The carrying trade, though it deserves no pre- CHAP. ference, ought not to be precluded, but to be left free like all other trades. It is a necessary refource for those capitals which cannot find employment either in the agriculture or in the manufactures of the country, either in its home trade or in its foreign trade of confumption. IV. The revenue of the customs, instead of suffering, profits from such drawbacks, by that part of the duty which is retained. If the whole duties had been retained, the foreign goods upon which they are paid, could feldom have been exported, nor confequently imported, for want of a market. The duties, therefore, of which a part is re tained, would never have been paid. These reasons seem sufficiently to justify draw. backs, and would justify them, though the whole duties, whether upon the produce of domeftic industry, or upon foreign goods, were always drawn back upon exportation. The revenue of excife would in this cafe, indeed, fuffer a little, and that of the customs a good deal more; but the natural balance of industry, the natural division and distribution of labour, which is always more or less disturbed by fuch duties, would be more nearly re-established by such a regulation. : These reasons, however, will justify drawbacks only upon exporting goods to those countries which are altogether foreign and independent, not to those in which our merchants and manufacturers enjoy a monopoly. A drawback, for example, upon the exportation of European goods IV. } BOOK to our American colonies, will not always occafion a greater exportation than what would have taken place without it. By means of the monopoly which our merchants and manufacturers enjoy there, the fame quantity might frequently, perhaps, be fent thither, though the whole duties were retained. The drawback, therefore, may frequently be pure loss to the revenue of excife and customs, without altering the state of the trade, or rendering it in any respect more extensive. How far fuch drawbacks can be justified, as a proper encouragement to the industry of our colonies, or how far it is advan. tageous to the mother-country, that they should be exempted from taxes which are paid by all the rest of their fellow-fubjects, will appear here. after when I come to treat of colonies. Drawbacks, however, it must always be understood, are useful only in those cafes in which the goods for the exportation of which they are given, are really exported to some foreign coun try; and not clandeftinely re-imported into our own. That fome drawbacks, particularly those upon tobacco, have frequently been abused in this manner, and have given occafion to many frauds equally hurtful both to the revenue and to the fair trader, is well known. CHAP. V. Of Bounties. BOUNTIES upon exportation are, in Great CHAP. Britain, frequently petitioned for, and fometimes granted to the produce of particular branches of domestic industry. By means of them our merchants and manufacturers, it is pretended, will be enabled to fell their goods as cheap or cheaper than their rivals in the foreign market. A greater quantity, it is said, will thus be exported, and the balance of trade consequently turned more in favour of our own country. We cannot give our workmen a monopoly in the foreign, as we have done in the home market. We cannot force foreigners to buy their goods, as we have done our own coun trymen. The next best expedient, it has been thought, therefore, is to pay them for buying. It is in this manner that the mercantile system proposes to enrich the whole country, and to put money into all our pockets by means of the balance of trade. Bounties, it is allowed, ought to be given to those branches of trade only which cannot be carried on without them. But every branch of trade in which the merchant can fell his goods for a price which replaces to him, with the ordinary profits of stock, the whole capital employed in preparing and sending them to market, can be carried $3 BOOK carried on without a bounty. Every fuch branch IV. is evidently upon a level with all the other branches of trade which are carried on without bounties, and cannot therefore require one more than they. Those trades only require bounties in which the merchant is obliged to fell his goods for a price which does not replace to him his capital, together with the ordinary profit; or in which he is obliged to fell them for less than it really costs him to fend them to market. The bounty is given in order to make up this lofs, and to encourage him to continue, or perhaps to begin, a trade of which the expence is fuppofed to be greater than the returns, of which every operation eats up a part of the capital employed in it, and which is of fuch a nature, that, if all other trades refembled it, there would foon be no capital left in the country. The trades, it is to be observed, which are carried on by means of bounties, are the only ones which can be carried on between two nations for any confiderable time together, in fuch a manner as that one of them shall always and regularly lofé, or fell its goods for less than it really costs to fend them to market. But if the bounty did not repay to the merchant what he would otherwife lose upon the price of his goods, his own interest would foon oblige him to employ his stock in another way, or to find out a trade in which the price of the goods would replace to him, with the ordinary profit, the capital employed in fending them to market. The effect of bounties, like that of all the other expedienta V. expedients of the mercantile system, can only be CHAP. to force the trade of a country into a channel much less advantageous than that in which it would naturally run of its own accord. The ingenious and well-informed author of the tracts upon the corn-trade has shown very clearly, that fince the bounty upon the exportation of corn was first established, the price of the corn exported, valued moderately enough, has exceeded that of the corn imported, valued very high, by a much greater sum than the amount of the whole bounties which have been paid during that period. This, he imagines, upon the true principles of the mercantile system, is a clear proof that this forced corn trade is beneficial to the nation; the value of the exportation exceeding that of the importation by a much greater sum than the whole extraordinary expence which the public has been at in order to get it exported, He does not confider that this extraordinary expence, or the bounty, is the smallest part of the expence which the exportation of corn really costs the society. The capital which the farmer employed in raising it, must likewise be taken into the account. Unless the price of the corn when fold in the foreign markets replaces, not only the bounty, but this capital, together with the ordinary profits of stock, the society is a lofer by the difference, or the national stock is so much diminished. But the very reason for which it has been thought necessary to grant a bounty, is the supposed infufficiency of the price to do this, |