same, or even at a higher price than they were accustomed to do
before, it might be expected that their profits should be very great;
and it is not improbable that those of some individuals may have been
SO. In general, however, I have every reason to believe, they have
been quite otherwise. The usual effect of such bounties is to en-
courage rash undertakers to adventure in a business which they do not
understand, and what they lose by their own negligence and ignorance,
more than compensates all that they can gain by the utmost liberality
of government. In 1750, by the same act which first gave the bounty
of thirty shillings the ton for the encouragement of the white herring
fishery (the 23 Geo. II. chap. 24.), a joint stock company was erected,
with a capital of five hundred thousand pounds, to which the sub-
scribers (over and above all other encouragements, the tonnage bounty
just now mentioned, the exportation bounty of two shillings and eight
pence the barrel, the delivery of both British and foreign salt duty free)
were, during the space of fourteen years, for every hundred pounds
which they subscribed and paid into the stock of the society, entitled
to three pounds a year, to be paid by the receiver-general of the
customs in equal half-yearly payments.
Besides this great company,
the residence of whose governor and directors was to be in London, it
was declared lawful to erect different fishing-chambers in all the
different out-ports of the kingdom, provided a sum not less than ten
thousand pounds was subscribed into the capital of each, to be managed
at its own risk, and for its own profit and loss. The same annuity,
and the same encouragements of all kinds, were given to the trade of
those inferior chambers, as to that of the great company. The sub-
scription of the great company was soon filled up, and several different
fishing-chambers were erected in the different out-ports of the king-

In spite of all these encouragements, almost all those different companies, both great and small, lost either the whole, or the greater part of their capitals; scarce a vestige now remains of any of them, and the white herring fishery is now entirely, or almost entirely, carried on by private adventurers.

If any particular manufacture was necessary, indeed, for the defence of the society, it might not always be prudent to depend upon our neighbours for the supply; and if such manufacture could not otherwise be supported at home, it might not be unreasonable that all the other branches of industry should be taxed in order to support it. The bounties upon the exportation of British-made sail-cloth, and British-made gun-powder, may, perhaps, both be vindicated upon this principle,

have not

been high.

Bounties for manufactures necessary for the defence of the country are not unreasonable

It is less absurd to give boun

ties in time of prosperity than in

times of distress.

Some allowances

called bounties are, properly speaking, drawbacks.

Prizes to successful artists and manufacturers do not divert industry to less advantageous

channels, but encourage perfection.

But though it can very seldom be reasonable to tax the industry of the great body of the people, in order to support that of some particular class of manufacturers; yet in the wantonness of great prosperity, when the public enjoys a greater revenue than it knows well what to do with, to give such bounties to favourite manufactures, may, perhaps, be as natural, as to incur any other idle expence. In public, as well as in private expences, great wealth may, perhaps, frequently be admitted as an apology for great folly. But there must surely be something more than ordinary absurdity, in continuing such profusion in times of general difficulty and distress.1

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 a bounty. The bounty, for example, upon refined sugar exported, may be considered as a drawback of the duties upon the brown and muscovado sugars from which it is made. The bounty upon wrought silk exported, a drawback of the duties upon raw and thrown silk imported. The bounty upon gunpowder exported, a drawback of the duties upon brimstone and saltpetre imported. In the language of the customs those allowances only are called drawbacks, which are given upon goods exported in the same form in which they are imported. When that form has been so altered by manufacture of any kind, as to come under a new denomination, they are called bounties.2

Premiums given by the public to artists and manufacturers who excel in their particular occupations, are not liable to the same objections as bounties. By encouraging extraordinary dexterity and ingenuity, they serve to keep up the emulation of the workmen actually employed in those respective occupations, and are not considerable enough to turn towards any one of them a greater share of the capital of the country than what would go to it of its own accord. Their tendency is not to overturn the natural balance of employments, but to render the work which is done in each as perfect and complete as possible. The expence of premiums, besides, is very trifling; that of bounties very great. The bounty upon corn alone has sometimes cost the public in one year more than three hundred thousand pounds.3

Bounties are sometimes called premiums, as drawbacks are sometimes called bounties. But we must in all cases attend to the nature of the thing, without paying any regard to the word.

[The ten paragraphs ending here are not in eds. 1 and 2. See above, p. 19, note 9.] [Eds. 1 and 2 read 'When that form has been altered by manufacture of any kind, they are called bounties.']

[Above, vol. i., p. 199,]

I

Digression concerning the Corn Trade and Corn Laws 1 CANNOT conclude this chapter concerning bounties, without observing that the praises which have been bestowed upon the law which establishes the bounty upon the exportation of corn, and upon that system of regulations which is connected with it, are altogether unmerited. A particular examination of the nature of the corn trade, and of the principal British laws which relate to it, will sufficiently demonstrate the truth of this assertion. The great importance of this subject must justify the length of the digression.

The trade of the corn merchant is composed of four different branches, which, though they may sometimes be all carried on by the same person, are in their own nature four separate and distinct trades. These are, first, the trade of the inland dealer; secondly, that of the merchant importer for home consumption; thirdly, that of the merchant exporter of home produce for foreign consumption; and, fourthly, that of the merchant carrier, or of the importer of corn in order to export it again.

I. The interest of the inland dealer, and that of the great body of the people, how opposite soever they may at first sight appear, are, even in years of the greatest scarcity, exactly the same. It is his interest to raise the price of his corn as high as the real scarcity of the season requires, and it can never be his interest to raise it higher. By raising the price he discourages the consumption, and puts every body more or less, but particularly the inferior ranks of people, upon thrift and good management. If, by raising it too high, he discourages the consumption so much that the supply of the season is likely to go beyond the consumption of the season, and to last for some time after the next crop begins to come in, he runs the hazard, not only of losing a considerable part of his corn by natural causes, but of being obliged to sell what remains of it for much less than what he might have had for it several months before. If by not raising the price high enough he discourages the consumption so little, that the supply of the season is likely to fall short of the consumption of the season, he not only loses a part of the profit which he might otherwise have made, but he exposes the people to suffer before the end of the season, instead of the hardships of a dearth, the dreadful horrors of a famine. It is the interest of the people that their daily, weekly, and monthly consumption, should be proportioned as exactly as possible to the supply

1[This heading is not in ed. I.]

The corn bounty and corn laws are undeserving of praise.

There are four branches of the corn trade:

I. The Inland Dealer, whose interest is the same as that of the people, viz., that the consumption should be proportioned to the supply avail

able.

The interest of a monopoly might perhaps be to destroy a portion of the crop, but corn cannot be monopolised where the

trade is free.

of the season. The interest of the inland corn dealer is the same. By
supplying them, as nearly as he can judge, in this proportion, he is
likely to sell all his corn for the highest price, and with the greatest
profit; and his knowledge of the state of the crop, and of his daily,
weekly, and monthly sales, enable1 him to judge, with more or less
accuracy, how far they really are supplied in this manner. Without
intending the interest of the people, he is necessarily led, by a regard
to his own interest, to treat them, even in years of scarcity, pretty
much in the same manner as the prudent master of a vessel is some-
times obliged to treat his crew.
When he foresees that provisions are
likely to run short, he puts them upon short allowance. Though from
excess of caution he should sometimes do this without any real neces-
sity, yet all the inconveniencies which his crew can thereby suffer are
inconsiderable, in comparison of the danger, misery, and ruin, to which
they might sometimes be exposed by a less provident conduct. Though
from excess of avarice, in the same manner, the inland corn merchant
should sometimes raise the price of his corn somewhat higher than the
scarcity of the season requires, yet all the inconveniencies which the
people can suffer from this conduct, which effectually secures them
from a famine in the end of the season, are inconsiderable, in com-
parison of what they might have been exposed to by a more liberal way
of dealing in the beginning of it. The corn merchant himself is likely
to suffer the most by this excess of avarice; not only from the indigna-
tion which it generally excites against him, but, though he should
escape the effects of this indignation, from the quantity of corn which
it necessarily leaves upon his hands in the end of the season, and which,
if the next season happens to prove favourable, he must always sell for
a much lower price than he might otherwise have had.

Were it possible, indeed, for one great company of merchants to possess themselves of the whole crop of an extensive country, it might, perhaps, be their interest to deal with it as the Dutch are said to do with the spiceries of the Moluccas, to destroy or throw away a considerable part of it, in order to keep up the price of the rest. But it is scarce possible, even by the violence of law, to establish such an extensive monopoly with regard to corn; and, wherever the law leaves the trade free, it is of all commodities the least liable to be engrossed or monopolized by the force of a few large capitals, which buy up the greater part of it. Not only its value far exceeds what the capitals of a few private men are capable of purchasing, but supposing they were

1[Not a misprint for 'enables'. There are two knowledges, one of the state of the crop and the other of the daily sales.] 2[Above, vol. i., p. 159; below, p. 135.]

capable of purchasing it, the manner in which it is produced renders
this purchase altogether impracticable. As in every civilized country
it is the commodity of which the annual consumption is the greatest,
so a greater quantity of industry is annually employed in producing
corn than in producing any other commodity. When it first comes
from the ground too, it is necessarily divided among a greater number
of owners than any other commodity; and these owners can never be
collected into one place like a number of independent manufacturers,
but are necessarily scattered through all the different corners of the
country. These first owners either immediately supply the consumers
in their own neighbourhood, or they supply other inland dealers who
supply those consumers. The inland dealers in corn, therefore, includ-
ing both the farmer and the baker, are necessarily more numerous than
the dealers in any other commodity, and their dispersed situation renders
it altogether impossible for them to enter into any general combination.
If in a year of scarcity therefore, any of them should find that he had
a good deal more corn upon hand than, at the current price, he could
hope to dispose of before the end of the season, he would never think
of keeping up this price to his own loss, and to the sole benefit of his
rivals and competitors, but would immediately lower it, in order to get
rid of his corn before the new crop began to come in.
The same
motives, the same interests, which would thus regulate the conduct of
any one dealer, would regulate that of every other, and oblige them all
in general to sell their corn at the price which, according to the best
of their judgment, was most suitable to the scarcity or plenty of the

season.

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

Dearths are never occa

sioned by combination, but always by scarcity, and famines are always caused by the supposed remedies for dearths ap

plied by government.

Scarcities

are never

great enough to cause famine,