the old subsidy, which still continues to be retained upon the exporta- We are unwilling even to be the carriers of French goods, and choose By the fourth of the rules annexed to the old subsidy, the drawback allowed upon the exportation of all wines amounted to a great deal more than half the duties which were, at that time, paid upon their importation; and it seems, at that time, to have been the object of the legislature to give somewhat more than ordinary encouragement to the carrying trade in wine. Several of the other duties too, which were imposed, either at the same time, or subsequent to the old subsidy; what is called the additional duty, the new subsidy, the onethird and two-thirds subsidies, the impost 1692, the coinage on wine, were allowed to be wholly drawn back upon exportation. All those duties, however, except the additional duty and impost 1692,5 being paid down in ready money, upon importation, the interest of so large a sum occasioned an expence, which made it unreasonable to expect any profitable carrying trade in this article. Only a part, therefore, of the duty called the impost on wine, and no part of the twenty-five 1[6 Geo. III., c. 28; 11 Geo. III., c. 49.] 2[Above, vol. i., p. 437.] (7 and 8 W. III., c. 20; 1 Geo. I., c. 12, § 3; Saxby, British Customs, p. 45; above vol. i., p. 437. The first 25 per cent. was imposed in 1692, the second in 1696.] [Saxby, British Customs, pp. 13, 22, 39, 46. The additional duty' was imposed in 1703. For the 'impost 1692' and the subsidies see above, vol. i., pp. 437, 438, and below, PP. 363, 364. 'The coinage on wine' was the duty levied under 18 Car. II., c. 5, for defraying the expenses of the mint.] [Saxby, British Customs, pp. 13, 38.] [1 Jac. II., c. 3, and continuing Acts: 8 a tun on French and £12 on other wine.] especially when ex ported to the American colonies, pounds the ton upon French wines,1 or of the duties imposed in 1745,2 in 1763, and in 1778,4 were allowed to be drawn back upon exportation. The two imposts of five per cent., imposed in 1779 and 1781, upon all the former duties of customs,5 being allowed to be wholly drawn back upon the exportation of all other goods, were likewise allowed to be drawn back upon that of wine. The last duty that has been particularly imposed upon wine, that of 1780,6 is allowed to be wholly drawn back, an indulgence, which, when so many heavy duties are retained, most probably could never occasion the exportation of a single ton of wine. These rules take place with regard to all places of lawful exportation, except the British colonies in America. 7 8 The 15th Charles II. chap. 7. called an act for the encouragement of trade, had given Great Britain the monopoly of supplying the colonies with all the commodities of the growth or manufacture of Europe; and consequently with wines. In a country of so extensive a coast as our North American and West Indian colonies, where our authority was always so very slender, and where the inhabitants were allowed to carry out, in their own ships, their non-enumerated commodities, at first, to all parts of Europe, and afterwards, to all parts of Europe South of Cape Finisterre, it is not very probable that this monopoly could ever be much respected; and they probably, at all times, found means of bringing back some cargo from the countries to which they were allowed to carry out one. They seem, however, to have found some difficulty in importing European wines from the places of their growth, and they could not well import them from Great Britain, where they were loaded with many heavy duties, of which a considerable part was not drawn back upon exportation. Madeira wine, not being a European commodity, could be imported directly into America and the West Indies, countries which, in all their nonenumerated commodities, enjoyed a free trade to the island of Madeira. These circumstances had probably introduced that general taste for 9 1[7 and 8 W. III., c. 20, § 3; 1 Geo. I., st. 2, c. 12, § 3.] 2[18 Geo. II., c. 9; Saxby, British Customs, p. 64: £8 a tun on French and £4 on other wine.] 3[? 1762. 3 Geo. III., c. 12: £8 a tun on French and £4 on other wine.] 51.e., 5 per cent., not on the value of the goods, but on the amount of the previously existing duties; 19 Geo. III., c. 25, and 22 Geo. III., c. 66.] [20 Geo. III., c. 30: 8 a tun on French and £4 on other wine.] [The colonial part of the Act is said in its particular preamble (§ 5) to be for the purpose of 'maintaining a greater correspondence and kindness between the colonies and mother country, and for keeping the colonies 'in a firmer dependence'.] 8 [All this is dealt with in greater detail below, pp. 78-81.] The framers of the Act were not so sure about Madeira being non-European. They excepted wine of the Madeiras and Azores by special provision, § 7 of 15 Car. II., c. 7, § 13.] Madeira wine, which our officers found established in all our colonies at the commencement of the war which began in 1755, and which they brought back with them to the mother-country, where that wine had not been much in fashion before. Upon the conclusion of that war, in 1763 (by the 4th Geo. III. Chap. 15. Sect. 12.), all the duties, except 31. 10 s. were allowed to be drawn back, upon the exportation to the colonies of all wines, except French wines, to the commerce and consumption of which national prejudice would allow no sort of encouragement. The period between the granting of this indulgence and the revolt of our North American colonies was probably too short to admit of any considerable change in the customs of those countries. The same act, which, in the drawback upon all wines, except French wines, thus favoured the colonies so much more than other countries; in those, upon the greater part of other commodities, favoured them much less. Upon the exportation of the greater part of commodities to other countries, half the old subsidy was drawn back. But this law enacted, that no part of that duty should be drawn back upon the exportation to the colonies of any commodities, of the growth or manufacture either of Europe or the East Indies, except wines, white callicoes and muslins.1 Drawbacks were, perhaps, originally granted for the encouragement of the carrying trade, which, as the freight of the ships is frequently paid by foreigners in money, was supposed to be peculiarly fitted for bringing gold and silver into the country. But though the carrying trade certainly deserves no peculiar encouragement, though the motive of the institution was, perhaps, abundantly foolish, the institution itself seems reasonable enough. Such drawbacks cannot force into this trade a greater share of the capital of the country than what would have gone to it of its own accord, had there been no duties upon importation. They only prevent its being excluded altogether by those duties. The carrying trade, though it deserves no preference, ought not to be precluded, but to be left free like all other trades. It is a necessary resource for those capitals which cannot find employment either in the agriculture or in the manufactures of the country, either in its home trade or in its foreign trade of consumption. 1[From the words 'duty upon importation' at the end of the first sentence of the third paragraph of the chapter to this point is new matter, which appears first in Additions and Corrections and ed. 3. Eds. 1 and 2 read in place of it simply, "Half the duties imposed by what is called the old subsidy, are drawn back universally, except upon goods exported to the British plantations; and frequently the whole, almost always a part of those imposed by later subsidies and imposts'. The provision of 4 Geo. III., c. 15, taking away drawbacks, is quoted below, p. 85.] though the export of other foreign commodities to those colonies was discouraged. Drawbacks were originally granted to encourage the carrying trade, which was absurd, but they are reasonable enough. The revenue gains by their exist ence when they do not amount to the whole of the duty paid. They would be justified even if they always did amount to the whole duty paid, but only to in respect of They give rise to frauds. The revenue of the customs, instead of suffering, profits from such drawbacks, by that part of the duty which is retained. If the whole duties had been retained, the foreign goods upon which they are paid, could seldom have been exported, nor consequently imported, for want of a market. The duties, therefore, of which a part is retained, would never have been paid. These reasons seem sufficiently to justify drawbacks, and would justify them, though the whole duties, whether upon the produce of domestic industry, or upon foreign goods, were always drawn back upon exportation. The revenue of excise would in this case, indeed, suffer a little, and that of the customs a good deal more; but the natural balance of industry, the natural division and distribution of labour, which is always more or less disturbed by such duties, would be more nearly re-established by such a regulation. These reasons, however, will justify drawbacks only upon exporting goods to those countries which are altogether foreign and independent, not to those in which our merchants and manufacturers enjoy a monopoly. A drawback, for example, upon the exportation of European goods to our American colonies, will not always occasion a greater exportation than what would have taken place without it. By means of the monopoly which our merchants and manufacturers enjoy there, the same quantity might frequently, perhaps, be sent thither, though the whole duties were retained. The drawback, therefore, may frequently be pure loss to the revenue of excise and customs, without altering the state of the trade, or rendering it in any respect more extensive. How far such drawbacks can be justified, as a proper encouragement to the industry of our colonies, or how far it is advantageous to the mother-country, that they should be exempted from taxes which are paid by all the rest of their fellow-subjects, will appear hereafter1 when I come to treat of colonies. Drawbacks, however, it must always be understood, are useful only in those cases in which the goods for the exportation of which they are given, are really exported to some foreign country; and not clandestinely re-imported into our own. That some drawbacks, particularly those upon tobacco, have frequently been abused in this manner, and have given occasion to many frauds equally hurtful both to the revenue and to the fair trader, is well known. 1 1 [Below, pp. 84-86.] B CHAPTER V OF BOUNTIES OUNTIES upon exportation are, in Great Britain, frequently petitioned for, and sometimes granted to the produce of particular branches of domestic industry. By means of them our merchants and manufacturers, it is pretended, will be enabled to sell their goods as cheap or cheaper than their rivals in the foreign market. A greater quantity, it is said, will thus be exported, and the balance of trade consequently turned more in favour of our own country. We cannot give our workmen a monopoly in the foreign, as we have done in the home market. We cannot force foreigners to buy their goods, as we have done our own countrymen. The next best expedient, it has been thought, therefore, is to pay them for buying. It is in this manner that the mercantile system proposes to enrich the whole country, and to put money into all our pockets by means of the balance of trade. Bounties, it is allowed, ought to be given to those branches of trade only which cannot be carried on without them. But every branch of trade in which the merchant can sell his goods for a price which replaces to him, with the ordinary profits of stock, the whole capital employed in preparing and sending them to market, can be carried on without a bounty. Every such branch is evidently upon a level with all the other branches of trade which are carried on without bounties, and cannot therefore require one more than they. Those trades only require bounties in which the merchant is obliged to sell his goods for a price which does not replace to him his capital, together with the ordinary profit; or in which he is obliged to sell them for less than it really costs him to send them to market. The bounty is given in order to make up this loss, and to encourage him to continue, or perhaps to begin, a trade of which the expence is supposed to be greater than the returns, of which every operation eats up a part of the capital (7) Foreigners cannot be forced to buy our goods, so it is proposed to pay them to do so. Bounties are not demanded for any but losing trades, |