Chapter V: Of Bounties (2)

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.