Bounties upon the exportation of any homemade commodity are 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 expense: they imposed a very heavy

tax upon the whole body of the people; but they did not, in any sensible

degree, increase 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 depend upon

the general industry of the country.

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. The

prejudices established by the commercial system have taught us to believe,

that national wealth arises more immediately from exportation than from

production. 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 production

might sometimes occasion. A bounty upon exportation, by enabling them to

send abroad their 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 granted upon

some particular occasions. The tonnage bounties given to the white herring

and whale fisheries may, perhaps, be considered as somewhat of this

nature. They tend directly, it may be supposed, to render the goods

cheaper in the home market than they otherwise would be. In other

respects, their effects, it must be acknowledged, 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 tonnage bounties to those fisheries do not contribute to

the opulence of the nation, it may, perhaps, be thought that they

contribute to its defence, by augmenting the number of its sailors and

shipping. This, it may be alleged, may sometimes be done by means of such

bounties, at a much smaller expense than by keeping up a great standing

navy, if I may use such an expression, in the same way as a standing army.

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. 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 252,231¼. During these

eleven years, the tonnage bounties paid amounted to £155,463:11s. or

8s:2¼d. upon every barrel of sea-sticks, and to 12s:3¾d. 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 1s:6d.,

that upon foreign salt 10s. 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 2s:8d. 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 17s:11¾d.; and, when entered for home consumption, 14s:3¾d.;

and that every barrel cured with foreign salt, when exported, has cost

government £1:7:5¾d.; and, when entered for home consumption, £1:3:9¾d.

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. {See the accounts at the end of this Book.}

Secondly, The bounty to the white-herring fishery is a tonnage 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 the 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, £113:15s.; each barrel of merchantable herrings £159:7:6.

Thirdly, The mode of fishing, for which this tonnage bounty in the white

herring fishery has been given (by busses or decked vessels from twenty to

eighty tons burden ), 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 these 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 30s. 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.

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-bus 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 2s:8d. 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, 16s. 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 was 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 3s. to

about 6s. 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.

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 30s. the ton for the encouragement of the white herring

fishery (the 23d Geo. II. chap. 24), a joint stock company was erected,

with a capital of £500,000, to which the subscribers (over and above all

other encouragements, the tonnage bounty just now mentioned, the

exportation bounty of 2s:8d. 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 £10,000 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 defence 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 gunpowder, may,

perhaps, both be vindicated upon this principle.

But 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 expense. In public, as well as in private

expenses, 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.

What 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.

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 expense 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 £300,000.

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 Laws.

I cannot conclude this chapter concerning bounties, without 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,

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 of the

people, how opposite soever they may at first 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, enables 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.

Were 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. 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 monopolised by the force

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.

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 of 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 economy, 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.

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 preventive 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.

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 28s. 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 of

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, meal-men, 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 this 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 grain, 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 buy 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. 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, the

privilege of granting it was confined to the quarter-sessions.

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 a farmer no other customers but either the

consumers or their immediate factors, 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 shop-keeping 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 his profit, he was a loser, and 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 a 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 on 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 of

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.

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 he 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 legislature 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.

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.

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.

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 the

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 as 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

preventive 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.

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 20s. and 24s. 32s. and 40s. the quarter.

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

48s. 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. 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.

This statute, however, authorises in some measure two very absurd popular

prejudices.

First, It supposes, that when the price of wheat has risen so high as 48s.

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 48s. 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.

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 expense

and loss which necessarily attend 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 inconvenience 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 compared 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 would 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.

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 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.

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. 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, he 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 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, whenever the

price in the home market did not exceed 53s:4d. the quarter, was subjected

to a duty of 16s. the quarter; and to a duty of 8s. whenever the price did

not exceed £4. 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 has 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

equally high. Before the 13th of the present king, the following were the

duties payable upon the importation of the different sorts of grain:

Grain. Duties. Duties Duties.

Beans to 28s. per qr. 19s:10d. after till 40s. 16s:8d. then 12d.

Barley to 28s. - 19s:10d. - 32s. 16s. - 12d.

Malt is prohibited by the annual malt-tax bill.

Oats to 16s. - 5s:10d. after - 9½d.

Pease to 40s. - 16s: 0d. after - 9¾d.

Rye to 36s. - 19s:10d. till 40s. 16s:8d - 12d.

Wheat to 44s. - 21s: 9d. till 53s:4d. 17s. - 8s.

till £4, and after that about 1s:4d.

Buck-wheat to 32s. per qr. to pay 16s.

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. Subsequent laws still further

increased those duties.

The distress which, in years of scarcity, the strict execution of those

laws might have brought upon the people, would probably have been very

great; but, upon such occasions, its execution was generally suspended by

temporary statutes, 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 establishment 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 48s. 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,

certainly does not contribute directly to the plentiful supply of the home

market. It does so, however, indirectly. From whatever source this supply

maybe 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 require. The freedom of exportation enables it to extend

cultivation for the supply of foreign nations.

By the 12th of Charles II. c.4, the exportation of corn was permitted

whenever the price of wheat did not exceed 40s. the quarter, and that of

other grain in proportion. By the 15th of the same prince, this liberty

was extended till the price of wheat exceeded 48s. the quarter; and by the

22d, 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 1s., upon oats to

4d., and upon all other grain to 6d. the quarter. By the 1st of William

and Mary, the act which established this bounty, this small duty was

virtually taken off whenever the price of wheat did not exceed 48s. 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 48s. the quarter. 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 48s. 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, 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 and 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 preventive 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 everywhere 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 or corn that was likely to be exported. In a

Swiss canton, or in some of the little states in 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 or legislative authority

which ought to be exercised only, which can be pardoned only, in cases of

the most urgent necessity. The price at which exportation of corn is

prohibited, if it is ever to be prohibited, ought always to be a very high

price.

The laws concerning corn may everywhere 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 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 expense 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 must 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.

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 drawback; 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.

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 encumbers its operations: though the effect of those 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 of 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, has exactly

the same tendency with the practice of Spain and Portugal, to lower

somewhat the value of the precious metals in the country where it takes

place; yet Great Britain is certainly one of the richest countries in

Europe, while Spain and Portugal are perhaps amongst 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, 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, 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 counterbalanced 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 greatest part of them are absurd and foolish.

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 respects perhaps not quite so good.

By this statute, the high duties upon importation for home consumption are

taken off, so soon as the price of middling wheat rises to 48s. the

quarter; that of middling rye, pease, or beans, to 32s.; that of barley to

24s.; and that of oats to 16s.; and instead of them, a small duty is

imposed of only 6d upon the quarter of wheat, and upon that or other grain

in proportion. With regard to all those 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.

By the same statute, the old bounty of 5s. upon the exportation of wheat,

ceases so soon as the price rises to 44s. the quarter, instead of 48s. the

price at which it ceased before; that of 2s:6d. upon the exportation of

barley, ceases so soon as the price rises to 22s. instead of 24s. the

price at which it ceased before; that of 2s:6d. upon the exportation of

oatmeal, ceases so soon as the price rises to 14s. instead of 15s. the

price at which it ceased before. The bounty upon rye is reduced from

3s:6d. to 3s. and it ceases so soon as the price rises to 28s. instead of

32s. the price at which it ceased before. 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.

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 mean time

lodged in a warehouse under the joint locks of the king and the importer.

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.

So far this law seems evidently an improvement upon the ancient system.

But by the same law, a bounty of 2s. the quarter is given 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 pease or beans.

By the same law, too, the exportation of wheat is prohibited so soon 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. 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.

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 interest, prejudices, and temper of the times, would admit

of. It may perhaps in due time prepare the way for a better.

CHAPTER VI.

OF TREATIES OF COMMERCE.

When a nation binds itself by treaty, either to permit the entry of

certain goods from one foreign country which it prohibits from all others,

or to exempt the goods of one country from duties to which it subjects

those of all others, the country, or at least the merchants and

manufacturers of the country, whose commerce is so favoured, must

necessarily derive great advantage from the treaty. Those merchants and

manufacturers enjoy a sort of monopoly in the country which is so

indulgent to them. That country becomes a market, both more extensive and

more advantageous for their goods: more extensive, because the goods of

other nations being either excluded or subjected to heavier duties, it

takes off a greater quantity of theirs; more advantageous, because the

merchants of the favoured country, enjoying a sort of monopoly there, will

often sell their goods for a better price than if exposed to the free

competition of all other nations.

Such treaties, however, though they may be advantageous to the merchants

and manufacturers of the favoured, are necessarily disadvantageous to

those of the favouring country. A monopoly is thus granted against them to

a foreign nation; and they must frequently buy the foreign goods they have

occasion for, dearer than if the free competition of other nations was

admitted. That part of its own produce with which such a nation purchases

foreign goods, must consequently be sold cheaper; because, when two things

are exchanged for one another, the cheapness of the one is a necessary

consequence, or rather is the same thing, with the dearness of the other.

The exchangeable value of its annual produce, therefore, is likely to be

diminished by every such treaty. This diminution, however, can scarce

amount to any positive loss, but only to a lessening of the gain which it

might otherwise make. Though it sells its goods cheaper than it otherwise

might do, it will not probably sell them for less than they cost; nor, as

in the case of bounties, for a price which will not replace the capital

employed in bringing them to market, together with the ordinary profits of

stock. The trade could not go on long if it did. Even the favouring

country, therefore, may still gain by the trade, though less than if there

was a free competition.

Some treaties of commerce, however, have been supposed advantageous, upon

principles very different from these; and a commercial country has

sometimes granted a monopoly of this kind, against itself, to certain

goods of a foreign nation, because it expected, that in the whole commerce

between them, it would annually sell more than it would buy, and that a

balance in gold and silver would be annually returned to it. It is upon

this principle that the treaty of commerce between England and Portugal,

concluded in 1703 by Mr Methuen, has been so much commended. The following

is a literal translation of that treaty, which consists of three articles

only.

ART. I. His sacred royal majesty of Portugal promises, both in his own

name and that of his successors, to admit for ever hereafter, into

Portugal, the woollen cloths, and the rest of the woollen manufactures of

the British, as was accustomed, till they were prohibited by the law;

nevertheless upon this condition:

ART. II. That is to say, that her sacred royal majesty of Great Britain

shall, in her own name, and that of her successors, be obliged, for ever

hereafter, to admit the wines of the growth of Portugal into Britain; so

that at no time, whether there shall be peace or war between the kingdoms

of Britain and France, any thing more shall be demanded for these wines by

the name of custom or duty, or by whatsoever other title, directly or

indirectly, whether they shall be imported into Great Britain in pipes or

hogsheads, or other casks, than what shall be demanded for the like

quantity or measure of French wine, deducting or abating a third part of

the custom or duty. But if, at any time, this deduction or abatement of

customs, which is to be made as aforesaid, shall in any manner be

attempted and prejudiced, it shall be just and lawful for his sacred royal

majesty of Portugal, again to prohibit the woollen cloths, and the rest of

the British woollen manufactures.

ART. III. The most excellent lords the plenipotentiaries promise and take

upon themselves, that their above named masters shall ratify this treaty;

and within the space of two months the ratification shall be exchanged.

By this treaty, the crown of Portugal becomes bound to admit the English

woollens upon the same footing as before the prohibition; that is, not to

raise the duties which had been paid before that time. But it does not

become bound to admit them upon any better terms than those of any other

nation, of France or Holland, for example. The crown of Great Britain, on

the contrary, becomes bound to admit the wines of Portugal, upon paying

only two-thirds of the duty which is paid for those of France, the wines

most likely to come into competition with them. So far this treaty,

therefore, is evidently advantageous to Portugal, and disadvantageous to

Great Britain.

It has been celebrated, however, as a masterpiece of the commercial policy

of England. Portugal receives annually from the Brazils a greater quantity

of gold than can be employed in its domestic commerce, whether in the

shape of coin or of plate. The surplus is too valuable to be allowed to

lie idle and locked up in coffers; and as it can find no advantageous

market at home, it must, notwithstanding; any prohibition, be sent abroad,

and exchanged for something for which there is a more advantageous market

at home. A large share of it comes annually to England, in return either

for English goods, or for those of other European nations that receive

their returns through England. Mr Barretti was informed, that the weekly

packet-boat from Lisbon brings, one week with another, more than £50,000

in gold to England. The sum had probably been exaggerated. It would amount

to more than £2,600,000 a year, which is more than the Brazils are

supposed to afford.

Our merchants were, some years ago, out of humour with the crown of

Portugal. Some privileges which had been granted them, not by treaty, but

by the free grace of that crown, at the solicitation, indeed, it is

probable, and in return for much greater favours, defence and protection

from the crown of Great Britain, had been either infringed or revoked. The

people, therefore, usually most interested in celebrating the Portugal

trade, were then rather disposed to represent it as less advantageous than

it had commonly been imagined. The far greater part, almost the whole,

they pretended, of this annual importation of gold, was not on account of

Great Britain, but of other European nations; the fruits and wines of

Portugal annually imported into Great Britain nearly compensating the

value of the British goods sent thither.

Let us suppose, however, that the whole was on account of Great Britain,

and that it amounted to a still greater sum than Mr Barretti seems to

imagine; this trade would not, upon that account, be more advantageous

than any other, in which, for the same value sent out, we received an

equal value of consumable goods in return.

It is but a very small part of this importation which, it can be supposed,

is employed as an annual addition, either to the plate or to the coin of

the kingdom. The rest must all be sent abroad, and exchanged for

consumable goods of some kind or other. But if those consumable goods were

purchased directly with the produce of English industry, it would be more

for the advantage of England, than first to purchase with that produce the

gold of Portugal, and afterwards to purchase with that gold those

consumable goods. A direct foreign trade of consumption is always more

advantageous than a round-about one; and to bring the same value of

foreign goods to the home market requires a much smaller capital in the

one way than in the ether. If a smaller share of its industry, therefore,

had been employed in producing goods fit for the Portugal market, and a

greater in producing those lit for the other markets, where those

consumable goods for which there is a demand in Great Britain are to be

had, it would have been more for the advantage of England. To procure both

the gold which it wants for its own use, and the consumable goods, would,

in this way, employ a much smaller capital than at present. There would be

a spare capital, therefore, to be employed for other purposes, in exciting

an additional quantity of industry, and in raising a greater annual

produce.

Though Britain were entirely excluded from the Portugal trade, it could

find very little difficulty in procuring all the annual supplies of gold

which it wants, either for the purposes of plate, or of coin, or of

foreign trade. Gold, like every other commodity, is always somewhere or

another to be got for its value by those who have that value to give for

it. The annual surplus of gold in Portugal, besides, would still be sent

abroad, and though not carried away by Great Britain, would be carried

away by some other nation, which would be glad to sell it again for its

price, in the same manner as Great Britain does at present. In buying gold

of Portugal, indeed, we buy it at the first hand; whereas, in buying it of

any other nation, except Spain, we should buy it at the second, and might

pay somewhat dearer. This difference, however, would surely be too

insignificant to deserve the public attention.

Almost all our gold, it is said, comes from Portugal. With other nations,

the balance of trade is either against as, or not much in our favour. But

we should remember, that the more gold we import from one country, the

less we must necessarily import from all others. The effectual demand for

gold, like that for every other commodity, is in every country limited to

a certain quantity. If nine-tenths of this quantity are imported from one

country, there remains a tenth only to be imported from all others. The

more gold, besides, that is annually imported from some particular

countries, over and above what is requisite for plate and for coin, the

more must necessarily be exported to some others: and the more that most

insignificant object of modern policy, the balance of trade, appears to be

in our favour with some particular countries, the more it must necessarily

appear to be against us with many others.

It was upon this silly notion, however, that England could not subsist

without the Portugal trade, that, towards the end of the late war, France

and Spain, without pretending either offence or provocation, required the

king of Portugal to exclude all British ships from his ports, and, for the

security of this exclusion, to receive into them French or Spanish

garrisons. Had the king of Portugal submitted to those ignominious terms

which his brother-in-law the king of Spain proposed to him, Britain would

have been freed from a much greater inconveniency than the loss of the

Portugal trade, the burden of supporting a very weak ally, so unprovided

of every thing for his own defence, that the whole power of England, had

it been directed to that single purpose, could scarce, perhaps, have

defended him for another campaign. The loss of the Portugal trade would,

no doubt, have occasioned a considerable embarrassment to the merchants at

that time engaged in it, who might not, perhaps, have found out, for a

year or two, any other equally advantageous method of employing their

capitals; and in this would probably have consisted all the inconveniency

which England could have suffered from this notable piece of commercial

policy.

The great annual importation of gold and silver is neither for the purpose

of plate nor of coin, but of foreign trade. A round-about foreign trade of

consumption can be carried on more advantageously by means of these metals

than of almost any other goods. As they are the universal instruments of

commerce, they are more readily received in return for all commodities

than any other goods; and, on account of their small bulk and great value,

it costs less to transport them backward and forward from one place to

another than almost any other sort of merchandize, and they lose less of

their value by being so transported. Of all the commodities, therefore,

which are bought in one foreign country, for no other purpose but to be

sold or exchanged again for some other goods in another, there are none so

convenient as gold and silver. In facilitating all the different

round-about foreign trades of consumption which are carried on in Great

Britain, consists the principal advantage of the Portugal trade; and

though it is not a capital advantage, it is, no doubt, a considerable one.

That any annual addition which, it can reasonably be supposed, is made

either to the plate or to the coin of the kingdom, could require but a

very small annual importation of gold and silver, seems evident enough;

and though we had no direct trade with Portugal, this small quantity could

always, somewhere or another, be very easily got.

Though the goldsmiths trade be very considerable in Great Britain, the far

greater part of the new plate which they annually sell, is made from other

old plate melted down; so that the addition annually made to the whole

plate of the kingdom cannot be very great, and could require but a very

small annual importation.

It is the same case with the coin. Nobody imagines, I believe, that even

the greater part of the annual coinage, amounting, for ten years together,

before the late reformation of the gold coin, to upwards of £800,000

a-year in gold, was an annual addition to the money before current in the

kingdom. In a country where the expense of the coinage is defrayed by the

government, the value of the coin, even when it contains its full standard

weight of gold and silver, can never be much greater than that of an equal

quantity of those metals uncoined, because it requires only the trouble of

going to the mint, and the delay, perhaps, of a few weeks, to procure for

any quantity of uncoined gold and silver an equal quantity of those metals

in coin; but in every country the greater part of the current coin is

almost always more or less worn, or otherwise degenerated from its

standard. In Great Britain it was, before the late reformation, a good

deal so, the gold being more than two per cent., and the silver more than

eight per cent. below its standard weight. But if forty-four guineas and

a-half, containing their full standard weight, a pound weight of gold,

could purchase very little more than a pound weight of uncoined gold;

forty-four guineas and a-half, wanting a part of their weight, could not

purchase a pound weight, and something was to be added, in order to make

up the deficiency. The current price of gold bullion at market, therefore,

instead of being the same with the mint price, or £46:14:6, was then about

£47:14s., and sometimes about £48. When the greater part of the coin,

however, was in this degenerate condition, forty four guineas and a-half,

fresh from the mint, would purchase no more goods in the market than any

other ordinary guineas; because, when they came into the coffers of the

merchant, being confounded with other money, they could not afterwards be

distinguished without more trouble than the difference was worth. Like

other guineas, they were worth no more than £46:14:6. If thrown into the

melting pot, however, they produced, without any sensible loss, a pound

weight of standard gold, which could be sold at any time for between

£47:14s. and £48, either in gold or silver, as fit for all the purposes of

coin as that which had been melted down. There was an evident profit,

therefore, in melting down new-coined money; and it was done so

instantaneously, that no precaution of government could prevent it. The

operations of the mint were, upon this account, somewhat like the web of

Penelope; the work that was done in the day was undone in the night. The

mint was employed, not so much in making daily additions to the coin, as

in replacing the very best part of it, which was daily melted down.

Were the private people who carry their gold and silver to the mint to pay

themselves for the coinage, it would add to the value of those metals, in

the same manner as the fashion does to that of plate. Coined gold and

silver would be more valuable than uncoined. The seignorage, if it was not

exorbitant, would add to the bullion the whole value of the duty; because,

the government having everywhere the exclusive privilege of coining, no

coin can come to market cheaper than they think proper to afford it. If

the duty was exorbitant, indeed, that is, if it was very much above the

real value of the labour and expense requisite for coinage, false coiners,

both at home and abroad, might be encouraged, by the great difference

between the value of bullion and that of coin, to pour in so great a

quantity of counterfeit money as might reduce the value of the government

money. In France, however, though the seignorage is eight per cent., no

sensible inconveniency of this kind is found to arise from it. The dangers

to which a false coiner is everywhere exposed, if he lives in the country

of which he counterfeits the coin, and to which his agents or

correspondents are exposed, if he lives in a foreign country, are by far

too great to be incurred for the sake of a profit of six or seven per

cent.

The seignorage in France raises the value of the coin higher than in

proportion to the quantity of pure gold which it contains. Thus, by the

edict of January 1726, the mint price of fine gold of twenty-four carats

was fixed at seven hundred and forty livres nine sous and one denier

one-eleventh the mark of eight Paris ounces. {See Dictionnaire des

Monnoies, tom. ii. article Seigneurage, p. 439, par 81. Abbot de

Bazinghen, Conseiller-Commissaire en la Cour des Monnoies à Paris.} The

gold coin of France, making an allowance for the remedy of the mint,

contains twenty-one carats and three-fourths of fine gold, and two carats

one-fourth of alloy. The mark of standard gold, therefore, is worth no

more than about six hundred and seventy-one livres ten deniers. But in

France this mark of standard gold is coined into thirty louis d’ors of

twenty-four livres each, or into seven hundred and twenty livres. The

coinage, therefore, increases the value of a mark of standard gold

bullion, by the difference between six hundred and seventy-one livres ten

deniers and seven hundred and twenty livres, or by forty-eight livres

nineteen sous and two deniers.

A seignorage will, in many cases, take away altogether, and will in all

cases diminish, the profit of melting down the new coin. This profit

always arises from the difference between the quantity of bullion which

the common currency ought to contain and that which it actually does

contain. If this difference is less than the seignorage, there will be

loss instead of profit. If it is equal to the seignorage, there will be

neither profit nor loss. If it is greater than the seignorage, there will,

indeed, be some profit, but less than if there was no seignorage. If,

before the late reformation of the gold coin, for example, there had been

a seignorage of five per cent. upon the coinage, there would have been a

loss of three per cent. upon the melting down of the gold coin. If the

seignorage had been two per cent., there would have been neither profit

nor loss. If the seignorage had been one per cent., there would have been

a profit but of one per cent. only, instead of two per cent. Wherever

money is received by tale, therefore, and not by weight, a seignorage is

the most effectual preventive of the melting down of the coin, and, for

the same reason, of its exportation. It is the best and heaviest pieces

that are commonly either melted down or exported, because it is upon such

that the largest profits are made.

The law for the encouragement of the coinage, by rendering it duty-free,

was first enacted during the reign of Charles II. for a limited time, and

afterwards continued, by different prolongations, till 1769, when it was

rendered perpetual. The bank of England, in order to replenish their

coffers with money, are frequently obliged to carry bullion to the mint;

and it was more for their interest, they probably imagined, that the

coinage should be at the expense of the government than at their own. It

was probably out of complaisance to this great company, that the

government agreed to render this law perpetual. Should the custom of

weighing gold, however, come to be disused, as it is very likely to be on

account of its inconveniency; should the gold coin of England come to be

received by tale, as it was before the late recoinage this great company

may, perhaps, find that they have, upon this, as upon some other

occasions, mistaken their own interest not a little.

Before the late recoinage, when the gold currency of England was two per

cent. below its standard weight, as there was no seignorage, it was two

per cent. below the value of that quantity of standard gold bullion which

it ought to have contained. When this great company, therefore, bought

gold bullion in order to have it coined, they were obliged to pay for it

two per cent. more than it was worth after the coinage. But if there had

been a seignorage of two per cent. upon the coinage, the common gold

currency, though two per cent. below its standard weight, would,

notwithstanding, have been equal in value to the quantity of standard gold

which it ought to have contained; the value of the fashion compensating in

this case the diminution of the weight. They would, indeed, have had the

seignorage to pay, which being two per cent., their loss upon the whole

transaction would have been two per cent., exactly the same, but no

greater than it actually was.

If the seignorage had been five per cent. and the gold currency only two

per cent. below its standard weight, the bank would, in this case, have

gained three per cent. upon the price of the bullion; but as they would

have had a seignorage of five per cent. to pay upon the coinage, their

loss upon the whole transaction would, in the same manner, have been

exactly two per cent.

If the seignorage had been only one per cent., and the gold currency two

per cent. below its standard weight, the bank would, in this case, have

lost only one per cent. upon the price of the bullion; but as they would

likewise have had a seignorage of one per cent. to pay, their loss upon

the whole transaction would have been exactly two per cent., in the same

manner as in all other cases.

If there was a reasonable seignorage, while at the same time the coin

contained its full standard weight, as it has done very nearly since the

late recoinage, whatever the bank might lose by the seignorage, they would

gain upon the price of the bullion; and whatever they might gain upon the

price of the bullion, they would lose by the seignorage. They would

neither lose nor gain, therefore, upon the whole transaction, and they

would in this, as in all the foregoing cases, be exactly in the same

situation as if there was no seignorage.

When the tax upon a commodity is so moderate as not to encourage

smuggling, the merchant who deals in it, though he advances, does not

properly pay the tax, as he gets it back in the price of the commodity.

The tax is finally paid by the last purchaser or consumer. But money is a

commodity, with regard to which every man is a merchant. Nobody buys it

but in order to sell it again; and with regard to it there is, in ordinary

cases, no last purchaser or consumer. When the tax upon coinage,

therefore, is so moderate as not to encourage false coining, though every

body advances the tax, nobody finally pays it; because every body gets it

back in the advanced value of the coin.

A moderate seignorage, therefore, would not, in any case, augment the

expense of the bank, or of any other private persons who carry their

bullion to the mint in order to be coined; and the want of a moderate

seignorage does not in any case diminish it. Whether there is or is not a

seignorage, if the currency contains its full standard weight, the coinage

costs nothing to anybody; and if it is short of that weight, the coinage

must always cost the difference between the quantity of bullion which

ought to be contained in it, and that which actually is contained in it.

The government, therefore, when it defrays the expense of coinage, not

only incurs some small expense, but loses some small revenue which it

might get by a proper duty; and neither the bank, nor any other private

persons, are in the smallest degree benefited by this useless piece of

public generosity.

The directors of the bank, however, would probably be unwilling to agree

to the imposition of a seignorage upon the authority of a speculation

which promises them no gain, but only pretends to insure them from any

loss. In the present state of the gold coin, and as long as it continues

to be received by weight, they certainly would gain nothing by such a

change. But if the custom of weighing the gold coin should ever go into

disuse, as it is very likely to do, and if the gold coin should ever fall

into the same state of degradation in which it was before the late

recoinage, the gain, or more properly the savings, of the bank,

in consequence of the imposition of a seignorage, would probably be very

considerable. The bank of England is the only company which sends any

considerable quantity of bullion to the mint, and the burden of the annual

coinage falls entirely, or almost entirely, upon it. If this annual

coinage had nothing to do but to repair the unavoidable losses and

necessary wear and tear of the coin, it could seldom exceed fifty

thousand, or at most a hundred thousand pounds. But when the coin is

degraded below its standard weight, the annual coinage must, besides this,

fill up the large vacuities which exportation and the melting pot are

continually making in the current coin. It was upon this account, that

during the ten or twelve years immediately preceding the late reformation

of the gold coin, the annual coinage amounted, at an average, to more than

£850,000. But if there had been a seignorage of four or five per cent.

upon the gold coin, it would probably, even in the state in which things

then were, have put an effectual stop to the business both of exportation

and of the melting pot. The bank, instead of losing every year about two

and a half per cent. upon the bullion which was to be coined into more

than eight hundred and fifty thousand pounds, or incurring an annual loss

of more than £21,250 pounds, would not probably have incurred the tenth

part of that loss.

The revenue allotted by parliament for defraying the expense of the

coinage is but fourteen thousand pounds a-year; and the real expense which

it costs the government, or the fees of the officers of the mint, do not,

upon ordinary occasions, I am assured, exceed the half of that sum. The

saving of so very small a sum, or even the gaining of another, which could

not well be much larger, are objects too inconsiderable, it may be

thought, to deserve the serious attention of government. But the saving of

eighteen or twenty thousand pounds a-year, in case of an event which is

not improbable, which has frequently happened before, and which is very

likely to happen again, is surely an object which well deserves the

serious attention, even of so great a company as the bank of England.

Some of the foregoing reasonings and observations might, perhaps, have

been more properly placed in those chapters of the first book which treat

of the origin and use of money, and of the difference between the real and

the nominal price of commodities. But as the law for the encouragement of

coinage derives its origin from those vulgar prejudices which have been

introduced by the mercantile system, I judged it more proper to reserve

them for this chapter. Nothing could be more agreeable to the spirit of

that system than a sort of bounty upon the production of money, the very

thing which, it supposes, constitutes the wealth of every nation. It is

one of its many admirable expedients for enriching the country.

CHAPTER VII.

OF COLONIES.

PART I. Of the Motives for Establishing New Colonies.

The interest which occasioned the first settlement of the different

European colonies in America and the West Indies, was not altogether so

plain and distinct as that which directed the establishment of those of

ancient Greece and Rome.

All the different states of ancient Greece possessed, each of them, but a

very small territory; and when the people in anyone of them multiplied

beyond what that territory could easily maintain, a part of them were sent

in quest of a new habitation, in some remote and distant part of the

world; the warlike neighbours who surrounded them on all sides, rendering

it difficult for any of them to enlarge very much its territory at home.

The colonies of the Dorians resorted chiefly to Italy and Sicily, which,

in the times preceding the foundation of Rome, were inhabited by barbarous

and uncivilized nations; those of the Ionians and Aeolians, the two other

great tribes of the Greeks, to Asia Minor and the islands of the Aegean

sea, of which the inhabitants sewn at that time to have been pretty much

in the same state as those of Sicily and Italy. The mother city, though

she considered the colony as a child, at all times entitled to great

favour and assistance, and owing in return much gratitude and respect, yet

considered it as an emancipated child, over whom she pretended to claim no

direct authority or jurisdiction. The colony settled its own form of

government, enacted its own laws, elected its own magistrates, and made

peace or war with its neighbours, as an independent state, which had no

occasion to wait for the approbation or consent of the mother city.

Nothing can be more plain and distinct than the interest which directed

every such establishment.

Rome, like most of the other ancient republics, was originally founded

upon an agrarian law, which divided the public territory, in a certain

proportion, among the different citizens who composed the state. The

course of human affairs, by marriage, by succession, and by alienation,

necessarily deranged this original division, and frequently threw the

lands which had been allotted for the maintenance of many different

families, into the possession of a single person. To remedy this disorder,

for such it was supposed to be, a law was made, restricting the quantity

of land which any citizen could possess to five hundred jugera; about 350

English acres. This law, however, though we read of its having been

executed upon one or two occasions, was either neglected or evaded, and

the inequality of fortunes went on continually increasing. The greater

part of the citizens had no land; and without it the manners and customs

of those times rendered it difficult for a freeman to maintain his

independency. In the present times, though a poor man has no land of his

own, if he has a little stock, he may either farm the lands of another, or

he may carry on some little retail trade; and if he has no stock, he may

find employment either as a country labourer, or as an artificer. But

among the ancient Romans, the lands of the rich were all cultivated by

slaves, who wrought under an overseer, who was likewise a slave; so that a

poor freeman had little chance of being employed either as a farmer or as

a labourer. All trades and manufactures, too, even the retail trade, were

carried on by the slaves of the rich for the benefit of their masters,

whose wealth, authority, and protection, made it difficult for a poor

freeman to maintain the competition against them. The citizens, therefore,

who had no land, had scarce any other means of subsistence but the

bounties of the candidates at the annual elections. The tribunes, when

they had a mind to animate the people against the rich and the great, put

them in mind of the ancient divisions of lands, and represented that law

which restricted this sort of private property as the fundamental law of

the republic. The people became clamorous to get land, and the rich and

the great, we may believe, were perfectly determined not to give them any

part of theirs. To satisfy them in some measure, therefore, they

frequently proposed to send out a new colony. But conquering Rome was,

even upon such occasions, under no necessity of turning out her citizens

to seek their fortune, if one may so, through the wide world, without

knowing where they were to settle. She assigned them lands generally in

the conquered provinces of Italy, where, being within the dominions of the

republic, they could never form any independent state, but were at best

but a sort of corporation, which, though it had the power of enacting

bye-laws for its own government, was at all times subject to the

correction, jurisdiction, and legislative authority of the mother city.

The sending out a colony of this kind not only gave some satisfaction to

the people, but often established a sort of garrison, too, in a newly

conquered province, of which the obedience might otherwise have been

doubtful. A Roman colony, therefore, whether we consider the nature of the

establishment itself, or the motives for making it, was altogether

different from a Greek one. The words, accordingly, which in the original

languages denote those different establishments, have very different

meanings. The Latin word (colonia) signifies simply a plantation. The

Greek word (apoixia), on the contrary, signifies a separation of dwelling,

a departure from home, a going out of the house. But though the Roman

colonies were, in many respects, different from the Greek ones, the

interest which prompted to establish them was equally plain and distinct.

Both institutions derived their origin, either from irresistible

necessity, or from clear and evident utility.

The establishment of the European colonies in America and the West Indies

arose from no necessity; and though the utility which has resulted from

them has been very great, it is not altogether so clear and evident. It

was not understood at their first establishment, and was not the motive,

either of that establishment, or of the discoveries which gave occasion to

it; and the nature, extent, and limits of that utility, are not, perhaps,

well understood at this day.

The Venetians, during the fourteenth and fifteenth centuries, carried on a

very advantageous commerce in spiceries and other East India goods, which

they distributed among the other nations of Europe. They purchased them

chiefly in Egypt, at that time under the dominion of the Mamelukes, the

enemies of the Turks, of whom the Venetians were the enemies; and this

union of interest, assisted by the money of Venice, formed such a

connexion as gave the Venetians almost a monopoly of the trade.

The great profits of the Venetians tempted the avidity of the Portuguese.

They had been endeavouring, during the course of the fifteenth century, to

find out by sea a way to the countries from which the Moors brought them

ivory and gold dust across the desert. They discovered the Madeiras, the

Canaries, the Azores, the Cape de Verd islands, the coast of Guinea, that

of Loango, Congo, Angola, and Benguela, and, finally, the Cape of Good

Hope. They had long wished to share in the profitable traffic of the

Venetians, and this last discovery opened to them a probable prospect of

doing so. In 1497, Vasco de Gamo sailed from the port of Lisbon with a

fleet of four ships, and, after a navigation of eleven months, arrived

upon the coast of Indostan; and thus completed a course of discoveries

which had been pursued with great steadiness, and with very little

interruption, for near a century together.

Some years before this, while the expectations of Europe were in suspense

about the projects of the Portuguese, of which the success appeared yet to

be doubtful, a Genoese pilot formed the yet more daring project of sailing

to the East Indies by the west. The situation of those countries was at

that time very imperfectly known in Europe. The few European travellers

who had been there, had magnified the distance, perhaps through simplicity

and ignorance; what was really very great, appearing almost infinite to

those who could not measure it; or, perhaps, in order to increase somewhat

more the marvellous of their own adventures in visiting regions so

immensely remote from Europe. The longer the way was by the east, Columbus

very justly concluded, the shorter it would be by the west. He proposed,

therefore, to take that way, as both the shortest and the surest, and he

had the good fortune to convince Isabella of Castile of the probability of

his project. He sailed from the port of Palos in August 1492, near five

years before the expedition of Vasco de Gamo set out from Portugal; and,

after a voyage of between two and three months, discovered first some of

the small Bahama or Lucyan islands, and afterwards the great island of St.

Domingo.

But the countries which Columbus discovered, either in this or in any of

his subsequent voyages, had no resemblance to those which he had gone in

quest of. Instead of the wealth, cultivation, and populousness of China

and Indostan, he found, in St. Domingo, and in all the other parts of the

new world which he ever visited, nothing but a country quite covered with

wood, uncultivated, and inhabited only by some tribes of naked and

miserable savages. He was not very willing, however, to believe that they

were not the same with some of the countries described by Marco Polo, the

first European who had visited, or at least had left behind him any

description of China or the East Indies; and a very slight resemblance,

such as that which he found between the name of Cibao, a mountain in St.

Domingo, and that of Cipange, mentioned by Marco Polo, was frequently

sufficient to make him return to this favourite prepossession, though

contrary to the clearest evidence. In his letters to Ferdinand and

Isabella, he called the countries which he had discovered the Indies. He

entertained no doubt but that they were the extremity of those which had

been described by Marco Polo, and that they were not very distant from the

Ganges, or from the countries which had been conquered by Alexander. Even

when at last convinced that they were different, he still flattered

himself that those rich countries were at no great distance; and in a

subsequent voyage, accordingly, went in quest of them along the coast of

Terra Firma, and towards the Isthmus of Darien.

In consequence of this mistake of Columbus, the name of the Indies has

stuck to those unfortunate countries ever since; and when it was at last

clearly discovered that the new were altogether different from the old

Indies, the former were called the West, in contradistinction to the

latter, which were called the East Indies.

It was of importance to Columbus, however, that the countries which he had

discovered, whatever they were, should be represented to the court of

Spain as of very great consequence; and, in what constitutes the real

riches of every country, the animal and vegetable productions of the soil,

there was at that time nothing which could well justify such a

representation of them.

The cori, something between a rat and a rabbit, and supposed by Mr Buffon

to be the same with the aperea of Brazil, was the largest viviparous

quadruped in St. Domingo. This species seems never to have been very

numerous; and the dogs and cats of the Spaniards are said to have long ago

almost entirely extirpated it, as well as some other tribes of a still

smaller size. These, however, together with a pretty large lizard, called

the ivana or iguana, constituted the principal part of the animal food

which the land afforded.

The vegetable food of the inhabitants, though, from their want of

industry, not very abundant, was not altogether so scanty. It consisted in

Indian corn, yams, potatoes, bananas, etc., plants which were then

altogether unknown in Europe, and which have never since been very much

esteemed in it, or supposed to yield a sustenance equal to what is drawn

from the common sorts of grain and pulse, which have been cultivated in

this part of the world time out of mind.

The cotton plant, indeed, afforded the material of a very important

manufacture, and was at that time, to Europeans, undoubtedly the most

valuable of all the vegetable productions of those islands. But though, in

the end of the fifteenth century, the muslins and other cotton goods of

the East Indies were much esteemed in every part of Europe, the cotton

manufacture itself was not cultivated in any part of it. Even this

production, therefore, could not at that time appear in the eyes of

Europeans to be of very great consequence.

Finding nothing, either in the animals or vegetables of the newly

discovered countries which could justify a very advantageous

representation of them, Columbus turned his view towards their minerals;

and in the richness of their productions of this third kingdom, he

flattered himself he had found a full compensation for the insignificancy

of those of the other two. The little bits of gold with which the

inhabitants ornamented their dress, and which, he was informed, they

frequently found in the rivulets and torrents which fell from the

mountains, were sufficient to satisfy him that those mountains abounded

with the richest gold mines. St. Domingo, therefore, was represented as a

country abounding with gold, and upon that account (according to the

prejudices not only of the present times, but of those times), an

inexhaustible source of real wealth to the crown and kingdom of Spain.

When Columbus, upon his return from his first voyage, was introduced with

a sort of triumphal honours to the sovereigns of Castile and Arragon, the

principal productions of the countries which he had discovered were

carried in solemn procession before him. The only valuable part of them

consisted in some little fillets, bracelets, and other ornaments of gold,

and in some bales of cotton. The rest were mere objects of vulgar wonder

and curiosity; some reeds of an extraordinary size, some birds of a very

beautiful plumage, and some stuffed skins of the huge alligator and

manati; all of which were preceded by six or seven of the wretched

natives, whose singular colour and appearance added greatly to the novelty

of the show.

In consequence of the representations of Columbus, the council of Castile

determined to take possession of the countries of which the inhabitants

were plainly incapable of defending themselves. The pious purpose of

converting them to Christianity sanctified the injustice of the project.

But the hope of finding treasures of gold there was the sole motive which

prompted to undertake it; and to give this motive the greater weight, it

was proposed by Columbus, that the half of all the gold and silver that

should be found there, should belong to the crown. This proposal was

approved of by the council.

As long as the whole, or the greater part of the gold which the first

adventurers imported into Europe was got by so very easy a method as the

plundering of the defenceless natives, it was not perhaps very difficult

to pay even this heavy tax; but when the natives were once fairly stript

of all that they had, which, in St. Domingo, and in all the other

countries discovered by Columbus, was done completely in six or eight

years, and when, in order to find more, it had become necessary to dig for

it in the mines, there was no longer any possibility of paying this tax.

The rigorous exaction of it, accordingly, first occasioned, it is said,

the total abandoning of the mines of St. Domingo, which have never been

wrought since. It was soon reduced, therefore, to a third; then to a

fifth; afterwards to a tenth; and at last to a twentieth part of the gross

produce of the gold mines. The tax upon silver continued for a long time

to be a fifth of the gross produce. It was reduced to a tenth only in the

course of the present century. But the first adventurers do not appear to

have been much interested about silver. Nothing less precious than gold

seemed worthy of their attention.

All the other enterprizes of the Spaniards in the New World, subsequent to

those of Columbus, seem to have been prompted by the same motive. It was

the sacred thirst of gold that carried Ovieda, Nicuessa, and Vasco Nugnes

de Balboa, to the Isthmus of Darien; that carried Cortes to Mexico,

Almagro and Pizarro to Chili and Peru. When those adventurers arrived upon

any unknown coast, their first inquiry was always if there was any gold to

be found there; and according to the information which they received

concerning this particular, they determined either to quit the country or

to settle in it.

Of all those expensive and uncertain projects, however, which bring

bankruptcy upon the greater part of the people who engage in them, there

is none, perhaps, more perfectly ruinous than the search after new silver

and gold mines. It is, perhaps, the most disadvantageous lottery in the

world, or the one in which the gain of those who draw the prizes bears the

least proportion to the loss of those who draw the blanks; for though the

prizes are few, and the blanks many, the common price of a ticket is the

whole fortune of a very rich man. Projects of mining, instead of replacing

the capital employed in them, together with the ordinary profits of stock,

commonly absorb both capital and profit. They are the projects, therefore,

to which, of all others, a prudent lawgiver, who desired to increase the

capital of his nation, would least choose to give any extraordinary

encouragement, or to turn towards them a greater share of that capital

than what would go to them of its own accord. Such, in reality, is the

absurd confidence which almost all men have in their own good fortune,

that wherever there is the least probability of success, too great a share

of it is apt to go to them of its own accord.

But though the judgment of sober reason and experience concerning such

projects has always been extremely unfavourable, that of human avidity has

commonly been quite otherwise. The same passion which has suggested to so

many people the absurd idea of the philosopher’s stone, has suggested to

others the equally absurd one of immense rich mines of gold and silver.

They did not consider that the value of those metals has, in all ages and

nations, arisen chiefly from their scarcity, and that their scarcity has

arisen from the very small quantities of them which nature has anywhere

deposited in one place, from the hard and intractable substances with

which she has almost everywhere surrounded those small quantities, and

consequently from the labour and expense which are everywhere necessary in

order to penetrate, and get at them. They flattered themselves that veins

of those metals might in many places be found, as large and as abundant as

those which are commonly found of lead, or copper, or tin, or iron. The

dream of Sir Waiter Raleigh, concerning the golden city and country of El

Dorado, may satisfy us, that even wise men are not always exempt from such

strange delusions. More than a hundred years after the death of that great

man, the Jesuit Gumila was still convinced of the reality of that

wonderful country, and expressed, with great warmth, and, I dare say, with

great sincerity, how happy he should be to carry the light of the gospel

to a people who could so well reward the pious labours of their

missionary.

In the countries first discovered by the Spaniards, no gold and silver

mines are at present known which are supposed to be worth the working. The

quantities of those metals which the first adventurers are said to have

found there, had probably been very much magnified, as well as the

fertility of the mines which were wrought immediately after the first

discovery. What those adventurers were reported to have found, however,

was sufficient to inflame the avidity of all their countrymen. Every

Spaniard who sailed to America expected to find an El Dorado. Fortune,

too, did upon this what she has done upon very few other occasions. She

realized in some measure the extravagant hopes of her votaries; and in the

discovery and conquest of Mexico and Peru (of which the one happened about

thirty, and the other about forty, years after the first expedition of

Columbus), she presented them with something not very unlike that

profusion of the precious metals which they sought for.

A project of commerce to the East Indies, therefore, gave occasion to the

first discovery of the West. A project of conquest gave occasion to all

the establishments of the Spaniards in those newly discovered countries.

The motive which excited them to this conquest was a project of gold and

silver mines; and a course of accidents which no human wisdom could

foresee, rendered this project much more successful than the undertakers

had any reasonable grounds for expecting.

The first adventurers of all the other nations of Europe who attempted to

make settlements in America, were animated by the like chimerical views;

but they were not equally successful. It was more than a hundred years

after the first settlement of the Brazils, before any silver, gold, or

diamond mines, were discovered there. In the English, French, Dutch, and

Danish colonies, none have ever yet been discovered, at least none that

are at present supposed to be worth the working. The first English

settlers in North America, however, offered a fifth of all the gold and

silver which should be found there to the king, as a motive for granting

them their patents. In the patents of Sir Waiter Raleigh, to the London

and Plymouth companies, to the council of Plymouth, etc. this fifth was

accordingly reserved to the crown. To the expectation of finding gold and

silver mines, those first settlers, too, joined that of discovering a

north-west passage to the East Indies. They have hitherto been

disappointed in both.