some part of the industry of the country into a channel less advantageous than that in which it would run of its own accord; and (2) to the objection of forcing it into a channel that is actually disadvantageous. The bounty upon the exportation of corn is liable to this further objection, that it cannot promote the raising of that commodity of which it was meant to encourage the production, pp. 91, 92.

To encourage the production of any commodity, a bounty upon production would have a more direct operation than one upon exportation. It would impose only one tax on the people. It would tend to lower the price of the commodity in the home market, which would, in part, contribute to repay the tax. Something like a bounty upon production has been granted upon some occasions. Such are the tonnage bounties given to the white-herring and whale-fisheries. They tend to render the goods cheaper in the home market than they would otherwise be. In other respects their effects are the same as those of bounties upon exportation. The tonnage bounties are thought to contribute to the defence of the country, by augmenting the number of its sailors and shipping. This is said to be done cheaper by these bounties than by keeping a standing navy, pp. 92, 93. Notwithstanding these favourable allegations, it is not improbable that the legislature has been imposed on in granting, at least, one of these bounties. For (1) the herring buss bounty seems too large every barrel costing the government nearly 188., but the price is only about a guinea at an average. (2) The bounty to the white-herring fishery is in proportion to the burden of the ship, not to her success in the fishery. Many vessels have probably been fitted out to catch not the fish but the bounty. (3) The mode of fishing for which this tonnage bounty has been given is not so well adapted for Scotland as the boat fishery, which has nearly gone to decay since the establishment of the buss

bounty. (4) In many parts of Scotland herrings make a great part of the food of the common people. The herring buss bounty has contributed rather to raise than lower their price in the home market,1 pp. 93-96.

Notwithstanding the liberal bounties bestowed on the undertakers of fisheries, they do not seem to have been great gainers in the business. The effect of such bounties is to encourage rash undertakers to adventure in a business they do not understand; and what they lose by their own ignorance more than compensates the liberality of government, p. 97.

If any manufacture was necessary for the defence of the society, and could not be otherwise supported at home, it might not be unreasonable that all other branches of industry should be taxed to support it. The bounties upon the exportation of British-made sailcloth and gunpowder may perhaps be vindicated on this principle. What is called a bounty is sometimes no more than a drawback, and consequently is not liable to the same objections as what is properly called a bounty. Such are the bounties upon refined sugar and upon wrought silk. The bounty, also, upon gunpowder is a drawback of the duties imposed upon brimstone and saltpetre imported. PREMIUMS given by the public to artists are not liable to the same objections as bounties. Their tendency is not to overturn the natural balance of employment, but to render the work done more perfect. The expense of premiums is small, that on bounties very great. The bounty on corn has sometimes cost the public, in one year, more than three hundred thousand pounds, pp. 98, 99.

1 For a further account of the herring fishery, see M'Culloch's edition of Wealth of Nations, pp. 551-52.j

Digression concerning the Corn trade and Corn

laws.

THE praises bestowed upon the corn laws of this country are altogether unmerited. The trade of the corn merchant is composed of four different branches. These are (1) the trade of the inland dealer; (2) that of the importer; (3) that of the exporter; and (4) that of the carrier who imports corn in order to export again, p. 99.

I. The interest of the inland dealer, and that of the great body of the people, are even in years of scarcity the same. It is his interest to raise the price of corn as high as the real scarcity of the season requires, and no higher. By raising the price, he discourages the consumption, and makes people economical. But by raising it too high he is liable to great loss, by not being able to sell all his corn. And by not raising it high enough he loses part of his profit and exposes the people to famine. It is the interest of the people that their consumption should be proportioned to the supply of the season. This also is the interest of the inland dealer in corn. If one great company of merchants could possess themselves of the whole crop of an extensive country, they might destroy a part to keep up the price of the rest, as the Dutch are said to do with the spices of the Moluccas. But it is scarcely possible with regard to corn: wherever the law leaves the trade free, it is of all commodities the least liable to be monopolised by a few large capitals. Its value exceeds the capitals of a few private men; and it is necessarily divided among a greater number of owners, who are scattered through the country, and no one of whom would think of keeping up the price for the benefit of his rivals and competitors, pp. 99-102.

1 See Mill, iv. 2, 4-5.

Dearths have never arisen from the combinations of the dealers in corn, but from real scarcity, occasioned by the waste of war, or by the fault of the seasons; and famines have always been caused by the violence of government attempting, by improper means, to remedy the inconveniences of dearths. In an extensive corn country, in which there is a free commerce, the scarcity occasioned by the worst seasons can never produce a famine. The seasons most unfavourable to a crop are those of excessive drought or excessive rain.1 But as corn grows equally on high and low lands, the season that is hurtful to one part of the country is favourable to another. In rice countries, where the crop requires much water, the effects of a drought are more dismal, yet seldom so universal as to occasion a famine if the government would allow a free trade, pp. 102, 103.

When a government, to remedy the inconveniences of a dearth, orders all dealers to sell their corn at what it supposes a reasonable price, it either hinders them from bringing their corn to market, or it enables the people to consume it too fast. The unlimited freedom of the corn trade is the only effectual preventive of a famine, and the best palliative of the inconveniences of a dearth. In years of scarcity, the inferior ranks of the people impute their distresses to the avarice of the corn merchant; though on such occasions he is often the greatest sufferer. It is evident that the profit of the corn merchant is no more than sufficient to put his trade on a level with other trades, since great fortunes

1 The last real famine in England was that of the years 1315-16, the result of two years' almost incessant rain. See Rogers's Agriculture and Prices. A population which habitually lives on the cheapest food must always be in danger of famine. In the middle ages wages were as high in Ireland as in England. All seems to have been changed by the introduction of the potato, which by its superior productiveness rendered subsistence cheaper and marriage more easy. The population rapidly increased, wages diminished, and a potato diet, at first the cause, became the effect, of poverty.

are not more frequent in this than in other trades, pp. 103, 104.

t;

The ancient policy of Europe encouraged the popular odium against this trade. By a statute of 5 and 6 Edward VI. cap. 14, it was made a punishable offence to buy corn with an intent to sell it again. Our ancestors endeavoured to hinder any middle man from coming in between the grower and consumer. Hence the restraints on the carrier of corn. Agriculture was, in this manner, regulated by motives quite different from those established with regard to manufacturers. The farmer was obliged to become a corn merchant while the manufacturer was, in many cases, forbidden to sell his goods by retail. The one law was intended to make corn cheap; the other was intended to encourage the business of shopkeepers. The manufacturer cannot undersell the common shopkeeper, for the capital placed in his shop must be withdrawn from his manufactory therefore he must have profits of the manufacturer on part of his capital, and those of the shopkeeper on the other part. The farmer, also, for the same reason, 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, pp. 104-6.

The dealer who employs his whole stock in one branch of business has an advantage similar to the workman whose labour is employed in a single operation. 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 were unjust, but the latter was the more pernicious. It obstructed the improvement and cultivation of land by forcing the farmer to divide his capital into two parts, only one of which could be em