AN ESSAY
ON THF.
EXTERNAL CORN TRADE; .
CONTAINING
AN INQUIRY INTO THE
General Principles of that Important Branch of Traffic;
AN EXAMINATION
OF THS
EXCEPTIONS TO WHICH THESE PRINCIPLES ARE LIABLE}
AND
at (fcompavatfoe statement
OF
THE EFFECTS
WHICH
^RESTRICTIONS ON IMPORTATION
AND
dfree intertowtft,
ARE CALCULATED TO PRODUCE
UPON SUBSISTENCE, AGRICULTURE, COMMERCE,
AND REVENUE.
By R. TORRENS, Esq.
AUTHOR OF " AN ESSAY ON MONEY AND PAPER CURRENCY,*
AND OF "THE ECONOMISTS REFUTED."
LONDON:
PRINTED FOR J. HATCHARD,
BOOKSELLER TO THE QUEEN, OPPOSITE ALBANY, PICCADILLY.
1815.
I AH' RKKJ At SiVA
x E59K3S ' *"
Hi>rt Stmt*, Upmarket, LmJm.
HD
T3
TO
MAJOR GENERAL SIR HENRY TORRENS,
knight Commanticc
OF THE
MOST HONORABLE MILITARY ORDER OF THE BATH,
AS A TESTIMONY
op
THE RESPECT AND THE ATTACHMENT
CALLED FORTH BY THAT
DISTINGUISHED TALENT, & UNDEVIATING RECTITUDE,
IN THE DISCHARGE OP OFFICIAL DUTIES ;
WHICH
THE PUBLIC VOICE ACKNOWLEDGES ;
AND BY THAT
URBANITY OF MANNERS & BENEVOLENCE OF HEART,
WHICH,
ALL WHO APPROACH HIM, FEEL;
<3H)e following Iteotft
IS INSCRIBED,
By his Friend,
THE AUTHOR.
PREFACE.
here is no question, which can be con-
sidered as of higher moment to the in-
terests of the whole community, than that
which respects the Trade in Corn. The laws
which regulate this branch of traffic, very
materially affect every individual in the
country, from the opulent landholder to the
common day-labourer. An error respecting
them may be fatal. Their influence extends
through every part of the economical sys-
tem. They regulate the supply of food,
and the value of money ; agriculture, com-
merce, and public credit, feel their power-
ful operation.
While the vast importance of the Cora
Trade and of the Corn Laws imposes upon
VI
every person, who has given attention to
these subjects, the obligation to contribute,
what he can, to a just conception of their
influence ; the danger of promulgating er-
roneous theories, or even of recommending,
without due qualification, the adoption of
correct general principles, demands a degree
of patient and persevering inquiry, which few
have leisure to bestow. In no investigations
are caution, diffidence, with an enlargement
of view, and a correct acquaintance with all
the actual circumstances, more necessary
than in those which regard political economy.
So various and complicated are the interests,
which questions of this nature involve, that
principles, incontestibly true, may be prac-
tically inadmissible ; and, conversely, what
is practically beneficial, may be at vari-
ance with a theory generally correct. As
lie is the most skilful physician who, in
complicated cases, cures one disease with
the least possible aggravation of another,
sb he is the most sagacious economist, who,
without deserting first principles as his ge-
neral guides, so far restricts and modifies
them, as to produce the greatest good, with
Til
the least possible evil, to the community.
For there are few universal rules in any
art or science ; and, in all cases, he must
be considered the wisest man, who fol-
lows the general principle, and yet avails
himself of exceptions, as they occasionally
occur.
These are the impressions under which
the following work was commenced, and
with which it is now submitted to the
public. The author has laboured to render
his investigation of the external Corn Trade,
both theoretically and practically, as com-
prehensive and complete as possible. He
believes there is no branch or ramification
of the question, the principles of which are
not examined in the following pages.
The first object of the author, when he en-
tered upon his work, was to ascertain what,
in this department of economical science,
had already been performed. On referring
to the " Wealth of Nations/' he found that
the principles of the internal Corn Trade had
been placed in a light so perspicuous, and
VIII
supported by arguments so irresistible, that,
on this branch of the subject, little re*
mained to be said. He closed the digres-
sion, which concludes Dr. Smith's chapter
upon bounties, impressed with a feeling of
regret, that our great economist should not,
by a more full application of his principles
to the external trade, and by pushing them
through all their important consequences,
have secured us against the absurd specu-
lation, and the pernicious practice, which,
notwithstanding the light diffused by his
admirable work, have since occurred on
almost every question connected with the
national subsistence.
From studying Dr. Smith, the author
was led to consult Mr. Malthus. In the
writings of the professor he found hints
for reflection, and suggestions for farther
thought ; but he looked in vain either for
a development of principles before un-
discovered, or for consistent deductions
from those already established. It is a
singular fact, and one which it is not impro-
per to impress upon the public, that, in the
leading questions of economical science,
Mr. Malthus scarcely ever embraced a
principle, which he did not subsequently
abandon. He owes his reputation as a po-
litical philosopher to the successful manner,
in which he applied a principle of Wallace
to confute the obnoxious theories of God-
win and Condorcet. Mr. Godwin main-
tains the perfectibility of our nature, and
affirms, that as the human mind advances
in improvement, benevolence will become
the ruling passion, and a state of equality
be established among mankind. Mr. Mal-
thus answers, that if this supposed per-
fection (necessarily implying the operation
of moral restraint in the highest degree)
should exist, the principle of population
would soon subvert it ; and yet afterwards,
extraordinary as it may appear, he asserts,
that the principle of population may be
checked by moral restraint. Here is a pal-
pable contradiction He first affirms that
the perfection supposed, is too feeble for
the principle of population, and then as-
serts, that the moral restraint, which is only
a part of this perfection, may control the
.
principle of population. Thus is one
tical cause made at once inadequate, and
adequate, to one and the same effect.
In his "Essay on Population,"* Mr. Mal-
thus argues at great length in favour of boun-
ties for forcing the exportation of our agri-
cultural produce, and yet, in his observations
on the Corn Laws (page 42,) he states the
impossibility of England's becoming an ex-
porting country. When the controversy
arose on the question whether the difference
between the value of our currency and of our
coin was occasioned by an excessive issue of
paper by the Bank, or by an extraordinary
demand for the metals upon the conti-
nent, he was known to be a strenuous sup-
porter of the former opinion ; yet, in the
" Grounds for an Opinion on the Policy of
restricting the Importation of Foreign
Corn," (page 9) he states his belief that
the paper of this country has risen in value,
notwithstanding the increased issues of the
- | i ' -
Book III. Chap.ix. and x.
Bank.* If these fluctuating and contra-
dictory opinions, however, do not indicate
that, in the difficult science of political
economy, Mr. Malthus has attained any
very clear conceptions, or arrived at any
certain conclusions, they at least must
serve-to convince us that he possesses, in a
very eminent degree, a spirit of candour,
and the love of truth. Though his works
cannot, perhaps, in any instance, be safely
consulted for practical authorities, they
may always be advantageously referred to
as furnishing materials for speculation, and
* The very inaccurate and unphilosophical language
which Mr. Malthus employs when alluding to our
monetary system, shews that he has not yet attained
an} r accurate conceptions on the question of the cur-
rency. u Our currency is still depreciated in reference
to the bullion currencies of the continent. A parr,
however, of this depreciation may still be owing to the
value of bullion in Europe not having yet fallen to its
former level." Now, when a difference exists between
currency and bullion, if it has been produced by a fall in
currency, there is depreciation ; but when the difference
is occasioned by bullion having risen, there is no depre-
ciation. To say that currency is depreciated owing to
bullion not having fallen to its level, is a confounding of
terms.
XII
suggesting bints for inquiry. The spirit,
too, in which his essays are written, forms
a pleasing contrast to that which pervades
the publications of certain economists, pa-
trician and plebeian, who, having lost them-
selves in the labyrinths of erroneous theory,
with, disdainful pertinacity reject the clue
of facts.
The principles of Dr. Smith, and the sug-
gestions of Mr. Malthus, are not the only
sources from which the author has derived
assistance. The investigation of error has
often a most beneficial effect in leading to
more clear perceptions of truth; and he,
therefore, hopes that he may have fallen
under some obligations both to the Earl of
Lauderdale, and to Sir Henry Parnell.
From private friendship, too, he has re-
ceived aids, which he should not obey the
impulse of his feelings, were he to omit to
acknowledge. To the acute discernment of
Dr. Crombie, with his distinguished talent
for abstract and profound inquiry, the au-
thor, in the revision of this work, as on other
occasions, has been much indebted.
xiii
After this acknowledgment of the aids
which have been received, it will now be
proper to present the reader with a brief
account of what has been performed.
In the first place, the author has availed
himself of the principles of the internal Corn
Trade unfolded by Dr. Adam Smith, and,
giving them what he conceives to be a ful-
ler development, and a more clear ar-
rangement, applies them to the external
trade, and traces their operation with re-
spect both to exporting and importing
countries. Thus far the argument is popu-
lar and obvious. In the succeeding chap-
ter, however, which treats of the influence
of the price of corn on the value of cur-
rency, and on the productive powers of
industry, he is necessarily led to investi-
gate the more elementary principles of the
science. Here many of the discussions are,
at least with respect to the author, original.
The principles of the natural and market
price of labour, he does not remember to
have seen previously developed, and, he
conceives, they throw a new and important
m
light on the manner, in which the price of
subsistence influences wages and produc-
tion.
In the division of his work, where he exa-
mines the limitations to which, in their ap-
plication to particular cases, the general
principles previously unfolded are liable,
the author conceives that several of the
disquisitions, particularly those relating to
the indirect operation of internal taxation,
upon the importation of foreign articles,
were never before presented to the public.
He believes, however, that one or two of
the arguments contained in the Second
Part, may have been suggested by a pam-
phlet of considerable merit, entitled " Ob-
servations on the Importation of Foreign
Corn/' and an excellent article which ap-
peared in the Eclectic Review.
In a work which professes to develop first
principles, and which even ventures to put
forth some pretensions to original discus-
sion, extending, in one or two instances,
perhaps, the limits of economical science,
XY
the frequent allusion, in the latter chapters,
to the particular and temporary discussions
of the day, may, perhaps, by the rigid cri-
tic, be considered as objectionable. The
great importance of these topics induced
the author to enter largely into them ; and,
the hope of contributing something to the
right decision of a question involving, in
a far greater degree than any other, which
has come before the legislature, the vital
interests of the whole community, rendered
him uot unwilling to depart from the unity
of his original design, and to conjoin con-
troversial detail with general disquisition.
London, Feb. \1th, 1815.
'
.
.
. , , ' ' - ' ..: =::=:
CONTENTS.
i.
-
mn m gm>
ON THE GENERAL PRINCI?LS OF THE EXTERNAL
TRADE IN CORN.
Chap. I. I. Qn the Principles of the internal Corn
Trade ; II. These Principles applicable to the exter-
nal Trade ------ Page 1
(Uhap. II. On the Influence of the external fra^e in
Corn; on the Subsistence, Wealth, and Prosperity;
I. of the Country that permanently exports ; II. of
the Country that permanently importi Grain - r 37
Chap. III. Qn the Influence of the Price of Corn,
J. 09 tfie Productive Powers of Industry; IL on
the Wages of Labour, and on the Price of Commo-
dities ------------i-54
b
/
XV111 CONTENTS.
part ti)c ^ccottfi.
ON THE EXCEPTIONS AND LIMITATIONS TO WHICH
THE GENERAL PRINCIPLES OF THE EXTERNAL
CORN TRADE ARE LIABLE.
Chap. I. On the Question, Are the Principles respect-
ing a free external Trade in Corn liable to any Limita-
tions in their Application to the particular Case of a
Country, which, by Restrictions on Import, and Boun-
ties upon Export , infringes on the Liberty of Com-
merce, in other Articles ?-------- 95
Chap. II. On the Question, Is the general Principle
of a free external Trade in Corn liable to Limitation
in its Application to the particular Case of a Country,
which is more heavily taxed than other growing Coun-
tries? --- no
Chap. III. On the Limitations, to which the general
Principles of the external Trade in Corn, arc liable,
in their Application to the particular Case of a Coun-
try, in which Restrictions upon Import hate already
induced an artificial Scale of Prices, and given a forced
Extension to Agriculture ,----- 173
CONTENTS. XIX
itovt tije Q$frtL
THE APPLICATION OF THE PRINCIPLES OF THE
EXTERNAL CORN TRADE, TO THE ACTUAL CIR*
CUMSTANCES OF THESE COUNTRIES.
Chap. I. The Effects which a System of Restraints
upon the Importation of foreign Corn would produce ;
I. on the Supply of Subsistence ; II. on Agriculture ;
III. on Commerce ; and IV. on Revenue - - 203
Chap. II. On the Effects which a free external Trade
in Corn would produce ; I. upon the Supply of Sub-
sistence ; II. Upon the Agriculture ; III. Upon
the Commerce; and IF. Upon the Finances of the
Country - ' - 262
Chap. III. Comparative Estimate of the Effects which
a restricted, and a free, external Trade in Corn, would
produce, upon the Subsistence, upon the Agriculture,
upon the Commerce, and upon the Finances of the
Country; II. on the Measures which, in revising the
Corn Laws, it would be expedient for the Legislature
to adopt ----- - 313
AN ESSAY, &c.
$art tfte dftttft
ON THE GENERAL PRINCIPLES OF THE EXTERNAL
TRADE IN CORN.
CHAP. I.
/. On the Principles of the internal Com Trade.
II. These Principles applicable to the ex-
ternal Trade.
I. The inequality of the seasons, with respect
to scarcity and plenty, is one of those obvious
facts which force themselves upon the attention
of all. Whoever looks abroad upon the face of
the country, perceives, that, under a precisely si-
milar course of culture, the same piece of ground
will, in one year, present an overflowing harvest,
B
and, in another, scarcely repay the expense of
tillage.
Now, this inequality, in the productiveness of
the seasons, is greater in a small, than it is in a
large district. A single field may, in some years,
give a produce, double, treble, or perhaps qua-
druple to that, which, under the same course of
husbandry, it may yield in others ; but an exten-
sive farm, much less an agricultural parish, com-
posed of many farms, could scarcely, in its fer-
tility from year to year, exhibit so striking an ir-
regularity. The irregularity would be still less if
we took the average produce of a county; and less
yet, if we took the average produce of the whole
kingdom. Other things remaining the same, in
proportion as the territory, which supplies subsist-
ence, is extended, the inequality in the produc-
tiveness of the seasons, will be diminished.
This principle is so obvious, that illustration is
scarcely requisite. The seasons most unfavour-
able to the crop of corn, are those of excessive
drought and of excessive rain. But as corn grows
equally upon high and low lands, on those which
are disposed to be too wet, as well as upon
those which are disposed to be too dry, the
drought or the rain, which is hurtful to one part
of the country, is favourable to some other ; and
though, both in the wet, and in the dry season,
the crop is a good deal less than it would be in
one more properly tempered, yet, in both, what
is lost in one part of the country, is, in some mea-
sure, compensated by what is gained in another;
and thus, the general crop of the kingdom will
never vary so much from year to year, as the par-
ticular crop of a county, a parish, or a farm.
On the principle, that the inequality in the pro- 1/
ductiveness of any district, diminishes, in pro-
portion as that district is enlarged, it is demon-
strable, that, in order to correct the evils arising
from the uncertainty of the seasons, and to obviate
the alternate recurrence of superfluity and of
famine, an agricultural country should extend
perfect freedom to the internal trade in corn. In S
years when the general crop has been deficient, the
inhabitants of those particular districts, in which
the irregularity of the seasons has been little felt,
might, perhaps, complain, that their abundance
should be withdrawn by the speculations of the
b 2
corn dealer ; and that they should be exposed to
an artificial scarcity when nature had lavished
plenty. The following considerations will shew,
that this complaint could be dictated, only by a
short-sighted selfishness, as ignorant of its own
true interest, as regardless of the general good.
I. Allowing a free circulation of corn,
throughout all the districts of the kingdom, and
thus, in a year of scanty harvest, compensating
the deficiency of one quarter, by the comparative
abundance of another, and equalizing the pres-
sure, as much as the state of the roads, and the
means of communication, will admit, not only mi-
tigates the general suffering of the country, but,
even to those particular districts, in which the
crop may have succeeded, but which the freedom
in the internal trade has rendered partakers in the
general distress, gives, in the assurance of future
relief, ample compensation for present pressure.
y Those very districts which have, this year, an
abundant crop, may, next year, have one that is
deficient, and that free circulation of corn which
now deprives them of part of their abundance,
and puts them upon thrift and saving, may, a few
months hence, supply their necessities from those
xery quarters which they now relieve.
Thus, in a country where a free internal trade
in corn is permitted, each district receives, in its
turn, the most important benefits; and, should the
country be of considerable extent, and its means of
communication ample, though it might occasion-
ally be visited by dearth, yet, the pressure falling
equally on all, and the favoured districts in some
measure compensating the failure of crop in others,
the hardships of dearth could scarcely, even in the
most deficient years, be heightened into the mise-
ries of famine.
2. This will appear still more evident, when we
consider the farther effects which an unshackled
domestic trade in corn has, both on the distribu-
tion, and on the production, of this important ar-
ticle. The public good requires that the supply
of subsistence should be equalized, not only
through all the districts of the country, but, also^
throughout all the periods of the year. When the
supply of grain is inadequate to subsist the people
abundantly, until the return of the next harvest,
economy in the consumption of food, is the only
means by which they can escape a famine. If
they put themselves, in time, upon the necessary
degree of saving; if, for example, they consume
daily, an ounce or two less food than ordinary,
they may pass on to the next harvest, without suf-
fering any \try serious inconvenience ; but if, on
the contrary, they were to feast, with their usual
profuseness, for eleven months, and leave the whole
deficiency to fall on the few last weeks of the
year, multitudes must perish of famine.
Now, an unrestricted domestic trade in corn,
forces the people upon that timely economy in the
consumption of food, which, partly from an impro-
vident disregard of the future, and partly from ig-
norance of their danger, they might otherwise fail
to adopt ; for, when the operations of the corn
dealer are unimpeded, he, on the prospect of a defi-
cient crop, and while grain as yet continues cheap,
buys up corn, under the expectation that it must
soon bring a higher price; and thus, before it is too
late, advertizes the deficiency of food to the people.
Nor need the people ever apprehend, that the
corn dealer, when the trade is left free and open,
can have an interest in buying up grain too largely,
/
and in putting them to unnecessary distress. When
there is a real scarcity, it is the interest of the great
body of consumers that the price of corn should
be raised sufficiently high, to cause such a degree
of economy in consumption, as may enable the
supply to last throughout the year. It is also the
interest of the corn dealer to raise the price thus
high ; and it never can be his interest to raise it
higher. If, by raising prices too high, he dis-
courages consumption so much, that the supply
of the season is likely not to be used until some
time after the next crop begins to come in, he runs
the hazard, not only of losing a considerable part
of his corn from natural causes, but of being
obliged to sell what remains, for much less than
he might have obtained for it several months be-
fore. If, by not raising the price sufficiently high,
he discourages consumptions little, that the sup-
ply of the season is likely to be exhausted before
the next harvest, he not only loses a part of the
profit which he might have made, but he exposes
the people to suffer, before the end of the season,
instead of the hardships of a dearth, the horrors of
a famine. It is the interest of the people, that
8
the daily, weekly, and monthly consumption,
should be proportioned, as exactly as possible, to
the supply of the season. The interest of inland
com dealers is the same. By supplying the people,
as nearly as they can judge, in this proportion,
they are likely to sell their corn at the highest
price, and with the greatest profit ; and their
knowledge of the state of the crop, and of the
daily, weekly, and monthly sales, enables them to
judge, with more or less accuracy, how far the
markets are really supplied in this manner. Without
intending to promote the interest of the public,
corn dealers are necessarily led, by a regard to
their own interest, to act in the manner most be-
neficial to the great body of consumers. They
perform towards the population of a country, func-
tions precisely similar to those which are perform-
ed by the prudent captain of a ship, who foreseeing,
that provisions are likely to run short, puts his
crew upon short allowance.
3. But it is not only by equalizing the supply of
subsistence throughout all the districts of the coun.
try, and periods of the year, that the unrestricted
operations of the inland corn trade mitigate the
evils arising from irregular seasons,, and obviate
the alternate recurrence of superfluity and famine.
As the growers of com always cultivate, as nearly
as possible, to such an extent, that, in average
years, the supply will equal the demand ; it ne-
cessarily follows, that, in deficient years, the sup-
ply must fall short of the demand ; and, in abun-
dant years, exceed it. Hence, where the internal
trade in corn is left free, intelligent and opulent
merchants will not limit their speculations to
equalizing, throughout the country and the year,
the supply of a single season, but will aim at cor- ^
recting, in some measure, the irregularities which
take place from year to year. These irregularities
have limits which they rarely pass. If two or
three years of abundance have occurred in succes-
sion, there is a strong probability that the next
may be a deficient, or, at least, an average year.
This probability will enter into the calculations of
the skilful and wealthy corn dealer. When two
or three abundant years have thrown superfluous
corn upon the market, its price becomes extremely
low ; and the capital that should be employed in
buying it up, and preserving it in stores and gra-
10
naries, until the recurrence of a deficient crop
again elevated prices, would obtain extraordinary
profits. The expectation of obtaining these,
would induce the dealer to keep on hand as much
of the old crop as possible. The more capital he
could employ in this way, and the more accurately
he observed the cycles of plenty and of dearth,
which the seasons generally perform, the more he
could enrich himself, and benefit the public.
Nor need the public be at all apprehensive, lest
his avarice should prompt him to keep up corn
beyond what the irregularity in the annual supply
might render expedient. In this, as in the former
instance, the interest of the dealer and of the con-
sumer exactly coincide. Should the dealer hoard his
corn beyond what was necessary to equalize the
supply of one year with another, he would not only
lose a considerable portion of his stock, from natural
causes, but, on the return of a good harvest, would
be obliged to dispose of what remained at a lower
rate than he could before have done ; and should
he, on the contrary, neglect to take the precau-
tions pointed out by the inequality in the seasons,
he would at once expose the country to inconvc-
11
nience which might have been avoided, and miss
the wealth which he might have realized. The
. if
more carefully he watches the course of the seasons,
and calculates the periods which abundant and
deficient jears perform, the more rapidly he may
enrich himself, and the more effectually supply the
deficiency of one season with the superfluity of
another.
In this manner, as society advances, as ca-
pital accumulates, and as the principles of econo-
mical science become understood, new resources
are developed for warding off those terrible visita-
tions of want and famine, to which, in ruder pe-
riods, nations are so frequently exposed. Not ^
only does the establishment of perfect freedom in
the internal corn trade in times of 'deficient crop,
compensate, in some measure, the wants of one
district by the comparative plenty of another, and
render the pressure tolerable, by laying it equally
on all ; but this most beneficial measure of internal
economy causes, whenever any deficiency occurs,
the markets to be fed with such regulated and ap-
portioned supplies, that a too rapid consumption w "
is interdicted, and the stock on hand made to last
until the returning harvest brings relief. And
12
further, it carries on the lavish bounty of one year,
to correct the stinted kindness of another ; until,
in a country possessed of abundant capital, and
having ample means of communication, the supply
of subsistence may be equalized through consider-
able periods, and dearth rendered a rare, and fa-
mine an almost impossible, occurrence.
4. As corn is an article in more general use, and,
therefore, more abundant, than any other ; and, as
the carriage of a commodity so bulky, is attended
with considerable expense, wherever internal in-
tercourse is left free, capital to a great amount,
will invest itself in the corn trade. This capital
will be principally directed to the erection of store-
houses, to the filling; of them with grain, and to
the preservation of it in them, until a favourable
market can be obtained. Indeed, in all we have
said, respecting the various operations of the corn
trade, the existence of stores, for the accumulation
of corn, has been implied. To equalize the sup-
ply of grain throughout the several districts of a
country ; to feed the markets in a manner so regu-
lated and apportioned, as to make the quantity of
corn upon hand, last throughout the year ; and,
above all, to carry on a portion of the produce
13
of an abundant harvest, to meet the probable re-
currence of a deficient crop, requires that a very
large proportion of the mercantile capital of the V
country, should be employed in collecting grain,
and in maintaining proper buildings for its pre-
servation.
Thus, then, by the simple expedient of leaving
the internal trade in corn free, all the func-
tions of public granaries are performed ; and not
only so, but are performed at infinitely less ex-
pense, and far more effectually, than they could
be by such complicated and difficult establish-
ments. The revenue that it would require, to
maintain public stores, and to lay up in them, in
order to meet the vicissitudes and exigencies of the
seasons, quantities of grain, equal to those, which,
for the self-same purpose, private dealers can,
with advantage to themselves, accumulate, such
revenue, no country would consent to raise.
But, suppose it otherwise ; suppose that the ne-
cessary revenue is raised, and the public granaries
erected and filled ; still, the state factors who should
be put in charge of them, however they might be
controuled, and however rewarded, would never at-
tain the vigilance and skill of private individuals
14
watching over their own property, and perpetually
stimulated by self-interest, to attend to every fluc-
tuation of supply. The mismanagement would be
without a remedy, and the waste enormous. \\ hat-
ever expense a country might consent to incur, in
order to preserve, in public granaries, a surplus of
subsistence for deficient seasons, she could not at-
tain this desirable end half so effectually, as by the
simple wisdom of refraining from all interference,
and leaving individuals at perfect liberty to em-
bark their capital in the internal corn trade. The
only granaries by means of which, in an extensive
country, the recurrence of famine can be obviated,
are those which, under a system of perfect freedom,
the merchant and the factor find it their interest to
erect.
Though, under a system of free trade, the store-
houses of private traders perform, with infinitely
less expense, and far greater effect, the functions
of public granaries, yet they have, at all times,
been viewed with peculiar jealousy and alarm, by
the people whom they save. When the supply of
auy article, particularly if it be one of first neces-
sity, is diminished below the demand, its value
ries, not merely in the ratio of this diminution,
15
but in a ratio considerably higher ; for example,
if there be, in any market, a demand for a thou-
sand quarters of corn, while the supply is di-
minished to nine hundred, then these nine hun- \
dred quarters will bring a larger sum, than a '
thousand would have brought. Some obscure
notion of this principle, which, indeed, is a funda-
mental one in political economy, has ever led the
consumers of corn to suppose, that, though the
internal dealer, in his various operations of
equalizing the supply through all the districts of
the country, and periods of the year, and of pre-
serving the superfluity of one season to meet the
probable deficiency of another, may, to a certain
extent, have an interest identical with that of the
people, yet that he may, after all these legitimate
objects are obtained, have a farther interest,
diametrically opposite to theirs ; and by keeping
up corn until it perishes upon his hands, may se-
cure a greater sum for the part that remains, than
he could have obtained by allowing the whole to
come to market.
The error here involved, arises from applying
a principle that can be thus acted upon, only
16
with respect to commodities, the supplying of
which is vested in exclusive companies, to an
article of universal consumption, in an open
market. It would be plainly impossible to esta-
blish, amongst the innumerable corn dealers, scat-
tered over an extensive country, such an intimate
and confidential union, as would induce each to
let a given portion of his stock perish, in order to
make a greater profit of what remained. But we
will admit this absurd and impossible supposition,
which is the foundation of the popular reasoning
against the storing of corn ; we will admit that the
nefarious compact has taken place, and that,
throughout the country, all the parties act upon it
with good faith. The first consequence of all
this would be, that, in the corn trade, the profits of
stock would rise considerably above the customary
level. But, from the unalterable laws of compe-
tition, and from capital ever seeking the most bene-
ficial occupation, new adventurers would now flock
into the corn trade ; and the second consequence of
the combination would be, its own destruction.
In vain would it be to urge, that the new
adventurers might join the combination ; for if
17
they did so, the rate of profit, in the corn trade,
Would still continue above the level, and the pros-
pect of extraordinary gains would perpetually at-
tract other speculators, until the whole commer-
cial capital of the country would be thrown into
the competition. Where government refrains from \
all interference, and competition is left free, it is
impossible that, in any particular business, the pro-
fits upon capital can be sustained above the ordi-
nary rate ; nor is it in the nature of things, that a
combination of all the capitalists in the country,
or in the world, could, even supposing it to be
established, injure the consumer, by raising the
rate of profit above the level marked by the pro-
portion which the supply of capital bears to the de-
mand for it. While the effectual demand, or the
power of purchasing all commodities, remains the
same, the consumers who give a greater portion of
their income for any one article, will have less to
bestow on others. Hence, finding that as they
succeeded in raising the price of one commodity,
the demand for something else would, at the same
time, and in the same proportion, be reduced;
the combining capitalists would speedily relinquish
their preposterous and absurd design.
18
No individual corn dealer can have an interest in
keeping up com to an extent injurious to the pub-
lic ; because the competition of all the other dealers
in the country, would immediately bring down to
the general level, any artificial elevation of price
which he might induce in the particular market
he supplied. No combination of all the corn
dealers throughout the country, even if its exis-
tence were possible, could, for any length of time,
keep up prices, even in years of scarcity, beyond
what the state of the crops rendered desirable ;
because, as soon as the corn dealers began, by
such means, to acquire exorbitant gains, the com-
petition of all other mercantile capitalists would
effectually prevent the profits of the corn trade
from continuing above that ordinary and level rate,
which, according to the circumstances of the coun-
try, is due to mercantile stock. Nay, no univer-
sal combination amongst the capitalists of the
world could\so raise the general rate of mer-
cantile profit, as to render the interest of the corn
dealer different from that of the people ; because
the means of purchasing, possessed by the con-
sumer, constituting the only funds from which
the profits of stock can be drawn, such combina-
19
tion (to say nothing of the impossibility of its
existence) as it drew from the purchaser higher
prices and larger profits^ in one article, would in-
fallibly diminish, in an equal degree, the profits
before obtained upon some other j- and thus, imme-
diately counteract and destroy itself.
The suspicion and alarm, with which the public
view a large accumulation of stock, in the hands
of the corn merchant, are entirely without founda-
tion. Such accumulation is a source of safety, not
of danger. Extensive stores of grain, and great
capitals vested in the corn trade, so far from lead-
ing to any destruction of subsistence, in order to
increase the profits on what remains, have, besides
their operation in distributing, in the most advan-
tageous manner, the supply actually in existence,
the happiest influence upon future production, and
ensure greater abundance in the years to come.
5. Whenever a country is sufficiently advanced in*
opulence, to render the business of the corn dealer
distinct from that of the farmer, very considerable
improvements begin to be realized in agriculturej
Exempt from the care of retailing his produce to
the consumer, the cultivator, without interrupting
c2
20
his time, or distracting his attention, now gives
himself exclusively to the concerns of his farm.
From this division of employment, as is ever the
case, he acquires increased skill and knowledge in
his particular calling ; and his fields become more
productive, from this undivided application of
what may be called his moral capital. The whole
of his stock, too, a great part of which might for-
merly have lain for weeks and months, nay, per-
haps, for the whole year, unproductive in his barns
and stack yards, may now be immediately directed
to bringing in new grounds, or to giving superior
cultivation to the old: Nay, he may frequently be
able to employ in production, not only his whole,
but much more than his whole stock ; for the
merchant has now acquired a species of property
in the soil ; it becomes his interest to encourage
the farmer, and he is willing, therefore, to ad-
vance to him the price of his produce, long before
it is brought into existence.
Thus, when no pernicious coutroul interdicts
the division of employment, the great capitals di-
rected to the corn trade, become so many aids and
backs to agriculture, enabling the farmer to cul-
21
tivate on a more extended scale, or sustaining
him against accidental failures. But this is not
all : every operation of the corn merchant, whe-
ther it be to equalize the supply through the dis-
tricts of the country, and periods of the year, or
to carry on the superfluity of one season, to meet
the probable deficiency of another, has the effect
of giving steadiness to the demand for agricultu-
ral produce.
Now, this steadiness given to the demand for
his produce, affords the best possible protection
and encouragement to the farmer. Though, in
the neighbouring towns, no consumers could be
found, yet, the corn merchant, acquainted with
the wants of distant parts of the country, where
the crops have been less favourable, would be
ready to take his corn off his hands. Though,
at the present period, all the markets through-
out the country, might be abundantly supplied,
yet the dealer, whose business it was to calcu-
late how far the corn on hand was equal to the
annual consumption, would be willing to pur-
chase, in order to be prepared for renewed de-
mands, at later periods of the year. Nay, though
the stock on hand should be more than sufficient
for the consumption of the season, still, the factor
might be ready to receive the farmers' corn, under
the probability that ensuing harvests would be
lcffl abundant.
Thus, in proportion to the extent of the capital
employed in the corn trade, is the farmer's cer-
tainty of finding, at all times, a ready sale for his
produce. The certainty of a market, with the
greater steadiness of price conferred upon his pro-
duce, enables lain to calculate, more accurately,
the amount of the rent he can afford to pay, and
the quantity of stock he can beneficially invest in
the soil. All the risks attending cultivation are
diminished, and improvement advances with a
steady, uninterrupted pace. It is in this manner
that great accumulations of grain, and command-
ing capitals vested in the eorn trade, instead of
leading to a destruction of subsistence, powerfully
conduce to its increase, t
Having now unfolded, as fully as is necessary to
our present purpose, the leading doctrines of the
internal corn trade, and obviated, as we passed,
some of the popular objections against this most
important branch of traffic, we shall dismiss the
present preliminary part of our subject, with a
23 ,
brief recapitulation of the principles contained in
the foregoing pages. $.j<~
An unrestricted internal trade in corn, peir^
forms five distinct operations, which, by regu-
lating the distribution, and by augmenting the
quantity of subsistence, rectify the irregularity
of the seasons, and obviate the alternate recur-
rence of superfluity and of famine. This traf-
fic, in the first place, equalizes, in a deficient
year, the supply of corn throughout the coun-
try, and renders the pressure tolerable, by lay-
ing it impartially on all : secondly, when the
average supply of food, through the different dis-
tricts, is less than the average consumption, it
feeds the markets so gradually, and frugally, that
the people, put timely upon short allowance, are,
towards the end of the season, saved from famine :
thirdly, when an overflowing harvest gives a sup-
ply of food beyond the consumption of the season,
it carries on the superfluity to meet the probable
deficiency of a future year : fourthly, it performs,
with infinitely less expense, and far more effec-
tually, the functions of public granaries ; and,
fifthly, it relieves the farmer from the distracted
attention, and interruption, and waste of time,
24
which would impede his operations, if he person-
ally distributed his produce to the consumer ; en-
ables him to invest bis whole, and often more than
his whole capital, in the important business of pro-
duction ; imparts a steadiness to prices, which, in
a great measure, removes the risks attending cul-
tivation ; and thus, by ensuring a certain market,
promotes, in the most efficient manner, the growth
\ofcoru.
II. As the territory which supplies subsistence
is enlarged, the irregularity in the productiveness
of the seasons will be diminished. This is a ge-
neral principle, equally applicable to the districts of
a country, and to the countries of the world ; and
the statement of it is sufficient to suggest the close
analogy which exists between the various opera-
tions of the internal and of the foreign trade in
corn.
1. If, within the limits of a single state, the
same season is never universally unfavourable;
but, in the worst years, the comparative abun-
dance of one district may fee made, in some mea-
sure, to compensate the failure in others, with
how much greater force must the principle apply
25
to all the states of Europe, and to all the quarters
of the globe. It has probably never yet occurred,
that, in the same year, the harvest has failed in all
countries. In seasons when England does not
produce an average crop, France may have an
abundant one; and if, both in England and in
France, the crops should be deficient, in Ger-
many and in Poland they may be in excess. Even
should Europe, as has been sometimes known,
fail of producing an average supply, in Asia, in
Africa, or in America, the deficiency might be
made good.
Hence, on the very same principle that we V
should give freedom to the internal trade in
corn, we should also give it to the external
trade. The merchant who equalizes the supply
of subsistence through all the countries of the
world, performs, though on a grander scale, and
in a more accurate manner, functions precisely
analogous to those performed by the dealer, who
equalizes it through all the districts of a country
in a manner more accurate, because the irregula-
rity of the seasons, in any territory, is in an inverse
ratio to its extent. The produce of all the com-; j
mercial countries of the world, varies from year
26
to year in a much less proportion than the produce
of any single country ; and, consequently, the com-
merce which equalizes it throughout the countries
of the world, must render the supply more steady
than the trade which distributes it equally through
the provinces of a country.
For example; if, in England, the most unfa-
vourable harvest which generally occurs, reduces
the crop, one district with another, a tenth below
an average crop ; while, in the whole of Europe,
the most unfavourable season that usually occurs,
reduces the crop, one country with another, only a
twentieth below the average ; it is evident that,
with respect to giving steadiness to the supply of
corn, the free external trade, which equalized it
throughout Europe, and thus gave us our usual
consumption within a twentieth, would possess
twice the advantages of a free internal trade,
which, only equalizing the supply throughout
England, left our usual consumption deficient by
a tenth. A free internal trade between the dis-
tricts of a considerable agricultural country, ob-
viates famine ; but, a free external trade between
all growing countries, would render it next to im-
possible that we should be visited even by a dearth.
27
2. This will appear still more evident, if we
trace, through its other operations, the close
analogy which the foreign bears to the home trade
in corn. It is of the greatest advantage to the
consumer, that subsistence should be equalized,
not only through all districts, but also through all
periods ; and that the monthly, weekly, and daily
consumption should be apportioned, as nearly as
possible, to the supply of the season. In whatever
degree the crops may have failed of their average,
this operation of the corn trade puts the people, in
a corresponding degree, upon short allowance ;
and thus saves them, at the end of the year, from
the miseries of want. But, in her general results,
Nature rectifies particular irregularities ; and the
crops, throughout all commercial countries, never
fail of their usual average, in so great a degree as
the crops of a single country. Therefore, when
the foreign trade is free, the consumers, though
crops should fail of their general average through-
out the world, which is an extremely improbable
occurrence, will not, by its operations, be put
upon so reduced an allowance as Would be neces-
sary to their safety, if the external trade were re-
28
stricted, and, which is a very probable occurrence,
crops failed of their average at home.
But the foreign has an advantage over the home
trade, not only in having a smaller failure in the
average supply to equalize throughout the year,
but also, in allowing this operation to be performed
with more exactness. The merchant who, in case
of his miscalculating the extent to which crops
had failed of their average, and keeping up corn
beyond what the real deficiency of the seasons ren-
dered necessary, ran little risk of his superfluous
accumulations perishing on his hands, but could,
at his option, throw it into any more favourable
foreign market, would, with increased confidence,
buy up corn in the beginning, in order to be en-
abled to meet, with a profit to himself, the wants
of the latter end of the season. Hence he would
more effectually secure the country against want ;
though he might, if the operation of free external
trade rested here, sometimes put the people upon
unnecessary thrift in the consumption of food.
The operation however would not rest here : if,
from the security which they thus obtained in pur-
chasing up corn, merchants should be tempted to
29
stint any particular market in a greater degree than
the failure of an average supply, throughout the
growing countries, rendered necessary, they would,
in that particular market, give prices an unnatural
elevation, and thus invite the competition of other
merchants ; and corn would flow in from other
quarters, and from other countries, to relieve the
consumer from the unnecessary and unequal pres-
sure. In commerce, competition is as the princi-
ple of gravitation, which, the instant restraint is
removed, draws all things to their proper level.
The foreign corn trade, when it operates unim-
peded by pernicious regulations, not merely en-
ables the dealer to equalize, throughout the year,
instead of the uncertain supply of a single country*
the regular and nearly uniform supply of all ; not
merely gives him confidence and spirit in these im-
portant functions, but, at the same time, fully se-
cures the public against the effects of his occasion-
ally overtrading, and stinting the market unduly.
3. But the security and confidence which free
external trade confers upon the dealer, would, in
the operation of carrying on the superfluity of one
season, to meet the deficiency of another, be far
greater, and far more beneficial to the public,
30
than it could be in the operation of equalizing
the supply throughout the year. When the ex-
ternal trade is subjected to restrictions, the corn
dealer, who, in any particular country, performs
the important office of preserving the superfluity
of one year to meet the deficiency of another,
incurs very considerable risk. For, though a suc-
cession of abundant years, glutting the markets
with grain, and leaving on the farmer's hands,
produce, for which there can be, at present, no
consumption, may probably be succeeded by defi-
cient years, requiring, to make them good, all the
surplus that can now be saved ; yet, the succession
of such deficient years is but a probability, in specu-
lating on which, the merchant, however accurately
he may have observed the general succession of
events, will often find his calculations falsified by a
particular result. Now, when his calculations are
thus falsified ; when, after a course of abundant
crops, deficient ones do not immediately succeed,
the merchant who had bought up, in the years of
plenty, to sell, with a profit, in the years of dearth,
will sustain a considerable loss ; and may, perhaps,
be ruined. But where a free external trade ex-
ists, such things cannot be.
31
The irregularities in the particular operations
of nature, rectify each other, and interfere not
with the uniformity of her general results. An
unusual succession of abundant years may often
occur in a single country, but probably, never
yet occured, at the same time, throughout all
countries. The merchant who might buy up
the superfluity occasioned by two or three over-
flowing crops in England, and who should find,
contrary to his expectations, and the usual course
of things, that the approaching year promised also
to be abundant, would, under a free external trade,
be certain, that somewhere else, deficiencies would
occur, and be secure of finding, in some other
country, in France, Spain, or Italy, in Europe,
Asia, or Africa, that vent for his stock which
could not be obtained at home. Thus all the
risks which might have deterred the timid from
attempting to carry on the superfluity of one year,
to meet the deficiency of another, would be dimi-
nished, and capital would flow with sufficient
abundance, into a channel of commerce, so effec-
tual in distributing to the consumer, a certain and
uniform supply of corn.
32
4. As its more extended operations, and its
increased security, drew larger capitals to the corn
trade, the stock in the hands of the various dealers
concerned in it, would become more considerable,
and their accumulations would more effectually
supersede the necessity, and perform the functions
of public granaries. Thus again, the effects of the
foreign, would be strictly analogous to those of the
domestic trade in corn. The irregularities of the
seasons, with respect to the production of corn, lay
the foundation for so extensive and so beneficial a
commerce in this article, bulky and of universal
consumption as it is, that, were all restrictions,
internal and external, removed, it would, in its
various operations, employ capital to an incalcu-
lable amount. To equalize the supply, not only
through all the districts of countries, but through
all the countries of the commercial world ; and
effectually to carry forward the superfluity of some
years, to meet the deficiency of others, would re-
quire stores and granaries, almost immeasurable.
The accumulation of grain, which it would be the
interest of dealers, in every country, to keep up,
would be so immense, that not only unforeseen,
S3
or unprecedented irregularity in the seasons, but
even temporary interruptions of that free inter-
course itself* from which these most important
benefits result, might be immediately provided for.
The accumulations of corn, occasioned by an un-
fettered commerce, would be more efficacious in
obviating famine than the granaries of Pharaoh.
5. But it is not only by equalizing subsistence
more perfectly throughout all the regions of the
world, and in laying up and preserving the super-
fluity of one year for the wants of another, that the
external trade in corn, when exempt from perni-
cious restraint, corrects the irregularity of the
seasons, and secures the earth from famine. Its ope-
rations, again analogous to those of the internal
trade, exert the happiest influence upon produc-
tion. Every increase of capital which it draws to
the purchase, the preservation, and the distribu-
tion of grain, is an additional back and support
to the farmer ; and every operation that gives steadi-
ness to prices, diminishes the risks of cultivation.
As Dr. Smith most justly observes, next to the trade
of the farmer, no trade encourages the growth
of corn so much as that of the corn merchant :
D
31
aud, if his trade were unfettered, it would not be
easy to calculate the impulse which agriculture
would receive through all the growing countries
of the world.
Thus, every view which we take of this impor-
tant subject tends to a more clear perception of the
analogy between the operations of the internal, and
those of the external trade in corn ; and to impress
us with the magnitude of the benefit which un-
restricted commerce, in this article, is calculated
to confer. By equalizing subsistence throughout
all the countries which engage, actively or pas-
sively, in commerce ; by distributing the supply,
in regular proportion, through all the periods of
the year ; by carrying forward the superfluities of
abundant seasons, to meet the wants of deficient
ones ; by occasioning the establishment of stores
and granaries ; and by giving security to agricul-
ture, and consequently, a new impulse to produc-
tion, it seems that an unfettered foreign trade in
corn, might render famine impossible, and make
even dearth an extremely improbable occurrence.
The inequality in the productiveness of the seasons,
diminishes as territory extends. The deficiency of
35
crop, in one country, is compensated by abundance
in other countries; and the quantity of human
sustenance, which, under any given state of agri-
cultural improvement, our earth produces, may be
considered as not liable to any very considerable
variations from year to year. Hence, were perfect
freedom granted to the external trade in corn, and
all its operations effectually carried on, the supply
and the price of grain, except as they might be
influenced by the expense of carriage, and by the
gradual progress of cultivation, would not only be
equal throughout all commercial countries, but
would continue steady, and almost stationary, for
periods of years. Neither famines nor dearths
would occur in the future history of the world.
These reasonings upon the external trade in
corn, receive the fullest sanction from experience.
Holland, we are told, by the simple expedient of
leaving this branch of commerce free, obtained, at
all times, a supply of corn equal to her demand.
Though her territory was inadequate to her subsis-
tence, and though her population depended, almost
entirely, upon foreign supply, yet she was exempt
from those sudden and considerable fluctuations in
d 2
36
the price of bread, which often prove so calamitous
in countries which possess every territorial advan-
tage, but whose economical system has less of
wisdom. Nay Holland not only enjoyed ample sup-
ply, and steady price ; but such were the benefits
derived from unrestricted external trade in corn,
that they extended beyond herself. She possessed,
at all times, supplies of grain beyond her consump-
tion ; and, though not a corn country, became a
kind of granary for other countries. The grain
kept in store by her merchants, always exceeded
her own annual wants so far as to enable her to
supply the occasional deficiencies of the neighbour-
ing countries ; and the price of corn in Holland,
represented, pretty accurately, its average price iii
Europe.
CHAP. II.
On the Influence of the external Trade in Corn ;
on the Subsistence, Wealth, and Prosperity,
I. of the Country that 'permanently exports ;
II. of the Country that permanently import?
Grain,
In the preceding chapter we considered the fo-
reign trade in corn, as, by equalizing food through
different countries, and different periods., by esta-
blishing granaries, and by giving encouragement
to agriculture, it rectifies the irregularities of the
seasons, and ensures, at all times, a steady and
an abundant supply of human sustenance. In the
present chapter we will take a less general view
of the question, and consider the foreign trade,
not as it alternately removes redundancy, supplies
deficiency, and regulates the supply of food
throughout the world, but, as it affects the sub-
sistence, wealth, and prosperity, of those parti-
38
cular countries, which permanently export, or per-
manently import grain.
When overflowing harvests have, in one coun-
try, reduced the price of corn, while, in some
neighbouring country, deficient harvests have
raised it, then corn will flow, from the one, into
the other. This, however, would be a merely
temporary adjustment of supply, and could not
give the former the character of an exporting, nor
the latter the character of an importing country.
But when, in average years, the price of corn is
lower in one country than it is, in such years, in
another, while this other country has lower prices,
in something else, then the one will permanently
export, and the other permanently import sub-
sistence. For example, while Poland can raise
corn cheaper than England, and England prepare
cloth cheaper than Poland, the latter, unless some
violent interference should prevent it, will be-
come an exporting, and the former an importing,
country.
I. Now the country, which permanently ex-
ports a part of its produce, is secured, in the most
effectual manner, against the visitations of want ;
39
and enjoys all the benefits, which, in the last chap-
ter, were shewn to result from the external trade
in corn. Prejudice, and passion, indeed, have
often decided otherwise. When the inhabitants
of an agricultural country, see a considerable part
of its produce sent to supply foreign wants, they
are very apt to conclude, that the foreign corn
trade, however beneficial it may be to others, is
injurious to themselves, and tends to inflict an ar-
tificial scarcity, when Nature had blessed them
with abundance. But this conclusion, however
obvious it may appear, and however frequently it
may have been drawn, is entirely erroneous. The
foreign demand creates the surplus it removes.
When the exportation of corn is restricted, the
farmer will cultivate, to such an extent only, that,
in average years, the supply will equal the home
consumption, and the consumer will not obtain
corn cheaper, or more abundantly, than before.
On the contrary, he will be in a much more pre-
carious condition than if free exportation were
allowed. For as, in an exporting country, the
natural price of corn must be lower than its na-
tural price elsewhere, such a country, in the event
40
of a deficient year, cannot be? relieved by importa*
tion, until prices have run up very considerably
above their customary and average rate. If Po-
land, where corn is naturally so cheap, were to
prohibit exportation, and, consequently, to grow
only her own supply, in an unfavourable harvest
her people might be visited by famine, before the
markets would be sufficiently high, to enable the
merchants of France, or England, where the ar-
ticle is naturally so much dearer, to send her corn
with an adequate profit. Hence, a country in
which natural price is very low, is, if she restrain
exportation, of all others the most likely to suffer
from the irregularity of the seasons. If, on the
contrary, she leaves the external trade in corn un-
fettered, cultivation is carried to an extent, far
beyond what is necessary to supply home con-
sumption, and a great surplus is created, from
which, on the recurrence of deficient years, all
the wants of her population may be made good.
The irregularities of the seasons arc almost unfclt,
and those sudden gluts, and critical suspensions of
supply, which prove at once so injurious to the
grower, and so calamitous to the consumer, are
41
unknown. A people clamouring against the per-
manent exportation of corn, is, in fact, a people
clamouring for their own starvation.
But, though it cannot be controverted that an
unrestricted exportation of corn, giving occasion
to a more extended cultivation than is necessary
for home consumption, is all-powerful to correct
the inconvenience of unequal seasons, and to in-
sure to a people an ample, and steady supply of
subsistence, yet such commerce has frequently been
represented as injurious to wealth and population.
When a people exchange the produce of their soil,
for the wrought goods of some neighbouring
country, it has been supposed, that the raw mate-
rials and subsistence which they thus send abroad,
might, to the great increase of the national opu-
lence and prosperity, give employment to manu-
facturers at home. The slightest examination of
the laws, which regulate the interchange of com-
modities between nations, is sufficient to show,
that, for this supposition there is no foundation.
When labour and capital are employed in culti-
vating the earth, and exchanging its produce for
the manufactured goods of other countries, it i*
42
because these goods, thus obtained, are better, or
more abundant, than those, which the same quan-
tities of labour and capital could have fabricated
at home. This interchange, therefore, of produce
against manufactures, effects a clear addition to
the wealth of the nation. If a thousand labourers,
and ten thousand pounds' worth of capital stock;
can, when employed upon the soil, raise a quan-
tity of produce which will exchange for a thousand
yards of foreign cloth, while the same labour and
capital, employed in manufacturing at home, could
furnish only nine hundred, then, it is evident, that,
by directing this labour and capital to cultivation,
and to exchanging produce against wrought goods,
an hundred yards of cloth are gained, and the
country enriched, not impoverished.
Again, a country which employs a portion of its
capital in raising a surplus produce for exportation,
cannot turn its produce to maintain manufactories
at home, until a further accession of capital, suffi-
cient for their establishment, has been previously
accumulated. If, in order to maintain a manu-
facturing population at home, capital be taken
from the soil, then the industry of the country will
43
diminish, in proportion as that of the towns is in-
creased, and the only difference will be, that a
number of hands will be employed in fabricating
goods, inferior in quantity, or quality, to those
which the same number of hands formerly enabled
the people to purchase by exchange from foreign
countries. It is only by the acquisition of addi-
tional capital, that, without breaking up the old,
new channels of industry can be opened ; and it is
by an unrestricted commerce, leaving labour and
stock to find their most beneficial employment,
that production is best increased, and capital most
rapidly accumulated. Hence, perfect liberty to
export the produce of the soil, accelerates the pe-
riod of manufacturing prosperity in an agricultural
country. In such a country, when capital begins
to exceed what can be beneficially vested in the
soil, it will seek other employment, and invest
itself in the working up of the raw material.
Now, as a country which raises, within itself,
subsistence and raw materials, can procure them
cheaper than countries that import them, charged
with the expense of carriage; and as the capital
and labour which cannot be beneficially occupied
44
in cultivation, will, rather than remain unem-
ployed, be satisfied with a very moderate recom-
pense, natural prices, in a flourishing agricultural
country, will become extremely low. But as the
component parts of price become low, as materials
and labour can be cheaply procured, and money
borrowed at an easy rate, the home manufacturers
gradually established, in such a country, will, par-
ticularly in the fabrication of coarser articles, on
which the charge of importation is considerable,
possess advantages which must more than coun-
terbalance their deficiency in skill, and which will
enable them to undersell the foreign workman, and
beat him out of the home-market. When the
coarser manufactures have thus established them-
selves, skill will gradually be acquired, capi-
tal will continue to increase, and the more refined
productions of industry will, by degrees, be intro-
duced. When this is the case, the corn that had
formerly been exported to feed foreign workmen,
will be retained at home to supply the wants of a
manufacturing population. Such a population
rises up most rapidly under a system that rejects
restraint. Perfect freedom in the foreign corn
45
trade, not only secures the people of an exporting
country against the irregularity of the seasons in
supplying food, but, by allowing labour and stock
to take the direction most profitable to them, is
the best and most powerful means of increasing
wealth and accumulating capital, and, conse-
quently, of ultimately accelerating that manufac-
turing prosperity, to which ignorance has imagined
it to be inimical.
IL If, from the many benefits, whether relating
to subsistence, to wealth, or to population, which
are conferred by the export trade in corn, any per-
son should conclude that the opposite species of
intercourse would produce opposite effects ; and
that a permanent import trade in corn must be in-
jurious, he would find himself miserably deceived.
It is only by leaving the import trade perfectly
free, that a country can escape the irregularities of
the seasons in supplying food. In countries where
the natural, or what may be called the growing
price of corn, is so high as to cause, in average
years, a part of their consumption to be brought
from other countries, an unrestricted importation
trade is necessary to prevent a ruinous fluctuation
46
in the markets. For the expense of carriage, on an
article' 10 bulky as corn, affords so great a protec-
tion to the home grower, that corn will not be
permanently imported, except into a country where
its natural price is very considerably above the
level of other countries ; and if, in such a country,
restrictions are laid upon import so as to force, in
average years, an independent supply, then, in
abundant years, superfluity will be created, but
will find no vent until prices have sustained an ex-
traordinary fall. Exportation can take place
only from places where articles are cheap, into
those where they are dear. If, in the country which,
by restrictions upon import, forced an independent
supply in average years, the average price of corn
should be ten per cent, above the level of other
countries, and if the cost of conveying the article
to the foreign market should be ten per cent, more ;
then, in such a country, corn must, in an abundant
year, fall twenty per cent, before the glut could
begin to be removed by exportation. Though, in
the event of deficient crops, foreign corn might be
admitted so as not to let prices run much above
those of average years ; yet, between the prices of
47
such years, and the very low comparative prices at
which, in abundant ones, merchants could export
with a profit, there would be perpetual, and even
great fluctuations. The effect of these, upon the
grower, would be distressing, and upon the con-
sumer would be calamitous. As in, countries
where natural prices are so low that relief cannot
be obtained from abroad, until the markets have
acquired an extraordinary elevation, a free expor-
tation trade is necessary to ensure the people against
the irregularity of the seasons ; so, in a country
where natural prices are so high, that superfluity
cannot be carried off until the markets have sus-
tained an extraordinary fall, it is necessary, in order
to attain the same desirable end, that there should
be an unrestricted import trade.
But it is not only in correcting the irregularity
of the seasons, and in securing, at all times, a steady
supply of subsistence at a steady price, that, when
the circumstances of the country naturally lead to
it, the permanent importation of corn is beneficial.
The advantages of commerce are always recipro-
cal. As the country which permanently exports
corn, does so only because she obtains, in exchange,
48
a greater quantity of other goods, than the labour
and capital, which raised the corn, could have
produced at home ; so, the country that imports
the corn does so, only because the labour and ca-
pital employed in fabricating the articles which
purchase it, could not, if employed upon her own
soil, raise so good a supply of corn as is thus ob-
tained. If a thousand labourers, and a thousand
pounds' worth of capital stock, can, in England,
fabricate a quantity of cottons, which, when ex-
changed with some other country, will bring her a
thousand quarters of wheat ; while the same num-
ber of workmen, and the same amount of capital,
employed in cultivating her soil, will raise only nine
hundred quarters of equal goodness ; then it is
evident that, by manufacturing the cottons, and
importing the corn, she adds an hundred quarters
to her wealth.
Nor would such an importation of corn, allow-
ing labour and capital to take their most beneficial
direction, be ultimately injurious to the interests
of agriculture. On the contrary, that direction
of national industry which is most beneficial to
national wealtjj, must, in the long run, be most
49
friendly to agricultural improvement. As, in a
country which cultivates cheaper than her neigh-
bours, a free exportation of corn occasions an ac-
cumulation of capital, which, exceeding what can
be beneficially employed upon the soil, flows out
into other channels, and occasions the establish-
ment of manufactures; so, in a country which
can manufacture at a cheaper rate than her neigh-
bours, the free importation of corn will occasion a
more rapid accumulation of capital, which, ex-
ceeding what can be beneficially directed to work-
ing up the raw material, will seek other employ-
ment, and extend cultivation throughout the coun-
try. This branch of our subject is of great im-
portance, and, even though we should incur the
censure of repetition and prolixity, we will endea-
vour to unfold it more at large.
If, in any country, the customary rate of profit
upon commercial and manufacturing stock be fif-
teen per cent, while the rate of profit upon the stock
which might be turned to the extension of tillage
would amount only to ten per cent, it is evident that
tillage cannot be extended, that tracts, which would
afford the speculator a profit of only ten per cent.
60
will remain unreclaimed, and that cultivation will
be confined to such fertile districts as can yield to
the capitalist (he customary return. Even though
these fertile districts should be insufficient to sus-
tain the population, yet, while manufacturing and
commercial profits continue to be higher than
those which could be obtained by the cultivation
of inferior lands, such lands will be neglected, and
labour and capital will be directed to the more
profitable occupation of fabricating commodities
with which to purchase the necessary supply of
corn from the foreign grower. Thus it is, that,
after her fertile soils have been brought under the
plough, a country which has acquired advantages
in manufactures, necessarily becomes, unless in-
dustry should be forced from its natural direction,
a permanent importer of corn. In the progress of
prosperity, however, this process is, in some mea-
sure, reversed ; manufactures and commerce have
a reaction on the soil, pour back upon it the labour
and capital which they at first appeared to take
away, and, at last, enable a territorial state to at-
tain a much higher degree of agricultural improve-
ment, than that, to which, without their powerful
SI
stimulus, she would have been capable of attain-
ing. For the increase of wealth, the accumulation
of capital, and the competition amongst capitalists,
iower the interest of money, and reduce the rate of
manufacturing and commercial profit, until it no
longer exceeds, what can be obtained by reclaiming
inferior lands. Capitalists, therefore, cease to be
induced, by the prospect of greater gains, to leave
such lands neglected ; nay, if the customary rate
of manufacturing and commercial profit should be
reduced to nine per cent, the lands lately left un-
filled, because they could bring a return of only ten
per cent, would be eagerly sought after, and ca-
pital would flow from manufactures and commerce,
and vest itself in agriculture. In the progress of
wealth, the profits of stock, and the interest of
money, are gradually lowered, while land acquires a
higher relative value, and tracts, which can afford
a return of nine, of eight, or even of seven per
cent, are brought into tillage. At length cultivation
ascends the hills and scales the mountains, and the
country wears the aspect of a universal garden.
No artificial encouragement afforded to agricul-
ture can be so efficient as that, which results in this
e 2
52
manner from the general opulence, and from the
reaction of manufactures and commerce upon the
soil. Bounties upon export, and restrictions upon
import, might, indeed, give an increased relative
value to land, and raise the price of its produce,
until the cultivation of very inferior lands afforded,
for a time, at least, a profit sufficiently high to
draw labour and capital from other occupations.
But this forced and artificial encouragement, af-
forded to agriculture, would be dearly, much too
dearly purchased. Corn is imported, because the
labour and capital, employed in this way, bring a
larger supply than they could raise at home. If
we restrict importation, or grant bounties, or in
any way turn capital from its most beneficial occu-
pation, we check the progress of wealth, and the
farther accumulation of capital ; and, conse-
quently, prevent the profits of stock, and the inte-
rest of money from becoming lower. But it is the
accumulation of capital, and the consequent re-
duction in the rate of profits and interest, which
enhance the wages of labour, give a spur to popu-
lation, and increase, in the home market, the de-
mand for corn. The demand regulates the sup-
53
ply. The country which gives a forced and arti-
ficial' encouragement to agriculture, will hare less
wealth, less capital, less population, a less demand
for corn, and, consequently, a less extended and
perfect cultivation than the country, which, leav-
ing things to their natural course, and permitting
industry to take its most profitable direction, re-
ceives subsistence from whatever quarter it can be
obtained at the cheapest rate, until capital, accu-
mulating beyond what can be profitably employed
in preparing articles for the foreign market, over-
flows, like fertilizing waters, on the soil.
54
CHAP. III.
On the Influence of the Price of Com ; I. on the
productive Pozoers of Industry ; and, II. on
the Wages of Labour, and on the Price of
Commodities.
-Having treated the external corn trade as it ap-
portions the general supply of subsistence through-
out the world, and as it operates upon the particu-
lar countries which permanently export or perma-
nently import grain, we might now pass to consi-
der the limitations to which our general principles
are liable, and to point out what effects, in the ac-
tual circumstances and relations of this country,
a free and a restricted intercourse would respect-
ively produce.
The discussion of these topics, however, neces-
sarily involves some of the elementary doctrines of
political economy, with respect to price and pro-
55
duction ; and it will, therefore, considerably faci-
litate our enquiries, if we previously examine the
influence which the price of corn has upon the
wages of labour, and on the productive powers of
industry.
I. Price is that which is given for any thing.
Now there are two kinds of price which, if we
would attain to any accuracy in our reasonings
upon commercial subjects, we must carefully dis-
tinguish ; these are, market price and natural
price. The market price of any commodity, as
the term sufficiently denotes, is that which is given
for it in the market ; the natural price of any arti-
cle, is that which is given for it at the original
store-house of nature, or, in other words, that
which must be bestowed upon its production.
Market price is determined by the proportion
which exists between supply and demand ; and is
subject according as this proportion varies, to per-
petual fluctuations. Natural price is more steady ;
but, as it is more complex, our apprehensions of it
maybe rendered clearer and more definite, by ana-
lyzing it into its component parts, and explaining
56
the circumstances by which these may be lowered
or elevated.
Whatever we consume is derived from labour,
capital, and land ; whoever would purchase from
nature any article of wealth, must devote a portion
of these to its production. Labour, capital, and
land, therefore, (including under the latter term
mines and fisheries) constitute the component parts
of the natural price of all things. When land is
fertile, and labour and capital are skilfully applied,
a greater quantity, of wealth is brought into ex-
istence ; that is, less is given for production ; in
other words, natural price is low. On the con-
trary, when land is indifferent, and labour and ca-
pital unskilfully applied, few articles are brought
into existence ; that is, more is given for the pro-
duction of commodities; or, natural price is high.
Hence, to reduce natural price is the same thing
as to increase the productive powers of labour,
capital, and land ; and to advance it is to reduce
them.
He who personally employs labour, capital, and
land, in the production of commodities, pays the
natural price of them directly ; he who does not
57
engage personally in production, but merely gives
for commodities the wages of the labour, the pro-
fits of the capital, and the rent of the land employ-
ed in production, pays the natural price indirectly.
Hence wages, profit, and rent, may be considered
as constituting the indirect natural price of things.
As labour, stock, and land, have the most intimate
relation to their respective wages, profits, and rent,
it will not be often necessary to consider these two
kinds of natural price as distinct. However, when
so considering them would tend to the clearness of
our reasonings, or to the accuracy of our conclu-
sions, we will employ the term " indirect natural
price " to signify the wages of the labour, the pro-
fits of the stock, and the rent of the land, emr
ployed in production.
As the wages of labour, the profits of stock,
and the rent of land, form, indirectly, the com-
ponent parts of natural price, we will briefly con-
sider the variations to which they are liable. In
the first place, there is every where a general and
ordinary rate of wages, which is determined by the
circumstances and habits of the country, and
which it is found difficult permanently to alter,
58
The sum of money, indeed, by which this rate it
expressed, may. frequently and suddenly vary ; but
the quantity and quality of the food, raiment, and
habitation, in which it really consists, cannot so
easily be changed. The circumstances and habits
of living, prevalent in England, have long deter-
mined that women in the labouring classes shall
wear their feet and legs covered, and eat wheaten
bread, with a portion of animal food. Now, long
before the rate of wages could be so reduced, as
to compel the women in this part of the United
Kingdom to go with their legs and feet uncovered,
and to subsist upon potatoes, with, perhaps, a lit-
tle milk from which the butter had been taken,
all the labouring classes would be upon parochial
aid, and the land in a great measure depopulated.
Thus difficult would it be, to effect such an altera-
tion in the rate of wages, as would assimilate the
real recompense of labour, between the eastern and
western parts of the same kingdom.
There is also in every neighbourhood, a cus-
tomary and ordinary rate of the profits of stock,
which is determined by the proportion, that exists
between the supply of capital and the demand for
59
it, and which cannot be altered, except by altering
this proportion ; that is, except by altering the
general circumstances of the country, with respect
to the accumulation and distribution of its wealth.
In like manner there is, in every neighbourhood, a
general and ordinary rate of rent for land, which,
like the other component parts of price, is little
liable to sudden variations ; because, under any
given state of fertility in land, and skill in the ap-
plication of labour and capital, it is by these other
parts of price that it is determined. For example,
if the customary rate of wages be one shilling and
sixpence a day, and the customary rate of profit be
fifteen per cent. ; and if, to cultivate any piece of
ground, it requires, throughout the year, twenty
labourers a-day, and capital stock, including all
expenses, of two thousand pounds; then, under
any given state of fertility and agricultural im-
provement, the rent of this piece of ground will be
determined. The customary rate of wages, with-
out which the labourer will seek employment else-
where, amounts to .547 ; and the customary pro-
fits, without which the farmer will vest his capital
in some other business, amount to .300. There-
60
fore, if this piece of ground is to be kept in culti-
vation, a sufficient quantity of its produce must be
appropriated to pay these sums, and then, whatever
may remain will be a net surplus, constituting the
natural rent of the land proprietor.
From the above analysis of natural price, it will
be evident that it is little liable to fluctuation.
The quantity, indeed, of labour, of stock, and of
land, necessary to the production of any article, as
well as the rate of wages, of profits, and of rent
due to them, may vary considerably in different
countries and in different ages ; but these varia-
tions, effected by a more or less skilful applica-
tion of labour and capital, and by the degree, in
which stock may be accumulated and wealth dif-
fused, are rare in their occurrence, and gradual in
their progress ; and, in ordinary circumstances,
and for any moderate period, natural price may be
considered as nearly stationary.
While natural price is stationary, or subject only
to gradual variations, market price, as has been
already hinted, is, from the changes which are
perpetually occurring in the proportion between
the supply of commodities and the demand for
61
them, liable to sudden and considerable fluctua-
tions. But, though market price is thus irregu-
lar, yet its movements are governed by fixed and
determined laws ; and natural price constitutes, as
it were, a centre, towards which it has a perpetual
tendency to approach. Whenever it sinks below
this centre, production, having its expenses no
longer repaid, is discontinued, and the supply of
commodities diminished, until their value again
become sufficient to pay the labour, capital, and
land, necessary to bring them to market. On the
other hand, if market price should at any time be
elevated above the natural, labour and capital must,
according to the invariable laws of competition,
be drawn to the production of the articles which
had acquired this extraordinary value ; and the
supply would be increased, until their market fell
back to the level of their natural price.
These principles, in their application to corn,
require no farther illustration. Though overflow-
ing harvests may, sometimes, sink the market price
of this article below, and deficient years raise it
above the natural price, yet, on the average of
seasons, corn will bear a value exactly sufficient to
pay, at the customary rates, the wages of tlie la-
bour, the profits of the stock, and the rent of the
land employed in its production. In their appli-
cation to labour, however, the principles of mar-
let, and natural price, may require some farther
explanation.
The proper way of regarding labour, is, as a
commodity in the market. It therefore has, as
well as every thing else, its market price, and its
natural price. The market price of labour is re-
gulated by the proportion which, at any time, and
any place, may exist between the demand and the
supply; its natural price is governed by other laws,
and consists, in such a quantity of the necessaries,
and comforts of life, as, from the nature of the
climate, and the habits of the country, are neces-
sary to support the labourer, and to enable him to
rear such a family as may preserve, in the market,
an undiminished supply of labour. That the la-
bourer must, usually, obtain for his work, a suffi-
cient quantity of those things, which the climate
may render necessary to preserve himself, and such
a family as may keep up the supply of labour to
the demand, in healthful existence, is self-evident;
C3
and, when we consider that things not originally
necessary to healthful existence, often become so
from use, and that men will be deterred from mar-
riage, unless they have a prospect of rearing their
families in the mode of living to which they have
been accustomed, it is obvious, that the labourer
must obtain, for his work, not only what the cli-
mate may render necessary, but what the habits of
the country, operating as a second nature, may re-
quire.
From this account of the natural price of labour,
it is evident, that it may be liable to very con-
siderable variations. The shelter, and the clothing
which are indispensable in one country, may be
no ways necessary in another ; and a labourer in
Hindostan, may continue to work with perfect vi-
gour, though receiving, as his natural wages, only
such a supply of covering, as would be insufficient
to preserve a labourer in Russia from perishing.
Even in countries situated in the same climate, dif-
ferent habits of living, will often occasion varia-
tions in the natural price of labour, as considerable
as those, which are produced by natural causes.
The labourer in Ireland will rear a family under
64
circumstances, which would not only deter an
English workman from marriage, but would force
him on the parish for personal support. Now, it
is certain, that a gradual introduction of capital
into Ireland, accompanied by such a diffusion of
instruction amongst the people, as might give a
prudential check to marriage, would raise the na-
tural price of labour to an equality with its na-
tural price in England ; and we can conceive a
succession of impoverishing, and calamitous causes,
which might reduce the reward of industry in
England, to a level with the scanty pittance that
it obtains in the sister island. Alterations, how-
ever, in the natural price of labour, cannot be
suddenly effected. That part of this price which
depends upon climate, is unchangeable ; and even
the part that is determined by the habits of living,
and the prudential check which may exist with re-
spect to marriage, can be effected, only by those
circumstances of prosperity or decay, and by those
moral causes of instruction and civilization, which
are ever gradual in their operation. The natural
price of labour, therefore, though it varies under
different climates, and with the different stages of
national improvement, may, in any given time and
place, be regarded as very nearly stationary.
While the natural price of labour is thus steady,
its market price, as has been already observed,
fluctuates perpetually according to the proportion
between supply and demand. The price which
labour fetches in the market, may often be consi-
derably more, and often considerably less, than
that, which, from the climate, and habits of living,
is necessary to maintain the labourer and his fa-
mily. But, notwithstanding these occasional varia-
tions, the natural, and the market price of labour,
have a mutual influence on each other, and can-
not long be separated. When the market price
falls below the other, the labourer no longer ob-
taining the quantity of necessaries, which climate
and habit render necessary to the healthful exist-
ence of himself and family, deaths are increased ;
while, the increasing difficulty of maintaining a
family, increasing the prudential check on mar-
riage, births are diminished ; and thus, by a double
operation, the level between the natural, and the
market price of labour, is restored. On the other
hand, if the market price should, at any time, be
F
66
raised above the natural, the increased comforts
enjoyed by the labourer and his family, would
diminish deaths, and, by giving encouragement to
marriage, increase births, until, by a double ope-
ration, the supply of labour was augmented, and
its market price brought back to that natural level,
from which it can never permanently recede.
Having, in this manner, explained both the dis-
tinction, and the connection, between the natural,
and the market price of labour, we are prepared
to unfold, with more perspicuity, the influence
which the price of corn has, upon the productive
powers of industry, and on the price of labour and
of commodities.
We shall, in the first place, consider the influ-
ence which the natural price of corn has, on the
productive powers of industry ; and, for the sake
of illustration, we will suppose, that a man farms
his own estate, and, frilhi its produce, feeds, and
clothes his labourers. On this estate, let the na-
tural price of corn be increased, or, in other words,
let it require a greater quantity of labour and
capital, to raise the same quantity of grain. But
labour and capital, when a greater quantity of
67
them is required to furnish the same quantity of
any commodity, are less productive than before.
A rise in the natural price of corn, is a fall in the
productive powers of agricultural industry.
. This requires no illustration. An increase in
the natural price of corn, and a diminution in the
productiveness of the industry which raises it, are,
n the strictest sense, convertible terms. The ef-
fect, however, of the natural price of corn, as it
acts, not upon the industry by which corn is pro-
duced, but on the industry employed upon other
articles, may require explanation; and, to get
rid of all complexity, and render this- explanation
as clear and intelligible as possible, we will, in
the first place, consider the question, without any
reference to the divisions-of employment ; and, for
the sake of illustration, suppose as before, that a
man farms his own estate, paying his labourers,
not only for cultivating it, but also for manufac-
turing the raw materials it produces.
By considering the question in this manner, un-
der the supposition that the same person carries on,
with the same set of labourers, the double busi-
ness of farmer and manufacturer, we shall simplify
f 2
6S
without weakening our illustration, and, at once,
perceive the effect, which the natural price of corn
has on the productive powers of the industry em-
ployed in preparing other articles. In the first
place, it is evident, that the labourers, alternately
employed in cultivating the ground, and in manu-
facturing its produce, must receive, while at work,
such a portion of the food and raiment they pro-
duce, as climate and habit may have rendered neces-
sary to their healthful existence. Let, therefore,
the natural price of corn be increased, let it be re-
quisite for each person on the farm to work three,
instead of two hours a-day, in order to raise the
quantity of food which he consumes ; and the con-
sequence will be, that he will have an hour less
for working up the raw materials of the farm. As
the quantity of labour, necessary to raise the sub-
sistence consumed by the labourer, is increased,
the quantity remaining for the production of other
things, will be diminished, and the supply of ma-
nufactured articles reduced. Now, on the other
hand, let the natural price of corn be lowered ;
1st the labour necessary to raise the labourer's sub-
sistence be diminished ; and the disposable labour.
69
which he can direct to work up materials, will be
increased, and the supply of manufactured goods
augmented. Thus, before the divisions of em-
ployment are thoroughly established, and while the
same hand cultivates the raw material and pre-
pares it, it is abundantly evident, that the ease, or
the difficulty with which subsistence can be raised,
is not only the measure of the productive powers of
agricultural industry, but governs, in a great .de-
gree, the productive powers of manufactural la-
bour. In this stage of society, a high natural
price of corn tends to diminish, while a low natu-
ral price in this necessary article, tends to augment
the supply of all wrought goods.
When the divisions of employment are esta-
blished in a country, and the same hand no longer
cultivates and prepares the raw material, the na-
tural price of corn has, on the productive powers
of the industry directed to the furnishing of other
articles, effects precisely similar to those above
described, though, in consequence of the more
complex structure of society, it becomes somewhat
more difficult to trace them. If a person, who at
once cultivates and makes cloth, occupy an inferior
70
soil, which requires that he should bestow a greater
portion of his labour in raising the necessary sup-
ply of food, fewer hours will remain to be devoted
to the loom, and less cloth will be produced. The
effect is perfectly analogous when the divisions of
employment arc established. The master clothier,
who employs a number of workmen, must, on the
average, pay them the natural price of their labour ;
and, if the habits of the country render bread an
essential article of diet, must allow them a suffi-
cient part of his cloth, or, what is the same thing,
of the worth of his cloth, to enable them to pur-
chase corn. Now, should the natural price of
corn have risen, should it require three labourers
to produce the same quantity of this article, which
might formerly have been produced by two, it is
evident that the increased number of labourers
must be clothed ; and that, in producing corn,
three coats, or their value, will be expended where
two would before have sufficed. The master clo-
thier, therefore, who gives his workmen a portion
of his cloth, or of the worth of his cloth, sufficient
to enable them to purchase their supply of corn,
will have to part with three yards of cloth for every
71
two which he formerly parted with. In raising
<he corn, and, through the corn, in preparing the
cloth, a greater quantity of the produce of labour
will be consumed by the labourer while at work ;
and, consequently, the net produce of manufac-
tural industry, remaining in the hands of the mas-
ter clothier, will be diminished, and, with the same
quantity of capital, he will furnish a less supply of
cloth, than before the natural price of corn, and
through it, of cloth, had been increased.
As a reduction in the natural price of corn
would have an operation directly the reverse of
that which has been here described, it will be un-
necessary to fatigue attention, by going into the
minute details of the process. As the person who
carries on the trades of the farmer and the weaver,
must, when he occupies an inferior soil, that re-
quires him to spend more hours in directly pro-
curing his consumption of food, have less time to
devote to the loom, and must produce less cloth
than if he obtained his corn at an easier rate ; so,
the person who confines himself to the particular
trade of the weaver, must, when the increased natu-
ral price of corn compels him to spend more of his
72
labour in procuring food indirectly o m the far-
mer, supply the market less abundantly with cloth,
than if the farmer, occupying better soils, had not
sunk so great a quantity of this article in the ex-
penses of production.
The converse of these propositions is equally true.
"Whether a person both cultivates and weaves, or
whether he confines himself exclusively to weaving,
his expending, either directly or indirectly, a less
portion of his labour in supplying himself with
food, will leave him a greater disposable portion of
his labour, to supply him with other things, and
will render his industry more productive than
before.
The foregoing illustrations, it is hoped, have
sufficiently explained and established the import-
ant principles in political economy, that, in any
given circumstances of skill, machinery, and capi-
tal, an increase in the natural price of subsistence,
diminishes the productive powers of all branches
of industry ; and a diminution in such natural
price increases them. From these principles the
following important conclusions result :
1st, Any improvement in agricultural science.
73
which enables the same quantity of labour and
capital, to raise a greater quantity of produce ; or
which, in other words, diminishes the natural price
of corn, not only increases the productive powers
of farming industry, but also adds power to all
the other branches of industry, carried on by the
consumers of corn, throughout the country.
2nd. Every improvement in the divisions of em-
ployment, every acquisition of skill, of machinery,
or of capital, which reduces the natural price of
any of the articles, which climate or custom may
have rendered necessary to the subsistence of the
labourer, not only increases the productive powers
of industry, in the particular business to which it
applies, but also, in every other branch of business,
the labourers in which consume the cheapened
article.
3rd. Every tax which falls upon agriculture, and
which has the effect of increasing the natural price
of subsistence, operates as a universal tax upon
production.
4th. Every restriction on the import trade in
corn, which forces into cultivation, land of inferior
quality, not only deprives the particular portions
74.
of labour and capital thus turned upon the soil, of
their most beneficial employment, but, by increas-
ing the natural price of corn, lowers, universally,
the productive powers of labour and capital, and
gives a general check to the prosperity of the
country.
.
II. Hitherto we have considered, without any
reference to currency, the manner in which the
natural price of corn operates on the natural price
of other articles ; or, which is the same thing, on
the productive powers of the labour and capital
employed in preparing other articles : in the re-
maining part of this chapter we shall examine the
influence which the money price of corn has, in
regulating the money price, first of labour, and
then of commodities.
When the market and the natural price of labour
are cqnal, the labourer's money wages amount to a
sum, just sufficient to purchase such a quantity of
the necessaries and comforts of life, as, from cli-
mate, and the habits of living established in the
country, are sufficient to keep up the labouring
population. Now, while thingg are in this state.
75
while the labourer is receiving this sum, let ua
suppose, that the money price of corn receives a
sudden fall. This, while it leaves his nominal or
money wages, as before, will increase the real wages
of the labourer, as measured in commodities. Hav-
ing a less sum to give for his bread, he will have
a greater to bestow upon other things ; and the
market, will be raised above the natural, price of
labour. But market and natural price can never,
for any length of time, be separated. Even sup-
posing that the farmers, when their corn fell, gave
the same amount of wages as before, still, as the
labourers received a greater quantity of the com-
forts of life, than was necessary to keep up their
present numbers, births would be increased in pro-
portion to deaths, until the supply of hands be-
came so abundant, that the market would be
brought down to the level of the natural price of
labour. Therefore, as the inability of the em-
ployer to pay more, or else the increasing popula-
tion, must ever prevent the labourer from receiv-
ing, for any length of time, a greater sum than is
necessary to purchase the articles which constitute
the natural price of his exertions, a fall in any of
y
76
these articles must be followed by a fall in wages.
Every reduction in the money price of corn, re-
duces the money price of labour.
The converse of this proposition is also true,
namely; an increase in the money price of corn,
increases wages. After wages have been so ad-
justed, as to be exactly sufficient to purchase the
articles which constitute the natural price of la-
bour, let the value of corn, as estimated in the
currency, experience a sudden rise. In conse-
quence of this, the class of labourers, being obliged
to give a greater portion of their wages for bread,
will have less to bestow on the other necessaries
and comforts of life; and though the nominal,
or money price of labour, may remain unchanged,
yet its real, or commodity price, will be reduced.
The pressure of the times, however, urging the
labourer to compensate the dearness of provisions
by increased industry, would immediately begin
to overstock the labour-market, and to reduce
the money, as well as the real value of wages;
and, for a time, labour would sink, as [corn rose in
price. But it is abundantly evident, that such a
tate of things could not last. Th labouring
17
classes, being, by a two-fold cause, the rise in
the money price of bread, and the fall in the mo-
ney price of labour, deprived of the species of sub-
sistence rendered, by climate, or habit, necessary
to healthful and vigorous existence, deaths would
begin to increase beyond the proportion of births.
Now, as the supply of labour diminished in this
manner, the competition of those who derived a
profit from employing it, would restore wages to
their natural rate; that is, to such a sum in the
currency, as would suffice to purchase subsistence
of the customary quality, and in the customary
quantity. Thus wages, by a gradual, but neces-
sary process, rise with every rise in the articles
which constitute subsistence ; and an increase in
the money price of corn, is followed by an in-
crease in the money price of labour.
That the market cannot, for any length of time,
be depressed below the natural price of labour ;
that wages must be sufficient to purchase the ar-
ticles which compose this natural price ; and that
they must consequently rise in their amount, as
these articles become equivalent to a greater sum
in the currency, are propositions which seem only
V
78
to require to be stated, in order to obtain assent.
Now, of all articles which compose natural price,
food is the most indispensable ; and where custom
has introduced bread corn, as the basis of the
labourer's food, the money price of corn will have
an irresistible effect on the money price of labour.
This effect, too, will be much more rapid than
might, at first sight, be imagined. It is not only,
or even principally, by the slow process of check-
ing marriage, and of rendering births less fre-
quent, that a rise in the price of food, has a ten-
dency to diminish the supply of labour, until wages
are restored to their natural rate. For, when food
rises beyond the proportion of wages, though the
labourer, by retrenching in other things, might
still be enabled to procure a sufficient quantity of
wholesome diet, yet this very retrenchment de-
prives him of some portion of those things, which
constitute the natural price of his labour ; of some
portion, for example, of the fuel, and warm
covering, which climate, or custom, has rendered
necessary to healthful existence. Hence, when
food rises, without a corresponding rise in wages,
disease will spread through all the habitations of
79
labour, and sickness and death diminish the sup-
ply of workmen. A single season, will, proba-
bly, be sufficient to reduce the population, so as
to force the money price of labour, up to the level
of the money price of corn.
Having thus traced the manner in which the
money price of corn influences wages ; and shewn,
that this influence, though not, indeed, immediate,
is yet much more rapid, and calamitous, than
might at first appear, I now proceed, first, to make
some estimate of the extent to which the price of
labour is raised by a rise in corn ; and then to shew,
how a rise in wages raises the price of commo-
dities.
Mr. Malthus, in his pamphlet on the subject of
an alteration in the corn laws, states, upon the au-
thority of Sir Frederic Morton Eden, that, in a
labourer's family of about an average size, the ar-
ticles of house-rent, fuel, soap, candles, tea, sugar,
and clothing, are, generally, equal to the article of
bread or meal. Meat, milk, butter, cheese, pota-
toes, and garden stuff, are, however, also consumed
in the labourer's family; and we shall probably
come sufficiently near the truth, if, as the basis of
80
our illustration, we suppose, that corn., or bread,
forms one-third of the labourer's whole consump-
tion.
Labour having adjusted itself so that its market
is equal to its natural price, let the wages, earned
by the labourer's family* be three shillings a-day ;
and, as one-third of their expenditure consists in
bread, they will, of course, give one shilling a-day
for this article. Now let an alteration in this state
of things take place, let the price of the quantity
of bread consumed in the labourer's family be raised
to one shilling and sixpence ; and it is evident,
that, as they give sixpence a-day more for their
bread, they must, in order to be placed on the same
footing as before, receive sixpence a-day more in
wages. Now, the proportion which sixpence bears
to three shillings (the former amount of wages) is
equal only to one-third of the proportion which it
bears to one shilling, the former price of a day's
supply of bread. Hence, when one-third of the la-
bourer's expenditure is for corn, a rise of three per
cent, in the price of corn, will be followed by a rise
of one per cent, in wages.
If one-half of the labourer's consumption con-
81
sisted in corn, in that case an advance of three per
cent, upon bread would advance wages one and a
half per cent. ; and thus on, according to any other
proportion, which the consumption of corn might
bear, to the whole consumption, which climate and
habit had rendered necessary to the maintenance of
labour. We assumed one-third, as a proportion
approximating to the truth ; but, whether it be so
or not, the principle we employed it to illustrate,
remains equally correct. Whatever proportion the
price of the labourer's corn bears to the price of
all the other things, which constitute his natural
wages, in that proportion, will a rise in the money
price of corn be followed by a rise in the money
price of labour.
And now we are to consider the manner, in which
a rise in the money price of labour raises the money
price of all commodities. When, in consequence
of a rise in corn, an advance has been effected in
the wages of labour, the capitalist who gives it
employment, and who pays the advance upon it,
must either suffer a diminution in the rate of his
profits, or else indemnity himself by charging an
advanced price upon his goods. Now when corn
G
82
has risen, be will be enabled to advance his goods ;
for the farmer and land-owner,, receiving" a greater
sum for the produce of their ground, will have a
greater sum to give for other articles. The money
demand for commodities being thus increased, the
capitalist will be indemnified, by increased money
prices, for the increased rate of wages which the
rise in corn obliged him to advance.
Supposing, as before, that the price of the far-
mer's* corn forms a third part of his whole expen-
diture, then, as we have seen, a rise in corn of nine
per cent, would raise wages three per cent. ; and,
supposing the wages of labour to constitute one-
third part of the price of commodities, then, the
rise of nine per cent, on corn, producing a rise of
three per cent, on wages, will occasion, in the first
instance, a rise of one per cent, in goods. But if
the wages of labour formed two-thirds, instead of
one-third , in the natural price of commodities, then,
as labour rose three per cent, goods (their market
price always approximating to their natural) would
rise two per cent. As, when corn experiences a rise,
the rise thereby given to wages, depends upon the
proportion, which the price of the labourer's corn
83
bears to the price of his whole subsistence ; so, when
wages rise, the rise thereby effected in goods, will
deeend, in the first instance, on the proportion
which the wages of labour, in each particular class
of commodities, bears to the other two component
parts of price.
When corn forms a third of the labourer's sub-
sistence, and the wages of labour form a third part
of the price of commodities, a rise in corn, of nine
per cent, would, in the first instance, raise goods
one per cent. If, therefore, the effects of the price
of corn upon that of goods rested here, such rise
would be most beneficial to the landed interest.
But its effects would by no means rest here, be-
cause, the rise of one per cent, in all articles, would
compel the labourer to give one per cent, more foi
the clothing, fuel, and other things, which, no less
than corn, are necessary to his support; and it
would become requisite that he should obtain a
rise of one per cent, on that part of his money
wages, which purchases these parts of his natural
wages.
Hence, every rise in the money price of corn,
raises the price of labour ; and, through labour,
g 2
84
the price of the other necessaries of life. The ad*
vance upon these, again, raises wages, and the rise
in wages, again advances them ; and so on, un-
til the increased money price of goods, equals the
increased money demand for them, which the rise
in corn threw into the hands of the landed interest.
Here the ascending scale of prices terminates.
Beyond the money demand for goods, it is impossi-
ble that money prices should increase. The neces-
saries of life no longer rising, the labourer will no
longer require increasing wages to enable him to
purchase subsistence ; and the employer of labour,
not being under the necessity of advancing in-
creased sums to procure it, will no longer seek, for
so doing, an indemnity by charging higher prices
upon his goods. Thus labour, capital, and goods,
will adjust themselves to the proper level.
It is not only the articles which labour annually
produces, that experience a rise of price, in conse-
quence of the increased money value of corn, aod
of labour. All the wrought goods which may be
on hand; nay, houses, timber, shipping; all the
permanent articles of wealth, at however remote a
period, or cheap a rate, they may have been pro-
85
duced, will be included in the general rise of no-
minal price. For example, if, after a rise in corn
has produced a corresponding rise in all the neigh-
bouring markets, I receive only the same sum of
money from the tenant who occupies my house,
then, though my nominal rent remains the same,
my real rent will be diminished. On letting this
house again, therefore, I shall naturally endeavour
to obtain such an increase in rent, as may enable
me to purchase the samequantity of commodities
as before. Now, as all persons, except, perhaps,
annuitants, are possessed of the same quantity of
commodities as formerly, the commodity demand,
and, consequently, the commodity price, of houses,
will be the same as formerly. I shall find no dif-
ficulty, therefore, in obtaining the same quantity
of commodities for my house, or (what is the same
thing) if these have risen in price, a rise in nominal
rent.
The wealth and revenue of individuals, as well
as that of the community, does not consist in the
pieces of coin, which may pass through their
hands ; but in the quantity of commodities that
they enjoy. While I continue to possess the same
86
quantify, and quality, of food, clothing, furniture,
equipage, and the other good things of life, my
real wealth remains unchanged, though I, at one
period, should purchase these articles of consump-
tion with five hundred pieces of gold, and, at ano-
ther period, with a thousand. It is the articles of
convenience and necessity, not the pieces in which
their value is computed, that constitute wealth.
It is the abundance or deficiency of commodities,
not the medium that circulates them, which deter-
mines effectual demand. If, therefore, the quan-
tity of other commodities, or what may be called
the commodity demand for houses, remain un-
changed, I shall receive, under my new lease, such
an increase of nominal rent, as will leave my real,
or commodity rent, just as it was before the price
of corn, and of labour, and of other things which
labour immediately produces, rose.
Again, a rise in the price of corn, raises the price,
not only of ail domestic, but also of all imported
foreign articles. All commerce between nations
resolves itself into the trade of barter. The pur-
chases which we make in the foreign market, are
made by commodities ; and, when these become
IP
dear, the articles that they exchange for, and to
which they are equivalent, must become dear also.
For example, if, for a quantity of cloth, which,
in the home market, cost him .100, a merchant
purchases, in the foreign market, a quantity of
wine, that, after all the expenses of bringing it
home are discharged, will bring him .120, he
realizes a net profit of twenty per cent. But
should a general rise of price in the home market,
compel him to give .120 for the cloth he ex-
ports, he must endeavour, in order to secure his
former rate of profit, to charge .144 for the wine
he brings back. And this change will be readily
paid ; for, in consequence of the increased com-
puted amount of their wealth, the consumers of
wine, will now be as able to pay the greater, as
they were before to pay the less price.
Thus we see that the increased current price of
any article, in the home market, will be commu-
nicated to all imported articles, against which it
had been employed as an equivalent in the foreign
market. While the same quantities of corn, and
of wine, continue to be produced, and the demand
for these articles remains unchanged, their relative
83
value, with respect to all other commodities, and,
consequently, to each other, must also remain un-
changed ; or, in other words, the same quantity of
the one, will continue to be equivalent to the same
quantity of the other. Now, while their equiva-
lency to each other continues unchanged, if any
given quantity of cloth should, in the home mar-
ket, become worth a greater sum in the currency,
its corresponding quantity of wine, when brought
to the same market, will be worth the increased
sum also. The question, in fact, may be resolved
into the self-evident proposition, that, of two equal
things when the first is equal to a third, the second
is equal to it also.
One other important consideration belongs to
this branch of our subject. A rise in the price of
corn raises the price of labour, and the rise in la-
bour is communicated to all commodities, both
those which it immediately produces, and those to
which these are employed as the equivalents. But
bullion is a commodity. It is immediately pro-
duced from the mines by domestic labour ; or, if
not, purchased by equivalents, which are. Does
it then rise and fall in price with the labour that
89
procures it, when it is a native commodity, and
with the produce of labour which purchases it,
when it is a foreign one ? These questions would
lead us far. They involve considerations on the
Value of bullion and of currency, upon which,
though they are highly important in themselves,
and intimately connected with the external trade in
corn, I must, in this place, refrain from enlarging.
I shall therefore conclude the chapter with notic-
ing some limitations, to which the principle, that
changes in the price of corn communicate them-
selves to labour and to commodities, is liable.
In the first place, it is evident, that all the fore-
going reasonings, respecting the influence of the
price of corn upon wages, turn upon the difficulty
of effecting a change in the natural price of labour.
Now this difficulty is not insuperable. Though a
sudden diminution in those things which custom
has rendered necessary, cannot take place, without
producing a similar diminution in the supply of
labour, and speedily restoring wages to their for-
mer level ; yet, a change of this kind, might be
gradually introduced, without occasioning so ca-
lamitous a destruction of the population. Though,
if the diet, the clothing, and the lodging, which
90
custom has rendered compatible with health, in
Iceland, were suddenly introduced into the ma-
nufacturing towns of England, disease would fol-
low, and thin the people, until the survivors
could obtain their former, and even more than their
former comforts ; yet, were corn to rise so very
gradually, as to lead the people of England, by a
progress almost insensible, to substitute potatoes
for bread, this reduction in the natural price, would
not be followed by any diminution in the supply
of labour. On the contrary, such a change in the
basis of subsistence would enable the country to
maintain a much greater population ; and the in-
creasing number of hands would diminish the value
of labour, until the market rate of wages settled
down to such a sum, as would purchase the cheaper
articles of diet, which custom had rendered suffi-
cient to the healthful existence of the labourer.
A gradual rise in the price of corn, therefore, lead-
ing imperceptibly to the substitution of a cheaper
article of food, forms an exception to the principle
unfolded above ; and, instead of raising the price
of labour, would have a tendency to lower it.
Secondly, even a sudden rise in the price of corn,
though, iustead of lowering the standard of sub-
91
sistence, it reduced the numbers of the people,
would not be instantaneous in raising the price of
labour. As provisions became dear, the poor
would, in the first instance, be driven to compen-
sate the badness of the times, by increased exer-
tion, and their competition for employment would
effect a reduction in their wages, until, their num-
bers failing for want of the comforts rendered ne-
cessary by habit, the counter-competition of em-
ployers to obtain hands, restored the market to a
level with the natural price of labour. Then, but
not before, the rise in corn would be communicated
to wages.
Thirdly, a very considerable rise might take place
in the price of corn, under circumstances which
would completely counteract its tendency, either
to lower the standard of subsistence, or to raise the
price of labour. For example, should the quantity
of corn consumed, each day, in the labourer's fa-
mily, receive an advance of sixpence, while, from
the improvements in manufactures, or the reduc-
tion of taxes, the clothing, fuel, and other articles
daily consumed in his family, received a fall of si-
liar amount, the increased expenditure, on the one
92
hand, would be exactly balanced by the diminished
expenditure upon the other ; and the labourer would
be enabled to pay the advance upon his corn, with-
out obtaining an advance upon his wages.
Where custom has rendered corn a principal in-
gredient in the labourer's food, a permanent rise
in the price of this article must, other things re-
maining the same, either lower the standard of
subsistence, or else raise the money rate of wages,
to a sum, sufficient to purchase, at the advanced
price, subsistence of the accustomed quality. Now,
if the labourer should have saved something out
of his earnings, and if he should possess sufficient
intelligence and fore-thought, for the prudential
check on marriage to operate, it will have become
difficult to lower the standard of his subsistence ;
or, in other words, to reduce the natural price of
his labour. Hence, as wealth and civilization de-
scend amongst the lower classes of the community,
the labourer becomes more certain of receiving an
increase of wages, proportional to any increase of
value in the articles he consumes ; and the money
price of corn is more regular and steady in its
effect upon the money price of labour.
93
Under these, aud one or two other limitations,
not of very frequent occurrence, nor very material
to our present subject, the value of corn, in what-
ever proportion it forms an ingredient in subsist-
ence, regulates the amount of wages. Now the
wages of labour form a component part of the natu-
ral price of all things ; and natural price is, as it
were, the centre towards which market price has a
constant tendency to approach. A rise in wages,
other things remaining as before, is, as we have
seen, communicated to all the articles of life. But
a rise in all the articles of life is the same thing as
a fall in the value of money. Here, then, every
question respecting the price of corn, ultimately
resolves itself into a question of currency. Into
the discussion of this very important branch of the
subject, however, I shall not, at present, enter ;
nor detain my readers by a repetition of disserta-
tions, which I have already laid before the public*
* See an Essay, by the Author, on Money and Paper Cur-
rency, dedicated to his friend the Rev. Dr. Crombie, and pub-
lished by Messrs. Johnson, in St. Paul's Church Yard.
*
.
^avt tfje ^etontr.
ON THE EXCEPTIONS AND LIMITATIONS TO WHICH
THE GENERAL PRINCIPLES OF THE EXTERNAL
CORN TRADE ARE LIABLE.
CHAP. I.
On the Question,; Are the Principles respecting
a free external Trade in Corn liable to any
Limitations in their Application to the parti"
eular Case of a Country, which, by Restrictions
on Import, and Bounties upon Export, in-
fringes on the Liberty of Commerce, in other
Articles ?
That the irregularity of the seasons, in supply-
ing food, diminishes as territory extends: that
equalizing the supply of subsistence throughout
all the districts of the world, and periods of the
year ; accumulating grain in store-houses and gra-
96
nanes, and earning forward the superfluity of
abundant harvests to compensate the wants of de-
ficient ones, not only obviate the alternate recur-
rence of superfluity and famine, but extend culti-
vation, and augment the numbers of mankind :
that, in a country where the natural price of corn
is so low, that relief from importation cannot be
obtained, until the markets arc ruinously elevated
above the ordinary level, a free export trade, oc-
casioning, in average years, a surplus produce is
the only means by which deficient years can be
provided for : that, in countries where the natural
price of corn is so high, that, in years of over-
flowing crops, superfluity cannot be removed, until
the markets have sustained an extraordinary fall,
unrestricted importation, throwing out of cultiva-
tion such inferior lands, as require for the produc-
tion of a given produce, a greater expense of labour
and capital than is requisite in other growing
countries, is the most effectual means of rendering
prices steady : and, that perfect freedom of inter-
course, uninterrupted, either directly or indirectly,
by legislative interference, and allowing industry
to take whatever direction individuals may find
97
most conducive to their interest, accelerates the
growth of wealth and the accumulation of capital,
leads agricultural states, by the shortest and surest
road, to commercial prosperity, and holds out, in
countries which have acquired manufacturing ad-
vantages, the only permanent and legitimate en-
couragement that agriculture can receive. These
are principles, the abstract truth of which, is as
capable of as rigid a demonstration, as any politi-
cal or physical proposition can admit.
But, every general principle, however evident
its abstract truth may be, is, in its application to
particular circumstances, liable to exceptions and
limitations. The exceptions and limitations, there-
fore, to which the principles of the external corn
trade, unfolded in the former part of this work,
may be liable, are what we now have to consider.
In the present Chapter it is intended to enquire,
whether the principle of unrestricted freedom in
the external corn trade, be applicable to the par-
ticular circumstances of a country, which, by pro-
hibitions, protecting duties, and bounties, controls
other branches of commerce.
It is universally admitted by those, who have
H
98
any acquaintance with the science of political
economy, that legislative interference, forcing in-
dustry from the channels into which the labourer
and capitalist, if left to themselves, would natu-
rally turn it, is injurious to the wealth of a coun-
try. Protecting duties, it is acknowledged, giving
manufactures a monopoly in the home market, and
bounties to extend their foreign sale, are as so many
fetters on the hand of industry, lowering the pro-
ductive powers of labour, and retarding the march
of prosperity.
To contend, therefore, that the existence of this
pernicious system, with respect to the trade in
manufactured articles, forms an exception to the
application of more enlightened principles to the
trade iu corn, appears, upon the face of it, singu-
larly preposterous. Thoso who admit the funda-
mental principles of political economy, respecting
the freedom of trade, must also admit, that the
protecting duties and bounties, by which, in the
case of manufacturers, this freedom is infringed,
are hurtful to the wealth of the country. When,
therefore, the advocates of restricted importation,
on the ground that regulations, avowedly injurious
99
to wealth, exist in some departments of industry,
urge, that such regulations should be extended to
another, they involve themselves in the absurdity
of seeking to remove a disease, by increasing the
cause which produces it.
The position, however, that the principles of
political economy, respecting the external trade in
corn, are inapplicable to the particular case of a
country, granting monopolies and bounties to ma-
nufacturing industry, is too important to be dis-
missed with an examination so brief and popular.
We must examine it more closely, and trace it
through all its bearings.
It may be urged, in the first place, that mono-
polies and protecting duties, granted to manufac-
turers, compel the agricultural classes to purchase
wrought goods at a dearer rate than if the pro-
ducts of foreign industry were admitted to a free
competition in the home market ; and that, there-
fore, on the principle of fair and equal dealing, the
manufacturing class should, by restriction on the
importation of corn, be compelled to pay the for-
mer something more for their bread.
This principle of equal dealing, and even hand-
h 2
100
ed justice, which has been urged against admitting/
in our actual circumstances, a free importation of
foreign corn, is, perhaps, the strongest and most
unanswerable, that could have been brought for-
ward. Let us see how it applies ; let us enquire,
whether it may not prove a dangerous deserter
from the cause, into the service of which some in-
judicial leaders have preposterously pressed it.
Protecting duties and bounties, do, indeed, com-
pel the agricultural interest to purchase some ar-
ticles at a dearer rate than if the trade in them
were left free: but then, this injury does not fall
on the agricultural interest alone. On the con-
trary, the monied interest, the commercial interest,
stock holders, annuitants, all the military and civil
servants of the state, all professional men, all shop-
keepers, all bricklayers, smiths, and house-car-
penters, in fact, the whole community, with the
exception of those persons who work up the arti-
cles which might be obtained cheaper from abroad,
arc equally partakers in the injury inflicted by
the exclusion of foreign manufactures from our
markets.
How, then, can the principle of equal dealing.
101
and even political justice, give the agriculturist a
right to claim exclusive exemption, from any evil,
which, with a trifling exception, falls alike on all ?
Naj, how can he, with any semblance or colour of
equity, demand, not merely an exclusive exemp-
tion, but one of such a nature, as would inflict a
double evil on all other classes ; and, upon the
ground, that these classes purchased some wrought
goods at a dearer rate than was necessary, would
cause them to purchase their bread dearer also ?
The case stands exactly thus : A and B sus-
tain an injury from some partial regulations made
for the benefit of C; and, in consequence, A
claims, not only an exclusive indemnity, but one
which must inflict on B a double injury. This
exclusive indemnity, too, and this double injury,
are urged upon the principle of equal dealing and
common justice ! !
Thus we see, that, to indemnify the agricultu-
rist for the monopoly granted to the manufacturers,
by granting a second monopoly, in the important
article of corn, against all other classes of the com-
munity, instead of being conformable to the prin-
ciple of fair and impartial dealing, would be a fla-
102
grant violation of it. An enlightened statesman,
on ascertaining that the agricultural interest, in
common with other orders of the state, sustained
an injury from the protection given to the manu-
facturers of those particular articles which might
be brought cheaper from abroad, would, with all
the caution which is necessary in conducting poli-
tical change, and with a due regard to the interest
and indemnification of those who might have em-
barked their capital, or served their time, in the
protected trades, seek to remove the injurious re-
straints upon industry ; but surely it could never
outer his contemplation, to correct one evil, by the
infliction of a second, or, while proclaiming his
belief in the benefits of unrestricted intercourse,
to establish, on the principle of equal dealing, ad-
ditional monopolies for indemnifying a single class,
at the general expense.
Those persons who are employed in the fabrica-
tion of such articles as we might obtain cheaper
from abroad, do not form a very large proportion,
cveu of our manufacturing population. But these
are the only persons, on whom the exclusion of
foreign manufacturers can,, possibly, confer a be-
103
nefii ; and, therefore, even admitting the strange
doctrine, that the agriculturalist is entitled to an
exclusive indemnity, for purchasing some articles
at too dear a rate, these are the only persons by
whom this exclusive indemnity should be paid.
To make the great mass of the community give
more for their bread, because a system of commer-
cial regulations, avowedly erroneous, compels them
to give too much for some other things, would not
only be a glaring violation of natural justice, but
of common sense.
It has been urged, that, if the external trade in
corn were exempted from all legislative interference,
while other branches of industry continued to
possess monopolies in the home market, and boun-
ties extending their foreign sales, such exemptions
would, indirectly, operate as the most severe and
prejudicial restraint, and cause those engaged in
the growing of corn, to withdraw their capital from
that concern, for the purpose of employing it in
those favoured channels, to which such artificial
advantages were continued;
This objection to admitting, under the present
circumstances of this country, the principle of an
104
unrestricted trade in corn, however plausible it
may, at the first glance, appear, can proceed, only
from an entire forgetfulness of the principles of
commercial intercourse. If France were to supply
us with silks, and other articles, in preparing which
she possesses advantages, she would not give us
the fruit of her labour for nothing ; she would re-
quire, in payment, hardware, or stuffs, or some
other goods, in preparing vrhich the advantage be-
longs to us. When, therefore, we prohibit the
importation of French silks, we necessarily pro-
hibit, at the same time, the exportation of the Bri-
tish goods, which would pay for them ; and when
we create a forced demand for home-made silks,
we, by the same operation, must destroy, to an un-
equal amount, the foreign demand for our other
manufactures.
Thus, then, it appears, that those legislative
measures of monopoly and bounty, which are sup-
posed to throw an undue proportion of capital into
the channels of manufactures and commerce, have,
on the contrary, the effect of depriving the manu-
facturing capitalist of that profitable occupation
of his stock, which, under a free trade, he would
K)5
find, in carrying on the increased communication
between nations. By these effects of monopolies
and bounties, manufacturing, and commercial pro-
fits, are reduced. The manufacturing and com-
mercial interests are placed in a less flourishing
condition, by the operation of such encourage-
ment; and are injured, by those regulations, which
are generally supposed to enrich them, at the ex-
pense of the rest of the community, and to throw
into their hands, too large a proportion of the ca-
pital of the country.
But we have not yet fully unfolded the injury
which the industrious classes sustain, from the du-
ties laid on for their protection ; nor the extent to
which, monopolies and bounties, instead of draw-
ing capital to manufactures and commerce, repel
it from these occupations. When a nation confines
her efforts to the fabrication of those things, in
which her natural productions, her situation, and
moral habits, give her an advantage, she not only
renders the labour and capital thus employed,
more productive, than if she fabricated, at home,
articles which foreigners could furnish to her at a
cheaper rate, but increases, to an indefinite extent,
106
(he quantity of labour and capital, which she may
beneficially invest in manufactures and commerce.
For, thus co-operating with nature, she cannot
be undersold by foreign nations ; while, from the
reciprocity of commerce, every increase in the pro-
ductive powers of her labour, which enables her to
consume a greater quantity of foreign articles,
creates new demands for her commodities in the
foreign market, and thus opens a perpetually ex-
tending field for her exertions. Thus we see, that,
if the current of events was not forced out of its
natural channel, industry would receive a still in-
creasing stimulus, and there would be an almost
interminable accumulation of manufacturing and
commercial capital. Let us contemplate, for a
moment, the diametrically opposite effects of boun-
ties and protecting duties.
The fabricating, at home, of those articles which
foreigners can furnish cheaper, not only turns, as
we have seen, labour and capital from their most
productive occupations, but diminishes the quan-
tity of both, which can be beneficially vested in the
operations of manufacture and commerce. Those
manufactures in which foreigners excel us, and
m
which, consequently, require for their establish-
ment, protecting duties and monopolies, cannot be
carried on, to a greater extent than is necessary, to
supply the home market. The foreigners, to whom,
in preparing such articles, natural advantages be-
long, will effectually beat us out of foreign mar-
kets ; and, when we have satisfied the demand of
the domestic consumer, all farther increase of ma-
nufacturing stock will be impossible.
To whatever extent we refuse to buy from fo-
reigners, we, to the same extent, deprive them of
the power of buying from us ; and, in whatever
degree we turn industry from its natural course, in
the same degree we dry up the sources of commer-
cial prosperity, and, instead of forcing too great a
proportion of the wealth of the country from the
soil, deprive the capitalist of the power of bene-
ficially vesting his stock in manufactures and
trade.
Thus, then, it clearly appears, that protecting
duties and bounties, turning our industry from em-
ployments in which we are naturally qualified to
excel, and in which we are secure against foreign
competition, not only injures the general wealth
108
and prosperity of the country, but, upon the manu-
facturer and merchant, the very persons whom they
are supposed to benefit at the expense of the com-
munity, accumulate double mischief, at once lower-
ing the productive powers of their capital, and
limiting the quantity of labour and of stock, which
they can beneficially employ.
The position, therefore, that bounties and pro-
tecting duties benefit the manufacturing and com-
mercial classes, and accumulate the capital of the
country in their hands, being entirely erroneous,
the doctrine it has been brought forward to support
falls instantly to the ground. These very boun-
ties and protecting duties, which, while intended
only to secure the home, shut us out from the
benefits of the foreign market, and limit the capital
that can be beneficially employed in manufactures
and commerce, must, in the most effectual manner,
withhold the grower of corn from transferring his
stock into those channels of industry, which receive
such pernicious favour. Commerce and manufac-
tures receive, from legislative encouragement, no
advantage, requiring, in order to restore a due equi-
librium between the different branches of industry,
109
that artificial encouragement should be extended
to agriculture. On the contrary, the trading classes
sustain the deepest injury from every infringement
on commercial liberty ; and bounties, on the ex-
portation of domestic articles, and protecting du-
ties laid on the introduction of foreign ones, in-
stead of being a reason for granting the corn grower
a monopoly of the home market, constitute an ar-
gument for leaving the trade in corn free, and re-
quire that, as some compensation for the peculiar
injury they sustain, in having a forced and unna-
tural direction given to their industry, manufac-
turers and traders should be permitted to purchase
their food wherever it can be obtained at the cheap-
est rate.
It is hoped, that, from these illustrations, it wilt
appear sufficiently evident, that the bounties and
protecting duties, by which our manufacturers
have been attempted to be favoured, cannot have
any tendency to withdraw capital from the soil ;
and that, therefore, establishing, during the con-
tinuance of such regulations respecting other
branches of industry, perfect freedom in the foreign
trade in corn, could not possibly operate upon the
110
domestic grower, as an indirect, and pernicious
restraint.
Bounties and protecting* duties granted to our
silk manufacturer, do, indeed, force capital into
this channel of industry ; but then, it is at the ex-
pense of some other manufacture, more adapted to
the country, with which, if intercourse were free,
foreign silks would have been purchased, and to
which, if our restrictions upon import had not in-
terdicted export, a much greater portion of the
capital of the community would have been drawn.
Such artificial regulations may increase the quan-
tity of capital in some particular employment, but
then, it is by diminishing the general mass of ca-
pital that might be profitably turned to manufac-
ture and commerce. For it is certain that, if we
refuse to receive the articles, in preparing which
foreigners excel us, we deprive them of the power
of purchasing the articles, which we can furnish at
a cheaper rate than they, and destroy those interna-
tional, and mutually beneficial divisions of labour,
that are at once the cause, and the effect of foreign
trade : while, if we were freely to receive the pro-
ductions of foreign industry, a much greater quan-
Ill
tity of domestic articles would be sent abroad to
pay for them, and, in order to carry on tbe increased
intercourse with other nations, a much larger por-
tion of the stock of the community would be turned
into the channels of manufacture and commerce.
Hence in a manufacturing country, bounties and
protecting duties for forcing exotic branches of in-
dustry, have a tendency, not to enlarge, but to
clioak up the channels of trade ; not to draw capi-
tal from the growing of corn, but rather, by limit-
ing the quantity of stock, that can be employed
in international intercourse, to pour a greater pro-
portion of it upon the soil.
It may be urged, perhaps, that if protecting du-
ties, laid on to favour domestic manufactures, did
not force industry from its natural direction, the
wrought goods, which, under a general freedom of
intercourse, we received from abroad, might be paid
for, not by other wrought goods, but by the pro-
duce of our soil ; and that, therefore, the protect-
ing duties which exclude foreign manufactures,
may destroy the foreign demand for our corn, and
thus operate as a restriction on our agriculture.
This objection would be applicable to Poland.
112
In that country, corn, from its low natural price,
forms the staple article of foreign trade, and, con-
sequently, prohibitory duties upon the import of
wrought goods, would there operate as interdictions
upon the exportation of agricultural produce.
But England is in a situation directly the reverse
of this. Here we have acquired extraordinary ad-
vantages in manufacturing industry, while the na-
tural price of our corn is higher than in any other
country of the world. Though we were freely to
receive the wrought goods of our neighbours, we
could not possibly pay for them in corn. It is
quite in vain to urge that, if foreign grain were
excluded, and that of home growth allowed to be
freely exported, capital would flow so copiously
upon the soil, that the supply of corn would be in-
creased, and, consequently, its price reduced, until
it could be sent abroad with a profit. Such arti-
ficial encouragements extended to agriculture,
could augment the supply of corn, only by turning
labour and capital to such inferior lands as have
been hitherto inadequate to repay the expense of
tillage ; that is, could increase the quantity of corn,
only by increasing its natural price; that is, as na-
113
tural price must ever, on the average, govern the
prices of the market, without rendering exportation
absolutely impossible.
To imagine, that, in England, a free admission
of foreign goods could create a demand for agri-
cultural produce ; and that prohibitory duties on
the importation of manufactures, can act as an in-
direct restriction on the exportation of corn, im-
plies absurdity, and contradiction ; and betrays la-
mentable ignorance of the fundamental principles
of political economy, namely, that market cannot
continue below natural price, and that production
must cease when its expenses are no longer repaid.
England cannot raise an independent supply of
corn for her increasing population, without such
restrictions on the importation of foreign grain, as
shall be sufficient to keep under cultivation, lands
considerably inferior in quality to those cultivated
in the neighbouring growing countries of Europe.
Now, to raise any given quantity of corn on our in-
ferior lands, would require more capital and labour,
than to raise it from the land under tillage upon
the continent ; and, as our better soils would ac-
quire an increased value in proportion to their su-
i
11*
periority over the inferior ones which could now be
profitably tilled, any given quantity of produce that
might be raised from them, would be charged with
a higher rent, than the same quantity raised in
France, or Germany, or Poland.
Thus, restrictions upon import, causing us to
produce an independent supply of subsistence, for
our increasing population, would raise all the com-
ponent parts of the price of corn, above their level
in the surrounding countries. Under such circum-
stances we could not, even in an abundant year, re-
move superfluity, until our markets had fallen very
considerably below the usual rate ; and to create a
permanent surplus to give in exchange for the
wrought goods of our neighbours, would not be
within the limits of possibility.
Those who wish that England should once more
become an exporting country, would do well to
consider the connection between market and natu-
ral price ; and to trace the backward march, which
roust be made before their object could be arrived
at. It is self-evident that, before we become an
exporting country, our markets must be lower than
the markets of other countries. Now, in order to
115
reduce our market prices, it is necessary that the
natural price of our corn should be reduced. But
this reduction in the natural price of our corn can-
not be effected, while, for lands of the same qua-
lity, we pay a higher rent than is paid in other
countries ; and while we till inferior soils, which,
to raise the same produce, require more capital and
labour. Before, therefore, we can reduce our na-
tural and market prices, and become an exporting
country again, landlords must abate their rents to
a level with the rents paid in France, or Germany,
or Poland ; and population must be so thinned,
that a cultivation, contracted within the limits of
those fertile districts which require little expense of
capital and labour, shall be sufficient, not only to
meet the home consumption, but to yield a surplus
produce for the foreign market. When these events
shall have taken place, and England, with respect
to the value of land, and to the existence of a manu-
facturing population, shall have been assimilated to
Poland, she may employ her plains in raising sub-
sistence for her neighbours ; and the objection, that
prohibitory duties upon the importation of wrought
goods, check the exportation of the produce which
i 2
116
might have paid for them, and thus operate as in-
direct restrictions forcing capital from the soil, may
become applicable to her situation.
And now, it is hoped, that we have sufficiently
examined the question, whether the existence of
legislative restrictions, imposed with a view of en-
couraging other branches of industry, forms an ex-
ception to the principles formerly unfolded, respect-
ing the benefits of a free external trade in corn.
We have seen, that bounties, and protecting duties,
extended to those manufactures, in which other
countries can work at a cheaper rate than we, do not
inflict an exclusive injury on the agricultural classes,
but fall with equal weight upon all the individuals
of the community, those only excepted, who work
at the protected and forced employments, in which
foreigners possess advantages ; and it has appeared,
that indemnifying the landed interests, by giving
them another monopoly against consumers, so far
from being called for by fair dealing, would be a
flagitious violation of that principle, inflicting on
all other classes a two-fold injury.
It has also been shewn, that, in a country where
the high natural price of corn already interdicts its
117
exportation, the prohibition of foreign manufac-
tures, cannot destroy a foreign demand for agri-
cultural produce, or operate as an indirect restraint,
withdrawing capital from the soil ; but that, on the
contrary, in such a country, these prohibitions on
foreign wrought goods, destroy the demand for
home wrought goods which would have paid for
them, and, by choaking up the channels of com-
merce, and limiting the quantity of stock, which can
be profitably employed in trade and manufactures,
have rather a tendency to confine the capital of the
country to the soil.
Thus, then, it is evident, that, in a country, where
the natural price of corn is higher than in others,
bounties, and protecting duties, granted to manu-
facturing industry, form no exception to the prin-
ciples of a free external trade in corn. Such boun-
ties, and protecting duties, indeed, are injurious to
the general wealth and prosperity of the country ;
and, with all due provision for the indemnification
of the individuals, who may have embarked in the
forced and exotic branches of industry, ought gra-
dually to be abolished ; but they cannot (except in
a country where the low natural price of corn ren-
118
ders it a staple article of commerce, the export of
which must diminish, as the importation of foreign
articles is restrained) inQict any peculiar discou-
ragement upon agriculture, or require, in order to
restore the profits of stock, in its different employ-
ments, to a just equilibrium, that the grower of
corn should obtain a monopoly of the home mar-
ket.-
Every view, therefore, which can be taken of the
question, confirms the conclusion, that, to the parti-
cular case of a country, which infringes the freedom
of commerce with respect to wrought goods, the
principle of uncontrolled external trade in corn,
applies with the fullest force. The existence of this
infringement will diminish the general wealth of
the community ; but, whether such infringement
exist or not, the unimpeded operations of the corn
merchant, rectify the irregularity of the seasons in
supplying food, and render dearth an improbable,
famine an impossible, occurrence.
119
CHAP. II.
On the Question, Is the general Principle of a
free external Trade in Corn liable to Limitation
in its Application to the particular Case of a
Country, which is more heavily taxed than
other growing Countries ?
W e are now to enquire, whether the particular
case of a country, pressed more heavily than her
neighbours by internal taxation, forms an excep-
tion, to which the general principles of the external
trade in corn do not apply. Taxation can affect
trade only by influencing prices. Now it influences
prices in two ways ; first, directly, by falling upon
the article consumed ; and, secondly, indirectly,
by falling, not on the article consumed, but upon
something else, which may be necessary to its pro-
duction. Indirect taxation, however, has two dis-
tinct operations ; it either, by being laid on arti-
cles necessary to the subsistence of labour, increases
120
wages, and occasions a general rise in the expenses
of production ; or else, by being laid, not upon the
labourer's subsistence, but upon things peculiar to
some branches of industry, it occasions the partial
rise in expenses of production.
The enquiry, therefore, how far the effects of a
heavy taxation upon prices may limit the principle
of a free external trade, naturally divides itself into
three heads, viz. a rise in prices occasioned by di-
rect imposts ; a general rise in prices occasioned
by indirect imposts ; and a partial rise in prices
occasioned by indirect imposts.
These we shall consider in their order.
I. Supposing an unrestricted commerce to exist
between England and France, and the two coun-
tries to possess equal advantages in the silk manu-
facture, then a tax of ten shillings a yard, laid upon
British, would operate as a bounty, to that amount,
upon the importation of foreign silks. Here, then,
we sec, that a direct tax upon a domestic article,
must turn foreign trade from its accustomed chan-
nels. While such an internal tax existed, a free im-
portation of the foreign article would act as a ruin-
121
ous discouragement to the domestic manufacturer,
and would compel him to desist from the working of
silk j while, in France, it would occasion a forced
investment of capital in the manufacture of that
article., in order to supply the British market.
Now, the balance being disturbed by a weight
thrown into one scale, it is necessary to restore the
equilibrium by placing a similar weight in the
other ; the direct internal tax having destroyed the
natural level of industry, a countervailing duty is
requisite to restore it. Such du ty^ too, would be
conformable to those very principles, on which,
when no direct internal tax is laid upon the home-
made article, the benefits of unrestricted importa-
tion are demonstrable. In the home market, it
would place the home and the foreign manufac-
turer on their former relative footing ; and, if ac-
companied by a drawback, to a similar amount,
upon exportation, would place them upon their
former relative footing, with respect to the foreign
market also.
When a direct tax is laid upon a domestic arti-
cle, a countervailing duty, laid upon the similar
foreign article, accompanied by a drawback upon
123
the exportation of the one, and re-exportation of
the other, though it increased the price to the con-
sumer, jet, instead of checking, would restore that
equal intercourse between nations, which incites
the industry, and augments the wealth of all.
But this is too obvious to require to be longer
dwelt upon. When direct taxes are laid upon
articles of home production, no one controverts
the principle, that countervailing duties should be
laid upon similar foreign articles. And, though
the principle were controverted, yet, as direct
taxes are not laid exclusively upon corn of home
growth, the discussion of it would be foreign to the
subject of the present work. We will pass to the
consideration of the next branch of the question
proposed for discussion in this chapter.
II. The reasoning formerly employed to prove
the influence which the price of corn has upon the
wages of labour, applies, with equal force, to every
other article, which climate, or habit, may have
rendered necessary to the subsistence of the la-
bourer. While shoes form an essential ingredient
in the natural price of labour, the labourer must
123
receive a sum which will enable him to purchase
them ; and a tax upon leather will be followed by
arise in wages.
It is no objection to this to urge, that the high
price of shoes may stimulate the labourer, by the
spur of necessity, to increased exertion, and that
his competition for employment, will render wages
lower than before. There can, indeed, be no
doubt that the market price of labour, as well as
of any thing else, may occasionally sink below the
natural level. But then, it is demonstrable, that
this state of things cannot continue long. From
the climate and the habits of life prevalent in
England, labour cannot be performed without
shoes ; and though, at first, the competition of
workmen might reduce the value of the commodity
they brought to market, yet, the failing number of
hands, and consequent competition of employers,
would speedily compel the latter to advance, in
the form of increased wages, the amount of the
tax falling upon the leather consumed by the
labourer.
Now it is evident, that, other things remaining
the same, increased wages increase the expenses of
124
production, and raise the price of every commo-
dity, which labour is an instrument in furnishing.
Where, therefore, shoes, and soap, and salt, and
whatever else habit may have introduced as con-
stituent parts of the natural price of labour, are
objects of taxation, it is, unless under some ex-
traordinary advantages of cheapness in the raw
material, or of skill in the application, and ma-
chinery for the abridgement, of labour, impossible
that commodities should be brought to market so
cheap as in countries, where the necessaries of life
are less heavily burthened.
As taxes, laid upon the necessaries of life, are
thus, by an indirect operation, just as efficacious
in raising the price of other articles, as taxes laid
directly upon them, it seems, at first sight, the
obvious conclusion from analogy, that the former,
equally with the latter, act as a bounty upon the
introduction of foreign goods, turn external trade
from its natural channels, and require, in order to
restore a just equality in the different modes of em-
ploying capital, that countervailing duties should
be imposed on imported articles. On a closer
examination, however, we shall find, that the
125
analogy between the high price occasioned by
direct, and the high price occasioned by indirect,
taxation, is not sufficiently strict, to authorize our
applying, to the one, conclusions which may be
correct as to the other. A short analysis will
demonstrate this.
If, other things remaining the tame, taxes laid
upon the various necessaries of life, so raise the
wages of labour, and the expenses of production,
in England, that the farmer cannot bring corn to
market, without charging twenty per cent, more
than the farmer in France can afford to sell it for,
the consequences to be apprehended are, that,
under a free importation, French produce would
inundate our markets, and compel the home grower
to turn his capital into some other channel. Let
us then suppose, that this consequence takes place,
and that the foreign grower, enabled, by the ab-
sence of taxation, to raise his corn twenty per
cent, cheaper than the domestic, undersells, and
fairly beats him out of the market.
Now, the necessary result of this is, that some-
thing must be sent abroad, to pay for the foreign
produce we have received. The foreign grower
126
will not give it to us for nothing. We must return
him a full equivalent. Commerce is reciprocal.
In whatever degree we import corn, in the same
degree must we export some other article. But
when internal taxation has increased the wages of
labour, and the expenses of production, twenty
per cent, beyond the rate of other countries, what
other article can we export ? A rise in the price
of labour communicates itself to every species of
agricultural produce, as well as to corn ; the
exportation, consequently, of any species of agri-
cultural produce, is impracticable.
But again, as the wages of labour enter more
largely into the price of wrought goods, than into
the price of raw produce, internal taxation upon
the necessaries of life, will increase the price of
manufactures, as much, if not more, than it in-
creases the price of corn ; and will check their
exportation, as much, if not more, than it checks
the exportation of the unwrought productions of
the soil. Such an internal taxation as raises the
rate of wages, raises, universally, the value of
every article, in the price of which, wages form a
component part. But, if the price of all articles
127
be equally raised, the exportation of all would be
equally checked. The advance in our markets,
which enabled the French to undersell us in the
article of corn, would also enable them to under-
sell us in every thing else. But, if they undersold
us in every thing, they would buy nothing from
us ; and it is certain, that, if they bought nothing
from us, they could sell nothing to us.
The supposition, therefore, that, if indirect in-
ternal taxation should generally raise our markets
twenty per cent, above those of France, grain
would be poured in from that country, to the
injury of the home grower, is erroneous. A rate
of prices universally high, cannot encourage ex-
portation, because it checks importation ; and
commerce being reciprocal, the one cannot exist
without the other.
It is no objection to this reasoning to say, that,
when commodities become too dear to find pur-
chasers in the foreign market, the cheaper articles
which we might receive from abroad, would be
paid for by a transmission of money, instead of
goods. For, granting the fact, the necessary con-
sequence still would be, that foreign commodities
128
could not continue to come into our markets.
The instant we ceased to export home productions,
and paid for foreign articles in money, at that
instant, the supply of money would begin to di-
minish, and its value to increase. But a rise in
the value of money, is the same thing as a fall in
the price of commodities. With the necessaries
of life, the wages of labour, and the expenses of
production, would fall. Hence the foreign, would
no longer be able to undersell the home, grower.
Ou the contrary, as the self-same process which
diminished our supply of money, and reduced our
pi ices, would iucrease the supply of the metals,
and elevate prices, in the country whose produce
we had purchased, the home, would obtain an
advantage over the foreign, grower , and we
should now be enabled to furnish produce to those,
whom we were so lately obliged to pay in cash.
Neither would it be an objection to the prin-
ciple that commerce is an exchange of equivalents,
to urge, that if we could not send commodities
abroad, we might pay for the goods we imported
by bills of exchange. Our bills would speedily
overstock the foreign market, and become depre-
129
ciated. Supposing 1 , as before, that indirect in-
ternal taxation raised our prices twenty per cent,
above those of France, and that this so checked
our exportation, that all we received from that
country we paid for in bills of exchange, then, in
a little time, these bills would be so depreciated,
that the exchange would be twenty per cent,
against us. Now the moment things arrived at
this state, (and, under this supposition, they must
arrive at it very speedily) the foreign grower would
cease to have any advantage over the home grower.
Though the French farmer might be able to raise
his produce twenty per cent, cheaper than the
British farmer, yet, on coming into the British
market, he would lose twenty per cent, on the
exchange. If he attempted to indemnify himself
for this loss upon the exchange, by raising his
prices, then, in whatever degree he thus indem-
nified himself, in the same degree he would cease
to undersell the home grower. If he carried back
gold, the consequent fall of prices, described in
the former paragraph, would speedily drive him
from the British market ; and, if, to save the ex-
change, he attempted to take back commodities,
ISO
lhose being, by the supposition, twenty per cent,
dearer in England than in France, the loss he
would sustain upon them, independently of car-
riage, would exactly counterbalance what he gained
upon the exchange. In whatever way he endea-
voured to cover the transaction, his advantage, in
coming into the British market, could in no way
be increased, by that universal rise of prices, which
is produced by taxation falling on the necessaries
of life, and increasing the wages of labour, and
the expenses of production.
And now, it is hoped, it has been made suf-
ficiently evident, that, however analogous, or
identical, they, at a hasty glance, may seem to be,
there is, between the high prices occasioned by
direct, and the high prices occasioned by indirect,
taxation, a material distinction, sufficient to render
completely erroneous, with respect to the one,
conclusions incontrovertible with respect to the
other. A tax, laid directly upon any home com-
modity, does not raise the price of all other com-
modities to an equal extent ; and does not, by
discouraging the exportation of whatever articles
might purchase foreign goods, check importation
131
on the one hand, in the same degree, in which it
promotes it on the other, and thus, from its own
reaction, prevent the producer of the taxed com-
modity from being undersold in the home market.
This counter-operation, however, is effectually
performed by those taxes, which, laid on indirectly,
through the medium of the labour by which they
afe produced, raise the price of commodities be-
yond their price in other countries less heavily bur-
thened. A rise in wages, and, through wages, in
the expenses of production, acts universally ; and,
if it checks importation with respect to one- com-
modity, checks it, also, with respect to all.
Hence, when the foreign speculator enters the
markets which have been raised by indirect taxa-
tion, the advantage he gains upon the high price
of the article he brings, is exactly counterbalanc-
ed by the high price of the article he takes away ;
and his profits, upon the whole of his transaction,
can be neither more nor less than they would have
been, before the country to which he trades had
her markets raised by taxes laid upon the necessa-
ries of life.
If, in order to realize high profits upon his sales,
132
lie refuses to buy any thing in the taxed country,,
but carries back her specie, then, in that country,
the metals rise in value, or, in other words, prices
fall, and the foreign adventurer can no longer un-
dersell the domestic trader ; and if, with a view to
continue a lucrative trade, the foreigner receives
payment in bills of exchange, the loss sustained
upon the depreciation of these, will leave him ex-
actly as he was before.
In economical science, no principles are more
strictly demonstrable, than that commerce is an
exchange of equivalents, and that whatever checks
exportation, operates as a check upon importation.
But taxes which, by raising the wages of labour,
and the expenses of production, increase the price
of commodities, check exportation in the same de-
gree that they encourage importation ; and, there-
fore, in fact, they discourage importation just as
much as they encourage it. The effects they pro-
duce upon the one hand, they counteract upon the
other. They constitute, in themselves, countervail-
ing duties, fully adequate for the protection of the
home market. The particular case, therefore, of a
country in which they raise the price of agricultural
133
produce, above its price in the neighbouring coun-
tries, forms no exception to the principle of a free
external trade in corn. Their existence does not
require that the domestic grower should be pro-
tected by legislative enactments in the home
market.
III. Though the taxes which, by raising the
amount of wages, increase the expense of produc-
tion, and, consequently, effect a general and si-
multaneous advance in the price of all commodi-
ties, do not, in the home market, give the foreign
any advantage over the home grower, yet, with
respect to all imposts falling exclusively, or with
disproportioned weight, upon agriculture, the case
is widely different.
A tax laid upon horses employed in husbandry,
would raise the price of the corn produced by the
home grower; but, at first, could have little com-
parative tendency to raise the price of other articles
with which foreign corn might be purchased. If
imposts laid exclusively on agriculture, should
raise the price of corn nine per cent, then, if corn
formed a third part of the labourer's subsistence,
134
wages would be raised three per cent. ; and, if
wages formed a third part in the price of things,
other commodities would, in the first instance, be
raised one per cent. Hence, as a rise in corn can
be communicated to wages, only in the proportion
which the labourer's consumption of corn bears
to his whole consumption, and as this proportioned
rise in wages can, in the first state of its progress,
affect commodities only in the proportion which
wages may bear to the whole of the component
parts of price, it is evident that taxes, falling ex-
clusively, or with disproportioned weight, upon
the soil, must raise the price of agricultural pro-
duce, in a much greater degree, than they could
raise the price of other things.
The merchant, therefore, paying very little more
for the articles, with which he purchased foreign
corn, could, notwithstanding the existence of such
taxes, be able to supply the consumer at nearly the
former prices ; while the heavily burthened do-
mestic grower, unless he relinquished the custo-
mary rate of profit upon his stock, could not pos-
sibly do so. The equilibrium would be destroyed.
Under the former supposition, that the taxes up-
135
on agriculture raised the price of corn nine per
cent, while, for a considerable period, they could
scarcely raise that of the commodities employ-
ed to purchase foreign corn above one; then,
in fact, a bounty of eight per cent, would be
granted on the importation of corn ; and labour
and capital would thus be turned from those chan-
nels in which, but for such unequal imposts, they
would naturally have flowed. The expenses heap-
ed exclusively on tillage would force us to import,
rather than to grow corn ; and would encourage
foreign agriculture, at the expense of our own.
Indirect taxes, therefore, falling exclusively on the
soil, and consequently raising the price of corn, not
only above its price in other countries, but also
above the proportion of the simultaneous rise in-
duced in other domestic articles, must, free impor-
tation being admitted, divert international inter-
course from the channels it naturally would take,
force capital from agriculture, and impose on the
trade of the farmer, a most oppressive species of
restriction.
All charges, that press unequally upon agricul-
ture, being, in this manner, so many indirect in-
136
fringements on equal intercourse, and on the li-
berty of trade, it becomes a point of much nicety
and interest to ascertain, where they exist, and
what is the extent of their operation.
Tithes have been very generally considered as
forming a direct a..d very unequal impost upon
cultivation. When we consider their effects,
however, the first thing which strikes us is, that
they occasion a diminution in the revenue of the
land proprietor, rather than in the profits of the
farmer. Ground which is tithe-free, is more va-
luable than ground subject to such charge ; and
the capitalist, who seeks to vest his stock in cul-
tivation, will, to the full amount of this greater
value, be disposed to pay a higher rent. Now it is
evident that, in whatever proportion tithes fall upon
the revenue of the land proprietor, they must, in
the same proportion, cease to be a tax upon the
profits of the cultivator. The farmer who pays
JC.90 a year to his landlord, and .10 a year to
his rector, will sell his produce at the same rate,
and with exactly the same profit, as the farmer,
who, being exempt from tithes, pays for fields of
the same extent and fertility, the whole sum pf
137
,.100 in the form of rent. The proper way of
considering tithes, therefore, is, as a portion of
the rent of land, made payable by law, to persons
not being land proprietors. While the same sum
is paid, it is of small importance to the cultivator,
by what person it is received. Neither have the
proprietors of those lands, a part of the rent of
which is made payable to the church, any just
cause of complaint. At the period of the original
conquests, or grants, upon the right of which their
families either inherit or have purchased, land was
subject to this charge ; and, therefore, proprietors
can make good a title, only to nine-tenths of its
produce. The other tenth, a title, as ancient and
as valid as their own, gives to the maintenance of
the religion of the state.
Though, to all land proprietors, whose families,
by conquest, grant, or purchase, have, subsequently
to the establishment of tithes, become entitled to
estates, this mode of raising a revenue for the
church can afford no ground of complaint ; and,
though it is quite evident, that, so long as a known,
and determinate sum is paid for the use of land, it
IP, tp the cultivator, a matter nearly indifferent,
138
whether the. whole be given to the landlord, or a
part to the rector ; yet as, in consequence of the
present mode of collecting them, the value of
tithes is unfixed, and may vary from year to year,
according to the quantity of capital, which is
employed upon the soil, they undoubtedly fall,
with disproportioned, and exclusive weight, on til-
lage. If the farmer brings in new fields, or be-
stows a heightened culture on the old, the clergy
become entitled to an increased share of the fruits
of his labour, and of the profits of his stock ; and
thus, from the mode of their collection, tithes ope-
rate as an interdiction upon improvement, and as a
direct tax on the growing of corn.
But this evil is by no means essential to the tithe
system ; and, by some modification in the manner
of collecting, might be completely obviated. If,
for example, they were, after a fair valuation, let
at a stated sum, for a given period, say ten years,
then their injurious influence upon industry and
cultivation, would be entirely done away. Under
such a mode of collecting their amount, they would
operate exactly as a rent ; they would be merely a
portion of the revenue of land, set apart, prior to
139
the landlord's title, for the maintenance of reli-
gious teachers. During the period for which they
were leased, they would not, to whatever extent
tillage or improvement might be carried, entitle
the clergy to enter on the fruits of the farmer's
labour, or to share in the profits of the increased
stock, he might lay out on the soil.
The lease granted by the rector, as well as the
lease granted by the landlord, ought to be of suf-
ficient length, to secure to the cultivator the cus-
tomary profit on whatever capital he might sink in
improvement. This improvement, after it had re-
paid, with an adequate profit, the expense of re-
alizing it, would increase the amount, both of the
rent, and of the tithe ; and landlords, clergy, and
tenantry, would have a joint interest in the improve-
ment of tillage.
But, though tithes, if fixed at a given sum, for
a known period, could not, any more than a rent
fixed for the same period, by the land proprietor,
have an injurious effect upon agriculture, yet we
must not forget, that, as they are at present col-
lected, they operate as a discouragement to agri-
culture, and as a direct, and unequal tax upon the
140
production of corn. Under the present mode of
collection, therefore, they force capital from the
soil, into channels where it would not naturally
flow, and are indirect infringements of the great
principles of equal intercourse and free trade.
Poor rates have been frequently represented as
a species of tax, falling exclusively upon agricul-
ture. The representation is undoubtedly errone-
ous. So far as the amount of the poor rates can
be ascertained, the capitalist who embarks his stock
in cultivation, will, to their full amount, give less
rent for a farm subject to poor rates, than for an
equal farm exempt from the payment of them ;
and hence, even supposing them to fall exclusively
upon the landed interest, they would, like well-re-
gulated tithe, be a deduction from the income of
the land proprietor, not a tax upon the capital of
the cultivator.
But poor rates do not fall exclusively upon the
landed interests. In England a very great propor-
tion of the population is collected into manufac-
turing towns ; and the parishes of the towns sup-
port their poor, as well as the parishes of the coun-
try. The country parishes, may probably pay a
141
higher rate than those situated in towns, but then,
as all that part of the rate which is fixed or ascer-
tained, at the time of taking leases, enters into the
calculation of the capitalist when he undertook his
rent, and vested his stock in cultivation, and must
diminish the revenue of the landlord, rather than
operate as a tax upon the tenant, charges for the
maintenance of the poor can have little tendency
to divert industry from the channels, which it na-
turally would take. It is only when that part of
the rate, which being too recent, and too uncertain
to have entered into the calculation of the cultiva-
tor, when he took his farm, is more burthensomein
the country, than it is in the towns, that assessments
for the poor operate, as direct and exclusive taxes
upon agriculture.
What we have said respecting poor rates, applies
equally to all county assessments, laid on for the
repair of roads and bridges. When they exceed
the proportion of the similar assessments laid on in
towns, for paving and lighting ; and when this ex-
cess is too recent and uncertain, to have entered
into the calculation of the farmer, when he as-
sumed his rent, they heighten, beyond the due pre-
portion, the expenses attending' cultivation, and
operate as restrictions on the trade of the farmer.
The same principle holds good with respect to
all taxes laid on servants, horses, and carriages em-
ployed in agriculture. In short, every impost, of
whatever kind, and every arrangement, of whatever
nature, which tends to increase the price of agri-
cultural produce, without, at the same time, and
in the same degree, tending to increase the price of
all the other articles that might be employed to
bring produce from abroad, gives the foreign, an
advantage over the home, grower, disturbs the equi-
librium which all occupations, if left to themselves,
have a perpetual inclination to preserve, diverts
capital from the channels, in which, but for such
interference, it would find its most profitable occu-
pation, and forms an indirect infringement on the
liberty of trade, and an unfair restriction upon the
farmer.
In the foregoing paragraphs, we have considered
the imposts laid exclusively, or unequally, upon the
soil, as they diminish the revenue of the land pro-
prietor, and as they reduce the profits of the stock
employed in cultivation. Now, though these ope-
143
rations of taxes imposed on land, have frequently
been confounded, and treated under the common
character of depressing the landed interest, yet there
is an important distinction between them, which,
if we would attain to any accuracy in our reason-
ings, it is necessary to mark, and keep to in view.
Tithes, considered as a portion of rent set apart,
at a period prior to the conquest, grant, or pur-
cliase, under which the proprietor holds, are neither
unjust towards individuals, nor injurious to the
public; while, in trenching upon the profits of the
stock employed in cultivation, they are both. Poor
rates, and assessments of all kinds, when they press
more heavily in the country, than in towns, are,
as they affect the rent of land, unjust ; and, as they
affect capital vested in the soil, are both unjust to
individuals, and injurious to the country.
In drawing this distinction, however, between
the effects produced upon the landlord's rent, and
the cultivator's profit, I would not be considered,
as urging any thing in extenuation of regulations,
which may be found to press unequally upon the
former. To tax land proprietors, or any other class,
more heavily than the rest of the community, is,
evidently, injurious and unjust. Injustice, and in-
141
jury, however, have their degrees. While the ert-
lightened legislator will be careful to avoid any
measures which inflict partial evil, he will be so-
licitous to shun the arrangements, which in addi-
tion to their partial evil, hurt the general good.
Taxes falling unequally on the cultivator, are, upon
the score of justice, as exceptionable as those, which
fall unequally upon the landlord ; and, over and
above this common evil inflicted on individuals,
tend to lower the rate of profit upon the stock vest-
ed in the soil, to restrict cultivation, to turn indus-
try aside from that most profitable direction, which,
if left to itself, it would seek, and, in this manner,
to retard the prosperity of the country.
Now, except when the landlord is also the culti-
vator, and employs what would otherwise be rent,
not as a revenue to support consumption, but as a
capital to increase production, it is, with respect to
the direction of industry, and the growth of wealth,
of small importance, whether the whole of the rent
of land goes into the pocket of the landlord, or
whether a" part of it, and even a disproportionate
part, goes to the clergy, to those who work upon
roads and bridges, or who supply articles to poor
houses and hospitals.
145
When landholders can shew, that any tax draws
from them a disproportionate part of their revenue,
they are, undoubtedly, entitled to redress ; but then,
their case, however clearly made out, is not so
strong, as that, which is formed of equal individual
injury, conjoined with great public evil.
Whenever it can be made appear, that a tax or
assessment falls with unequal weight upon the rent
of the proprietor, or on the profit of the cultivator,
the landed interests, both on the principle of im-
partial dealing, and on the ground of public pros-
perity, are entitled to redress and protection. The
most obvious redress, the most simple and natural
protection, undoubtedly would be, a repeal, or
equalization of the impost which inflicted the un-
equal and injurious pressure. To such equaliza-
tion or repeal, there could not be, throughout the
country, an objection raised. But when a more
equivocal species of indemnification and protection
is demanded, when, in order to make good the
landlord's loss, and to restore the different branches
of industry to their proper level, it is proposed to
infringe upon the freedom of the external trade in
corn, which theory and experience have united to
h
146
pronounce, so powerful in saving us from the irre-
gularities of the seasons, in augmenting subsistence,
and in accelerating prosperity, it is natural to
pause, and to ask, before we risk such a measure,
whether a protecting duty laid upon foreign corn,
could be so apportioned, as to attain, without go-
ing beyond its object ; and whether, if it could be
so apportioned, the remedy might not be found
more injurious than the original evil it removed ?
These points we shall endeavour to ascertain.
For, though, in general, the high price com-
municated to a commodity, by those indirect taxes,
which, falling partially, do not, by elevating the
markets universally, constitute, in themselves, a
countervailing duty, should be considered as pre*
ciaely analogous to the high price added to a com-
modity by a direct impost, and though it could,
with respect to every other branch of industry, be
proved conformable to the best maxims of political
economy, to impose, in the former, as well as in
the latter case, such duties on the importation of a
similar foreign commodity, as would deprive it of
any advantages over the domestic one ; yet, the
external corn trade is of a nature so peculiar, and
147
exerts so powerful and important an effect upon
the supply of subsistence, and on the productive
powers of labour, that it becomes necessary to en-
quire, whether., wifh respect to it, the principle of
countervailing duties, for the purpose of restoring
equality of intercourse, and returning capital into
the original channels, from which it had been forced,
may not be found inapplicable.
We are to enquire whether, when taxes press
disproportionately upon the soil, duties upon fo-
reign corn can be so apportioned, as to restore
things to their original places ; and whether, could
they be thus apportioned, they might not inflict
evils, greater than those which they removed.
In the first place, when taxation, even in its most
simple form, and without affecting any thing else,
falls directly and exclusively upon the land, and
enables us precisely to ascertain the unequal and
injurious diminution occasioned in the proprietor's
rent, and cultivator's profit, it becomes a problem
of great difficulty and nicety, to determine, what
amount of countervailing duty would readjust the
balance of industry, and place the farmer in his
former relative situation with respect to the do-
l 2
148
mestic manufacturer, and the foreign grower. But,
as the sum, which may be demanded for tithes is,
under the existing mode of collecting them, liable
to perpetual variation, the enquiry, to what extent
they force capital from the soil, and to what amount
protecting duties are required to turn it back into
its natural channels, becomes in a higher degree
perplexed and uncertain.
With respect to all parochial and county rates,
and assessments, the case is still worse. Not only
are these varying and uncertain in their amount,
but, before any conclusion can be drawn, respect-
ing the degree of duty which might be necessary to
counteract their operation, the new, and difficult
question arises, how far they act unequally, and
depress the industry of the country, below that of
the towns ?
But this is not all. When the expenses of cul-
tivation are increased, the farmer must either in-
crease the price of his corn, or else, ceasing to ob-
tain the customary rate of profit upon his stock,
must cease to cultivate. Now, if importation be
restricted, as the farmer begins to leave off grow-
ing corn, the failing supply will necessarily raise
149
prices, sufficiently high to cover all the increased
costs of tillage. Hence, any thing which tends to
keep foreign grain out of our markets, will have an
irresistible effect in raising the price of corn, with
every increase which may be induced in the expense
of cultivation, and in indemnifying the landed in-
terest for imposts falling unequally upon the soil.
But, in whatever degree the foreign grower may
be subject to ill-regulated tithes, and burthensome
assessments, in the same degree must his prices be
raised, and his corn kept out of our markets. It
is therefore, only in the proportion in which the
unequal imposts laid upon the soil at home, exceed
the burthen laid upon the foreign farmer, that the
landed interest have any claim to indemnity, or
that industry is turned from the channels which, if
all charges upon the soil, both at home and abroad
were removed, it naturally would take.
Before, therefore, we can decide upon the amount
of a protecting duty upon importation, we have
previously to determine, how far the various im-
posts, which press unequally upon the land at
home, exceed the burthens which are imposed upon
land abroad. The difficulty of doing this is Ob-
150
vious. When we consider the various facts which
must be ascertained, and the different balances that
must be struck ; when we take into account the
fluctuating operation of tithes, the uncertainty of
rates and assessments, the nicety of distinguishing
how far they press more heavily upon the soil, than
upon the towns; and, above all, the difficulty of
ascertaining the degree, in which this excess ex-
ceeds the imposts laid on foreign agriculture, we
may safely pronounce, that, to determine with pre-
cision, the amount of the protecting duty which
would be sufficient to indemnify the landed interest
for unequal taxes, and to restore tlxe equilibrium
they disturb, must be impossible.
The impossibility of ascertaining, \> ith any pre-
cision, the amount of the countervailing duties
which it might be necessary to lay on importation*
is a sufficient objection to resorting to them, as a
means of counteracting the operation of those im-
posts which fall exclusively, or with dispropor-
tioned weight, upon' cultivation. If the duty
were laid on too low, it would be an inadequate
measure, and could not accomplish its object; if it
were laid on too high, it would be a gratuitous in-
m
151
diction of evil on the country, depriving the people
of the power of availing themselves of that admira-
ble provision, which, in the uniformity of her
general results, nature has made for repairing the
mischief, which might arise from her partial irre-
gularity ; and exposing them to that uncertainty in
the supply of food, which, while the seasons con-
tinue to vibrate between redundance and defi-
ciency, must increase, in proportion as they depend
on the resources of a single country.
But the difficulty, not to say the impossibility,
of ascertaining what the duty ought to be ; the
abortiveness of taking it too low, and the mischief
of taking it too high, however valid they may be
a,s objections against attempting to rectify, by re-
stricted importation, the evils of taxation falling
unequally on the growing of corn, become of
minor importance, when we consider, that, even if
all difficulty in determining the amount of the duty
were removed, and that if it were so apportioned
as just to reach, without going beyond its object,
and exactly to indemnify the proprietor and tlje
cultivator for the excess of taxation which they
paid ; such duty might, nevertheless, inflict upon
152
the country, evils of greater magnitude than those
which it removed. This I will endeavour to explain
with all possible brevity and clearness.
AVhen taxation falls more heavily upon agricul-
ture than on other branches of industry, and raises
the natural, or production-price, of corn, in a
greater degree than it raises, at the same time, the
natural or production-prices of the other articles
with which foreign corn may be purchased, then
the following effects will necessarily be produced.
The farmer, in the first instance, when he finds t.he
expenses of cultivation increased on him, will raise
the price of his corn, so as to enable him to pay
his rent, and to enjoy the customary rate of profit
upon stock. But as all articles do not, as in the
case of equal taxation, experience a simultaneous
rise, in the same proportion with the productions
of the soil, and thus, in the manner before ex-
plained, prevent importation, the advance which
the farmer induces in the markets, will operate as
a bounty on the introduction of foreign corn.
The consequence will be, that, the foreign
grower, in whatever degree he may be less bur-
thened with taxation, will have an advantage over
153
the home grower ; and the markets, which had at
first been raised, will be forced down below what
is sufficient to secure the farmer in the customary
rate of profit upon stock. Of this, diminished
cultivation is the inevitable result. Farms, which,
though inferior to the growing lands in the neigh-
bouring countries, were kept under the plough, in
consequence of the natural protection afforded by
the expense of carriage on an article so bulky as
corn, will be unable, at the reduced prices, to re-
pay the new and unequal charges, and will be
thrown out of tillage. Cultivation will be con-
fined to those districts, whose natural fertility, aided
by the natural protection just named, will be found
adequate to sustain the unequal competition ; and
capital will be forced from the soil to the now
more profitable occupation of fabricating articles,
with which to purchase foreign corn. The foreign
corn thus imported, will, indeed, create an increas-
ed foreign demand for our wrought goods ; and, as
the uninterrupted circulation of grain will keep the
price of provisions both low and steady, manufac-
tures and commerce may flourish, while the landed
interest is depressed and agriculture discouraged.
154
This statement of the consequences which must
flow from taxation falling with disproportioned
weight upon the soil, and raising the production-
price of corn, in a greater degree than the pro-
duction-price of other articles, must instantly con-
vince us that such taxation is unjust and impolitic*
It is evidently unjust to depress the landed interest
by laying on them burthens not borne by the rest
of the community; evidently impolitic to give,
by unequal imposts, the national industry a direc-
tion different from that which it naturally would
take. When, under a state of free intercourse,
inferior soils are made to produce corn, it can only
be because, in consequence of the expense of
bringing so bulky an article from abroad, such em-
ployment of stock is deemed the most beneficial.
To prevent, by unequal imposts, or by any artificial
regulation whatever, stock from being invested in
what would be its most beneficial employment,
is the same thing as diminishing the productive
powers of industry ; is the same thing as diminish-
ing the wealth, and checking the prosperity, of the
country. On the impolicy of taxes, which press
partially upon the soil, and on the propriety of re-
155
pealing them., there cannot, consequently, be two
opinions. But, before we can decide upon the
wisdom, not of repealing such taxes., but of coun-
teracting their effects by a duty on importation, we
must, even admitting that the duty could be so
apportioned as to attain the end, inquire, in the
second place, whether it might not induce conse-
quences more injurious than those, which it re-
moved.
When taxation falls upon the soil, and increases
the expenses of cultivation, it will require a greater
quantity of capital, to produce the same quantity
of corn. If duties upon servants, horses, iron,
leather, with rates and assessments, add fifty per
cent, to the out-goings of any farm, it is evident,
that, in order to continue it in the same state of
culture as before, fifty per cent, must be added to
the farmer's stock.
Hence, with respect to the productive powers of
the capital employed in cultivation, to tax the land
is the same thing as to lower the quality of the soil.
Suppose that, of two farms equal in extent, one is
so fertile that a thousand pounds, in capital stocky
will raise from it ample crops of corn, while, owing
156
to the inferiority of the other, and the greater de-
gree of dressing which it requires, crops of similar
goodness cannot be raised from it, without employ-
ing a capital of fifteen hundred pounds. Here the
production is equal, and the only difference con-
sists in the quantity of capital employed. Now,
let us farther suppose, that, upon the more fertile
farm, various imposts are accumulated, until the
increased wages of labour, the increased cost of
keeping horses, and the increased price of every
article requisite to tillage, compelled the farmer,
in producing the same crops as formerly, to employ
stock to the amount of fifteen hundred pounds ;
that is, equal to the amount of stock employed on
the inferior farm. Here, then, the produce of the
two farms being the same, and the stock employed
on them being the same also, it is evident that the
taxes accumulated on the fertile one, would have
an effect identical with that, which would be pro-
duced by lowering the quality of its soil, and would
reduce the productive powers of the capital vested
in its cultivation.
Taxes laid upon the land, having, in this man-
ner, the effect of deferliUzing the soil, we perceive
157
more clearly the extreme impolicy of imposing
them ; and are enabled to judge, more accurately,
how far protecting duties upon foreign corn, would
tend to counteract their operation, and to relieve
the country from the mischief they inflict.
It has appeared, in a former chapter, that when,
in consequence of natural sterility, a given quan-
tity of capital, employed upon the soil, cannot
raise so abundant a supply of corn, as, by prepar-
ing wrought goods, it could purchase from the
foreign grower, tiie happiest consequences are pro-
duced by leaving importation free. Now, the
same holds good with what may be called the
artificial sterility induced by taxation. When, in
consequence of various imposts, pressing unequally
upon the land, the expenses of growing corn are so
much increased, that a given quantity of capital,
vested in cultivation, will not raise so abundant
a produce as the same capital, if directed to some
branch of industry less heavily burthened, could
purchase from abroad, it is self-evident, that, in
such branch of industry, it receives its most bene-
ficial occupation, and conduces, most powerfully
to increase wealth and promote prosperity. It is
158
also self-evident, that if, by taxing our land, we
increase the expense of producing corn at home,
beyond the expense of producing it in other coun-
tries, our prices will be higher than theirs, and
we shall be an importing, rather than an exporting
country. But it has already been fully shown,
that a country, the circumstances of which are
adverse to the exportation of produce, can escape
fluctuating supply and unsteady price, only by
granting perfect freedom in the import trade in
corn.
All (he benefits, therefore, of unrestricted inter-
course, whether with respect to wealth and pros-
perity, or to correcting the irregularity of the sea-
sons in supplying food, belong equally to the case
of a country where the production-priec of com is
raised by natural sterility, and to the case of a
country in which natural price is raised by taxes
lowering the productive powers of the capital
vested in cultivation. Such unequal taxes upon
land, inflicting, as it were, an artificial sterility on
the country, cannot be too severely censured, or
too speedily repealed; but, during their continu-
ance, a perfectly unrestricted external trade in
159
corn, seems the most effectual means of mitigating,
whether with respect to the supply of subsistence,
or the progress of wealth, the evils which they
inflict.
Taxes, falling unequally upon the soil, inflict
evil in three ways. First, they reduce the pro-
ductive powers of the capital employed in cultiva-
tion ; op, as we before said, produce an effect
similar to that of lowering the quality of the soil ;
in the second place, they throw out of cultivation,
lands which, though inferior to those cultivated in
other countries, were kept in tillage by the natural
protection arising from the expense of carriage,
and, consequently, give capital a forced, and,
therefore, a less profitable, direction, than it natu-
rally would take ; and, thirdly, by occasioning an
increased portion of produce, to be devoted to pay
the profits on the increased quantity of capital
necessary to cultivation, as well as by throwing
out land which, but for their operation, might be
profitably tilled, they effect an unjust diminution
in the revenue of the land proprietor. The ques-
tion is, would these evils be remedied by laying a
protecting duty on the importation of foreign
100
coin ? Let us enquire a little farther, what ten-
dency this measure could have to counteract such
injurious effects ; let us, in concluding the chap-
ter, briefly examine, how far a restriction on im-
portation could diminish the quantity of capital
required to produce a given quantity of corn ;
turn the capital, forced from the soil, into a chan-
nel more conducive to wealth and prosperity ; or,
restore, to the landlord, the income he had lost.
If, after unequal taxation had diminished til-
lage, and occasioned us to draw a part of our
consumption from the foreign grower, importation
were restricted, the diminution of the supply would
immediately elevate prices, until it again become
profitable to cultivate the inferior soils which had
been thrown out. Now, these elevated prices, and
this restored cultivation, could have no conceivable
tendency to reduce the quantity of capital neces-
sary to the production of corn. The unequal
taxes must still be paid, and their amount still
increase the expenses of production, and compel
the farmer to employ a greater stock in cultiva-
tion. But further, the capital necessary to cul-
tivate any given extent of land, would be increased,
161
not diminished. For the high price of corn
would, after a little time, communicate itself
both to wages and to commodities ; and the ex-
penses of tillage would thus be increased upon the
farmer.
Restricted importation, therefore, instead of
reducing the quantity of stock, which taxation
rendered necessary to the growing of corn, would
have a directly opposite effect, and would lower,
still farther, the productive powers of the capital
employed in cultivation. With respect to turning
the capital which taxation had forced from the
soil, into a more beneficial channel, the case
would be still worse. This capital was originally
employed in cultivating inferior soils, because,
from the natural protection, afforded by the charge
of carriage, on an article so bulky as corn, such
employment was found most beneficial ; and sub-
sequently, when unequal taxation increased the
expense of growing corn, without increasing, in
a like proportion, the expense of producing other
things, it was withdrawn from the soil, because it
found a more profitable employment in working
up goods, with which to purchase grain in the
M
162
foreign market. Now, to force, by restricted
importation, this capital back upon the soil which
it had left, would not be to return it to its most
beneficial employment. While, in consequence of
unequal taxation increasing the expense of pro-
ducing corn at home > any quantity of capital can
bring a more abundant supply of corn from abroad,
than it can raise at home; then, to bring corn
from abroad is the most profitable occupation,
which, in consequence of injudicious imposts,
remains. To deprive capital, therefore, of the
most profitable employment remaining, would be
adding injury to injury.
Here then, again, restricted importation would
increase the evil, which it was employed to coun-
teract. "With respect to restoring the landlord's
income, its effect, in the first instance, would be
better. As the foreign supply was cut off, and
the prices rose until the inferior lands were re-
stored to tillage, these lands would afford a rent
to the proprietor, and the rents already paid upon
the better grounds, whose fertility enabled them,
notwithstanding the burthens upon production, to
meet the competition of the grower of otjjer coun-
163
tries, would receive, on leases being renewed, a
considerable increase.
This indemnification, however, received by the
landlord, would be but of short duration. The
restriction from which it was derived, would have
increased, not diminished, the quantity of capital
necessary to produce a given quantity of corn,
from the better lands ; and would not have restored,
but would still further have diminished, the pro-
ductiveness of the capital turned back to the
inferior soils. The powers of industry would be
lowered, and the value of land, necessarily suf-
fering from the universal check given to pros-
perity, would sink ; hence it would be found
impossible to sustain the landlord's rent so high
as it might have risen, if unrestricted importation,
leaving manufactures and commerce to attain their
utmost height, had suffered capital to accumulate,
until the reduction in the rate of profit and of
interest, increased, in the manner already shewn,
the relative value of the soil, and compensated, in
some measure, the artificial sterility inflicted by
taxation.
When such artificial sterility is inflicted, when
m2
164
a greater quantity of stock is rendered necessary
to the production of the same quantity of corn,
capital will seek to escape from cultivation, now
become the least beneficial employment, and to
take a direction in which its productive powers
will be less oppressed. This process, to borrow
an illustration from the animal economy, is as a
rectifying effort of nature, forcing the circulation
into inferior vessels, when the main artery has
been stopped. The surgeon who, instead of aiding
nature, or, at least, leaving her unimpeded in her
efforts, to rectify the derangement occasioned in
her operations, should propose to turn the blood
into its former course by tying up the inferior
vessels into which it had been forced, would
evince but little knowledge of the animal eco-
nomy. Now, might it not be asked, whether a
greater share of knowledge, in political economy,
would belong to him who, while unequal taxes
upon land render cultivation the least productive
occupation in which capital can engage, should
seek to rectify the injury these taxes inflict, by
stopping up the other channels into which capital
had been forced ?
165
When, in consequence of accumulated taxation,
capital escapes from the soil, to the more profit-
able occupation of working up raw material, and
purchasing corn from other countries, the price of
corn is little advanced, and, therefore, the pro-
ductive powers of general industry are little lowered.
But when, the taxes still continuing, we check
importation, and force into tillage, land on whieh
the expenses of cultivation are so great, that a
given quantity of capital cannot raise from them
so abundant a supply as it would have purchased
abroad, then the natural price of corn is increased.
The additional rent, too, which will now be paid
for superior lands, will increase its natural price
upon them, as well as upon the inferior, forced
into tillage. The natural price of corn, then,
will be increased throughout the country. An
increased natural price of corn, however, is not
only the same thing as a reduction in the produc-
tive powers of agricultural capital, but occasions
a reduction in the productiveness of every species
of industry, carried on by the consumers of corn.
As the solitary individual, who is obliged to devote
a greater quantity of his time to raising food,^will
166
have less time to prepare clothes and furniture, so,
the society which is compelled to direct a greater
number of its hands, and quantity of its stock, to
raising its supply of corn, will have less of both to
employ in manufactures and trade. As the high
price of corn, gradually communicates itself to
wages, and, through wages, to the various expense*
attending the working up of materials, the capi-
talist, with the same quantity of stock, will be able
to produce only a smaller quantity of goods.
Hence, restriction upon import, again forcing
into cultivation land from which taxation had
driyen capital, would universally check production.
"With the failing wealth of all consumers, the home
demand (the only one which could exist while tax-
ation elevated prices) would fail. Prices would fall,
until the inferior lands could no longer be culti-
vated, nor the superior ones offer the heightened
rent. After having, for a short period, received an
indemnity for unequal taxation, the land-proprietor
would be thrown back into a worse condition than
before.
And now we may conclude, that a protecting
duty laid on the introduction of foreign corn, would
16?
not remedy any of the evils inflicted by unequal
taxes upon land. On the contrary, it would ag-
gravate them all. Jh the first place, it would in-
crease the quantity of capital, necessary to raise any
given quantity of corn, or, in other words, add to
what may be called the artificially induced sterility
of the soil ; in the second place, in restoring the
lands, which had been thrown out, to cultivation,
it would not (and this is a most important consi-
deration) restore the capital forced back upon them,
to its former productiveness ; but, on the contrary,
would turn it from the channels which, in conse-
quence of unequal taxation, had now become the
most conducive to wealth and prosperity ; and, in
the third place, the restriction upon importation,
though it might, at first, restore the land proprie-
tor's income, and even, perhaps, give him more
than a just indemnity for the excess of taxes he
paid, would, in consequence of the powers of in-
dustry being universally paralyzed, involve him in
the general failure, and reduce him to a much worse
condition than before.
To all these evils, respecting wealth and pros-
perity, is to be added, the evil of perpetual fluctua-
168
tion in the supply, and in the price, of corn. When,
by restricted importation, we force an independent
supply, from soils which, in consequence of unequal
taxation, could not, even under the powerful na-
tural protection afforded by the expense of carriage,
stand the competition with foreign soils ; we ne-
cessarily raise our prices considerably beyond those
of foreign countries.
The consequence is, that, in abundant years, su-
perfluity cannot be removed, until the markets have
sustained an extraordinary fall. If, by the joint
operation of taxes, and duties to countervail taxa-
tion, we raise an independent supply at the average
price of sixty shillings a quarter, while, in the
neighbouring countries, the average price is only
forty shillings; then, it is evident, that exportation
could not take place, until our markets fell so far
below forty shillings the quarter, that the merchant,
after paying the expense of carriage, could sell, in
the foreign market, at that price. Let ten shillings
a quarter be sufficient to pay the expense of car-
riage, and the exporting merchant's profit, and then
our markets must fall ten shillings below forty, be-
fore our com can be sent abroad ; that is, oar mar-
169
kets must be in a perpetual state of fluctuation,
between sixty shillings, the price of average years,
and thirty shillings, the highest price at which, in
abundant years, superfluity can be removed.
From this illustration it must appear, that were
we, when taxation renders production more expen-
sive than on the continent, to force, by counter-
vailing duties, an independent supply, we should,
in addition to a calamitous loss of wealth, suffer all
the evils of uncertain and deeply vibrating prices.
The beautiful provision, which, in the uniformity
of her general results, Nature has made against
partial irregularity, would be lost to us. Duties
on the importation of foreign corn, even if they
could be so apportioned as exactly to countervai
unequal taxes upon land, to pour back capital into
the channels from which it had been forced, and
to place the landed interest on a footing with other
classes of the community, would, nevertheless, with
respect to wealth, subsistence, and even the reve-
nue of the land proprietor, induce mischief far
greater than that which they were intended to
remove.
And now, to recapitulate the conclusions which
170
the reasonings of this chapter have been employed
to enforce.
Taxes, falling equally on all the classes of the
community, and thereby producing a universal
rise in wages, do not, (as wages form a smaller pro-
portion in the component parts of raw produce,
than in the component parts of the price of wrought
goods) increase the expenses of growing corn, in a
greater, or even in so great a degree, as they increase
the expenses of working up materials. Such taxes,
therefore, repel the foreign grower by the high
price of the articles he must receive in payment,
full as much as they attract him by the high price
to be obtained upon his produce, and, conse-
quently, do not give him any advantage over the
domestic cultivator.
Taxes, falling exclusively, or with dispropor-
tioned force, upon land, and thus increasing the
expenses of cultivation, in a greater degree than
they add to the costs of production in other bran-
ches of industry, and raising the price of corn
without raising, in a similar proportion, the price
of the goods with which it might be purchased in
other countries, give the foreign, an undue ad-
171
*
vantage over the home grower ; operate as an in-
jurious discouragement to domestic agriculture;
force capital from the channels in which it found
its most profitable occupation; and, in relation
to the manufacturing and commercial classes, un-
unjustly depress the landed interest.
Such a state of things is at variance with the
fundamental principles of political economy.
Whether with a view to promote the prosperity of
the country, or to dispense impartial justice, capi-
tal should be allowed to take its most profitable
occupation, and individuals be indemnified for
any disproportionate pressure which they may
sustain.
These most desirable objects can be attained,
only by removing the causes, which disturbed the
balance between the various departments, of indus-
try ; that is, by regulating the collection of tithes,
discontinuing all duties on the farmer's servants,
horses, and carriages ; and equalizing rates and
assessments, between the country and the towns.
Countervailing and protecting duties, imposed
on foreign corn, cannot be so apportioned as to
replace things in their former relative positions ;
172
and, even if their amount could be determined
with sufficient accuracy, to restore the original
balance between all the employments of capital, and
classes of the state, they would yet effect a univer-
sal reduction in the productive powers of industry,
induce a perpetual fluctuation in the supply of
food, involve the land proprietor in the general
declension of the country, and inflict evils much
greater than those, which they were adopted to
remove.
And, therefore, the particular case of a country,
more heavily taxed than her neighbours, does not
constitute an exception to which the general prin-
ciple of a free external trade in corn is inapplicable.
On the contrary, during the continuance of taxes,
even in their most objectionable operation, of un-
equal pressure upon the land, an unrestricted com-
merce in grain, mitigates the evils which they
inflict.
173
CHAP. III.
On the Limitations, to which the general Princi-
ples of the external Trade in Corn, are liable,
in their Application to the particular Case of a
Country, in which Restrictions upon Import
have already induced an artificial Scale of
Prices, and given a forced Extension to Agri*
culture.
Having, in the two last chapters, shewn, that
neither legislative interference with respect to other
branches of commerce, nor the existence of a hea-
vier taxation than is borne in other growing coun-
tries, forms an exception to the principles of a free
external trade in corn ; we have now, with respect
to this part of our subject, only to enquire, whether
these principles are liable to any limitations in their
application to the particular case of a country, in
which restrictions on the commerce in grain have
already turned capital from its natural direction,
m 174
and established an artificial scale of prices. This
question, always interesting, as involving the dif-
ficult problem respecting the introduction of poli-
tical change, derives, at present, great additional
importance from the circumstances that a forced
direction of capital, in consequence of interrupted
commerce, constitutes our actual state ; and that,
it is under an artificial scale of prices, thereby in-
duced, that it has become necessary to legislate.
The effects of the war, and of the Berlin and
Milan decrees, were, to lay such restrictions on
the importation of foreign corn, as to give the
British farmer almost the entire supplying of the
home market ; and to occasion a great additional
capital to be vested in cultivation. The practical
consideration for the statesman, therefore, is, whe-
ther, now that this artificial stimulus has been
withdrawn by the peace, the capital which was
thus forced into agriculture, should receive, from
the legislature, protection in that occupation.
Our great political economist, Dr. Smith, in
stating the limitations to which the general prin-
ciple of complete freedom in trade is liable, seems
to consider the actual existence of artificial encou-
175
*
ragement as one. He urges, that when any com-
modity of our own production, has been encou-
raged for some time by high duties and protections,
it would be injurious suddenly to restore a free
importation of the same kind of article. te Hu-
manity, in this case," he contends, " requires that
freedom of trade should be restored only by slow
gradations, and with caution and circumspection.
Were these high duties and protections taken away
all at once, cheaper foreigu goods, of the same
kind, might be poured so fast into the home mar-
ket, as to deprive, all at once, many thousands of
our people of their ordinary employment, and
means of subsistence."
This scarcely needs illustration. England, by
very high duties on the importation of foreign
wrought goods, has, to a considerable extent, esta-
blished manufactures, not naturally adapted to the
country. In this she has undoubtedly given some
check to her prosperity, and rendered her labour
and capital less productive, than they otherwise
might have been. But, nevertheless, were she, all
at once, to attempt the introduction of theoretic
perfection into her commercial regulations, and
176
suddenly to repeal the high duties upon the impor-
tation of articles not naturally adapted to the coun-
try, very calamitous consequences would, in the
first instance at least, ensue. Undersold, in their
own market, by the foreigner whose exertions co-
operated with nature, our capitalists and labourers,
who had been induced to vest their stock, and to
acquire skill, in the forced and exotic employ-
ments, would now be driven to seek a livelihood in
other occupations. The former could not do so,
without extensive pecuniary loss ; nor the latter,
without losing all that species of moral capital,
consisting in the skill and dexterity he had acquired
in his trade. Great individual distress, and a con-
siderable temporary reduction in the productive
powers of industry, would be the consequences.
Now if, even in the case of some exotic manu-
factures, the sudden repeal of the duties which had
given a forced direction to industry, would be at-
tended with consequences so injurious, we may
form some estimate of the calamitous effects which
would ensue, from a similar proceeding, with re-
spect to the universal trade of agriculture. In a
country, accustomed to import a part of her con-
177
sumption of food, any considerable restriction on
the introduction of foreign corn, effects, in the first
instance, a great advance in the markets ; and,
hence, forces labour and capital, to the cultivation
of those inferior soils which, under the old prices,
could not be tilled with a profit. Now, as soon
as the interruption of foreign supply raised prices
so high, that the customary rate of profit could be
obtained by the cultivation of tracts which had be-
fore remained untilled on account of their sterility,
a rate of profit, higher than the customary, would
be obtained by the cultivation of the fertile districts
which had been able to stand foreign competition.
But, as leases expire, the competition of capitalists
will always prevent lands from being let at a lower
rate, than is necessary to ensure the farmer, the
customary profit on his stock. In a country, there-
fore, which would naturally import a part of her
consumption, an interruption of free intercourse,
occasions a universal rise in rents, and affects every
contract which may be entered into, between land-
lord and tenant.
Nor is this all. All the money transactions of
the land-proprietors, will be influenced by this in-
178
crease of income; mortgages, marriage settlements,
incumbrances for younger children, will all in-
crease, with the increasing rent-roll ; whife, as the
high price of corn soon begins to communicate it-
self to all other things, the expenses of government
will be enlarged, and an influence will be extended
to all its transactions with the public creditor.
Thus we see, that, while restrictions on the im-
> so) it.
portation of wrought goods, not naturally adapted
to the country, Mould give a forced direction to
,7)1,.
labour and capital, in a few manufacturing* towns
and districts; restrictions on the introduction of
foreign corn, would, in a coimtry, the circumstances
of which naturally led to the importation of grain,
not only give, to an incalculably greater extent, a
forced direction to capital and labour, but would,
universally, influence the money transactions of in-
dividuals, and the financial arrangements of the
government. In proportion to the magnitude of
the change, would be the evils inflicted by a sud-
den cessation of the restrictions, which had produced
it. The nature of these evils we will now examine.
In the first place, thejceaoval of those obstacles
to the importationof foieign grain, which, by turn-
179
ing industry from its natural course, hadforced an
independent supply of food, would enable the' cul-
tivator of the fertile tracts of the adjacent growing
countries, to pour in a cheaper supply of corn than
could, from the inferior soils which had beeft &N&d
into cultivation by the artificial prices induced
by fettered commerce, be obtained tft Htfcnfe B&fiHt
when prices were, in this manner, brought doWh
to the natural level, these inferior soils could no
longer be tilled with advantage The capital,
therefore, which had been expended in bringing
them into a state of tillage, would cease to be pro-
ductive; nay, even the stock which existed in per-
manent implements, and buildings, would be de-
prived, in a great measure, of its exchangeable
value, and productive power, and could not be dis-
posed of, or converted into other articles, or turned
into ether employments, without considerable loss.
The agricultural labourers, too, who had been em-
ployed upon the land thus thrown out of tillage,
Vfould lose all the benefit of the skill and dexterity
they might have acquired in their accustomed call-
ing ; and, 1 deprived of their moral capital, would
n 2
180
be driven to seek employments in which their pro-
ductive powers must be lowered.
It would be fortunate, however, if the derange-
ment and distress could be limited to those districts
which should be thrown out of tillage by the sudden
removal of the restrictions upon importation.
When a diminished supply, and heightened price
of corn, enable capital to obtain the ordinary rate
of profit from the cultivation of the inferior lands,
then those of a superior quality yield, upon the ca-
pital employed on them, an extraordinary return,
and, when they come to be re-let, must, from the
competition of farmers, obtain such an increase of
rent, as will reduce the profits of cultivating them
to the natural and level rate. Now, on the re-
moval of restrictions upon import, and consequent
fall in the markets, the occupiers of such land will
no longer be able to afford the advanced rents con-
tracted for, under artificial prices. If they con-
tinue to pay these rents, they will fail of obtaining
the customary rate of profit on their capital : nay,
their profit will not only fail, but even their capital
itself will begin to diminish. They will be obliged ,
181
i
either to surrender their farms, or to become bank-
rupts.
The interest of the proprietor, and of the culti-
vator of the soil, though not identical, are yet so
intimately connected, that any serious injury affect-
ing the one, is likely to be communicated to the
other. While a sudden reduction of prices falls
thus ruinously upon the tenant, it occasions a dis-
tressing diminution in the income of the landlord.
Under such circumstances, and when it is impos-
sible to sustain prices, it is the wisest plan in the
proprietor, to acquiesce in the reduction of his for-
tune, to enter into some equitable compromise with
his tenantry, and to grant new leases, proportion-
ing rent to the new scale of prices. Should he
have incurred debts, made settlements, or entered
into any money transactions, under the confidence
of receiving an undiminished income, and should
the necessity of making good his engagements, or
the mere force of avarice, cause him still to demand
the stipulated amount of rent, such proceeding
would, ultimately, tend only to increase the em-
barrassment, or to defeat the cupidity, which
192
prompted it, For, if the tenantry, under such cir-
cumstances, continued to hold their farms, they
would exhaust, in the payment of a rent, now ren-
dered exorbitant, the capital available for cultiva-
tion ; and, in a little time, would render themselves,
not -ou.lv unable to discharge the sum agreed upon,
but even to make up, as they might easily have
done, if a compromise had early taken place, a rent
abated in proportion to the reduced scale of prices.
Landlords must ultimately impoverish themselves,
when they enforce bargains, the fulfilment of which
WouJd;$rench upon the stock employed in cultiva-
t 10n tai r.jn^ o) t 90u)
The important classes of land proprietors and
cultivators, could not sustain so violent a convul-
sion of property, without a shock being communi-
cated to the whole community. The manufacturing
an$ commercial classes, indeed, would, at first, ex-
pejience some encouragement from preparing, and
exporting, the articles which paid for the foreigtr
corn, that unrestricted intercourse brought into the
country. But the benefit they received on the one
baud, would be couaterbalaAced, and much more
.
183
the other; 1 r The hbftey h; K$8ntfkti l 6tti$&M)ill { >
more conducive to wealth and prosperity, than the
fd^/trafde 1 ; Ji Nd ad vantage^ at^uired in theSfe' 1
reign market, could compensafe the manufacturer
and merchant, for the diminished demand of the
domestic market: proprietors and cultivators would
initio ,kn ^.../(ilocno 10 Jio flf/qid) adbJuow Isiiqio
not nave sustained? a mere reduction of their money
. yijs ,. t d'jyoiiid nava, t ylJ3snibni ."io jrlipaiib
income, which, accompanied and occasioned by a
corresponding rise in the value of money, left their
aarfif 3Mjboiiuiol igmsljf auoiaftyjui LiiirfeBT ad*
real wealth, and demand Tor commodities un-
, ..(fis^jH ifiiaaoramoa.iiia oini noitsarwnpib-i
changed. Diminished cultivation woulanaveflett
them a reduced quantity of produce ; and, as the
throwing out of the interior lands, ana the redtrc-
, . - rfj i edT, , .90110^01 oddug sdt JosEjs vlduiab
tion of rents, will have lowered tne natural, as well
., >?aoa ad* ni AJaianoD jipi)X>, Jiogqw* ofr
as the market price of this produce, the smaller
baeoqxD. gL bsligsD ted) b/us. : dJfaaw
quantity, now in their hands, will have lost a por-
-.. -0i?pfqfO9 adt moil nwp-irfi&iiuodal&B
tion of its exchangeable value, not only with respect
. rSizwon aviiDuboig sii foyT^dabri bad stu
to currency, but also with respect to commodities.
,Mi>3b ./L>or foj?) fling gdi bn ^baiBn-) purmai Mlt
The real wealth, therefore, and the real power of
purchasing, possessed by the land proprietor and
farmer, will have sustained considerable diminu-
,. iaidvijuitojintadi sdJ jtojfi/pcnai.nsijbi i sag d^umm
tion. The home market, which is always the near-
est, the rhosi J secure, a an4 ine'most extensive, and
184
which, for the smith, the carpenter, the bricklayer,
the mason, and the entire classes of artificers and
manufacturers, who work upon the coarser house-
hold articles which admit not a profitable exporta-
tion, is the only market, would be narrowed, in a
much greater degree than the foreign market could
be extended. Hence manufacturing and trading
capital would be thrown out of employ ; and, either
directly, or indirectly, every branch of industry,
throughout the kingdom, would receive injury from
the rash and injudicious attempt to introduce theo-
retic perfection into our commercial system.
The check thus given to industry, and the de-
rangement occasioned in property, would consi-
derably affect the public revenue. That the power
to support taxation, consists in the possession of
wealth ; and that as capital is exposed to waste ;
as labour is thrown from the employments in which
use had heightened its productive powers ; and as
the revenue of lands, and the profits of stock, decay,
the sources of financial prosperity dry up, are pro-
positions too evident to require illustration. In-
asmuch as a sudden removal of the restraints which
had existed on the importation of corn, deranged
185
the established course of industry, and checked
prosperity and wealth, it would, by a direct opera-
tion, render the taxes less productive. This ope-
ration, obvious, and incontrovertible, it would be
superfluous to dwell upon ; but precipitate adop-
tion of perfect liberty in the external corn trade,
would have also an indirect effect upon the revenue,
and lead to financial results, which, not lying so
near the surface, it may be necessary to lay open,
and examine.
When corn can be brought from abroad, at a
less expense of labour and capital, than it can be
raised at home, the removal of restraints upon im-
portation, necessarily reduces its price. Now we
have seen, that a reduced price of corn gradually
communicates itself to labour (of which, indeed,
bread may be considered as a tool, or implement,
necessary to the performance of work) ; and,
through labour, by the same gradual progress, to
every article, which labour either manufactures at
home, or purchases, with the fruit of its exertions,
from abroad. A fall in the price of all commodi-
ties is the same thing as a rise in the value of cur-
rency. But taxes are estimated and paid in cur-
1#'
rency : ; and % ftftgtt, tyfaKtffli WAafuff? 3
dergo, cannot fiil to have an important effect upon
ther^\ Mill 'VlJ'Juboiq !<>l 89XBJ 3f{l dOi)
9 &1! duties laid on ad valorem, must diminish in
anftfthft as the vaWe lH of money rises. A quantity
o^meTchandise worth a ttiousarid pounds, will,
from an ad valorem duty of ten per cent, produce
an hundred pounds, while, if, in consequence of the
a the value of money, this merchandise became
equivalent to no more than nine hundred pounds,
ttfis 1 ad valorem duty Would return into the trea-
sury only ninety. The principle operates with
respect to all taxes laid upon income. Supposing
real wealth to remain unchanged, a rise in the
value of currency is the same thing as a fall in the
amount of all money incomes ; and, as the amourit
of income fails, of course the per centage laid upon
it fails also uonauno'hsq t>dj o) ^taanMO
The average price of wheat, by the WincrMeY 1 '
rneasure, was, during the nine 1 ^ears preceding
m&, an hundred shillings the qu f aV#R : Now,
supposing a free importation to fefruce, b fci YhWS?
the average pric* of xvheiat to 1 ffi^V^iMl?^ ,! tS4l i,
quarter; and even assuming that, while the price
187
ofcoW feH one-half, the price of other things
would 7 Idnfy Faflt a fourth ; then, the computed
amount of all incomes would be reduced one-fourth,
and a property tax which might formerly have
produced fourteen millions, would yield but ten
millions and a half. ^ fifi
In thus illustrating the manner in which a sud-
den opening of the ports to foreign Corn, would, in
a country where restrictions had induced an arti-
ficial scale of prices, occasion a reduction in the
public revenue, I have supposed that the real
wealth of the Community remained unchanged.
This, as we have already seen, could not be the
case. Labour thrown out of employment, capital
wasted, the revenue of land diminished, and the
profits of stock lowered these would, in the first
instance, be the inevitable results of receiving,
from the foreign grower, any considerable portion
of the grain, which domestic agriculture had for-
merly supplied. Not only computed income, but
real wealth, would be reduced; not only would
any given quantity of commodities, or of property,
yield, in proportion to its fall in money value, a
diminished sum, as ad valorem and income taxes,
188
to the treasury ; but commodities and property
would be themselves reduced ; a part of the real
wealth, on which taxation fell, would have ceased
to exist ; and the revenue of the state would be
impaired from a double cause.
It may be objected, perhaps, that the revenue
would not receive this two-fold injury, because,
though the finances might fail in proportion to the
loss of wealth, yet the change in the currency could
not be attended with any loss to the state ; the in-
creased value of money, exactly counterbalancing
the nominal reduction it occasioned in the sums
paid into the treasury ; and, as far as the circulat-
ing medium was concerned, leaving the real power
of the revenue exactly as before.
The answer is obvious. Though the increased
value of money should counterbalance, with respect
to all new contracts and expenditure, the diminu-
tion it occasioned in the amount of ad valorem
duties, yet, in making good all old engagements,
the case would be widely different. The dividend
of the public creditor, the pay of the soldier and
sailor, cannot be reduced in amount, as money may
rise in value. When government comes into the
189
market, the diminution in the computed revenue
(as far as it may have been occasioned by a change
in the currency, and not by a loss of wealth) will be
compensated by the increased power of what re-
mains ; but, when fixed salaries, and sums stipu-
lated and determined, are to be paid, the increased
value of the money which the taxes bring in,, forms
no counterpoise against diminutions in its amount.
In all such transactions, a diminution in the nomi-
nal amount is, whatever may be the worth of cur-
rency in the market, a reduction in the real power
of the revenue.
But while the increased value of money could
not, in providing for the interest of the public debt,
or in paying the military and civil servants of the
state, afford the government any compensation for
the diminution occasioned in the amount of re-
venue, it would, with respect to all taxes laid on,
not ad valorem, but by weight, tale, and measure-
ment, add to the burthens of the people. If the
equivalency of the currency, with respect to com-
modities, has risen one-fourth, and I continue to
pay, on the commodities I consume, the same
J 90
amount of duties as before, then, in fact, five and
twenty per cent, has been added to my taxes.
To resume our former illustration: Supposing;,
that a free admission of foreign grain reduces, the
average price of wheat from an hundred to fifty
shillings a quarter ; and assuming that this fall of
one-half in corn, produces a.fall of one-fourth in
Other commodities; or, what is the same thing, a
rise of one-fourth in the value of money ; then, the
effeet of opening the ports would be, to add a
fourth to all taxes laid on by tale, weight, or mea-
surement. And while this great additional, pres-
sure fell upon the country, government would'de-
rive no aid from it, either in paying the annuities
of its civil and military servants, or in providing
for the dividends of the public creditor.
In any country, where the price of corn has been
forced above the level price of the neighbouring
growing countries, a sudden removal of restrictions
on importation will throw inferior lands out of
cultivation, and occasion a waste of capital* and a
reduction in the productiveness of, labour; in a
degree proportional to the fall, whieh may be given
to the value of corn: and, proportional to the
effect which the price of com has, upon the value
of money, will be the deficiency occasioned in some
branches of the revenue, and the increased pres-
sure communicated to others.
- - These proportions must, of course, be liable to
perpetual variation, according as the expense of
carriage may prevent the price of corn from being
equalized throughout commercial countries ; and
according as bread may be necessary ,to the, sub-
sistence of labour. In the, foregoing reasonings,
we have assumed data, not with a view to their
absolute correctness, but for the sake of lllustra-
Jon . rr
tion : and, in order to unfold the .general nature,
rather than, under any local circumstances, the
particular and precise extent of the operation, of a
US 5 it. / x
sudden fall in the price of corn upon wealth and
revenue. Though we were perpetually to vanr
the data, the principle would remain unchanged.
Though corn might npl fall to one-half the aver-
age price of the nine years preceding the peace;
, i Jo
and though, in consequence, the price of commo-
dities should not be lowered ; or, what is the same
310-3 10 .
thing, the value of money raised one-fourth ; yet,
192
in whatever proportion the unrestrained introduc-
tion of foreign corn might reduce prices and ele-
vate currency, according to that proportion, would
be the evil, whether with respect to labour, wealth,
or revenue, inflicted by suddenly applying a prin-
ciple of theoretic perfection to the external trade
in corn.
In considering the evils, which would be inflicted
by suddenly applying the principle of free external
trade, to the particular case of a country, in which
restrictions upon the introduction of foreign grain,
have produced an artificial scale of prices, and
given a forced extension to tillage, we must not
forget that these evils would be only temporary.
The instant the derangement was effected, the
rectifying process would commence. As soon as
lands, requiring a great expense of dressing, were
thrown out, and rents on the superior farms were
reduced, less capital would be required to raise a
given quantity of corn. But, when a less quantity
of capital raises the same quantity of corn, then
the natural price of corn is low. Now, as has
already been shewn, a low natural price of corn
lowers the natural price of every article which the
193
consumers of corn prepare. Corn is as a tool, or
implement, necessary to the performance of labour ;
and a reduction in its price is a reduction in the
price of labour also. Thus, then, as soon as open-
ing the ports to foreign grain should have thrown
inferior lands out of cultivation, and reduced the
rent of better farms, natural prices would be univer-
sally lowered ; or, in other words, the productive
powers of industry would be universally increased.
This rectifying process would not be slow. As
reduced natural prices increased the power of capi-
tal, as subsistence, labour, and every article neces-
sary to cultivation, could be obtained at a cheaper
rate, land would begin to recover a higher relative
value, and, the diminished expenses of production
compensating for the fall in the markets, tracts,
which., antecedently to this reduction of expense
in cultivation, had been thrown out, could now
be profitably restored to tillage. Hence the re-
venue of the land proprietor would recover it-
self; and though the increased value of money
could not, in paying off mortgages, or in making
good pecuniary engagements previously entered
into, afford him any compensation for the dimi-
o
194
wished sum received ; yet, it would tell in meeting-
all new expenses, and in affording to the manu-
facturer and merchant renewed demand.
The merchant and manufacturer, with the pro-
ductive powers of their capitals increased, with
home demand enlarging, and with foreign sale*
extending in proportion as natural prices had been
reduced, would rapidly advance in wealth. Stock
would now begin to accumulate beyond what
could be profitably employed in working up raw
materials, and in carrying on foreign intercourse,
and, consequently, by overflowing upon the soil,
would bestow on land a heightened relative value
The low rate of interest, aided by the great natural
protection afforded by the expense of carriage upon
a commodity so bulky as corn, would extend cul-
tivation over districts the most unpromising.
Commerce and agriculture have a reciprocal ac-
tion, and a direct injury or benefit, inflicted or
bestowed, on the one, is an indirect benefit or in-
jury, bestowed or inflicted, on the other.
\\ bile from the reciprocal action between the
different departments of industry, and from labour
aud capital receiving every where their most benefi-
195
cial direction, the wealth of the country was thus in-
creased, all the branches of the public revenue would
improve. The nominal deficiency, which the rise
in the value of money had occasioned, in ad valo-
rem duties, would now be made good, in conse-
quence of the diminished sums arising from such
duties being paid upon a greater number of com-
modities ; and thus, in discharging fixed salaries,
and in providing for the dividends of stockholders,
the powers of the revenue would be restored.
The increasing wealth of the country, too,
would enable the public to bear, with less incon-
venience, the increased pressure, which the rise in
the value of money had given to all taxes laid on
by tale, weight, and measurement ; and, while the
greater number of commodities, on which such
taxes would then be paid, would swell the amount
of revenue, any given portion of it, in consequence
of the rise in the value of money, would, with re-
spect to all new expenditure, have attained a higher
power. The finances, from a double cause, would
be improved. When an artificial scale of prices
has been induced, a sudden opening of the ports
would, after a temporary infliction of suffering
o 2
196
and embarrassment, place a country in a much
more flourishing condition than she could have
attained, by a continuance of restrictions upon ex-
ternal trade.
This infliction of suffering and embarrassment,
however, might be easily obviated. In a country
where restrictions on the importation of foreign
grain, have induced an artificial scale of prices, and
gi ven a forced extension to tillage, the temporary evils
inflicted by a sudden, would be completely obviated
by a gradual, opening of the ports. Duties upon
importation, progressively diminishing, from year
to year, until, after a given period, and when their
amount had become very low, perfect freedom of
intercourse should be introduced, would, without
any injury to labour, capital, or revenue, but, on
the contrary, with progressive benefit to them all,
allow industry to take its most profitable direction ;
and, without communicating a shock to any class
of individuals, would advance the state to a degree
of prosperity and affluence unattainable under a
system of restraint.
These duties, laid on at first sufficiently high to
prevent any immediate diminution of tillage, and
197
reduced so gradually, that the demand for agri-
cultural labourers could not diminish faster than
disease and death cut off the present supply, would
allow the youth of the rising generation to turn
themselves to more advantageous employments,
before the land, too inferior in quality to be kept
in cultivation by the natural protection afforded by
the expense of carriage, should be thrown out by
the competition of the foreign grower. Thus,
then, a cautious and progressive introduction of
the principle of a free external trade in corn,
would, with respect to the labourers who had been
induced, by the forced encouragement given to
agriculture, to devote themselves to husbandry,
obviate, in the most perfect manner, the evils to
be apprehended from a sudden opening of the
ports ; and, while the rising youth betook them-
selves to the more profitable paths of industry,
opened by unfettered commerce, not an individual,
losing the benefit of his acquired skill and moral
capital, would, with reduced productive powers,
be driven out in quest of new employment.
With respect to the stock, too, which obstructed
intercourse might have forced from its natural di-
198
lection, and vested in inferior lands, a gradual
opening of the ports would have the same saving
influence. A protection granted to the home
grower, for a period equal to the average length
which leases had to run, would enable him to gain
the ordinary return on whatever capital he might,
under existing leases, have expended in the exten-
sion of tillage ; while the foreknowledge that pro-
tecting duties were gradually to decline, and finally
to cease, would effectually prevent future invest-
ments of capital, upon lands so inferior as to be
unable, at the level prices of unrestricted inter-
course, to pay the expenses of cultivation.
In consequence of this temporary protection,
too, landlords would not be compelled to come to
any compromise with their tenantry, nor to make
abatements in the stipulated rents. On leases fall-
ing in, indeed, and grounds coming to be re-let, the
knowledge that all artificial and forced protection
was about to cease, would cause the farmer to
engage for a less heavy rent, and would effect a
diminution in the land proprietor's income. This
diminution, however, would, to a certain extent,
be nominal ; and the increased power of the cur-
199
rency would partly indemnify him for the smaller
sum received. Such partial indemnity would be
all that he could in equity expect, or that, on the
principle of fair and equal dealing, could be his
due. To maintain the price of corn in a state of
artificial elevation, merely for the purpose of en-
hancing the income of iand proprietors, would be
a measure of intolerable injustice. No land pro-
prietor, capable of comprehending the principle*,
that a high natural price of corn lowers, univer-
sally, the productive powers of industry ; and that,
when the value of the produce of the land is too
high to admit, until the markets have sustained an
extraordinary fall, the superfluity of abundant years
to be exported to other countries, the price of
bread is ruinously fluctuating, no proprietor who
had an understanding to receive these principles,
could, consistently with the common feelings of
humanity, ask for a continuance of restrictions?
A cautious and gradual application of the
principle of free external trade in corn, would
also completely obviate the financial derangement
which a rash and sudden opening of the ports
might occasion. In the first place, a temporary
200
and gradually diminishing protection, offered to the
home grower, would throw no labour out of em-
ployment, would occasion no waste of capital, and
no reduction in that general opulence, in which
the sources of public revenue are found. In the
next place, as the fall in the price of corn, and gra-
dually through corn, in that of all other things,
could not begin to take place, until industry had
begun slowly, and without loss, to revert to its
most productive channels, the amount of all ad
valorem duties would be sustained, in consequence
of the smaller sum being paid on a greater number
of commodities. But as ad valorem duties (the
only ones that could be diminished in amount by a
fall in prices) would be thus sustained ; and as the
revenue derived from taxes laid on by weight, tale,
and measurement, would be increased with the
increasing wealth, while, with the rising value of
currency, any given portion of it would acquire a
higher power than before ; the gradual adoption
of a system of freedom in the external trade, would
completely obviate the financial defalcation which
a sudden admission of foreign grain, and fall of
prices., might induce.
201
And now to conclude the chapter. An artifi-
cial scale of prices, and a forced extension given
to tillage, are, both with respect to the progress
of opulence, and to the supply of subsistence,
highly injurious to a country ; the increased ex-
pense of labour and capital, which they render
necessary to the production of corn, at once lower-
ing the productive powers of industry, and, by
rendering it impossible to export superfluity, until
the markets have sustained an extraordinary fall,
exposing the consumer to suffer from perpetual
fluctuation in the price of bread. But a sudden
fall from the artificial scale of prices, and the
withdrawing of capital from such land as could
not, at the level price of a free external trade,
Tepay the expenses of cultivation, would be a
gueat, though only a temporary, aggravation of
the mischief, throwing labour out of employ, oc-
casioning a destruction of stock, and effecting a
great falling off in the revenue, while it increased
the pressure of the taxes. A circumspect and
gradual adoption of more enlightened principles
into our commercial system, would, however,
completely obviate the evils of incautious change ;
would not diminish the demand for agricultural
202
labour, more rapidly than natural causes diminish-
ed the supply ; would allow the capital, which had
been forced upon inferior lands, time to work out
an adequate return ; would sustain the amount of
ad valorem duties, by causing the smaller sums
to be paid on a greater number of commodities ;
would at once occasion a numerical increase io
the revenue derived from other taxes, and add to
the power of the medium in which it was paid ;
and, without inflicting injury on any class of the
community, would open to the country sources of
prosperity, unattainable under a state of restricted
commerce.
The conclusion from the whole, is, that to the
particular case of a country, in which obstructions
on the importation of foreign grain, have induced
an artificial scale of prices, and given a forced ex-
tension to tillage, the general principles of a free
external trade in corn, are stictly applicable ; but
that, in order to obviate the individual suffering,
and temporary embarrassment, which a sudden
%hangc in the direction of industry could not fail
to occasion, their application, under such circum-
stances, should be gradual.
THE APPLICATION OF THE PRINCIPLES OF THE
EXTERNAL CORN TRADE, TO THE ACTUAL CIR-
CUMSTANCES OF THESE COUNTRIES.
CHAP. I.
The Effects which a System of Restraints upon
the Importation of foreign Corn would pro-
duce ; I. on the Supply of Subsistence ; II. on
Agriculture; III. on Commerce; and IV. on
Revenue,
Having, in the two former parts of this work, en-
deavoured to unfold the principles of political eco-
nomy, as they respect the external trade in corn,
and also to examine the limitations to which they
are liable, under the particular circumstances of re-
strictions imposed on other branches of commerce,
of taxes increasing the expense of production be-
yond what it is in other countries, and of the actual
existence of restrictions upon the importation of
204
grain, occasioning an artificial scale of prices, and
a forced extension of agriculture; we are now to
consider the effects which, in the present circum-
stances of this country, would be produced ; first,
by prohibitory duties on the introduction of foreign
grain ; and, secondly, by adopting, with a due re-
gard to the indemnification of those, who may have
been induced to embark in agriculture, an unre-
stricted external trade in the produce of the soil.
A comparison of these effects will immediately lead
us to an accurate conclusion respecting the mea-
sures which, in revising the corn laws, it would be
expedient for the legislature to adopt. With, this
comparison and conclusion, therefore, the present
volume shall terminate.
In the present chapter, it is intended to examine
the effects which prohibitory duties on the impor-
tation of foreign corn would produce upon the sup-
ply of subsistence, upon the agriculture, upon the
wealth and commerce, and upon the finances, of
the country. Of these in their order.
I. The Select Committee of the House of Com-
mons, appointed to enquire into the corn trade of
the United Kingdom, after having examined into
. 205
the means which these countries possess, of growing
more corn, came to the conclusion, that they are
able to produce as much more, in addition to what
they already grow, as would relieve them from the
necessity of continuing in any degree dependent for
a supply, on foreign countries. This is also stated
in the fullest manner, by the evidence given before
the Lords' Committees.' All the witnesses who
were examined upon the state of the agriculture of
the United Kingdom, concurred in rep/esenting,
that, by a liberal application of capital, the produce
of the soil might be increased to a vast extent.
Respecting, therefore, the capacity of the soil of
these countries, to raise subsistence, not only for
our actual, but for a greatly extended population,
there can exist no doubt. A farther application of
Capital is all that is required, to develop this capa-
city. For the last half century, England has not
grown her own supply of corn, but has been an
importing, and not, as formerly, an exporting coun-
try ; because, in manufactures and, commerce, ca-
pital found a more profitable occupation, than in
the cultivation of inferior soils. But if the im-
portation of foreign corn were restricted, the de-
mand for corn pf pur own growth would be so in-
creased, and its price so raised, that capital would
no longer find its most beneficial occupation in
manufactures and commerce, but would be attract-
ed, by the prospect of larger returns, to the soil.
This is what actually has occurred. The war,
and the enemies' decrees against commerce, in-
creased, so enormously, the amount of freight, in-
surance, and shipping charges, that foreign corn
was almost prohibited. The consequences were,
that the price of grain rose to an unprecedented
height ; that capital was drawn abundantly to the
soil ; that, as appears by the evidence given before
the Lords' Committees, lands were brought into
cultivation, that could not otherwise have been
tilled ; that, as the Custom House books set forth,
the United Kingdom grew its owu supply ; and
that' the exportation exceeded the importation of
com. Similar causes will ever produce similar ef-
fects. If the legislature should replace, by high
protecting duties, those obstructions to the intro-
duction of foreign grain which the peace has re-
moved, the present improved and extended state of
tillage will not only, while the effectual demand for
corn remains undiminished, be sustained, but, with
every increase effected in demand and in capital,
207
tracts will be brought in, which have hitherto been
inadequate to repay the expenses of cultivation,
and the country continue to raise an independent
supply of corn for her increasing population.
But it must be remembered that the growing
demand for corn, and the more liberal application
of capital, both of which are necessary to a farther
development of the capacities of the soil, and to
raising an independent supply for increasing popu-
lation, would, in a little time, be effectually check-
ed by restricted importation. As has been already
fully explained, restrictions for the purpose of
forcing inferior lands into cultivation, would dimi-
nish wealth, and prevent that accumulation of
stock, without which the improvement and exten-
sion of tillage cannot be effected. Hence, whatever
the absolute capacities of the soil may be, restricted 1
importation would speedily deprive us of the power
of raising an independent supply for increasing po-
pulation. Nay, as our wealth and capital decayed,
it would be found impracticable to retain in culti-
vation many of the inferior soils already under the
plough, and we should be unable to raise an inde-
pendent supply even for our present numbers. If,
however, the means of subsistence cannot be raised
41
208
to the level of population, population must sink to
the level of subsistence ; and, under the supposi-
tion that the country is to be gradually depopu-
lated, restricted importation may occasion inde-
pendent supply.
While we admit, then, that under restricted im-
portation, an independent supply might, for some
time, be obtained for our existing, nay, even per-
haps for an increasing population, we cannot admit
that this supply could be kept up ; or, as is stated
in the Report of the Commons' Committee, that
we should become permanently independent of
foreign countries for a supply equal to our existing,
much less to an increasing population. We will
now proceed to inquire into the effect which a
forced independent supply would, while it lasted,
produce on prices.
In the Report of the Select Committee of the
House of Commons, on the corn trade of the United
Kingdom, plenty and low prices are represented as
connected with a system of restricted importation ;
and Sir Henry Parnell, the chairman of that Com-
mittee, states, * that the measure of very high pro-
* Sir H. Parnell's Observations on the Corn Laws, p. 43.
209
tecting duties, which it recommends, would render
Our prices gradually lower, and lower, until we
should become an exporting country, and be enabled
to sell corn as cheap as it can be sold in the foreign
markets.
Representations more contrary to experience,
more repugnant to principle, were, perhaps, never
before exhibited. In the first place, more contrary
to experience. The persons best acquainted with the
state of agriculture throughout the country, have
given it in evidence before the Lords' Committee,
that, to give the farmer, while his present expenses
continue, a reasonable profit upon capital, wheat
must be at least eighty shillings the quarter ; and
that, if prices fall below this, inferior lands, even
shoulu they pay no rent, could not be profitably
tilled. Now, taking the facts as stated by the
very able and experienced Secretary of the Board
of Agriculture, by Mr Bennet, Mr. Wakefield,
Mr. Buxton, and several others, who gave evidence
before the Lords, the statement of the Commons*
Committee, as well as that of its chairman, in
his published pamphlet, must be completely er-
roneous. If we prevent importation, and raise
p
210
an independent supply, our average prices will
be just sufficient to afford the cultivator the cus-
tomary rate of profit upon his stock ; and if, from
expenses incident on tillage, or from the inferior
quality of the lands employed in growing corn, our
remunerating price be eighty shillings the quarter,
it must be equally impossible either to lower the
home market, or to meet the competition of the
foreign.
The assertions respecting the influence of restrict-
ed importation, in reducing prices, are as repug-
nant to the principles of political economy, as they
are contrary to the facts and documents laid before
the Lords' Committee. The assertions involve a
fundamental error, arising from a total forget-
fulness of the connection between natural and mar-
ket price. While the former remains unabated,
permanently to reduce the latter, is impossible.
Unless restrictions upon importation could reduce
rents, and diminish the quantity of labour and ca-
pital necessary to the production of a given quan-
tity of corn, they could not possibly effect a per-
manent rcductiou in our markets. But, instead of
reducing rent and diminishing the quantity of la-
211
bour and capital necessary to production, they
would have a diametrically opposite effect. In
cutting off the foreign supply, they would, in order
to meet the growing demand for corn, and to feed
our increasing population, force into cultivation,
lands which could not, under free competition, be
profitably tilled. But, as such lands afforded the
cultivator an adequate profit, better soils would af-
ford a higher rent. Hence, the quantity of labour,
of capital, and of rent, which ihe farmer paid for
production, would be increased ; or, in other words,
all the component parts of the natural price of corn
would be raised. In this rise, the average price of
the markets would necessarily partake. Sir Henry
Parnell seems to have forgotten, that England has
not, like the continent of America, vast tracts of
first-rate and unoccupied land, from which, at a
moderate expense, abundant crops may be pro-
duced ; and seems not to be aware, that the capi-
tal, which artificial prices might force upon the
soil, could be retained there, only while the conti-
nuance of such prices should secure to it the ordi-
nary rate of profit. If, tempted by the very high
prices at first occasioned by cutting off foreign sup-
p 2
ply, the agriculturalist should be led into the error
of overtrading, and produce a supply beyond the
demand, then, indeed, the market, would sink be-
low the natural, price. But the slightest know-
ledge of political economy is sufficient to convince
us, that such a state of things caunot last. If there
be, in the whole compass of this science, a prin-
ciple universally admitted, and completely incon-
trovertible, it is, that demand regulates supply ;
and that no article can be permanently brought to
market, except at a price sufficient to replace, with
an adequate profit, the expenses of it3 production.
To increase the expenses of production, by forcing
inferior lands into cultivation, and, at the same
time, to lower the markets, is evidently impossible.
Forced cultivation can be induced, and continued,
only by excessive prices. The evidence given be-
fore the Lords' Committee, shews that our inferior
lands must be thrown out of tillage, if prices re-
main below eighty shillings the quarter for wheat.
If, therefore, restrictions on the importation of corn
could have the effect of lowering prices, they would
diminish cultivation, not extend it ; and would
counteract the object they were meant to attain.
213
The supposition that forced cultivation leads to re-
duced prices, involves a palpable contradiction :
tbey are incompatible ; they are mutually destruc-
tive of each other.
The evidence given before the Lords' Commit-*
tee, proves that the farmer cannot, even with some
abatement of his present rent and expenses, obtain
an adequate remuneration, unless the price of
wheat be eighty shillings the quarter. If, there-
fore, importation be restricted, and the country
made to grow an independent supply, eighty shil-
lings will, for a time, be the average price of
wheat; for should it fall below this, cultivation
would cease, and the supply diminish, until the
value of corn again became sufficient to afford the
farmer the customary profit upon his stock. How-
eVer^ if our population should continue at its pre-
sent rate of increase, the average price of wheat,
if we grow our supply, will perpetually rise above
eighty shillings. By the registers of the Popula-
tion Acts, it appears, that from 1803 to 1812,
upwards of a million was added to the popula-
tion. This ratio of increase will give us, each
year, above 100,000 additional mouths to feed ;
214
and if such annual additions are to be fed from our
own soil, lands which had formerly been inadequate
to repay the expenses of cultivation, must annually
be brought in. But, in proportion as we extend
cultivation over lands of an inferior quality, the re-
munerating, or natural price of corn will rise.
The necessary consequence must be, a progressive
rise in the markets, until the consumer's power of
purchasing is exhausted, and the progress of popu-
lation checked.
The Report of the Commons' Committee, and
the pamphlet of their chairman, represent restric-
tion upon import, and independent supply, as the
means of rendering the price of corn steady, as
well as low. Nothing can be more contrary to
the principles of economical science. In what-
ever proportion we limit the territory from which
we derive subsistence, in the same proportion do
we expose ourselves to the uncertainty of the sea-
sons, and deprive ourselves of the benefit of the
provision which, in the uniformity of her general
results, Nature has made for the correction of par-
tial irregularity in her operations. If we restrict
importation, and, in order to raise an independent
215
supply of food for our increasing population,
force into tillage lands which have not hitherto
been adequate to repay the charges of cultivation,
then, the expenses of production will be increased,
and the average price of wheat will rise consi-
derably above eighty shillings the quarter, the
remunerating price at present. Now, while our
prices, under a system of restriction, would be
upwards of eighty shillings, wheat, by Sir Henry
Parnell's own shewing, may be usually obtained
at Dantzic for thirty-two shillings. How, then,
in abundant years, could our superfluity be ex-
ported, so as to meet the competition of the con-
tinental grower ? Our markets must be completely
glutted, must fall, at the very least, to half their
average, before our produce could begin to be
sent abroad with a profit. A forced independent
supply, therefore, instead of giving steadiness to
prices, would cause them to fluctuate perpetually,
between eighty shillings the quarter, the average
price, and forty shillings, the highest price at
which, in abundant years, we could export, with
a chance of standing the competition of the conti-
nental grower. But farther, if we would grow an
216
independent supply, our average prices, unless the
increase of population should be interdicted, will
soon rise beyond eighty shillings the quarter ; and
foreign corn must be farther excluded, until prices
have risen beyond this increased and increasing
average. Therefore, the fluctuation between the
high price of scarce years, when we admitted im-
portation, and the low price of abundant years,
when exportation became profitable, would be
much greater than that which we have stated,
Before superfluity could be removed, our markets
would probably fall two-thirds below the rate of
average seasons. Taking the Dantzic prices at
thirty-two shillings, and even allowing eight shil-
lings the quarter, on account of our being nearer
to the markets of Southern Europe, it is evident
that our produce could not meet the 'competition
of the Polish grower, until it fell to forty shillings
thp quarter for wheat. Between forty shillings,
therefore, and that price at which importation
might be admitted in deficient years, our markets,
if we raised an independent supply for average
years, would be perpetually fluctuating. As an
independent supply would not come naturally, but
217
would require prohibitory duties, in order to force
it from lands which, under a system of free inter-
course, could not be profitably cultivated, it is not
in the nature of things, that such supply should be
either cheap or steady. Nature, as if to promote
union and brotherhood among the nations of the
world, has, in the important point of a certain and
steady supply of food, rendered each dependent
upon all ; and, in proportion as we narrow our in-
tercourse, causes the irregularity of the seasons to
be more severely felt,
II. From the reasonings of the present, as well
as of former chapters, it must already be apparent
to the reader, that if, under the present circum-
stances of this country, the legislature were to re-
place, by high protecting duties, the obstacles to
importation which the peace has removed, the im-
mediate consequence would be, an improvement
and extension of agriculture. But this does not
rest on reasoning alone ; it has received the fullest
sanction of experience. During the ten years from
1803 to 1812, while the war threw increasing
difficulties in the way of importation, we received
218
from abroad, nearly 400,000 quarters of corn less
than had been received during the preceding ten
years ; though, in the former period, the popula-
tion increased upwards of a million. Under the
obstacles to importation created by the war, the
agriculture of Great Britain must, therefore, in a
period of ten years, have received a most extraordi-
nary increase. The dependence on foreign supply
diminished, while subsistence was created for a
great additional population. Similar causes will
produce similar effects. The evidence contained
in the Reports of the Committees ordered to sit
upon the Corn Trade of the United Kingdom,
establishes the fact, that a liberal application of
capital is all that is required to effect a great im-
provement in the tillage of these countries. If
the legislature should replace, by high protecting
duties, the obstructions to importation, which the
peace has removed, then, while capital and popu-
lation continue to increase, cultivation will ex-
tend ; and tracts, which have hitherto been neg-
lected, because incapable, under existing prices,
of yielding the capitalist an adequate return, will
be progressively enclosed and prepared for corn.
219
Duties upon the importation of foreign corn,
while they continued to raise prices, and to extend
cultivation, would, by a necessary operation, in-
crease the revenue of land proprietors. The great
rise in rents, which took place from the period
when the war began to create obstructions to the
introduction of foreign grain, proves this experi-
mentally. The demonstration from theory is ob-
vious. As corn rises in price, inferior lands,
which could not before repay the expense of til-
lage, yield the cultivator the customary rate of
profit upon his stock. Now, as inferior lands
yield the customary rate of profit, superior lands
will, under the original leases granted before the
elevation of the markets, yield more than the ordi-
nary profit. As soon, therefore, as such lands
come to be re-let, the competition of capitalists
will necessarily raise the rent of the proprietor,
until nothing remains to the cultivator, beyond the
customary rate of wages and of profit upon the
labour and capital which he employs. Competi-
tion perpetually tends to equalize the rate of pro-
fit upon stock ; and whatever enables inferior
lands to be cultivated, necessarily increases the
220
rent due front the superior. During the term of
existing leases, indeed, the increased value added
to land will belong to the tenant, but on the re-
letting of farms, it will go to augment the revenue
of the proprietor.
Restrictions upon the importation of foreign
corn, increasing the profits of the farmer, during
the term of existing leases, and, at the period of
their expiration, raising the rent of tlie landlord,
would undoubtedly confer, in its immediate opera-
tions, an important benefit upon the landed inte-
rests. But the landed interests, even upon the
principle of the narrowest selfishness, should look
beyond the immediate effects of restricted importa-
tion, and should inquire, whether the benefit to be
derived from establishing an artificial scale of
prices, might not carry in itself the seeds of it sown
destruction ? To answer this important question,
it is necessary previously to shew, how far restric-
tions upon importation, and an artificial elevation
of the price of agricultural produce, might, under
existing circumstances, affect the wealth and com-
mercial prosperity of these countries, and, conser
quently, the demand for corn.
221
III. To those who have embraced the opinions
of the French economists, it may, perhaps, appear
somewhat paradoxical to say, that a measure which
should extend agriculture, and increase the value
of iand, would be injurious to prosperity, and dimi-
nish wealth : yet such would certainly be the case.
Even upon the principles of those, who assert that
agriculture is the only source of wealth, it is de-
monstrable, that the general opulence of these
countries would be diminished by a restriction
upon importation, forcing our inferior lands into
tillage ; and that, by the operation of such a mea-
sure, the national prosperity would be checked, in
the exact proportion in which agriculture should
be extended. Though it should be conceded, that
agriculture is the only source of wealth, yet it
would still remain an incontrovertible proposition,
that opulence is advanced by obtaining agricultu-
ral produce, at the smallest possible expense of
labour and capital. If, in consequence of our
skill in manufactures, any given portion of our
labour and capital can, by working up cloth,
obtain from Poland a thousand quarters of wheat,
while it could raise, from our own soil, only nine
222
hundred ; then, even on the agricultural theory,
we must increase our wealth by being, to this ex-
tent, a manufacturing, rather than an agricultural
people. Though the economist should establish
the fact, that our manufactures brought none of
this wealth into existence, but that the whole was
created by the cultivator of Poland, yet this would
not, in any way, alter the state of the case. We
have an hundred quarters of corn more than we
could have obtained by raising it from our own
soil. Though our manufacturers should not have
increased the wealth of the world, yet they have
increased the particular wealth of England. They
have given us a species of property in the soil of
Poland ; and, from the agriculture of that coun-
try, have enabled us to draw a larger supply of
wealth, than could have been raised at home.
The theory of the economists is, indeed, in a high
degree, incorrect ; but it is not necessary that we
should, in this place, enter into any formal refuta-
tion of their errors ; because, even admitting their
principles, it still rcmaius true, that restrictions
upon importation, compelling us to raise at home
a less quantity of agricultural produce than might,
223
at the same expense of labour and capital, be pro-
cured from abroad, would be, notwithstanding the
extension given to tillage, injurious to the Wealth
of the country.
Having disposed of this preliminary objection,
which might suggest itself to those who still lean
to the doctrines of the economists ; and shewn that,
even on the principle, that agriculture is the only
source of wealth, a measure which gives extension
to tillage, and raises the value of our land, may,
notwithstanding, cause our labour and capital to
procure for us a less supply of agricultural pro-
ductions, and diminish the general opulence of the
country ; we may now proceed to examine more in
detail, the effects which, if the legislature should
establish a system of restriction on the importation
of foreign corn, would be produced on the produc-
tive powers of industry, and on the national pros-
perity. We shall examine a system of restriction ;
first, as it operates upon the labour and capital em-
ployed upon the soil ; and then, as it operates upon
the labour and capital employed on manufactures
and commerce.
Were legislative restrictions to replace those
224
obstructions to importation which the peace lias
removed, it would, in order to feed our increasing
population, become necessary to bring into tillage
lands which, under the prices that have hitherto
existed, have been found inadequate to repay the
expense of tillage. The natural price of corn
would, therefore, receive a considerable, and a pro-
gressive, increase ; or, in other words, it would
gradually require greater quantities of labour and
capital, to procure a given quantity of grain. This
would hold good with respect to the best, as well
as with respect to the worst land ; for, as has been
already explained, the increasing rent of the for-
mer, would necessarily prevent its produce from
being afforded at a cheaper rate than the produce
of the latter. Now, as the natural price of corn
increased ; as it required greater quantities of la-
bour and capital, to procure a given quantity of
grain, it is self-evident, that the productive powers
of the industry which supplied agricultural pro-
duce, would be lowered, and that wealth and pros-
perity would decline. Every forced extension given
to tillage, which, in its progress, elevates the com-
ponent parts of natural price ; which raises the rent
225
of land, or increases the quantity of labour and ca-
pital on which, in order to procure a given quan-
tity of commodities, wages and profit must be paid,
would, in fact, inflict an artificial sterility upon
the country, and take from us the advantages be-
stowed by nature.
Secondly, that restrictions upon importation,
compelling us to direct a greater portion of our la-
bour and capital to procuring food, would leave us
a less portion of labour and capital to carry on the
operations of manufacture and commerce, is also
self-evident. But this would be a very small part
of the injury which restricted importation, and the
consequent high price of corn, would inflict upon
the manufacturing and commercial interests. Com-
merce being an interchange of equivalents, as we
refused to import, we should find it impossible to
export ; and should deprive ourselves of the de-
mand of the foreign markets. Sir Henry Parnell
has said, that this loss of the foreign, would be
compensated by the extension of the home, market.
A greater error we cannot conceive. A restrict-
ed importation, giving forced encouragement to
domestic agriculture, would necessarily increase the
Q
226
value of corn with respect to other things ; and it
is self-evident, that, as consumers gave more for
their corn, they would have less to give for other
articles. Thus, a restriction upon the importation
of corn, while it tended to exclude our merchants
from the foreign, would narrow the home, market ;
and, by a double operation, would check our ma-
nufacturing and commercial prosperity. But this
is not all. The rise which restricted importation
would occasion in the natural price of corn, would
be communicated to labour, and, through labour,
to all wrought goods. Now, the high natural
price, thus communicated to wrought goods, would
not only be the same thing as a reduction in the
productive powers of manufacturing industry, but
would enable foreigners to undersell us, and would
reduce our manufacturing population to the alter-
native of emigrating, or of starving.
This view of the question is awfully important.
England has become the greatest manufacturing
country that ever yet existed ; aud if, while tran-
quillity and commerce are restored to the conti-
nent, we keep up the price of provisions at home,
the foreigner, gradually acquiring capital and skill,
227
, will certainly be enabled to undersell us. What,
then, is to become of our unemployed manufac-
turing population ; and how are we prepared to
meet the tremendous vengeance they would take
for the infliction of artificial famine? Yet, on
this most momentous view of the question, the ad-
vocates of an independent supply of corn, perversely
close their eyes. Contrary to all sound theory,
and in direct opposition to experience, those who
would make provisions dear, contend, that the price
of corn has no influence on wages ; and cannot,
therefore, increase the price of wrought goods, or
give the foreign any advantage over the home ma-
nufacturer. The error here involved has been al-
ready pointed out, in the chapter where we consi-
dered the natural and the market price of labour ;
but it may in this place be necessary to remark upon
the evidence which, with respect to the connection
between the price of grain and the wages of la-
bour, was given before the Lords' Committee.
Lord Lauderdale, after having stated to the
Committee his strong opinion, that the price of
labour, like the price of every other commodity,
was solely regulated by the proportion between the
q 2 .
228
quantity of it, and the demand for it ; and having
given in a statement to shew, that, in years when
corn was very dear, manufacturing labour was very
cheap, proceeded with the following reasoning.
" In dear years, a working manufacturer, finding
himself deprived of his usual enjoyments, is natu-
rally excited to greater industry, and is desirous of
working extra hours, for the purpose of obtaining
those comforts to which he has been accustomed ;
and this disposition of the manufacturers must
necessarily increase the supply of labour in the
market. For example, supposing there existed, in
any country, a demand for a thousand manufac-
turing labourers, who, on an average, worked eight
hours a-day, it is obvious that the stock of manu-
facturing labour, per week, would be 48,000 hours.
If, in a dear year, the desire of securing their usual
enjoyments induced them to work ten hours a-day,
the stock of manufacturing labour would become
60,000 hours per week ; and, if the demand for it
remained the same, the value of it, on all general
principles, must fall. In cheap years, on the other
hand, the working manufacturer, finding his fa-
mily more than supplied by the wages he usually
229
acquires, is apt either to relax his industry, and to
work fewer hours, or to spend the surplus of his
wages in an alehouse, which, by disqualifying him
for work the next day, produces the same effect ;
and as the stock of labour must be thereby dimi-
nished, an increase in the value of it must follow,
upon the supposition that the demand for it re-
mains the same."
In the above passage, Lord Lauderdale has suc-
ceeded in placing in a clear light, the obvious and
incontrovertible principle, that, with respect to la-
bour, as well as with respect to every thing else,
market will occasionally vary from natural price.
But this is looking merely on the surface of the
question. The prices of the market, however
fluctuating and uncertain they may seem, are al-
ways, upon the average, determined by the prices
of production. Labour, like every thing else, has
its production, or natural price. When the la-
bourer fails to obtain this, diminished births, and
increased deaths, will speedily cut off the surplus
labour which had glutted the market ; and, in this
manner, restore wages to their natural rate. Lord
Lauderdale's statement proves nothing. Indeed,
230
both his statement, and the argument which ac-
companies it, are totally foreign to the question at
issue Iu 1190, when wheat was at .2 16s. the
quarter, it cost lad to weave an ell of muslin;
and in 181 ; , when wheat was at A>, the same
work was done for 6d. ! This shews, that, when
pro* isions are scarce, aud commerce at a stand, the
market price of corn may rise, while that of labour
may fall. But it shews nothing more. Now the
question to be decided is, whether, if such a state
of things were to continue, the manufacturing po-
pulation would remain undiminished. If the po-
pulation should fail, then the value of labour, in
consequence of the withdrawing of the supply,
would be increased, and the high price of corn
would be found, notwithstanding occasional fluc-
tuations, to have a powerful effect in raising wages :
but, on the contrary, if under the dear provisions,
and low wages, of 1812, our manufacturing popu-
lation could be kept up, then, indeed, as the sup-
ply of labour would not be withdrawn, its value
would not rise with the rising price of corn. The
question resolves itself into a question of popula-
tion. As long as abundant subsistence increases,
231
and deficient subsistence diminishes, the numbers
of mankind, and., consequently, the supply of la-
bour, so long will the wages of the labourer
(making, of course, allowance for occasional and
temporary fluctuations in the market) be regulated
by the price of corn.
But it is not necessary to refer to the general
principles of political economy, for a refutation of
Lord Lauderdale's strong opinion, respecting the
influence which the price of grain has upon the
price of labour. The whole scope of the evidence
given before the Committee of which he was a
member, controverts his doctrine, and furnishes an
experimental proof, that wages rise with the rising
price of subsistence. Mr. Buxton states, in his
evidence, that, from the year 1792 to the year
181$, the annual sum which he paid for the labour
employed upon his farm, rose from .274 to
.816, though, in the first years of his lease, he
had employed more hands than in the latter ; and
though, in 1805, he introduced a thrashing ma-
chine, which abridged labour to the amount of
.139. During this progressive rise in wages, the
quarter of wheat gradually rose from .2 13s. its
232
price in 1792, to .6 8s. its price in 1812. But,
to render the experimental proof as complete as evi-
dence can make it, and to shew, by a statement of
the fact, how powerfully the price of corn operates
upon the price of labour, Mr. Buxton farther
states, that, latterly, wages have declined with the
fall in corn ; and that the farmers " dropped wages,
on account of the price of corn coming down."
The evidence of Mr. Birkbeck is to the same ef-
fect. He states to the Committee, that, within
these twenty years, wages have been doubled ; and
that, in addition to this rise, the labourer, when
corn is dear, receives from the parish, a portion of
what ought to be paid by the employer. The evi-
dence of the Secretary of the Board of Agriculture
is the same. He gives in to the Committee a state-
ment, shewing, that, from 1790 to 1813, while, as
appears from other documents, the quarter of wheat
rose from .2 16s. to .6, the wages of the la-
bour, necessary to cultivate an hundred acres, rose
also, from .85 to .161. The evidence of Mr.
Joyce proves a similar fact, with respect to manu-
facturing labour ; his workmen obtaining double
their former earnings.
233
But there is no necessity for farther authorities,
as the facts which Lord Lauderdale has himself
stated to the Committee, afford a complete refuta-
tion of the opinions he maintains. He says, that
te in Scotland, where the poor rates are compara-
tively trifling, the wages of a day-labourer, during
the last century, have, probably, risen in a greater
proportion than in England;" that, "atthe Union,
the peck of oatmeal was &|d. and a day's wages
5d. ;" while> " at present, oatmeal is worth Js. 3d.
the peck," and the labourer can earn better than
" 2s. a-day."
Here the rise in wages has been greater than tlie
rise in corn. But no one contends, that the value
of subsistence is the exclusive, and the only cause,
that can operate upon wages. Education has been
much more generally diffused in Scotland, than in
any other part-of the kingdom ; and this, giving
force to the prudential check on population, and
occasioning the labour market to be more frugally
supplied, would co-operate with the high price of
corn, in raising wages. Now, when a double cause
produces an effect beyond what could be produced
by a single one, it is not quite logical to infer, that
234
the tingle one produces no effect at all. The cir-
cumstance, that, in Scotland, the rise in wages has
been greater than the rise in corn, has no con-
ceivable tendency to prove, that this irn reased price
of labour was not, in part, produced by the in-
creased price of subsistence; and leaves us at full
liberty to disprove Lord Lauderdale's theory by his
Lordship's facts.
Having, in this manner, obviated the objection
contained in Lord Lauderdale's evidence before the
Lords' Committee ; and shewn, that not only all
sound general principles, but also the testimony of
persons of the greatest practical knowledge, in the
economy of the country, establish the fact, that
the price of corn influences the rate of wages, we
may now resume the consideration of the effects
which, in the actual circumstances of this king-
dom, restriction on the importation of grain, and
the consequent high and increasing price of provi-
sions, would produce on the manufactures and com-
merce of the country.
In a former chapter, we shewed, that the ease or
the difficulty, with which subsistence can be raised,
it not only the measure of the productive powers
235
of agricultural industry, but also governs, in a
great degree, the productiveness of the capital
vested in trade and manufactures. If the master
manufacturer should give to the labouring manu-
facturers whom he employs, a quantity of the pro-
duce of their labour, or, (what is the same thing)
of the value of this produce, sufficient to purchase
subsistence for their families, population must de-
cay, and the supply of labour diminish, until the
competition of employers shall restore its market
to a level with its natural price. Hence, when
coin forms a part of the subsistence of the labourer,
an increase in its natural price, necessarily occa-
sions an increase in the natural price of labour ;
or, in other words, when it requires a greater
quantity of labour to procure subsistence, a greater
quantity of labour, or of its produce, must remain
with the labourer, as his wages. But, as a greater
quantity of his labour, or (what is the same thing)
of the produce of his labour, becomes necessary to
the subsistence of the labouring manufacturer, and
is consumed by him while at work, a smaller
quantity of the productions of labour will remain
with the employer ; and any given quantity of
236
manufacturing capital will bring to market a less
supply of wrought goods than before. Thus it is,
that a restriction upon the importation of corn,
forcing, in order to feed our increasing population,
the cultivation of inferior soils, while, in its first
operation, it increased the natural price of corn ;
or, in other words, rendered a greater quantity of
labour and capital necessary to the production of
the same quantity of grain, would, in the second
place, increase the natural price of every article
wrought up by the consumers of corn ; or, in other
words, lower the productive powers of every spe-
cies of manufacturing industry.
While restriction upon the importation of corn
would thus, in every branch of industry, lower the
productive powers of our labour and capital, they
would farther, in the present circumstances of
these countries, tend to exclude our commodities
from every foreign market. Indeed, this, to a cer-
tain extent, at least, would be the effect of restric-
tion, even if we had no commercial rivals, eager to
supplant us. As nothing can be produced without
labour, the wages of labour must form a compo-
nent part in the natural price of all things ; and,
237
therefore, other things remaining the same, as we
increase the value of subsistence, and, consequent-
ly, the rate of wages, we must, in whatever pro-
portion wages may enter into natural price, in-
crease the price of all commodities. Now as the
price of our commodities increased, our customers,
whether at home or abroad, would be able to
consume only a diminished quantity of them ; and,
even though we possessed a monopoly of all the
markets of the world, our manufactures and com-
merce would necessarily decline. But, whatever
might have been the case during the late convul-
sions on the continent, it has now become impos-
sible that we should monopolize the trade of the
world ; and we can retain our commercial pre-emi-
nence, only by underselling the competitors that
are every where ready to start against us. At such
a crisis, the adoption of regulations, for the pur-
pose of increasing the price of subsistence, would
be little less than madness. If the industrious
classes are compelled to purchase their corn at an
artificially elevated price, we must speedily cease
to be a manufacturing and commercial people.
This conclusion, which seems capable of being
supported by a process of reasoning, self-evident
in all its steps. Sir Henry Parnell, in his pamphlet
on the Corn Trade, has laboured to overthrow.
"The opposition,'* he asserts, "which has been
so generally made, by many in the House of Com-
mons, and by all the bodies of the manufacturers,
who have petitioned against the new regulations,
upon the assumption, that they will raise the price
of corn, and, therefore, the price of manufacturing
labour, and that this advance in the price of ma-
nufacturing labour will deprive us of our manu-
facturing superiority over foreign merchants, in
the foreign market, though the most loudly set
forth, and the most frequently dwelt upon, is, of
the whole opposition which has been given to them,
the most easily to be controverted."
Now, it must be confessed, that Sir Henry Par-
nell has adopted a very easy mode of controverting
the objection, that a system of restrictions on the
importation of grain, would advance the price of
subsistence and of labour, and thus tend to deprive
us of our advantages in the foreign market. He
admits, indeed, for the sake of argument, that the
price of corn will be advanced. But then, in pro-
239
ceeding to the argument, he most conveniently
passes oyer, both the distinction and the connection
between the market and the natural price of la-
bour, and throws completely out of sight, the
fundamental principles, that there is, in every
neighbourhood, an ordinary rate of wages, deter-
mined by the climate, and by the habits of living ;
and that, when the labourer obtains more than this
rate, population, and the supply of labour, in-
crease ; and, when he obtains less, population,
and the supply of labour, diminish; until, in
either case, the market is brought to a level with
the natural price of labour. The bare statement
of these principles is sufficient to set aside all that
can be advanced by such political economists, as
confine their consideration to the market rate of
wages ; and would persuade us, that labour can
be procured at a cheaper rate than is sufficient to
maintain the labourer's family. We shall proceed
to the next step of the argument, and consider, for
a moment, the manner in which Sir Henry Parnell
obviates the objection, that a high rate of wages
would expose our manufacturers to be undersold
in the foreign market.
240
!f If it were true," Sir Henry Parnell continues,
" that the price of labour did advance with the
price of corn, it by no means follows, that such an
advance in the price of labour would expose our
manufacturers to be undersold in the foreign mar-
ket ; because, it is not the cheapness of labour that
has given us the superiority we have so long pos-
sessed ; on the contrary, the price of labour has
always been higher in this country, than in those
countries in which we have established markets.
The cause of our superiority is to be found in the
greater skill, better machinery, and more extend-
ed capital, of this country, than exist in any other
country in the world. As we should continue to
possess these advantages, notwithstanding the
price of labour might still be enhanced, such an
enhancement of it could not be productive of that
injury to our manufactures, as it has been hastily
asserted must flow from it."
The error which this passage involves, is very-
obvious. A farther enhancement of wages might
completely counteract all the advantages of our
skill, machinery, and capital. Supposing that, in
consequence of our skill, capital, and machinery,
241
a master manufacturer in England can, with ah
hundred workmen, bring to market a thousand
yards of cloth; while, to produce a thousand,
of equal goodness, two hundred labourers must be
employed in France. Here, then, we possess an
immense advantage over our rivals. But suppos-
ing, on the other hand, that manufacturing labour
in France, could be had for half the price which
it brought in England ; then, the English em-
ployer would be obliged to give, to his hundred
workmen, exactly the same sum as the French
employer gave to his two hundred ; and, as far as
the wages of labour might be a component part
in the price of the cloth, the article could not be
made cheaper in England, than in France. Here,
therefore, the advantages, which we gained upon
the one hand, we should lose upon the other. The
effects of our skill, capital, and machinery, in
abridging labour, and cheapening our commodity,
would be completely counteracted by the high rate
of subsistence and of wages.
In the above illustration, we have supposed,
that England is to retain her present decided su-
periority uv skill, capital, and machinery. But
it
242
(his is manifestly impossible. As industry and
commerce revive upon the continent, the manufac-
turers of France, and of Germany, will gradually
acquire capital, and imitate our machinery ; and
these advantages will lower the price of all their
articles. Now, if, while this process is going on>
and natural prices are becoming lower, in the rest
of Europe, we permanently adopt an economical
system, which must raise the wages of our labour,
and, consequently, elevate our prices, we shall be
playing into the hands of our rivals ; and the
result will be, that we shall exclude ourselves from
every foreign market.
As, in this section, the chain of the argument
has been a great deal broken, by entering into an
examination of the erroneous doctrines contained
in the pamphlet of Sir Henry Parnell, or given in
as evidence before the Lords' Committee, it may be
proper to recapitulate, in a brief and connected
manner, our reasonings upon the effects, which a
system of restrictions upon the importation of
foreign corn, would produce on the manufactures
and commerce of these countries.
A restriction upon importation, compelling us
243
to provide for our increasing population, by the
cultivation of inferior soils, would force us to em-
ploy a greater quantity of our labour and capital,
than would otherwise be necessary, in procuring
our supply of grain ; or, in other words, would
raise the natural price of corn. But market,
though it sometimes rises considerably above, and
at other times, falls considerably below, must,
upon the average, exactly conform to natural price;
or, in other words, the consumer must always,
upon the average, pay the expenses of production.
This holds good with respect to labour, as well as
with respect to all other commodities. As labour
cannot be brought permanently to market, unless
the expenses of its maintenance and production be
paid, the average price of corn must, in whatever
proportion meal and flour may form ingredients in
subsistence, determine the rate of wages. But, as
wages form a component part in the price of all
things, when corn and wages rise, a universal rise
in commodities will take place. Now, it is self-
evident that, as our commodities rise in price,
their exportation will be diminished. A high scale
of duties, therefore; on the importation of foreign
r2
344
corn, while it enhanced the price of subsistence,
would strike directly at our manufacturing and
commercial prosperity. This would be the case,
even if we had no rivals to supplant us. Increas-
ing" the expenses of production, has the same effect,
as diminishing the demand for commodities. As
our articles become dear, the consumer will not be
able to purchase them in the same quantity as be-
fore ; and the amount of our foreign sales must be
reduced.
To the general principle, however, that a rise
in the value of subsistence is accompanied by a
rise in the price, and a diminution in the con-
sumption, of commodities, there are some excep-
tions. If improved machinery, or a more perfect
establishment of the divisions of employment,
should increase the productive powers of labour,
and, consequently, reduce natural prices in a
greater degree than the increased value of subsistr
ence raised them, it is evident that, notwithstanding
the dearness of food, manufactured articles would
become cheaper, and the sale of them extend.
And again ; if, while subsistence, and, through
subsistence, all other articles, experienced, in any
245
particular country, an extraordinary rise, this coun-
try should, from political causes, obtain a mono-
poly of the commerce of the world, then, it is
evident, that, while her prices rose, her foreign
sales might extend.
During the last twenty years, England has
been experiencing the benefit of both these excep-
tions. Improvements in the application of labour
and capital have, notwithstanding the advancing
price of subsistence, kept down the price of many
of her articles ; while the loss of capital, and the
suspension of all active commerce upon the con-
tinent, secured her against competition, and en-
abled her to sell, at advanced monopoly prices, in
all the markets of the world. Hence, general prin-
ciples became inapplicable to the particular, and
the extraordinary, circumstances, in which we
were placed ; and, though subsistence experienced
an unexampled rise, our commerce extended, and
our wealth increased. But now these particular
and extraordinary circumstances have ceased to
exist. If, with arrogant ignorance, mistaking
casual results for the operation of established laws,
erecting exceptions into principles, and denying
that a high rate of wages communicates itself to
246
commodities, and checks their sale, we, while
commerce opens to our rivals, and enables them to
accumulate captial, and to acquire skill, should
madly attempt to keep up war prices, and to sus-
tain, and even still farther to extend, the cultiva-
tion of inferior lands, we must, as far, at least, as
relates to the foreign market, cease to be a manufac-
turing and a trading people.
Having thus shewn the effect which a system of
restriction on the importation of corn, would pro-
duce up.on our commerce and wealth, we are pre-
pared to resume the question, with which we con-
cluded the last division of this chapter, and to en-
quire, whether agriculture could receive any per-
manent benefit, from legislative protection giving
to its produce an artificial elevation ?
We have already seen, that the direct and imme-
diate effects of a system of restrictions on the im-
portation of foreign grain, would be to sustain,
and, while the population continued on the in-
crease, to extend, our tillage. The benefit, how-
ever, which agriculture would receive from such
artificial encouragement, could be but of short
duration ; and would, in fact, bear within itself
the principle of its own destruction. Demand
247
regulates supply ; and nothing can be permanently
brought to market, unless there are consumers,
able and willing to pay the expenses of production.
Now, as manufactures and commerce decline in
any country, the demand for agricultural produce
fails. If foreign corn were excluded, the first
consequence would be, an increased consumption
of, and higher prices for, corn of home growth ;
but, as these higher prices would raise wages, and
thereby shut out our manufacturers and merchants
from the foreign market, the second consequence
of restricted importation would be, that the im-
poverished domestic consumer would no longer
have ability to replace, to the farmer, the expenses
of cultivation.
This second consequence of .a system of restric-
tion on the importation of corn, would not, pro-
bably, be immediate. Corn is an article of such
prime necessity, that, if measures for keeping up
its price were adopted, the people would dispense
with almost all other articles, in order to procure
it. Thus, while the demand for all other articles
diminished, and their production, consequently,
ceased, the value of corn would be sustained, and
248
agriculture would flourish, for a time, amid the
geueral decay of wealth. To continue such a
state of things, would be evidently impossible.
As the high price of subsistence at once closed
foreign markets against them, and diminished the
home consumption of their productions, our manu-
facturers, whatever other articles they might be
disposed to give up, would soon find themselves
unable to purchase the same quantity of corn, as
before. By emigration, or by death, their num-
bers would rapidly diminish. Here, then, agricul-
ture, after having, for a time, retained a preter-
natural vigour, under the influence of an artificial
stimulus, would begin to exhibit the symptoms of
decline. The deficiency in the home demand,
which had, at first, a flee ted manufactured articles
only, will now extend to the productions of the
soil. The market price of corn will suddenly fall,
and the labour and capital which had been forced
upon inferior lands, no longer obtaining an ade-
quate recompence, such lands will be thrown out
of cultivation. As, in consequence of diminished
demand, and reduced prices, inferior lands are
thrown out of cultivation, superior gfound will be
249
reduced in value, and yield a lower rent. The land-
lord, the farmer, and all the persons to whom they
give employment, will be involved in the general
distress.
It may, perhaps, be objected, that this reasoning
is opposed to experience; and that the obstructions
to the importation of corn, created by the war, gave
to agriculture an artificial encouragement, which,
so far from bearing in itself the seeds of its own
destruction, was accompanied with a progressive
increase in wealth, in population, and consequently,
in the home demand for corn.
The answer to this objection is obvious, and is
short. During the war, our merchants and ma-
nufacturers had no competitors, and were enabled
to charge a monopoly price on every thing they
sold. The monopoly price, therefore, which they
obtained, enabled them to pay a monopoly price to
the farmer for subsistence. Our commercial rela-
tions are now altogether changed. Competitors
are ready to start against us, in all the maritime
countries of Europe ; and our manufacturers and
merchants must either lower their prices, or cease
to sell in the foreign market. Now, as our mer-
250
chants and manufacturers cease to receive mono-
poly prices, they will cease to have ability to pay
them. It is the quantity of wrought goods, that
the consumers are able and willing to exchange
against agricultural produce, which constitutes the
effectual demand for it, and regulates its value.
When these fetch a smaller sum than formerly, the
corn, to which they are equivalent, must fetch a
smaller sum also. The attempt to sustain the price
of subsistence, when free competition had reduced
the scale of prices in other things, would be en-
tirely abortive, and would completely counteract
itself. It would exclude the manufacturer and
merchant from the foreign market ; it would oc-
casion a diminution in all those articles, which con-
stitute the demand for agricultural produce ; and,
ultimately, reduce the landed interests to a much
worse condition, than if they had acquiesced in the
changes of the times, allowed corn to come gradu-
ally down to a level with other things, nor sought
to perpetuate, in peace, the monopoly prices of the
war.
In a former chapter, we traced the effects which,
in a country where obstruction to importation had
251
given a forced extension to tillage, and induced an
artificial scale of prices, must follow a sudden open-
ing of the ports to foreign corn. The derange-
ment and embarrassment, however, occasioned by
a rash and injudicious application of the principle
of free intercourse, would appear light and tran-
sient, when contrasted with the depression and ca-
lamity, which would ultimately overtake the land-
ed interests, in consequence of the diminution in the
home market, and the fall in the value of agricul-
tural produce, which, now that our merchants and
manufacturers can no longer obtain the war prices
for their goods, would be indirectly occasioned by
an attempt to keep up the war price of corn. In
the former case, the temporary evil would be gra-
dually, but effectually, corrected, by the operation
of the very causes, which had at first produced it.
Free trade, though circumstances may sometimes
render its sudden introduction inexpedient, is, in
its nature, highly beneficial ; and, however injudi-
ciously admitted, must, after the first calamitous,
shock and derangement, occasion more accurate
divisions of employment, give labour and stock a
more productive direction, and thus recreate trie
252
wealth it had destroyed. Now, it is the neigh-
bourhood of wealthy markets, which affords the
best encouragement to agriculture ; it is the quan-
tity of other commodities offered in exchange for
it, that determines the real value of corn. As un-
restricted intercourse began to extend manufactures
and commerce, our farmers, under the natural pro-
tection afforded by the expense of carriage, upon
an article so bulky as grain, would, after the price
of all things had settled down to the reduced scale,
be enabled to carry tillage to a much greater ex-
tent, than could have been possible under artificial
encouragements, the necessary effects of which
must be, to narrow the home market, which the
farmer would monopolize.
While the direct injury inflicted on the landed
interest, by a hasty and injudicious application of
sound general principles, would, after a period of
calamity, be corrected by the very causes which had
produced it ; in the evil which would be indirectly
occasioned by our attempt to give permanence to
our artificial scale of prices, nothing of this re-
deeming spirit would be found. In proportion as
we infringe on the liberty of trade, we destroy the
253
elastic power which enables it to rebound after
every decline; we take from industry, the vital,
renovating principle, by which, in a state of free-
dom, the national resources recover from every ac-
cidental decay, and the public prosperity, after each
apparent check, receives a new impulse. A sud-
den opening of the ports would, after a time, in-
crease the number and the wealth of consumers ;
and thus, by enlarging the home market, would
compensate the domestic grower for the injury he
might have sustained from foreign competition.
But, when a permanent system of restriction, and
its consequent artificial scale of prices, had de-
pressed the manufacturing and mercantile classes,
and thus deprived the agriculturist of those opu-
lent markets, the exclusive benefits of which, ig-
norance had asserted they would secure, the agri-
cultural interest, in grasping at the shadow, would
have lost the substance ; in seeking for artificial,
would have deprived themselves of their natural,
encouragement ; and no longer finding consumers
in the country, which their avarice had impove-
rished and depopulated, wculd be compelled to go
to foreign markets for remunerating prices.
254
Thus then, it appears, that while our merchants
and manufacturers are again exposed to rivalship
and competition, a permanent system of restrictions
on the importation of corn, and a consequent con-
tinuation of the artificial prices of the war, would
ultimately diminish the home demand for grain,
and render us once more, an exporting country.
This change, however, would be produced by
causes, and would be the result of a process, very
different from those, which are contemplated by the
advocates of a restricted corn trade. These per-
sons contend, that the high prices, occasioned, in
the first instance, by the exclusion of foreign grain,
would lead to an extension of tillage; and that the
increased supply, raised from our own soil, would
reduce the price of corn, until it could be sent to
foreign markets with a profit. In arriving at this
conclusion, however, they totally omit the distinc-
tion which exists between natural and market price;
and seem absolutely unacquainted with the funda-
mental principle of political science, that it is im-
possible to increase the supply of any commodity,
so as permanently to reduce its price, below what
will pay the labour and capital employed in pro-
255
duction. It is plainly impossible that, at one and
the same time, it should be profitable to export corn,
and profitable to extend cultivation to lands re-
quiring, in order to yield a given produce, a greater
quantity of labour and capital, than the lands cul-
tivated in other growing countries. To enable us
to do the former, corn must be cheaper in the home,
than in the foreign market ; to enable us to do the
latter, it must be dearer. While it remains im-
possible for the same thing to be, and not to be, it
will also remain impossible for England to Income
an exporting country, in the manner contemplated
by the advocates of a restricted external trade in
corn. The real process, by which restrictions upon
the importation, would lead to the exportation, of
corn, w r e shall briefly state.
The high price of corn, occasioned by restricted
importation, would, in the first instance, reduce the
home demand for wrought goods, and exclude our
manufactures from the foreign market. While
ruin thus fell upon the manufacturing and trading
population, the home demand for corn would di-
minish, and its value become too low to remunerate
the labour and capital, which the first temporary
256
rise in prices, had forced upon inferior lands.
These, therefore, would no longer he cultivated ;
and, from the same cause, the value of fertile lands
would fall. In the progress of impoverishment
and depopulation, a sufficient number of opulent
consumers could not be fouud, to pay the expense
of cultivation, upon soils of third, or even of second-
rate quality. Cultivation would be limited to tracts
of first-rate quality : these requiring but a small
expense of dressing, the natural price of the corn
produced upon them, would be lower than the na-
tural price of the grain produced in prosperous fo-
reign countries, which, having a better demand,
could afford to cultivate second, or third-rate soils.
"When things arrived at this state, our corn might
be sent abroad with a profit ; and England, bank-
rupt and depopulated, sunk from her place in Eu-
rope, and, perhaps, deprived of her existence as an
independent nation, might again become an ex-
porting country.
IV. We have'now to consider the effects, which
adopting a system of restrictions on the importation
of foreign corn, would, in the present circumstances
257
of these countries, have upon the finances, and on
public credit.
The first operation of restriction, upon the re-
venue, would be beneficial. We have seen, that,
as long as our wealth and population should re-
main undiminished, the exclusion of foreign corn
would induce a universal rise in prices; or, in
other words, lower the value of money. Now,
the rise in the price of all commodities, or the fall
in the value of money, would increase the amount of
all duties laid on ad valorem, and would enable
government nominally to increase the other taxes,
without adding really to the burthens of the people.
If, for example, we were, by excluding foreign
corn, to establish an artificial scale of prices, and
to double the money value of every article, then,
without increasing the real portion of wealth drawn
from the people, the revenue might be doubled.
Though, when an artificial scale of prices is es-
tablished, the revenue can rise, only in the propor-
tion in which the value of money falls ; and though,
under our supposition, two hundred pounds could
not have a greater power in the market, than one
hundred formerly possessed ; yet, the increased
258
sums, thus brought into the treasury, would afford
to the government, the greatest facilities in pro-
viding for the public expenditure. The dividends
of the public creditor, and the salaries of the civil
and military servants of the state, do not rise in
amount, as the value of money falls. An artificial
scale of prices, lowering the value of money, in the
degree just supposed, would, in fact, be tanta-
mount to taking fifty per cent, from all salaries, and
reducing, by one-half, the real value of our debt.
That, pressed as we are by taxation, and just
breathing from a contest, in which all the resources
of the country were overstrained, such a mode of
providing for our vast expenditure, would, if it
could be rendered permanent, be, in many respects,
desirable, few, I believe, will be disposed to con-
trovert. But it could not be rendered permanent.
After having afforded the treasury a temporary aid,
it would leave our financial difficulties greater, be-
yond all calculation, than before. The sources of
revenue would be dried up ; the wealth of the
country be gone. The artificial scale of prices,
which had increased the receipts of the treasury,
would, iu its first operation, have extended tillage.
259
and increased the value of agricultural produce.
This increase in the value of subsistence would soon
exclude our commodities from the foreign market.
The ruin of the manufacturing and commercial
classes would recoil upon the landed interest ; and
prices, after having been, for awhile, maintained
at an unnatural elevation, would fall much lower
than the original level, from which they had been
forced. This fall in prices would be a rise in the
value of money ; and, while all ad valorem duties
sunk in amount, and other taxes pressed with more
grievous weight, the real debt, which the depre-
ciation of the metals had diminished, would be in-
creased by their recovered value. Nor would this
be all. Ad valorem duties would be diminished,
not merely by the fall in prices, but also by the
smaller number of commodities, on which they
would now be paid. The smaller number of com-
modities, too, would occasion defalcations in the
duties laid on by measurement and tale ; while the
impoverished country would become incapable of
supporting the increasing pressure which, with re-
spect to such taxes, the rise in the value of money
would occasion. The exclusion of foreign corn,
s 2
now that our manufacturers can no longer obtain a
monopoly price for their goods, and make foreign
customers pay a part of the monopoly price de-
manded by the farmer for subsistence, would, after
having occasioned a temporary augmentation in the
revenue, lead to bankruptcy and ruin.
As this chapter has been unavoidably extended,
and the connection of the argument frequently in-
terrupted, by obviating objections, it may be proper
to bring together, in as few words as possible, the
conclusions which the discussions contained in it,
were intended to establish.
A system of restriction on the importation of fo-
reign grain, would enable us, for a time, to raise
an independent supply of corn, but at a high, and
at an unsteady price. The advanced price of corn,
while the consumer retained ability to pay it, would
give extension to tillage, and increase the value of
land ; but this ability would be only temporary.
For the high price imparted to subsistence, would
be communicated to wages ; would raise the price
of all commodities ; would ruin our manufacturers
and merchants; and, by reducing the home de-
maud for agricultural produce, would leave the
261
landed interests in a much less flourishing condi-
tion, than that which they might have attained and
preserved., hy being satisfied with the natural pro-
tection afforded by the expense of carriage, upon
an article so bulky as corn. While the artificial
scale of prices continued, the revenue would im-
prove, and government would obtain considerable
facilities in paying fixed salaries, and in discharging
the interest of the public debt ; but, when these
prices, directly destructive to commerce, and indi-
rectly ruinous to agriculture, began to decline, and
to diminish the wealth of the country, the revenue
would fail, and bankruptcy ensue.
262
CHAP. II.
On the Effects which a free external Trade in
Corn would produce ; /. Upon the Supply of
Subsistence ; II. Upon the Agriculture ; III.
Upon the Commerce; and IV. Upon the Fi~
nanaes of the Country.
j\ e are now to consider the effects which would
be produced by establishing, in these countries, a
system of perfect liberty in the external corn trade.
For the sake of simplicity and perspicuity, we will
preserve, throughout the present discussions, the
order which we adopted in the preceding chapter;
and consider the influence of an unrestrained ex-
ternal trade, first, upon the supply of subsistence ;
secondly, upon agriculture ; thirdly, upon manu-
factures and commerce ; and fourthly, upon the
finances.
I. It is abundantly evident, that where free inter-
course is permitted, no country possessing any
articles, which can profitably be sent abroad in ex*
2(53
change for corn, will cultivate lands very much
inferior to those under cultivation in adjacent
countries. When, in the progress of wealth and
population, tillage has been extended over all the
fertile districts of a country, and when the expense
of raising grain from soils of inferior quality,
would exceed the cost of bringing it from abroad,
then, unless some arbitrary legislative interference
should disturb the natural course of events, sub-
sistence will be imported.
Even long before the lands of superior quality
have been brought under the plough, a country,
though exempt from all legislative interference
with the direction of its industry, may yet be natu-
rally led to import a part of her consumption,
rather than to grow an independent supply of corn.
To illustrate this, let us suppose, that there are, in
England, unreclaimed districts, from which corn
might be raised at as small an expense of labour
and capital, as from the fertile plains of Poland.
This being the case, and all other things the same,
the person who should cultivate our unreclaimed
districts, could afford to sell his produce at as
cheap a rate, as the cultivator of Poland ; and it
264
seems natural to conclude, that if industry were
left to take its most profitable direction, capital
would be employed in raising corn at home, rather
than in bringing it from Poland at an equal prime
cost, and at a much greater expense of carriage.
But this conclusion, however obvious and natural
it may, at first sight, appear, might, on a closer
examination, be found entirely erroneous. If Eng-
land should have acquired such a degree of skill in
manufactures, that, with any given portion of her
capital, she could prepare a quantity of cloth, for
which the Polish cultivator would give a greater
quantity of corn, than she could, with the same
portion of capital, raise from her own soil, then,
tracts of her territory, though they should be equal,
nay, even though they should be superior, to the
lands in Poland, will be neglected; and a part of her
supply of corn will be imported from that country.
For, though the capital employed in cultivating at
home, might bring an excess of profit, over the
capital employed in cultivating abroad, yet, under
the supposition, the capital which should be em-
ployed in manufacturing, would obtain a still
greater excess of profit ; and this greater excess of
2G5
profit would determine the direction of our indus-
try.
Thus we see, that when trade is left free, and
governments interfere neither directly nor indirectly,
with the course of industry, an agricultural coun-
try, though possessing within herself, the means of
feeding her population, may be induced to import
a part of her supply of corn, by two distinct cir-
cumstances : namely, a deficiency in lands of first-
rate quality ; or, advantages in manufacturing in-
dustry. In the present situation of England, both
these circumstances unite. Our increased wealth,
by rendering animal food a part of the subsistence
of all classes, and, consequently, causing a great
proportion of the soil to be kept under pasture ;
and our rapidly advancing population, by creating
a great and increasing demand for corn, have con-
tributed to occasion some scarcity of land equal in
quality to that under cultivation in the neighbour-
ing countries ; while our accurate divisions of em-
ployment, and the wonderful perfection of our ma-
chinery for abridging labour, have increased, to
such an astonishing extent, the productive powers
of our manufacturing industry, that a given portion
26(5
of our capital, when directed to supplying the fo-
reign demand for wrought goods, can obtain, in
return, a larger quantity of corn, than it could
raise by cultivating wastes of the greatest fertility.
In this state of things, therefore, if the obstructions
to importation, which the peace has removed, are
not replaced by high duties upon foreign grain, it
is obvious, that we shall become dependent upon
foreign growing countries, for a part of our supply
of food.
All the arguments which we employed in the
preceding chapter, to prove that restricted importa-
tion, forcing us to raise an independent supply of
corn, would render prices high, go also to prove
the converse proposition ; namely, that free inter-
course, allowing part of our supply to come from
abroad, would render prices low. It is, indced >
astonishing how any person should, for a moment,
imagine, that the importation of corn could, by
possibility, have any other effect than that of keep-
ing down the markets. Why is corn imported ?
For no assignable, no conceivable reason, except
that it is found cheaper to import, than to grow.
"Were it not that upon this subject, the most
267
astonishing ignorance prevails ; and that the advo-
cates for restrictions which would give the home
grower a monopoly in the home market, perpetu*-
ally attempt to impress upon the public, the so-
phistical paradox, that obstructed importation
would keep down the prices, while unrestricted in-
tercourse would raise them, we might dismiss this
branch of the question, without discussion. But
as great stress has been laid upon it, and as Sir
Henry Parnell, in his pamphlet, has asserted that,
with respect to the merits of high duties upon im-
portation, the only question is, whether they would
have the effect of lowering, or of raising prices,
some farther consideration of the influence, which
free intercourse would have upon the value of corn,
seems expedient.
If to the quantity of corn which we have now
on hand, an additional quantity of foreign corn
were added, the market price would become lower
than it now is ; and if, from the supply of grain
which we shall derive from the next harvest, an
additional supply should be brought from abroad,
then, prices throughout the next year, will also be
depressed. These propositions, if not strictly self-
26S
evident, are, however, of such a nature, that no
person who has ever looked at a question of eco-
nomical science, will for a moment controvert them.
Thus far then, free importation^will have the effect
of rendering corn cheaper.
But again ; as part of our supply is derived
from abroad, there will be less demand for corn of
our own growth ; and, consequently, some portion
of our capital will be withdrawn from cultivation.
Now, capital will never be withdrawn from anj
occupation, except when prices become insufficient
to yield it the customary profit ; that is, in the
case of agriculture, except the out-goings of the
farmer are increased, or the value of his produce is
diminished. But importation has no conceivable
tendency to increase the out-goings of the cultiva-
tor ; and could, therefore, deprive his stock of the
customary rate of profit, only by reducing the value
of his produce. Thus then, receiving part of our
supply from abroad, while it diminished the demand
for corn of our own growth, and caused capital to
be withdrawn from domestic cultivation, would
continue to keep down the markets.
But yet again : when capital is withdrawn from
269
cultivation, it will of course be from the cultiva-
tion of those inferior lands which, with the greatest
expense of dressing, yield the least return. Now
as, when it became profitable to till those inferior
lands, lands of superior quality acquired a greater
value, and paid a higher rent than before; so,
when inferior lands cease to indemnify the cultiva-
tor, the superior will lose the heightened value they
had gained, and yield a lower rent. Hence, as
we import a part of our supply, and throw our
inferior lands out of cultivation, there will be less
labour, less capital, and less rent, to be paid upon
whatever quantity of corn we continue to grow at
home ; that is to say, the natural price of our com
will be lowered. But, to natural price the prices
of the market have a perpetual tendency to con-
form. Receiving a part of our supply from the
foreign grower, while it keeps inferior lands out of
cultivation, and keeps down the rate of rent upon
the superior, must also keep down the price of corn.
To the principle, that importation lowers the
markets, the following objection has been urged :
' ' While we depend, in any degree, upon a foreign
supply of corn, the prices are constantly governed
210
by the principle of scarcity, and not, as they other-
wise would be, by the principle of abundance.
The object of importing merchants being to import
with the greatest possible profit, they will allow
prices to run up very high, before they come into
the market ; and will feed it only in such quanti-
ties, as shall keep down competition against them-
selves, but not to that extent as will have any great
effect in lowering the price of corn." *
Now, even were we to admit, that when we
depend upon foreign countries for a part of our
supply of corn, this combination for stinting the
market and keeping up prices, could be formed
amongst the importing merchants, still, the objec-
tion would be perfectly invalid ; nay, would com-
pletely refute itself. Supposing that free importa-
tion had so reduced prices, and, consequently, so
discouraged agriculture, as to have rendered us
dependent on foreign countries for a part of our
supply of corn ; then, as soon as our importing
merchants began, as asserted in the objection, to
raise prices, the market, would exceed the growing,
* Sir Henry ParnclTs Observations on the Corn Laws,
Page 17.
271
price of corn ; unusual profits would be obtained
by the domestic cultivator; and, consequently,
tillage would be again extended. If the combi-
nation of the importing merchants raised the price
of grain as high, as it was before the opening of the
ports, the whole of the discouragement occasioned
by such opening, would be removed, and agricul-
ture would be restored to its former state. And
if, as the advocates of restriction contend, the
combination of the importers should advance prices
beyond what they would be, if the whole of our
consumption were produced at home, then, it
is plain, that the stock invested in agriculture
would obtain a higher profit than before, and that
capital, ever seeking its most beneficial occupation,
would bring in new lands, and extend tillage be-
yond its former state. Thus, the two propositions,
that free importation would discourage domestic
agriculture ; and, that by leading to combinations
amongst the importers, it would advance prices,
are inconsistent and contradictory. If a system
of free importation discouraged agriculture, it
could only be by reducing prices ; and if, instead
of keeping prices low, such a system of freedom
irZ
should either immediately, or subsequently, occa-
sion combinations which would raise the price of
corn, higher than it would be under a system of
restraint, then, free importation would prove much
more beneficial to the landed interests, than the
restrictive protection, for which they are con-
tending 1 .
But the combination contemplated in the ob-
jection, could not possibly have existence. We
reasoned on the supposition, merely to expose the
nature of the argument, if argument it may be
called, to which the advocates of permanent re-
strictions on the importation of corn, are compelled
to resort, when they would persuade the public,
that receiving part of our supply from the foreign
grower would advance our markets. A combina-
tion amongst all importing merchants, dispersed
throughout all the sea-ports of the kingdom, and
having all the growing countries of the world
open to their speculations ! A monopoly of corn
occasioned by rendering the trade in corn free !
These are propositions, a formal refutation of
which, would be a satire on the understanding of
the reader. A free external trade could render us
273
dependent on the foreign grower, for a part of our
supply, only by throwing out of cultivation, lands
which require, in order to raise a given produce,
a greater quantity of labour and capital, than the
lands under tillage in other countries : that is, by
enabling us to procure corn at a cheaper rate, than
if we raised it from our own soil. To say that
importing a part of our supply, would elevate our
markets, is tantamount to asserting a contradic-
tion.
A free external trade in corn, allowing us to
derive a part of our supply from the foreign-
grower, would lead, not only to low, but, what is
of more importance, to steady, prices. The in-
equality in the productiveness of the seasons di-
minishes as the territory of which we calculate the
average supply is enlarged. The only efficacious
means of obviating the alternate recurrence of
superfluity and of want, ig the removal of every
restriction, the refraining from every regulation,
which can prevent the abundance of one quarter
from compensating the deficiency of another. These
great principles, applicable alike to the internal,
and to the external, trade in corn, have, in the first
274
part of this volume, been already fully unfolded.
In whatever degree we may find it practicable to
adopt them into our commercial system, in that
degree shall we give certainty to the supply, and
steadiness to the price, of corn.
These principles, however, so obvious and so
incontrovertible, the advocates of high duties on
the importation of foreign corn, have either over-
looked, or attempted to set aside. They seek to
terrify the public by the assertion, that an unre-
strained commerce in grain would lead to scarcity
and famine. " If we allow importation, and con-
sequently become dependent on foreign countries
for a part of our subsistence; and if, when the
failure of our crops rendered their aid most neces-
sary, these countries should themselves have defi-
cient harvests, and require for their own consump-
tion, all the corn they had raised, then should we
be placed in a situation infinitely more calamitous,
than if our agriculture had been forced, so as in
average years to furnish us with an independent
supply."
In tlie first place, this objection to a free trade
supposes a state of things, the occurrence of which
275
is, in a high degree, improbable. In the unifor-
mity of her general results, Nature has made a
provision for correcting her partial irregularities.
It has probably never yet occurred, that, in the
same season, the crops have been deficient in all
countries. To a maritime people, navigating all
the waters of the world, the attainable supply of
subsistence may be considered as little liable to
variation, from year to year. Were we to adopt a
system of freedom in the external corn trade, ages
might roll away, without the earth being visited
by such a universally deficient harvest, as to pre-
vent our obtaining, from some country or other,
the supply of which we stand in need.
But, in the second place, if a universal failure
of crop, throughout the growing countries of the
world, were of probable, or even of frequent oc-
currence, it could neither form a solid objection to
a free external corn trade, nor prove, that deriv-
ing a part of our consumption from the foreign
grower, would render the supply of corn uncertain,
or its price unsteady. It has already appeared,
that a free external trade in corn, equalizing sub-
sistence throughout the countries of the world, and
t2
2715
carrying forward the superfluity of one year, to
meet the deficiency of another, would occasion
capital, to a vast amount, to be vested in this im-
portant branch of commerce, and cause grain to
be accumulated to an incalculable extent. A free
trade, while it might render us dependent on foreign
supply, would establish granaries, amply sufficient
to secure us against want, in the event of that sup-
ply being cut off by a failure of crops throughout
the world. This conclusion, demonstrable in theory^
has also received the fullest proof from experience*
Holland, in the days of her commercial prospe-
rity, had always in the stores of her merchants,
a supply of subsistence which exceeded her con-
sumption ; and, though not a corn country, be-
came, by leaving the trade in corn free, the gra-
nary of Europe. Now England, from her posi-
tion, from her more numerous harbours, not liable
to be closed by ice, but navigable throughout the
year ; and more than all, from her decided naval
preponderance, capable at all times of command-
ing the seas, is infinitely better calculated than
Holland ever could have been, for becoming the
great store-house of the nations. As the ports of
277
the Baltic are closed, for a considerable part of the
year, the great growing countries of the North of
Europe require a place of deposit, from which
their produce may at all times be sent, to supply
the demand of the foreign market. England,
from her position, and from her natural and ac-
quired advantages, seems ordained to become the
entrepot for the surplus produce furnished by the
countries on the shores of the Baltic. Were we
to adopt an enlightened commercial system, and
to grant unlimited freedom, both of ingress and
of egress, to the important article of corn, our
merchants and dealers would, at all times, have on
their hands, accumulations of grain, far exceeding
the consumption of our population. Though
throughout the world, a failure in the crop should,
at the same time, be felt ; and though every grow-
ing country, in order to ward off famine at home,
should refuse to give us the customary supply ;
yet, in consequence of the liberty which had been
granted to commerce, and of the accumulations of
produce thereby occasioned, our people would
not be dependent for their food on the fertility of
a single season, and would escape all participation
' 278
in the general distress. Thus, the objection, even
when we admit the very improbable fact on which
it rests, is perfectly invalid. The granaries esta-
blished by a free external trade in corn, would leave
us nothing to fear, though the crops failing at the
same time throughout the world, should cause a
temporary suspension of the supply we had been
accustomed to receive from abroad.
Another objection to the principle, that a free
external trade would ensure us a steady supply of
corn, it may be proper to cousider, " If any thing
resembling the state of Europe under the late ruler
of France, should take place in future, when, in-
stead of growing nearly our own supply of corn,
we depended on foreign countries for the subsist-
ence of some millions of our people, the difficulty
and danger which we have just escaped, would be
nothing, in comparison with that which would
be inflicted upon us by this renewed continental
system."
On this objection it is obvious to remark, that
the experiment of excluding us from commerce,
has been tried, and has failed. Though the con-
tinent of Europe recefved its impulse from a single
279
mind, and though America, with a consentaneous
movement, closed her ports, yet Napoleon found it
impracticable to give efficacy to his system against
the trade of England ; and while his decrees were
evaded or suspended, we received supplies of corn,
even from France. Now, that the continental sys-
tem, the most extraordinary, and the most wide-
wasting species of despotism, which the world ever
witnessed, should again be acted upon, is, in the
highest degree, improbable. Supposing it possible,
that we could import to such an extent, as to feed
with foreign corn, an increased population of some
millions ; then, this very circumstance, by rendering
foreign growing countries so greatly dependent
upon us for a market for their produce, would
make them more reluctant to close their ports
against us ; while, as we should necessarily be-
come, under a free external trade, a great granary
and emporium of corn, the nations which, oh the
recurrence of deficient crops, received from us a
portion of their food, could hardly be induced to
combine against a commerce, in the reciprocal be-
nefits of which they so largely participated. In
280
proportion as we afforded to foreign countries, a
market for their surplus produce, the probability
of their shutting their ports against us, would be
diminished. A combination amongst the growing
countries of the world, to deprive England of sup-
plies, and themselves of a market, is, to say the
least of it, but a remotely possible limitation of the
principle, that a free external trade in corn gives
steadiness to the supply, and to the price, of that
essential article.
Neither do the laws respecting the exportation
of corn, which have been lately passed in France,
form any valid objection to the principle, that open-
ing the ports of the United Kingdom would render
our supply of subsistence steady. In the first
place, the corn laws in France, prohibiting expor?
tation after grain rises to about forty-nine shillings
the quarter, have, with respect to their influence
upon British prices, a necessary tendency to coun-
teract themselves. In whatever degree they may
check exportation, in the same degree they must
discourage agriculture, and prevent the French
grower from furnishing us with those supplies of
281
corn, tbe sudden withdrawing of which might, it
is apprehended,* occasion fluctuations in our mar-
kets. In the second place, even supposing that
these laws should have no effect in checking culti-
vation in France, and in preventing her from grow-
ing such a surplus as could influence prices in other
countries, yet still the objection would be nugatory,
because, as the inequality in the productiveness of
the seasons diminishes as the territory from which
we draw subsistence is increased, and as the partial
irregularities of nature are rectified in her general
results, there is the strongest probability that when
a deficient harvest in France deprived us of our
customary supply of corn from that country, an
abundant harvest in other countries would indem-
nify us for the loss. Thirdly, were we to adopt a
system of freedom in the external corn trade, and,
consequently, to receive a part of our supply from
France, the great accumulations of grain which
we should have on hand would (as was the case in
Holland), at all times exceed our consumption ;
* This apprehension is entertained by Mr. Malthus. See
The Grounds of an Opinion on the Policy of restricting the
Importation of Foreign Corn, p. 15.
282
would render us independent of the growth of a
single season ; and would prevent temporary sus-
pensions of importation from France, or even from
all Europe, from inflicting any distressing fluctua-
tions in our markets. Fourthly, and lastly, were
it demonstrable that the corn laws, lately enacted
in France, could have the effect of inflicting dis-
tressing fluctuations in the British market, their
existence might constitute a legitimate ground for
laying restrictions on the importation of French
grain, but could furnish no conceivable objection
against opening our ports to the rest of the world.
II. In whatever degree the adoption of perfect
freedom in the external corn trade, might lead us
to derive a part of our supply from the foreign
grower, in the same degree, it would, in the first
instance, act as a discouragement to domestic agri-
culture. If part of our consumption continues to
consist of grain of foreign growth, there will be
less demand for grain of home growth ; and, as
demand ever regulates supply, lands which were
cultivated while the war rendered importation more
difficult, must be thrown out of tillage.
283
That importing a part of our consumption of
corn would, in the first instance, occasion a dimi-
nution in domestic cultivation, is self-evident. The
degree, however, in which the diminution would
be inflicted, no one seems to have attempted to as-
certain. Exaggeration and alarm are the natural
associates of ignorance. Finding that, under the
actual scale of their expenses, they cannot afford to
sell wheat under eighty shillings the quarter ; and
seeing that foreign corn is poured into our ports,
at a price, lower by almost a third, than that which
would be adequate to remunerate its cultivation at
home, our farmers have become panic struck ; and
in their alarm, mistaking casual results for the ope-
ration of general laws, conclude, that without high
and permanent protecting duties on the importa-
tion of foreign grain, the agriculture of the coun-
try must be ruined. This conclusion of the alarm-
ists is entirely erroneous. The glut occasioned in
our markets, by the grain thrown in from France,
is the result of an unusually overflowing harvest in
that country ; and in ordinary years cannot be ex-
perienced. The artificial scale of prices which at
284
present so greatly increases the expenses of the do-
mestic cultivator, would, under a system of free in-
tercourse, gradually decline; and enable him, un-
less he occupied lands considerably inferior to those
under tillage in other countries, to meet the com-
petition of the foreign grower. The most unli-
mited freedom of intercourse could throw out of
cultivation, only those very inferior soils, which,
though enjoying the great natural protection arising
from the cost of carriage, require, to raise a given
portion of produce, more labour and capital than
would suffice to bring that produce from abroad.
The manner in which a free external trade, and
the consequent reduction of our artificial scale of
prices, would reduce the expenses of cultivation,
requires only to be stated, in order to obtain as-
sent. As corn falls in price, the money value of
seed, of tithes, and, in a little time, of rents, must
necessarily fall also. Here, then, there would be,
in consequence of the reduced price of the farmer's
produce, a reduction in three of the principal items
of his expenditure. But this would not be all.
Changes in the value of subsistence are soon com-
285
municated to the value of labour ; and , as the price
of produce fell, wages, another important item in
the expenses of cultivation, would fall also. Thus
the farmer, paying less for seed and labour, and
giving less as tithes and rent, would be enabled,
with an adequate profit upon his stock, to sell his
corn at a less price. But jet again. The fall in
the value of raw produce, and of labour, would
soon be communicated to wrought articles ; and
the farmer would have less to pay to the smith, to
the collar-maker, to the wheel-wright, and to all
the artificers who furnished him with implements of
husbandry ; and the whole scale of his expenses
being reduced, a smaller amount of capital would
be required in cultivation. A much lower price
of corn, therefore, would be sufficient to remune-
rate the farmer ; and unless he occupied lands very
inferior to those under tillage in foreign countries,
he would be enabled to meet the competition of the
foreign grower.
We shall briefly illustrate this, by a reference to
a table, shewing the comparative expenses of cul-
tivation, in different years, which the Secretary
of the Board of Agriculture laid before the Lords'
286
Committee. The table is given below;* and
we shall deviate from it, only so far as may be
necessary to preserve round numbers, and to avoid
the prolixity of stating fractional parts . The table
shews how all the items which enter into the ex-
penditure of the farmer have increased, from the
year 1790, to the year 1813. We are to trace
the manner in which a fall in the price of corn,
reducing rent to its former amount, would bring
all these items back to nearly their former level.
Comparison of the Expenses of cultivating an Hundred Acres
of Arable Land in 1790, 1803, aud 1813.
1790.
1803. \ 1813.
Wear and Tear
Total ....
. t. d.
88 6 3i
20 14 l|
17 13 10
1j 13 51
85 5 4|
4G 4 101
48 3
67 4 10
22 11 111
. *. d.
121 2 71
26 8 01
31 7 71
22 11 101
118 4
49 2 7
68 6 2
80 8 01
30 3 8$
. s. d.
161 12 7|
38 17 SI
38 19 2|
31 2 10i
161 12 111
98 17 10
37 7 01
134 19 81
50 5 6
18 1 4
411 14 111 | 547 10 111
771 16 4
287
By this table it appears, that, in order to obtain
.50 as interest upon his capital, and to cover all
expenses, the farmer, in 1813, must have obtained
nearly .800 for the produce of ope hundred acres
of land. Of this .800 it also appears, that rent
and tithe form a fourth part ; and therefore, tithes
being but a portion of rent, we may take rent as
constituting a fourth part of the price of agricul-
tural produce. Now, reduce the rent of one hun-
dred acres, from .200, its amount in 1815, to
.150, its amount in 1803; and it is self-evident
that the farmer will be able, with the same profit
as before, to sell his produce for .750, where he
used to sell it for .800. A fall in rent, there-
fore, of one-fourth, would, in its first operation,
occasion a fall of one-sixteenth in the natural or
growing price of agricultural produce.
Again, it is self-evident, that, as agricultural pro-
duce falls a sixteenth, the price of seed must fall in
the same proportion. This item, therefore, in the
expense of cultivating one hundred acres, will, by
a diminution in rent of .50, be reduced from
.98, its amount given in the table, for 1813, to
.92. Farther, agricultural produce forms, at the
288
very least, one-half^of the labourer's expenditure ;
and, consequently, a fall in this produce, of one-
sixteenth, will cause labour to fall half a sixteenth.
The item for labour, in the column for 1813, is
,.160; and, therefore, as rent and produce fall in
the proportions stated, half a sixteenth, or .5
must be deducted from this branch of expense.
The same reasoning will apply, with still greater
force, to tjie labour performed by the team. And,
as labour and produce fall, all wrought articles
will fall also; consequently, the reduction of rent
will lead to a reduction in the item of wear and
tear ; and as other items are in this manner re-
duced, a less amount of capital will be required in
cultivating, and the item of interest must be re-
duced also.
It will be at once perceived, that we have
hitherto noticed only the first and most immediate
operations, by which a reduced rent reduces all
the other items which enter into the expenses of
cultivation. When a fall in rent, of a fourth, has
reduced produce a sixteenth, and labour half a
sixteenth, this half- sixteenth effects another reduc-
fltm in produce ; and this, again, another reduc-
289
tion in labour. The same holds good with respect
to every other item of expenditure. As the fall in
rent lowers the price of seed, reduces the cost of
wear and tear, and, in consequence of the fall it
communicates to the raw material and to wages,
enables all the wrought goods which compose any
part of the farmer's capital, to be purchased at a
cheaper rate, the reduction in each, reduces all ;
Until, from the reciprocal operation of the several
items of expenditure, all things settle down to
their natural level. Were rents brought back
to what they were in 1803, the expenses of pro-
duction, except as they might be affected by in-
creased taxes falling on subsistence, and, conse-
quently, raising wages, would gradually, but ne-
cessarily, return to what they were, at that period.
With the same exception, the rents of 1790 would
bring back the out-goings of the cultivator, to
what they were, in that year ; or, as appears by
the table, to but little more than half their amount
at present It is demonstrable, that while the rate
of profit, and the natural, or commodity rate of
wages, remain the same, the amount of rent must,
under any given state of fertility and skill, deter-
u
290
mine the amount of all the items which enter into
the expense of cultivation ; and, consequently,
the prices which arc necessary to remunerate the
farmer.
Thus, it appears, that the existing panic among
the friends of agriculture, is entirely without foun-
dation.* The level prices of unrestricted inter-
* An unanswerable and irresistible argument against tin
alarm which at present exists amongst the agricultural inte-
rests, has been furnished by a writer, who is himself an
alarmist. Mr. Jacob, in his "* Considerations on the Protec-
tion required by British Agriculture," enters into some judi-
cious calculations, to shew, that the quantity of grain, of all
kinds, consumed by Great Britain alone, amounts very nearly
to 50,000,000 quarters. He states that five quarters go to a
Ion; and that, by the accounts laid before Parliament, the
whole shipping of the British dominions, European and Colo-
nial, amounts to 2,500,000 tons. If, therefore, every other
branch of commerce were abandoned, and all the shipping of
the British dominions freighted with grain, the imporh <1
supply would amount to only 12,500,000 quarters : that is,
to about three months' consumption. Under this extreme
case, this case of absolutely impossible occurrence, the British
fanner would have the supplying of the British market, for
nine months of the year. But let us look at the question,
under circumstances of possible occurrence. Mr. Jacob in-
291
course would, indeed, throw out of cultivation,
lands of a quality so very inferior as to require,
for their tillage, a greater quantity of labour and
capital, than is necessary both to till foreign land,
and to bring its produce to the home market.
But these level prices could effect no farther dimi-
nution in our tillage. On the contrary, they
forms us, that in 1800, and 1801, years of the greatest scarcity
and highest prices, the largest foreign supply which England
ever received, was 4,500,000 quarters of grain; or, less than
five weeks' consumption. Taking the average of these two years
of greatest scarcity, the importation was 2,250,000 quarters, or
little more than two weeks' consumption. Is it not, therefore,
fair to turn the statements of this alarmist against himself, and
to inquire, how it comes to pass, that, while shewing the diffi-
culty, nay, the impossibility, of importing any considerable
portien of our consumption, he should feel apprehensive lest
agriculture should be ruined by the glut of foreign corn?
Foreign competition would, indeed, bring down monopoly
rents, and reduce every item which enters into the expenses
of cultivation ; but it could not throw out of cultivation any
lands, except those of extremely inferior quality. In what
concerns subsistence, Providence has been our legislator. In
rendering corn a bulky commodity, Nature has given the
necessary protection to the domestic grower; and all we have
to do is., to refrain from disturbing her admirable laws.
u2
292
would compel the proprietor to forego the mono-
poly rents of the war ; would, as we have just seen,
diminish all the expenses of production ; and, ex-
cept as he might be pressed by a heavier taxation,
replace the domestic, on his former equality with the
foreign, grower. Now we have seen that taxation,
except when it falls with disproportioned weight
upon the soil, does not give the foreign grower
any advantages in the home market. On the
contrary, taxes which fall on necessaries, and oc-
casion a rise in wages, advance the price of wrought
goods, more than they advance the price of raw
produce, and rather tend to keep foreign corn
out f the market, by checking the exportation of
the articles which might purchase it. The level
prices, therefore, of unrestricted intercourse, would,
except in regard to the imposts which may bear
more heavily on the industry of the country, than
on that of the towns, secure the domestic'cultivator
from being undersold in the home market.
But, possessed of the great natural protection
arising from his vicinity to the most opulent mar-
kets in the world, the British cultivator, after the
level prices of free intercourse have lowered mono-
293
poly rents, and reduced the items of his expendi-
ture, cannot, unless he should occupy very inferior
soils, the tillage of which is injurious to the capital
and wealth of the country, have any thing to fear
from the competition of the foreign grower, though
the latter may be somewhat less heavily taxed.
The corn of Kent and Essex is conveyed to the
London market, at a very trifling expense, while
the grain furnished by the foreign grower comes
to that market, charged with the land carriage to
the shipping port, with shipping costs, and with
the freight and insurance on the voyage. In sup-
plying the markets furnished by the great manu-
facturing population of the interior, the advantages
of the home grower are still more decisive. The
produce of the adjacent counties can be brought
to Birmingham and Manchester, at a very small
expense of carriage; while the wheat of Franee
and Poland, in addition to the land carriage to the
shipping port, and to all the charges of lading and
unlading, freight and insurance, must be brought
to the consumers in these interior towns, loaded
with the cost of a second land carriage. With
reference to the home market, land in England,
294
is, by the whole amount of the expenses incident
to bringing corn from abroad, more valuable than
foreign land, equal in fertility, and cultivated with
equal skill. As soon as the natural, or production-
price, of our corn shall have been lowered by the
reduction of exorbitant rents, and by throwing
out of tillage, lands requiring an enormous expense
of labour and capital, British agriculture, enjoy-
ing the great natural protection of vicinity to the
most opulent markets of the world, can have no-
thing to apprehend from the freest competition of
the foreign grower.
The degree of protection which, after rents had
been lowered, and very inferior lands thrown out,
the home grower might derive from the vicinity of
the home market, would necessarily be increased
or diminished, according as the country advanced
or declined in opulence. But, supposing trade to
flourish, and increasing population to accumulate
in our interior manufacturing towns, the neigh-
bourhood of more numerous, and more wealthy,
consumers, would be far from constituting the
only encouragement and protection thereby held
domestic agriculture. We have already
295
seen that, in a prosperous country, the profits of
stock, and the interest of money, become lower,
and bestow a higher relative value on the soil.
But this is not all. Among a flourishing people,
more accurate divisions of employment, and more
skilful machinery for abridging labour, gradually
increase the productive powers of industry ; or, in
other words, lower the natural price of the necessa-
ries of life. But, as the natural price of the arti-
cles which enter into the labourer's subsistence,
become lower, the rate of wages is lowered also.
Hence, in a flourishing country, the cheaper rate
at which a given quantity of labour can be per-
formed, bestows, no less than the reduced rate of
the interest of money, an increased relative value
upon the soil, and enables the farmer to extend
cultivation over tracts, which could not before be
profitably tilled. Commercial and manufacturing
prosperity have an irresistible effect upon agricul-
tural improvement. If, as we shall proceed to
shew, in the following division of this chapter, a
free external trade would increase our commerce
and our wealth, it would, in a little time, bring
back into cultivation, the inferior soils which it
296
might at first throw out ; and ultimately place the
landed interests in a situation infinitely more pros*
perous and commanding than that which, under
any artificial system, it would be possible for them
permanently to attain.
III. Commerce is an exchange of equivalents,
a bartering between nations, of one commodity
for another. It is self-evident, therefore, that if
we were to adopt the principle of free intercourse,
with respect to the important article of corn, and
were to import a considerable quantity of agricul-
tural produce, we should have to export a consi-
derable quantity of something else, in order to pay
for it. In whatever degree an unrestricted exter-
nal trade might lead us to receive subsistence from
other countries, in the same degree it would ren-
der those countries customers for our commodities,
would promote our manufactures, and would ex-
tend our trade. As air expands, in proportion as
the surrounding pressure is removed, so commerce
flourishes, as legislative interference is withdrawn.
Whatever natural facilities we may possess, for
carrying on the several branches of industry ; and
297
whatever may be our acquired advantages of skill,
capital, and machinery ; free intercourse is neces-
sary, to give them their most efficient operation,
and to allow them scope for their full develope-
meot. When any given portion of capital can, in
England, fabricate a greater quantity of cloth,
than in Poland ; and can, in Poland, produce a
greater supply of corn, than in England ; then, the
absence of regulation is all that is necessary to
establishing between the two countries an active
and mutually beneficial commerce.
In the foregoing paragraphs we have considered
a free external corn trade, only in its first and most
direct influence on commerce; and as, in common
with all other branches of traffic between nations,
it would create a foreign demand for our goods,
proportional to the amount of foreign produce
which it enabled us to consume. But, as was shewn
in the first part of this work, the external corn
trade, in addition to its direct operation, exerts
upon industry, upon production, and upon all the
various branches of * trade, a beneficial influence
which is peculiar to itself, and which, if we would
form a just estimate of its value, must be atten-?
298
tively considered. Commodities are received iuto
foreign countries, only because they can be fur-
nished at a cheaper rate than those countries could
prepare them at home. Hence, in order to in-
crease manufactures, and to extend commerce, the
great object is, to effect a reduction in the natural
price of commodities. Now, the component parts
of natural price are rent, profits, and wages, and
a free external corn trade would have a powerful
influence in loweriug them all. We have shewn,
that, in the present circumstances of these coun-
tries, an unrestrained trade would lower the price
of corn, and bring down the monopoly rents occa-
sioned by the war ; we have explained how a re-
duction in the value of corn reduces wages, and we
have unfolded the principles, that the low natural
priceof subsistence heightens the productive powers
of industry ; that these heightened powers accele-
rate the accumulation of stock ; and that this ac-
cumulation lowers the rate of profit. A free ex-
ternal trade in corn, then, would effect a reduction
in rents, wages, and profits : that is, would reduce
all the component parts of natural price, and enable
us to sell every article at a cheaper rate, than if re-
299
strictions upon importation kept up the value of
agricultural produce. The great encouragement
which this would confer on manufactures and com-
merce is obvious.
In the last chapter, we saw that, as we increase
the natural price of commodities, we reduce the
demand for them. Now, the converse proposition
is equally true : namely, that, as we reduce na-
tural price, we increase demand. In proportion as
our goods can be brought to market at a cheaper
rate, consumers, both at home and abroad, will be
enabled to purchase them in larger quantities.
The reduction in our prices, effected by an unfet-
tered trade in corn, would enable us to meet the
competition of the rivals now starting against us,
and to maintain the markets which we have esta-
blished. Nay, as we supplied consumers at a
cheaper rate, we should not only be enabled to
maintain ourselves in the markets which we have
already established, but new foreign markets would
be opened, and our commerce pushed to an extent
which cannot easily be estimated.
The beneficial effects which the lowering of na-
tural price produces upon commerce, have been
300
most happily exemplified in what took place upon
our adopting", in the cotton manufactories, im-
proved machinery for abridging labour. Now,
the reduction in natural price, occasioned by a free
trade in corn, would produce effects precisely ana-
logous to those which have been produced by im-
proved machinery. In every branch of business,
carried on throughout the country, it would aug-
ment the productive powers of industry. While
our manufacturing population increased, each ma-
nufactuner, being enabled to procure the produce
of the earth, with a smaller portion of his labour
than before, would have a larger portion of it, to
employ in working up materials. From a double
cause, the supply of goods brought to market would
be increased. Commerce being an exchange of
equivalents, every improvement in industry, which
enabled us to augment our foreign sales, would en-
large our demand for foreign articles. From their
reciprocal action, exports and imports would be
enlarged, and thus prosperity would receive a still
increasing impulse.
But it is not only in manufacturing industry,
and in the direct commerce of consumption, that
SOI
the benefits of an unrestricted trade in corn would
be felt. We have already seen, that opening our
ports to the foreign grower would, from the great
natural advantages of our ports, and of our posi-
tion, throw into our hands an extensive carrying
trade in the important article of corn ; and render
England, what the wisdom of her commercial sys-
tem formerly rendered Holland, the great depdt
and Granary of Europe. The flourishing state of
our internal industry, promoted by a cheap and
steady supply of subsistence, would powerfully co-
operate with a free external trade, in enabling us
to avail ourselves of the advantages of our posi-
tion, and to become the carriers of the world. Im-
proved manufactures, and a more extensive com-
merce of consumption, increase wealth, and occa-
sion a more rapid accumulation of capital. Now,
as capital increases, it fills all the old channels of
employment, and overflows into new. Hence, a
country, more wealthy than its neighbours, can,
particularly if it should possess any advantages of
position, prosecute the carrying trade at a cheaper
rate, and monopolize this branch of commerce.
Let us suppose, by way of illustration, that, from
302
the accumulation of capital, and the consequently
increasing difficulty of finding beneficial occupa-
tion for it, the profits of stock fall in England, to
ten per cent, while, upon the continent, they re-
main at fifteen per cent. Under such circum-
stances, it is evident that England could afford to
carry cheaper, by five per cent, than her neigh-
bours; and that it would be the interest of all coun-
tries in which capital was less abundant, to throw
their carrying trade into her hands. Now, from
all the principles unfolded throughout this work,
it follows as a necessary conclusion, that an unfet-
tered commerce in corn would powerfully conduce
to realize the state of things which we have sup-
posed. It would, in every employment; lower na-
tural price ; or, in other words, raise the produc-
tive powers of industry. This would increase
wealth and capital, and diminish the rate of inte-
rest and of profit. The competition of capitalists,
to obtain beneficial occupation for their stock,
would at once give incitement to the spirit of mer-
cantile adventure, and cause each operation of com-
merce to be performed at a cheaper rate. The
capital which overflows the channels of domestic
303
industry will, with equal advantage to the British
merchant, and to the foreign producer and con-
sumer, vent itself in the carrying trade ; and En-
gland, seconding, by the wisdom of her economical
system, the great natural advantages of her posi-
tion, would become the warehouse of the nations,
and the emporium of the world.
It is self-evident, that that accumulation of
stock, and reduction in the rate of interest and of
profit,, which caused capital to flow out into the
distant channels of the carrying trade, would, as
stated in the preceding section of this chapter,
cause it to be poured upon the soil. The cheaper
rate at which cultivation could be conducted, and
the increasing number of opulent consumers, would
speedily restore to tillage, the lands which the free
importation of foreign produce had at first thrown
out. The proprietors and occupiers of land,
though now panic-struck at the approach of that
state of things which alone can afford them legiti-
mate and permanent encouragement, would, as we
have already stated and explained, be placed in a
more flourishing and commanding position in the
community, than they could possibly hold, under
,504
any system of restriction on the external trade in
corn. The real and permanent interests of the
agricultural and the mercantile classes, are iden-
tical. A benefit or an injury, bestowed or in-
flicted on the one, is a benefit or injury, bestowed
or inflicted on the other. But it is unnecessary to re-
capitulate arguments upon a point which is almost
self-evident. We proceed to consider the effects,
which an unrestrained external corn trade would
produce upon the finances of the country.
IV. Whatever affects the value of money, is,
under any circumstances, a matter of considerable
importance ; and must, at the present time, acquire
a peculiar, and most serious interest, in consequence
of the immense money debt due to the public cre-
ditor. In whatever degree an unrestrained intro-
duction of foreign corn might keep ddwn prices,
and raise the value of money ; in the same degree
it would increase the real quantity of debt, dimi-
nish the amount of advalorcm duties, and increase
the pressure of all taxes laid on by tale and mea-
surement. These arc serious evils. In the present
mortgaged state of the revenue, they would pro-
305
bably prdve imperative against the introduction of
a free trade in corn, were it not for the circum-
stances, that they would be only of temporary
duration ; and that, if we should attempt to ward
them off, by a system of restriction, and an arti-
ficial scale of prices, the remedy would speedily
induce consequences much more injurious ; and,
as we have already seen, would plunge the finances
into total and irremediable embarrassment.
The defalcation occasioned in the revenue, by a
free trade in corn, and the consequent rise in the
value of money, could be but of short duration ;
because, this free trade, this rise in money, or, in
other words, fall in prices, would as has been
already amply explained, powerfully conduce to
that national opujence, from which the income
of the state is derived ; and with the increase
of which, taxation, in all its branches, must be-
come more productive. Though, in consequence
of the rise in the value of money, each particular
commodity, on which the duty was laid ad valorem,
would pay into the treasury a smaller sum than
before ; yet, in proportion as wealth increased,
this smaller sum would be yielded upon a greater
306
number of articles; and, with respect to the
branches of the revenue growing out of such du-
ties, a free external trade would soon make good
the deficiency it at first occasioned.
As a free external trade in corn, if gradually
and cautiously introduced, could not, in any period
of its progress, effect a diminution in wealth, or,
what is the same thing, in the quantity of com-
modities, it could not, in any period of its progress,
occasion a diminution in the amount of taxes laid
upon commodities by weight, tale, or measure-
ment; though, in proportion as it increased the
value of money, it would increase the real weight
of such taxes upon the people. Now it is self-
evident, that, as free trade increases the productive-
ness of industry, and augments the wealth of the
community, it will give the people power to sup-
port the heavier pressure which it inflicts ; while
every addition effected in the number of commo-
dities subject to taxes laid on by tale or measure-
ment, will occasion a clear addition to the amount
of the revenue. While the amount of the revenue
thus augments, any given portion of it will possess,
in consequence of the rise in the value of money, a
307
higher power than before. Now, though the in-
creased power of the revenue will afford no aid to
government, in providing for the interest of the
debt, or in paying the fixed salaries of civil and
military servants ; yet in all new items of expendi-
ture, and with respect to the immense purchases
which the agents of government annually make for
the public service, it will tell ; and it must, there-
fore, as well as the numerical increase in the pro-
ductiveness of the taxes, be regarded as an im-
provement in the finances.
Let us suppose, for the sake of illustration, that
the free external trade is introduced so cautiously
and gradually, that wealth increases, in exact pro-
portion as money rises; or, in other words, that
commodities multiply in the ratio in which their
prices fall. In this case, the free trade would not,
at any period of its progress, induce financial em-
barrassment. Though, in whatever degree money
rose in value, the real debt, the real salaries of civil
and military servants, the real expenditure of the
country, would be increased, yet the revenue, in-
stead of falling short, would be found to increase
beyond the disbursements.
x2
308
For example : If, in any particular market, four
hundred pounds of tea are consumed ; and if these,
exclusive of duty, are worth .100, then, it is self-
evident that, from an ad valorem tax of an hundred
percent, they will yield .10<> to the treasury Now,
if a free external trade should so raise the value of
money, that the four hundred pounds become
worth only .90, the:i, it is also self-evident, that
the ad valorem tax of an hundred per cent could
produce only .90. But if the free trade which
raised the value of money, and thus reduced the
amount of the tax upon tea, should, at the same
time, so increase the wealth, and consequently, the
demand, of the market, as to cause an additional
quantity of tea, to the value of .10 to be con-
sumed, then this additional quantity, at the ad
valorem duty of an hundred per cent, would add
. 10 to the receipts of the treasury ; and, so far,
the defalcation in the revenue, occasioned by the
rise in the value of money, would be exactly made
good, by the increased consumption of commo-
dities, by which this rise was accompanied. And
again : Supposing that, in any market, there is a con-
sumption of four hundred gallons tif wine, which,
S09
independently of duty, are worth ,.100, then, a
tax upon this wine, of five shillings a gallon, will
yield the treasury .100. Should the adoption of
a free external trade raise the value of money, until
the wine, independently of duty, became worth
only .90, still, the tax laid on by measure, not
by value, would return to the treasury the same
sum as before. And should the free trade which
lowered the price of the wine, increase the wealth of
the market, so as to cause forty additional gallons
to be consumed, then the tax of five shillings a
gallon upon these would produce .10, and in-
crease the receipts of the treasury, by that sum.
Hence it is demonstrable, that a free trade which
should raise the value of money ten per cent, and
at the same time, add ten per cent, to the produc-
tive powers of industry, and to the demand for
articles of consumption, would sustain the amount
of ad valorem duties, while it increased, by ten per
cent, the productiveness of the taxes laid on by
tale or measure.
And now, as in the former chapter, we will re-
capitulate the conclusions, which our reasonings
and illustrations have been brought forward to
establish.
310
1st. A free external trade in corn would, under
our present circumstances, render us dependent on
foreign countries for a part of our consumption;
but would render our supply of subsistence at once
cheap and steady.
2nd. Importing a part of our supply would, in
its first operation, necessarily give some check to
tillage, and inflict some depression on the landed
interest ; but in whatever degree it might be
found to increase the interior demand for corn, and
to diminish the expenses of production, in that de-
gree it would ultimately bestow a higher relative
value upon land, and place the agriculture of the
country in a more flourishing state than it could
maintain, under any system of artificial encourage-
ment, and restricted importation.
3rd. But a free external trade in corn would be
found to increase the home demand for corn, and
to diminish the expenses of production, in a degree
not easily to be calculated ; would, in every branch
of business carried on throughout the country, in-
crease the productive powers of labour and capital ;
reduce our natural prices ; augment the demand,
both of the home and of the foreign market ; in-
311
crease our manufactures ; extend our commerce ;
and cause a rapid accumulation of capital, which,
overflowing upon the soil, would, under the natural
protection arising from the expense of carriage on
an article so bulky as corn, and, in order to sup-
ply subsistence to the increasing number of wealthy
consumers, be perpetually employed in bringing in
new lands, and in heightening the culture of the
old.
4th. As free external trade in corn would raise
the value of the currency, it would, on the one
hand, increase the real magnitude of the public
debt, while it would have a tendency to diminish
the amount of ad valorem duties, and augment the
pressure of the taxes laid on by tale or measure ;
but then, as this free trade must necessarily in-
crease the wealth of the country, it would, on the
other hand, relatively diminish the public debt,
when compared with the public resources ; would
sustain ad valorem duties, by causing the reduced
sum to be paid on a greater number of articles ;
would increase the productiveness of taxes laid on
by measure, weight, or tale ; and, while it at once
312
added to the numerical amount, and, with respect
to all new expenditure, heightened the power of any
given portion of the revenue, would place the
finances in a much more flourishing condition than
before.
313
CHAP. III.
I. Comparative Estimate of the Effects which a
restricted, and a free, external Trade in Corn,
would produce, upon the Subsistence, upon the
Agriculture, upon the Commerce, and upon tht
Finances, of the Country ; II. on the Measures
which, in revising the Corn Laws, it would be
expedient for the Legislature to adopt.
.Having, in the two preceding chapters, un-
folded the effects which would be produced by
imposing permanent restriction on the external
corn trade, and which would arise from giving
perfect freedom to this important branch of com-
merce ; nothing now remains, except to compare
the consequences resulting from these two oppo-
site measures ; and to ascertain the safest and most
efficacious means of introducing that system which
shall be found most conducive to the prosperity of
the country.
314
I. In tracing the operations of restricted, and of
free, intercourse, we have occasionally been led to
contrast the effects of the two opposite systems,
and to draw conclusions in favour of the latter.
But to render this contrast complete, and to give
those conclusions the irresistible evidence which
belongs to them, it is necessary to place in juxta-
position, the results of restriction and of freedom,
and to bring forward some considerations which,
without breaking the connection of our discus-
sions, could not, in the preceding chapters, have
found a place.
1. It has appeared, that, in the present circum-
stances of these countries, and of the neighbouring
states, restrictions on the importation of foreign
corn would, for a short time, enable us to raise an
independent supply, at a very high, and a very un-
steady price ; while the contrary system of free in-
tercourse, by enabling us to obtain our consump-
tion of corn, without keeping inferior lands under
cultivation, and by enlarging the territory from
which subsistence was drawn, would at once keep
down our markets, and correct the evils arising
from unequal seasons. As far, therefore, as the
315
supply of subsistence is concerned, a system of free
intercourse would be decidedly more beneficial
than a system of restriction. To say one word
upon the advantages of furnishing our numerous
population with a cheap supply of food, would be
superfluous. Steadiness in the supply of subsist-
ence is, perhaps, still more important, though its
benefits may be less obvious. When the price of
corn is liable to considerable and sudden fluctua-
tions, the market price of labour has not time to
accommodate itself to the natural price ; and the
lower classes of the community, unable, by any
exertion of prudence, or of industry, to obtain an
adequate support, will be driven to the parishes,
or to the compassionate, for relief. Hence, the
respectable pride of independence, and the love of
labour which it inspires, will gradually be lost ;
and the peasant, and the manufacturer, will ac-
quire those habits of idleness, improvidence, and
dissipation, which are ever the characteristics of
those who, having no regular means of obtaining
a livelihood, trust to chance for their support.
2. Restrictions upon importation, in their first
and direct operation, would extend tillage, and
316
raise the value of laud ; but, in their second and
indirect operation, would, in whatever degree they
might prove prejudicial to commerce and wealth,
again contract cultivation, and involve the landed
interest in the general decline ; while, on the con-
trary, unrestrained intercourse would, at first, throw
out some inferior soils, and lower rents ; but sub-
sequently, in whatever degree it might be found to
encourage commerce, and to promote prosperity,
would pour the accumulating capital back upon
the soil, and bestow a higher relative value upon
land. With respect, therefore, to the agriculture
of the country, a free external trade in corn would
be, beyond all comparison, more beneficial than the
opposite system of restraint. A forced state of
tillage, and an artificial elevation in the value of
land, even if it were possible to sustain them, and
if they did not bear within themselves the seeds of
their own destruction, would be evils. A forced
state of agriculture is the same thing as capital de-
prived of its natural and most beneficial occupa-
tion ; is the same thing as a diminution in the pro-
ductive powers of industry. An artificial elevation
given to land, and, consequently, to its produce,
317
would be worse. To increase the rent-roll of pro-
prietors, by compelling all other members of the
community to pay more for their corn than they
otherwise need to do, would be as gross a viola-
tion of* natural justice, as it is possible for the mind
to conceive. It would be tantamount to laying a
tax upon bread, for the purpose of pensioning off
the landed aristocracy. It would be nothing better
than legalized robbery, taking the money out of
the pockets of the poor and of the industrious, in
order to lavish it on the idle and the rich. A
forced state of agriculture, with its high scale of
rents and prices, even if some extraordinary com-
bination of circumstances should give it perma-
nence, would inflict positive evil on the country.
But now, when, in consequence of the peace, the
consumers of corn in this country no longer pos-
sess a monopoly of the commerce of the world,
they have no longer the ability to pay, for their
subsistence, the monopoly prices of the war ; and
it has become impossible to give permanence to our
forced state of cultivation. Artificial regulations,
for the purpose of keeping the value of land above
its natural level, would, as has been already un-
318
folded, retard the period when the general pros-
perity of the country, by increasing the demand for
corn, and reducing the expense of its production,
should allow tillage to be extended over inferior
soils. Such regulations ultimately deprive the
home grower of his only legitimate and permanent
encouragement ; and tend to depress that very
agriculture which they were intended to promote.
The natural order of events we cannot with impu-
nity invect. In any country, to extend tillage
beyond its actual state, two things are necessary,
viz. lands susceptible of improvement, and con-
sumers able to pay, with an adequate profit, the
expenses of realizing it. A high price of corn can
promote cultivation, only when there are consumers
capable of paying it. Now, artificial regulations,
prematurely forcing inferior lands into cultivation,
would diminish both the number and the wealth of
consumers; and, in the second step of their pro-
gress, would visit proprietors and cultivators with
all the evils which, at the first step of their pro-
gress, they brought on the other classes of the com-
munity.
The opposite system would produce diametri-
#319
calljy opposite effects. As soon as the first em-
barrassment of withdrawing the very inferior soils
from tillage, and of re-adjusting rents to their
natural level, should have subsided, an unfettered
commerce would exert the most friendly influence
upon agriculture. Industry being permitted to
take its most beneficial direction, the number and
wealth of consumers would gradually increase;
while the interest of money, and the profits of
stock, becoming lower with each advance in opu-
lence, the expense of cultivation would diminish.
These constitute the only legitimate, the only per-
manent encouragement which agriculture can re-
ceive. It cannot be too often repeated, that the
interests of the landed, and of the trading, classes
of the community, are identical. The rent of pro-
prietors, and the profits of cultivators, must ever
be determined by the quantity of other commodi-
ties which the manufacturer and merchant are
able and willing to give in exchange for agricultu-
ral produce. Though it were possible (and, I
firmly believe, it is not) that the land-owners and
cultivators should be uninfluenced by a regard for
the good of the public, and for their country's pros-
320
perity and power, yet a sensibility to their own
true interests should render them solicitous for the
adoption of an economical system, which would
give ncrease to the productive powers of industry,
and extension to manufactures a d commerce.
With the flourishing or declining state of these,
the value of their produce must ultimately rise or
fall. The superiority of a free external trade in
corn, with respect to its influence in promoting
agricultural improvement, must, in the last ana-
lysis, be estimated by its superiority in promoting
wealth and commerce
3. Permanent prohibitory duties on the impor-
tation of foreign corn would almost annihilate our
manufactures and commerce ; while a free trade
in this important article, would afford them all the
encouragement of which they are susceptible.
These propositions, which were fully unfolded and
established in the two preceding chapters, are,
even if we confine our attention to the indirect in-
fluence which commerce exerts upon agricultural
improvement, sufficient to impress us with the vast
superiority which the free external trade possesses
over a system of restriction. But if, in estimating
m
321
the benefits conferred by commerce, we were to
confine our attention to the indirect influence
which it extends to agriculture, our views of the
subject would be extremely narrow and inadequate.
As such narrow and inadequate views, however,
are sometimes taken; and as there is an inclination
occasionally discovered, to revive the exploded
paradoxes of the economists, it will be proper to
present a comparative display of the degrees of
wealth, prosperity, and power, which a country may
obtain when her industry is limited to the supply-
ing of the home market, and when her productions
are exchanged against those of foreign countries.
This will place in a full and perfect light, the ad-
vantages that a free external trade in corn, which
would promote all other branches of commerce,
possesses over a system of restriction, which would
depress them.
It is self-evident, that a state which refuses to
receive agricultural produce from other countries,
can never possess a population beyond that which
its own territory is able to subsist. It is demon-
strable, that a people who, by the nature of their
situation, or by the errors of their economical
Y
322
system, are shut out from foreign trade, can never
make any very considerable advances in wealth and
power. The first principle of political economy
informs us, that the divisions of employment, whe-
ther established between the individuals of the
same country, or between the individuals of dif-
ferent countries, are the sources from which every
considerable improvement in the productive powers
of industry is derived. Now the people who deprive
themselves of foreign trade, deprive themselves of
the benefits of the foreign divisions of employment ;
and can neither cultivate exclusively, the produc-
tions for which Nature has adapted their soil, nor
devote themselves to those manufactures, in which
they may have acquired advantages. Hence, they
will neither be so abundantly supplied with the
comforts of life, nor be able to contribute so largely
to the exigencies of the state, as if their situation,
or their institutions, had been favourable to com-
merce.
But this is a very small part of the disadvantage
to which a country, shut out from foreign trade,
and relying on her internal resources, is necessarily
exposed. Such a country has limits set to her
323
population and wealth, which it is not only impos-
sible to pass, but which it becomes every day
more difficult to approach. Every step in the
progress of prosperity is, to a merely agricultural
state, more tardy and operose than that which pre-
ceded it.
Let us suppose, for example, that such a state
has so far surmounted the obstacles thrown in the
way of improvement by uofavourable situation, or
erroneous legislation, as to bring into cultivation
all the good and middling lands which require
little, or but a moderate quantity of capital. Now,
as all those tracts of territory, which, though of
somewhat inferior quality, might, under adequate
encouragement, and with a liberal application of
capital, furnish large additional supplies of subsist-
ence, remain by the supposition unreclaimed, it is
evident, that this state cannot, as yet, have even ap-
proached the limits of its possible population and
power. Let us, therefore, suppose farther, that
such an increased encouragement to agriculture
has arisen, that it becomes profitable to apply
capital to land one degree inferior to the first-rate
and middling soils already under tillage. Now,
324
the necessary consequences are, that these soils, as
soon as it becomes profitable to apply capital to
inferior land, will afford a higher rent ; and that
the natural price of corn throughout the country
will be increased ; the produce of the inferior soils
coming to market, charged with wages and pro-
fits upon a greater quantity of labour and capital,
and the produce of the superior charged with a
higher rent. Now, a rise in the natural price of
corn, is not only the same thing as a reduction in
the productive powers of the labour and capital
employed in cultivation ; but is the same thing
as a reduction in the productive powers of indus-
try, in every branch of business carried on by the
consumers of corn.
It is self-evident, that, as the powers of produc-
tion are lowered, the march of prosperity must be
retarded. Such a further increase, therefore, in
the demand for corn, and in the capital applicable
to cultivation, as would allow lands in the next de-
gree of inferiority to be brought under tillage, could
not be effected without great and growing diffi-
culty. But we will suppose that this difficulty is
surmounted ; we will suppose that, in consequence
325
of some circumstances favourable to the growth of
wealth, the revenue of consumers, and the capital
of growers, have been so increased, that lands in the
next degree of inferiority may be cultivated with a
profit. Now, as soon as the cultivation of these
is effected, the process just detailed will be re-
peated. Lands of third-rate quality will require,
in order to raise a given produce, a greater quan-
tity of labour and capital than the first and second-
rate sorts which were before under tillage. The
latter will, consequently, acquire a higher value,
and afford a greater rent. All the component parts
in the natural price of corn will, therefore, be again
increased ; that is to say, the productive powers of
industry will be again diminished, and any fur-
ther advance in opulence and power rendered still
more difficult than before. If, in the course of
years, tracts in the fourth degree of inferiority
should be reclaimed, then, the next step towards
improvement would be made by a movement so
slow as to be scarcely perceptible; and i in the
march of ages, soils in the fifth degree could be
redeemed, the country which relied exclusively on
internal resources might, with respect to any period
326
of time which can form the basis of political cal-
culation, be regarded as stationary.
Thus it is, that countries, merely agricultural,
begin, after cultivation has been extended over
their most fertile districts, to lose the active prin-
ciple of improvement, and scarcely ever attain
even to that limited degree of opulence and power,
which their own soil, if its capacities were deve-
loped, could supply. But this is not the worst.
As the gradual diminution in the productive powers
of industry, retarded their advance, it would also,
render them slow in recovering from the effects of
deficient seasons, or from the waste of war. Un-
less Nature should prove ever favourable, and the
neighbouring states ever just, a country, merely
agricultural, would not only cease, in a short pe-
riod, to advance, but would, probably, become re-
trograde.
The country whose position and whose policy
permitted her to participate freely in foreign trade,
would experience every thing the reverse of that,
which has been described in the preceding para-
graphs. To the possible increase of her resources,
no limit could be assigned ; and her prosperity, in-
327
stead of becoming every day more tardy, would ad-
vance with an accelerated pace. The divisions of
employment established with other countries, would
enable her to avail herself to the utmost of every
natural advantage ; and the rapid increase of opu-
lent consumers would speedily bring into cultiva-
tion, all her lands of first-rate, and of middling
quality. When she had arrived at this point, she
would not, at a great waste of labour and capital,
force cold and sterile tracts into tillage ; but, adopt-
ing a more enlightened policy, would receive a
part of her subsistence from the foreign grower.
Hence, there would be no increase in the natural
price of corn, and hence no diminution in the pro-
ductive powers of industry. The number of opu-
lent consumers would go on increasing, and capital
would continue to accumulate as rapidly as be-
fore.
As capital accumulated, the rate of interest and
of profit would fall; as commerce extended, more
accurate divisions of employment would multiply
and cheapen all wrought goods. Hence, while the
increasing number of wealthy consumers increased
the demand for corn, the expenses of cultivation
328
would diminish. Agriculture would flourish be-
neath the reaction of an enlightened commercial
system ; the soil would acquire a higher relative
value, from the abundance of commodities ready
to be exchanged for its produce ; and, while tracts
of third, fourth, and fifth-rate quality could be
profitably tilled, rents would experience a progres-
sive rise.
Now it must be obvious, that, in a flourishing
commercial country, which freely imports the pro-
duce of her neighbours, the progressive reclaiming
of inferior soils, and the consequent rise in rents,
would proceed from causes, and would lead to ef-
fects, very dissimilar to those which an extension
of tillage, and a rise in rents, could proceed from,
or could lead to, in a country merely agricultural.
In the agricultural country, the rise in rents, and
the extension of tillage over inferior soils, would,
as has been shewn above, have the effect of raising
the natural price of corn; but, in the commercial
couutry, this effect would be counteracted, because
the more perfect divisions of employment would re-
quire less wages, and the fall in the interest of
money, less profits, to be paid for producing any
329
quantity of grain. These causes, co-operating with
the competition of an open trade, would necessarily
keep subsistence cheap. The natural price of corn
would receive no increase, and, consequently, the
productive powers of industry sustain no diminu-
tion. Prosperity would encounter no check. On
the contrary, manufactures, commerce, and po-
pulation, would acquire an heightened ratio of
increase : for every addition made to the quan-
tity of agricultural produce imported, would,
while it gave employment to a greater number of
workmen, create, in the foreign market, an addi-
tional demand for the equivalents which purchased
it. The limits of commercial prosperity cannot be
assigned.
These conclusions from general principles, have
received the fullest sanction of experience ; and the
superiority which, in point of opulence, popula-
tion, and power, a commercial country possesses
over one that is merely agricultural, has been con-
firmed by the history of all ages. In ancient times,
Sidon, Tyre, Corinth, Athens, Syracuse, and Car-
thage; and, iu modern times, Venice, Genoa, Pisa,
330
Florence, the Ilanseatic Towns, and Holland, not
only acquired by their industry and commerce, an
opulence, of which there is no example amongst
nations, whose position or whose institutions have
been unfriendly to foreign trade, but attained a de-
gree of political power and consideration, to which,
had they been limited to the resources of their own
territories, they could never have ventured to as-
pire. Venice, Hamburgh, and Holland, if they
had refused to cultivate commerce, must always
have remained perfectly insignificant states ; yet,
by adopting an enlightened system of external in-
tercourse, what fleets and armies they put forth ;
what kingdoms, what confederations they resisted ;
and what a leading, what a preponderating
part they acted in the affairs of Europe !
To this it may be objected, that security and in-
dependence are of still higher importance than
great wealth and population ; that as foreign trade
is liable to perpetual fluctuations, the power and
preponderance which it confers, must be unstable ;
and that the commercial states, once so formidable
in Europe, have been swallowed up in the great
331
territorial monarchies; and, deprived even of their
political existence, retain nothing of their former
splendour but their name.
The objection proves too much ; it applies
equally to every institution, the origin of which is
human. Empires rise and fall, flourish and decay.
The power which is derived from extended com-
merce is, perhaps, less unstable than that which is
derived from extended territory. Ancient Egypt,
though possessing the most fertile territory in the
world, was subjugated in succession, by every pre-
ponderating state which arose within her neigh-
bourhood. China, of whose agriculture such won-
ders are related, has been unable to defend herself
against the hordes of Tartary. Poland ceased to
be a kingdom, before Venice lost her indepen-
dence.
The question, however, is not, whether extend-
ed commerce, or extended territory, be the most
stable foundation upon which national greatness
can rest ; but, whether a country possessing a given
territory, should, by the prosecution of external
trade, establish a species of property in the terri-
tory of her neighbours, and acquire accessions of
332
population, wealth, and power, which would be
unattainable if she confined herself to her internal
lesourccs. The question, as it respected Venice,
was, whether the inhabitants of a few rocks in the
Adriatic, should remain in helpless insignificance,
exposed to the depredations of every horde of pi-
rates ; or whether they should place themselves in
a condition to contend successfully against the Ot-
toman Empire, when its power was at its height,
and when it seemed ready to subjugate the migh-
tiest monarchies of Europe ? The question, as it
respects England, is not, whether her power would
be more independent and stable, if she possessed
the extended territory and numerous population of
France, or Austria, or Russia ; but, whether, being
inferior to these great continental states in natural
resources, she should avail herself of the artificial,
and even, perhaps, less permanent, advantages,
placed within her reach, and by the wonders of her
commerce, create the means for taking au ascen-
dancy in Europe.
If the persons who, in their admiration of the
independent and permanent resources which are
derived from domestic agriculture, would adopt
333
measures dangerous to that species of power which
our industry has established, and which has so long
rendered us the wonder and the envy of our neigh-
bours ; if these persons possessed an enchanted
wand, by the touch of which, they could change
the waters between the British Islands into fertile
plains, and thus give us territorial resources, equi-
valent to the commercial ones they seem solicitous to
under-rate, and to destroy; then, indeed, their doc-
ix ine might patiently be heard. But as long as the
abandonment of commerce cannot create additional
Jands, so long must we cherish that compensa-
tion, that substitute for extended territory, which a
flourishing external trade confers. When the advo-
cate of independent and self-derived power urges
the instability of commerce, instead of advancing a
reason for neglecting the advantages it bestows,
he furnishes an irresistible argument against the
adoption of any measure which might in any way
endanger the resources, by which our position in
Europe, if not our national independence, is main-
tained.
The argument respecting the expediency of
compensating, by the resources growing out of
334
commerce, the deficiency of territorial power, ap-
plies, with peculiar cogency, to insular states.
Without extended commerce, there can be no naval
preponderance ; and without naval preponderance,
an insular state must, in all her foreign relations,
be perfectly insignificant. To a continental power,
commerce, and naval affairs, are objects only of
secondary, but, to an island, they are objects of
primary, importance. France may invade her
neighbours, and dictate to Europe, without a
fleet ; and, though she rode unrivalled on the
waters, might be invaded on the land side and sub-
dued. To England, on the contrary, superiority
at sea is the best means of defence, and the only
means of offence. Without our Navy, we should
be excluded from all participation in the affairs of
Europe ; and our Army, however numerous, and
however brave, could never be brought into con-
tact with an enemy, unless to repel the descents, to
which we should be perpetually exposed.
Popular sentiment, though occasionally liable to
unsteadiness and excess, has, in general, a better
foundation in reason, than the pride of philosophy
is willing to allow. The public voice in favour of
335
our naval ascendency, and of our maritime rights,
is the expression of consummate political wisdom.
Our naval greatness is the only foundation, on
which our military glory can be made to rest.
Our squadrons are not only floating fortifications
drawn around our coasts, but constitute the mili-
tary road, over which our armies must move.
Now, we should never cease to remember, that
manufactures and commerce are necessary, not
only to compensate for our deficiency in extent and
population, but also as the sources of that justly
cherished naval preponderance, without which an
insular empire can take up no position among the
nations of the world.
Having now explained, from general principles,
and from a reference to historical facts, the nature
of the superiority, which a commercial state has
over a country which confines herself to her inter-
nal resources ; and also shewn that, to the parti-
cular case of a country which is inferior to its
neighbours, in extent and population, and which,
in consequence of an insular situation, is dependent
on naval preponderance for its place in Europe,
these principles, and these facts, apply with pecu-
336
liar cogency ; it is now only necessary, in order to
establish the vast, the incalculable advantage,
which a free, would possess over a restricted, trade
in corn, that we should repeat the principles, al-
ready fully established, that the former system
would be friendly, and that the latter would be
destructive, to our commerce.
4. Though enough may already have been
urged, to establish the great and extraordinary
superiority which, to countries in general, and to
England in particular, a free, would possess over
a restricted, corn trade ; yet, we should be depriv-
ing our argument of much of the evidence of which
it is susceptible, did we omit to re-state, and to
place in contrast, the influence of these opposite
systems upon finance.
A system of restrictions on the importation of
foreign grain would, in its first operation, lower
the value of money, and, consequently, increase
the amount of ad valorem duties, and lighten the
pressure of all other taxes, while it would be tanta-
mount to reducing the salaries of all the servants
of the state, and to diminishing the real quantity
of our debt. These financial facilities, however,
337
would be of very short duration. The second opera-
tion of restricted importation would be the loss of
wealth, the destruction of manufactures and com-
merce, and the drying up of all the sources from
which revenue is supplied. All taxes, whether laid
on ad valorem, or by measurement and tale, would
become less productive by being paid on a smaller
number of commodities ; while, as wealth decayed,
as the manufacturing and commercial classes emi-
grated or perished, the demand for agricultural
produce would cease, the artificial scale of prices
would sink in the general ruin it had occasioned,
and, consequently, the value of money be elevated
once more. Here, then, the amount of ad valorem
duties, already reduced by being paid upon a
smaller number of commodities, would sustain a
still farther diminution ; while all other taxes fell
with redoubled weight upon the wasted country.
At the same time, all the salaries paid by govern-
ment would be, in fact, increased, and the real
quantity of our debt augmented. The restriction
on the importation of corn, and the artificial scale
of prices it had induced, after having afforded a tern-
538
porary relief to the finances, would then plunge the
country into bankruptcy and ruin.
A free external trade in corn would effect a
process the reverse of this. Its first effect would be
to raise the value of money, and, consequently, to
diminish the amount of ad valorem duties, and to
increase upon the public the pressure of other taxes.
But, by a nearly contemporaneous operation, it would
augment wealth, extend commerce, and improve
the sources from which revenue is supplied. The
former amount of ad valorem duties would now be
restored in consequence of the smaller sum being
paid upon a greater number of commodities ;
the growing wealth of the country would enable
it to sustain, with as little inconvenience as be-
fore, the increased pressure of other taxes, while
these, by being paid upon a greater number of
commodities, would be rendered considerably more
productive. The finances would become more
flourishing from a double cause. While the re-
ceipts of the treasury increased in amount, any
given portion of the revenue would, in all the
branches of expenditure, except those of disbursing
339
fixed salaries, and of discharging the interest of the
debt, acquire a heightened power.
Thus, in contrasting the effects of the two sys-
tems upon the financial resources of the country,
we again find that a free, possesses important, nay,
incalculable advantages over a restricted, corn trade.
Just escaped from a contest, to which the history
of man affords no parallel, and which has entailed
upon us a weight of taxation never before sustained
by any people, the difficulties of the country are
seriously great ; and, unless our economical system
be revised with a happy union of sagacity and
science, the pacification and deliverance of Europe
may, for us, have arrived too late. If, at such a
crisis, the legislature should be unhappily induced
to sanction regulations, the necessary operations
of which would be to lower the productive powers
of our industry, to raise the natural price of all
our commodities, and to strike at the roots of our
commercial prosperity, then national bankruptcy
will be the inevitable result. On the other hand,
if, by the adoption of an enlightened economical
system, our wonderfully accumulated capital (aided
by more perfect divisions of employment, and by
z2
340
that improved machinery for abridging labour,
which are ever its concomitants) should be per-
mitted to take its mo3t profitable direction, and our
manufacturers be allowed to purchase subsistence
and materials wherever they can be procured at
the cheapest rate, then the natural price of our
productions will be reduced ; then our commerce
will extend; then wealth will flow in, and the
country will acquire an elastic power, enabling
her to bear, and to flourish under, all her burthens.
The comparison between the financial results of a
restricted, and of a free trade, in corn, is, in fact,
a comparison between flourishing revenue and
bankruptcy.
II. And now, if we have been at all successful
in unfolding the principles of the external corn
trade, in examining the exceptions to which these
principles are liable, and in tracing and comparing
the effects, which freedom and restriction would
respectively produce, the irresistible conclusion
must be, that, in revising the corn laws, the in-
troduction of a free trade, is the object which the
legislature should steadily keep in view. In effect-
ing this improvement in our economical system,
341
however, difficulty and embarrassment may occur,
and considerable caution will be required. We
may lay it down as a universal maxim in political
science, that sudden change is evil. The truth of this
principle, as it applies to the case of a precipitate fall
from an artificial scale of prices, was fully unfolded
in the first part and third chapter of this volume.
What we there proved from general principles, the
farmer has, during the last year, fatally experienced.
Now, in order to guard from impending calamity
a very numerous and a most important class of the
community, as well as to arrest that waste of the
national resources which must ever accompany a
sudden breaking up of the accustomed channels of
industry, it becomes highly necessary that the legis-
lature, without ever losing sight of the great ulti-
mate object of introducing a free trade in corn,
should afford the domestic grower the protection
of a moderate and temporary duty on the importa-
tion of foreign grain.
It is evident that, in order to determine the
degree of protection necessary to check the waste
of agricultural capital, we must previously ascer-
tain the price, which is necessary to secure to the
342
farmer the customary rate of profit on the stock he
has vested in the soil. Now, in endeavouring to
ascertain the remunerating price, our economists
seem, in a great measure, to have overlooked the
important influence which the price of corn has
upon the expenses of its own production ; or, in
other words, upon the cost of cultivation. The
secretary of the Board of Agriculture, indeed, to
whose talents and unwearied exertions the public
has so frequently been indebted for valuable infor-
mation, gave in to the Lords' Committee a table,
which we have already exhibited, and which, from
the year 1790, to the year 1813, shews, on the as-
cending scale, the extent to which the value of
produce regulates most of the items of the culti-
vator's expenditure. Taking this table as the basis
of our illustration, we endeavoured, in the pre-
ceding chapter, to trace, on the descending scale,
the gradations by which the price of corn affects
the out-goings of the farm. The reasoning on
this subject is obvious, and is self-evident, in all
its steps. When the price of produce falls, the
value of tithes, and of seed, will immediately, and
in the same proportion, be reduced ; and, though
343
neither immediately, nor in the same degree,
labour, and all the instruments of production, will
come down also. Now, as, since the period when,
according to Mr. Young's calculations, the remu-
nerating price for wheat was eighty*seven shillings
the quarter, the price of produce, and, conse-
quently, many items of the cultivator's expendi-
ture, have been considerably reduced, we may
(particularly as the farther disbanding of our
sailors and soldiers will, for a time, lower yet
more the important article of labour), take the pre-
sent remunerating price at about seventy shillings
the quarter, for wheat of a middling quality.
If this estimate of the present remunerating price
should come near the truth, it will be expedient*
that, in revising the corn laws, the legislature
should in the first instance, lay such duties upon
importation as may keep the foreign grower out
of our markets, until wheat has risen above
seventy shillings the quarter. And, even should
seventy shillings be something below the full re-
munerating price, giving to the former, accord*
ing to Mr. Young's calculation, ten per cent,
upon his stock, it does not seem adviseable that
a higher scale of duties should be imposed. For
344
we never should forget, that every artificial ele-
vation of price secured to the farmer, is not only
a direct tax imposed upon the community at
large, but a positive discouragement to manu-
factures and commerce. Now the interests of
agriculture, as has repeatedly appeared, through-
out this work, are inseparably connected with the
flourishing state of trade. If the duty upon the
introduction of foreign grain should be laid on so
high as to cause our commodities to be excluded
from the foreign market, our unemployed manufac-
turers would no longer have an effectual demand for
corn, and prices would ultimately sustain a ruinous
fall from the unwise attempt to sustain them
at an artificial and unnatural elevation. Of all
classes of the community, proprietors and culti-
vators would, ultimately, receive the deepest in-
jury from the duty upon importation being laid
on too high. Should the necessaries of life be
ruinously advanced, the merchant might with-
draw his capital, the manufacturer transport his
skill to some better regulated country ; but the
land must remain, and its proprietor be left alone
to survey the desolation he bad wrought; Should
the duty on importation be laid on somewhat too
315
low, seed and tithe, and, in a little time, labour
and rent, would sustain a fall, and so reduce the
expenses of cultivation, that the farmer would
nearly regain his general rate of profit on his
stock ; but should the duty be laid on too high, the
home demand for corn would be reduced, and the
possibility of a rectifying process be destroyed.
It being demonstrable, therefore, that the interest
of all classes requires that the duty laid on impor-
tation should rather be below than above what may
be necessary to secure the remunerating price, ac-
cording to the present expenses of cultivation, we
will take seventy shillings the quarter, as the
lowest price at which wheat of a middling quality
should, in the first instance, be permitted to come
into our markets.
When the legislature shall have adjusted, as a
temporary measure, the duty for protecting the
home grower, and for checking any farther loss of
agricultural capital, leisure will be afforded for a
gradual and cautious introduction of more enlight-
ened principles into our commercial system. The
only exception, as was shewn in the first part of
this work, to the principle of a free external trade
in corn, is formed by the existence of a forced state
S46
of tillage, and an artificial scale of prices; and
even this exception is founded entirely on the evils
arising out of precipitate change. Precipitate
change, therefore is the only thing against which,
in conferring upon the country the incalculable
advantage of an unrestricted trade in corn, the
legislature has to guard. In doing this, no diffi-
culty could arise. Supposing the temporary mea-
sure of protection to consist of duties checking
importation, whenever the quarter of middling
wheat was below seventy shillings, and increasing
in proportion as our markets fell, so as to render
seventy shillings the lowest price at which, in the
first year, the foreign, could enter into com-
petition with the domestic, cultivator ; then, by
providing that, in the second year, the duties should
not be laid on until middling wheat fell to sixty-
eight shillings, and that, in the third, and each suc-
cessive year, the duties should not commence until
prices came down two shillings below the ave-
rage of the former season, the legislature might
gradually give freedom to the corn trade, without
imparting to industry, and to property, that sud-
den shock, the calamitous effects of which we
formerly described.
347
Some will, probably, consider this as a too hasty,
and others may regard it as a too tardy, adoption
of the principle of free trade. In solving the dif-
ficult problem, however, respecting the grada-
tions, by which we could arrive at the important
object of unrestricted intercourse, the productive-
ness of the several branches of revenue would fur-
nish us with an unerring guide. If, for example,
the amount of ad valorem duties should, other
things remaining the same, sustain a diminution,
we should be warned that the value of money
was raised faster than the quantity of commodities
paying such duties, was augmented ; and, conse-
quently, that the approach to a free trade was
conducted with too much haste. But if, on the
other hand, the amount of duties should, not-
withstanding the rise in the value of money, con-
tinue to increase, we might confidently conclude,
that an increased number of taxable commodities
was consumed ; and that the progress to unre-
stricted intercourse was accompanied with a rapid
increase in the wealth and resources of the country.
When, in order to give time for a reduction of
rents, for a withdrawing of capital from very in-
ferior soils, and for the increased quantity of com .
348
modities to make good the financial deficit occa-
sioned by a rise in the value of money, a temporary
protection shall have been afforded to agriculture,
the legislature may proceed to regulate tithes, to
repeal whatever taxes may fall with dispropor-
tioned weight upon tillage, and to provide for an
equalization of all rates and assessments. Should
these desirable measures be effected before the pe-
riod when the foreign shall be permitted to com-
pete with the home grower, then capital would
everywhere flow into its natural and most pro-
ductive channels, and the free external trade in
corn, without inflicting depression or embarrass-
ment on any class of individuals, would, with
respect to subsistence, to agriculture, to commerce,
and to revenue, produce those generally, and
greatly beneficial consequences, the nature and
extent of which we have, throughout this work,
endeavoured to unfold, and to determine.
THE END.
J. Er.-Hell, Printer,
Rupert Street, Hayinaiku, London.
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