During the eighteenth century the supremacy of British trade and the command of the ocean were again and again challenged; but Britain always emerged from the struggle with extended dominion and trade, and only from the American War with serious loss.
France and Spain from 1739 to 1748, and again from 1756 to 1763, were at war with Britain directly or indirectly, because of the expansion of her trade. On each occasion these countries were at the same time engaged in continental wars, and on each occasion Britain supported their opponents by the profits of her commerce, so that their resources were exhausted by land wars, while such commerce as had sprung up tended more and more to fall to Britain. French commerce had been growing up in India under the French East India Company, in Canada and in the West Indies, but it was left entirely unsupported by a navy, and these lands rapidly became either British altogether or became so dominated by Britain that their trade was to her advantage.
Hitherto British possessions outside the British Isles had been for the most part merely trading-stations or points of call for the navy. The ideal had been rather the Phcenician than the Roman; trade, not conquest. But there had been gradually growing up also real colonies, where men of British birth had settled with no intention of returning to their native land. On the eastern seaboard of North America open to the ocean, with a climate more extreme indeed than that of Britain, but more temperate than anywhere else on the east coast, they had founded a New England, and a New Scotland added by conquest had also been settled, while southwards and westwards stretched•the beginnings of New York, the old colony of Virginia, and the newer colonies of the Carolinas and Georgia. As these had already a population of two million people and seemed to require room for expansion, it was natural that they should come into conflict with Frenchmen, who had entered the continent by way of the great river systems of the St. Lawrence and Mississippi, and who, though fewer than one-twentieth of the British, were endeavouring to control the whole vast area so easily reached by these magnificent waterways. Cut off from France by the navy of Britain, Canada became a British dominion.
In India, too, along with rivalries in trade there had been growing up a rivalry as to land conquest, but un supported by a fleet the French aims came to nothing. At the end of the Seven Years War France was indeed allowed to retain her trading-stations, but the conquests passed to great Britain, and even the trading-stations became of less account as the great proportion of the trade naturally went to the neighbouring British ports.
Thus by 1763, partly peacefully as colonies, partly as conquests, great areas of land had come under British rule, and the kingdom of Great Britain had become in effect the British Empire, while British trade was still increasing.
But, just as mistakes were made when trade suddenly expanded at the time of the South Sea Bubble, so mistakes were made with regard to the government of the colonies. From the nature of the case these lands required more from Britain than they sent to Britain; there was always a balance of trade against them. In other words, energy was being drained away. This required to be made 'up in other ways. It was made up by trading illegally with the Spanish colonies to the south, and supplying them with much-needed products which they could not grow. Irritation was started by interfering with this arrangement, directly by forbidding the illegal trade and stopping it by men-of-war, and indirectly by requiring the colonies to contribute taxes which they could ill spare to the English Exchequer. Though the incidence of these ,taxes eventually became the test question, it was the stopping of the trade which began the trouble.
By this time France had realized that her schemes of land expansion had always been thwarted by Britain's sea-power, so that now, when Britain's resources were being drained by a land war on the American continent, seemed the time to challenge that power again; further, France recognized the fact that on the sea lay Britain's strength, and refrained from becoming entangled in European wars which Britain endeavoured to excite. Thus Britain was taken at a disadvantage. During years of peace, too, when every penny not spent on obviously commercial pursuits seemed wasted, the British navy had been allowed to become weaker, and when war was declared the allied fleets of France and Spain were actually superior. Yet even so Britain lost only 1 the American colonies, for the past history— controlled by the geography—counted. In the one navy there was a sea tradition, which was to boot largely a tradition of victory; in the other there was an unfamiliarity with the sea. Though mistakes were made on both sides, yet the farther-reaching mistakes were made by the allies, and at the peace in 1783 Britain obtained remarkably favourable terms, as France was again suffering from financial exhaustion.