The Online Library of Liberty

A project of Liberty Fund, Inc.

• Book Iv
• Chapter IV: Of Drawbacks
• Chapter V: Of Bounties
• Digression Concerning the Corn Trade and Corn Laws 1
• Chapter VI: Of Treaties of Commerce
• Chapter VII: Of Colonies
• Part First: of the Motives For Establishing New Colonies
• Part Second: Causes of the Prosperity of New Colonies
• Part Third: of the Advantages Which Europe Has Derived From the Discovery of America, and From That of a Passage to the East Indies By the Cape of Good Hope
• Chapter VIII: Conclusion of the Mercantile System 1
• Chapter IX: Of the Agricultural Systems, Or of Those Systems of Political Œconomy, Which Represent the Produce of Land As Either the Sole Or the Principal Source of the Revenue and Wealth of Every Country
• Book V: Of the Revenue of the Sovereign Or Commonwealth
• Chapter I: Of the Expences of the Sovereign Or Commonwealth
• Part I: Of the Expence of Defence
• Part II: Of the Expence of Justice
• Part III: Of the Expence of Public Works and Public Institutions
• Article I: Of the Public Works and Institutions For Facilitating the Commerce of the Society And, First, of Those Which Are Necessary For Facilitating Commerce In General 1
• Article II: Of the Expence of the Institutions For the Education of Youth 1
• Article III: Of the Expence of the Institutions For the Instruction of People of All Ages
• Part IV: Of the Expence of Supporting the Dignity of the Sovereign
• Conclusion
• Chapter II: Of the Sources of the General Or Public Revenue of the Society
• Part I: Of the Funds Or Sources of Revenue Which May Peculiarly Belong to the Sovereign Or Commonwealth
• Part II: Of Taxes
• Article I: Taxes Upon Rent. Taxes Upon the Rent of Land
• Article II: Taxes Upon Profit, Or Upon the Revenue Arising From Stock
• Appendix to Articles I and Ii Taxes Upon the Capital Value of Land, Houses, and Stock
• Article III: Taxes Upon the Wages of Labour
• Article IV: Taxes Which, It Is Intended, Should Fall Indifferently Upon Every Different Species of Revenue
• Chapter III: Of Public Debts
• Appendix 1

CHAPTER V

OF BOUNTIES

BOUNTIES upon exportation are, in Great Britain, frequentlyForeigners cannot be forced to buy our goods, so it is proposed to pay them to do so. petitioned for, and sometimes granted to the produce of particular branches of domestic industry. By means of them our merchants and manufacturers, it is pretended, will be enabled to sell their goods as cheap or cheaper than their rivals in the foreign market. A greater quantity, it is said, will thus be exported, and the balance of trade consequently turned more in favour of our own country. We cannot give our workmen a monopoly in the foreign, as we have done in the home market. We cannot force foreigners to buy their goods, as we have done our own countrymen. The next best expedient, it has been thought, therefore, is to pay them for buying. It is in this manner that the mercantile system proposes to enrich the whole country, and to put money into all our pockets by means of the balance of trade.

Bounties, it is allowed, ought to be given to those branches of tradeBounties are not demanded for any but losing trades, only which cannot be carried on without them. But every branch of trade in which the merchant can sell his goods for a price which replaces to him, with the ordinary profits of stock, the whole capital employed in preparing and sending them to market, can be carried on without a bounty. Every such branch is evidently upon a level with all the other branches of trade which are carried on without bounties, and cannot therefore require one more than they. Those trades only require bounties in which the merchant is obliged to sell his goods for a price which does not replace to him his capital, together with the ordinary profit; or in which he is obliged to sell them for less than it really costs him to send them to market. The bounty is given in order to make up this loss, and to encourage him to continue, or perhaps to begin, a trade of which the expence is supposed to be greater than the returns, of which every operation eats up a part of the capital employed in it, and which is of such a nature, that, if all other trades resembled it, there would soon be no capital left in the country.

and their effect is to force trade into disadvantageous channels.The trades, it is to be observed, which are carried on by means of bounties, are the only ones which can be carried on between two nations for any considerable time together, in such a manner as that one of them shall always and regularly lose, or sell its goods for less than it really costs to send them to market. But if the bounty did not repay to the merchant what he would otherwise lose upon the price of his goods, his own interest would soon oblige him to employ his stock in another way, or to find out a trade in which the price of the goods would replace to him, with the ordinary profit, the capital employed in sending them to market. The effect of bounties, like that of all the other expedients of the mercantile system, can only be to force the trade of a country into a channel much less advantageous than that in which it would naturally run of its own accord.

Charles Smith forgets the cost of raising the corn upon which the bounty is paid.The ingenious and well-informed author of the tracts upon the corn-trade1 has shown very clearly, that since the bounty upon the exportation of corn was first established, the price of the corn exported, valued moderately enough, has exceeded that of the corn imported, valued very high, by a much greater sum than the amount of the whole bounties which have been paid during that period. This, he imagines, upon the true principles of the mercantile system, is a clear proof that this forced corn trade is beneficial to the nation; the value of the exportation exceeding that of the importation by a much greater sum than the whole extraordinary expence which the public has been at in order to get it exported. He does not consider that this extraordinary expence, or the bounty, is the smallest part of the expence which the exportation of corn really costs the society. The capital which the farmer employed in raising it, must likewise be taken into the account. Unless the price of the corn when sold in the foreign markets replaces, not only the bounty, but this capital, together with the ordinary profits of stock, the society is a loser by the difference, or the national stock is so much diminished. But the very reason for which it has been thought necessary to grant a bounty, is the supposed insufficiency of the price to do this.

The fall in the price of corn since the establishment of the bounty is due to other causes.The average price of corn, it has been said, has fallen considerably since the establishment of the bounty. That the average price of corn began to fall somewhat towards the end of the last century, and has continued to do so during the course of the sixty-four first years of the present, I have already endeavoured to show. But this event, supposing it to be as real as I believe it to be, must have happened in spite of the bounty, and cannot possibly have happened in consequence of it. It has happened in France, as well as in England, though in France there was, not only no bounty, but, till 1764, the exportation of corn was subjected to a general prohibition.1 This gradual fall in the average price of grain, it is probable, therefore, is ultimately owing neither to the one regulation nor to the other, but to that gradual and insensible rise in the real value of silver, which, in the first book of this discourse, I have endeavoured to show has taken place in the general market of Europe, during the course of the present century.2 It seems to be altogether impossible that the bounty could ever contribute to lower the price of grain.3

In years of plenty, it has already been observed,4 the bounty, byThe bounty keeps up the price both in years of plenty and of scarcity. occasioning an extraordinary exportation, necessarily keeps up the price of corn in the home market above what it would naturally fall to. To do so was the avowed purpose of the institution. In years of scarcity, though the bounty is frequently suspended, yet the great exportation which it occasions in years of plenty, must frequently hinder more or less the plenty of one year from relieving the scarcity of another. Both in years of plenty, and in years of scarcity, therefore, the bounty necessarily tends to raise the money price of corn somewhat higher than it otherwise would be in the home market.

That, in the actual state of tillage, the bounty must necessarily haveIt has been supposed to encourage cultivation and so to lower price this tendency, will not, I apprehend, be disputed by any reasonable person. But it has been thought by many people that it tends to encourage tillage, and that in two different ways; first, by opening a more extensive foreign market to the corn of the farmer, it tends, they imagine, to increase the demand for, and consequently the production of that commodity; and secondly, by securing to him a better price than he could otherwise expect in the actual state of tillage, it tends, they suppose, to encourage tillage. This double encouragement must, they imagine, in a long period of years, occasion such an increase in the production of corn, as may lower its price in the home market, much more than the bounty can raise it, in the actual state which tillage may, at the end of that period, happen to be in.5

The addition to the price of corn at home caused by the bounty is a heavy tax on the people, which restrains population and industry and in the long run tends to diminish the consumption of cornI answer, that whatever extension of the foreign market can be occasioned by the bounty, must, in every particular year, be altogether at the expence of the home market; as every bushel of corn which is exported by means of the bounty, and which would not have been exported without the bounty, would have remained in the home market to increase the consumption, and to lower the price of that commodity. The corn bounty, it is to be observed, as well as every other bounty upon exportation, imposes two different taxes upon the people; first, the tax which they are obliged to contribute, in order to pay the bounty; and secondly, the tax which arises from the advanced price of the commodity in the home market, and which, as the whole body of the people are purchasers of corn, must, in this particular commodity, be paid by the whole body of the people. In this particular commodity, therefore, this second tax is by much the heaviest of the two. Let us suppose that, taking one year with another, the bounty of five shillings upon the exportation of the quarter of wheat, raises the price of that commodity in the home market only sixpence the bushel, or four shillings the quarter, higher than it otherways would have been in the actual state of the crop. Even upon this very moderate supposition,1 the great body of the people, over and above contributing the tax which pays the bounty of five shillings upon every quarter of wheat exported, must pay another of four shillings upon every quarter which they themselves consume. But, according to the very well informed author of the tracts upon the corn-trade, the average proportion of the corn exported to that consumed at home, is not more than that of one to thirty-one.2 For every five shillings, therefore, which they contribute to the payment of the first tax, they must contribute six pounds four shillings to the payment of the second. So very heavy a tax upon the first necessary of life, must either reduce the subsistence of the labouring poor, or it must occasion some augmentation in their pecuniary wages, proportionable to that in the pecuniary price of their subsistence. So far as it operates in the one way, it must reduce the ability of the labouring poor to educate and bring up their children, and must, so far, tend to restrain the population of the country. So far as it operates in the other, it must reduce the ability of the employers of the poor, to employ so great a number as they otherwise might do, and must, so far, tend to restrain the industry of the country. The extraordinary exportation of corn, therefore, occasioned by the bounty, not only, in every particular year, diminishes the home, just as much as it extends the foreign market and consumption, but, by restraining the population and industry of the country, its final tendency is to stunt and restrain the gradual extension of the home market; and thereby, in the long run, rather to diminish, than to augment, the whole market and consumption of corn.

This enhancement of the money price of corn, however, it has beenThe enhancement of price would encourage production if it was an enhancement of real price, but it is not, thought, by rendering that commodity more profitable to the farmer, must necessarily encourage its production.1

I answer, that this might be the case if the effect of the bounty was to raise the real price of corn, or to enable the farmer, with an equal quantity of it, to maintain a greater number of labourers in the same manner, whether liberal, moderate, or scanty, that other labourers are commonly maintained in his neighbourhood. But neither the bounty, it is evident, nor any other human institution, can have any such effect. It is not the real, but the nominal price of corn, which can in any considerable degree be affected by the bounty.2 And though the tax which that institution imposes upon the whole body of the people, may be very burdensome to those who pay it, it is of very little advantage to those who receive it.3

The real effect of the bounty is not so much to raise the real valueIt is only a degradation of the value of silver of corn, as to degrade the real value of silver; or to make an equal quantity of it exchange for a smaller quantity, not only of corn, but of all other home-made commodities: for the money price of corn regulates that of all other home-made4 commodities.

It regulates the money price of labour, which must always be suchfor corn regulates the money price of labour, as to enable the labourer to purchase a quantity of corn sufficient to maintain him and his family either in the liberal, moderate, or scanty manner in which the advancing, stationary or declining circumstances of the society oblige his employers to maintain him.

It regulates the money price of all the other parts of the rudeof all rude produce produce of land, which, in every period of improvement, must bear a certain proportion to that of corn, though this proportion is different in different periods. It regulates, for example, the money price of grass and hay, of butcher’s meat, of horses, and the maintenance of horses, of land carriage consequently, or of the greater part of the inland commerce of the country.

and of almost all manufactures.By regulating the money price of all the other parts of the rude produce of land, it regulates that of the materials of almost1 all manufactures. By regulating the money price of labour, it regulates that of manufacturing art and industry. And by regulating both, it regulates that of the complete manufacture. The money price of labour, and of every thing that is the produce either of land or labour, must necessarily either rise or fall in proportion to the money price of corn.

So farmers and landlords are not benefited by the increased price due to the bountyThough in consequence of the bounty, therefore, the farmer should be enabled to sell his corn for four shillings the bushel instead of three and sixpence, and to pay his landlord a money rent proportionable to this rise in the money price of his produce; yet if, in consequence of this rise in the price of corn, four shillings will purchase no more home-made2 goods of any other kind than three and sixpence would have done before, neither the circumstances of the farmer, nor those of the landlord, will be much3 mended by this change. The farmer will not be able to cultivate much better: the landlord will not be able to live much4 better. In the purchase of foreign commodities this enhancement in the price of corn may give them some little advantage. In that of home-made commodities it can give them none at all. And almost the whole expence of the farmer, and the far greater part even of that of the landlord, is in home-made commodities.5

A worldwide degradation of the value of silver is of little consequence,That degradation in the value of silver which is the effect of the fertility of the mines, and which operates equally, or very near equally, through the greater part of the commercial world, is a matter of very little consequence to any particular country. The consequent rise of all money prices, though it does not make those who receive them really richer, does not make them really poorer. A service of plate becomes really cheaper, and every thing else remains precisely of the same real value as before.

but degradation confined to one country discourages the industry of that country.But that degradation in the value of silver which, being the effect either of the peculiar situation, or of the political institutions of a particular country, takes place only in that country, is a matter of very great consequence, which, far from tending to make any body really richer, tends to make every body really poorer. The rise in the money price of all commodities, which is in this case peculiar to that country, tends to discourage more or less every sort of industry which is carried on within it, and to enable foreign nations, by furnishing almost all sorts of goods for a smaller quantity of silver than its own workmen can afford to do, to undersell them, not only in the foreign, but even in the home market.

It is the peculiar situation of Spain and Portugal as proprietors ofIn Spain and Portugal gold and silver are naturally cheaper than in the rest of Europe, the mines, to be the distributors of gold and silver to all the other countries of Europe. Those metals ought naturally, therefore, to be somewhat cheaper in Spain and Portugal than in any other part of Europe. The difference, however, should be no more than the amount of the freight and insurance; and, on account of the great value and small bulk of those metals, their freight is no great matter, and their insurance is the same as that of any other goods of equal value. Spain and Portugal, therefore, could suffer very little from their peculiar situation, if they did not aggravate its disadvantages by their political institutions.

Spain by taxing, and Portugal by prohibiting the exportation ofbut by the hindrances to exportation they are made still cheaper, gold and silver, load that exportation with the expence of smuggling, and raise the value of those metals in other countries so much more above what it is in their own, by the whole amount of this expence.1 When you dam up a stream of water, as soon as the dam is full, as much water must run over the dam-head as if there was no dam at all. The prohibition of exportation cannot detain a greater quantity of gold and silver in Spain and Portugal than what they can afford to employ, than what the annual produce of their land and labour will allow them to employ, in coin, plate, gilding, and other ornaments of gold and silver. When they have got this quantity the dam is full, and the whole stream which flows in afterwards must run over. The annual exportation of gold and silver from Spain and Portugal accordingly is, by all accounts, notwithstanding these restraints, very near equal to the whole annual importation. As the water, however, must always be deeper behind the dam-head than before it, so the quantity of gold and silver which these restraints detain in Spain and Portugal must, in proportion to the annual produce of their land and labour, be greater than what is to be found in other countries. The higher and stronger the dam-head, the greater must be the difference in the depth of water behind and before it. The higher the tax, the higher the penalties with which the prohibition is guarded, the more vigilant and severe the police which looks after the execution of the law, the greater must be the difference in the proportion of gold and silver to the annual produce of the land and labour of Spain and Portugal, and to that of other countries. It is said accordingly to be very considerable, and that you frequently find there a profusion of plate in houses, where there is nothing else which would, in other countries, be thought suitable or correspondent to this sort of magnificence. The cheapness of gold and silver, or what is the same thing, the dearness of all commodities, which is the necessary effect of this redundancy of theand agriculture and manufactures are thereby discouraged. precious metals, discourages both the agriculture and manufactures of Spain and Portugal, and enables foreign nations to supply them with many sorts of rude, and with almost all sorts of manufactured produce, for a smaller quantity of gold and silver than what they themselves can either raise or make them for at home. The tax and prohibition operate in two different ways. They not only lower very much the value of the precious metals in Spain and Portugal, but by detaining there a certain quantity of those metals which would otherwise flow over other countries, they keep up their value in those other countries somewhat above what it otherwise would be, and thereby give those countries a double advantage in their commerce with Spain and Portugal. Open the flood-gates, and there will presently be less water above, and more below, the dam-head, and it will soon come to a level in both places. Remove the tax and the prohibition, and as the quantity of gold and silver will diminish considerably in Spain and Portugal, so it will increase somewhat in other countries, and the value of those metals, their proportion to the annual produce of land and labour, will soon come to a level, or very near to a level, in all. The loss which Spain and Portugal could sustain by this exportation of their gold and silver would be altogether nominal and imaginary. The nominal value of their goods, and of the annual produce of their land and labour, would fall, and would be expressed or represented by a smaller quantity of silver than before; but their real value would be the same as before, and would be sufficient to maintain, command, and employ, the same quantity of labour. As the nominal value of their goods would fall, the real value of what remained of their gold and silver would rise, and a smaller quantity of those metals would answer all the same purposes of commerce and circulation which had employed a greater quantity before. The gold and silver which would go abroad would not go abroad for nothing, but would bring back an equal value of goods of some kind or another. Those goods too would not be all matters of mere luxury and expence, to be consumed by idle people who produce nothing in return for their consumption. As the real wealth and revenue of idle people would not be augmented by this extraordinary exportation of gold and silver, so neither would their consumption be much augmented by it. Those goods would, probably, the greater part of them, and certainly some part of them, consist in materials, tools, and provisions, for the employment and maintenance of industrious people, who would reproduce, with a profit, the full value of their consumption. A part of the dead stock of the society would thus be turned into active stock, and would put into motion a greater quantity of industry than had been employed before. The annual produce of their land and labour would immediately be augmented a little, and in a few years would, probably, be augmented a great deal; their industry being thus relieved from one of the most oppressive burdens which it at present labours under.

The bounty upon the exportation of corn necessarily operatesThe corn bounty acts in the same way, exactly in the same way as this absurd policy of Spain and Portugal. Whatever be the actual state of tillage, it renders our corn somewhat dearer in the home market than it otherwise would be in that state, and somewhat cheaper in the foreign; and as the average money price of corn regulates more or less that of all other commodities, it lowers the value of silver considerably in the one, and tends to raise it a little in the other. It enables foreigners, the Dutch in particular, not only to eat our corn cheaper than they otherwise could do, but sometimes to eat it cheaper than even our own people can do upon the same occasions; as we are assured by an excellent authority, that of Sir Matthew Decker.1 It hinders our own workmen from furnishing their goods for so small a quantity of silver as they otherwise might do; and enables the Dutch to furnish their’s for a smaller. It tends to render our manufactures somewhat dearer in every market, and their’s somewhat cheaper than they otherwise would be, and consequently to give their industry a double advantage over our own.

it discourages manufactures without much benefiting farmers and country gentlemen.The bounty, as it raises in the home market, not so much the real, as the nominal price2 of our corn, as it augments, not the quantity of labour which a certain quantity of corn can maintain and employ, but only the quantity of silver which it will exchange for, it discourages our manufactures, without rendering any considerable service1 either to our farmers or country gentlemen. It puts, indeed, a little more money into the pockets of both, and it will perhaps be somewhat difficult to persuade the greater part of them that this is not rendering them a very considerable service.2 But if this money sinks in its value, in the quantity of labour, provisions, and home-made3 commodities of all different kinds which it is capable of purchasing, as much as it rises in its quantity, the service will be little more than nominal4 and imaginary.

It is essentially serviceable only to the corn merchants.There is, perhaps, but one set of men in the whole commonwealth to whom the bounty either was or could be essentially serviceable.5 These were the corn merchants, the exporters and importers of corn. In years of plenty the bounty necessarily occasioned a greater exportation than would otherwise have taken place; and by hindering the plenty of one year from relieving the scarcity of another, it occasioned in years of scarcity a greater importation than would otherwise have been necessary. It increased the business of the corn merchant in both; and in years of scarcity, it not only enabled him to import a greater quantity, but to sell it for a better price, and consequently with a greater profit than he could otherwise have made, if the plenty of one year had not been more or less hindered from relieving the scarcity of another. It is in this set of men, accordingly, that I have observed the greatest zeal for the continuance or renewal of the bounty.

The country gentlemen established the duties on the importation of corn, and the bounty, in imitation of the manufacturers,Our country gentlemen, when they imposed the high duties upon the importation of foreign corn, which in times of moderate plenty amount to a prohibition, and when they established the bounty, seem to have imitated the conduct of our manufacturers. By the one institution, they secured to themselves the monopoly of the home market, and by the other they endeavoured to prevent that market from ever being overstocked with their commodity. By both they endeavoured to raise its real value, in the same manner as our manufacturers had, by the like institutions, raised the real value of many different sorts of manufactured goods. They did not perhaps attend to the great and essential difference which nature has established between corn and almost every other sort of goods.without attending to the essential difference between corn and other goods. When, either by the monopoly of the home market, or by a bounty upon exportation, you enable our woollen or linen manufacturers to sell their goods for somewhat a better price than they otherwise could get for them, you raise, not only the nominal, but the real price of those goods. You render them equivalent to a greater quantity of labour and subsistence, you encrease not only the nominal, but the real profit, the real wealth and revenue of those manufacturers, and you enable them either to live better themselves, or to employ a greater quantity of labour in those particular manufactures. You really encourage those manufactures, and direct towards them a greater quantity of the industry of the country, than what would probably go to them of its own accord. But when by the like institutions you raise the nominal or money-price of corn, you do not raise its real value. You do not increase the real wealth, the real revenue either of our farmers or country gentlemen. You do not encourage the growth of corn, because you do not enable them to maintain and employ more labourers in raising it. The nature of things has stamped upon corn a real value which cannot be altered by merely altering its money price.1 No bounty upon exportation, no monopoly of the home market, can raise that value.2 The freest competition cannot lower it. Through the world in general that value is equal to the quantity of labour which it can maintain, and in every particular place it is equal to the quantity of labour which it can maintain in the way, whether liberal, moderate, or scanty, in which labour is commonly maintained in that place. Woollen or linen cloth are not the regulating commodities by which the real value of all other commodities must be finally measured and determined; corn is. The real value of every other commodity is finally measured and determined by the proportion which its average money price bears to the average money price of corn. The real value of corn does not vary with those variations in its average money price, which sometimes occur from one century to another. It is the real value of silver which varies with them.

Bounties upon the exportation of any home-made commodity areAll the expedients of the mercantile system force industry into less advantageous channels, bounties on exports force it into actually disadvantageous channels the bounty on corn does not encourage its production. liable, first, to that general objection which may be made to all the different expedients of the mercantile system; the objection of forcing some part of the industry of the country into a channel less advantageous than that in which it would run of its own accord: and, secondly, to the particular objection of forcing it, not only into a channel that is less advantageous, but into one that is actually disadvantageous; the trade which cannot be carried on but by means of a bounty being necessarily a losing trade. The bounty upon the exportation of corn is liable to this further objection, that it can in no respect promote the raising of that particular commodity of which it was meant to encourage the production. When our country gentlemen, therefore, demanded the establishment of the bounty, though they acted in imitation of our merchants and manufacturers, they did not act with that complete comprehension of their own interest which commonly directs the conduct of those two other orders of people. They loaded the public revenue with a very considerable expence; they imposed a very heavy tax upon the whole body of the people; but they did not, in any sensible degree, increase1 the real value of their own commodity; and by lowering somewhat the real value of silver, they discouraged, in some degree, the general industry of the country, and, instead of advancing, retarded more or less the improvement of their own lands, which necessarily depends upon the general industry of the country.

A bounty on production would be more effectual than one on exportation and would lower the price of the commodity,To encourage the production of any commodity, a bounty upon production, one should imagine, would have a more direct operation, than one upon exportation. It would, besides, impose only one tax upon the people, that which they must contribute in order to pay the bounty. Instead of raising, it would tend to lower the price of the commodity in the home market; and thereby, instead of imposing a second tax upon the people, it might, at least in part, repay them for what they had contributed to the first. Bounties upon production, however, have been very rarely granted.2 The prejudices established by the commercial system have taught us to believe, that national wealth arises more immediately from exportation than from production.but such bounties have been rare, It has been more favoured accordingly, as the more immediate means of bringing money into the country. Bounties upon production, it has been said too, have been found by experience more liable to frauds than those upon exportation. How far this is true, I know not. That bounties upon exportation have been abused to many fraudulent purposes, is very well known. But it is not the interest of merchants and manufacturers, the great inventors of all these expedients, that the home market should be overstocked with their goods, an event which a bounty upon productionowing to the interest of merchants and manufacturers might sometimes occasion. A bounty upon exportation, by enabling them to send abroad the surplus part, and to keep up the price of what remains in the home market, effectually prevents this. Of all the expedients of the mercantile system, accordingly, it is the one of which they are the fondest. I have known the different undertakers of some particular works agree privately among themselves to give a bounty out of their own pockets upon the exportation of a certain proportion of the goods which they dealt in. This expedient succeeded so well, that it more than doubled the price of their goods in the home market, notwithstanding a very considerable increase in the produce. The operation of the bounty upon corn must have been wonderfully different, if it has lowered the money price of that commodity.

Something like a bounty upon production, however, has been grantedThe herring and whale fishery bounties are in part given on production. upon some particular occasions. The tonnage bounties given1 to the white-herring and whale-fisheries may, perhaps, be considered as somewhat of this nature.2 They tend directly, it may be supposed,3 to render the goods cheaper in the home market than they otherwise would be.4 In other respects their effects, it must be acknowledged,5 are the same as those of bounties upon exportation. By means of them a part of the capital of the country is employed in bringing goods to market, of which the price does not repay the cost, together with the ordinary profits of stock.

But though the tonnage6 bounties to those fisheries do not contributeThey are supposed to augment the number of sailors and ships. to the opulence of the nation, it may perhaps be thought that they contribute to its defence,7 by augmenting the number of its sailors and shipping. This, it may be alleged, may sometimes be done8 by means of such bounties at a much smaller expence, than by keeping up a great standing navy, if I may use such an expression,9 in the same way as a standing army.10

In granting the herring bounties Parliament has been imposed on, since (1) the herring buss bounty is too large,Notwithstanding these favourable allegations, however, the following considerations dispose me to believe, that in granting at least one of these bounties, the legislature has been very grossly imposed upon.

First, the herring buss bounty seems too large.

From the commencement of the winter fishing 1771 to the end of the winter fishing 1781, the tonnage bounty upon the herring buss fishery has been at thirty shillings the ton. During these eleven years the whole number of barrels caught by the herring buss fishery of Scotland amounted to 378,347. The herrings caught and cured at sea, are called sea sticks.1 In order to render them what are called merchantable herrings, it is necessary to repack them with an additional quantity of salt; and in this case, it is reckoned, that three barrels of sea sticks, are usually repacked into two barrels of merchantable herrings. The number of barrels of merchantable herrings, therefore, caught during these eleven years, will amount only, according to this account, to 252,231⅓. During these eleven years the tonnage bounties paid amounted to 155,463 l. 11 s. or to 8 s. 2¼ d. upon every barrel of sea sticks, and to 12 s. 3¾ d. upon every barrel of merchantable herrings.

The salt with which these herrings are cured, is sometimes Scotch, and sometimes foreign salt; both which are delivered free of all excise duty to the fish-curers. The excise duty upon Scotch salt is at present 1 s. 6 d. that upon foreign salt 10 s. the bushel. A barrel of herrings is supposed to require about one bushel and one-fourth of a bushel foreign salt. Two bushels are the supposed average of Scotch salt. If the herrings are entered for exportation, no part of this duty is paid up; if entered for home consumption, whether the herrings were cured with foreign or with Scotch salt, only one shilling the barrel is paid up. It was the old Scotch duty upon a bushel of salt, the quantity which, at a low estimation, had been supposed necessary for curing a barrel of herrings. In Scotland, foreign salt is very little used for any other purpose but the curing of fish. But from the 5th April 1771, to the 5th April 1782, the quantity of foreign salt imported amounted to 936,974 bushels, at eighty-four pounds the bushel: the quantity of Scotch salt delivered from the works to the fish-curers, to no more than 168,226, at fifty-six pounds the bushel only. It would appear, therefore, that it is principally foreign salt that is used in the fisheries. Upon every barrel of herrings exported there is, besides, a bounty of 2 s. 8 d. and more than two-thirds of the buss caught herrings are exported. Put all these things together, and you will find that, during these eleven years, every barrel of buss caught herrings, cured with Scotch salt when exported, has cost government 17 s. 11¾ d.; and when entered for home consumption 14 s. 3¾ d.: and that every barrel cured with foreign salt, when exported, has cost government 1 l. 7 v. 5¾ d.; and when entered for home consumption 1 l. 3 s. 9¾ d. The price of a barrel of good merchantable herrings runs from seventeen and eighteen to four and five and twenty shillings; about a guinea at an average.1

Secondly, the bounty to the white herring fishery is a tonnage(2) the bounty is not proportioned to the fish caught, bounty; and is proportioned to the burden of the ship, not to her diligence or success in the fishery; and it has, I am afraid, been too common for vessels to fit out for the sole purpose of catching, not the fish, but the bounty. In the year 1759, when the bounty was at fifty shillings the ton, the whole buss fishery of Scotland brought in only four barrels of sea sticks. In that year each barrel of sea sticks cost government in bounties alone 113 l. 15 s.; each barrel of merchantable herrings 159 l. 7 s. 6 d.

Thirdly, the mode of fishing for which this tonnage bounty in the(3) the bounty is given to busses, whereas the fishery ought to be carried on by boats, white herring fishery has been given (by busses or decked vessels from twenty to eighty tons burthen), seems not so well adapted to the situation of Scotland as to that of Holland; from the practice of which country it appears to have been borrowed. Holland lies at a great distance from the seas to which herrings are known principally to resort; and can, therefore, carry on that fishery only in decked vessels, which can carry water and provisions sufficient for a voyage to a distant sea. But the Hebrides or western islands, the islands of Shetland, and the northern and north-western coasts of Scotland, the countries in whose neighbourhood the herring fishery is principally carried on, are everywhere intersected by arms of the sea, which run up a considerable way into the land, and which, in the language of the country, are called sea-lochs. It is to these sea-lochs that the herrings principally resort during the seasons in which they visit those seas; for the visits of this, and, I am assured, of many other sorts of fish, are not quite regular and constant. A boat fishery, therefore, seems to be the mode of fishing best adapted to the peculiar situation of Scotland: the fishers carrying the herrings on shore, as fast as they are taken, to be either cured or consumed fresh. But the great encouragement which a bounty of thirty shillings the ton gives to the buss fishery, is necessarily a discouragement to the boat fishery; which, having no such bounty, cannot bring its cured fish to market upon the same terms as the buss fishery. The boat fishery, accordingly, which, before the establishment of the buss bounty, was very considerable, and is said to have employed a number of seamen, not inferior to what the buss fishery employs at present, is now gone almost entirely to decay. Of the former extent, however, of this now ruined and abandoned fishery, I must acknowledge, that I cannot pretend to speak with much precision. As no bounty was paid upon the outfit of the boat-fishery, no account was taken of it by the officers of the customs or salt duties.

(4) the bounty has raised, or at any rate not lowered, the price of herrings.Fourthly, in many parts of Scotland, during certain seasons of the year, herrings make no inconsiderable part of the food of the common people. A bounty, which tended to lower their price in the home market, might contribute a good deal to the relief of a great number of our fellow-subjects, whose circumstances are by no means affluent. But the herring buss bounty contributes to no such good purpose. It has ruined the boat fishery, which is, by far, the best adapted for the supply of the home market, and the additional bounty of 2 s. 8 d. the barrel upon exportation, carries the greater part, more than two thirds, of the produce of the buss fishery abroad. Between thirty and forty years ago, before the establishment of the buss bounty, sixteen shillings the barrel, I have been assured, was the common price of white herrings. Between ten and fifteen years ago, before the boat fishery was entirely ruined, the price is said to have run from seventeen to twenty shillings the barrel. For these last five years, it has, at an average, been at twenty-five shillings the barrel. This high price, however, may have been owing to the real scarcity of the herrings upon the coast of Scotland. I must observe too, that the cask or barrel, which is usually sold with the herrings, and of which the price is included in all the foregoing prices, has, since the commencement of the American war, risen to about double its former price, or from about three shillings to about six shillings. I must likewise observe, that the accounts I have received of the prices of former times, have been by no means quite uniform and consistent; and an old man of great accuracy and experience has assured me, that more than fifty years ago, a guinea was the usual price of a barrel of good merchantable herrings; and this, I imagine, may still be looked upon as the average price. All accounts, however, I think, agree, that the price has not been lowered in the home market, in consequence of the buss bounty.

Profits in the business have not been high.When the undertakers of fisheries, after such liberal bounties have been bestowed upon them, continue to sell their commodity at the same, or even at a higher price than they were accustomed to do before, it might be expected that their profits should be very great; and it is not improbable that those of some individuals may have been so. In general, however, I have every reason to believe, they have been quite otherwise. The usual effect of such bounties is to encourage rash undertakers to adventure in a business which they do not understand, and what they lose by their own negligence and ignorance, more than compensates all that they can gain by the utmost liberality of government. In 1750, by the same act which first gave the bounty of thirty shillings the ton for the encouragement of the white herring fishery (the 23 Geo. II. chap. 24.), a joint stock company was erected, with a capital of five hundred thousand pounds, to which the subscribers (over and above all other encouragements, the tonnage bounty just now mentioned, the exportation bounty of two shillings and eight pence the barrel, the delivery of both British and foreign salt duty free) were, during the space of fourteen years, for every hundred pounds which they subscribed and paid into the stock of the society, entitled to three pounds a year, to be paid by the receiver-general of the customs in equal half-yearly payments. Besides this great company, the residence of whose governor and directors was to be in London, it was declared lawful to erect different fishing-chambers in all the different out-ports of the kingdom, provided a sum not less than ten thousand pounds was subscribed into the capital of each, to be managed at its own risk, and for its own profit and loss. The same annuity, and the same encouragements of all kinds, were given to the trade of those inferior chambers, as to that of the great company. The subscription of the great company was soon filled up, and several different fishing-chambers were erected in the different out-ports of the kingdom. In spite of all these encouragements, almost all those different companies, both great and small, lost either the whole, or the greater part of their capitals; scarce a vestige now remains of any of them, and the white herring fishery is now entirely, or almost entirely, carried on by private adventurers.

If any particular manufacture was necessary, indeed, for the defenceBounties for manufactures necessary for the defence of the country are not un reasonable of the society, it might not always be prudent to depend upon our neighbours for the supply; and if such manufacture could not otherwise be supported at home, it might not be unreasonable that all the other branches of industry should be taxed in order to support it. The bounties upon the exportation of British-made sail-cloth, and British-made gun-powder, may, perhaps, both be vindicated upon this principle.

It is less absurd to give bounties in time of prosperity than in times of distressBut though it can very seldom be reasonable to tax the industry of the great body of the people, in order to support that of some particular class of manufacturers; yet in the wantonness of great prosperity, when the public enjoys a greater revenue than it knows well what to do with, to give such bounties to favourite manufactures, may, perhaps, be as natural, as to incur any other idle expence. In public, as well as in private expences, great wealth may, perhaps, frequently be admitted as an apology for great folly. But there must surely be something more than ordinary absurdity, in continuing such profusion in times of general difficulty and distress.1

Some allowances called bounties are, properly speaking, drawbacksWhat is called a bounty is sometimes no more than a drawback, and consequently is not liable to the same objections as what is properly a bounty. The bounty, for example, upon refined sugar exported, may be considered as a drawback of the duties upon the brown and muscovado sugars from which it is made. The bounty upon wrought silk exported, a drawback of the duties upon raw and thrown silk imported. The bounty upon gunpowder exported, a drawback of the duties upon brimstone and saltpetre imported. In the language of the customs those allowances only are called drawbacks, which are given upon goods exported in the same form in which they are imported. When that form has been so altered by manufacture of any kind, as to come under a new denomination, they are called bounties.2

Prizes to successful artists and manufacturers do not divert industry to less advantageous channels, but encourage perfection.Premiums given by the public to artists and manufacturers who excel in their particular occupations, are not liable to the same objections as bounties. By encouraging extraordinary dexterity and ingenuity, they serve to keep up the emulation of the workmen actually employed in those respective occupations, and are not considerable enough to turn towards any one of them a greater share of the capital of the country than what would go to it of its own accord. Their tendency is not to overturn the natural balance of employments, but to render the work which is done in each as perfect and complete as possible. The expence of premiums, besides, is very trifling; that of bounties very great. The bounty upon corn alone has sometimes cost the public in one year more than three hundred thousand pounds.3

Bounties are sometimes called premiums, as drawbacks are sometimes called bounties. But we must in all cases attend to the nature of the thing, without paying any regard to the word.

Digression concerning the Corn Trade and Corn Laws1

I CANNOT conclude this chapter concerning bounties, withoutThe corn bounty and corn laws are undeserving of praise observing that the praises which have been bestowed upon the law which establishes the bounty upon the exportation of corn, and upon that system of regulations which is connected with it, are altogether unmerited. A particular examination of the nature of the corn trade, and of the principal British laws which relate to it, will sufficiently demonstrate the truth of this assertion. The great importance of this subject must justify the length of the digression.

The trade of the corn merchant is composed of four different branches,There are four branches of the corn trade which, though they may sometimes be all carried on by the same person, are in their own nature four separate and distinct trades. These are, first, the trade of the inland dealer; secondly, that of the merchant importer for home consumption; thirdly, that of the merchant exporter of home produce for foreign consumption; and, fourthly, that of the merchant carrier, or of the importer of corn in order to export it again.

I. The interest of the inland dealer, and that of the great body ofI. The Inland Dealer, whose interest is the same as that of the people, vis., that the consumption should be proportioned to the supply available. the people, how opposite soever they may at first sight appear, are, even in years of the greatest scarcity, exactly the same. It is his interest to raise the price of his corn as high as the real scarcity of the season requires, and it can never be his interest to raise it higher. By raising the price he discourages the consumption, and puts every body more or less, but particularly the inferior ranks of people, upon thrift and good management. If, by raising it too high, he discourages the consumption so much that the supply of the season is likely to go beyond the consumption of the season, and to last for some time after the next crop begins to come in, he runs the hazard, not only of losing a considerable part of his corn by natural causes, but of being obliged to sell what remains of it for much less than what he might have had for it several months before. If by not raising the price high enough he discourages the consumption so little, that the supply of the season is likely to fall short of the consumption of the season, he not only loses a part of the profit which he might otherwise have made, but he exposes the people to suffer before the end of the season, instead of the hardships of a dearth, the dreadful horrors of a famine. It is the interest of the people that their daily, weekly, and monthly consumption, should be proportioned as exactly as possible to the supply of the season. The interest of the inland corn dealer is the same. By supplying them, as nearly as he can judge, in this proportion, he is likely to sell all his corn for the highest price, and with the greatest profit; and his knowledge of the state of the crop, and of his daily, weekly, and monthly sales, enable1 him to judge, with more or less accuracy, how far they really are supplied in this manner. Without intending the interest of the people, he is necessarily led, by a regard to his own interest, to treat them, even in years of scarcity, pretty much in the same manner as the prudent master of a vessel is sometimes obliged to treat his crew. When he foresees that provisions are likely to run short, he puts them upon short allowance. Though from excess of caution he should sometimes do this without any real necessity, yet all the inconveniencies which his crew can thereby suffer are inconsiderable, in comparison of the danger, misery, and ruin, to which they might sometimes be exposed by a less provident conduct. Though from excess of avarice, in the same manner, the inland corn merchant should sometimes raise the price of his corn somewhat higher than the scarcity of the season requires, yet all the inconveniencies which the people can suffer from this conduct, which effectually secures them from a famine in the end of the season, are inconsiderable, in comparison of what they might have been exposed to by a more liberal way of dealing in the beginning of it. The corn merchant himself is likely to suffer the most by this excess of avarice; not only from the indignation which it generally excites against him, but, though he should escape the effects of this indignation, from the quantity of corn which it necessarily leaves upon his hands in the end of the season, and which, if the next season happens to prove favourable, he must always sell for a much lower price than he might otherwise have had.

The interest of a monopoly might perhaps be to destroy a portion of the crop, but corn cannot be monopolised where the trade is freeWere it possible, indeed, for one great company of merchants to possess themselves of the whole crop of an extensive country, it might, perhaps, be their interest to deal with it as the Dutch are said to do with the spiceries of the Moluccas, to destroy or throw away a considerable part of it, in order to keep up the price of the rest.2 But it is scarce possible, even by the violence of law, to establish such an extensive monopoly with regard to corn; and, wherever the law leaves the trade free, it is of all commodities the least liable to be engrossed or monopolized by the force of a few large capitals, which buy up the greater part of it. Not only its value far exceeds what the capitals of a few private men are capable of purchasing, but supposing they were capable of purchasing it, the manner in which it is produced renders this purchase altogether impracticable. As in every civilized country it is the commodity of which the annual consumption is the greatest, so a greater quantity of industry is annually employed in producing corn than in producing any other commodity. When it first comes from the ground too, it is necessarily divided among a greater number of owners than any other commodity; and these owners can never be collected into one place like a number of independent manufacturers, but are necessarily scattered through all the different corners of the country. These first owners either immediately supply the consumers in their own neighbourhood, or they supply other inland dealers who supply those consumers. The inland dealers in corn, therefore, including both the farmer and the baker, are necessarily more numerous than the dealers in any other commodity, and their dispersed situation renders it altogether impossible for them to enter into any general combination. If in a year of scarcity therefore, any of them should find that he had a good deal more corn upon hand than, at the current price, he could hope to dispose of before the end of the season, he would never think of keeping up this price to his own loss, and to the sole benefit of his rivals and competitors, but would immediately lower it, in order to get rid of his corn before the new crop began to come in. The same motives, the same interests, which would thus regulate the conduct of any one dealer, would regulate that of every other, and oblige them all in general to sell their corn at the price which, according to the best of their judgment, was most suitable to the scarcity or plenty of the season.

Dearths are never occasioned by combination, but always by scarcity and famines are always caused by the supposed remedies for dearths applied by government.Whoever examines, with attention, the history of the dearths and famines which have afflicted any part of Europe, during either the course of the present or that of the two preceding centuries, of several of which we have pretty exact accounts, will find, I believe, that a dearth never has arisen from any combination among the inland dealers in corn, nor from any other cause but a real scarcity, occasioned sometimes, perhaps, and in some particular places, by the waste of war, but in by far the greatest number of cases, by the fault of the seasons; and that a famine has never arisen from any other cause but the violence of government attempting, by improper means, to remedy the inconveniencies of a dearth.

In an extensive corn country, between all the different parts ofScarcities are never great enough to cause famine. which there is a free commerce and communication, the scarcity occasioned by the most unfavourable seasons can never be so great as to produce a famine; and the scantiest crop, if managed with frugality and œconomy, will maintain, through the year, the same number of people that are commonly fed in a more affluent manner by one of moderate plenty. The seasons most unfavourable to the crop are those of excessive drought or excessive rain. But, as corn grows equally upon high and low lands, upon grounds that are disposed to be too wet, and upon those that are disposed to be too dry, either the drought or the rain which is hurtful to one part of the country is favourable to another; and though both in the wet and in the dry season the crop is a good deal less than in one more properly tempered, yet in both what is lost in one part of the country is in some measure compensated by what is gained in the other. In rice countries, where the crop not only requires a very moist soil, but where in a certain period of its growing it must be laid under water, the effects of a drought are much more dismal. Even in such countries, however, the drought is, perhaps, scarce ever so universal, as necessarily to occasion a famine, if the government would allow a free trade. The drought in Bengal, a few years ago, might probably have occasioned a very great dearth. Some improper regulations, some injudicious restraints imposed by the servants of the East India Company upon the rice trade, contributed, perhaps, to turn that dearth into a famine.

Governments cause famines by ordering corn to be sold at a reasonable price.When the government, in order to remedy the inconveniencies of a dearth, orders all the dealers to sell their corn at what it supposes a reasonable price, it either hinders them from bringing it to market, which may sometimes produce a famine even in the beginning of the season; or if they bring it thither, it enables the people, and thereby encourages them to consume it so fast, as must necessarily produce a famine before the end of the season. The unlimited, unrestrained freedom of the corn trade, as it is the only effectual preventative of the miseries of a famine, so it is the best palliative of the inconveniencies of a dearth; for the inconveniencies of a real scarcity cannot be remedied; they can only be palliated. No trade deserves more the full protection of the law, and no trade requires it so much; because no trade is so much exposed to popular odium.

The corn merchant is odious to the populace,In years of scarcity the inferior ranks of people impute their distress to the avarice of the corn merchant, who becomes the object of their hatred and indignation. Instead of making profit upon such occasions, therefore, he is often in danger of being utterly ruined, and of having his magazines plundered and destroyed by their violence. It is in years of scarcity, however, when prices are high, that the corn merchant expects to make his principal profit. He is generally in contract with some farmers to furnish him for a certain number of years with a certain quantity of corn at a certain price. This contract price is settled according to what is supposed to be the moderate and reasonable, that is, the ordinary or average price, which, before the late years of scarcity, was commonly about eight-and-twenty shillings for the quarter of wheat, and for that of other grain in proportion. In years of scarcity, therefore, the corn merchant buys a great part of his corn for the ordinary price, and sells it for a much higher. That this extraordinary profit, however, is no more than sufficient to put his trade upon a fair level with other trades, and to compensate the many losses which he sustains upon other occasions, both from the perishable nature of the commodity itself, and from the frequent and unforeseen fluctuations of its price, seems evident enough, from this single circumstance, that great fortunes are as seldom made in this as in any other trade. The popular odium, however, which attends it in years ofand this deters respectable people from entering the trade. scarcity, the only years in which it can be very profitable, renders people of character and fortune averse to enter into it. It is abandoned to an inferior set of dealers; and millers, bakers, mealmen, and meal factors, together with a number of wretched hucksters, are almost the only middle people that, in the home market, come between the grower and the consumer.

The ancient policy of Europe, instead of discountenancing thisThis popular odium was encouraged by legislation. popular odium against a trade so beneficial to the public, seems, on the contrary, to have authorised and encouraged it.

By the 5th and 6th of Edward VI. cap. 14. it was enacted, That whoever should buy any corn or grain1 with intent to sell it again, should be reputed an unlawful engrosser, and should, for the first fault suffer two months imprisonment, and forfeit the value of the corn; for the second, suffer six months imprisonment, and forfeit double the value; and for the third, be set in the pillory, suffer imprisonment during the king’s pleasure, and forfeit all his goods and chattels. The ancient policy of most other parts of Europe was no better than that of England.

Our ancestors seem to have imagined that the people would buyMany restraints were imposed on traders. their corn cheaper of the farmer than of the corn merchant, who, they were afraid, would require, over and above the price which he paid to the farmer, an exorbitant profit to himself. They endeavoured, therefore, to annihilate his trade altogether. They even endeavoured to hinder as much as possible any middle man of any kind from coming in between the grower and the consumer; and this was the meaning of the many restraints which they imposed upon the trade of those whom they called kidders or carriers of corn, a trade which nobody was allowed to exercise without a licence ascertaining his qualifications as a man of probity and fair dealing.1 The authority of three justices of the peace was, by the statute of Edward VI. necessary, in order to grant this licence. But even this restraint was afterwards thought insufficient, and by a statute of Elizabeth,2 the privilege of granting it was confined to the quarter-sessions.

Endeavours were made to force the farmers to be retailers, though manufacturers were forbidden to be so.The ancient policy of Europe endeavoured in this manner to regulate agriculture, the great trade of the country, by maxims quite different from those which it established with regard to manufactures, the great trade of the towns. By leaving the farmer no other customers but either the consumers or their immediate factors,3 the kidders and carriers of corn, it endeavoured to force him to exercise the trade, not only of a farmer, but of a corn merchant or corn retailer. On the contrary, it in many cases prohibited the manufacturer from exercising the trade of a shopkeeper, or from selling his own goods by retail. It meant by the one law to promote the general interest of the country, or to render corn cheap, without, perhaps, its being well understood how this was to be done. By the other it meant to promote that of a particular order of men, the shopkeepers, who would be so much undersold by the manufacturer, it was supposed, that their trade would be ruined if he was allowed to retail at all.

The manufacturer, however, though he had been allowed to keep a shop, and to sell his own goods by retail, could not have undersold the common shopkeeper. Whatever part of his capital he might have placed in his shop, he must have withdrawn it from his manufacture. In order to carry on his business on a level with that of other people, as he must have had the profit of a manufacturer on the one part, so he must have had that of a shopkeeper upon the other. Let us suppose, for example, that in the particular town where he lived, ten per cent. was the ordinary profit both of manufacturing and shopkeeping stock; he must in this case have charged upon every piece of his own goods which he sold in his shop, a profit of twenty per cent. When he carried them from his workhouse to his shop, he must have valued them at the price for which he could have sold them to a dealer or shopkeeper, who would have bought them by wholesale. If he valued them lower, he lost a part of the profit of his manufacturing capital. When again he sold them from his shop, unless he got the same price at which a shopkeeper would have sold them, he lost a part of the profit of his shopkeeping capital. Though he might appear, therefore, to make a double profit upon the same piece of goods, yet as these goods made successively a part of two distinct capitals, he made but a single profit upon the whole capital employed about them; and if he made less than this profit, he was a loser, or did not employ his whole capital with the same advantage as the greater part of his neighbours.

What the manufacturer was prohibited to do, the farmer was in some measure enjoined to do; to divide his capital between two different employments; to keep one part of it in his granaries and stack yard, for supplying the occasional demands of the market; and to employ the other in the cultivation of his land. But as he could not afford to employ the latter for less than the ordinary profits of farming stock, so he could as little afford to employ the former for less than the ordinary profits of mercantile stock. Whether the stock which really carried on the business of the corn merchant belonged to the person who was called a farmer, or to the person who was called a corn merchant, an equal profit was in both cases requisite, in order to indemnify its owner for employing it in this manner; in order to put his business upon a level with other trades, and in order to hinder him from having an interest to change it as soon as possible for some other. The farmer, therefore, who was thus forced to exercise the trade of a corn merchant, could not afford to sell his corn cheaper than any other corn merchant would have been obliged to do in the case of a free competition.

The dealer who can employ his whole stock in one single branch ofThe dealer confined to one branch of business can sell cheaper. business, has an advantage of the same kind with the workman who can employ his whole labour in one single operation. As the latter acquires a dexterity which enables him, with the same two hands, to perform a much greater quantity of work; so the former acquires so easy and ready a method of transacting his business, of buying and disposing of his goods, that with the same capital he can transact a much greater quantity of business. As the one can commonly afford his work a good deal cheaper, so the other can commonly afford his goods somewhat cheaper than if his stock and attention were both employed about a greater variety of objects. The greater part of manufacturers could not afford to retail their own goods so cheap as a vigilant and active shopkeeper, whose sole business it was to buy them by wholesale, and to retail them again. The greater part of farmers could still less afford to retail their own corn, to supply the inhabitants of a town, at perhaps four or five miles distance from the greater part of them, so cheap as a vigilant and active corn merchant, whose sole business it was to purchase corn by wholesale, to collect it into a great magazine, and to retail it again.

Laws preventing the manufacturer from being a shopkeeper and compelling the farmer to be a corn merchant were both impolitic and unjust, but the latter was the most pernicious.The law which prohibited the manufacturer from exercising the trade of a shopkeeper, endeavoured to force this division in the employment of stock to go on faster than it might otherwise have done. The law which obliged the farmer to exercise the trade of a corn merchant, endeavoured to hinder it from going on so fast. Both laws were evident violations of natural liberty, and therefore unjust; and they were both too as impolitic as they were unjust. It is the interest of every society, that things of this kind should never either be forced or obstructed. The man who employs either his labour or his stock in a greater variety of ways than his situation renders necessary, can never hurt his neighbour by underselling him. He may hurt himself, and he generally does so. Jack of all trades will never be rich, says the proverb. But the law ought always to trust people with the care of their own interest, as in their local situations they must generally be able to judge better of it than the legislator can do. The law, however, which obliged the farmer to exercise the trade of a corn merchant, was by far the most pernicious of the two.

by obstructing the improvement of land.It obstructed not only that division in the employment of stock which is so advantageous to every society, but it obstructed likewise the improvement and cultivation of the land. By obliging the farmer to carry on two trades instead of one, it forced him to divide his capital into two parts, of which one only could be employed in cultivation. But if he had been at liberty to sell his whole crop to a corn merchant as fast as he could thresh it out, his whole capital might have returned immediately to the land, and have been employed in buying more cattle, and hiring more servants, in order to improve and cultivate it better. But by being obliged to sell his corn by retail, he was obliged to keep a great part of his capital in his granaries and stack yard through the year, and could not, therefore, cultivate so well as with the same capital he might otherwise have done. This law, therefore, necessarily obstructed the improvement of the land, and, instead of tending to render corn cheaper, must have tended to render it scarcer, and therefore dearer, than it would otherwise have been.

Corn merchants support the farmers just as wholesale dealers support the manufacturers.After the business of the farmer, that of the corn merchant is in reality the trade which, if properly protected and encouraged, would contribute the most to the raising of corn. It would support the trade of the farmer, in the same manner as the trade of the wholesale dealer supports that of the manufacturer.

Wholesale dealers allow manufacturers to devote their whole capital to manufacturing.The wholesale dealer, by affording a ready market to the manufacturer, by taking his goods off his hand as fast as he can make them, and by sometimes even advancing their price to him before he has made them, enables him to keep his whole capital, and sometimes even more than his whole capital, constantly employed in manufacturing, and consequently to manufacture a much greater quantity of goods than if he was obliged to dispose of them himself to the immediate consumers, or even to the retailers. As the capital of the wholesale merchant too is generally sufficient to replace that of many manufacturers, this intercourse between him and them interests the owner of a large capital to support the owners of a great number of small ones, and to assist them in those losses and misfortunes which might otherwise prove ruinous to them.

An intercourse of the same kind universally established between theSo corn merchants should allow farmers to devote their whole capital to cultivation. farmers and the corn merchants, would be attended with effects equally beneficial to the farmers. They would be enabled to keep their whole capitals, and even more than their whole capitals, constantly employed in cultivation. In case of any of those accidents, to which no trade is more liable than theirs, they would find in their ordinary customer, the wealthy corn merchant, a person who had both an interest to support them, and the ability to do it, and they would not, as at present, be entirely dependent upon the forbearance of their landlord, or the mercy of his steward. Were it possible, as perhaps it is not, to establish this intercourse universally, and all at once, were it possible to turn all at once the whole farming stock of the kingdom to its proper business, the cultivation of land, withdrawing it from every other employment into which any part of it may be at present diverted, and were it possible, in order to support and assist upon occasion the operations of this great stock, to provide all at once another stock almost equally great, it is not perhaps very easy to imagine how great, how extensive, and how sudden would be the improvement which this change of circumstances would alone produce upon the whole face of the country.

The statute of Edward VI., therefore, by prohibiting as much asAccordingly the statute of Edward VI. endeavoured to annihilate a trade which is the best palliative and preventative of a dearth. possible any middle man from coming in between the grower and the consumer, endeavoured to annihilate a trade, of which the free exercise is not only the best palliative of the inconveniencies of a dearth, but the best preventative of that calamity: after the trade of the farmer, no trade contributing so much to the growing of corn as that of the corn merchant.

Its provisions were moderated by later statutes down to 15 Car II., c. 7.The rigour of this law was afterwards softened by several subsequent statutes, which successively permitted the engrossing of corn when the price of wheat should not exceed twenty, twenty-four, thirty-two, and forty shillings the quarter.1 At last, by the 15th of Charles II. c. 7, the engrossing or buying of corn in order to sell it again, as long as the price of wheat did not exceed forty-eight shillings the quarter, and that of other grain in proportion, was declared lawful to all persons not being forestallers, that is, not selling again in the same market within three months.2 All the freedom which the trade of the inland corn dealer has ever yet enjoyed, was bestowed upon it by this statute. The statute of the twelfth of the present king, which repeals almost all the other ancient laws against engrossers and forestallers, does not repeal the restrictions of this particular statute, which therefore still continue in force.3

which is absurd, as it supposes,This statute, however, authorises in some measure two very absurd popular prejudices.

(1) that engrossing is likely to be hurtful after a certain price has been reached,First, it supposes that when the price of wheat has risen so high as forty-eight shillings the quarter, and that of other grain in proportion, corn is likely to be so engrossed as to hurt the people. But from what has been already said, it seems evident enough that corn can at no price be so engrossed by the inland dealers as to hurt the people: and forty-eight shillings the quarter besides, though it may be considered as a very high price, yet in years of scarcity it is a price which frequently takes place immediately after harvest, when scarce any part of the new crop can be sold off, and when it is impossible even for ignorance to suppose that any part of it can be so engrossed as to hurt the people.

(2) that forestalling is likely to be hurtful after a certain price has been reached.Secondly, it supposes that there is a certain price at which corn is likely to be forestalled, that is, bought up in order to be sold again soon after in the same market, so as to hurt the people. But if a merchant ever buys up corn, either going to a particular market or in a particular market, in order to sell it again soon after in the same market, it must be because he judges that the market cannot be so liberally supplied through the whole season as upon that particular occasion, and that the price, therefore, must soon rise. If he judges wrong in this, and if the price does not rise, he not only loses the whole profit of the stock which he employs in this manner, but a part of the stock itself, by the expence and loss which necessarily attend1 the storing and keeping of corn. He hurts himself, therefore, much more essentially than he can hurt even the particular people whom he may hinder from supplying themselves upon that particular market day, because they may afterwards supply themselves just as cheap upon any other market day. If he judges right, instead of hurting the great body of the people, he renders them a most important service. By making them feel the inconveniencies of a dearth somewhat earlier than they otherwise might do, he prevents their feeling them afterwards so severely as they certainly would do, if the cheapness of price encouraged them to consume faster than suited the real scarcity of the season. When the scarcity is real, the best thing that can be done for the people is to divide the inconveniencies of it as equally as possible through all the different months, and weeks, and days of the year. The interest of the corn merchant makes him study to do this as exactly as he can: and as no other person can have either the same interest, or the same knowledge, or the same abilities to do it so exactly as he, this most important operation of commerce ought to be trusted entirely to him; or, in other words, the corn trade, so far at least as concerns the supply of the home market, ought to be left perfectly free.

The popular fear of engrossing and forestalling may be comparedThe fear of engrossing and forestalling is as groundless as that of witchcraft. to the popular terrors and suspicions of witchcraft. The unfortunate wretches accused of this latter crime were not more innocent of the misfortunes imputed to them, than those who have been accused of the former. The law which put an end to all prosecutions against witchcraft, which put it out of any man’s power to gratify his own malice by accusing his neighbour of that imaginary crime, seems effectually to have put an end to those fears and suspicions, by taking away the great cause which encouraged and supported them. The law which should restore entire freedom to the inland trade of corn, would probably prove as effectual to put an end to the popular fears of engrossing and forestalling.

Still, the 15 Car. II., c. 7, is the best of the corn laws, as it gives the inland corn trade all the freedom it possesses,The 15th of Charles II. c. 7, however, with all its imperfections, has perhaps contributed more both to the plentiful supply of the home market, and to the increase of tillage, than any other law in the statute book. It is from this law that the inland corn trade has derived all the liberty and protection which it has ever yet enjoyed; and both the supply of the home market, and the interest of tillage, are much more effectually promoted by the inland, than either by the importation or exportation trade.

The inland trade is much more important than the foreign.The proportion of the average quantity of all sorts of grain imported into Great Britain to that of all sorts of grain consumed, it has been computed by the author of the tracts upon the corn trade, does not exceed that of one to five hundred and seventy. For supplying the home market, therefore, the importance of the inland trade must be to that of the importation trade as five hundred and seventy to one.1

The average quantity of all sorts of grain exported from Great Britain does not, according to the same author, exceed the one-and-thirtieth part of the annual produce.2 For the encouragement of tillage, therefore, by providing a market for the home produce, the importance of the inland trade must be to that of the exportation trade as thirty to one.

I have no great faith in political arithmetic, and I mean not to warrant the exactness of either of these computations. I mention them only in order to show of how much less consequence, in the opinion of the most judicious and experienced persons, the foreign trade of corn is than the home trade. The great cheapness of corn in the years immediately preceding the establishment of the bounty, may perhaps, with reason, be ascribed in some measure to the operation of this statute of Charles II., which had been enacted about five-and twenty years before, and which had therefore full time to produce its effect.

A very few words will sufficiently explain all that I have to say concerning the other three branches of the corn trade.

II. The Importer, whose trade benefits the people and does not really hurt the farmers and country gentlemenII. The trade of the merchant importer of foreign corn for home consumption, evidently contributes to the immediate supply of the home market, and must so far be immediately beneficial to the great body of the people. It tends, indeed, to lower somewhat the average money price of corn, but not to diminish its real value, or the quantity of labour which it is capable of maintaining. If importation was at all times free, our farmers and country gentlemen would, probably, one year with another, get less money for their corn than they do at present, when importation is at most times in effect prohibited; but the money which they got would be of more value, would buy more goods of all other kinds, and would employ more labour. Their real wealth, their real revenue, therefore, would be the same as at present, though it might be expressed by a smaller quantity of silver; and they would neither be disabled nor discouraged from cultivating corn as much as they do at present. On the contrary, as the rise in the real value of silver, in consequence of lowering the money price of corn, lowers somewhat the money price of all other commodities, it gives the industry of the country, where it takes place, some advantage in all foreign markets, and thereby tends to encourage and increase that industry. But the extent of the home market for corn must be in proportion to the general industry of the country where it grows, or to the number of those who produce something else, and therefore have something else, or what comes to the same thing, the price of something else, to give in exchange for corn. But in every country the home market, as it is the nearest and most convenient, so is it likewise the greatest and most important market for corn. That rise in the real value of silver, therefore, which is the effect of lowering the average money price of corn, tends to enlarge the greatest and most important market for corn, and thereby to encourage, instead of discouraging, its growth.

By the 22d of Charles II. c. 13, the importation of wheat, wheneverThe Act of 2 Car. II., c. 13, imposed very high duties on importation the price in the home market did not exceed fifty-three shillings and four pence the quarter, was subjected to a duty of sixteen shillings the quarter; and to a duty of eight shillings whenever the price did not exceed four pounds.1 The former of these two prices has, for more than a century past, taken place only in times of very great scarcity; and the latter has, so far as I know, not taken place at all. Yet, till wheat had risen above this latter price, it was by this statute subjected to a very high duty; and, till it had risen above the former, to a duty which amounted to a prohibition. The importation of other sorts of grain was restrained at rates, and by duties, in proportion to the value of the grain, almost equally1 high.2 Subsequent laws still further increased those duties.

The distress which, in years of scarcity, the strict execution of thosebut its operation was generally suspended in years of scarcity. laws might have brought1 upon the people, would probably have been very great. But, upon such occasions, its execution was generally suspended by temporary statutes,2 which permitted, for a limited time, the importation of foreign corn. The necessity of these temporary statutes sufficiently demonstrates the impropriety of this general one.

These restraints upon importation, though prior to the establishmentRestraint was necessary on account of the bounty. of the bounty, were dictated by the same spirit, by the same principles, which afterwards enacted that regulation. How hurtful soever in themselves, these or some other restraints upon importation became necessary in consequence of that regulation. If, when wheat was either below forty-eight shillings the quarter, or not much above it, foreign corn could have been imported either duty free, or upon paying only a small duty, it might have been exported again, with the benefit of the bounty, to the great loss of the public revenue, and to the entire perversion of the institution, of which the object was to extend the market for the home growth, not that for the growth of foreign countries.

III. The trade of the merchant exporter of corn for foreign consumption,III. The Exporter, whose trade indirectly contributes to the plentiful supply of the home market. certainly does not contribute directly to the plentiful supply of the home market. It does so, however, indirectly. From whatever source this supply may be usually drawn, whether from home growth or from foreign importation, unless more corn is either usually grown, or usually imported into the country, than what is usually consumed in it, the supply of the home market can never be very plentiful. But unless the surplus can, in all ordinary cases, be exported, the growers will be careful never to grow more, and the importers never to import more, than what the bare consumption of the home market requires. That market will very seldom be overstocked; but it will generally be understocked, the people, whose business it is to supply it, being generally afraid lest their goods should be left upon their hands. The prohibition of exportation limits the improvement and cultivation of the country to what the supply of its own inhabitants requires. The freedom of exportation enables it to extend cultivation3 for the supply of foreign nations.

Liberty of exportation was made complete in 1700,By the 12th of Charles II. c. 4. the exportation of corn was permitted whenever the price of wheat did not exceed forty shillings the quarter, and that of other grain in proportion.1 By the 15th of the same prince,2 this liberty was extended till the price of wheat exceeded forty-eight shillings the quarter; and by the 22d,3 to all higher prices. A poundage, indeed, was to be paid to the king upon such exportation. But all grain was rated so low in the book of rates, that this poundage amounted only upon wheat to a shilling, upon oats to four pence, and upon all other grain to six pence the quarter.4 By the 1st of William and Mary,5 the act which established the bounty, this small duty was virtually taken off whenever the price of wheat did not exceed forty-eight shillings the quarter; and by the 11th and 12th of William III. c. 20. it was expressly taken off at all higher prices.

The trade of the merchant exporter was, in this manner, not only encouraged by a bounty, but rendered much more free than that of the inland dealer. By the last of these statutes, corn could be engrossed at any price for exportation; but it could not be engrossed for inland sale, except when the price did not exceed forty-eight shillings thethough the interest of the exporter sometimes differs from that of the people of his country. quarter.6 The interest of the inland dealer, however, it has already been shown, can never be opposite to that of the great body of the people. That of the merchant exporter may, and in fact sometimes is. If, while his own country labours under a dearth, a neighbouring country should be afflicted with a famine, it might be his interest to carry corn to the latter country in such quantities as might very much aggravate the calamities of the dearth. The plentiful supply of the home market was not the direct object of those statutes; but, under the pretence of encouraging agriculture, to raise the money price of corn as high as possible, and thereby to occasion, as much as possible, a constant dearth in the home market. By the discouragement of importation, the supply of that market, even in times of great scarcity, was confined to the home growth; and by the encouragement of exportation, when the price was so high as forty-eight shillings the quarter, that market was not, even in times of considerable scarcity, allowed to enjoy the whole of that growth. The temporary laws, prohibiting for a limited time the exportation of corn, and taking off for a limited time the duties upon its importation, expedients to which Great Britain has been obliged so frequently to have recourse,1 sufficiently demonstrate the impropriety of her general system. Had that system been good, she would not so frequently have been reduced to the necessity of departing from it.

Were all nations to follow the liberal system of free exportation andThe bad policy of some great countries may sometimes render it necessary for small countries to restrain exportation free importation, the different states into which a great continent was divided would so far resemble the different provinces of a great empire. As among the different provinces of a great empire the freedom of the inland trade appears, both from reason and experience, not only the best palliative of a dearth, but the most effectual preventative of a famine; so would the freedom of the exportation and importation trade be among the different states into which a great continent was divided. The larger the continent, the easier the communication through all the different parts of it, both by land and by water, the less would any one particular part of it ever be exposed to either of these calamities, the scarcity of any one country being more likely to be relieved by the plenty of some other. But very few countries have entirely adopted this liberal system. The freedom of the corn trade is almost every where more or less restrained, and, in many countries, is confined by such absurd regulations, as frequently aggravate the unavoidable misfortune of a dearth, into the dreadful calamity of a famine. The demand of such countries for corn may frequently become so great and so urgent, that a small state in their neighbourhood, which happened at the same time to be labouring under some degree of dearth, could not venture to supply them without exposing itself to the like dreadful calamity. The very bad policy of one country may thus render it in some measure dangerous and imprudent to establish what would otherwise be the best policy in another. The unlimited freedom of exportation, however, would be much less dangerous in great states, in which the growth being much greater, the supply could seldom be much affected by any quantity of corn that was likely to be exported. In a Swiss canton, or in some of the little states of Italy, it may, perhaps, sometimes be necessary to restrain the exportation of corn. In such great countries as France or England it scarce ever can. To hinder, besides, the farmer from sending his goods at all times to the best market, is evidently to sacrifice the ordinary laws of justice to an idea of public utility, to a sort of reasons of state; an act of legislative authority which ought to be exercised only, which can be pardoned only in cases of the most urgent necessity. The price at which the exportation of corn is prohibited, if it is ever to be prohibited, ought always to be a very high price.

The corn laws are like the laws on religion.The laws concerning corn may every where be compared to the laws concerning religion. The people feel themselves so much interested in what relates either to their subsistence in this life, or to their happiness in a life to come, that government must yield to their prejudices, and, in order to preserve the public tranquillity, establish that system which they approve of. It is upon this account, perhaps, that we so seldom find a reasonable system established with regard to either of those two capital objects.

IV. The Merchant Carrier, whose trade contributes to the plentiful supply of the home market.IV. The trade of the merchant carrier, or of the importer of foreign corn in order to export it again, contributes to the plentiful supply of the home market. It is not indeed the direct purpose of his trade to sell his corn there. But he will generally be willing to do so, and even for a good deal less money than he might expect in a foreign market; because he saves in this manner the expence of loading and unloading, of freight and insurance. The inhabitants of the country which, by means of the carrying trade, becomes the magazine and storehouse for the supply of other countries, can very seldom be in want themselves. Though the carrying trade might thus contribute to reduce the average money price of corn in the home market, it would not thereby lower its real value. It would only raise somewhat the real value of silver.

British law in effect prohibited the carrying trade in corn.The carrying trade was in effect prohibited in Great Britain, upon all ordinary occasions, by the high duties upon the importation of foreign corn, of the greater part of which there was no drawback1 ; and upon extraordinary occasions, when a scarcity made it necessary to suspend those duties by temporary statutes, exportation was always prohibited. By this system of laws, therefore, the carrying trade was in effect prohibited upon all occasions.

The prosperity of Great Britain is not due to the corn bounty, but to the security of enjoying the fruits of labour.That system of laws, therefore, which is connected with the establishment of the bounty, seems to deserve no part of the praise which has been bestowed upon it. The improvement and prosperity of Great Britain, which has been so often ascribed to those laws, may very easily be accounted for by other causes. That security which the laws in Great Britain give to every man that he shall enjoy the fruits of his own labour, is alone sufficient to make any country flourish, notwithstanding these and twenty other absurd regulations of commerce; and this security was perfected by the revolution, much about the same time that the bounty was established. The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often incumbers its operations; though the effect of these obstructions is always more or less either to encroach upon its freedom, or to diminish its security. In Great Britain industry is perfectly secure; and though it is far from being perfectly free, it is as free or freer than in any other part of Europe.

Though the period of the greatest prosperity and improvement ofThat the greatest prosperity has been subsequent proves nothing. Great Britain, has been posterior to that system of laws which is connected with the bounty, we must not upon that account impute it to those laws. It has been posterior likewise to the national debt. But the national debt has most assuredly not been the cause of it.

Though the system of laws which is connected with the bounty, hasSpain and Portugal are poorer than Great Britain because their bad policy is more effectual, and not counteracted by general liberty and security. exactly the same tendency with the police of Spain and Portugal; to lower somewhat the value of the precious metals in the country where it takes place;1 yet Great Britain is certainly one of the richest countries in Europe, while Spain and Portugal are perhaps among the most beggarly. This difference of situation, however, may easily be accounted for from two different causes. First, the tax in Spain, the prohibition in Portugal of exporting gold and silver,2 and the vigilant police which watches over the execution of those laws, must, in two very poor countries, which between them import annually upwards of six millions sterling,3 operate, not only more directly, but much more forcibly in reducing the value of those metals there, than the corn laws can do in Great Britain. And, secondly, this bad policy is not in those countries counter-balanced by the general liberty and security of the people. Industry is there neither free nor secure, and the civil and ecclesiastical governments of both Spain and Portugal, are such as would alone be sufficient to perpetuate their present state of poverty, even though their regulations of commerce were as wise as the greater part of them are absurd and foolish.

The 13 Geo. III., c. 43,The 13th of the present king, c. 43. seems to have established a new system with regard to the corn laws, in many respects better than the ancient one, but in one or two respects1 perhaps not quite so good.

opens the home market at lower prices,By this statute the high duties upon importation for home consumption are taken off so soon as the price of middling wheat rises to forty-eight shillings the quarter; that of middling rye, pease or beans, to thirty-two shillings; that of barley to twenty-four shillings; and that of oats to sixteen shillings; and instead2 of them a small duty is imposed of only six-pence upon the quarter of wheat, and upon that of other grain in proportion. With regard to all these different sorts of grain, but particularly with regard to wheat, the home market is thus opened to foreign supplies at prices considerably lower than before.3

stops the bounty earlier,By the same statute the old bounty of five shillings upon the exportation of wheat ceases so soon as the price rises to forty-four shillings the quarter, instead of forty-eight, the price at which it ceased before; that of two shillings and six-pence upon the exportation of barley ceases so soon as the price rises to twenty-two shillings, instead of twenty-four, the price at which it ceased before; that of two shillings and six-pence upon the exportation of oatmeal ceases so soon as the price rises to fourteen shillings, instead of fifteen, the price at which it ceased before. The bounty upon rye is reduced from three shillings and six-pence to three shillings, and it ceases so soon as the price rises to twenty-eight shillings, instead of thirty-two, the price at which it ceased before.4 If bounties are as improper as I have endeavoured to prove them to be, the sooner they cease, and the lower they are, so much the better.

and admits corn for reexport duty free,The same statute permits, at the lowest prices, the importation of corn, in order to be exported again, duty free, provided it is in the meantime lodged in a warehouse under the joint locks of the king and the importer.5 This liberty, indeed, extends to no more than twenty-five of the different ports of Great Britain. They are, however, the principal ones, and there may not, perhaps, be warehouses proper for this purpose in the greater part of the others.1

So far this law seems evidently an improvement upon the ancientwhich are improvements, system.

But by the same law a bounty of two shillings the quarter is givenbut it gives a bounty on the export of oats, for the exportation of oats whenever the price does not exceed fourteen shillings. No bounty had ever been given before for the exportation of this grain, no more than for that of peas or beans.2

By the same law too, the exportation of wheat is prohibited so soonand prohibits exportation of grain at prices much too low. as the price rises to forty-four shillings the quarter; that of rye so soon as it rises to twenty-eight shillings; that of barley so soon as it rises to twenty-two shillings; and that of oats so soon as they rise to fourteen shillings. Those several prices seem all of them a good deal too low, and there seems to be an impropriety, besides, in prohibiting exportation altogether at those precise prices at which that bounty, which was given in order to force it, is withdrawn.3 The bounty ought certainly either to have been withdrawn at a much lower price, or exportation ought to have been allowed at a much higher.

So far, therefore, this law seems to be inferior to the ancient system.It is as good a law as can be expected at present With all its imperfections, however, we may perhaps say of it what was said of the laws of Solon, that, though not the best in itself, it is the best which the interests, prejudices, and temper of the times would admit of. It may perhaps in due time prepare the way for a better.4

[1 ] [Charles Smith (already described as ‘very well-informed’ above, vol. 1., p. 426), Three Tracts on the Corn Trade and Corn Laws, 2nd ed., 1766, pp. 132-138.]

[1 ] [Above, vol. i., pp. 195-198.]

[2 ] [Above, vol. i., pp. 197-210, and cp. p. 403.]

[3 ] [These three sentences beginning with ‘It has happened in France,’ appear first in Additions and Corrections and ed. 3.]

[4 ] [Above, vol. i., p. 197.]

[5 ] [Eds. 1 and 2 read (beginning at the third line of the paragraph) ‘But it has been thought by many people, that by securing to the farmer a better price than he could otherwise expect in the actual state of tillage, it tends to encourage tillage; and that the consequent increase of corn may, in a long period of years, lower its price more than the bounty can raise it in the actual state which tillage may at the end of that period happen to be in.’ The alteration is given in Additions and Corrections. The next two paragraphs appear first in Additions and Corrections and ed. 3.]

[1 ] [It is really anything but a moderate supposition. It is not at all likely that the increase of demand caused by the offer of a bounty on exportation would raise the price of a commodity to the extent of four-fifths of the bounty.]

[2 ] [C. Smith, Three Tracts on the Corn Trade, 2nd ed., p. 144.]

[1 ] [This and the preceding paragraph are not in eds. 1 and 2. See above, p. 9, note 5.]

[2 ] [See above, vol. i., pp. 32-40. It does not occur to Smith that the additional corn might require greater labour to produce it than an equal quantity of the old.]

[3 ] [In place of this and the preceding sentence eds. 1 and 2 read only ‘It is not the real but the nominal price of corn only which can be at all affected by the bounty.’ The alteration is given in Additions and Corrections.]

[4 ] [‘Home-made’ here and in the line above is not in eds. 1 and 2.]

[1 ] [‘Almost’ is not in eds. 1 and 2.]

[2 ] [Eds. 1 and 2 do not contain ‘home-made’.]

[3 ] [Eds. 1 and 2 read ‘in the smallest degree’.]

[4 ] [Neither ‘much’ is in eds. 1 and 2.]

[5 ] [This and the two preceding sentences from ‘in the purchase’ appear first in Additions and Corrections (which reads ‘of even’ instead of ‘even of’) and ed. 3.]

[1 ] [Spain’s prohibition of exportation of gold and silver had only been abolished at a recent period. The tax was 3 per cent. till 1768, then 4 per cent. See Raynal, Histoire philosophique, Amsterdam ed. 1773, tom. iii., pp. 290, 291. As to the export of gold from Portugal, see below, p. 48, note 1.]

[1 ] [Essay on the Causes of the Decline of the Foreign Trade, consequently of the Value of the Lands of Britain, and on the means to restore both, 2nd ed., 1750, pp. 55, 171.]

[2 ] [Eds. 1 and 2 read ‘not the real but only the nominal price’.]

[1 ] [Eds. 1 and 2 read ‘the smallest real service’.]

[2 ] [Eds. 1 and 2 read ‘a very real service’.]

[3 ] [‘Home-made’ is not in eds. 1 and 2.]

[4 ] [Eds. 1 and 2 read ‘will be merely nominal’.]

[5 ] [Eds. 1 and 2 read ‘could be really serviceable’.]

[1 ] [Eds. 1 and 2 read ‘a real value which no human institution can alter’. Cp. p. 11.]

[2 ] [Ed. 1 reads ‘raise it’.]

[1 ] [Eds. 1 and 2 read ‘They loaded the public revenue with a very considerable expence, but they did not in any respect increase’. The alteration is given in Additions and Corrections.]

[2 ] [In place of this and the two preceding sentences (beginning ‘It would besides’) eds. 1 and 2 read only ‘It has, however, been more rarely granted.’ The alteration is given in Additions and Corrections.]

[1 ] [Eds. 1 and 2 read ‘The encouragements given’.]

[2 ] [The whale fishery bounty under 11 Geo. III., c. 38, was 40s per ton for the first five years, 30s. for the second five years, and 20s. for the third.]

[3 ] [‘It may be supposed’ is not in eds. 1 and 2.]

[4 ] [Eds. 1 and 2 read ‘would be in the actual state of production’.]

[5 ] [‘It must be acknowledged’ is not in eds. 1 and 2.]

[6 ] [‘Tonnage’ is not in eds. 1 and 2.]

[7 ] [Eds. 1 and 2 read ‘they may perhaps be defended as conducing to its defence’.]

[8 ] [Eds. 1 and 2 read ‘This may frequently be done’.]

[9 ] [Eds. 1 and 2 read ‘in time of peace’ here.]

[10 ] [The next four pages, to page 24 line 10, are not in eds. 1 and 2, which read in place of them ‘Some other bounties may be vindicated perhaps upon the same principle. It is of importance that the kingdom should depend as little as possible upon its neighbours for the manufactures necessary for its defence; and if these cannot otherwise be maintained at home, it is reasonable that all other branches of industry should be taxed in order to support them. The bounties upon the importation of naval stores from America, upon British made sail-cloth, and upon British made gunpowder, may perhaps all three be vindicated upon this principle. The first is a bounty upon the production of America, for the use of Great Britain. The two others are bounties upon exportation.’ The new paragraphs, with the two preceding paragraphs as amended, are given in Additions and Corrections.]

[1 ] [In Additions and Corrections the term is ‘seasteeks,’ as in the Appendix.]

[1 ] See the accounts at the end of the volume. [In Additions and Corrections they are printed in the text.]

[1 ] [The ten paragraphs ending here are not in eds. 1 and 2. See above, p. 19, note 9.]

[2 ] [Eds. 1 and 2 read ‘When that form has been altered by manufacture of any kind, they are called bounties.’]

[3 ] [Above, vol. i., p. 199.]

[1 ] [This heading is not in ed. 1.]

[1 ] [Not a misprint for ‘enables’. There are two knowledges, one of the state of the crop and the other of the daily sales.]

[2 ] [Above, vol. i., p. 159; below, p. 135.]

[1 ] [‘Any corn growing in the fields, or any other corn or grain, butter, cheese, fish or other dead victuals whatsoever’. But grain was exempted when below certain prices, e.g., wheat, 6s. 8d. the quarter.]

[1 ] [This and the preceding sentence are misleading. The effect of the provisions quoted in the preceding paragraph would have been to ‘annihilate altogether’ the trade of the corn merchant if they had been left unqualified. To avoid this consequence 5 and 6 Ed. VI., c. 14, § 7, provides that badgers, laders, kidders or carriers may be licensed to buy corn with the intent to sell it again in certain circumstances. So that the licensing of kidders was a considerable alleviation, not, as the text suggests, an aggravation.]

[2 ] [5 Eliz., c. 12, § 4.]

[3 ] [Ed. 1 reads ‘the consumer or his immediate factors’. It should be noticed that under 5 and 6 Edward VI., c. 14, § 7, the kidder might sell in ‘open fair or market’ as well as to consumers privately.]

[1 ] [Diligent search has hitherto failed to discover these statutes.]

[2 ] [§ 4 incorrectly quoted. The words are ‘not forestalling nor selling the same in the same market within three months’. Under 5 and 6 Ed. VI., c. 14, a person buying and selling again ‘in any fair or market holden or kept in the same place or in any other fair or market within four miles’ was a regrator, while a forestaller was one who bought or contracted to buy things on their way to market, or made any motion for enhancing the price of such things or preventing them going to market.]

[3 ] [12 Geo. III., c. 71, repeals 5 and 6 Ed. VI., c. 14, but does not mention 15 Car. II., c. 7, which is purely permissive. If 15 Car. II., c. 7, remained of any force in this respect it must have been merely in consequence of the common law being unfavourable to forestalling.]

[1 ] [Eds. 1 and 2 read ‘attends’.]

[1 ] [Charles Smith, Three Tracts on the Corn Trade and Corn Laws, 2nd ed., 1766, p. 145. The figures have been already quoted above, vol. i., p. 426.]

[2 ] [‘The export is bare one thirty-second part of the consumption, one thirty-third part of the growth exclusive of seed, one thirty-sixth part of the growth including the seed.’—Ibid., p. 144; quoted above, p. 10.]

[1 ] [This was not the first law of its kind. 3 Ed. IV., c. 2, was enacted because ‘the labourers and occupiers of husbandry within this realm of England be daily grievously endamaged by bringing of corn out of other lands and parts into this realm of England when corn of the growing of this realm is at a low price,’ and forbids importation of wheat when not over 6s. 8d., rye when not over 4s. and barley when not over 3s. the quarter. This Act was repealed by 21 Jac. I., c. 28, and 15 Car. II., c. 7, imposed a duty of 5s. 4d. on imported wheat, 4s. on rye, 2s. 8d. on barley, 2s. on buckwheat, 1s. 4d. on oats and 4s. on pease and beans, when the prices at the port of importation did not exceed for wheat, 48s.; barley and buckwheat, 28s.; oats, 13s. 4d.; rye, pease and beans, 32s. per quarter.]

[1 ] [Ed. 1 reads ‘restrained by duties proportionably’.]

[2 ] Before the 13th of the present king, the following were the duties payable upon the importation of the different sorts of grain:

These different duties were imposed, partly by the 22d of Charles II. in place of the Old Subsidy, partly by the New Subsidy, by the One-third and Two-thirds Subsidy, and by the Subsidy 1747. [The table of duties in this note is an exact copy of that in Charles Smith, Three Tracts on the Corn Trade, 2nd ed., 1766, p. 83. That author professes to have taken the figures from ‘Mr. Saxby, in his Book of Rates’ (i.e., Henry Saxby, The British Customs, containing an Historical and Practical Account of each branch of that Revenue, 1757, pp. 111-114), but besides rounding off Saxby’s fractions of a penny in an inaccurate and inconsistent manner, he has miscopied the second duty on barley, the first on pease and the third on wheat. The ‘Old Subsidy’ consisted of the 5 per cent. or 1s. poundage imposed by 12 Car. II., c. 4, on the values attributed to the various goods by the ‘Book of Rates’ annexed to the Act. According to this, imported beans, barley and malt were to be rated at 26s. 8d. the quarter when the actual price at the place of importation did not exceed 28s. When the actual price was higher than that they were to be rated at 5s. the quarter. Oats and pease were to be rated at 4s. the quarter. Rye when not over 36s. was to be rated at 26s. 8d., and when over that price at 5s. Wheat when not over 44s. was to be rated at 40s., and when over that price at 6s. 8d.

So under the Old Subsidy:—

The Act 22 Car. II., c. 13, took off these duties and substituted the following scheme:—

But 9 and 10 Will. III., c. 23, imposed a ‘New Subsidy’ exactly equal to the Old, so that duties equal to those of 12 Car. II., c. 4, were superimposed on those of 22 Car. II., c. 13. By 2 and 3 Ann., c. 9, an additional third, and by 3 and 4 Ann., c. 5, an additional two-thirds of the Old Subsidy were imposed, and by 21 Geo. II., c. 2, another amount equal to the Old Subsidy (‘the impost 1747’) was further imposed. So between 1747 and 1773 the duties were those of 22 Car. II., c. 13, plus three times those of 12 Car. II., c. 4. This gives the following scheme:—

Saxby’s figures are slightly less, as they take into account a 5 per cent. discount obtainable on all the subsidies except one. The note appears first in ed. 2.]

[1 ] [Eds. 1 and 2 do not contain ‘subsequent laws still further increased those duties,’ and read ‘the distress which in years of scarcity the strict execution of this statute might have brought’.]

[2 ] [These do not seem to have been numerous. There were cases in 1757 and 1766. See the table in Charles Smith, Three Tracts upon the Corn Trade and Corn Laws, 2nd ed., pp. 44, 45.]

[3 ] [Eds. 1 and 2 read ‘extend its cultivation’.]

[1 ] [Earlier statutes are 15 Hen. VI., c. 2; 20 Hen. VI., c. 6; 23 Hen. VI., c. 6; 1 and 2 P. and M., c. 5; 5 Eliz., c. 5. § 26; 13 Eliz., c. 13; and 1 Jac., c. 25, §§ 26, 27. The preamble of the first of these says ‘by the law it was ordained that no man might carry nor bring corn out of the realm of England without the King’s licence, for cause whereof farmers and other men which use manurement of their land may not sell their corn but of a bare price to the great damage of all the realm’. Exportation was therefore legalised without licence when grain was above certain prices.]

[2 ] [C. 7.]

[3 ] [C. 13.]

[4 ] [The ‘Book of Rates’ (see above, p. 38, note) rated wheat for export at 20s., oats at 6s. 8d., and other grain at 10s. the quarter, and the duty was a shilling in the pound on these values.]

[5 ] [1 W. and M., c. 12. The bounty was to be given ‘without taking or requiring anything for custom’.]

[6 ] [Because as to inland sale 15 Car. II., c. 7 (above, p. 34), remained in force.]

[1 ] [The Acts prohibiting exportation were much more numerous than the others. See above, p. 39, note 2, and the table in Charles Smith there referred to.]

[1 ] [Ed. 1 does not contain ‘of the greater part of which there was no drawback’.]

[1 ] [According to the argument above, p. 15.]

[2 ] [See above, p. 13.]

[3 ] [Above, vol. i., pp. 207-209.]

[1 ] [Ed. 1 reads ‘in one respect’.]

[2 ] [Ed. 1 reads only ‘By this statute the high duties upon importation for home consumption are taken off as soon as the price of wheat is so high as forty-eight shillings the quarter, and instead’.]

[3 ] [In place of this sentence ed. 1 reads ‘The home market is in this manner not so totally excluded from foreign supplies as it was before.’]

[4 ] [Ed. 1 reads (from the beginning of the paragraph) ‘By the same statute the old bounty of five shillings upon the quarter of wheat ceases when the price rises so high as forty-four shillings, and upon that of other grain in proportion. The bounties too upon the coarser sorts of grain are reduced somewhat lower than they were before, even at the prices at which they take place.’]

[5 ] [Ed. 1 reads ‘The same statute permits at all prices the importation of corn in order to be exported again, duty free; provided it is in the meantime lodged in the king’s warehouse.’]

[1 ] [Ed. 1 contains an additional sentence, ‘Some provision is thus made for the establishment of the carrying trade.’]

[2 ] [This paragraph is not in ed. 1.]

[3 ] [Ed. 1 reads (from the beginning of the paragraph) ‘But by the same law exportation is prohibited as soon as the price of wheat rises to forty-four shillings the quarter, and that of other grain in proportion. The price seems to be a good deal too low, and there seems to be an impropriety besides in stopping exportation altogether at the very same price at which that bounty which was given in order to force it is withdrawn.’]

[4 ] [These two sentences are not in ed. 1.]