This augmentation will be most rapid | evil. Such are the results of bounties. when profits are highest; that trade, there- paid on production. But bounties on exfore, which is most profitable to the indi-portation have a very different and worse vidual, is most beneficial to the country; and the greatest advantage that can befal a nation, is a permanent rise in the average profits of stock. Now, as encouragement to any particular trade cannot influence the general rate of profits, it can in no wise tend to produce the only result from which the people receive real benefit. A bounty is the converse of a tax, and, consequently, as it lessens the cost of production, it diminishes price to the amount of the bounty paid; but, as the bounty itself must be raised by taxation, the price of the articles on which it is levied must be raised to the same extent, as the commodity, on which the bounty is paid, will be depressed: for competition will not allow either the profits on one to be below, or on the other to be above the average, level. Thus, if a tax of 100,000l. were annually levied upon shoes, and paid as a bounty upon the production of stockings, the price of shoes would rise in proportion to the fall in stockings; and no one would be able to clothe his legs a whit the cheaper: on the contrary, the expence would be rather increased, for, as the tax cannot be raised without expense, the bounty paid must fall short of the tax levied; and the difference would be so much lost to the consumers of shoes and stockings. As what is paid must have been received, whatever is gained by one party is lost by another if more stockings and fewer shoes are consumed, either the bounty must be diminished, or the tax increased, or transferred to some other commodity; and the community would neither gain nor lose.

It is not our intention, nor is it within the scope of our discussion, to trace the various and interesting effects produced upon wages and profits, according as the bounty is paid, or the tax levied upon commodities which are principally consumed by labourers or capitalists. It is sufficient for us to shew that it cannot benefit any class, without equally prejudicing another; and that the mass of the production of the country remains unchanged: still, however, as it alters existing relations, as it may cause a transfer of capital and some consequent loss, and as it causes an expenditure, however slight, without return, it is accompanied by some

effect, though by the operation of the same principles. Such bounties tend to lower the price of the article on which they are bestowed, not for the home, but for the foreign consumer. If Great Britain paid a bounty of 3 per cent. above the cost of carriage, on the exportation of a commodity to France, for the production of which each country possessed the same advantages, the latter deriving her supplies from the former, would withdraw her capital from this employment, to which the capital of Great Britain would be attracted. The demands, however, of the domestic consumer would remain unaltered, and must be met by imports from abroad, for which payment would be made in the commodity encouraged by the bounty. The French capital withdrawn from the production of this very commodity, would either directly, or through the intervention of some other country, supply the unsatisfied demands of the domestic consumer, by which process an additional 3 per cent. would be gained on that capital; while at home the sole result would be to increase the quantity produced of the encouraged article, without altering the cost of production. The foreign consumer would save the bounty for the purchase of other commodities, or the accumulation of capital; while the home consumer, forced to pay dearer for some articles, and cheaper for none, would suffer under a needlessly limited command over the objects of desire, and a diminished power of accumulation.

What is true of bounties is equally true of drawbacks; though the latter may bear an appearance of justice, and the former of favour, the effects are the same. Drawbacks are but equivalents on exportation for duties on importation, and in no wise affect the price in the home market, which is determined by the cost of production. In excised articles, where the duty levied in one stage of production, is partially returned in a succeeding stage, it is immaterial to the consumer whether this surplus be levied and repaid, or altogether omitted.

As bounties and restrictive duties correspond in their operation, so are they to be removed by similar remedies. The first step of a gradual diminution of a bounty, would destroy the foreign demand; while the fixing a decreasing li

mit to the quantity, on which the bounty | bourer unavailing. These necessary losses, should be paid, would gently and effectual- attendant on the whims and improvements ly remove the evil, by the operation we of the world, are but slight, when comhave already traced, when describing the pared with the evils which arise from effect of an increasing limited admission the fatal propensities of those who govern of foreign goods, on the home producer. mankind. The commencement, or close Fortunately the actual evil is less in the of a single war, produces more extensive case of bounties, than in that of restrictive injury, from the loss of capital, conseduties, as the principle is little acted on;quent upon the alterations in the channels still, however, as upwards of one million of trade, than the mechanical improveis annually paid in the shape of draw-ments of a century, without their ulterior backs on the customs alone, and more advantages; and the taxes of government, than two millions on the excise t, beside as transitory and whimsical in their nabounties on sail-cloth, cordage, linens, ture, but of more extensive operation and sugar, it is by no means so slight an than the fashions of ages, render great evil as to be unworthy of attention. If portions of capital valueless, and by disthe necessities of government require a turbing the natural relations of commerce, revenue, let it be raised; but let not un- lay the foundation of still greater losses to necessary sums be exacted, for the purpose come. of either altering the due relations in the production of commodities at home, or to enable other countries to buy them, at less than their natural price.

What was done with regard to bounties in the last session, is too trivial to need remark; we have mentioned the subject, rather with an eye to what may be done hereafter, than what has been attempted hitherto.

The time, however, we may hope, is not far distant, when the artificial impediments, opposed by mistaken legislation, to the natural courses of industry, which are, with scarcely an exception, the most profitable, will be at last removed. It has been our endeavour to point out the way in which they may be removed, with the least immediate loss. If the sole object be free trade, that may be best attained by repealing all duties, whose abolition As the increase of capital is, or more would cause no change in the direction properly ought to be, the great end of of industry, and withdrawing, by a gracommercial regulations, one of the main dual operation, the capital of the country objects which should never be lost sight engaged in constrained employments. If of by the legislator, in altering or framing the object combine revenue with the ultisuch regulations, is to avoid as much as mate emancipation of commerce as it possible, that partial destruction of capital, must do, at least for a long time, in a which almost necessarily attends its country overloaded with taxes, like Great transfer. The destruction of capital is Britain, recourse must still be had to the one of the few necessary evils that occur, same mild but efficient remedy. While even under the most perfect system. A de- emancipating fettered industry, revenue mand for the necessaries of life, as they should be obtained from such duties, as are indispensable, admits of little fluctua- are not followed by a forced and unnatution; but the constant variation in the ral distribution of national capital; so taste for luxuries, and the uniform pro- that, when the revenue ceases to be necesgression of human skill, unite unavoida-sary, or is derivable from other sources, ble evils with the most beneficial effects; the immediate removal of the duties may and the fashion of a day, or the alteration confer a permanent benefit on the comof a wheel, may render large masses of munity, unattended by individual suffercapital useless, and the skill of the la-ing. In either case, the ultimate object

should be the entire removal of commer

cial impediments; that the productions of every corner of the globe, may be distributed according to the wants and desires of nations, and not according to the caprice of Ministers of Finance, and the rules of the book of rates.

At present our commerce is far removed from this desirable state. The old

principle, which ascribed the benefits of remark, we may observe that, whenever trade to a surplus of exports over imports, the members of the House of Comsupposed to be paid in money, as it pro- mons represent any thing" but their own duced, still pervades our commercial sys-" pockets," as one of them facetiously tem. This fallacious doctrine, which terms it; whenever their language in the nearly every writer from Locke to Adam house is influenced by the opinions of Smith, has successively exposed, and to their constituents-we uniformly find them which the increase of the capital of this emitting the most unwholesome notions country to the extent of many millions, on the subject of trade. while the currency has only increased by some thousands, has added so effectual a refutation, retained its place in all the measures of government, from its open recognition by the Methuen treaty, down to its virtual rejection by the colonial bill of the present Government. Almost within our own recollection, we find Mr. Fox avowing a theory, which supposes a perfect ignorance of the common principles in a science, without a knowledge of which, a man may become the successful leader of a faction, but will never be fit for a legislator. In his speech on the commercial treaty with France (Feb. 12, 1787), Mr. Fox observed, that,

"With respect to the equivalent, which we were to have for the reduction of the duties on French wines, so as to admit them more freely into our ports, what article had we the privilege of exporting into France? He knew of none. It appeared to him, therefore, an advantage given to France, without the least sign of an equivalent."

We must not, however, impute too much superiority to the present House of Commons, over that of 1787, because we have a Chancellor of the Exchequer and a President of the Board of Trade, who have at last acquired more enlarged ideas, and adopted a more liberal practice than their predecessors. The majority of the house, and, what is worse, a large body of the merchants out of doors, still adhere to the principle of Mr. Fox. In his speech on Foreign Trade, Mr. Huskisson observed, that,

"He expected a further objection—indeed he had already been told, in the correspondence which he had felt it right to hold with some of our most intelligent and accomplished merchants and manufacturers, on this subject-that in 1786, we had insured from France, by treaty, a reciprocity of commercial advantages; but that, at present, we had made no such arrangement"."

Be it remarked, that we have already had occasion to animadvert upon this very fallacy and a most absurd one it is-from the lips of Mr. Huskisson himselft.

As a further proof of Mr. Huskisson's

Ante, p. 369. ↑ Ante, pp. 636, 637.

Thus the member for Truro is alarmed at the introduction of foreign coppert: the member for Staffordshire demands protection for crockery§: the member for Rippon considers that woollen goods are neglected: the member for Bristol demands attention to the West India trade¶: the member for Newcastle complains of the duty on Northumberland coals**; and the members for Westminster, London, and Bristol++, declaim long and loudly against assessed taxes. All, however, as if desirous of delivering themselves from the imputation of downright imbecility, agree in praising the general tendency of Mr. Huskisson's measures.

This language will, of course, continue till the people become more instructed. In the mean time, it is fortunate for the country, that what, in this instance, public opinion is not sufficiently enlightened to effect, is likely to be in part, at least, accomplished by the enlarged views and It is to liberal ambition of individuals. ministers like the Chancellor of the Exchequer, and the President of the Board of Trade, that we may look for the final renunciation of the principles of the mercautile school of commerce. Their continued exertions cannot fail to produce a beneficial change, not only in our commercial policy, but in the state of public opinion. In the debates which have taken place upon the propositions they have severally brought forward during the last two or three sessions of parliament, the speeches of those gentlemen have formed, both as to the matter conveyed, and the mode of conveying it, a striking contrast with the ordinary style of House of Commons' oratory. The prepared speeches of the Chancellor of the Exchequer are models of the useful style. If his prac tice continue worthy of his speeches, we shall not despair of the consummation we have long desired, when the ignorance

and the rhetoric of the brilliant talkers This reasoning, if correct, is undoubtedly of the last century will give place to so-worthy of consideration, although it would lid information and a sober style of de- not, we think, be found conclusive. As livery; a consummation which will con- we do not propose at present, to inquire vert the House of Commons from a de-into the state of our naval establishment bating club, into a place for the soberan inquiry which we reserve for anotransaction of public business.

Navigation Laws.

ther time; we shall confine ourselves te the two leading topics which the foregoing statement suggests.

First, then, we deny that part of the premises, by which it is assumed that the competition of the shipping of foreign nations would narrow the employment of our own. Undoubtedly the effect of a free intercourse with foreign countries, by increasing the amount of exports and im

AMONGST the numerous objections adduced against the recent propositions for establishing an open trade with our colonies and foreign countries, there is one, which from its extent and speciousness seems to call for some notice here, al-ports, might enable those countries to though but little prominent in the debates; we mean, the Navigation Laws. Our remarks, however, will rather be proportioned to the space which that subject occupied in parliament, than to its actual importance: and we shall rather touch upon it for the purpose of pointing out the insufficiency of the reasons alledged in defence of the Navigation Laws as an objection to a free trade, than handle it with any view to expound a system of our own.

extend their mercantile marine; and if it should happen that their governments should continue, with regard to our shipping, the system which we have so long enforced against their own, it is possible that our merchant vessels would not increase in the same proportion. But how should they be diminished? From what department of the carrying trade should we be driven, which we now enjoy? Is it possible to suppose, that any nation in the world-not even excepting the United States-possesses so great a superiority over us in skill or capital, as to compete with us on our coasts, in our fisheries, in our trade with the West Indies and the two continents of America, or in our commerce with the East? Or is it not rather more than probable, that Other objections are, for the most part, with our present advantages, augmented of a partial nature; being drawn only by the removal of restrictions, of which from particular evils, and applying to par- the tendency of many is to raise the price ticular measures. But this objection over- of the materials of shipping-as, for inrides the whole subject, and is only sa-stance, the preposterous duty on Eurotisfied by a total rejection of the principles of free trade.

Putting aside all other evil consequences of the new commercial system; its evil consequence to our navy, and thence to the security of our shores, by undermining our most effectual means of defensive warfare, is alleged to be conclusive against its adoption.

done by exclusion or force? It shows but a small acquaintance either with the principles of trade, or the peculiar facts relating to the state of our merchant service, to entertain the contrary apprehension.

pean timber, in favour of the Canadian monopoly is it not more than probable The proposition is simply this.-The that it is we who should drive the vessels essential defence of the country, in time of other nations from the maritime trade, of war, is the navy: The efficiency of and monopolize the seas by dint of sucthe navy depends on the supply of effi-cessful competition, as we have formerly cient sailors; for the furnishing of which, we must depend on the merchant service. The admission of foreign vessels to a participation of the carrying trade, by limiting the demand for merchant shipping, has a tendency to destroy the sources which supply our naval marine; whence it follows, that a system of free trade (from which a competition between the inerchant service of foreign countries and our own must unavoidably spring up) is incompatible with the safety of the empire in time of war.

But granting, for a moment, that the decay of our merchant service, would ensue from a change in the Navigation Laws: Is it certain that such an event would be followed by a decline of our naval superiority? We think not. We sec no essential connexion between the

prosperity of the one service and the other. The experience of the merchant service is no necessary preparative for navy sailors. They may be reared as well, or better, in the naval service itself. All that is necessary for keeping up an effective supply to meet the sudden exigency of a declaration of war, is the establishment of a sufficient school-an increase in the present naval force, and the appointment of a larger number of men to the King's ships, in time of peace. We are of opinion that this plan should be adopted, independently of commercial views, for the purpose of preventing or diminishing the practice of impressment; a practice which has long been the disgrace of the British navy: but dismissing that consideration for the present, we maintain that the plan suggested would amply provide for the naval service of the country, and obviate all objections to the emancipation of our foreign and colonial trade, which are based on the Navigation Laws.

But this plan is an expensive one :Granted. If the estimates of the Navy, which amounted last year to something less than 6,000,000l., be doubled-it will be admitted that, for such a sum, the plan might be effected. If so, the objection on the side of expense is unworthy a moment's hesitation: It has been calculated-and the calculation is accurate enough for the purpose -that the tax levied by the operation of the Corn Laws on British grain amounts to 15,000,0001. This tax is now raised for the exclusive advantage of the landlords. Something more than one-third of it would suffice for the maintenance of the force proposed to be added to the navy, and the people would still be relieved by the adoption of a free trade in corn, from the burthen of the remaining two-thirds. This, however, though the most prominent, is but a single instance of monopoly. It is evident, that whatever is paid by the public for any article of consumption, when raised by the restrictive system, above its natural price, is a tax which in no way differs from the taxes paid to the state, excepting that in every case but that of corn, it is paid into no man's pocket, but is merely squandered for the maintenance of certain trades, which could not be maintained in a fair

See, amongst other similar estimates, Mr.

Monck's specchi; ante, p. 398.

and open competition, and which ought nct, therefore, to be maintained at all. The articles which are so raised in price, by the artificial increase in the cost of their production-the articles on which this wasteful tax is levied-are too numerous to admit of, and too well known to require specification. By the abolition of restraints on trade, such commodities would be reduced to their natural price, and this wasteful impost would be saved. All that is wanted is a security for our navy; a security of which, for the present purpose, we would consent to estimate the cost at the extravagant sum of 10,000,0001. To levy this sum in the shape of excise or custom duties, on the commodities in question, instead of flinging away the whole amount of the difference between their natural and artificial price, is an obvious suggestion.

Exportation of Machinery.

We know of no question to which the principles of economical science may be applied with more certainty or with less qualification, than that which has been raised of late, with respect to the policy of exporting British machinery. The considerations arising from the state and practice of foreign countries, or domestic interests, which grievously embarrass our trade in other cases, in this are both few attempts at introducing a system of free and unimportant.

tion, whether importation or exportation In every case of commercial prohibibe its object; in every case, in short, in which the public are compelled to buy a particular commodity at a given place, of a given seller, or of a certain manufacture or growth, their interests and those of the seller are at variance. If they could purchase cheaper goods elsewhere, they pay a tax to the seller to whom they are compelled to resort: if they could not, they would resort to him without compulsion. Nothing more is required to shew, that to protect the seller is to tax the public; and what makes it the less tolerable, the tax is taken from the public, not for the purpose of being put into the seller's pocket, but merely to maintain him in the same, if not a worse, condition than he would have stood in, had he never been protected at all. If the seller gained what the public paid,

no loss would be incurred on the whole