Monopolies, Privileges and Immunities — England and its American Colonies

Monopolies figure greatly in American history, beginning even before the first English colony was settled in Massachusetts.  England has been a trading nation since the breakdown of feudal estates and the settlement and growth of towns.  Queen Elizabeth I was often short of money during her long reign and used what were called royal prerogatives to raise cash for her personal affairs.  She used her prerogatives to grant monopolies of various kinds to her subjects who were capable of establishing operations and paying rents to the Queen thereafter.  This would of course involve putting previously working tradesmen out of work in that line of trade.    The Queen-granted rights were enforceable and extant tradesmen were put out of work.  Such is the shabby beginnings of monopolies (also called privileges).  English subjects hated monopolies, but nothing came of that until much later.  

King James I was much less popular in England than was Elizabeth I during her reign.  He was also much less wealthy than was Elizabeth to begin with, and was known as “careless” with his spending.  Parliament also had reasons for liking James less than Elizabeth, so gave fewer and smaller allowances to James than what was received by Elizabeth.  James used prerogatives extensively.  One of James’ clients was his butler who was granted a monopoly to sell playing cards in England.  Years later an entrepreneur started producing and selling playing cards, illegally. The Butler sued to have him stopped.  The case is Darcy v. Allen (1603).  It was heard in the Court of Common Law, and Edward Coke was Attorney General for the government.  The verdict was that monopolies were per se illegal under the Common Law.  From Edward Coke’s account of the case we know royal grants were not to burden the general public.  Furthermore, Coke found that every Englishman had a right to earn a living and to conduct a trade suitable to his skills and which would support his family, provide wealth to the nation, prevent idleness, improve quality of workmanship, and expand production for the public good.  Monopolies were anathema to free trade, and the general public was strongly against them. Parliament finally passed The Monopolies Act in 1625.  

While monopolies were illegal in England if conducted privately, Parliament had few scruples about a state chartered company having monopoly protection and chartered the British East India Company in 1600.  It was destined to be a colossus in trade and having its own army and navy to coerce the reluctant and retard competitors (Rule Britannia!)     

The Seven Years War (1756) was a global war involving North America and the entire continent of Europe.  Great Britain and France had made war against each other for centuries, but the Seven Years War drew into the fray allies to each of Britain and France.  By 1763 the war ended with Britain gaining France’s territory in North America and concentration of all trade between North America and Europe.  Britain’s American colonies were involved only in warfare in North America.  Even though the American’s fought most of the war that was in the colonies Parliament wanted to tax the colonies for more than their “share.”  Furthermore, taxation continued after the war was settled and was extended to more objects, which is usual with taxation.  England found it expedient to monopolize all trade between Europe and the colonies, which had two affects between England and the colonies. Besides growing animosity the Americans felt it expedient to protest and become disobedient. The colonies smuggled goods into North America extensively along the Atlantic coast.  The Boston Tea Party was also a protest against raising the price of tea and dealing only with an exclusive monopoly seller – the British East India Company, which by that time dealt in over one-half of all world trade.  

The Americans in 1787 were presented with two conclusions about monopolies that they saw firsthand from their experience in the colonies.  Parliament outlawed monopolies for reasons of justice and public policy, but Parliament was unable to control itself when it came to establishing power and empire through monopolizing trade.  What did England learn?  The lesson was not applied to those who established Britain’s primacy, but carelessness at home leads to blunders in foreign affairs, and eventual correction beginning a century later.                                                                                             July 25, 2021