ployed in the cultivation of land; it must consequently have tended to raise the price of corn, pp. 106-8.

After the business of the farmer, that of the corn merchant, properly protected from odium and outrage, will contribute most to the raising of corn. It will support the trade of the farmer, in the same manner as the trade of the wholesale dealer supports that of the manufacturer. It will enable the farmers to keep their whole capitals constantly employed in cultivation, and render them independent of the landlord. The statute of Edward VI. therefore endeavoured to annihilate a trade of which the free exercise is the best preventive of a dearth, as contributing more than any trade except that of the farmer to the growing of corn, pp. 108, 109.

The rigour of this law was afterwards softened, and by a statute of Charles II. the buying of corn in order to sell it again is declared lawful, as long as the price of wheat does not exceed 488. the quarter, to persons not being forestallers, that is, not selling it again in the same market within three months. This statute authorises two absurd popular prejudices: (1) It supposes that when wheat is 488. the quarter it is likely to be so engrossed as to hurt the people. (2) It supposes that there is a certain price at which corn is likely to be forestalled so as to injure the public. But if the merchant buys corn either going to a market or at the market, in order to sell it again soon in the same market, it must be because he judges that the market cannot be so liberally supplied through the whole season as on that occasion, and that the price must soon rise. If he judges wrong, he must be the loser. If he judges right, he renders the people a service: by making them feel the inconveniences of a dearth somewhat earlier, he prevents them from feeling it so severely as they would otherwise do, pp. 109-11.

The popular fear of engrossing and forestalling may

be compared to the popular terrors of witchcraft. The law which should restore entire freedom to the inland trade of corn would probably put an end to the fears of engrossing, as the law which put an end to all prosecutions against witchcraft seems effectually to have put an end to fears and suspicions of that imaginary crime. The statute of Charles II., with all its imperfections, has contributed much to the increase of tillage, which is more promoted by the inland than by the importation or exportation trade, for (although I have no great faith in political arithmetic) the computations of the most judicious and experienced persons show the two latter to be small in comparison with the former, pp. 111, 112.

II. The trade of the merchant importer of foreign corn for home consumption contributes to the immediate supply of the home market, and must be beneficial to the people. It tends, indeed, to lower the average money price of corn, but not to diminish its real value. By 22 Charles II. cap. 13, when wheat did not exceed 53s. 4d. the quarter it might be imported subject to a duty of 168. a quarter; and to a duty of 88. whenever the price did not exceed 4l. The distress which in years of scarcity these laws might have brought upon the people led to temporary statutes, permitting the importation of foreign corn. The necessity for the temporary demonstrates the impropriety of the general statute, pp. 112–14.

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.

The supply of the home market can never be plentiful unless the surplus can, in all ordinary cases, be exported. The prohibition of exportation limits the improvement and cultivation of the country to what the supply of its own inhabitants requires. The freedom of exportation enables it to extend cultivation for

the supply of foreign nations. By the 12th of Charles II. the exportation of corn was permitted; and by the 1st of William and Mary a bounty was granted on exportation. By this last statute corn could be engrossed at any price for exportation, but not for inland trade, except when the price was less than 488. the quarter. The interest of the inland dealer can never be opposite to that of the great body of the people; that of the exporter may. The direct object of these statutes was, under the pretence of encouraging agriculture, to raise the money price of corn as high as possible, pp. 114, 115.

Were all nations to admit a free exportation and importation, the different states of a great Continent would resemble the different provinces of a great empire, which would at all times be best supplied by a perfectly free trade.1 But the freedom of the corn trade has been almost everywhere restrained, which restraints have been the occasion of many dangers and misfortunes. The bad policy of one country may render the establishment of the best imprudent or dangerous in another. In large states it will be less dangerous. In some of the little Italian states it may, sometimes, be necessary to restrain the exportation of corn; but in such countries as France and England, it scarcely ever can. The laws concerning corn may be compared to those concerning religion; government, to preserve public tranquillity, yields to popular prejudices, and on that account we seldom find a rational system established, pp. 115-17.

IV. The trade of the merchant carrier, or of the importer of foreign corn for exportation, contributes to the plentiful supply of the home market; for he can sell his corn for less money than he might expect in a foreign market. The country which becomes the store

1 By the constitution of the United States the various States of the Union are forbidden to impose customs duties. The Union thus affords an example of perfect internal freedom of trade.

house for the supply of other countries can seldom be in want itself. The carrying trade has been virtually prohibited in Great Britain. That system of laws connected with the establishment of the bounty deserves no praise. The prosperity of Great Britain (so often ascribed to those laws)' depends on the security of property and upon the effort of every man to better his condition, a principle so powerful that it is capable of surmounting a hundred impertinent obstructions, pp. 117, 118.

Though the system of laws connected with the bounty has the same tendency with the policy of Spain and Portugal, to lower the value of the precious metals, yet Great Britain is one of the richest countries in Europe, while Spain and Portugal are among the most beggarly; which may be thus accounted for: (1) The tax in Spain, and the prohibition in Portugal, of exporting gold and silver, must operate more forcibly in reducing the value of those metals than the corn laws of England. (2) In Spain and Portugal industry is neither free nor secure, and the governments are such as would alone be sufficient to perpetuate their present state of poverty, pp. 118, 119.

The 13th of Geo. III. c. 43 has established a new system with regard to the corn laws, in many respects better than the ancient one, but in others not so good, pp. 119, 120.

CHAPTER VI.

Of Treaties of Commerce.2

WHEN a nation binds itself by treaty, either to permit the entry of certain goods from one foreign country, 1 Post ergo propter.

2 The chief argument for commercial treaties is the approach they make in practice to free trade. The chief argument against them is the encouragement they give in theory to the fallacies of reciprocity.

which it prohibits from all others; or to exempt the goods of one country from duties to which it subjects those of all others, that foreign country must derive advantage from the treaty, p. 122. Such treaties are disadvantageous to the merchants of the favouring country, and a monopoly is granted against them to a foreign nation. They must frequently buy their foreign goods dearer than if a free competition was admitted. The exchangeable value of their annual produce is likely to be diminished by every such treaty. This diminution, however, can scarcely amount to a positive loss, consequently the favouring country will gain by the treaty, though less than it would gain by free competition. Some countries have granted treaties of commerce against themselves, because they expected, that in the whole commerce between them an annual balance of gold and silver would be returned to them. Such was the treaty of commerce between England and Portugal, concluded in 1703 by Mr. Methuen, p. 123. By this treaty Portugal agreed to admit the woollen manufactures of the British, on condition that Great Britain should admit her wines upon paying only two thirds of the duty which is paid for those of France. This treaty, though evidently in favour of Portugal, has been celebrated as the masterpiece of the commercial policy of England, as bringing to her a large share of the precious metals. It has been estimated that the Lisbon packet brings 50,000l. in gold and silver every week into England. But if this were true, it does not follow that the trade is more advantageous than any other, in which, for the same value sent out, we receive an equal value of consumable goods in return. It is but a small part of this importation which can be employed as an annual addition to the plate or coin of the kingdom. The rest must be sent abroad and exchanged for consumable goods. But if these consumable goods were purchased directly with the produce of English indus