified in 1933 as a memorandum by Adam Smith on the American problem.1
The arguments advanced for the identification are partly biographical, and partly textual and doctrinal. The memorandum is endorsed in Wedderburn’s hand: ‘Smiths Thoughts on the State of the Contest with America, February 1778’. Wedderburn and Smith were friends of thirty year’s standing by this date, if we accept Dugald Stewart’s account that they met in 1748.2 At the time of the memorandum, Wedderburn was North’s Solicitor–General and at the centre of the discussion on American policy. Moreover, he corresponded with Smith about American matters: Letters 159 and 185. Thus he was in a position to seek Smith’s advice on behalf of the Government. The need for consultation with experts at this period, following the dismaying news of Burgoyne’s surrender at Saratoga in October 1777, was expressed by North in a letter of 4 December: ‘[The] consequences of this most fatal event may be very important and serious and will certainly require some material change of system. No time shall be lost, and no person who can give good information left unconsulted in the present moment.’3
Smith was well qualified as such a person. During his professor’s days in Glasgow he had known merchants with direct experience of America. Subsequently, he had worked with Charles Townshend in 1766–7 when a budget was in preparation that vitally affected the relationship between the mother country and the American colonies, and at the same period he had been consulted by Lord Shelburne concerning the history of the colonies.4 During the last stages of the composition of WN and at the time of its publication he was much preoccupied with America. Hume wrote to him on 8 February 1776: ‘The Duke of Buccleugh tells me, that you are very zealous in American Affairs’ (Letter 149). Also, as is seen in Governor Pownall’s Letter (Appendix A), two parts of WN dealing with American problems and similar ones in Ireland commanded respect and added to his contemporary reputation (IV.vii, ‘Of Colonies’, and V.iii, ‘Of publick Debts’). Further, when the North government became concerned in October 1779 with Irish demands for free trade, Smith was called upon for advice (Letters 200–3).
The negative point that the memorandum has a topical notation, Imo, IIdo, IIItio, and IVto, which is not found elsewhere in Smith’s manuscripts, does not amount to much. The memorandum is in the hand of a copyist or amanuensis, which is in line with Smith’s practice with lengthy documents, e.g. the revisions sent on 10 October 1759 to Gilbert Elliot of Minto (Letter 40). The paper of the memorandum bears the Britannia watermark common on Smith manuscripts but also found on paper used in Government offices.5
In the memorandum, the writer describes himself as ‘a solitary philosopher’, which was indeed Smith’s condition from 1767 until 1773 when he lived in seclusion in Kirkcaldy and worked on WN, and again from November 1777 until January 1778 while he waited for his appointment as a Commissioner of Customs in Scotland. The latter period can be postulated as that of the composition of the memorandum. As a ‘solitary philosopher’, however, Smith was by no means cut off from the course of public business. It has been argued that his commissionership was as much a reward for his contribution to North’s budgets of 1777 and 1778 as for his service to the Buccleugh family through acting as tutor to the third Duke.6 The memorandum, then, is not to be seen as a mere academic exercise but as advocacy in the spirit of WN, perhaps the more persuasive because couched in the language of the professional student of politics and history.
This last point brings matters round to the text and the doctrines it embodies. Here, again, the reasons for detecting Smith’s authorship are strong. In vocabulary, phrasing, and sentence structure the memorandum is reminiscent of parallel passages in WN. Also, the doctrines expressed are strikingly similar. Only the thesis concerning the cost to the mother country of a monopoly trade is scanted in the memorandum, possibly because the stress is on political rather than economic considerations. The other chief topics are there, discussed in the same manner: the cost of past wars, the solution of electoral and representative problems, the basis of representation upon taxation, the role and ambition of the American leaders, and the expense of a military solution.7
There are two curiosities of thought in the memorandum that are not unworthy of the ingenuity of Smith. One is the proposal that to secure the independent Americans as allies of Britain, Canada should be restored to the French and the Floridas to Spain. Something like this suggestion, which smacks of Realpolitik, had occurred to Samuel Johnson in 1775: ‘one wild proposal is best answered by another. Let us restore to the French what we have taken from them. We shall see the colonists at our feet, when they have an enemy so near them’ (Taxation No Tyranny). The other is that ostensibly the old colonial relationship of 1763 should be resumed. Secretly, however, the American and British leaders would agree to sever gradually the link between the two countries. With reason the memorandum concludes that a scheme of such finesse would probably fail in the execution.
In the opinion of the author of the memorandum, the scheme offering most advantages to the British empire was that of a constitutional union with American representation. This scheme is alleged to have scarce a single advocate except for ‘a solitary philosopher’ like the writer. Now, Smith himself mentions the idea of a federal union some twelve times in WN, but he was not unique in presenting this idea. Franklin had written in 1754 that union would be ‘very acceptable to the colonies’ with certain reservations. As late as 1775 he had a lingering sympathy for the idea, but came round thereafter to the view that nothing would serve but complete emancipation.8 Lord Kames had suggested a ‘consolidating union’ in 1774, in Sketches of the History of Man (II.iv). Governor Pownall recommended a federal union in successive editions of Administration of the Colonies (1764, 1765, 1766, 1768, 1774, 1777), but on 2 December 1778, before the news of Saratoga was received, he told the House of Commons: ‘Until you shall be convinced that you are no longer sovereigns over America, but that the United States are an independent sovereign people—until you are prepared to treat with them as such—it is of no consequence at all, what schemes or plans of conciliation this side the House or that may adopt.’9
Yet, if the case for constitutional union had no chance of acceptance in connection with America, something would be added by the memorandum to the quantum of opinion in Government circles concerning the appropriate way to deal with a colony inclined to rebellion. In 1800 that opinion triumphed in the parliamentary union with Ireland, when the free trade argument won the support of the Irish commercial interest, Wedderburn still in Government at that date as Lord Chancellor Loughborough, sought to prejudice George III against the expected outcome of the union in the form of Catholic emancipation. That the measure was carried forward at all was due to the exertions of another ‘pupil’ of Smith, the younger Pitt, who certainly had the doctrines of WN in his head, if not the ‘Thoughts on the Contest with America’ which usefully supplement and amplify them.10
There seem to be four, and but four, possible ways in which the present unhappy war with our Colonies may be conceived to end.
First, it may be conceived to end in the complete submission of America; all the different colonies, not only acknowledging, as formerly, the supremacy of the mother country; but contributing their proper proportion towards defraying the expence of the general Government and defence of the Empire.
Secondly, it may be conceived to end in the complete emancipation of America; not a single acre of land, from the enterance into Hudson’s Straits to the mouth of the Mississipi, acknowledging the supremacy of Great Britain.
Thirdly, it may be conceived to end in the restoration, or something near to the restoration, of the old system; the colonies acknowledging the supremacy of the mother country, allowing the Crown to appoint the Governors, the Lieutenant–Governors, the secretaries and a few other officers in the greater part of them, and submitting to certain regulations of trade; but contributing little or nothing towards defraying the expence of the general Government and defence of the empire.11
Fourthly, and lastly, it may be conceived to end in the submission of a part, but of a part only, of America; Great Britain, after a long, expensive and ruinous war, being obliged to acknowledge the independency of the rest.
The probability of some of these events is, no doubt, very small; and it may not, perhaps, be worth while so say any thing about them. For the sake of order and distinctness, however, I shall say a few words concerning the advantages and disadvantages which might be expected from each.
Imo The first event might be conceived to be brought about, either altogether by Conquest, or altogether by treaty, or partly by the one, and partly by the other.
If the complete submission of America was brought about altogether by Conquest, a military government would naturally be established there; and the continuance of that submission would be supposed to depend altogether upon the continuance of the force which had originally established it. But a military government is what, of all others, the Americans hate and dread the most. While they are able to keep the field they never will submit to it; and if, in spite of their utmost resistance, it should be established, they will, for more than a century to come, be at all times ready to take arms in order to overturn it. The necessary violence of such a government would render them less able, than they otherwise would be, to contribute towards the general expence of the empire. Their dislike to it would render them less willing. Whatever could be extorted from them, and probably much more than could be extorted from them, would be spent in maintaining that military force which would be requisite to command their obedience. By our dominion over a country, which submitted so unwillingly to our authority, we could gain scarce anything but the disgrace of being supposed to oppress a people whom we have long talked of, not only as of our fellow subjects, but as of our brethren and even as of our children.
But whatever may be the impracticability of bringing about the complete submission of America in this manner; it arises altogether from the resistance of America. A plan of this kind would be agreeable to the present humour of Great Britain where, if you except a few angry speeches in Parliament, it would meet with scarce any opposition.
If the complete submission of America was brought about altogether by treaty, the most perfect equality would probably be established between the mother country and her colonies; both parts of the empire enjoying the same freedom of trade and sharing in their proper proportion both in the burden of taxation and in the benefit of representation. No expensive military force would, in this case, be necessary to maintain the allegiance of America. The principal security of every government arises always from the support of those whose dignity, authority and interest, depend upon its being supported. But the leading men of America, being either members of the general legislature of the empire, or electors of those members, would have the same interest to support the general government of the empire which the Members of the British legislature and their electors have at present to support the particular government of Great Britain. The necessary mildness of such a government, so exactly resembling that of the mother country, would secure the continuance of the prosperity of the colonies. They would be able to contribute more largely; and, being taxed by their own representatives, they would be disposed to contribute more willingly.
That the complete submission of America, however, should be brought about by treaty only, seems not very probable at present. In their present elevation of spirits, the ulcerated minds of the Americans are not likely to consent to any union even upon terms the most advantageous to themselves. One or two campaigns, however, more successful than those we have hitherto made against them, might bring them perhaps to think more soberly upon the subject of their dispute with the mother country: And if, in this case, the Parliament and people of Great Britain appeared heartily to wish for a union of this kind, it is not, perhaps, impossible but that, partly by conquest, and partly by treaty, it might be brought about. Unfortunately, however, the plan of a constitutional union with our colonies and of an American representation seems not to be agreeable to any considerable party of men in Great Britain. The plan which, if it could be executed, would certainly tend most to the prosperity, to the splendour, and to the duration of the empire, if you except here and there a solitary philosopher like myself, seems scarce to have a single advocate.12 A government which has failed in accomplishing, what seemed to them to be very easy, is, perhaps, with some reason, afraid to undertake what would certainly prove very difficult. After the unavoidable difficulty, however, of reconciling the discordant views both of societies and of individuals, whose interests might be affected by this union; the greatest difficulty which I have heard of, as resulting from the nature of the thing, is that of judging concerning the controverted elections which might happen in that distant country. A Worcestershire election of which the witnesses were to be brought from America, it must be acknowledged, would prove an endless business.13 There should not, however, seem to be any great inconveniency, or such as could essentially alter the constitution of Parliament, in establishing particular courts of justice for deciding such controverted elections as might occur, either in that or in the other parts of the empire. The genius of the present election Committees of the house of Commons is in reality more different from that of the antient judicature of the whole house; than the genius of such courts of justice might be from that of those election Committees.14
IIdo The complete emancipation of America from all dependency upon Great Britain, would at once deliver this country from the great ordinary expence of the military establishment necessary for maintaining her authority in the colonies, and of the naval establishment necessary for defending her monopoly of their trade. It would at once deliver her likewise from the still greater extraordinary expence of defending them in time of war; whether that war was undertaken upon their account or upon our own. The two most expensive wars which Great Britain ever carried on, the Spanish war which began in 1739, and the French war which began in 1755, were undertaken, the one chiefly, the other altogether on account of the colonies. During the reign of the late king, and that of his royal father, we used to complain, that our connexion with Hanover deprived us of the advantages of our insular situation, and involved us in the quarrels of other nations, with which we should, otherwise, have had nothing to do. But we, surely, have had much more reason to complain, upon the same account, of our connexion with America. If in those days it was the general wish of the people that Hanover might some time or other be separated from the Crown of Great Britain; it ought to be much more their wish now that America should be so. If, with the complete emancipation of America, we should restore Canada to France and the two Floridas to Spain; we should render our colonies the natural enemies of those two monarchies and consequently the natural allies of Great Britain. Those splendid, but unprofitable acquisitions of the late war, left our colonies no other enemies to quarrel with but their mother country. By restoring those acquisitions to their antient masters, we should certainly revive old enmities, and probably old friendships. Even without this restitution, tho’ Canada, Nova Scotia, and the Floridas were all given up to our rebellious colonies, or were all conquered by them, yet the similarity of language and manners would in most cases dispose the Americans to prefer our alliance to that of any other nation. Their antient affection for the people of this country might revive, if they were once assured that we meant to claim no dominion over them; and if in the peace which we made with them, we insisted upon nothing, but the personal safety, and the restoration to their estates and possessions, of those few unfortunate individuals who have made some feeble, but ineffectual efforts to support our authority among them. By a federal union with America we should certainly incur much less expense, and might, at the same time, gain as real advantages, as any we have hitherto derived from all the nominal dominion we have ever exercised over them.
But tho’ this termination of the war might be really advantageous, it would not, in the eyes of Europe appear honourable to Great Britain; and when her empire was so much curtailled, her power and dignity would be supposed to be proportionably diminished. What is of still greater importance, it could scarce fail to discredit the Government in the eyes of our own people, who would probably impute to mal–administration what might, perhaps, be no more than the unavoidable effect of the natural and necessary course of things. A government which, in times of the most profound peace, of the highest public prosperity, when the people had scarce even the pretext of a single grievance to complain of, has not always been able to make itself respected by them; would have every thing to fear from their rage and indignation at the public disgrace and calamity, for such they would suppose it to be, of thus dismembering the empire.
IIItio The restoration, or something near to the restoration, of the old system would sufficiently preserve, both in the eyes of foreign nations and of our own people, the credit and honour of the government. Our own people seem to desire this event so ardently, that what might be the effect of mere weakness and inability, would by them be imputed to wisdom, tho’ to late wisdom, and moderation. But this event would not preserve the honour of the British Government in the eyes of the Americans. After so complete a victory, as even this event would amount to; after having, not only felt their own strength, but made us feel it, they would be ten times more ungovernable than ever; factious, mutinous and discontented subjects in time of peace; at all times, upon the slightest disobligation, disposed to rebel; and, in the case of a French or Spanish war, certainly rebelling. This event, however, does not at present seem very probable. The Americans, I imagine, would be less unwilling to consent to such a union with Great Britain as Scotland made with England in 1707; than to the restoration, or to anything like the restoration, of the old system. The leading men of America, we may believe, wish to continue to be the principal people in their own country. After a union with Great Britain, they might expect to continue to be so; in the same manner as the leading men of Scotland continued to be the principal people of their own country after the union with England.15 But after the restoration, or any thing like the restoration, of the old system, the appointment of the principal people among them, of their Governors, Lieutenant Governors, etc., will revert to the Crown of Great Britain.
The Americans, it has been said, when they compare the mildness of their old government with the violence of that which they have established in its stead, cannot fail both to remember the one with regret and to view the other with detestation. That these will be their sentiments when the war is over and when their new government, if ever that should happen, is firmly established among them, I have no doubt. But while the war they will impute, and with appearance of reason too, the greater part of the oppressions which they suffer to the necessity of the times. Those oppressions will serve to animate them, not so much against their own leaders, as against the government of the Mother country to which they will impute the causes of that necessity. It was not till some time after the conclusion of the civil war that the people of England began to regret the loss of that regal Government which they had rashly overturned, and which was happily restored to them by such a concurrence of accidental circumstances as may not, upon any similar occasion, ever happen again.
An apparent restoration of the old system, so contrived as to lead necessarily, but insensibly to the total dismemberment of America, might, perhaps, satisfy both the people of Great Britain and the leading men of America; the former mistaking, and the latter understanding the meaning of the scheme. It might, at the same time, gradually bring about an event which, in the present distressful situation of our affairs, is, perhaps, of all those which are likely to happen, the most advantageous to the state. But the policy, the secrecy, the prudence necessary for conducting a scheme of this kind, are such as, I apprehend, a British Government, from the nature and essence of our constitution, is altogether incapable of.
IVto The submission or conquest of a part, but of a part only, of America, seems of all the four possible terminations of this unhappy war, by far the most probable; and unfortunately it is the termination which is likely to prove most destructive to Great Britain. The defence of that part, from the attacks of the other colonies, would require a much greater military force than all the taxes which could be raised upon it could maintain. The neighbourhood of that part would keep alive the jealousy and animosity of all the other provinces, and would necessarily throw them into the alliance of the enemies of Great Britain. If all the seventeen provinces of the Netherlands had completely emancipated themselves from the dominion of Spain, their situation, as soon as their independency was acknowledged, would have rendered them the natural enemies of France and consequently the natural allies of Spain. Spain would have suffered little more than the mortification of losing the dominion of a great country, which, for some years before the revolt, had never paid the whole expence of its own government. To compensate this mortification, she would have gained the solid advantage of a powerful, and probably a faithful alliance, against the most formidable of all her enemies. Whoever considers with attention the causes of the declension of the Spanish Monarchy, will find that it was owing, more to the recovery of the ten, than to the loss of the seven united provinces. Those ten provinces, a much richer and more fertile country than any part of America; and at that time more populous than all the thirteen united colonies taken together, never paid the tenth part of the expence of the armies which Spain was obliged to maintain in them. The neighbourhood of those armies rendered the seven united provinces, for about a hundred years together; that is, till France had conquered the greater part of the ten provinces, the constant allies of France and the constant enemies of Spain.
[1 ]The MS. in question is Wedderburn Papers vol. 3, item 2; it was published by G. H. Guttridge, American Historical Review xxxviii (1933), 714–20 and again by Fay 110–14. Wedderburn’s heir was Sir James St. Clair Erskine (2nd Earl of Rosslyn), and the heir’s descendant was Captain John Erskine–Wemyss: Howard H. Peckham, A Guide to the Manuscript Collections in the William L. Clements Library (University of Michigan Press, Ann Arbor, 1942), 264–8.
[2 ]‘Account of the Life and Writings of Adam Smith’, Works of Smith, ed. Stewart (1811), v. 410. See Letters 15 and 163 for evidence about the degree of friendship. Smith wrote articles for the Edinburgh Review which Wedderburn edited in 1755, and they were founder members of the Select Society, which debated in 1754 such topics as union with Ireland: John, Lord Campbell, Lives of the Chancellors (1868), vii. 358–61, 365–9.
[3 ]Geo. III Corr. ii. 504.
[4 ]See Letter 302, and Scott, ‘Adam Smith at Downing Street, 1766–7’, 79–89; also Letter 101. Adam Smith’s attitudes to the colonies and the options open to the British Government are summarized in Donald Winch, Classical Political Economy and Colonies (London, 1965), 14–24.
[5 ]Scott 60, 321–2; R. L. Meek and A. S. Skinner, Economic Journal 83 (1973), 1104.
[6 ]Smith ascribed his appointment to the ‘interest of the Duke of Buccleuch’, but see Rae 320–1, for the argument that North valued Smith’s advice, his evidence being the 1777 taxes on man–servants and property sold by auction, and the 1778 malt tax and duty on inhabited houses: compare WN V.ii.e.8, g,12, k.49. North’s budget speech of 1777 acknowledged the support given by Smith for added impositions: Cobbett’s Parliamentary History (1814), xix. 241–9. See also John Ehrman, The Younger Pitt (1969), i. 249.
[7 ]Parallel passages are extensively reported in the Glasgow Edition WN.
[8 ]Verner W. Crane, Benjamin Franklin’s Letters to the Press (University of North Carolina Press, Chapel Hill, 1950), 72, n. 28, and Franklin, Papers, ed. Willcox et al. (Yale University Press, New Haven and London, 1972), xv. 238–9.
[9 ]Quoted at HP iii. 318.
[10 ]Rae 405; J. Steven Watson, The Reign of George III: 1760–1815 (Oxford, 1960), 399–402.
[11 ]WN IV.vii.c. 64–7; see, also Letter 221.
[12 ]At WN IV.vii.c.60, Smith urges the advantages of the emancipation of the colonies in a similar fashion, but avers ‘the most visionary enthusiast would scarce be capable of proposing such a measure, with any serious hopes at least of its ever being adopted’.
[13 ]Worcestershire was one of twelve counties which never went to the poll from 1754 to 1790, but in 1754 Oxfordshire had a celebrated election case involving a double return of two Whigs and two Tories: HP i. 9, 178–9.
[14 ]Grenville’s Act of 1770 provided that each election petition should be referred to a Committee of the House of Commons chosen by lot. The measure was made a permanent one in 1774: HP i. 179.
[15 ]Cf. WN IV.viii.c.75; but see Letter 50’s account of the short–run disadvantages of the union of 1707, and WN V.iii.89 for the argument that the union freed the Scottish people from the an oppressive aristocracy.