|Research Points Needed|
|Building Needed||Tax Office|
Tempting though it may be to exploit colonies mercilessly, income is often improved by sensible and controlled investment.
Colonial funding increases the income from trade nodes. Colonial possessions and the trade they generate are vital to great empires. The nation that controls the flow of trade wealth from all corners of the world controls the flow of cash to its rivals. Trade pays for wars: an under-funded war effort will fail. By investing in the good governance and physical assets of overseas colonies, the trade generated by those colonies is increased many fold. It is simply good business sense to make sure that there are docks as well as law and order throughout an empire.
British involvement in the Peninsular War has its origins in trade. Following Nelson’s victory at Trafalgar in 1805, Napoleon sought to cripple Britain by prohibiting British trade with Europe. His “Continental System” apparently stopped all British trade with the European mainland. The Portuguese, however, saw no reason to obey French rules and carried on trading with the British. Napoleon demanded that Portugal suspend trade; the Portuguese cheerfully ignored his ultimatum, and Napoleon’s armies invaded in 1807. Britain now had a land ally worth supporting with troops: the British army arrived in the Peninsular in 1808 by sea, and marched into France, in company with Portuguese troops, after five years of hard fighting.
Colonial funding's 10% increase to military supplies essentially means that merchantmen are 10% more profitable. Considering how this technology is avaialble for research immediately from the beginning of The Peninsular Campaign, colonial funding can have long-reaching benefits. The lands of the Iberian peninsula are initially very poor, and tax income in the early game is often negligible; merchantmen and the wealth they carry may be critical for keeping a faction afloat financially.