How Adam Smith grappled with issue of independence

A RARE letter from Scotland’s “father of modern economics” Adam Smith to the British statesman William Eden – written in the aftermath of the loss of Britain’s American colonies – has surfaced at an auction house.

Scotlands father of modern economics Adam Smith circa 1765. Picture: Getty

The letter is expected to fetch up to £40,000 when it goes under the hammer on 18 June at Bonhams in London.

In it, Smith even tells how his mail goes astray when it is sent to other Adam Smiths.

Kirkcaldy-born Smith was appointed to a post as commissioner of customs in Scotland in 1778 following the success of his Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776.

In the letter, written from Edinburgh on Tuesday 9 December, 1783, Smith promises Eden he will endeavour to answer “all the questions you have done me the very great honour to ask me concerning our future Commercial connexions with our thirteen revolted Colonies”.

Smith opens with an apology for the delay in submitting reports as requested, adding: “The report of the board of Customs here, concerning the proper method of preventing smuggling, is likely to be so perfectly agreeable to my own ideas, that I shall not anticipate it by giving you any account of them. You will receive it in a day or two after the accounts.”

The letter was written three months after the independence of the United States of America was formally recognised by Great Britain.

Spurred on by the secession of the 13 American colonies, the prime minister William Pitt the Younger, a great admirer of Smith, had asked Eden to look into how Britain and France – which had lost her own colonies in Canada – could open up trade across the English Channel to replace those former captive markets.

Eden went on to successfully negotiate the French Commercial Treaty, or the Eden Treaty as it became known.

The treaty was signed between Britain and France in 1786 and briefly ended the economic war between the countries.

Smith signs off by asking for further correspondence to be addressed to “Commission of Customs”, due to previous confusion.

Smith wrote: “I once had the vanity to flatter myself that I was the only Adam Smith in the world; but to my unspeakable mortification, there are two or three others of the same name in this town, and my letters are sometimes gone wrong.”