" Adam Smith had raised a doubt as to the wisdom
of the end. The American Revolution had raised a doubt as to the
wisdom of the means. Yet, with significant changes, the old
colonial system lasted for full two generations after 1776.
In the second British Empire, which rose after the loss of the
first in 1783, the means to the old end were altered. To secure
control and to prevent disaffection and democratic folly, the
authorities relied not merely on their own powers but on the
cooperation of friendly classes and interests in the colonies
themselves. Their direct control was exercised in many ways. In
last reserve there was the supreme authority of King and
Parliament to bind the colonies by treaty and by law and the
right to veto any colonial enactment. This was as before the
Revolution. One change lay in the renunciation in 1778 of the
intention to use the supreme legislative power to levy taxes,
though the right to control the fiscal system of the colonies in
conformity with imperial policy was still claimed and practised.
In fact, far from seeking to secure a direct revenue, the British
Government was more than content to pay part of the piper's fee
for the sake of being able to call the tune. "It is considered by
the Well wishers of Government," wrote Milnes, Lieutenant
Governor of Lower Canada, in 1800, "as a fortunate Circumstance
that the Revenue is not at present equal to the Expenditure.
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