Navigation, therefore, properly endeavours to give the sailors and shipping the monopoly of the trade of their own country, pp. 35–38.

The second case is when some tax is imposed at home upon the produce of domestic industry. In this case it seems reasonable that an equal tax should be imposed upon the produce of foreign industry. This would leave the competition, after the tax, on the same footing as it was before it. But according to some people, when the necessaries of life have been taxed it becomes necessary to tax all sorts of foreign goods which can come into competition with any part of the produce of domestic industry; since every commodity which is the produce of domestic industry becomes dearer, though not immediately taxed itself, in consequence of such taxes, because the labour which produces it becomes so. Admitting this, yet the general enhancement of the price of all commodities, in consequence of that of labour, is a case which differs in two respects from that of a particular commodity. (1) It may be known how far the price of such a commodity could be enhanced by such a tax, but how far it might affect the price of labour could never be known. (2) Taxes on the necessaries of life have the same effect upon the circumstances of the people as a poor soil and bad climate; and to lay a new tax upon them because they are already overburdened with taxes, making them pay too dear for other commodities because they pay too dear for the necessaries of life, would be an absurd way of making amends. Such taxes, at a certain height, are a curse equal to the barrenness of the earth. Only rich countries could bear them, pp. 38-40.

As there are two cases in which it may be advantageous to burden foreign, for the encouragement of domestic, industry, so there are two in which it may be matter of deliberation, p. 40.

The first is, how far is it proper to continue the free

importation of certain foreign goods, when some foreign nation restrains the importation of our manufactures into their country. Nations seldom fail to retaliate. France has been forward in thus favouring her own manufactures. But the opinion of the most intelligent people there, is that it has been of no advantage to the country. Retaliations may be good policy if they tend to procure a repeal of the prohibitions complained of. To judge whether they are likely to produce this effect does not belong so much to the legislator as to the crafty statesman.1 When there is no probability of procuring a repeal, it is a bad method of compensating the injury done to some classes of the people to do another to almost all the other classes of them, pp. 40-42.

The second case is, how far, and in what manner, it is proper to restore the free importation of foreign goods after it has been interrupted. When any manufactures, by means of prohibitions upon foreign goods, have been so far extended as to employ a multitude of hands, humanity may require that the freedom of trade should be restored with great circumspection; 2 otherwise it might occasion great disorder; though less, perhaps, than is commonly imagined, for two reasons: (1) All those manufactures of which any part is commonly exported to other European countries, without a bounty, could be very little affected by the freest importation of foreign goods. Such are the woollen manufactures, tanned leather, and hardware. (2) Though by restoring the freedom of trade a great number of people would be thrown out of their ordinary employment, it does not follow that they would be deprived of subsistence. At the end of a war 100,000 soldiers and seamen are some

1 This reasoning has been much questioned of late years, owing to its supposed connection with the fallacies of Reciprocity.' For a full exposure of the latter, see Bonamy Price, Practical Political Economy, cap. ix.

2 Hence arises one of the greatest evils of so-called protective duties.

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times disbanded, without even diminishing the price of labour, except in that of seamen in the merchant service. But the habits of manufacturers do not tend to disqualify them from exercising a new trade so much as those of soldiers. Soldiers and seamen are at liberty to exercise any trade within any town or place. Grant the same liberty to all people; that is, break down the privileges of corporations, repeal the statute of apprenticeship, and that of parochial settlements, and neither the public nor individuals would suffer more from disbanding some particular classes of manufacturers than from that of soldiers, pp. 43, 44.

Perfect freedom of trade is not to be expected in Great Britain; public prejudices and private interests oppose it. Hence the member of parliament who supports monopolies acquires reputation and popularity; but he who opposes and thwarts them is liable to insults and danger, from which the greatest public services cannot always protect him. A regard to the interest of manufacturers requires that home markets be not suddenly laid open to the competition of foreigners, since they would find it difficult to dispose of that part of their capital, without considerable loss, which consists in fixed workhouses and in the instruments of trade. Hence the legislature should be very careful not to establish new monopolies, nor to extend those already established, pp. 44, 46.

A century has but just passed since the publication of the Wealth of Nations (1776), and yet all is changed, and the Utopia bids fair to become a reality.

35

CHAPTER III.

Of the extraordinary restraints upon the Importation of goods from those countries with which the balance is supposed disadvantageous.

PART I.

Of the unreasonableness of those restraints even upon the principles of the Commercial system.

To lay extraordinary restraints on the importation of goods from those countries with which the balance of trade is supposed disadvantageous, is the second expedient to increase the quantity of gold and silver. Thus, higher duties are imposed on French goods than on those of other nations. France has treated our manufactures in the same way. These principles take their origin from national prejudices, and are highly unreasonable, even according to the commercial system. For

I. Though in the free trade betwixt Great Britain and France the balance were in favour of France, it would not necessarily follow that the trade was disadvantageous to England, or that the general balance of her whole trade would thereby be turned more against her; for the goods of France might be cheaper than those of any other foreign country, and thus the value of the total annual importation be diminished.

II. A great part of them might be re-exported with a profit. Though a great part of the goods were bought with gold and silver, the re-exportation of a part of them might bring back more gold and silver than the prime cost of the whole amounted to.

III. There is no certain criterion by which we can

determine on which side the balance between any two countries lies. Custom-house books and the course of exchange have been appealed to. The former is an uncertain criterion, on account of the inaccuracy of the valuation of the goods rated in them. The latter, perhaps, is almost equally so. For though the ordinary course of exchange of any two places be a sufficient indication of the ordinary state of debt and credit; yet the ordinary state of credit and debt is often regulated by the dealings of either of them, with many other places. Besides, the real course of exchange is often different from the computed one, pp. 46-50.

When for a sum of money paid in England, containing, according to the standard of the English mint, a certain number of ounces of pure silver, you receive a bill for a sum of money to be paid in France, containing, according to the French standard, an equal number of ounces of pure silver, exchange is said to be at par between England and France. But when you pay more, exchange is said to be against England. When less, exchange is against France. But (1) we cannot always judge of the value of the current money of different countries, which must be in proportion to the quantity of pure silver which it actually does contain. (2) In England the expense of coining is defrayed by the government; in France 8 per cent. is charged for coinage. French money must, therefore, be more valuable than the same quantity of English money, in the same manner as wrought plate exceeds in value an equal weight of bar silver; consequently the real exchange might be in favour of England, while the computed was in favour of France. (3) In some places, as Amsterdam, Hamburg, &c., foreign bills of exchange are paid in what they call bank money, while in others, as London, Lisbon, &c., they are paid in the currency of the country. Bank money is of more value than currency, and the difference is called the agio of the bank.