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IV.

BOOK and manufacturers enjoy a monopoly. A drawback, for example, upon the exportation of European goods to our American colonies, will not always occafion a greater exportation than what would have taken place without it. By means of the monopply which our merchants and ma nufacturers 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 excise and customs, without altering the state of the trade, or rendering it in any refpect more extenfive. How far fuch drawbacks can be justified, as a proper encouragement to the industry of our colonies, or how far it is advantageous to the mother-country, that they fhould be exempted from taxes which are paid by all the reft of their fellow-fubjects, will appear hereafter when I come to treat of colonies.

DRAWBACKS, however, it must always be understood, 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 thofe 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.

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CHAP. V.

Of Bounties.

V.

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 propofes 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 fending them to market, can be carried

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JV.

BOOK carried on without a bounty. Every fuch branch is evidently upon a level with all the other branches of trade which are carried on without bounties, and cannot therefore require one more than they. Those trades only require bounties in which the merchant is obliged to 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 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 fhall 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 ex

pedients

V.

pedients of the mercantile fyftem, can only be to cHAP. force the trade of a country into a channel much lefs 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 firft established, the price of the corn exported, valued moderately enough, has exceeded that of the corn imported, valued very high, by a much greater fum than the amount of the whole bounties which have been paid during that period. This, he imagines, upon the true principles of the mercantile fyftem, 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 fum than the whole extraordinary expence which the public has been at in order to get it exported. He does not confider that this extraordi

nary expence, or the bounty, is the smallest part of the expence which the exportation of corn really costs the fociety. The capital which the farmer employed in raifing it, muft likewife 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 fòciety is a lofer by the difference, or the national ftock is so much diminished. But the very reafon for which it has been thought neceffary to grant à bounty, is the fuppofed infufficiency of the price to do this,

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BOOK

IV.

THE average price of corn, it has been faid, has fallen confiderably fince the establishment of the bounty. That the average price of corn began to fall fomewhat towards the end of the laft century, and has continued to do fo during the courfe of the fixty-four firft years of the prefent, I have already endeavoured to fhow. But this event, fuppofing it to be as real as I believe it to be, must have happened in fpite of the bounty, and cannot poffibly have happened in confequence of it. It has happened in France, as well as in England, though in France there was, not only no bounty, but, till 1764, the exportation of corn was fubjected to a general prohibition. This gradual fall in the average price of grain, it is probable, therefore, is ultimately owing neither to the one regulation nor to the other, but to that gradual and infenfible rife in the real value of filver, which, in the first book of this difcourfe, I have endeavoured to fhow has taken place in the general market of Europe, during the course of the prefent century. It feems to be altogether impoffible that the bounty could ever contribute to lower the price of grain.

IN years of plenty, it has already been obferved, the bounty, by occafioning an extraordinary exportation, neceffarily keeps up the price of corn in the home market above what it would naturally fall to. To do fo was the avowed purpose of the institution. In In years of fcarcity, though the bounty is frequently fufpended, yet the great exportation which it occafions in years

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