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IV.

BOOK allow no fort of encouragement. The period between the granting of this indulgence and the revolt of our North American colonies was probably too fhort to admit of any confiderable change in the customs of thofe countries.

The fame act, which, in the drawback upon all wines, except French wines, thus favoured the colonies fo much more than other countries; in those, upon the greater part of other commodities, favoured them much lefs.

Upon the exportation of the greater part of commodities to other countries, half the old fubfidy was drawn back. But this law enacted, that no part of that duty fhould be drawn back upon the exportation to the colonies of any commodities, of the growth or manufacture either of Europe or the East Indies, except wines, white callicoes and muflins.

Drawbacks were, perhaps, originally granted for the encouragement of the carrying trade, which, as the freight of the fhips is frequently paid by foreigners in money, was fuppofed to be peculiarly fitted for bringing gold and filver into the country. But though the carrying trade certainly deferves no peculiar encouragement, though the motive of the inftitution was, perhaps, abundantly foolish, the inftitution itfelf feems reasonable enough. Such drawbacks cannot force into this trade a greater fhare of the capital of the country than what would have gone to it of its own accord, had there been no duties upon importation. They only prevent its being excluded altogether by thofe duties.

The

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The carrying trade, though it deferves no pre- CHA P. ference, ought not to be precluded, but to be left free like all other trades. It is a neceffary refource for thofe 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.

The revenue of the customs, inftead of fuffering, profits from fuch 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 retained, would never have been paid.

These reasons seem fufficiently to juftify drawbacks, 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 induftry, the natural divifion and diftribution of labour, which is always more or lefs difturbed by fuch duties, would be more nearly re-established by fuch a regulation.

These reasons, however, will justify drawbacks only upon exporting goods to thofe countries. which are altogether foreign and independent, not to thofe in which our merchants and manufacturers enjoy a monopoly. A drawback, for example, upon the exportation of European goods

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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 lofs to the revenue of excife and customs, without altering the ftate of the trade, or rendering it in any respect more extenfive. How far fuch drawbacks can be justified, as a proper encouragement to the induftry of our colonies, or how far it is advantageous to the mother-country, that they should be exempted from taxes which are paid by all the rest of their fellow-fubjects, will appear hereafter when I come to treat of colonies.

Drawbacks, however, it must always be underftood, are useful only in thofe cafes in which the goods for the exportation of which they are given, are really exported to fome foreign country; 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.

V.

BOUN OUNTIES 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 faid, will thus be exported, and the balance of trade confequently turned more in favour of our own country. We cannot give our workmen a monopoly in the foreign, as we have done in the home market. We cannot force foreigners to buy their goods, as we have done our own countrymen. The next beft expedient, it has been thought, therefore, is to pay them for buying. It is in this manner that the mercantile fyftem 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 thofe 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 flock, the whole capital employed in preparing and fending them to market, can be carried

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BOOK carried on without a bounty. Every fuch branch is evidently upon a level with all the other

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branches of trade which are carried on without bounties, and cannot therefore require one more than they. Thofe 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 lefs than it really cofts 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 obferved, 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 lofe, or fell its goods for lefs than it really cofts to fend them to market. But if the bounty did not repay to the merchant what he would otherwife lofe upon the price of his goods, his own intereft 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 expedients

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