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Book IV: On Systems of Political Economy
Adam Smith
Chapter VII: On Colonies
Part I: On the Motives for establishing new Colonies
The interest which occasioned the first settlement of the different European colonies in America
and the West Indies was not altogether so plain and distinct as that which directed the
establishment of those of ancient Greece and Rome.
All the different states of ancient Greece possessed, each of them, but a very small territory, and
when the people in any one of them multiplied beyond what that territory could easily maintain, a
part of them were sent in quest of a new habitation in some remote and distant part of the world;
the warlike neighbours who surrounded them on all sides, rendering it difficult for any of them to
enlarge very much its territory at home. The colonies of the Dorians resorted chiefly to Italy and
Sicily, which, in the times preceding the foundation of Rome, were inhabited by barbarous and
uncivilised nations: those of the Ionians and Aeolians, the two other great tribes of the Greeks, to
Asia Minor and the islands of the Aegean Sea, of which the inhabitants seem at that time to have
been pretty much in the same state as those of Sicily and Italy. The mother city, though she
considered the colony as a child, at all times entitled to great favour and assistance, and owing in
return much gratitude and respect, yet considered it as an emancipated child over whom she
pretended to claim no direct authority or jurisdiction. The colony settled its own form of
government, enacted its own laws, elected its own magistrates, and made peace or war with its
neighbours as an independent state, which had no occasion to wait for the approbation or consent
of the mother city. Nothing can be more plain and distinct than the interest which directed every
such establishment.
Rome, like most of the other ancient republics, was originally founded upon an Agrarian law
which divided the public territory in a certain proportion among the different citizens who
composed the state. The course of human affairs by marriage, by succession, and by alienation,
necessarily deranged this original division, and frequently threw the lands, which had been allotted
for the maintenance of many different families, into the possession of a single person. To remedy
this disorder, for such it was supposed to be, a law was made restricting the quantity of land which
any citizen could possess to five hundred jugera, about three hundred and fifty English acres. This
law, however, though we read of its having been executed upon one or two occasions, was either
neglected or evaded, and the inequality of fortunes went on continually increasing. The greater part
of the citizens had no land, and without it the manners and customs of those times rendered it
difficult for a freeman to maintain his independency. In the present time, though a poor man has no
land of his own, if he has a little stock he may either farm the lands of another, or he may carry on
some little retail trade; and if he has no stock, he may find employment either as a country labourer
or as an artificer. But among the ancient Romans the lands of the rich were all cultivated by slaves,
who wrought under an overseer who was likewise a slave; so that a poor freeman had little chance
of being employed either as a farmer or as a labourer. All trades and manufactures too, even the
retail trade, were carried on by the slaves of the rich for the benefit of their masters, whose wealth,
authority, and protection made it difficult for a poor freeman to maintain the competition against
them. The citizens, therefore, who had no land, had scarce any other means of subsistence but the
bounties of the candidates at the annual elections. The tribunes, when they had a mind to animate
the people against the rich and the great, put them in mind of the ancient division of lands, and
represented that law which restricted this sort of private property as the fundamental law of the
republic. The people became clamorous to get land, and the rich and the great, we may believe,
were perfectly determined not to give them any part of theirs. To satisfy them in some measure
therefore, they frequently proposed to send out a new colony. But conquering Rome was, even
upon such occasions, under no necessity of turning out her citizens to seek their fortune, if one may
say so, through the wide world, without knowing where they were to settle. She assigned them
lands generally in the conquered provinces of Italy, where, being within the dominions of the
republic, they could never form an independent state; but were at best but a sort of corporation,
which, though it had the power of enacting bye-laws for its own government, was at all times
subject to the correction, jurisdiction, and legislative authority of the mother city. The sending out a
colony of this kind not only gave some satisfaction to the people, but often established a sort of
garrison, too, in a newly conquered province, of which the obedience might otherwise have been
doubtful. A Roman colony therefore, whether we consider the nature of the establishment itself or
the motives for making it, was altogether different from a Greek one. The words accordingly,
which in the original languages denote those different establishments, have very different
meanings. The Latin word (Colonia) signifies simply a plantation. The Greek word apoikia, on the
contrary, signifies a separation of dwelling, a departure from home, a going out of the house. But,
though the Roman colonies were in many respects different from the Greek ones, the interest
which prompted to establish them was equally plain and distinct. Both institutions derived their
origin either from irresistible necessity, or from clear and evident utility.
The establishment of the European colonies in America and the West Indies arose from no
necessity: and though the utility which has resulted from them has been very great, it is not
altogether so clear and evident. It was not understood at their first establishment, and was not the
motive either of that establishment or of the discoveries which gave occasion to it, and the nature,
extent, and limits of that utility are not, perhaps, well understood at this day.
The Venetians, during the fourteenth and fifteenth centuries, carried on a very advantageous
commerce in spiceries, and other East India goods, which they distributed among the other nations
of Europe. They purchased them chiefly in Egypt, at that time under the dominion of the
Mamelukes, the enemies of the Turks, of whom the Venetians were the enemies; and this union of
interest, assisted by the money of Venice, formed such a connection as gave the Venetians almost a
monopoly of the trade.
The great profits of the Venetians tempted the avidity of the Portuguese. They had been
endeavouring, during the course of the fifteenth century, to find out by sea a way to the countries
from which the Moors brought them ivory and gold dust across the desert. They discovered the
Madeiras, the Canaries, the Azores, the Cape de Verde Islands, the coast of Guinea, that of Loango,
Congo, Angola, and Benguela, and, finally, the Cape of Good Hope. They had long wished to share
in the profitable traffic of the Venetians, and this last discovery opened to them a probable prospect
of doing so. In 1497, Vasco de Gama sailed from the port of Lisbon with a fleet of four ships, and
after a navigation of eleven months arrived upon the coast of Indostan, and thus completed a
course of discoveries which had been pursued with great steadiness, and with very little
interruption, for nearly a century together.
Some years before this, while the expectations of Europe were in suspense about the projects of
the Portuguese, of which the success appeared yet to be doubtful, a Genoese pilot formed the yet
more daring project of sailing to the East Indies by the West. The situation of those countries was
at that time very imperfectly known in Europe. The few European travellers who had been there
had magnified the distance, perhaps through simplicity and ignorance, what was really very great
appearing almost infinite to those who could not measure it; or, perhaps, in order to increase
somewhat more the marvellous of their own adventures in visiting regions so immensely remote
from Europe. The longer the way was by the East, Columbus very justly concluded, the shorter it
would be by the West. He proposed, therefore, to take that way, as both the shortest and the surest,
and he had the good fortune to convince Isabella of Castile of the probability of his project. He
sailed from the port of Palos in August 1492, nearly five years before the expedition of Vasco de
Gama set out from Portugal, and, after a voyage of between two and three months, discovered first
some of the small Bahamas or Lucayan islands, and afterwards the great island of St. Domingo.
But the countries which Columbus discovered, either in this or in any of his subsequent voyages,
had no resemblance to those which he had gone in quest of. Instead of the wealth, cultivation, and
populousness of China and Indostan, he found, in St. Domingo, and in all the other parts of the
new world which he ever visited, nothing but a country quite covered with wood, uncultivated, and
inhabited only by some tribes of naked and miserable savages. He was not very willing, however,
to believe that they were not the same with some of the countries described by Marco Polo, the
first European who had visited, or at least had left behind him, any description of China or the East
Indies; and a very slight resemblance, such as that which he found between the name of Cibao, a
mountain in St. Domingo, and that of Cipango mentioned by Marco Polo, was frequently sufficient
to make him return to this favourite prepossession, though contrary to the clearest evidence. In his
letters to Ferdinand and Isabella he called the countries which he had discovered the Indies. He
entertained no doubt but that they were the extremity of those which had been described by Marco
Polo, and that they were not very distant from the Ganges, or from the countries which had been
conquered by Alexander. Even when at last convinced that they were different, he still flattered
himself that those rich countries were at no great distance, and, in a subsequent voyage,
accordingly, went in quest of them along the coast of Terra Firma, and towards the Isthmus of
Darien.
In consequence of this mistake of Columbus, the name of the Indies has stuck to those
unfortunate countries ever since; and when it was at last clearly discovered that the new were
altogether different from the old Indies, the former were called the West, in contradistinction to the
latter, which were called the East Indies.
It was of importance to Columbus, however, that the countries which he had discovered,
whatever they were, should be represented to the court of Spain as of very great consequence; and,
in what constitutes the real riches of every country, the animal and vegetable productions of the
soil, there was at that time nothing which could well justify such a representation of them.
The Cori, something between a rat and a rabbit, and supposed by Mr. Buffon to be the same with
the Aperea of Brazil, was the largest viviparous quadruped in St. Domingo. This species seems
never to have been very numerous, and the dogs and cats of the Spaniards are said to have long ago
almost entirely extirpated it, as well as some other tribes of a still smaller size. These, however,
together with a pretty large lizard, called the ivana, or iguana, constituted the principal part of the
animal food which the land afforded.
The vegetable food of the inhabitants, though from their want of industry not very abundant, was
not altogether so scanty. It consisted in Indian corn, yams, potatoes, bananas, etc., plants which
were then altogether unknown in Europe, and which have never since been very much esteemed in
it, or supposed to yield a sustenance equal to what is drawn from the common sorts of grain and
pulse, which have been cultivated in this part of the world time out of mind.
The cotton plant, indeed, afforded the material of a very important manufacture, and was at that
time to Europeans undoubtedly the most valuable of all the vegetable productions of those islands.
But though in the end of the fifteenth century the muslins and other cotton goods of the East Indies
were much esteemed in every part of Europe, the cotton manufacture itself was not cultivated in
any part of it. Even this production, therefore, could not at that time appear in the eyes of
Europeans to be of very great consequence.
Finding nothing either in the animals or vegetables of the newly discovered countries which
could justify a very advantageous representation of them, Columbus turned his view towards their
minerals; and in the richness of the productions of this third kingdom, he flattered himself he had
found a full compensation for the insignificancy of those of the other two. The little bits of gold
with which the inhabitants ornamented their dress, and which, he was informed, they frequently
found in the rivulets and torrents that fell from the mountains, were sufficient to satisfy him that
those mountains abounded with the richest gold mines. St. Domingo, therefore, was represented as
a country abounding with gold, and, upon that account, (according to the prejudices not only of the
present time, but of those times) an inexhaustible source of real wealth to the crown and kingdom
of Spain. When Columbus, upon his return from his first voyage, was introduced with a sort of
triumphal honours to the sovereigns of Castile and Arragon, the principal productions of the
countries which he had discovered were carried in solemn procession before him. The only
valuable part of them consisted in some little fillets, bracelets, and other ornaments of gold, and in
some bales of cotton. The rest were mere objects of vulgar wonder and curiosity; some reeds of an
extraordinary size, some birds of a very beautiful plumage, and some stuffed skins of the huge
alligator and manati; all of which were preceded by six or seven of the wretched natives, whose
singular colour and appearance added greatly to the novelty of the show.
In consequence of the representations of Columbus, the council of Castile determined to take
possession of countries of which the inhabitants were plainly incapable of defending themselves.
The pious purpose of converting them to Christianity sanctified the injustice of the project. But the
hope of finding treasures of gold there was the sole motive which prompted him to undertake it;
and to give this motive the greater weight, it was proposed by Columbus that the half of all the
gold and silver that should be found there should belong to the crown. This proposal was approved
of by the council.
As long as the whole or the far greater part of the gold, which the first adventurers imported into
Europe, was got by so very easy a method as the plundering of the defenceless natives, it was not
perhaps very difficult to pay even this heavy tax. But when the natives were once fairly stripped of
all that they had, which, in St. Domingo, and in all the other countries discovered by Columbus,
was done completely in six or eight years, and when in order to find more it had become necessary
to dig for it in the mines, there was no longer any possibility of paying this tax. The rigorous
exaction of it, accordingly, first occasioned, it is said, the total abandoning of the mines of St.
Domingo, which have never been wrought since. It was soon reduced therefore to a third; then to a
fifth; afterwards to a tenth; and at last to a twentieth part of the gross produce of the gold mines.
The tax upon silver continued for a long time to be a fifth of the gross produce. It was reduced to a
tenth only in the course of the present century. But the first adventurers do not appear to have been
much interested about silver. Nothing less precious than gold seemed worthy of their attention.
All the other enterprises of the Spaniards in the new world, subsequent to those of Columbus,
seem to have been prompted by the same motive. It was the sacred thirst of gold that carried Oieda,
Nicuessa, and Vasco Nugnes de Balboa, to the Isthmus of Darien, that carried Cortez to Mexico,
and Almagro and Pizzarro to Chili and Peru. When those adventurers arrived upon any unknown
coast, their first inquiry was always if there was any gold to be found there; and according to the
information which they received concerning this particular, they determined either to quit the
country or to settle in it.
Of all those expensive and uncertain projects, however, which bring bankruptcy upon the greater
part of the people who engage in them, there is none perhaps more ruinous than the search after
new silver and gold mines. It is perhaps the most disadvantageous lottery in the world, or the one
in which the gain of those who draw the prizes bears the least proportion to the loss of those who
draw the blanks: for though the prizes are few and the blanks many, the common price of a ticket is
the whole fortune of a very rich man. Projects of mining, instead of replacing the capital employed
in them, together with the ordinary profits of stock, commonly absorb both capital and profit. They
are the projects, therefore, to which of all others a prudent lawgiver, who desired to increase the
capital of his nation, would least choose to give any extraordinary encouragement, or to turn
towards them a greater share of that capital than that would go to them of its own accord. Such in
reality is the absurd confidence which almost all men have in their own good fortune that,
wherever there is the least probability of success, too great a share of it is apt to go to them of its
own accord.
But though the judgment of sober reason and experience concerning such projects has always
been extremely unfavourable, that of human avidity has commonly been quite otherwise. The same
passion which has suggested to so many people the absurd idea of the philosopher’s stone, has
suggested to others the equally absurd one of immense rich mines of gold and silver. They did not
consider that the value of those metals has, in all ages and nations, arisen chiefly from their
scarcity, and that their scarcity has arisen from the very small quantities of them which nature has
anywhere deposited in one place, from the hard and intractable substances with which she has
almost everywhere surrounded those small quantities, and consequently from the labour and
expense which are everywhere necessary in order to penetrate to and get at them. They flattered
themselves that veins of those metals might in many places be found as large and as abundant as
those which are commonly found of lead, or copper, or tin, or iron. The dream of Sir Walter
Raleigh concerning the golden city and country of Eldorado, may satisfy us that even wise men are
not always exempt from such strange delusions. More than a hundred years after the death of that
great man, the Jesuit Gumila was still convinced of the reality of that wonderful country, and
expressed with great warmth, and I dare to say with great sincerity, how happy he should be to
carry the light of the gospel to a people who could so well reward the pious labours of their
missionary.
In the countries first discovered by the Spaniards, no gold or silver mines are at present known
which are supposed to be worth the working. The quantities of those metals which the first
adventurers are said to have found there had probably been very much magnified, as well as the
fertility of the mines which were wrought immediately after the first discovery. What those
adventurers were reported to have found, however, was sufficient to inflame the avidity of all their
countrymen. Every Spaniard who sailed to America expected to find an Eldorado. Fortune, too, did
upon this what she has done upon very few other occasions. She realized in some measure the
extravagant hopes of her votaries, and in the discovery and conquest of Mexico and Peru (of which
the one happened about thirty, the other about forty years after the first expedition of Columbus),
she presented them with something not very unlike that profusion of the precious metals which
they sought for.
A project of commerce to the East Indies, therefore, gave occasion to the first discovery of the
West. A project of conquest gave occasion to all the establishments of the Spaniards in those newly
discovered countries. The motive which excited them to this conquest was a project of gold and
silver mines; and a course of accidents, which no human wisdom could foresee, rendered this
project much more successful than the undertakers had any reasonable grounds for expecting.
The first adventurers of all the other nations of Europe who attempted to make settlements in
America were animated by the like chimerical views; but they were not equally successful. It was
more than a hundred years after the first settlement of the Brazils before any silver, gold, or
diamond mines were discovered there. In the English, French, Dutch, and Danish colonies, none
have ever yet been discovered; at least none that are at present supposed to be worth the working.
The first English settlers in North America, however, offered a fifth of all the gold and silver which
should be found there to the king, as a motive for granting them their patents. In the patents to Sir
Walter Raleigh, to the London and Plymouth Companies, to the Council of Plymouth, etc., this
fifth was accordingly reserved to the crown. To the expectation of finding gold and silver mines,
those first settlers, too, joined that of discovering a northwest passage to the East Indies. They have
hitherto been disappointed in both.
Next Part: Causes of Prosperity of New Colonies
An Inquiry into the Nature and Causes of the Wealth of Nations
Book IV: On Systems of Political Economy
Adam Smith
Chapter VIII: Conclusion of the Mercantile System
Though the encouragement of exportation and the discouragement of importation are the two
great engines by which the mercantile system proposes to enrich every country, yet with regard to
some particular commodities it seems to follow an opposite plan: to discourage exportation and to
encourage importation. Its ultimate object, however, it pretends, is always the same, to enrich the
country by an advantageous balance of trade. It discourages the exportation of the materials of
manufacture, and of the instruments of trade, in order to give our own workmen an advantage, and
to enable them to undersell those of other nations in all foreign markets; and by restraining, in this
manner, the exportation of a few commodities, of no great price, it proposes to occasion a much
greater and more valuable exportation of others. It encourages the importation of the materials of
manufacture in order that our own people may be enabled to work them up more cheaply, and
thereby prevent a greater and more valuable importation of the manufactured commodities. I do
not observe, at least in our Statute Book, any encouragement given to the importation of the
instruments of trade. When manufactures have advanced to a certain pitch of greatness, the
fabrication of the instruments of trade becomes itself the object of a great number of very
important manufactures. To give any particular encouragement to the importation of such
instruments would interfere too much with the interest of those manufactures. Such importation,
therefore, instead of being encouraged, has frequently been prohibited. Thus the importation of
wool cards, except from Ireland, or when brought in as wreck or prize goods, was prohibited by the
3rd of Edward IV; which prohibition was renewed by the 39th of Elizabeth, and has been
continued and rendered perpetual by subsequent laws.
The importation of the materials of manufacture has sometimes been encouraged by an
exemption from the duties to which other goods are subject, and sometimes by bounties.
The importation of sheep’s wool from several different countries, of cotton wool from all
countries, of undressed flax, of the greater part of dyeing drugs, of the greater part of undressed
hides from Ireland or the British colonies, of sealskins from the British Greenland fishery, of pig
and bar iron from the British colonies, as well as of several other materials of manufacture, has
been encouraged by an exemption from all duties, if properly entered at the custom house. The
private interest of our merchants and manufacturers may, perhaps, have extorted from the
legislature these exemptions as well as the greater part of our other commercial regulations. They
are, however, perfectly just and reasonable, and if, consistently with the necessities of the state,
they could be extended to all the other materials of manufacture, the public would certainly be a
gainer.
The avidity of our great manufacturers, however, has in some cases extended these exemptions a
good deal beyond what can justly be considered as the rude materials of their work. By the 24th
George III, c. 46, a small duty of only one penny the pound was imposed upon the importation of
foreign brown linen yam, instead of much higher duties to which it had been subjected before, viz.
of sixpence the pound upon sail yarn, of one shilling the pound upon all French and Dutch yarn,
and of two pounds thirteen shillings and fourpence upon the hundredweight of all spruce or
Muscovia yarn. But our manufacturers were not long satisfied with this reduction. By the 29th of
the same king, c. 15, the same law which gave a bounty upon the exportation of British and Irish
linen of which the price did not exceed eighteenpence the yard, even this small duty upon the
importation of brown linen yarn was taken away. In the different operations, however, which are
necessary for the preparation of linen yarn, a good deal more industry is employed than in the
subsequent operation of preparing linen cloth from linen yarn. To say nothing of the industry of the
flax-growers and flax-dressers, three or four spinners, at least, are necessary in order to keep one
weaver in constant employment; and more than four-fifths of the whole quantity of labour
necessary for the preparation of linen cloth is employed in that of linen yarn; but our spinners are
poor people, women commonly scattered about in all different parts of the country, without support
or protection. It is not by the sale of their work, but by that of the complete work of the weavers,
that our great master manufacturers make their profits. As it is their interest to sell the complete
manufacture as dear, so is it to buy the materials as cheap as possible. By extorting from the
legislature bounties upon the exportation of their own linen, high duties upon the importation of all
foreign linen, and a total prohibition of the home consumption of some sorts of French linen, they
endeavour to sell their own goods as dear as possible. By encouraging the importation of foreign
linen yarn, and thereby bringing it into competition with that which is made by our own people,
they endeavour to buy the work of the poor spinners as cheap as possible. They are as intent to
keep down the wages of their own weavers as the earnings of the poor spinners, and it is by no
means for the benefit of the workman that they endeavour either to raise the price of the complete
work or to lower that of the rude materials. It is the industry which is carried on for the benefit of
the rich and the powerful that is principally encouraged by our mercantile system. That which is
carried on for the benefit of the poor and the indigent is too often either neglected or oppressed.
Both the bounty upon the exportation of linen, and the exemption from duty upon the
importation of foreign yarn, which were granted only for fifteen years, but continued by two
different prolongations, expire with the end of the session of Parliament which shall immediately
follow the 24th of June 1786.
The encouragement given to the importation of the materials of manufacture by bounties has
been principally confined to such as were imported from our American plantations.
The first bounties of this kind were those granted about the beginning of the present century
upon the importation of naval stores from America. Under this denomination were comprehended
timber fit for masts, yards, and bowsprits; hemp; tar, pitch, and turpentine. The bounty, however, of
one pound the ton upon masting-timber, and that of six pounds the ton upon hemp, were extended
to such as should be imported into England from Scotland. Both these bounties continued without
any variation, at the same rate, till they were severally allowed to expire; that upon hemp on the 1st
of January 1741, and that upon masting-timber at the end of the session of Parliament immediately
following the 24th June 1781.
The bounties upon the importation of tar, pitch, and turpentine underwent, during their
continuance, several alterations. Originally that upon tar was four pounds the ton; that upon pitch
the same; and that upon turpentine, three pounds the ton. The bounty of four pounds the ton upon
tar was afterwards confined to such as had been prepared in a particular manner; that upon other
good, clean, and merchantable tar was reduced to two pounds four shillings the ton. The bounty
upon pitch was likewise reduced to one pound; and that upon turpentine to one pound ten shillings
the ton.
The second bounty upon the importation of any of the materials of manufacture, according to the
order of time, was that granted by the 21st George II, c. 30, upon the importation of indigo from
the British plantations. When the plantation indigo was worth three-fourths of the price of the best
French indigo, it was by this act entitled to a bounty of sixpence the pound. This bounty, which,
like most others, was granted only for a limited time, was continued by several prolongations, but
was reduced to fourpence the pound. It was allowed to expire with the end of the session of
Parliament which followed the 25th March 1781.
The third bounty of this kind was that granted (much about the time that we were beginning
sometimes to court and sometimes to quarrel with our American colonies) by the 4th George III, c.
26, upon the importation of hemp, or undressed flax, from the British plantations. This bounty was
granted for twenty-one years, from the 24th June 1764 to the 24th June 1785. For the first seven
years it was to be at the rate of eight pounds the ton, for the second at six pounds, and for the third
at four pounds. It was not extended to Scotland, of which the climate (although hemp is sometimes
raised there in small quantities and of an inferior quality) is not very fit for that produce. Such a
bounty upon the importation of Scotch flax into England would have been too great a
discouragement to the native produce of the southern part of the United Kingdom.
The fourth bounty of this kind was that granted by the 5th George III, c. 45, upon the
importation of wood from America. It was granted for nine years, from the 1st January 1766 to the
1st January 1775. During the first three years, it was to be for every hundred and twenty good
deals, at the rate of one pound, and for every load containing fifty cubic feet of other squared
timber at the rate of twelve shillings. For the second three years, it was for deals to be at. the rate of
fifteen shillings, and for other squared timber at the rate of eight shillings; and for the third three
years, it was for deals to be at the rate of ten shillings, and for other squared timber at the rate of
five shillings.
The fifth bounty of this kind was that granted by the 9th George III, c. 38, upon the importation
of raw silk from the British plantations. It was granted for twenty-one years, from the 1st January
1770 to the 1st January 1791. For the first seven years it was to be at the rate of twenty-five pounds
for every hundred pounds value; for the second at twenty pounds; and for the third at fifteen
pounds. The management of the silk worm, and the preparation of silk, requires so much hand
labour, and labour is so very dear in America that even this great bounty, I have been informed,
was not likely to produce any considerable effect.
The sixth bounty of this kind was that granted by 2nd George III, c. 50, for the importation of
pipe, hogshead, and barrel staves and heading from the British plantations. It was granted for nine
years, from 1st January 1772 to the 1st January 1781. For the first three years it was for a certain
quantity of each to be at the rate of six pounds; for the second three years at four pounds; and for
the third three years at two pounds.
The seventh and last bounty of this kind was that granted by the 19th George III, c. 37, upon the
importation of hemp from Ireland. It was granted in the same manner as that for the importation of
hemp and undressed flax from America, for twenty-one years, from the 24th June 1779 to the 24th
June 1800. This term is divided, likewise, into three periods of seven years each; and in each of
those periods the rate of the Irish bounty is the same with that of the American. It does not,
however, like the American bounty, extend to the importation of undressed flax. It would have
been too great a discouragement to the cultivation of that plant in Great Britain. When this last
bounty was granted, the British and Irish legislatures were not in much better humour with one
another than the British and American had been before. But this boon to Ireland, it is to be hoped,
has been granted under more fortunate auspices than all those to America.
The same commodities upon which we thus gave bounties when imported from America were
subjected to considerable duties when imported from any other country. The interest of our
American colonies was regarded as the same with that of the mother country. Their wealth was
considered as our wealth. Whatever money was sent out to them, it was said, came all back to us
by the balance of trade, and we could never become a farthing the poorer by any expense which we
could lay out upon them. They were our own in every respect, and it was an expense laid out upon
the improvement of our own property and for the profitable employment of our own people. It is
unnecessary, I apprehend, at present to say anything further in order to expose the folly of a system
which fatal experience has now sufficiently exposed. Had our American colonies really been a part
of Great Britain, those bounties might have been considered as bounties upon production, and
would still have been liable to all the objections to which such bounties are liable, but to no other.
The exportation of the materials of manufacture is sometimes discouraged by absolute
prohibitions, and sometimes by high duties.
Our woollen manufacturers have been more successful than any other class of workmen in
persuading the legislature that the prosperity of the nation depended upon the success and
extension of their particular business. They have not only obtained a monopoly against the
consumers by an absolute prohibition of importing woollen cloths from any foreign country, but
they have likewise obtained another monopoly against the sheep farmers and growers of wool by a
similar prohibition of the exportation of live sheep and wool. The severity of many of the laws
which have been enacted for the security of the revenue is very justly complained of, as imposing
heavy penalties upon actions which, antecedent to the statutes that declared them to be crimes, had
always been understood to be innocent. But the cruellest of our revenue laws, I will venture to
affirm, are mild and gentle in comparison of some of those which the clamour of our merchants
and manufacturers has extorted from the legislature for the support of their own absurd and
oppressive monopolies. Like the laws of Draco, these laws may be said to be all written in blood.
By the 8th of Elizabeth, c. 3, the exporter of sheep, lambs, or rams was for the first offence to
forfeit all his goods for ever, to suffer a year’s imprisonment, and then to have his left hand cut off
in a market town upon a market day, to be there nailed up; and for the second offence to be
adjudged a felon, and to suffer death accordingly. To prevent the breed of our sheep from being
propagated in foreign countries seems to have been the object of this law. By the 13th and 14th of
Charles II, c. 18, the exportation of wool was made felony, and the exporter subjected to the same
penalties and forfeitures as a felon.
For the honour of the national humanity, it is to be hoped that neither of these statutes were ever
executed. The first of them, however; so far as I know, has never been directly repealed, and
Serjeant Hawkins seems to consider it as still in force. It may however, perhaps, be considered as
virtually repealed by the 12th of Charles II, c. 32, sect. 3, which, without expressly taking away the
penalties imposed by former statutes, imposes a new penalty, viz., that of twenty shillings for every
sheep exported, or attempted to be exported, together with the forfeiture of the sheep and of the
owner’s share of the ship. The second of them was expressly repealed by the 7th and 8th of
William III, c. 28, sect. 4. By which it is declared that, “Whereas the statute of the 13th and 14th of
King Charles II, made against the exportation of wool, among other things in the said act
mentioned, doth enact the same to be deemed felony; by the severity of which penalty the
prosecution of offenders hath not been so effectually put in execution: Be it, therefore, enacted by
the authority aforesaid, that so much of the said act, which relates to the making the said offence
felony, be repealed and made void.”
The penalties, however, which are either imposed by this milder statute, or which, though
imposed by former statutes, are not repealed by this one, are still sufficiently severe. Besides the
forfeiture of the goods, the exporter incurs the penalty of three shillings for every pound weight of
wool either exported or attempted to be exported, that is about four or five times the value. Any
merchant or other person convicted of this offence is disabled from requiring any debt or account
belonging to him from any factor or other person. Let his fortune be what it will, whether he is or
is not able to pay those heavy penalties, the law means to ruin him completely. But as the morals of
the great body of the people are not yet so corrupt as those of the contrivers of this statute, I have
not heard that any advantage has ever been taken of this clause. If the person convicted of this
offence is not able to pay the penalties within three months after judgment, he is to be transported
for seven years, and if he returns before the expiration of that term, he is liable to the pains of
felony, without benefit of clergy. The owner of the ship, knowing this offence, forfeits all his
interest in the ship and furniture. The master and mariners, knowing this offence, forfeit all their
goods and chattels, and suffer three months’ imprisonment. By a subsequent statute the master
suffers six months’ imprisonment.
In order to prevent exportation, the whole inland commerce of wool is laid under very
burdensome and oppressive restrictions. It cannot be packed in any box, barrel, cask, case, chest, or
any other package, but only in packs of leather or pack-cloth, on which must be marked on the
outside the words wool or yam, in large letters not less than three inches long, on pain of forfeiting
the same and the package, and three shillings for every pound weight, to be paid by the owner or
packer. It cannot be loaden on any horse or cart, or carried by land within five miles of the coast,
but between sun-rising and sun-setting, on pain of forfeiting the same, the horses and carriages.
The hundred next adjoining to the sea-coast, out of or through which the wool is carried or
exported, forfeits twenty pounds, if the wool is under the value of ten pounds; and if of greater
value, then treble that value, together with treble costs, to be sued for within the year. The
execution to be against any two of the inhabitants, whom the sessions must reimburse, by an
assessment on the other inhabitants, as in the cases of robbery. And if any person compounds with
the hundred for less than this penalty, he is to be imprisoned for five years; and any other person
may prosecute. These regulations take place through the whole kingdom.
But in the particular counties of Kent and Sussex, the restrictions are still more troublesome.
Every owner of wool within ten miles of the sea-coast must given an account in writing, three days
after shearing to the next officer of the customs, of the number of his fleeces, and of the places
where they are lodged. And before he removes any part of them he must give the like notice of the
number and weight of the fleeces, and of the name and abode of the person to whom they are sold,
and of the place to which it is intended they should be carried. No person within fifteen miles of
the sea, in the said counties, can buy any wool before he enters into bond to the king that no part of
the wool which he shall so buy shall be sold by him to any other person within fifteen miles of the
sea. If any wool is found carrying towards the sea-side in the said counties, unless it has been
entered and security given as aforesaid, it is forfeited, and the offender also forfeits three shillings
for every pound weight. If any person lays any wool not entered as aforesaid within fifteen miles of
the sea, it must be seized and forfeited; and if, after such seizure, any person claim the same, he
must give security to the Exchequer that if he is cast upon trial he shall pay treble costs, besides all
other penalties.
When such restrictions are imposed upon the inland trade, the coasting trade, we may believe,
cannot be left very free. Every owner of wool who carries or causes to be carried any wool to any
port or place on the seacoast, in order to be from thence transported by sea to any other place or
port on the coast, must first cause an entry thereof to be made at the port from whence it is
intended to be conveyed, containing the weight, marks, and number of the packages, before he
brings the same within five miles of that port, on pain of forfeiting the same, and also the horses,
carts, and other carriages; and also of suffering and forfeiting as by the other laws in force against
the exportation of wool. This law, however (1st William III, c. 32), is so very indulgent as to
declare that, “This shall not hinder any person from carrying his wool home from the place of
shearing, though it be within five miles of the sea, provided that in ten days after shearing, and
before he remove the wool, he do under his hand certify to the next officer of the customs, the true
number of fleeces, and where it is housed; and do not remove the same, without certifying to such
officer, under his hand, his intention so to do, three days before.” Bond must be given that the wool
to be carried coastways is to be landed at the particular port for which it is entered outwards; and if
any part of it is landed without the presence of an officer, not only the forfeiture of the wool is
incurred as in other goods, but the usual additional penalty of three shillings for every pound
weight is likewise incurred.
Our woollen manufactures, in order to justify their demand of such extraordinary restrictions and
regulations, confidently asserted that English wool was of a peculiar quality, superior to that of any
other country; that the wool of other countries could not, without some mixture of it, be wrought
up into any tolerable manufacture; that fine cloth could not be made without it; that England,
therefore, if the exportation of it could be totally prevented, could monopolize to herself almost the
whole woollen trade of the world; and thus, having no rivals, could sell at what price she pleased,
and in a short time acquire the most incredible degree of wealth by the most advantageous balance
of trade. This doctrine, like most other doctrines which are confidently asserted by any
considerable number of people, was, and still continues to be, most implicitly believed by a much
greater number- by almost all those who are either unacquainted with the woollen trade, or who
have not made particular inquiries. It is, however, so perfectly false that English wool is in any
respect necessary for the making of fine cloth that it is altogether unfit for it. Fine cloth is made
altogether of Spanish wool. English wool cannot be even so mixed with Spanish wool as to enter
into the composition without spoiling and degrading, in some degree, the fabric of the cloth.
It has been shown in the foregoing part of this work that the effect of these regulations has been
to depress the price of English wool, not only below what it naturally would be in the present
times, but very much below what it actually was in the time of Edward III. The price of Scots
wool, when in consequence of the union it became subject to the same regulations, is said to have
fallen about one half. It is observed by the very accurate and intelligent author of the Memoirs of
Wool, the Reverend Mr. John Smith, that the price of the best English wool in England is generally
below what wool of a very inferior quality commonly sells for in the market of Amsterdam. To
depress the price of this commodity below what may be called its natural and proper price was the
avowed purpose of those regulations; and there seems to be no doubt of their having produced the
effect that was expected from them.
This reduction of price, it may perhaps be thought, by discouraging the growing of wool, must
have reduced very much the annual produce of that commodity, though not below what it formerly
was, yet below what, in the present state of things, it probably would have been, had it, in
consequence of an open and free market, been allowed to rise to the natural and proper price. I am,
however, disposed to believe that the quantity of the annual produce cannot have been much,
though it may perhaps have been a little, affected by these regulations. The growing of wool is not
the chief purpose for which the sheep farmer employs his industry and stock. He expects his profit
not so much from the price of the fleece as from that of the carcass; and the average or ordinary
price of the latter must even, in many cases, make up to him whatever deficiency there may be in
the average or ordinary price of the former. It has been observed in the foregoing part of this work
that, “Whatever regulations tend to sink the price, either of wool or of raw hides, below what it
naturally would be, must, in an improved and cultivated country, have some tendency to raise the
price of butcher’s meat. The price both of the great and small cattle which are fed on improved and
cultivated land must be sufficient to pay the rent which the landlord, and the profit which the
farmer has reason to expect from improved and cultivated land. If it is not, they will soon cease to
feed them. Whatever part of this price, therefore, is not paid by the wool and the hide must be paid
by the carcass. The less there is paid for the one, the more must be paid for the other. In what
manner this price is to be divided upon the different parts of the beast is indifferent to the landlords
and farmers, provided it is all paid to them. In an improved and cultivated country, therefore, their
interest as landlords and farmers cannot be much affected by such regulations, though their interest
as consumers may by the rise in the price of provisions.” According to this reasoning, therefore,
this degradation in the price of wool is not likely, in an improved and cultivated country, to
occasion any diminution in the annual produce of that commodity, except so far as, by raising the
price of mutton, it may somewhat diminish the demand for, and consequently the production of,
that particular species of butcher’s meat. Its effect, however, even in this way, it is probable, is not
very considerable.
But though its effect upon the quantity of the annual produce may not have been very
considerable, its effect upon the quality, it may perhaps be thought, must necessarily have been
very great. The degradation in the quality of English wool, if not below what it was in former
times, yet below what it naturally would have been in the present state of improvement and
cultivation, must have been, it may perhaps be supposed, very nearly in proportion to the
degradation of price. As the quality depends upon the breed, upon the pasture, and upon the
management and cleanliness of the sheep, during the whole progress of the growth of the fleece,
the attention to these circumstances, it may naturally enough be imagined, can never be greater
than in proportion to the recompense which the price of the fleece is likely to make for the labour
and expense which that attention requires. It happens, however, that the goodness of the fleece
depends, in a great measure, upon the health, growth, and bulk of the animal; the same attention
which is necessary for the improvement of the carcase is, in some respects, sufficient for that of the
fleece. Notwithstanding the degradation of price, English wool is said to have been improved
considerably during the course even of the present century. The improvement might perhaps have
been greater if the price had been better; but the lowness of price, though it may have obstructed,
yet certainly it has not altogether prevented that improvement.
The violence of these regulations, therefore, seems to have affected neither the quantity nor the
quality of the annual produce of wool so much as it might have been expected to do (though I think
it probable that it may have affected the latter a good deal more than the former); and the interest
of the growers of wool, though it must have been hurt in some degree, seems, upon the whole, to
have been much less hurt than could well have been imagined.
These considerations, however, will not justify the absolute prohibition of the exportation of
wool. But they will fully justify the imposition of a considerable tax upon that exportation.
To hurt in any degree the interest of any one order of citizens, for no other purpose but to
promote that of some other, is evidently contrary to that justice and equality of treatment which the
sovereign owes to all the different orders of his subjects. But the prohibition certainly hurts, in
some degree, the interest of the growers of wool, for no other purpose but to promote that of the
manufacturers.
Every different order of citizens is bound to contribute to the support of the sovereign or
commonwealth. A tax of five, or even of ten shillings upon the exportation of every ton of wool
would produce a very considerable revenue to the sovereign. It would hurt the interest of the
growers somewhat less than the prohibition, because it would not probably lower the price of wool
quite so much. It would afford a sufficient advantage to the manufacturer, because, though he
might not buy his wool altogether so cheap as under the prohibition, he would still buy it, at least,
five or ten shillings cheaper than any foreign manufacturer could buy it, besides saving the freight
and insurance, which the other would be obliged to pay. It is scarce possible to devise a tax which
could produce any considerable revenue to the sovereign, and at the same time occasion so little
inconveniency to anybody.
The prohibition, notwithstanding all the penalties which guard it, does not prevent the
exportation of wool. It is exported, it is well known, in great quantities. The great difference
between the price in the home and that in the foreign market presents such a temptation to
smuggling that all the rigour of the law cannot prevent it. This illegal exportation is advantageous
to nobody but the smuggler. A legal exportation subject to a tax, by affording a revenue to the
sovereign, and thereby saving the imposition of some other, perhaps, more burdensome and
inconvenient taxes might prove advantageous to all the different subjects of the state.
The exportation of fuller’s earth or fuller’s clay, supposed to be necessary for preparing and
cleansing the woolen manufactures, has been subjected to nearly the same penalties as the
exportation of wool. Even tobacco-pipe clay, though acknowledged to be different from fuller’s
clay, yet, on account of their resemblance, and because fuller’s clay might sometimes be exported
as tobacco-pipe clay, has been laid under the same prohibitions and penalties.
By the 13th and 14th of Charles II, c. 7, the exportation, not only of raw hides, but of tanned
leather, except in the shape of boots, shoes, or slippers, was prohibited; and the law gave a
monopoly to our bootmakers and shoemakers, not only against our graziers, but against our
tanners. By subsequent statutes our tanners have got themselves exempted from this monopoly
upon paying a small tax of only one shilling on the hundred-weight of tanned leather, weighing one
hundred and twelve pounds. They have obtained likewise the drawback of two-thirds of the excise
duties imposed upon their commodity even when exported without further manufacture. All
manufactures of leather may be exported duty free; and the exporter is besides entitled to the
drawback of the whole duties of excise. Our graziers still continue subject to the old monopoly.
Graziers separated from one another, and dispersed through all the different corners of the country,
cannot, without great difficulty, combine together for the purpose either of imposing monopolies
upon their fellow citizens, or of exempting themselves from such as may have been imposed upon
them by other people. Manufacturers of all kinds, collected together in numerous bodies in all great
cities, easily can. Even the horns of cattle are prohibited to be exported; and the two insignificant
trades of the horner and combmaker enjoy, in this respect, a monopoly against the graziers.
Restraints, either by prohibitions or by taxes, upon the exportation of goods which are partially,
but not completely manufactured, are not peculiar to the manufacture of leather. As long as
anything remains to be done, in order to fit any commodity for immediate use and consumption,
our manufacturers think that they themselves ought to have the doing of it. Woolen yarn and
worsted are prohibited to be exported under the same penalties as wool. Even white cloths are
subject to a duty upon exportation, and our dyers have so far obtained a monopoly against our
clothiers. Our clothiers would probably have been able to defend themselves against it, but it
happens that the greater part of our principal clothiers are themselves likewise dyers. Watch-cases,
clockcases, and dial-plates for clocks and watches have been prohibited to be exported. Our clockmakers and watch-makers are, it seems, unwilling that the price of this sort of workmanship should
be raised upon them by the competition of foreigners.
By some old statutes of Edward M, Henry VIII, and Edward VI, the exportation of all metals
was prohibited. Lead and tin were alone excepted probably on account of the great abundance of
those metals, in the exportation of which a considerable part of the trade of the kingdom in those
days consisted. For the encouragement of the mining trade, the 5th of William and Mary, c. 17,
exempted from the prohibition iron, copper, and mundic metal made from British ore. The
exportation of all sorts of copper bars, foreign as well as British, was afterwards permitted by the
9th and 10th of William III, c. 26. The exportation of unmanufactured brass, of what is called gunmetal, bell-metal, and shroff-metal, still continues to be prohibited. Brass manufactures of all sorts
may be exported duty free.
The exportation of the materials of manufacture, where it is not altogether prohibited, is in many
cases subjected to considerable duties.
By the 8th George I, c. 15, the exportation of all goods, the produce or manufacture of Great
Britain, upon which any duties had been imposed by former statutes, was rendered duty free. The
following goods, however, were excepted: alum, lead, lead ore, tin, tanned leather, copperas, coals,
wool cards, white woolen cloths, lapis calaminaris, skins of all sorts, glue, coney hair or wool,
hares’ wool, hair of all sorts, horses, and litharge of lead. If you expect horses, all these are either
materials of manufacture, or incomplete manufactures (which may be considered as materials for
still further manufacture), or instruments of trade. This statute leaves them subject to all the old
duties which had ever been imposed upon them, the old subsidy and one per cent outwards.
By the same statute a great number of foreign drugs for dyers’ use are exempted from all duties
upon importation. Each of them, however, is afterwards subjected to a certain duty, not indeed a
very heavy one, upon exportation. Our dyers, it seems, while they thought it for their interest to
encourage the importation of those drugs, by an exemption from all duties, thought it likewise for
their interest to throw some small discouragement upon their exportation. The avidity, however,
which suggested this notable piece of mercantile ingenuity, most probably disappointed itself of its
object. It necessarily taught the importers to be more careful than they might otherwise have been
that their importation should not exceed what was necessary for the supply of the home market.
The home market was at all times likely to be more scantily supplied; the commodities were at all
times likely to be somewhat dearer there than they would have been had the exportation been
rendered as free as the importation.
By the above-mentioned statute, gum senega, or gum arabic, being among the enumerated
dyeing drugs, might be imported duty free. They were subjected, indeed, to a small poundage duty,
amounting only to threepence in the hundredweight upon their re-exportation. France enjoyed, at
that time, an exclusive trade to the country most productive of those drugs, that which lies in the
neighbourhood of the Senegal; and the British market could not easily be supplied by the
immediate importation of them from the place of growth. By the 25th George II, therefore, gum
senega was allowed to be imported (contrary to the general dispositions of the Act of Navigation)
from any part of Europe. As the law, however, did not mean to encourage this species of trade, so
contrary to the general principles of the mercantile policy of England, it imposed a duty of ten
shillings the hundredweight upon such importation, and no part of this duty was to be afterwards
drawn back upon its exportation. The successful war which began in 1755 gave Great Britain the
same exclusive trade to those countries which France had enjoyed before. Our manufacturers, as
soon as the peace was made, endeavoured to avail themselves of this advantage, and to establish a
monopoly in their own favour both against the growers and against the importers of this
commodity. By the 5th George III, therefore, c. 37, the exportation of gum senega from his
Majesty’s dominions in Africa was confined to Great Britain, and was subjected to all the same
restrictions, regulations, forfeitures, and penalties as that of the enumerated commodities of the
British colonies in America and the West Indies. Its importation, indeed, was subjected to a small
duty of sixpence the hundredweight, but its re-exportation was subjected to the enormous duty of
one pound ten shillings the hundredweight. It was the intention of our manufacturers that the whole
produce of those countries should be imported into Great Britain, and, in order that they
themselves might be enabled to buy it at their own price, that no part of it should be exported again
but at such an expense as would sufficiently discourage that exportation. Their avidity, however,
upon this, as well as upon many other occasions, disappointed itself of its object. This enormous
duty presented such a temptation to smuggling that great quantities of this commodity were
clandestinely exported, probably to all the manufacturing countries of Europe, put particularly to
Holland, not only from Great Britain but from Africa. Upon this account, by the 14th George III, c.
10, this duty upon exportation was reduced to five shillings the hundredweight.
In the book of rates, according to which the Old Subsidy was levied, beaver skins were
estimated at six shillings and eightpence a piece, and the different subsidies and imposts, which
before the year 1722 had been laid upon their importation, amounted to one-fifth part of the rate, or
to sixteenpence upon each skin; all of which, except half the Old Subsidy, amounting only to
twopence, was drawn back upon exportation. This duty upon the importation of so important a
material of manufacture had been thought too high, and in the year 1722 the rate was reduced to
two shillings and sixpence, which reduced the duty upon importation to sixpence, and of this only
one half was to be drawn back upon exportation. The same successful war put the country most
productive of beaver under the dominion of Great Britain, and beaver skins being among the
enumerated commodities, their exportation from America was consequently confined to the market
of Great Britain. Our manufacturers soon bethought themselves of the advantage which they might
make of this circumstance, and in the year 1764 the duty upon the importation of beaver-skin was
reduced to one penny, but the duty upon exportation was raised to sevenpence each skin, without
any drawback of the duty upon importation. By the same law, a duty of eighteenpence the pound
was imposed upon the exportation of beaverwool or wombs, without making any alteration in the
duty upon the importation of that commodity, which, when imported by Britain and in British
shipping, amounted at that time to between fourpence and fivepence the piece.
Coals may be considered both as a material of manufacture and as an instrument of trade. Heavy
duties, accordingly, have been imposed upon their exportation, amounting at present (1783) to
more than five shillings the ton, or to more than fifteen shillings the chaldron, Newcastle measures,
which is in most cases more than the original value of the commodity at the coal pit, or even at the
shipping port for exportation.
The exportation, however, of the instruments of trade, properly so called, is commonly
restrained, not by high duties, but by absolute prohibitions. Thus by the 7th and 8th of William III,
c. 20, sect. 8, the exportation of frames or engines for knitting gloves or stockings is prohibited
under the penalty, not only of the forfeiture of such frames or engines so exported, or attempted to
be exported, but of forty pounds, one half to the king, the other to the person who shall inform or
sue for the same. In the same manner, by the 14th George III, c. 71, the exportation to foreign parts
of any utensils made use of in the cotton, linen, woollen, and silk manufactures is prohibited under
the penalty, not only of the forfeiture of such utensils, but of two hundred pounds, to be paid by the
person who shall offend in this manner, and likewise of two hundred pounds to be paid by the
master of the ship who shall knowingly suffer such utensils to be loaded on board his ship.
When such heavy penalties were imposed upon the exportation of the dead instruments of trade,
it could not well be expected that the living instrument, the artificer, should be allowed to go free.
Accordingly, by the 5th George I, c. 27, the person who shall be convicted of enticing any artificer
of, or in any of the manufactures of Great Britain, to go into any foreign parts in order to practise
or teach his trade, is liable for the first offence to be fined in any sum not exceeding one hundred
pounds, and to three months’ imprisonment, and until the fine shall be paid; and for the second
offence, to be fined in any sum at the discretion of the court, and to imprisonment for twelve
months, and until the fine shall be paid. By the 23rd George II, c. 13, this penalty is increased for
the first offence to five hundred pounds for every artificer so enticed, and to twelve months’
imprisonment, and until the fine shall be paid; and for the second offence, to one thousand pounds,
and to two years’ imprisonment, and until the fine shall be paid.
By the former of those two statutes, upon proof that any person has been enticing any artificer,
or that any artificer has promised or contracted to go into foreign parts for the purposes aforesaid,
such artificer may be obliged to give security at the discretion of the court that he shall not go
beyond the seas, and may be committed to prison until he give such security.
If any artificer has gone beyond the seas, and is exercising or teaching his trade in any foreign
country, upon warning being given to him by any of his Majesty’s ministers or consuls abroad, or
by one of his Majesty’s Secretaries of State for the time being, if he does not, within six months
after such warning, return into this realm, and from thenceforth abide and inhabit continually
within the same, he is from thenceforth declared incapable of taking any legacy devised to him
within this kingdom, or of being executor or administrator to any person, or of taking any lands
within this kingdom by descent, device, or purchase. He likewise forfeits to the king all his lands,
goods, and chattels, is declared an alien in every respect, and is put out of the king’s protection.
It is unnecessary, I imagine, to observe how contrary such regulations are to the boasted liberty
of the subject, of which we affect to be so very jealous; but which, in this case, is so plainly
sacrificed to the futile interests of our merchants and manufacturers.
The laudable motive of all these regulations is to extend our own manufactures, not by their own
improvement, but by the depression of those of all our neighbours, and by putting an end, as much
as possible, to the troublesome competition of such odious and disagreeable rivals. Our master
manufacturers think it reasonable that they themselves should have the monopoly of the ingenuity
of all their countrymen. Though by restraining, in some trades, the number of apprentices which
can be employed at one time, and by imposing the necessity of a long apprenticeship in all trades,
they endeavour, all of them, to confine the knowledge of their respective employments to as small
a number as possible; they are unwilling, however, that any part of this small number should go
abroad to instruct foreigners.
Consumption is the sole end and purpose of all production; and the interest of the producer
ought to be attended to only so far as it may be necessary for promoting that of the consumer. The
maxim is so perfectly self evident that it would be absurd to attempt to prove it. But in the
mercantile system the interest of the consumer is almost constantly sacrificed to that of the
producer; and it seems to consider production, and not consumption, as the ultimate end and object
of all industry and commerce.
In the restraints upon the importation of all foreign commodities which can come into
competition with those of our own growth or manufacture, the interest of the home consumer is
evidently sacrificed to that of the producer. It is altogether for the benefit of the latter that the
former is obliged to pay that enhancement of price which this monopoly almost always occasions.
It is altogether for the benefit of the producer that bounties are granted upon the exportation of
some of his productions. The home consumer is obliged to pay, first, the tax which is necessary for
paying the bounty, and secondly, the still greater tax which necessarily arises from the
enhancement of the price of the commodity in the home market.
By the famous treaty of commerce with Portugal, the consumer is prevented by high duties from
purchasing of a neighbouring country a commodity which our own climate does not produce, but is
obliged to purchase it of a distant country, though it is acknowledged that the commodity of the
distant country is of a worse quality than that of the near one. The home consumer is obliged to
submit to this inconveniency in order that the producer may import into the distant country some of
his productions upon more advantageous terms than he would otherwise have been allowed to do.
The consumer, too, is obliged to pay whatever enhancement in the price if those very productions
this forced exportation may occasion in the home market.
But in the system of laws which has been established for the management of our American and
West Indian colonies, the interest of the home consumer has been sacrificed to that of the producer
with a more extravagant profusion than in all our other commercial regulations. A great empire has
been established for the sole purpose of raising up a nation of customers who should be obliged to
buy from the shops of our different producers all the goods with which these could supply them.
For the sake of that little enhancement of price which this monopoly might afford our producers,
the home consumers have been burdened with the whole expense of maintaining and defending
that empire. For this purpose, and for this purpose only, in the two last wars, more than two
hundred millions have been spent, and a new debt of more than a hundred and seventy millions has
been contracted over and above all that had been expended for the same purpose in former wars.
The interest of this debt alone is not only greater than the whole extraordinary profit which it ever
could be pretended was made by the monopoly of the colony trade, but than the whole value of that
trade, or than the whole value of the goods which at an average have been annually exported to the
colonies.
It cannot be very difficult to determine who have been the contrivers of this whole mercantile
system; not the consumers, we may believe, whose interest has been entirely neglected; but the
producers, whose interest has been so carefully attended to; and among this latter class our
merchants and manufacturers have been by far the principal architects. In the mercantile
regulations, which have been taken notice of in this chapter, the interest of our manufacturers has
been most peculiarly attended to; and the interest, not so much of the consumers, as that of some
other sets of producers, has been sacrificed to it.
Next Chapter: On the Agricultural Systems, or of those Systems of
Political Economy which represent the Produce of Land as either the
sole or the principal Source of the Revenue and Wealth every Country
An Inquiry into the Nature and Causes of the Wealth of Nations

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