LIBRARY 
 
 OF THE 
 
 UNIVERSITY OF CALIFORNIA. 
 Class 
 
 J 
 
Digitized by the Internet Archive 
 
 in 2007 with funding from 
 
 IVIicrosoft Corporation 
 
 http://www.archive.org/details/essayonexternalcOOtorrrich 
 
AN ESSAY 
 
 ON 
 
 THE EXTERNAL CORN TRADE. 
 
 BY 
 
 R. TORRE NS, Esq. F.R.S. 
 
 THIRD EDITION, 
 
 LONDON: 
 
 PRINTED FOR 
 
 LONGMAN, REES, ORME, BROWN, AND GREEN, 
 
 PATERNOSTER ROW. 
 1826. 
 

 GENERM 
 
 LON1>ON : 
 rRiNTEO »1f T. BRETTBLL, RUPERT STREBT, HAT MARK! 
 
TO 
 
 MAJOR-GENERAL SIR HENRY TORRENS, 
 fenig{)t Commantiec 
 
 OF THE 
 MOST HONOURABLE MILITARY ORDER OF THE BATH, 
 
 AS A TESTIMONY 
 
 OF 
 
 THE RESPECT AND THE ATTACHMENT 
 
 CALLED FORTH BY THAT 
 
 DISTINGUISHED TALENT, & UNDEVIATING RECTITUDE, 
 
 IN THE DISCHARGE OF OFFICIAL DUTIES; 
 WHICH 
 
 THE PUBLIC VOICE ACKNOWLEDGES; 
 
 AND BY THAT 
 
 URBANITY OF MANNERS & BENEVOLENCE OF HEART, 
 
 WHICH 
 
 ALL WHO APPROACH HIM, FEEL ; 
 
 €te follotoing Wotb 
 
 IS INSCRIBED, 
 
 By his Friend, 
 
 THE AUTHOR. 
 
PREFACE. 
 
 The Essay on the External Corn Trade 
 having been, for a considerable time, ont 
 of print, and a new edition being called 
 for, the Anthor has availed himself of 
 the opportunity thus afforded for revising 
 the work, and for explaining the manner 
 in which the Corn Laws have contributed 
 to create the revulsion and embarrassment 
 which have recently occurred. 
 
 Since the publication of the first edition 
 of this work, the Author has had the satis- 
 faction of seeing the doctrines therein un- 
 folded, sanctioned and confirmed by the 
 authority of the principal writers who have, 
 subsequently, directed their attention to the 
 important subject of the Corn Laws. 
 
vi 
 
 It was stated in the first edition of this 
 work, that when a tax is imposed on any 
 domestic article, a duty of equal amount 
 should be imposed on the importation of 
 the similar foreign article, and a bounty^ 
 also of equal amount, should be granted 
 on the exportation of the one, and the re- 
 exportation of the other. This was consi- 
 dered, in the first instance, as a somewhat 
 startling proposition, and as one savouring, 
 not of the enlightened doctrines of free trade, 
 but rather of the exploded system of legisla- 
 tive restriction and encouragement. The 
 principle, however, was adopted by Mr. 
 Ricardo, in his valuable Treatise on the 
 Protection of Agriculture, who explained 
 and enforced it with his usual ability. It is 
 now generally admitted that this principle, 
 instead of being opposed to the doctrine 
 of free trade, is part and parcel of that 
 doctrine, inasmuch as it tends to restore 
 that natural equilibrium between the dif- 
 
Vli 
 
 ferent branches of industry, which equili* 
 brium taxation occasionally disturbs. 
 
 In the earlier edition of the Essay on the 
 Corn Trade, it was shown, the Autlior be- 
 lieves for the first time, that a permanently 
 high scale of general prices, from whatevei* 
 cause arising, cannot depress domestic in^ 
 dustry by encouraging the importation of 
 cheaper foreign articles ; and that commo- 
 dities, the cost of producing which isgreatei* 
 in foreign countries than at home, may> 
 nevertheless, be imported, provided the 
 comparative disadvantage of the foreign 
 capitalist in producing the imported article^ 
 be less than the comparative advantage of 
 the domestic capitalist in producing the 
 articles exported in exchange. These prin- 
 ciples Mr. Ricardo adopted into his very 
 valuable work upon Political Economy and 
 Taxation ; and they form, in some measure^ 
 the ground-work of his chapters upon fo- 
 reign trade, and of his doctrines on the in* 
 
VIU 
 
 fluence of taxation upon the export and 
 import of commodities. 
 'j: = To this edition have been added some 
 facts and reasonings originally published by 
 the Author in 1816, in a Letter addressed to 
 the Earl of Liverpool on Agricultural Dis- 
 tress. These principally relate to the refu- 
 tation, by a comparison of the prices of corn 
 and of silver, of the opinion that the fluctua- 
 tions in the price of agricultural produce 
 which occurred during, and subsequent to the 
 vrar, w^ere occasioned by variations in the 
 value of the currency ; and to the statement 
 of the doctrine, that redundant supply reduces 
 prices in a ratio greater than that of the 
 excess. It is a gratifying confirmation of 
 the correctness of these principles, that, 
 although he had not then seen the publication 
 in vv^hich they at first appeared, one of our 
 ablest writers upon questions of political 
 economy, by an original process of his own, 
 arrived at similar conclusions. Mr. Tooke, 
 
IX 
 
 in his work " On High and Low Prices/' 
 one of the most valuable contributions which 
 have of late years been made to the sci- 
 ence, has established these principles by an 
 ample induction from curious and valuable 
 facts, and has explained in a masterly man- 
 ner their extensive influence on the varying 
 phenomena of the market. 
 
 In the First Edition of the Essay on the 
 Corn Trade, which was written in 1814, 
 and published early in the following year, 
 before the Author was acquainted with the 
 very able and original disquisitions of Mr. 
 Malthus and Mr. Ricardo, it was stated, 
 that the difference between the returns to 
 capital upon the worst, and upon the best 
 lands under tillage appears in the form of 
 rent; and that when we increase the cost 
 of obtaining subsistence, a greater portion 
 of the produce of labour will be required 
 for wages, and a less proportion will re- 
 main for profits. With respect to the 
 
first of these ' principles, the Author has 
 found nothing very material to modify or 
 correct ; but, with respect to the second, the 
 doctrine was stated incidentally, and without 
 the Author's being aware of the very im- 
 portant consequences to which it leads. The 
 chief corrections and additions which it has 
 appeared necessary to make in the last and 
 present editions of this work, relate, there- 
 fore, to the doctrine of profits. 
 
 Though the very profound disquisitions 
 of Mr. Ricardo were the occasions which 
 originally suggested the Author's inquiries 
 into the causes which determine the rate 
 of profit upon capital, yet, in prosecuting 
 these inquiries, he has arrived at conclusions 
 very different from those which Mr. Ricardo 
 has endeavoured to establish. To the prin- 
 ciples of that eminent economist, that the 
 whole produce of industry is divided be- 
 tween wages and profits, and that profits rise 
 or fall only as wages fall or rise, the Author 
 
XI 
 
 has never been able to assent; and the more 
 attentively he has considered the subject the 
 more thoroughly has he been convinced, 
 that these principles have had their origin in 
 a hasty and premature generalisation, bestow- 
 ing universality upon one leading particular, 
 and attributing to the exclusive agency of 
 a single cause, effects resulting from the 
 combined operation of many. 
 
 On a former occasion, the Author ven- 
 tured to predict, that, at no distant period, 
 controversy amongst the professors of politi- 
 cal economy would cease, and unanimity 
 prevail respecting the fundamental prin- 
 ciples of the science. He thinks he can 
 already perceive the unequivocal signs of 
 the approaching fulfilment of this predic- 
 tion. Since it was hazarded, two works 
 have appeared, each of which, in its 
 own peculiar line, is eminently calculated 
 to correct the errors which previously pre- 
 
XI 1 
 
 vailed. These publications are, " A critical 
 Dissertation on the Nature, Causes, and 
 Measures of Value, by an anonymous 
 author ;" and " Thoughts and Details on 
 High and Low Prices," by Mr. Tooke. 
 
 The Dissertation on Value is a masterly 
 specimen of perspicuous and accurate logic ; 
 and furnishes an unerring test for the de- 
 tection of that vague and ambiguous lan- 
 guage in which some of our most eminent 
 economists have indulged, and which has 
 mainly contributed to retard the progress of 
 the science. 
 
 The work on High and Low Prices, is also 
 excellent in its kind. It is practical, rather 
 than theoretical. It establishes its conclu- 
 sions by an extensive induction from various 
 and important facts ; and, independently of 
 its intrinsic merits, it derives an additional 
 vahie from the circumstance, that its inves. 
 tigations are conducted in a manner wliich 
 
Xlll 
 
 presents a striking and corrective contrast 
 to the premature generalisations, and pure 
 abstractions, of the Ricardo school. 
 
 The influence of these writers in checking 
 the tendency to a species of sectarian dog- 
 matism, and in bringing controverted ques- 
 tions to a satisfactory conclusion, is already 
 perceptible. In his recent work upon Poli- 
 tical Economy, Mr. MCulloch has, with 
 laudable candour, corrected, in an essential 
 degree, his former opinions on the subject of 
 profit ; and has admitted, that Mr. Ricardo's 
 principles are tenable, only when we pervert 
 from their established acceptation the terms 
 in which these principles are expressed. 
 This is the same thing as admitting, that the 
 Ricardo doctrine of profit is erroneous. Ar- 
 bitrary alterations in the meaning of terms 
 are not discoveries in science. 
 
 To be consistent with himself, Mr. M^Cul- 
 loch must also admit, that the Ricardo theory 
 of value is indefensible. Upon his own 
 
XIV 
 
 shewing, that theory admits of no species of 
 proof, except that which is obtained by a 
 most arbitrary and unjustifiable extension of 
 the meaning of the term, labour. If the 
 process of fermentation in a cask, and the 
 progress of vegetation in a tree, are labour, 
 then may we demonstrate that labour is the 
 cause of value. By the same novum organum 
 we may demonstrate, that the three angles 
 of a triangle are equal to four right angles ; 
 for all that is necessary to render this demon- 
 stration as perfect as the former is, that 
 we should alter the meaning of words, and 
 employ the term four to signify the number 
 commonly expressed by the term two. This 
 is a most convenient species of logic, by 
 which we may, with equal facility, prove 
 every proposition to be true, and every pro- 
 position to be false. 
 
 Mr. Mill appears more reluctant than Mr. 
 M'CuUoch to modify and correct the pure 
 Ricardo doctrines which he maintains. 
 
XV 
 
 Yet, from his manner of defending these 
 doctrines, it is evident, that he is not far 
 from admitting tliat they are essentially un- 
 tenable. In the last edition of his Elements 
 of PoHtical Economy, he contends, that a 
 self-moving machine, and a fermenting cask, 
 perform labour; he admits, that the pro- 
 duce of capital, which he formerly asserted 
 was all divided between wages and profit, is 
 in reality divided between wages, profit, and 
 that third quantity which is necessary to 
 replace capital ; and the doctrine, that pro^ 
 fits rise or fall, as wages fall and rise, he gives 
 up, in all cases, except in those in which 
 the terms are used, not according to their 
 accustomed acceptation, but with a refer- 
 ence to proportions. It may be easily shewn, 
 however, that the doctrine ti^at profits depend 
 on wages is equally untenable, whether the 
 terms, alteration of wages, alteration of pro- 
 fits, are employed with a reference to pro- 
 
XVI 
 
 portions, or whetlier they are used in rela- 
 tion to quantities. 
 
 Let us suppose, that a capitalist advances 
 to a labourer 20 quarters of corn as wages, 
 and 20 quarters as seed ; and let the produce 
 returned to the capitalist at the end of the 
 year be 60 quarters. In this case, if we 
 deduct from the whole produce, as Mr. Mill 
 contends we ought, what is necessary to 
 replace the seed, 40 quarters will remain to 
 be divided between wages and profit ; and 
 as, by the supposition, wages are 20, profits 
 must be 20 also ; that is, as the whole ad- 
 vances of the capitalist for wages and seed 
 was 40 quarters, and as he has 20 quarters 
 remaining over and above the replacement 
 of these advances, the rate of his profit will 
 be 50 per cent. 
 
 Now, let us vary our supposition, and 
 assume, that while the quantity of labour 
 employed, and the quantity of produce ob- 
 
XVll 
 
 tained, remain exactly as before, an improve-* 
 ment takes place in cultivation, which enables 
 the farmer to crop his field w^ith 10 quarters 
 of seed, instead of with 20 quarters. In this 
 case, when from the whole produce of 60 
 quarters, the 10 quarters required to replace 
 capital, in Mr. Mill's sense of the term, are 
 deducted, 50 quarters will remain to be 
 divided between wages and profit. Let these 
 50 be equally divided, as the 40 quarters for- 
 merly were, between the labourer and capi- 
 talist, each getting 25 quarters, and then the 
 shares or proportions will remain exactly as 
 before. But though the proportions, or pro- 
 portional wages remain unchanged, yet pro- 
 fits will have risen from 50 to upwards of 70 
 per cent. The capitalist, after replacing his 
 expenditure of 25 quarters for wages, and 
 10 quarters for seed, will have a surplus of 
 25 quarters remaining, while, in the former 
 case, after replacing an expenditure of 20 
 quarters for wages, and 20 quarters for seed, 
 
 b 
 
XVlll 
 
 he had a surplus of only 20 quarters re- 
 maining. 
 
 Thus we find, by a short and simple, but 
 strictly demonstrative process, that even vs^hen 
 we adopt Mr. Mill's language of shares and 
 proportions, profits do not depend upon 
 wages. When he again revises his chapter 
 upon profits, he will discover that the position 
 to which he has retired is just as untenable 
 as that which he has abandoned ; and he 
 will be disposed to assent to those correct 
 principles of value and of profit which are 
 arrived at, not by hasty generalisations of a 
 single influential fact, but by a careful in- 
 duction from the several circumstances, 
 which, after a complete, analysis, are found 
 to contribute to the production of the phe- 
 nomena to be accounted for and explained. 
 
 February I7th, 1826. 
 
CONTENTS. 
 
 ON THE GENERAL PRINCIPLES OF THE TRADE 
 IN CORN. 
 
 Pag« 
 CHAP. I. — On the Principles of the internal 
 Corn Trade 1 
 
 CHAP. II — On the Principles of the" ex- 
 ternal Corn Trade 25 
 
 CHAP. Ill — On the Influence of the ex- 
 ternal Trade in Corn on the Subsistence, 
 Wealth, and Prosperity of the Country 
 which permanently exports Grain . . .88 
 
 CHAP. IV. — On the Influence of the ex- 
 ternal Trade in Corn on the Subsistence, 
 Wealth, and Prosperity of the Country 
 which permanently imports Grain ... 46 
 
XX 
 
 rage. 
 
 CHAP. V. — 0)i the Influence of the Corn 
 Trade on the Value of Commodities . . 55 
 
 § 1. On Value 55 
 
 § 2. Quantity of producing Labour ^ the Regulator 
 of FaluCf when Men work on their own 
 
 Account 57 
 
 § 3. Amount of producing Capital the Regulator 
 of Falue, when Capitalists become a distinct 
 
 Class 58 
 
 §4. Effect of Monopoly in regulating Value . . 63 
 § 5. Erroneous Views of Dr. Smith respecting the 
 
 Value of Corn 66 
 
 § G. Erroneous Doctrine of the French Economists 
 
 respecting the Value of raw Produce . .71 
 § 7. Influence of free Trade on the relative Value 
 
 of raw Produce and wrought Goods ... 79 
 
 CHAP. VI.— Ow the Influence of the Corn 
 Trade on the Wages of Labour . . , 83 
 
 CHAP. VII.— Ow the Influence of a free 
 Trade in Corn, upon the Profits of Capital 94 
 
 § 1. Circumstances which determine the Rate of 
 Profit before the Divisions of Employment 
 arc established d5 
 
XXI 
 
 Page 
 
 § 2. Circumstances ivkich determine the aggregate 
 Profit of the Community after the Divisions, 
 of Employment are established . . . .100 
 
 § 3. The Causes which regulate individual Profit 
 when the Divisions of Employment have 
 been established 103 
 
 § 4. As the Faltie of raw Produce riseSf agricul- 
 tural Profits fall 110 
 
 § 5. Influence of a free Trade in Corn in increas- 
 ing the Rate of Profit upon Capital . .117 
 
 § 6. Refutation of the Doctrine of Mr. Malthus^ 
 that the high Value of the Articles 
 composing Wages is beneficial to the 
 Labourer 124 
 
 CHAP. Ylll.-— On the Influence of the Corn 
 Trade on the Rent of Land ; and on the 
 Interest of Landed Proprietors . . . .130 
 
 §1. Origin of Rent 130 
 
 § 2. Errors of Mr. Ricardo and his Followers 
 
 on the Subject of Rent 137 
 
 § 3. Error of Mr. Malthus respecting the Nature 
 
 of Rent 150 
 
 § 4. Effect of a free Importation of Corn upon 
 
 the Interests of landed Proprietors . . .156 
 
XXll 
 
 ^art tt)c ^econlr* 
 
 ON THE EXCEPTIONS AND LIMITATIONS TO 
 WHICH THE GENERAL PRINCIPLES OF THE 
 EXTERNAL CORN TRADE ARE LIABLE. 
 
 ^ Page 
 
 CHAP. I. — On the Question, Are the Prin- 
 ciples respecting a free external Trade in 
 Corn liable to any Limitations in their 
 Application to the particular Case of a 
 Country, which infringes on the Liberty 
 of Commerce in other Articles . . . .174 
 
 CHAP. II.— 0« the Limitations to which the 
 general Principles 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 Agriculture . 199 
 
 CHAP. III. — On the Question, Is the gene- 
 ral Principle of a free external Trade in 
 
V 
 
 
 XXlll 
 
 Page 
 
 Com liable to Limitation in its Applica- 
 tion to the particular Case of a Country 
 which is more heavily taxed than other 
 growing Countries ? 217 
 
 ^art tt)e ©Ijutj. 
 
 THE APPLICATION OF THE PRINCIPLES OF 
 THE EXTERNAL CORN TRADE TO THE 
 ACTUAL "CIRCUMSTANCES OF THESE COUN- 
 TRIES. 
 
 CHAP. I. — On the Fluctuations in the Sup- 
 ply and Price of Corn which have been 
 experienced under the existing System of 
 Restraint and Protection 267 
 
 CHAP. II. — Examination of some of the 
 Measures which have been proposed for 
 correcting the Evils of sudden and consi- 
 derable Fluctuations in the Supply and 
 Price of Corn 995 
 
XXIV 
 
 Page 
 
 CHAP. III. — On the Manner in which our 
 Restrictions on the Importation of foreign 
 agricultural Produce contributed to hring 
 on the present commercial Crisis . . .317 
 
 CHAP. IV. — On the Measures which, in 
 revising the Corn Laws, it would he 
 expedient for the Legislature to adopt . 351 
 
 § 1. Importation of agricultural Produce . . .351 
 § 2. Popular Objections against the Adoption of 
 
 free Trade, answered S55 
 
 § 3. Comparative Effects of free and of restricted 
 
 Trade 372 
 
 § 4. On the specific Measures which, in revising 
 
 the Corn Laws, it would he expedient that 
 
 the Legislature should adopt . . . .394 
 
AN ESSAY, &c 
 
 ^avt m ^ivit 
 
 ON THE GENERAL PRINCIPLES OF THE 
 TRADE IN CORN. 
 
 CHAP. I. 
 
 On the Principles of the internal Corn Trade, 
 
 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 similar 
 course of culture, the same piece of ground will, 
 in one year, present an overflowing harvest, and, 
 in another, scarcely repay the expense of tillage. 
 
 B 
 
3 
 
 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 ex- 
 tensive farm, and much less, an agricultural parish 
 composed of many farms, could scarcely, in its 
 fertility from year to year, exhibit so striking an 
 irregularity. 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- 
 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 
 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 
 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. 
 
 1. The allowing of a free circulation of com 
 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 
 mitigates 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. 
 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 
 very 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 further effects which an unshackled 
 domestic trade in corn has, both on the distribu- 
 tion, and on the production, of this important 
 article. The public good requires that the supply 
 of subsistence should be equalised, not onlyb 
 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 
 
6 
 
 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 
 suffering any very 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 
 ignorance of their danger, they might otherwise fail 
 to adopt; for, when the operations of the com 
 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, advertises 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 consumption so 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 
 corn dealers is the same. By supplying the people, 
 as nearly as they can judge, in this proportion, 
 they are likely to sell their com 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 beneficial to the great body of 
 consumers. They perform, towards the popula- 
 tion of a country, functions precisely similar to 
 those which are performed 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 equalising 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 
 
9 
 
 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 
 equalising, 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 in-egularities 
 have limits which they rarely pass. If two or 
 three years of abundance have occurred in suc- 
 cession, 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 
 would 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 
 bis corn beyond what was necessary to equalise 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, 
 be would at once expose the country to inconve- 
 
11 
 
 iiience which might have been avoided, and miss 
 the wealth which he might have realised. The 
 more carefully he watches the course of the 
 seasons, and calculates the periods which abun- 
 dant and deficient years 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 capital 
 accumulates, and as the principles of economical 
 science become understood, new resources are 
 developed for warding off those terrible visitations 
 of want and famine, to which, in ruder periods, 
 nations are so frequently exposed. Not only 
 in times of deficient crop does the establishment 
 of perfect freedom in the internal corn trade 
 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 
 apportioned supplies, that a too rapid consumption 
 is interdicted, and the stock on hand made to last 
 
12 
 
 until the returning harvest brfngs relief. And 
 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 equalised through consider- 
 able periods, and dearth rendered a rare, and 
 famine an almost impossible, occurrence. 
 
 4. As com 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 
 intercourse 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 filUng 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 com 
 trade, the existence of stores, for the accumulation 
 of com, has been implied. To equalise the supply 
 of grain throughout the several districts of a coun- 
 try ; to feed the markets in a manner so regulated 
 and apportioned, as to make the quantity of com 
 
13 
 
 upon hand last throughout the year ; and, above 
 all, to carry on a portion of the produce of an 
 abundant harvest to meet the probable recurrence 
 of a deficient crop, require, that a very large 
 proportion of the mercantile capital of the coun- 
 try 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 functions 
 of public granaries are performed; and not only 
 so, but are performed at infinitely less expense, 
 and far more effectually, than they could be by 
 such complicated and difficult establishments. 
 No country would consent to raise the revenue 
 that it would require to maintain public stores, 
 and to lay up in them, in order to meet the vicissi- 
 tudes 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. 
 
 But, suppose it otherwise ; suppose that the 
 necessary revenue is raised, and the public gra- 
 naries erected and filled ; still, the state factors 
 
14 
 
 who should be put in charge of them, however 
 they might be controuled, and however rewarded, 
 would never attain the vigilance and skill of 
 private individuals watching over their own 
 property, and perpetually stimulated by self- 
 interest to attend to every fluctuation of supply. 
 The mismanagement would be without a remedy, 
 and the waste enormous. Whatever expense a 
 country might consent to incur, in order to pre- 
 serve, in public granaries, a surplus of subsistence 
 for deficient seasons, she could not attain this 
 desirable end half so effectually, as by the simple 
 wisdom of refraining from all interference, and 
 leaving individuals at perfect liberty to embark 
 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 
 
15 
 
 all times, been viewed with peculiar jealousy 
 and alarm by the people whom they save. When 
 the supply of any article, particularly if it be 
 one of the first necessity, is diminished below the 
 demand, its valu^ rises, not merely in the ratio of 
 this diminution, but in a ratio considerably higher ; 
 for example, if there be, in any market, a demand 
 for a thousand quarters of corn, while the supply is 
 diminislied to nine hundred, then these nine 
 hundred 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 equalis 
 ing the supply through all the districts of the 
 country, and periods of the year, and of preserving 
 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 furtlier interest, diametrically 
 opposite to theirs ; and, by keeping up corn until 
 it perishes upon his hands, may secure a greater 
 
16 
 
 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 
 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 com dealers 
 scattered 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 com trade, the profits 
 of stock would rise considerably above the cus- 
 tomary level. But, from the unalterable laws of 
 competition, and from capital ever seeking the 
 
 / 
 
17 
 
 most beneficial 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 
 they did so, the rate of profit, in the corn trade, 
 would still continue above the level, and the 
 prospect of extraordinary gains would perpetually 
 attract 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 general 
 rate; nor, as will hereafter appear, 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 con- 
 sumer by raising the rate of profit above the level 
 determined by the quality of the soil under culti- 
 vation, the efficacy of labour, and the rate of 
 wages. While the effectual demand, or the power 
 of purchasing all commodities, remains the same, 
 
 c 
 
18 
 
 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 prepos- 
 terous and absurd design. 
 
 No individual corn-dealer can have an interest in 
 keeping up corn 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 com trade 
 from continuing above that ordinary and level rate. 
 
19 
 
 which, according to the circumstances of the coun- 
 try, is due to mercantile stock. Nay, no uni- 
 versal 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 the dealer and merchant can be 
 drawn, such combination (to say nothing of the 
 impossibility of its existence), as it drew from the 
 purchaser higher prices and larger profits, in one 
 article, would infallibly diminish, in an equal 
 degree, the profits before obtained upon some 
 other; and thus, immediately counteract and 
 destroy itself. 
 
 The suspicion and alarm with which the public 
 view a large accumulation of stock, in the hands 
 of the com 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 
 
20 
 
 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 sufliiciently advanced in 
 opulence, to render the business of the corn-dealer 
 distinct from that of the farmer, very considerable 
 improvements begin to be realised in agriculture. 
 Exempt from the care of retailing his produce to 
 the consumer, the cultivator, without interrupting 
 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, 
 
SI 
 
 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 controul interdicts 
 the division of employment, the great capitals di- 
 rected to the com trade become so many aids and 
 backs to agriculture, enabling the farmer to cul- 
 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 equalise 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 agricul- 
 tural 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 
 foiind, yet, the corn merchant, acquainted with 
 
22 
 
 the wants of distant parts of the country, where 
 the crops have been less favourable, would be 
 ready to take his com off his hands. Thougli, 
 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 farmer's corn, under 
 the probability that ensuing harvests would be 
 less 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 him to calculate, more accurately, 
 the amount of the rent he can affoVd to pay, and 
 the quantity of stock he can beneficially invest in 
 the soil. All the risks attending cultivation are 
 
23 
 
 diminished, and improvement advances with it 
 steady, uninterrupted pace. It is in this manner 
 that great accumulations of grain, and command- 
 ing capitals vested in the com trade, instead of 
 leading to a destruction of subsistence, powerfully 
 conduce to its increase. 
 
 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 
 brief recapitulation of the principles contained in 
 the foregoing pages. 
 
 An unrestricted internal trade in corn per- 
 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 recurrence 
 of superfluity and of famine. This traffic, in the 
 first place, equalises, in a deficient year, the 
 supply of com throughout the country, and ren- 
 ders the pressure tolerable, by laying it impartially 
 on all: secondly, when the average supply of 
 
24 
 
 food, through the different districts, 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 supply 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, 
 which would impede his operations, if he per- 
 sonally distributed his produce to the consumer ; 
 enables him to invest his whole, and often more 
 than his whole capital, in the important business 
 of production ; imparts a steadiness to prices, 
 which, in a great measure, removes the risks 
 attending cultivation ; and thus, by ensuring a 
 certain market, promotes, in the most efficient 
 manner, the production of com. 
 
CHAP. II. 
 
 On the Principles of the external Corn Trad^, 
 
 As the territory which supplies subsistence is 
 enlarged, the irregularity in the productiveness 
 of the seasons will be diminished. This is a 
 general 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 
 operations 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 be made, in some mea- 
 sure, to compensate the failure in others, with 
 how much greater force must the principle apply 
 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 
 
26 
 
 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 Germany 
 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 
 should give freedom to the internal trade in com, 
 we should also give it to the external trade. 
 The merchant who equalises the supply of sub- 
 sistence through all the countries of the world, 
 performs, though on a grander scale, and in a 
 
 more accurate manner, functions precisely ana- 
 
 • 
 
 logons to those performed by the dealer, who 
 equalises it through all the districts of a country. 
 The irregularity of the seasons, in any territory, 
 is in an inverse ratio to its extent. The produce 
 of all the commercial countries of the world varies, 
 from year to year, in a much less proportion than 
 the produce of any single country ; and, con- 
 sequently, the commerce which equalises subsist- 
 
27 
 
 ence 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 un- 
 favourable 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 equalised 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 equalising 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 
 impossible that we should be visited even by a 
 dearth. 
 
28 
 
 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 equalised, 
 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 
 
29 
 
 restricted, 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 proportional 
 failure in the average supply to equalise through- 
 out 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 of his 
 keeping up corn beyond what the real deficiency of 
 the seasons rendered 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 buy up corn, 
 with increased confidence, in the beginning, in 
 order to be enabled to meet, with a profit to him- 
 self, the wants of the latter end of the season. 
 Hence he would more effectually secure the coun- 
 try against want; though he might, if the ope- 
 ration of free external trade rested here, some- 
 times 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- 
 
30 
 
 flbs^ing up corn, merchants should be tempted to 
 stint any particular market in a greater degree than 
 Ihe 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 prin- 
 ciple 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 equalise, 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 
 important functions ; — but, at the same time, fully 
 secures the public against the effects of his occa- 
 sionally over-trading, and stinting the market 
 unduly. 
 
 3. But the security and confidence which free 
 external trade confers upon the dealer, would, in 
 
31 
 
 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, 
 than it could be in the operation of equalising 
 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 deficiencies of another, 
 incurs very considerable risk. For, though a 
 succession 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 
 deficient years, requiring, to make them good, 
 all the surplus that can now be saved ; yet, the 
 succession of such deficient years is but a proba- 
 bility, in speculating 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 
 
32 
 
 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 exists, such things 
 cannot be. 
 
 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 occurred 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, 
 
33 
 
 to meet the deficiency of another, would be dimi- 
 nished, and capital would flow with sufficient 
 abundance into a channel of commerce, so effectual 
 in distributing to the consumer a certain and 
 uniform supply of food. 
 
 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 consi- 
 derable, 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 incalculable amount. To 
 equalise the supply, not only through all the 
 districts of countries, but through all the 
 countries of the commercial world ; and effectually 
 
 D 
 
to carry forward the superfluity of some years, 
 to meet the deficiency of others, would require 
 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, 
 or unprecedented irregularities 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 
 unfettered commerce, would be more efiicacious in 
 obviating famine than the granaries of Pharaoh. 
 
 5. But it is not only by equalising 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 com, when exempt from 
 pernicious restraint, corrects the irregularity of 
 the seasons, and secures the earth from famine. 
 Its operations, again analogous to those of the 
 internal trade, exert the happiest influence upon 
 production. Every increase of capital which it 
 draws to the purchase, the preservation, and the 
 
35 
 
 distribution of grain, is an additional back and 
 support to the farmer ; and every operation that 
 gives steadiness to prices, diminishes the risks of 
 cultivation. As Dr. Smith most justly observes, 
 next to the trade of the' farmer, no trade encou- 
 rages the growth of corn so much as that of the 
 corn merchant : and, if his trade vi^ere 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 unrestricted commerce, in this ai'ticle, is 
 calculated to confer. By equalising subsistence 
 throughout all the countries which engage, actively 
 or passively, 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 esta- 
 blishment of stores and granaries ; and by giving 
 
security to agriculture, and, consequently, a new 
 impulse to production, it seems that an unfettered 
 foreign trade in corn, might render famine impos- 
 sible, and make even dearth an extremely impro- 
 bable occurrence. The inequality in the produc- 
 tiveness of the seasons diminishes as territory 
 extends. The deficiency of crop, in one country, 
 is compensated by abundance in other countries ; 
 and the quantity of human sustenance, which, 
 under any given state of agricultural improve- 
 ment, 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 through- 
 out all commercial countries, but would continue 
 steady, and almost stationary, Jbr 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. 
 
37 
 
 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 subsist- 
 ence, and though her population depended, almost 
 entirely, upon foreign supply, yet she was exempt 
 from those sudden and considerable fluctuations in 
 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 
 supply, 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 consumption ; 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 
 neighbouring countries ; and the price of corn in 
 Holland represented, pretty accurately, its average 
 price in Europe. 
 
\z 
 
 CHAP. III. 
 
 On the Influence of the external Trade in Corn 
 on the Subsistence, Wealth, and Prosperity of 
 the Country which permanently exports Grain, 
 
 In the preceding chapter we considered the 
 foreign trade in corn; as, by equalising food 
 through different countries, and different periods, 
 by establishing granaries, and by giving encou- 
 ragement to agriculture, it rectifies the irregula- 
 rities of the seasons, and ensures, at all times, a 
 steady and an abundant supply of human sus- 
 tenance. In the present, and in the succeeding 
 chapter, we will take a less general view of the 
 question, and consider the foreign trade, not as 
 it alternately removes redundancy, supplies defi- 
 ciency, and regulates the supply of food through- 
 out the world ; but, as it affects the subsistence, 
 wealth, and prosperity, of those particular coun- 
 tries which permanently export, or permanently 
 import grain. 
 
39 
 
 When overflowing harvests have, in one coun- 
 try, reduced the price of corn, while, in some 
 neighbouring country, deficient harvests have 
 raised it, then com 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 
 comparatively lower in one country than it is, in 
 such years, in another ; or while this other country 
 has comparatively lower prices in something else, 
 then the one will permanently export, and the 
 other permanently import, subsistence. For ex- 
 ample : while Poland can raise com comparatively 
 cheaper than England, or England prepare cloth 
 comparatively cheaper than Poland, the latter, 
 unless some violent interference should prevent it> 
 will become an exporting, and the fornuer an 
 importing, country. 
 
 Now, the country which permanently exports 
 a part of its subsistence, is secured, in the most 
 effectual manner, against the visitations of want ; 
 and enjoys all the benefits, which, in the last 
 
40 
 
 chapter, 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 com 
 trade, however beneficial it may be to others, is 
 injurious to themselves, and tends to inflict an 
 artificial 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 more abundantly than before. On the con- 
 trary, he will be in a much more precarious con- 
 dition than if free exportation were allowed. For 
 as, in an exporting country, the price of corn must 
 be comparatively lower than its price elsewhere, 
 such a country, in the event of a deficient year, 
 cannot be relieved by importation, until prices have 
 
41 
 
 run up very considerably above their customary and 
 average rate. If Poland, v^here corn is naturally 
 so cheap, were to prohibit exportation, and, conse- 
 quently, to grow only her own supply, in an unfa- 
 vourable 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 article is naturally so much 
 dearer, to send her corn with an adequate profit. 
 Hence, a country in which the comparative cost 
 of producing corn 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 
 unfettered, 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 are almost unfelt ; 
 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 
 unknown. A people, clamouring against the per- 
 
42 
 
 manent exportation of corn, is, in fact, a people 
 clamouring for their own occasional 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 popu- 
 lation. When a people exchange the produce of 
 their soil, for the wrought goods of some neigh- 
 bouring country, it has been supposed, that the 
 raw materials and subsistence which they thus 
 send abroad, might, to the great increase of the 
 national opulence and prosperity, give employment 
 to manufacturers at home. 
 
 The slightest examination of the laws which 
 regulate the interchange of commodities between 
 nations, is sufficient to shew, that, for this supposi- 
 tion there is no foundation. When labour and 
 capital are employed in cultivating the earth, and 
 exchanging its produce for the manufactured goods 
 of other countries, it is because these goods, thus 
 
4^ 
 
 obtained are better, or more abundant, than those 
 which the same quantities 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 quantity of produce which will ex- 
 change for a thousand yards of foreign cloth, while 
 the same labour and capital, employed in manu- 
 facturing at home, could furnish only nine hun- 
 dred, then, it is evident, that, by directing this 
 labour and capital to cultivation, and to exchang- 
 ing produce against wrought goods, a 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 export- 
 ation, cannot turn its produce to maintain manu- 
 factories at home, until a further accession of 
 capital, sufficient for their establishment, has been 
 previously accumulated. If, in order to maintain 
 a manufacturing population at home, capital be 
 taken from the soil, then the industry of the 
 country will diminish, in prooortion au that of the 
 
44 
 
 towns is increased ; and the only difference will be, 
 that a number of hands will be employed in fabri- 
 cating gords, inferior in quantity, or quality, to 
 those which the same number of hands formerly 
 enabled the people to procure by exchange from 
 foreign countries. It is only by the acquisition of 
 additional 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 
 period of manufacturing prosperity in an agricul- 
 tural country. In such a country, when capital 
 begins to exceed what, at the existing price of 
 produce, 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; the home^ manu- 
 facturers gradually established, in such a country, 
 will, particularly in the fabrication of coarier 
 
45 
 
 articles, on which the charge of importation is 
 considerable, possess advantages which must more 
 than counterbalance their deficiency in skill, and 
 which will enable them to under-sell the foreign 
 workman, and beat him out of the home-market. 
 When the coarser manufactures have thus esta- 
 blished themselves, skill will gradually be acquired, 
 capital will continue to increase, and the more 
 refined productions of industry will, by degrees, be 
 introduced. When this is the case, the corn that 
 had formerly been exported to feed foreign work- 
 men, 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 
 trade, not only secures the people of an exporting 
 country against the irregularity of the seasons in 
 sup[ilying 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. 
 
CHAP. IV. 
 
 On the Influence of the external Corn Trade 
 upon the Subsistence, Wealth, and Prosperity 
 of the Country which permanently imports 
 Grain, 
 
 If, from the many benefits, whether relating to 
 subsistence, to wealth, or to population, which are 
 conferred by the export trade in corn, any person 
 should conclude that the opposite species of inter- 
 course would produce opposite effects, and that a 
 permanent import trade in corn must be injurious, 
 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 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 
 
47 
 
 tluctuation in the markets. For the expense of 
 carriage, on an article so bulky as corn, affords so 
 great a protection to the home grower, that corn 
 will not be permanently imported, except into a 
 country where the expense of producing it is very 
 considerably abov e the level of other countries ; 
 and if, in such a country, restrictions are laid upon 
 import so as to force, in average years, an indepen- 
 dent supply, then, in abundant years, superfluity will 
 be created, but will find no vent until prices have 
 sustained an extraordinary fall. Exportation can 
 take place only from places where articles are rela- 
 tively cheap, into those where they are relatively 
 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 
 
48 
 
 average years ; yet, between the prices of 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 the relative cost of producing corn is so 
 low that relief cannot be obtained from abroad, until 
 the markets have acquired an extraordinary 
 elevation, a free exportation trade is necessary. to 
 ensure the people against the irregularities of the 
 seasons ; so, in a country where the price of 
 produce is so high, that superfluity cannot be 
 carried off until the markets have sustained 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 
 com is beneficial The advantages of commerce 
 
49 
 
 are always reciprocal. As the country which 
 permanently exports corn, does so only because 
 she obtains in exchange 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 capital employed in fabri- 
 cating the articles which purchase it, could not, if 
 employed upon her own soil, raise so large a supply 
 of corn as is thus obtained. If a thousand 
 labourers, and a thousand pounds' worth of capital 
 stock can, in England, fabricate a quantity of 
 cottons which, when exchanged with sdme other 
 country, will bring her a thousand quarters of 
 wheat ; while the same number 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 a 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 
 
 E 
 
50 
 
 of national industry which is most beneficial to 
 national wealth, must, in the long run, be most 
 friendly to agricultural improvement. As, in a 
 country which cultivates cheaper than her neigh- 
 bours, a free exportation of corn occasions an 
 accumulation 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, 
 exceeding what can be beneficially directed to 
 working up the raw material, will seek other 
 employment, and extend cultivation throughout 
 the country. 
 
 If, in any country, the customary rate of profit 
 upon commercial and manufacturing stock be 
 fifteen 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 evi- 
 dent that tillage cannot be extended, — that tracts 
 which would afford the speculator a profit of only 
 ten per cent, will remain unreclaimed, and that 
 
51 
 
 cultivation will be confined to such fertile districts 
 as can yield to the capitalist the customary return. 
 Even though these fertile districts should be insuf- 
 ficient to sustain the population, yet, while manu- 
 facturing 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 com 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 industry should be forced from its natural 
 direction, a permanent importer of corn. In the 
 progress of prosperity, however, this process is, in 
 some measure, reversed ; manufactures and com- 
 merce 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 attain a much higher degree of 
 agricultural improvement than that to which, 
 without their powerful stimulus, she would havr 
 
52 
 
 Ijeen capable of attaining. For, in the progress of 
 wealth and population, the increasing demand for, 
 and value of, raw produce, reduces 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 
 untilled, because they could bring a return of only 
 ten per cent, would be eagerly sought after, and 
 capital would flow from manufactures and com- 
 merce, 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 
 
53 
 
 in this manner from the general opulence, and 
 from the reaction of manufactures and commerce 
 upon the soil. Bounties upon export, and restric- 
 tions 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 suffi- 
 ciently high to draw labour and capital from other 
 occupations. But this forced and artificial encou- 
 ragement, afforded to agriculture, would be dearly, 
 much too dearly purchased. Corn is imported be- 
 cause 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 
 further accumulation of capital ; but it is the 
 accumulation of capital which enhances the wages 
 of labour, gives a spur to population, and increases 
 in the home market the demand for com. The 
 demand regulates the supply. The country which 
 gives a forced and artificial encouragement to 
 agriculture, will have less wealth, less capital, less 
 population, a less demand for corn, and, ulti- 
 
54 
 
 mately, a less extended and perfect cultivation, 
 than the country which, leaving things to their 
 natural course, and permitting industry to take its 
 most profitable direction, receives subsistence from 
 whatever quarter it can be obtained at the cheapest 
 rate, until capital, accumulating beyond what can 
 be profitably employed in preparing articles for 
 the foreign market, overflows, like fertilising 
 waters, on the soil. 
 
CHAP. V. 
 
 On the Influence of the Corn Trade on the Value 
 of Commodities. 
 
 § I. —On Vahie. 
 
 When the possessors of different articles of 
 wealth are willing to give one for another, then, in 
 the language of political economy, such articles are 
 said to possess the quality of value in exchange, or, 
 more simply, of value. The value of any article, 
 therefore, is its power of purchasing other articles, 
 or, to vary the expression, of commanding other 
 articles in exchange. 
 
 From what has been said, it must be evident 
 that the quality of value is not an absolute and 
 independent quality, which may be possessed by 
 any one article of wealth, considered singly and 
 alone. On the contrary, the quality of value is a 
 relative quality, which belongs only to those 
 co-existing articles of wealth which are offered 
 and received in exchange for each other. If each 
 
56 
 
 individual produced, by his own exertions, all the 
 commodities he consumed, or were the country 
 divided into small societies, like the villages of 
 Mr. Owen, working in common, and possessing a 
 community of goods, their wealth, however abun- 
 dantly supplied, would not have the quality of 
 value. 
 
 When commodities are exchanged for each 
 other in any given proportions ; for instance, 
 when a quarter of com is exchanged for a yard of 
 cloth, it becomes the business of the political econo- 
 mist to discover and to explain why the one passes 
 as the equivalent of the other ; th^t is, why this 
 precise quantity of corn is given and received for 
 this precise quantity of cloth. In other words, it is 
 the business of the economist to give a satisfactory 
 account of the causes which regulate value. 
 
 The general desire to give as little as pos- 
 sible for what we wish to obtain, and to get as 
 much as we can for what we wish to dispose of, 
 is a first and main cause in regulating value. This 
 desire creates a constant competition amongst pro- 
 ducers and consumers ; and competition, sometimes 
 acting in one way, and at other times in another 
 
57 
 
 way, regulates the proportions in which commodi- 
 ties exchange. In order, therefore, to ascertain 
 what, under any given circumstances, is the imme- 
 diate cause of vakie, it is necessary to discover 
 what, under such circumstances, is the particular 
 point upon which competition turns. 
 
 §2. — Quantity of producing Labour, tlic Regulator of 
 Value, when Men work on their own Account. 
 
 In those early stages of society ih which each 
 individual works upon his own account, the main 
 point upon which competition turns, is the quan- 
 tity of labour employed ; and therefore the value 
 of commodities will be as the quantities of labour 
 required to obtain them. Under these circum- 
 stances, if, in the course of a day, one man can 
 hunt down a deer, while it requires two men to 
 hunt down a buffalo, then one buffalo will ex- 
 change for two deer. For as each party is desirous 
 of obtaining what he wants on the easiest terms, 
 neither would consent to receive in exchange for 
 the produce of his labour less than that labour 
 might immediately procure for him ; and hence 
 
58 
 
 the competition of the parties would cause the pro- 
 ducts of equal quantities of labour to be of equal 
 value in exchange. 
 
 § 3. — Amount of producing Capital^ the Regulator of 
 Value, when Capitalists become a distinct Class. 
 
 As society ^advances from its first and most 
 simple form, and the class of capitalists becomes 
 distinct from the class of labourers, competition 
 turns upon another, and very different circum- 
 stance. In this state of society the competition of 
 capitalists will have a constant tendency to 
 equalise the rate of profit ; and it is a necessary 
 consequence of the equality of profits, that the 
 products of equal capitals, employed for equal 
 times, should be of equal value. But the products 
 of equal capitals are scarcely ever the products of 
 equal quantities of labour ; and consequently, as the 
 quantity of producing labour is no longer the 
 circumstance on which competition turns, it ceases 
 to be a regulating cause of value. An illustrative 
 case will demonstrate this. 
 
 It is self-evident, that if a day's labour did not 
 
59 
 
 produce something more than the subsistence of 
 the labourer, capital could not be accumulated, 
 and no surplus or profit could exist. That which 
 the labourer produces, over and above the subsist- 
 ence he consumes, varies in quantity, from differ- 
 ences in soil and in skill ; but) for the sake of 
 precision, we will assume, as a datum, that the 
 labour of one day produces subsistence for two 
 days. 
 
 Under these circumstances, let us suppose that 
 A and B work 100 days, each on his own account ; 
 and that, besides supplying themselves with sub- 
 sistence, each has, at the end of the hundred days, 
 accumulated the produce of 50 days' labour, for 
 the purpose of employing it, as capital, in setting 
 other labourers at work. Let us further assume, 
 that A's capital consists of wool, the produce of 
 10 days' labour, and of subsistence, the produce 
 of 40 days' labour ; while B's capital is composed 
 of silk, the produce of 40 days' labour, and of 
 subsistence, the produce of 10 days' labour. 
 
 On the principle before stated, that when each 
 person labours on his own account competition turns 
 on quantity of labour, it follows that the capitals of 
 
60 
 
 A and B, being each the produce of 50 days' pure 
 labour, will be of equal value ; and, on the prin- 
 ciple also explained above, that, when capitalists 
 and labourers are distinct, competition turns upon 
 the equalisation of profits, it follows that the 
 wrought woollens and the wrought silks, fabri- 
 cated by the advance of the equal capitals of A 
 and B, will possess equal value in exchange. 
 
 But though the wrought woollens and silks 
 would be of equal value, they would be the pro- 
 ducts of very unequal quantities of labour. For 
 as, by the supposition, the labour of one produces 
 subsistence for two. A, with his capital, consist- 
 ing of subsistence, produced by 40 days' labour, 
 and wool produced by 10 days' labour, would 
 e'mploy for a day, 80 immediate labourers, upon 
 a material which had cost 10 days' previous 
 labour ; while B, with his capital, consisting of 
 subsistence, the produce of 10 days' labour, and 
 of silk, the produce of 40, would employ, for a 
 day, 20 immediate labourers, upon a material 
 which had cost him 40 days' previous labour. 
 Thus the whole labour, immediate and previous, 
 worked up in A's woollens, would amount to 90 
 
61 
 
 days; while the whole labour, immediate and 
 
 previous, worked up in B's silks, would amovmt 
 
 to no more than 60. That which cost 90 would 
 
 be equal in value to that which cost 60 days' 
 
 labour. 
 
 ^Vere the quantity of labour which produces 
 
 subsistence equal to the quantity to which tliis 
 subsistence will supply wages, then the products of 
 equal capitals would also be the products of equal 
 quantities of labour. In this case A, with his capital 
 consisting of subsistence produced by 40, and of 
 wool produced by 10, would obtain his wrought 
 woollens by employing 40 immediate labourers, 
 upon a material which had cost 10 previous labour ; 
 while B, with his capital, consisting of subsistence 
 produced by 10, and silk produced by 40, would 
 obtain his wrought silks by employing 10^ imme- 
 diate labour, upon a material which had cost 40 ; 
 and the woollens and the silks, while equal to each 
 other in value, because the products of equal 
 capitals, would each be the product of 50 days' 
 labour. 
 
 But the above is an impossible- case, which, 
 in practice, never can exist. There must always 
 
62 
 
 be some profit, otherwise subsistence and material 
 would not be advanced ; and, if there be any 
 profit, the labour which produces subsistence must 
 be less than the labour to which that sul)sistence 
 will furnish wages; and, consequently, whenever 
 equal capitals contain subsistence in different pro- 
 portions, the products of equal capitals will be 
 the products of unequal quantities of labour. But, 
 as competition equalises profit, the value of com- 
 modities must be as the value of their producing 
 capitals ; and, while the value of the producing 
 capitals remains the same, no increase or diminu- 
 tion in the quantity of producing labour, can cause 
 a change in the value of the commodities produced. 
 As it is competition, equalising the rate of 
 profit, which regulates value, the principle that 
 the value of commodities is as the amounts of 
 their producing capitals, requires some modifi- 
 cation, whenever the capitals employed are of 
 unequal durability. If profits are at twenty per 
 cent., and if the whole of A's capital be consumed 
 in production, then his finished article must be 
 equal to the value of his capital, increased by 
 twenty per cent. ; while, if B's capital be only half 
 
63 
 
 consumed, the value of his finished article will be 
 equal to the value of half his capital, increased 
 by twenty per cent, upon his whole capital. In 
 order to embrace the numerous cases of inequality 
 in the durability of capital, we should render our 
 language more general ; and, in saying that when 
 equal capitals are employed for equal times, the 
 results will be of equal value, we should include, 
 under the term results, not only the finished 
 article, but the residue of the capital. This ex- 
 tension of the meaning of the term cannot lead 
 to ambiguity. 
 
 ^ 4. — Effect of Monopoly in regulating Value, 
 
 Generalised in the way above stated, the prin- 
 ciple, that equal capitals, employed for equal 
 times, have equivalent results, embraces every 
 case respecting the regulation of value, in which 
 the competition of capitalists equalises profits. 
 But there are many cases in which the profits 
 cannot be equalised, because the competition of 
 capitalists is suspended, either wholly or in part. 
 The suspension of competition amongst producing 
 capitalists is termed monopoly ; and, in all cases 
 
64 
 
 of monopoly, value will be regulated by principles 
 somewhat different from those above stated. 
 
 When any one set of capitalists possess peculiar 
 advantages in skill, situation, or connection, the 
 value of the commodities which they bring to 
 market will not be regulated by the amount of 
 capital employed in producing them, under such 
 peculiar advantages ; but, on the contrary, will 
 be regulated by the expenditure which must be 
 incurred in producing them in those ordinary cases, > 
 under which competition operates unchecked. 
 
 No limits can be assigned to the value of those 
 articles of luxury, the supply of which cannot be 
 increased in proportion to the demand. The case, 
 is different with respect to the necessaries of life. 
 To the value of these, there are natural limits 
 which cannot be permanently passed. The value 
 of those things which constitute a day's subsistence 
 can never, for any length of time, exceed the 
 value of those things which are produced by a 
 day's labour ; for if it did, the capitalist, instead 
 of obtaining a profit, would suffer a loss, and 
 labour could not be advantageously employed. 
 It necessarily follows from this principle, or rather 
 
65 
 
 it is the same principle, differently expressed, that 
 the value of the articles produced by a day's 
 labour, cannot be permanently lower than the 
 value of the articles constituting a day's subsist- 
 ence *, for if it did, the labourer, instead of earning 
 a profit for his employer, could not replace what 
 he expended while at work. These principles 
 are of great practical importance. 
 
 From this analysis it appears, that it is only 
 articles of luxury, whose value can be indefinitely 
 increased by monopoly ; that there is a maximum, 
 beyond which the value of subsistence, in relation to 
 other things, cannot rise ; and that, conversely, there 
 is a minimum, below which, in relation to subsist- 
 ence, the value of the other products of industry 
 cannot fall. It also appears, that with the excep- 
 tion of those rare aii:icles of luxury, the quantity 
 of which cannot be increased with the demand, 
 the value of all commodities is regulated by' the 
 amount of capital required to produce them, under 
 the most unfavourable circumstances to which it 
 may be necessary to resort, in order to keep the 
 supply level with the demand* 
 
66 
 
 § 5. — Er7'oncou8 Views of Dr. Smith respecting the 
 Value of Corn, 
 
 Adam Smith has said*, that the nature of 
 things has stamped upon corn a real value which 
 ^ is always equal to the quantity of labour which 
 it can maintain, and which competition cannot 
 lower, nor monopoly advance. This is a funda- 
 mental error. The value of every commodity, 
 not the subject of monopoly, is determined by 
 the cost of production ; and as the cost of pro- 
 ducing corn may increase or diminish, without 
 occasioning a proportional increase or diminution 
 in the cost of producing other things, a given 
 quantity of corn may purchase a greater or a less 
 quantity of other articles ; or, in other words, corn 
 may rise or fall in value. 
 
 Supposing that, in order to raise three hundred 
 quarters of corn, it required an advance of one 
 hundred and fifty quarters as seed, fifty quarters 
 as the food of the labourers employed, together 
 with fifty yards of cloth, as their clothing; and 
 that in order to fabricate three hundred yards 
 
 * Book IV. c. 5. 
 
«7 
 
 of cloth, it required an advance of material fqiii- 
 valent to fifty quarters, with fifty quarters as food, 
 and fifty yards as clothing; then three hun- 
 dred quarters of cdrn would be worth three 
 hundred yards of cloth. But supposing, that 
 while three hundred yards of cloth can be fabri- 
 cated by this advance of one hundred quarters 
 as material and food, and fifty yards as cloth- 
 ing, the land under cultivation is so iilferior in 
 quality, that to raise three hundred quarters 
 of corn requires an advance of one hundred 
 quarters as seed, one hundred quarters as the 
 food, and one hundred yards as the clothing of 
 the greater number of labourers employed; then 
 three hundred quaiters of corn would be equal 
 in productive cost, and consequently in exchange- 
 able value, to six hundred yards of cloth. The 
 same principle applies to every other article, the 
 quantity of which human industry can increase. 
 If, while it requires a double quantity of capital 
 to raise the same quantity of corn, the cost of 
 production remains stationary, not only with 
 respect to cloth, but also with respect to the 
 general mass of commodities, then corn, as com- 
 
6S 
 
 pared with the general mass of commodities, will 
 acquire a double value. 
 
 We may lay it down as a universal maxim, 
 that whatever increases the cost of production in 
 agricultural industry, without increasing contem- 
 poraneously, and proportionally, the cost of pro- 
 duction in manufacturing industry, will raise the 
 value of raw produce as compared with wrought 
 goods; or, in other words, will cause the same 
 quantity of corn to exchange for a greater quantity 
 of cloth, or of other fabrics. 
 
 The conclusions to which the principle we are 
 combating necessarily leads, also demonstrate its 
 incorrectness. If the value of corn be invariable, 
 then whatever occasions a relative increase in 
 its productive cost, will destroy that equality 
 in the rate of profit, which the law of com- 
 petition has a perpetual tendency to establish. 
 When the raising of three hundred quarters 
 of corn requires the expenditure of any given 
 amount of capital ; and the fabricating of three 
 hundred yards of cloth requires the expenditure 
 of the same given amount of capital ; then, if three 
 hundred quarters of com, and three hundred yards 
 
69 
 
 of cloth, possess in the market the same value, or 
 power of purchasing, the rate of return upon 
 agricultural and manufacturing capital will be pre- 
 cisely equal, and the capitalist can have no induce- 
 ment to transfer his stock from the one occupation 
 to the other. But when, in consequence of the 
 inferiority of the land under cultivation, or any 
 other cause, the raising of three hundred quarters 
 of corn requires the expenditure of a greater 
 capital, then, if three hundred quarters of com did 
 not acquire a higher value than three hundred yards 
 of cloth, fabricated with the expenditure of the 
 same capital as before, it is self-evident that the 
 rate of profit in manufactures would be much 
 higher than in agriculture. The continuance of 
 this state of things would be morally impossible. 
 Influenced by the desire of bettering his condition, 
 the farmer would transfer his capital from agricul- 
 ture to manufactures. This would diminish the 
 supply of raw produce in relation to the demand ; 
 and its value, or exchangeable power in the 
 market, would consequently rise until the prbfits of 
 capital became equal, and the prices of corn and of 
 cloth proportional to thie cost of their production. 
 
70 
 
 Adam Smith's principle, that corn possesses aif 
 invariable value, could not be true unless every 
 increase or diminution in the difficulty of raising 
 raw produce were accompanied by a proportional 
 increase or diminution in the difficulty of working 
 up material. But this never is the case. The 
 quantity of the several articles of capital whicli 
 must be expended in preparing wrought goods, is 
 neither increased nor diminished by an increase cv 
 diminution in the quantity of the several articles 
 of capital which must be expended in raising raw 
 produce, When we cultivate a more fertile soil, 
 the food and material necessarily expended in the 
 fabrication of our three hundred yards of cloth, are 
 reduced in value, but are not diminished in quan- 
 tity; while the food and material necessarily ex- 
 pended in raising three hundred quarters of corn, 
 are reduced both in value and in quantity. Thus 
 the cost of producing corn is diminished in a 
 greater proportion than the cost of producing 
 manufactured goods ; and as the cost of j^roduction 
 regulates exchangeable value, the exchangeable 
 value of corn will fall, as compaied with the ex- 
 changeable value of manufactured articles. On 
 
7\ 
 
 the contrarv, when we resort to inferior soils, the 
 productive cost, and consequently the exchange- 
 able value of corn, are raised, as compared with 
 the productive cost and exchangeable value of 
 wrought goods. — While the law of competition 
 tends to equalise the rate of return upon capital, 
 it will be impossible that corn should possess an 
 invariable value. 
 
 i§ C. — Erroneous Doctihie of' the French Economists 
 respecting the Value of raw Produce. 
 
 The doctrine of Adam Smith, that the nature 
 of things has stamped upon corn an invariable 
 value, bears some analogy to the doctrine of tlie 
 French Economists, that the labour of the manu- 
 facturer does not increase the value of the produce 
 of the soil, but merely adds to the raw material 
 the value of the subsistence which he consumes 
 while carrying on his industry. If wrought goods 
 possessed no greater value than that of the food 
 and material expended in fabricating them, any 
 given quantity of food and material would ex- 
 change for neither more nor less than that quan- 
 tity of wrought goods which its expenditure 
 
72 
 
 produced ; and corn, and other raw produce, would 
 possess an invariable value as compared with 
 manufactured articles. Improvements in manu- 
 facturing industry, indeed, enabling us to work up 
 the same quantity of material w ith a less expen- 
 diture of food, would cause a given quantity of 
 cloth, or of any other fabric, to exchange for a less 
 quantity of raw pi'oduce ; because, in tliis case, 
 the value of a less quantity of raw produce would 
 be realised in it. But in any given state of 
 manufacturing industry it would necessarily folloAV, 
 that a given quantity of raw produce, and the 
 wrought goods prepared from it, would possess 
 the same identical value with respect to each 
 other. A given quantity of food and material 
 would not exchange for a less quantity of the 
 manufactured article prepared from it, because a, 
 more fertile soil were cultivated ; nor for a greater 
 quantity of the manufactured article, because an 
 inferior soil were cultivated. If the manufacturer 
 does no more than add to the raw material the value 
 of the subsistence which he consumes, then the 
 value of the manufactured article must be identical 
 with the sum of the values of the food and material ; 
 
78 
 
 and any given quantity of it must continue to be 
 worth the same quantity of food and material, 
 whatever may be the quality of the soil under 
 cultivation, or the facility or difficulty with which 
 raw produce is procured. 
 
 But the doctrine of the French Economists, 
 that the manufacturer does not increase the value 
 of the produce of the soil, but merely adds to 
 the mateiial the value of the subsistence which 
 he consumes, is fundamentally erroneous. The 
 value of wrought goods is always superior, by the 
 rate of profit, to the sum of the values of the food 
 and material by means of which they are pre- 
 pared. 
 
 From the perpetually operating law of compe- 
 tition, the employment of equal capitals, for equal 
 times, yields results of equal exchangeable value. 
 If an agiicultural capital, consisting of fifty quar- 
 ters of corn as seed, and fifty quarters as food, 
 can raise a produce of one hundred and fifty 
 quarters ; then a manufacturing capital, employed 
 ibr the same period, and consisting of fifty quarters 
 of corn as food, with raw material, equal in pro- 
 ductive cost, and therefore in value to fifty 
 
n 
 
 quarters, will fabricate a quantity of doth equi- 
 valent to one bundled and fifty quarters of corn. 
 In this case, the manufacturer, instead of having 
 merely added to the raw material the vahie of the 
 subsistence consumed in working it up, will have 
 created an article more valuable, by fifty per cent., 
 than the products of the soil from which it was 
 prepared. If the value of his finished article did 
 not exceed the values of the food and material 
 by the advance of which it was prepared, then 
 manufacturing capital would obtain no profit at 
 all ; while, by the supposition, agricultural capital 
 was obtaining a profit of fifty per cent. But this 
 is manifestly impossible. No capitalist would ever 
 engage in manufacturing industry, unless the value 
 of the finished article exceeded the values of the 
 food and material advanced in preparing it; and 
 no one would continue the manufacturing of any 
 article unless the excess of its value, over and 
 above the cost of its production, were sufl^icient 
 to afford him a rate of profit equal to that which 
 he might obtain by investing his stock in agri- 
 cultural industry. 
 
 Hence it may be laid down, as a general prin- 
 
75 
 
 dple, that in whatever proportion the quantity 
 of produce obtained from the soil exceeds the 
 quantity employed in raising it, in that proportion 
 the value of manufactured goods will exceed the 
 values of the food and material expended in 
 preparing them. If an agricultural capital, con- 
 sisting of fifty quarters of com as food, and fifty 
 (juarters as seed, instead of raising one hundred 
 and fifty, raised only one hundred and twenty- 
 five quarters, — then a manufacturing capital, con- 
 sisting of fifty quarters as food, with material 
 equivalent to fifty quarters more, instead of fabri- 
 cating a finished article worth one hundred and fifty 
 quarters, would fabricate one worth only one hun- 
 dred and twenty-five quarters. When the pro- 
 ductive powers of agricultural industry are high; 
 then tlie value of manufactured articles will con- 
 siderably exceed that of the food and material 
 with which they are prepared; and when the 
 productive powers of agricultural industry are 
 lowered, then the value of manufactured g^ods 
 is reduced, as compared with that of the agri- 
 cidtural produce expended on their production. 
 
re 
 
 This effect would be produced even if the 
 effective powers of manufacturing industry were 
 to remain stationary, and the same quantity of 
 food and material were always required to prepare 
 a given quantity of wrought goods. But as wealth 
 and population increase, the effective powers of 
 manufacturing industry rise ; and new divisions of 
 employment, and improved machinery, enable the 
 same quantity of material to be wrought up with 
 a less expenditure of food. Hence, in the progress 
 of society, there are two causes which diminish 
 the value of wrought goods as compared with raw 
 produce. While a given quantity of agricultural 
 produce serves to fabricate a greater quantity of 
 wrought goods, the value of this greater quantity 
 of wrought goods does not exceed the value of 
 the given quantity of raw material in so great 
 a proportion as the value of the less quantity 
 formerly exceeded it. If the soil under culti- 
 vation was so fertile that fifty quarters of com 
 laid out as subsistence, and fifty quarters as 
 seed, caused a re-production of one hundred and 
 fifty quarters — ^while manufacturing industry was 
 
n 
 
 in such a state, that fifty quarters of corn ad- 
 vanced as subsistence, with material worth fifty 
 quarters more, fabricated one hundred and fifty 
 yards of cloth — then one hundi^ed and fifty yards 
 of cloth would be equivalent to one hundred and 
 fifty quarters of corn. But if the soil resorted 
 to be so inferior that fifty quarters of corn as 
 food, and fifty as seed, can raise only one hundred 
 and twenty-five quarters, — while manufacturing 
 industry is so improved that twenty-five quarters 
 of corn as food are sufficient to work up the 
 material equivalent to fifty quarters, out of which 
 one hundi-ed and fifty yards of cloth are prepared — 
 then one hundred and fifty yards of cloth, which 
 were formerly worth one hundred and fifty 
 quarters of corn, will be worth only ninety-three 
 quarters. For, raising one hundred and twenty^ 
 five quarters of corn required a capital of one 
 hundred quarters; and fabricating one hundred 
 and fifty yards of cloth, required a capital equi*- 
 valent to seventy-five quarters ; and the law of 
 competition determines that, times being equals 
 the values of products shall bear the same pro- 
 
portion to each other as the vahjes of the capital* 
 employed in obtaining them. 
 
 But though, in the progress of society, the increas- 
 ing demand for food, and the necessity of resorting 
 to inferior soils for supplying it, with the successive 
 improvements in machinery, and in the divisions 
 of employment, are constantly operating to di- 
 minish the difference between the value of produce 
 in the raw and in the manufactured state; yet 
 the period never can arrive when the finished 
 article shall possess no greater value than that 
 possessed by the food and material with which it 
 is prepared. No man will permanently engage his 
 capital in production, except for the sake of a 
 profit. The farmer will not expend one hundred 
 quarters of com in cultivation, if something more 
 than one hundred quarters be not returned to him 
 at the end of the harvest. But if one hundred 
 quarters expended in cultivation yield a return of 
 one hundred and one quarters, the law of competi- 
 tion requires, that one hundred quarters, or their 
 equivalents expended in manufactures, shall give a 
 finished article equal in value to one hundred and 
 
79 
 
 one quarters. — As the extension of tillage must be 
 arrested before the expenditure of agricultural 
 capital ceases to occasion a reproduction greater 
 in quantity than itself, so the progress of manufac- 
 tures must be stayed before the employment of a 
 given quantity of food and material ceases to 
 return a finished article of greater value than 
 .itself. 
 
 Thus it appears, from abundant evidence, 
 that the doctrine of the French Economists, that 
 the manufacturer does no more than add to the 
 raw material the value of the subsistence which 
 he consumes while at work, is fundamentally 
 erroneous, and cannot, in any possible state, either 
 of agricultural or manufacturing industry, be con- 
 formable to fact. 
 
 § 7. — Infiuence of free Trade 07i the relative Value of 
 raw Produce and wrcmght Goods. 
 While in the progress of society these two 
 causes, namely, the cultivation of inferior soils, 
 and the improving powers of manufacturing 
 industry, have a constant tendency to raise the 
 Value of raw produce in relation to wrought goods, 
 a tliird cause comes into operation, and coun- 
 
80 
 
 teracts their influence. This tliird cause is, 
 commerce. It is the business of the merchant to 
 transfer commodities from places where they are 
 comparatively cheap, to places where they are 
 comparatively dear. Hence, when trade is free^ 
 the price of an article in the situations most un- 
 favourable for its production, will not exceed its 
 price in the most favourable situations to a greater 
 extent than is necessary to pay the expense of 
 transport, with the customary rate of profit upon 
 the capital employed in the transaction. In new 
 and thinly peopled countries, where, as none 
 but the best lands are cultivated, the powers of 
 agriculture are high, but where, from the want 
 of judicious divisions of employment and or ex- 
 tensive machinery, the powers of manufacturing 
 industry are low, the introduction of cheap wrought 
 goods has the effect of raising the value of raw 
 produce as compared with that of wrought goods ; 
 but in all old and densely peopled countries, 
 where domestic agriculture cannot be extended 
 without resorting to inferior soils upon which its 
 productive powers must diminish, but where, in 
 consequence of minute divisions of employment, 
 
81 
 
 large capitals, and extensive machinery for abridg- 
 ing labour, the productive powers of manufacturing 
 .industry are high, the importation of raw produce 
 must necessarily counteract the tendency of such 
 produce to rise in value as compared with wrought 
 goods. 
 
 Of all the countries in the world, England 
 exhibits the most striking practical example, of 
 the natural tendency of raw produce to rise iii 
 value as compared with wrought goods. Having, 
 in proportion to the extent of her fertile land, 
 started before her neighbours in wealth and popu- 
 lation, she is obliged to extract supplies of food 
 and material from soils inferior to those under 
 cultivation in- the surrounding countries; while 
 from her coal mines, her capital and her machinery, 
 the effective powers of her manufacturing industry 
 have increased in a degree unequalled in the history 
 of the world. The effects of these two causes in 
 raising the value of raw produce in relation to 
 wrought goods, or, what comes to the same thing, 
 in lowering the value of wrought goods in relation 
 to raw produce, commerce is not permitted to 
 counteract. If intercourse were free, the price of 
 
 a 
 
82 
 
 corn in the British market would exceed its price 
 in the neighbouring growing countries, only by 
 the sum sufficient to pay the expense of its carriage, 
 together with the customary rate of profit upon 
 the capital employed in the transaction. But our 
 restrictive system excludes this natural check upon 
 %he comparative rise in the value of raw produce ; 
 and while, in all the main branches of manufac- 
 turing industry, our finished articles are consi- 
 derably cheaper than in any other country, our 
 food and material are dearer by a hundred per 
 cent. — It becomes a momentous problem for the 
 Solution of the practical statesman, whether, under 
 such circumstances, our manufacturing and com- 
 mercial prosperity can be preserved* 
 
CHAP. VI. 
 
 On the Influence of the Corn Trade on the 
 Wages of Labour, 
 
 When men cease to work upon their own 
 account, they must receive from their employers, 
 in exchange for their labour, such articles of wealth 
 as may be necessary to preserve them in working 
 condition, and to enable tliem to keep up tlie race 
 of labourers. The articles of wealth which the 
 Jabourer receives, in exchange for his labour, arc 
 denominated wages. When the quantity of neces- 
 saries and comforts which the labourer receives is 
 large, wages are said to be high ; when it is smaU» 
 they are said to be low. 
 
 When money becomes the instrument of ex- 
 changing one thing for another, a distinction must 
 be made between money wages, and commodity 
 trages ; or, in other words, between nominal and 
 real wages. Real wages consist of the quantity 
 of necessaries and comforts whkh the labourer 
 
84 
 
 receives ; nominal wages of the sum of money 
 in which he is paid. If money always retained 
 the same value, in relation to the necessaries and 
 comforts of life, nominal wages would always be a 
 correct measure of real wages : and both would 
 rise or fall together, and in the same proportion. 
 But the exchangeable power of money is liable to 
 constant fluctuations, and therefore nominal wages 
 often rise, while real wages fall ; and fall, while 
 real wages rise. 
 
 • The minimum below which the real wages of 
 labour cannot permanently fall, consists of that 
 quantity of the necessaries of life which climate 
 and custom render necessary to support the 
 labourer while at work, and to enable him to 
 bring iip a family sufficient to preserve the supply 
 of labour even with the demand. From the prin- 
 ciples established in .the preceding chapter, the 
 reader will immediately perceive, that the value 
 of this quantity of the necessaries of life is liable 
 to considerable fluctuations. Of all the articles 
 which enter into the labourer's subsistence, food 
 is the most considerable and the most important ; 
 and we have seen that, in the progress of wealth 
 
8* 
 
 and population, food, as an article of agricultural 
 produce, is constantly rising in value in relation 
 to manufactured goods. Hence, in the progress 
 society, the value of the articles which the labourer 
 receives as his wages, has a constant tendency to rise. 
 
 Let us suppose, in the first instance, that 
 the real annual wages of the labourer consist 
 of six quarters of corn, and three suits of clothing ; 
 and that a quarter of corn and a suit of clothing 
 cost each £.3. This being the previous state of 
 things, we will suppose further, that while the cost 
 of producing the material of money, and all other 
 commodities, remains unchanged, the cost of 
 raising corn is doubled ; and then the price of that 
 part of tlie labourer's real annual wages which 
 consists of corn, will rise from £.18 to £.36, and 
 the price of his whole real wages from £.27 to 
 £.45. Thus his money wages would rise upwards 
 of sixty per cent. ; and as, by the supposition, 
 money retains its former worth with respect to 
 every article except corn, the general value of the* 
 things constituting his real wages would rise 
 upwards of sixty per cent. also. 
 
 If, during this process, the cost of producing ma- 
 
86 
 
 ffufaetored goods weire reduced one lialf, while th^ 
 cost of producing the precious metals reiDciiiied un- 
 changed, then the money price of that part of the 
 labourer's real wages which consisted of clothing, 
 would fall from £.9 to £.4 10,9. and the whole of his 
 wages, when estimated in money, would faH from 
 £.45 to £.40 10^. But notwithstanding this, the 
 value of the articles constituting the labourer's real 
 wages would be still further increased. By the 
 supposition, money has acquired 'twice its former 
 power in the market with respect to all wrought 
 goods. While £.4 10^., the present price of the 
 labourer's three suits of clothing, are worth the 
 same quantity of all wrought goods which £.9 were 
 worth before, £.36, which continue to be the price 
 of his six quarters of corn, are worth double the 
 quantity of all wrought goods. Any given quantity 
 of his corn which the labourer can spare for the 
 market, will purchase for him four times the quan- 
 tity of every fabric of the manufacturer which it 
 could have purchased before the expense of raising 
 raw produce was increased, and that of preparing 
 wrought goods diminished. 
 
 From the principles here stated, Mr. Malthus 
 
has drawn the conclusion, that restrictions on the 
 importation of foreign corn, forcing our inferior 
 soils into cultivation, and raising the price of the 
 first necessaries of life, are beneficial to the 
 labouring classes, by giving them advantages in 
 purchasing conveniences and luxuries*. This 
 conclusion, as it appears to me, involves a funda- 
 mental and pernicious en'or. I shall therefore 
 endeavour to shew its invalidity both in this, and 
 in the succeeding chapter ; lest the authority of 
 Mr. Malthus's name, deservedly great in some 
 other departments of political economy, should 
 have the effect of giving it currency in public 
 opinion. 
 
 The real wages of labour have a constant ten- 
 dency to settle down to that quantity of the neces- 
 saries of life which chmate and custom have 
 rendered requisite to support the labourer while 
 at work, and to enable him to bring up a family 
 sufficient to preserve the supply of labour even 
 with the demand for labour. Now, to all those 
 amongst the labouring classes whose families ex- 
 
 * " Grounds of an Opinion on the Policy of restricting the 
 Importation of Foreign Corn,'*^ — Page 24. 
 
88 
 
 ceed, or even equal the number sufficient to keep 
 up the supply of labour, it is a matter of perfect 
 indifference whether the articles which constitute 
 their real wages possess a high or a low exchange- 
 able value. Every article which they can obtain 
 in return for their labour is necessary to their own 
 consumption; thiey have no surplus to bring to 
 market, and therefore can obtain no advantage 
 from the circumstance, that a given quantity of 
 corn, or the price of a given quantity, will pur- 
 chase a greater quantity of the conveniences and 
 luxuries of life. 
 
 With respect to some others amongst the labour- 
 ing classes, the fact will be different. As the real 
 rate of wages must be adequate to the support of 
 a family sufficiently numerous to keep the supply 
 of labour even with the demand, it will be more 
 than sufficient to support the labourer who is 
 unmarried, or who has less than the average 
 number of children. Such labourers will have a 
 surplus quantity of food and clothing, or, what 
 comes to the same thing, the price of a surplus 
 quantity to bring to market ; and to them, there- 
 fore, every rise in the value of the articles comr 
 
89 
 
 posing wages will afford advantages in the purchase 
 of the conveniences and necessaries of life. In 
 whatever degree the wages of a single man may 
 exceed what is necessary for his individual sup- 
 port, in that degree a rise in the value of the- 
 articles which constitute wages will be beneficial 
 to him. If his real annual wages are three quar- 
 ters of corn and three suits of clothing ; if three 
 quarters of corn be worth £.9, and three suits 
 of clothing be worth £.9 also; and if one and a 
 half quarters and one and a half suits be sufficient 
 for his support; then the labourer will have one 
 and a half quarters, and one and a half suits, or 
 £.9 to bring to market for the purchase of other 
 things. But if three quarters of com instead of 
 £.9 become worth £.18, while money retains its 
 former value with respect to all other things, 
 then the single labourer, instead of £.9, will have 
 £.13 10^. to bring to market ; and consequently, 
 will be able to purchase not merely the same 
 quantity of necessaries and conveniences as for- 
 merly, but half as much more. 
 
 It is quite demonstrable that, supposing the 
 real wages of labour to remain undiminished, the 
 
90 
 
 labourer who is unmarried, or who has less thaa 
 the average number of children, must derive an 
 advantage from every rise in the value of the 
 articles of which his wages are composed. Upon 
 an accurate investigation; however, this advantage 
 will be found much less considerable than it might 
 at first sight appear, — It affords the single labourer 
 a greater number of immediate and individual 
 comforts ; but it in no way aids him in making 
 provision for the wants of age, or for the support 
 of a future family. It is the quantity, and not the 
 value, of the necessaries of life, which is available 
 for these purposes. If real wages be three quarters 
 of corn, and three suits of clothing a yeai' ; if the 
 unmarried labourer be able to subsist for that 
 period on one and a half quarters and one and a 
 half suits ; and if, for the period of ten years, he 
 lay up annually the other one and a half quarters, 
 and one and a half suits, or the price of them, for 
 his future wants ; then in sickness or old age he 
 will be able to support himself for that period 
 without work. His food and clothing will not 
 support him for a shorter period, because they may 
 become less valuable in relation to money and 
 
91 
 
 other things ; nor for a longer period, becanse they 
 may become of more value with respect to money 
 and other articles. 
 
 Neither could the high value of the necessaries 
 of life afford the labourer' any aid in providing for 
 the contingency of his having a greater number of 
 cliildren than the rate of wages could support. 
 If originally a quarter of corn and a suit of cloth- 
 ing were worth £.3 each, if corn afterwards rose 
 to £.6 the quarter, and if the single labourer were 
 to save out of his yearly earnings one and a half 
 quarters and one and a half suits for ten years, his 
 capital, at the end of that period, would amount 
 to £. 135 instead of to £.90; and as money had 
 not altered in value with respect to any thing but 
 raw produce, this greater sum would purchase a 
 greater quantity of conveniences and luxuries. 
 But this greater sum would still be no more than 
 the price of fifteen quarters of corn, and fifteen 
 suits of clothing ; and these quantities of the first 
 necessaries of life could not by possibility support 
 a more numerous family because they possessed a 
 higher e;xchangeable value with respect to super- 
 fluities. 
 
93 
 
 Thus, even under the supposition, that increased 
 difficulty in producing the first necessaries of hfe 
 has no tendency to diminish the demand for labour^ 
 and to lower the real rate of wages, the high value 
 of corn is advantageous to none amongst the 
 labouring classes, except those who are unmarried^ 
 or who have less than the average number of 
 children. But, except in extraordinary con- 
 junctures, the rate of wages will always be suffi- 
 cient to place in easy circumstances the healthy 
 and the strong whose families are under the average 
 I'equired to keep up the supply of labour. Want 
 and misery fall upon the sick, the infirm, and 
 those who have large families. To these the high 
 exchangeable value of food cannot by possibility 
 afford relief. The high exchangeable value of 
 the necessaries of life can be advantageous only 
 to those who have a surplus quantum to dispose 
 of; and the aged, the infirm, and the members 
 of numerous families, so far from having a surplus 
 to dispose of, too frequently perish prematurely 
 from a deficiency of wholesome sustenance. 
 
 But the supposition, that restrictions upon 
 the importation of foreign agricultural produce, 
 
93 
 
 forcing inferior soils into tillage, and increasing 
 the value of the first necessaries of life, have no 
 tendency to diminish the demand for labour, and 
 to lower the real rate of wages, is completely 
 erroneous. It is the necessary effect of such 
 restrictions to lower the rate of profit, and thereby 
 to check the accumulation of the fund for the 
 maintenance of labour. Instead of affording, as 
 Mr. Maltluis imagines, advantages to a certain 
 portion of the labouring class, they inflict pri- 
 vation and distress upon the whole. The injurious 
 operation of a restricted corn trade upon all those 
 who live by wages, cannot, however, be accurately 
 and completely ascertained until we have pre- 
 viously considered its influence upon profit. 
 
CHAP. vir. 
 
 On the Influence of a Free Trade in Cam upon 
 the Profits of CapitaL 
 
 Profit is that net surplus which remains with 
 the capitalist after the complete re-placement of 
 ail his advances. Thus, if a cultivator occupying 
 a soil which paid no rent, were to expend one 
 hundred quarters of com in tillage, and at the 
 end of the harvest were to obtain one hundred 
 and fifty quartei-s, the surplus of fifty quarters over 
 and above the re-placement of the capital advanced 
 would be his profit. 
 
 The circumstances which determine the rate of 
 profit are, the natural productiveness of the land 
 (including under the term not only the exterior 
 soil, but also fisheries) which is resorted to for 
 obtaining the necessaries of life ; the degree of 
 skill with which labour is applied, whether in 
 raising raw produce, or in preparing wrought 
 goods ; and the real rate of wages, or the quantity 
 
95 
 
 of the products of labour which ike capitalist 
 expends in supporting his labourers. 
 
 I shall endeavour to explain distinctively the 
 influence which each of these circumstances has in 
 determining the rate of profit ; and, ija order to 
 simplify the sulyect as much as possible, I will, in 
 the first instance, take my illustrations from that 
 early stage of society which precedes tlie divisioa 
 of employment, and the consequent interchange of 
 commodities in the market. 
 
 -§ 1. — Circumstance,^ which determine the Rate qfPrqfU 
 before the Divisions of Employment are established. 
 
 Let us suppose that a patriarchal capitalist 
 combines in his own person the different occupa- 
 tions of farmer and manufacturer, and em[)lays 
 throughout the year one hundred labourers, who at 
 once cultivate the soil, and work up its produce. 
 \n this case it is evident that the rate of profit wiH 
 be determined by the circumstances above enume- 
 rated. Under any given degree of skiU in the 
 application of labour, and amount of wages, profits 
 wiU rise or fall as the fertiUty of the soil under 
 cultivation is increased or diminished ; under any 
 
96 
 
 given degree of fertility and amount of wages, 
 they will rise or fall, as labour is more or less 
 skilfully applied ; and under any given degree of 
 fertility and skill, they will rise or fall, as the real 
 rate of wages falls or rises. 
 
 ' For example, if the annual wages of a labourer 
 be two quarters of corn and two suits of clothing, 
 and if, in the actual state of agricultural and 
 manufacturing skill, the land under cultivation be 
 of such a quality that our capitalist's hundred 
 labourers, by expending, in addition to their 
 annual wages of two hundred quarters and two 
 hundred suits, fifty quarters as seed, and material 
 equivalent to fifty quarters more, can raise four 
 hundred and fifty quarters of corn, and fabricate 
 three hundred suits of clothing, then the surplus or 
 profit obtained by the capitalist will be fifty per 
 cent. ; for, by the supposition, his advance of three 
 hundred quarters of corn has procured him a 
 reproduction of four hundred and fifty quarters, 
 and his advance of two hundred suits of 
 clothing a reproduction of three hundred suits. 
 Each portion of his expenditure has, therefore, 
 been replaced to him, with an increase of fifty per 
 
 2 
 
97 
 
 cent. But, while the capitalist's advance to his 
 one hundred agricultural and manufacturing 
 labourers continued to be two hundred suits of 
 clothing, with three hundred quarters of com as 
 food, seed, and material, — if the soil under cultiva- 
 tion were so inferior, that his return was three 
 hundred suits of clothing, with only, four hundred 
 quarters of corn, then the surplus on that portion 
 of his capital which consisted of raw produce, 
 would be less than fifty per cent., and conse- 
 quently the average profit upon his whole capital 
 would be less than fifty per cent. On the other 
 hand, if the quality of the soil under cultivation 
 were so superior, that the capitalist's retura was 
 three hundred suits of clothing as before, with five 
 hundred quarters of corn, then the quantity of raw 
 produce reproduced would exceed the quantity 
 expended by more than fifty per cent., and con- 
 sequently the average rate of profit on the whole 
 capital employed would l)e more than fifty per 
 cent. 
 
 Other things remaining the same, the rate of 
 profit will always be determined l)y the quality of 
 
 H 
 
98 
 
 the soil resorted to for the supply of food, and of 
 the materials for wrought necessaries. 
 
 Again ; — Let the natural powers "of the soil 
 remain unchanged, and let the capitalist continue 
 to expend two hundred suits of clothing, and two 
 hundred quarters of com, as the wages of his one 
 hundred labourers, with fifty quarters as seed, and 
 fifty quarters as material ; and then his profit upon 
 his whole capital will be fifty per cent., provided 
 the degree of skill in the application of agricultu- 
 ral and manufacturing labour be such as to give 
 him a return of four hundred and fifty quarters of 
 corn, and three hundred suits of clothing. But 
 while his expenditure continues to be three hundred 
 quarters and two hundred suits, if his labour were 
 to be less skilfully employed, either in agriculture 
 or in manufactures, and were to reproduce him 
 a less quantity of corn than four hundred and fifty 
 quarters, or a less quantity of clothes than three 
 hundred suits,— then the average rate of profit upon 
 his capital would be less than fifty per cent. If 
 he obtained a reproduction of more than four 
 hundred and fifty quarters, or more than three 
 
99 
 
 hundred suits of clothing, the average rate of profit 
 upon his whole capital would be more than fifty 
 per cent. 
 
 While the quality of the land under cultivation, 
 and the real rate of wages, remain the same, profits 
 will rise or fall as the degree of skill in the appli- 
 cation either of agricultural or of manufacturing 
 labour is increased or diminished. 
 
 Once more : — Let the quality of the soil under 
 cultivation, and the degree of skill with which 
 labour is applied in agriculture and manufactures, 
 be such, that our one hundred labourers, expend- 
 ing fifty quarters of corn as seed, and fifty as 
 material, can raise four hundred and fifty quarters 
 of com, and fabricate three hundred suits of cloth- 
 ing ; and then our capitalist's profit will be fifty 
 per cent., provided the hundred labourers receive 
 as their wages two hundred quarters and two 
 hundred suits. His profit will be less than fifty 
 per cent, if they receive more than this real rate 
 of wages, and will be more if they receive less. 
 
 Under any given degree of fertility in the soil 
 resorted to for the supply of food, and of skill in 
 the application of labour, whether in agriculture 
 
100 
 
 or in manufactures, the rate of profit will fall 
 or rise as the rear rate of wages is increased or 
 diminished. 
 
 Thus it is strictly demonstrable, that before the 
 divisions of employment are established, and while 
 the same capitalist, with the same set of labourers, 
 at once cultivates the ground and manufactures 
 its produce, his profit, or surplus of reproduction, 
 over and above expenditure, will always be deter- 
 mined by the three circumstances which I have 
 mentioned, — namely, the quality of the soil, the 
 skill with which labour is applied, and the real 
 amount qf wages. 
 
 § 2. — Circumstances which determine the aggregate 
 Profit of the Community after Divisions of Employ- 
 ment are established. 
 
 The self-same causes which determine the pro- 
 portion in which re-production shall exceed expen- 
 diture in that simple state of society in which the 
 same capitalist carries on all the different branches 
 of industry, also regulate the proportion in which 
 re-production shall exceed expenditure in that 
 more complex state of society in which the divi- 
 sions of employment, and their consequences, 
 
101 
 
 barter and sale, are established. This I will now 
 proceed to demonstrate. 
 
 If one capitalist advances a hundred suits of 
 clothing, a hundred quarters of com as food, and 
 fifty quarters as seed, to fifty agricultural labourers ; 
 and if another capitalist advances a hundred suits 
 of clothing, a hundred quarters of corn as food, 
 and fifty quarters, or the value of fifty quarters, as 
 material ; and if the return which these two 
 capitalists obtain be four hundred and fifty quarters 
 of corn, and three hundred suits of clothing, then 
 it is self-evident that, in this little community, the 
 aggregate surplus of reproduction above expendi- 
 ture will be one hundred and fifty quarters, and 
 one hundred suits, or fifty per cent, upon the whole 
 capital employed. If an improvement in the 
 quality of the soil, or in the skill with which 
 agricultural labour is applied, cause five hundred 
 quarters of corn to be produced with the same 
 expenditure which formerly produced four hundred 
 and fifty quarters, then the surplus upon the agri- 
 cultural capital will be two hundred quarters ; and 
 as the surplus upon the manufacturing capital 
 remains as before, the average profit upon the 
 
102 
 
 whole capital employed in our little community 
 will be more than fifty per cent. If, while the 
 quality of the soil, or the skill in agriculture fall 
 back to their original state, an improvement were 
 to take place in manufactures, enabling our fifty 
 manufacturers, with the same expenditure as be- 
 fore, to prepare three hundred and fifty, instead 
 of three hundred suits of clothing, then again 
 the surplus of production above expenditure 
 would be more than fifty per cent. ; and if the 
 quality of the soil under cultivation, and the 
 degree of skill with which labour was applied 
 in agriculture and manufactures, should be such 
 that the fifty agricultural and fifty manufactur- 
 ing labourers, with seed and material equivalent 
 to one hundred quarters of corn, raised and pre- 
 pared four hundred and fifty quarters of corn, and 
 three hundred suits of clothing, then the aggregate 
 profit obtained by our two capitalists would be 
 fifty per cent, upon the whole capital employed, 
 provided the advance on account of wages had 
 been two hundred quarters, and two hundred 
 suits; but would be more than fifty per cent, 
 if wages had been less, and less than fifty per cent. 
 
103 
 
 if wages had been more than two hundred quar- 
 ters, and two hundred suits. 
 
 Thus then it is strictly demonstrable, that when 
 the divisions of employment are established in any 
 community, the aggregate rate of profit, or, in 
 other words, the proportion in which reproduction 
 exceeds the expenditure necessary to obtain it, is 
 regulated by the self-same circumstances which 
 regulate it in that more simple stage of society 
 when the capitalist combines in his own person a 
 variety of callings, and employs the same set of 
 labourers to raise and fabricate the several commo- 
 dities he consumes. 
 
 § S.-^The Causes which regulate individual Projlty 
 when the Divisioii^ of Employment have been esta- 
 blished, I 
 
 After the divisions of employment have been 
 established, the particular profits of each individual 
 capitalist will be regulated by a different principle 
 from that which determines the aggregate profit of 
 the community. For when the capitalist confines 
 himself to one occupation, and advances the 
 several difierent ingredients of capital, consisting 
 
104 
 
 of wages, material, and implements, in order to 
 produce a single commodity, his profit must depend, 
 not so much upon the quantity, as upon the value 
 of this commodity. Thus, if a farmer employs one 
 hundred labourers, whose wages are two hundred 
 quarters of corn and two hundred suits of clothing, 
 and advances two hundred quarters as seed, with 
 two hundred implements, and obtains a repro- 
 duction of twelve hundred quarters ; this quantity 
 of corn will yield him a profit of fifty per cent, so 
 long only as tWo quarters of corn will exchange for 
 one suit of clothing and one implement. As he 
 advanced 400 quarters for food and seed, 600 
 quarters, or one half of his produce, will replace 
 his part of the advance, with a profit of 50 per 
 cent.; and as he advanced 200 suits and 200 
 implements, he will also obtain a profit of 50 per 
 cent, on this portion of the advance, provided the 
 other moiety of his produce exchange for 300 suits 
 and 300 implements. If clothing and implements 
 rose in value, and two quarters of corn ceased to 
 be equivalent to one suit and one implement ; then, 
 under the circumstances supposed, the farmer's 
 profit would be less than fifty per cent. : while, if 
 
105 
 
 corn rose in relation to clothing and implements, 
 his profit would exceed 50 per cent. 
 
 In agriculture, some of the things produced are 
 generally homogeneous with some of the things 
 expended in production ; and, to whatever extent 
 this may be the case, the exchangeable value of 
 the production will have no influence on profit. 
 In manufactures, however, it very frequently 
 happens, that the advances and the reproduction 
 are altogether heterogeneous, and that no part 
 of the former can be directly replaced by the 
 latter. In these branches of manufacture, there- 
 fore, the profit of the capitalist must depend 
 entirely upon the proportion which the value of 
 the whole of the reproduction bears to the value 
 of the whole of the advance. 
 
 In the general industry of a country, commo- 
 dities will be produced, homogeneous to those 
 expended in production ; and, therefore, the 
 aggregate profit of the country will be deter- 
 mined by the proportion between the quantity 
 of production and the quantity of expenditure 
 which obtains it. But in the particular branches 
 of industry, carried on by irniividual capitalists. 
 
106 
 
 the commodities produced cease to be homo- 
 geneous with the commodities expended in pro- 
 duction ; and therefore, the capitalist must replace 
 his advances, not by directly appropriating a 
 portion of his reproduction thereto, but by taking 
 his commodity to market, and exchanging it for 
 the several ingredients of capital employed in 
 carrying on his business. Hence individual profits 
 are regulated, not by the quantity, but by the 
 value of the commodities produced. 
 
 After the divisions of employment ai^e esta- 
 blished, value has so important an influence in de- 
 termining individual profit, that a correct theory 
 of value is essentially necessary, in order to enable 
 us to ascertain and to explain the causes by which 
 profits are elevated or depressed. Profits can be 
 elevated only by those causes which raise the 
 value of the reproduction, without raising, in the 
 same proportion, the value of the advance ; or 
 which lower the value of the advance, without 
 lowering, in the same proportion, the value of the 
 reproduction : and profits can be depressed by 
 tliose causes only which lower the value of the 
 reproduction, in relation to that of the advance. 
 
lor 
 
 or raise the value of the advance, in relation to 
 that of the reproduction. Until we understand 
 the nature and causes of value, the principles 
 which regulate profit cannot be understood. The 
 misconceptions which have prevailed upon the 
 fundamental question of value, are at the bottom 
 of the obscurity and error in which the doctrine 
 of profit has been hitherto involved. 
 
 It will be remembered, that when considering 
 the causes which regulate value, it was demon- 
 strated that when equal capitals are employed 
 for equal times, the results (including under the 
 term both the finished article and the residue 
 of the capital) are of equal value in exchange. 
 On this principle, the causes which regulate indi- 
 vidual profits may be clearly and satisfactorily 
 explained. 
 
 ^et us assume that a farmer employs one 
 hundred labourers, whose wages are two hun- 
 dred quarters of corn and two hundred suits of 
 clothing ; that in addition to these wages he 
 advances two hundred implements and two hun- 
 dred quarters as seed, and that with three- 
 fourths of this expenditure he raises seven bun- 
 
108 
 
 dred and fifty quarters of corn, and with the 
 other fourth a quantity of raw material equi- 
 valent to 250 quarters; and let us assume, fur- 
 ther, that a manufacturer employs one himdred 
 labourers, whose wages are two hundred quarters 
 and two hundred suits ; that in addition to those 
 wages he advances two hundred implements, with 
 a portion of raw material equivalent to two hun- 
 dred quarters; and that with one half of this 
 expenditure he fabricates five hundred suits of 
 clothing, and with the other half, five hundred 
 implements. 
 
 In this case the farmer's produce, consisting 
 of 750 quarters of corn, ^nd of raw material 
 equivalent to 250 quarters, will be equal in pro- 
 ductive cost, and, therefore, in value, to the 
 manufacturer's fabrics, consisting of 500 suits of 
 clothing, and 500 implements. Consequently, 250 
 quarters of corn, with raw material equivalent 
 to 250 quarters, which constitute one half of 
 the farmer's produce, will exchange for 250 
 suits of clothing, and 250 implements, which 
 constitute one half of the manufacturer's fabrics ; 
 and when the exchange is effected, the capital 
 
109 
 
 of each will be replaced, with a profit of twenty- 
 five per cent. For, the farmer who had advanced 
 400 quarters, with 200 suits and 200 implements, 
 will have 500 quarters, with 250 suits and 250 
 implements; while the manufacturer, who had 
 advanced 200 quarters, 200 material, 200 suits, 
 and 200 implements, will be in possession of 250 
 of each of these ingredients of capital. 
 
 Thus it appears, by evidence strictly demon- 
 strative, that while commodities exchange in 
 proportion to the cost of their production, the 
 rate of profit will be raised by all those circum- 
 stances which increase the quantities reproduced, 
 without increasing in an equal ratio the quantities 
 expended on production ; or which diminish the 
 quantities expended in production, without dimi- 
 nishing, in the same degree, the quantities repro- 
 duced. On the very same principles, too, it is 
 demon St mble, that the rate of profit will be 
 lowered by all those circumstances which increase 
 the expenditure, without, in the same proportion, 
 increasing reproduction ; or which diminish repro- 
 duction, without, in an equal degree, diminishing 
 expenditure. 
 
no 
 
 The main circumstances wiiicli, in this manner, 
 regulate the rate of profit upon capital, are, as it 
 has been before stated, the quality of the soil 
 resorted to for the supply of food and material ; 
 the skill, energy, duration, and effect, with which 
 labour is applied, either in agriculture or manu- 
 factures ; and the state of wages. 
 
 These causes may act, either in conjunction 
 with, or in opposition to, each other. Profits 
 might continue to rise while inferior soils were 
 resorted to, provided the operation of this cause 
 were counteracted by improvement in agriculture 
 or in manufactures, or by a fall in wages ; and, on 
 the other hand, the greatest fertility of soil might 
 be accompanied with an extremely low rate of 
 profit, if wages were very high, or if labom* were 
 unskilfully and ineffectually applied. 
 
 ^ 4. — As the Value of Raw Produce rises, agricultural 
 Profits fall 
 
 When the cultivation of inferior soils increases 
 the productive cost, and consequently the ex- 
 changeable value, of food, and the materials of 
 wrought necessaries, it is quite obvious that manu- 
 
Ill 
 
 facturing profits must fall It is sometimes ima- 
 gined, however, that these circumstances do not 
 reduce agricultural profits ; but that, on the 
 contrary, the increased value of raw produce is 
 beneficial to the farmer, in the same proportion in 
 which it is prejudicial to the manufacturer. This 
 is a fundamental error, and the prevalence of it 
 frequently leads to the most mischievous practical 
 results. In the long run, the interests of the capi- 
 talist who embarks in agriculture, are identical 
 with the interests of the capitalist who embarks in 
 manufactures. The same causes which raise or 
 lower the rate of profit in one occupation, raise 
 or lower it in all. A fall in the value of food and 
 mateiial, occasioned by a diminution in the expense 
 of production, is as beneficial to the farmer as to 
 all other capitalists ; and a rise in their value from 
 increased cost of production is as injurious. — 
 These principles are so seldom acknowledged, and 
 are of such vast practical importance, that I will 
 endeavour to enforce them, even at the hazard of 
 appearing prolix and tautological. 
 
 When the farmer, by expending fifty suits of 
 clothing, and one hundred quarters of corn as food 
 
112 
 
 and seed, can raise three hundred quarters ; and 
 when the manufacturer, by expending fifty suits of 
 clothing and one hundred quarters of corn as food 
 and material, can fabricate one hundred and fifty 
 suits of clothing; then the rate of profit, both in 
 agriculture and in manufactures, will be fifty per 
 cent. ; because, as the three hundred quarters of 
 com and the one hundred and fifty suits of cloth- 
 ing are equal in productive cost, and therefore in 
 exchangeable value, the whole expenditure which 
 raises the farmer's three hundred quarters will be 
 one hundred quarters for food and seed, and one 
 hundred quarters for the purchase of fifty suits of 
 clothing ; and the whole expenditure which pre- 
 pares the manufacturer's one hundred and fifty 
 suits of clothing, will be fifty suits for clothing his 
 labourers, and fifty suits more for the purchase of 
 their food and material. 
 
 Now, while the expense of preparing clothing 
 remains unaltered, let the soil under cultivation 
 become so inferior, that a capital consisting of 
 fifty suits of clothing, with one hundred quarters 
 of corn as food and material, will raise only two 
 hundred and fifty quarters of corn; and then two 
 
* 11:3 
 
 hundred and fifty quarters of corn, and one hun- 
 dred and fifty suits of clothing, being, by the 
 supposition, equal in productive cost, will also be 
 equal in exchangeable value. But this rise in the 
 yalue of corn, instead of being beneficial, will be 
 injurious to the farmer. Agricultural profit will 
 fall from fifty to thirty-eight per cent. The 
 capital advanced in raising the two hundred end 
 fifty quarters of corn, will be one hundred quarters 
 for food and seed, and eighty quarters for the 
 purchase of fifty suits of clothing. The surplus 
 of reproduction above expenditure, which was for- 
 merly one hundred quarters of corn upon a capital 
 equivalent to two hundred quarters, will now be 
 reduced to seventy quarters upon a capital con- 
 sisting of one hundred and eighty quarters. 
 
 It may perhaps be objected, that if the increased 
 value of corn did not completely indemnify (he 
 farmer for the increased cost of its production, 
 he would not invest his capital in inferior soils, 
 but would turn it into the more beneficial channels 
 of manufactures or commerce ; and that therefore 
 the fact, that inferior soils are resorted to for cul- 
 tivation, is a practical proof that the rate of agri- 
 
 I 
 
Ill 
 
 / 
 
 cultural profit does not fall \yith the increased 
 difficulty in raising com. 
 
 To this I answer, that when all the best lands 
 of a country have been already brought under cul- 
 tivation, additional capitals cannot be employed 
 in manufactures and commerce, unless additional 
 supplies of food and material be obtained; and 
 that, by the supposition, there is no possibility of 
 obtaining these without resorting to lands of an 
 inferior quality. The resorting to such soils is a 
 matter of necessity, not of choice. Lands of a 
 worse quality than those already under tillage are 
 never resorted to, until their cultivation becomes 
 the most beneficial species of occupation in which 
 additional portions of capital can be employed. 
 As additional quantities of manufactured articles 
 cannot be prepared until additional supplies of 
 food and material are previously procured, in the 
 progress of wealth and population, an increased 
 ^demand for raw produce is necessarily antecedent 
 to an increased demand for wrought goods. 
 Hence, in the first instance, the value of raw pro- 
 duce is raised, as compared with that of wrought 
 goods; and this depresses manufacturing profit, 
 
 >^.iL.. 
 
115 
 
 until the cultivation of inferior soils becomes the 
 most beneficial occupation which the accumulating 
 * capital of the society can obtain. The fact, that 
 inferior soils are resorted to, is no proof that 
 agricultural profits do not fall, as the difficulty in 
 obtaining raw produce is increased ; on the con- 
 trary, this fact affords demonstrative evidence, that 
 the increased difficulty in obtaining additional 
 supplies of food and material has already so re- 
 duced the general rate of profit, that the cultivation 
 of soils which yield a less proportional return upon 
 capital is found to be the most beneficial occupa- 
 tion which remains for the increasing stock of the 
 society. 
 
 It may be contended, perhaps, that as the value 
 of corn must be regulated by the cost of producing 
 it from the worst soils which the wants of a country 
 may force into cultivation, all those farmers who 
 occupy superior soils, and raise their produce at a 
 moderate expense of labour and capital, will have 
 their profits increased by every rise in the price of 
 corn. 
 
 I answer, that the rise of profits here contem- 
 plated can be obtained only during the currency of 
 
116 
 
 leases taken prior to the period at which prices 
 rose. The rates of profit in the several occupa- 
 tions of stock, have a constant tendency to settle 
 down to one common level. If the difficulty in 
 obtaining additional supplies of raw produce had 
 reduced the general rate of profit to ten per cent., 
 and if two farms in equal extent and situation were 
 to be let, one of which yielded one thousand two 
 hundred quarters of com, when a capital of one 
 thousand quarters was expended on its cultivation, 
 while the other yielded no more than one thousand 
 one hundred and ten quarters, when the same capital 
 of one thousand quarters was laid out upon it, — 
 then a competition would arise amongst the class 
 of capitalists for the possession of these farms, 
 until the rent offered for the first amounted to ten 
 quarters, and that offered for the second amounted 
 to one hundred quarters. When the rent of the 
 two farms was thus adjusted, according to their 
 different degrees of fertility, the cultivator of the 
 best could obtain no greater profit than the culti- 
 vator of the worst. In whatever degree the 
 increased expense of production may reduce the 
 rate of agricultural profit upon the most inferior 
 
117 
 
 land wliich it is necessary to resort to, in the same 
 degree a contemporaneous rise of rent will reduce 
 the farmer's profit upon all the superior lands which 
 are about to be re-let. 
 
 A rise in the value of raw produce, occasioned 
 by the increased expense of raising it, will doubt- 
 less confer a temporary benefit upon the occupiers 
 of fertile lands during the unexpired terms of their 
 leases; but when these terms are expired, and 
 new contracts are to be entered into with the land 
 proprietor, the increased value of food and material 
 must inflict upon them, in common with all other 
 capitalists, a lasting and irreparable injury. 
 
 § 5. — Influence of a free Trade in Corn in increasing 
 the Rate of Profit upon Capital. 
 
 There are three causes then, — the quality of the 
 soil under cultivation, — the degree of skill with 
 which labour is applied, — and the quantity of the 
 productions of labour absorbed as wages, which at 
 all times determine the rate of profit. The two 
 first, however, exert a much more powerful influ- 
 ence than the third. When a larger portion of the 
 productions of labour fall to the share of labourers, 
 
118 
 
 their numbers are always found to incnease ; and 
 hence, as the supply of labour augments with the 
 demand, wagea scarcely ever retain an elevation 
 sufficient to depress the rate of profit in any 
 material degree. Neither can the return upon 
 capital be permanently raised by the reduction of 
 wages below their natural level; because, when 
 the labouring classes do not obtain that quantity 
 of the necessaries of life which cliaiate and custom 
 have rendered necessary to their healthful ex- 
 istence, distress diminishes their numbers, until 
 the failing supply of labour restores its value in 
 the market. Very different is the case with 
 respect to the quality of the soil under cultivation, 
 and the degree of skill with which labour is 
 applied. These two causes exert a powerful 
 and permanent influence upon the rate of profit ; 
 and it is only by a due consideration of the 
 manner in which they operate in any given 
 circumstances, that we can obtain a satisfactory 
 solution of the difficult, but important problem, 
 why a country at one period should advance 
 rapidly in prosperity, and at another, should, 
 without any external disaster, approach the limits 
 of her prosperity, or verge sensibly to decay. 
 
119 
 
 In new and thinly peopled countries, no lands, 
 except those of the first quality and situation, will 
 be resorted to for the supply of food and material ; 
 and consequently, the effective powers of agricul- 
 tural industry will be extremely high. But as the 
 division of employment is limited by the extent of 
 tlie market, and can be perfectly established only 
 amongst a dense population, it follows, that in 
 new or thinly inhabited countiies, the effective 
 powers of manufacturing industry must be ex- 
 tremely low. Hence, in the progress of society, 
 the two main causes which govern the rate of 
 profit are as antagonist muscles, modifying and 
 balancing each other. As an increasing popula- 
 tion compels us on the one hand to resort to 
 inferior soils, and thus raises the productive cost 
 of raw produce, so it leads on the other hand to 
 more accurate divisions of employment, and to the 
 use of improved machinery, and thus lowers the 
 productive cost of all wrought goods. But increased 
 facility in producing wrought necessaries has the 
 same effect in raising the rate of profit, which 
 diminished facility in producing food and material 
 has in lowering it. Hence it will frequently 
 
120 
 
 happen, that a greater degree of skill and economy 
 in the aj^pUcation of labour may completely coun- 
 teract the effects of resorting to inferior soils ; and 
 that the rate of profit may rise, though the 
 difficulty of obtaining food and material should 
 increase. Uncjer any given degree of skill and 
 economy in the application of labour, however, the 
 return upon capital will be determined by the 
 quality of land under cultivation ; and as inferior 
 soils are resorted to, the rate of profit will con- 
 stantly diminish, until that stationary state is 
 attained, in which no additional capital can be 
 employed, and all tendency to increased population 
 must be checked by famine. 
 
 From the analysis which I have thus attempted 
 to give of the principles whicli regulate the return 
 upon capital, the influence of a free trade in corn 
 upon the rate of profit may at once be traced. In 
 old and advanced countries, tlie return upon 
 capital is reduced in consequence of the low 
 effective powers of agricultural industry, brought 
 on by the necessity of resorting to inferior soils ; 
 while in new or thinly peopled countries, the 
 return upon capital is less than it might otherwise 
 
121 
 
 be, in consequence of the low effective powers 
 of manufacturing industry, arising from the want 
 of machinery, and of the divisions of employ- 
 ment. Now, in either country, the main cause 
 which depresses tlie rate of profit may be re- 
 moved by the operation of an unrestricted foreign 
 trade. 
 
 If in America, where none but soils of the first 
 quality are cultivated, one hundred labourers can 
 raise the customary quantity of food received by 
 three hundred and fifty ; while, from the absence of 
 machinery and of the divisions of employment, it 
 requires two hundred labourers to prepare clothing 
 for three hundred and fifty, then the profits of 
 stock will be sixteen per cent., because a capital 
 consisting of food and clothing for three hundred, 
 employed in setting to work one hundred agricul^ 
 tural, and two hundred manufacturhig labourers, 
 occasions a reproduction of food and clothing for 
 three hundred and fifty. In like manner, if in 
 England, where inferior soils are resorted to, it 
 requires the labour of two hundred to raise the 
 customary quantity of food advanced to three 
 hundred and fifty, while, from improved ma-. 
 
122 
 
 cbinery and accurate divisions of employment, 
 the labour of one hundred is sufficient to prepare 
 the customary quantity of clothing for three 
 hundi-ed and fifty, then the rate of profit will be 
 sixteen per cent, in this country also; since a 
 capital of food and clothing for three hundred, 
 employed in setting to work two hundred agricuU 
 tural and one hundred manufacturing labourers, 
 occasions a reproduction of food and clothing 
 for three hundred and fifty. 
 
 Now, let us suppose that an unrestricted com-* 
 mercial intercourse is established between Eng- 
 land and America ; and, that in consequence, the 
 American manufacturer, instead of continuing to 
 employ his capital of food and clothing for two 
 hundred in preparing clothing for three hundred 
 and fifty, invests it in the soil, and, under the 
 assumed powers of agricultural industry, raises food 
 for seven hundred; while the English farmer, 
 instead of keeping soils under cultivation from 
 which his capital of food and clothing for two 
 hundred, can raise food for no more than three 
 hundred and fifty, embarks his stock in manu- 
 factures, and, under the assumed cficctive powers 
 
123 
 
 of manufacturing industry, occasions the fabri- 
 cation of clothing for seven hundred. 
 
 By thig distribution of the capital and labour of 
 the two countiies, the rate of profit, both in England 
 and in America, will be raised from sixteen to 
 seventy-five* per cent. For, with the exception of 
 what it might cost for freight and insurance, 
 the capital expended would be exactly as before, 
 namely:— food and clothing for three hundred 
 American and three hundred English labourers, 
 while the reproduction obtained would be swelled 
 from food and clothing for seven hundred, to food 
 and clothing for one thousand and fifty. And 
 this, when the two classes of commodities were 
 exchanged against each other, according to their 
 productive cost, would aflbrd, both to the English 
 and to the American capitalist, the increased 
 surplus which I have named. 
 
 Supposing, however, that England, for the sake 
 of encouraging her domestic agriculture, were to 
 exclude the raw produce of America ; or that 
 
 * To avoid complicating the illustration, I have omitted to 
 make allowanoe for the expense necessary to transfer the food 
 and clothing from one country to the other. 
 
124 
 
 America, with the view of protecting her domestic 
 manufactures, were to prohibit the wrought goods 
 of England ; then, in either case, the interruption 
 of the international division of employment would 
 reduce the rate of profit, both in England and in 
 America, from seventy-five to sixteen per cent. 
 For, the production of food and clothing for three 
 hundred and fifty would now, as before, require 
 in the former country the expenditure of a capital 
 of food and clothing for three hundred, giving 
 employment to two hundred agricultural, and 
 one hundred manufacturing labourers ; and in the 
 latter country, the advance of an equal quantity 
 of capital, putting in motion two hundred manu- 
 facturing, and one hundred agricultural labourers. 
 
 § 6. — Further Refutation of the Doctrine of Mr. Malthus, 
 that the high Value of the Articles composing Wages, 
 is beneficial to the Labourer. 
 
 Having now traced the principles which regulate 
 profits, and explained the manner in which they are 
 elevated by a free, and depressed by a restricted 
 commerce, we are prepared to resume the consi- 
 derations of Mr. Malthus's doctrine, that the ex- 
 clusion of foreign corn, forcing inferior soils into 
 
125 
 
 cultivation, and thereby raising the value of the 
 articles which compose wages, is calculated to 
 confer advantages upon the labouring classes. 
 
 It appeared, in the preceding chapter, that an 
 increase in the value of the main articles which 
 constitute the labourer's subsistence, would give 
 single men, and those who had less than the average 
 number of children, some advantages, — not in pro- 
 viding for the wants of age, or for the demands of 
 a future family, but in purchasing superfluities 
 and luxuries for present immediate enjoyment, 
 provided the demand for labour, and the real 
 rate of wages, were not reduced. 
 
 But restrictions on commerce, forcing inferior 
 soils into cultivation, and thereby raising the value 
 of food, would inevitably diminish the demand for 
 labour, and reduce the real amount of wages. It 
 is a principle capable of the most rigid and perfect 
 demonstration, that increasing the productive cost 
 and exchangeable value of food, and the materials 
 of wrought necessaries, depresses the rate of profit. 
 But when the rate of profit is depressed, the accu- 
 mulation of capital is checked; and when the 
 accumulation of capital is checked, the demand 
 
126 
 
 for labour and the real rate of wages are reduced. 
 Under a restrictive system, therefore, the dimi- 
 nished quantity of the necessaries of life received 
 as wages, not only counterbalances to the single 
 labourer all the advantage which their increased 
 value might confer in the purchase of superfluities 
 for immediate enjoyment, but prevents his having 
 the same power of providing for the wants of age, 
 and the demands of a future family, which he 
 would have possessed, had the quantity of the 
 things constituting wages been greater, and their 
 value less. 
 
 Let us now examine the effects which duties 
 upon the importation of corn, and the consequent 
 high value of wages, must have upon the condition 
 of the married labourer. 
 
 The real wages of labour must be sufficient to 
 enable the labourer to bring up such a family 
 as will preserve the supply of labour even with 
 the demand for it. Should capital, and the de- 
 mand for labour, be increasing at such a rate, that 
 it required on the average four children to every 
 marriage to supply the number of hands necessary 
 to perform the work of the society, then the cus* 
 
127 
 
 tomary rate of wages would consist of a quantity 
 of food and clothing sufficient for the support of 
 a family of four children. But were productive 
 capital to increase with such rapidity, that the 
 work of the society could not be performed unless 
 each married pair were to bring up five children, 
 then the ordinary wages of labour would become 
 sufficient to support a family of five children. 
 Whatever accelerates the accumulation of capital, 
 and thereljy increases the demand for labour, 
 causes the labourer to receive as his wages a 
 quantity of the necessaries of life adequate to the 
 support of a larger family. But we have seen 
 that an unrestricted importation of foreign agri- 
 cultural produce, preventing the cultivation of 
 inferior soils, and keeping down the price of food 
 and necessary materials, raises the rate of profit, 
 accelerates the accumulation of capital, and in- 
 creases the demand for labour. Unrestricted im- 
 portation, therefore, increases the real amount of 
 wages, and enables the married labourer to support 
 a larger family. 
 
 The converse propositions are also strictly 
 
128 
 
 demonstrable. Whatever checks accumulation^ 
 and thereby diminishes the demand for labour, 
 necessarily lowers wages, and deprives the labourer 
 of the means of supporting so large a family as 
 before. If, in the actual state of the intercourse 
 between the sexes, each married labourer has on 
 the average five children, while, by restrictions on 
 the importation of corn, we lower profits and 
 check accumulation to such an extent, that four 
 children to every marriage are sufficient to keep 
 the supply of labour even with the demand, — then 
 one out of five must die of the diseases brought 
 on by deficient and unwholesome sustenance. If, 
 in our mania for growing an independent supply 
 of corn, we were to force lands of a still in- 
 ferior quality into cultivation, and thereby lower 
 profits, and check accumulation, until three chil- 
 dren to each marriage became sufficient to keep 
 the supply of labour even with the demand, then 
 two fifths of the children born to the labouring 
 classes would be cut off by famine. Such are 
 the benefits which restricted importation, and the 
 consequent high price of provisions, are calculated 
 
129 
 
 to confer on that great portion of the population 
 which lives by wages ! These restrictions have 
 no influence in diminishing the number of births* 
 and therefore they must necessarily increase the 
 number of deaths by the agency of misery and 
 starvation. 
 
CHAP. VIII. 
 
 On the Influence of the Corn Trade on the 
 Rent of Land; and on the Interest of Landed 
 Trojprietors, 
 
 \ 1. -^Origin of Rent. 
 
 Rent is that part of the produce which is given 
 to the land proprietor for the use of the soil. In 
 order to obtain an accurate knowledge of the in- 
 fluence of tlie external corn trade upon this branch 
 of the national revenue, it is necessary that we 
 should trace the origin of rent, and ascertain the 
 principles which govern it. 
 
 During that early period of society in which 
 there remains unappropriated an abundance of 
 fertile and well situated land, which may be occu- 
 pied at will, it is evident that nothing will be 
 paid for the use of the soil. No person will give 
 the fruits of his labour for that which he can 
 obtain for nothing. In the case supposed, land, 
 like light, air, and rain, and those laws of the 
 physical world, the productive services of which 
 
131 
 
 we employ in the formation of wealth, will possess 
 no value in exchange, and cannot be a source of 
 revenue to any person except the cultivator who 
 actually expends his labour or his capital upon it. 
 
 As soon, however, as all the land of a country 
 was appropriated, it would acquire, like every 
 thing else which is useful to man, and which exists 
 in scarcity, a certain value in exchange. If one 
 person had the command of a portion of labour 
 and capital, but possessed no land to work upon, 
 while another person possessed land, but had not 
 the means of tilling it, it would become their 
 mutual and obvious interest to enter into some 
 arrangement for cultivating the soil, and dividing 
 its surplus produce. Under this arrangement, or 
 compromise, that portion of the surplus produce 
 which remained with the capitalist would be 
 profit, and that other portion of it which was 
 given to the proprietor for the use of the soil, 
 would be rent. 
 
 But it is not at all necessary that all the land of 
 a country should be appropriated, in order to 
 occasion the separation of the surplus produce of 
 the soil into the respective channels of profit and 
 
132 
 
 rent. Whenever it happens, and it almost in- 
 variably does so, that the lands of a district 
 possess different degrees of fertility, the appro- 
 priation of those of the first quality will have 
 exactly the same effect in giving rise to rent, as 
 the appropriation of the whole. If no land remains 
 for the individual who may have acquired the 
 command of labour and capital, except that from 
 which the expenditure of one hundred quarters of 
 corn will raise one hundred and ten quarters, then 
 it would be his obvious interest to pay five quar- 
 ters for the use of a farm from which the expen- 
 diture of one hundred quarters could raise one hun- 
 dred and twenty quarters. And if the proprietor 
 of this more fertile farm happened not to have 
 the strength, or the stock, to work it for himself, 
 it would also be his obvious interest to let it out 
 to the capitalist for a portion of the surplus pro- 
 duce. Hence, as soon as all the lands of first rate 
 quality have become private property, the con- 
 curring interests of capitalists and of proprietors 
 will occasion the separation of the surplus produce 
 of the soil into profit and rent. 
 
 The appropriation of the whole, or even of the 
 
133 
 
 best land, would cause rent to appear, whether the 
 divisions of employment were, or were not esta- 
 blished, and wliether or not the surplus produce 
 of the soil was brought to market, and thereby 
 acquired a value in exchange. Though there 
 should be no division of employment, no exchange 
 of commodities, and consequently no exchangeable 
 value, still it would be the interest of the person 
 who had acquired the command of labour and 
 capital, to give five quarters of corn for the use of 
 a fertile farm which yielded one hundred and 
 twenty quarters of corn on the expenditure of one 
 hundred quarters, rather than resort to an inferior 
 farm from which the expenditure of one hundred 
 quarters raised only one hundred and ten quarters ; 
 and it would still be the interest of the proprietor 
 who wanted the vigour or the stock to cultivate 
 for himself, to let out his farm for the largest 
 portion of the surplus produce which he could 
 prevail upon the capitalist to give. 
 
 But though exchangeable value, and price, are 
 not absolutely essential to the existence of rent, 
 yet, in practice, they are found to have a powerful 
 effect upon it. When the divisions of employment 
 
134 
 
 have been once thoroughly introduced, the greater 
 part of every man's wants is supplied by the pro- 
 duce of other men's labour ; and the greater part 
 of ^very man's capital is replaced, not by the 
 articles which he himself actually produces, but 
 by those which are produced by other capitalists, 
 and which he obtains by means of barter and ex- 
 change. Hence the amount of the return which 
 the capitalist obtains, does not depend wholly 
 upon the productive powers of the industry which 
 he immediately carries on, but also on the produc- 
 tive powers of all the other branches of industry 
 from which any of the ingredients of his capital 
 are derived. A diminution in the cost of raising 
 raw produce raises manufacturing profits, and an 
 improvement in manufacturing skill raises the rate 
 of profit in agriculture. The same causes also 
 influence rent. 
 
 When society is in a progressive state, an 
 additional accumulation of capital is effected in 
 the first instance; this additional capital then in- 
 creases the demand for labour, and by raising 
 wages, enables the labourer to increase the popu- 
 lation by bringing up a larger family ; and, lastly. 
 
135 
 
 a growing population creates an additional demand 
 for the necessaries of life. But an additional de- 
 mand for fogd and material must always precede 
 an additional demand for clothing and furniture ; 
 and hence the value of raw produce, as compared 
 with wrought goods, will rise above the level 
 marked by the cost of production ; while the value 
 of wrought goods, as compared with raw produce, 
 will sink below this level. This will elevate agri- 
 cultural, and depress manufacturing profit ; and by 
 consequence give the moveable capital of the 
 society a tendency to pour itself upon the soil. 
 
 Under these circumstances, if there remained to 
 be taken in, abundance of fertile lands, from which 
 additional supplies of food and material might be 
 obtained with the same expense of production as 
 before, raw produce would speedily sink to its 
 former level with respect to wrought goods ; and 
 in this manner agricultural and manufacturing 
 profits would be equalised. But if no new land 
 remained to be taken in, or none of a quality 
 capable of yielding additional supplies of food at 
 the same productive cost as before, then raw 
 material could not fall to its former level with 
 tespect to wrought goods ; and, consequently, the 
 
136 
 
 capitals invested in agriculture would continue 
 to yield a greater surplus than those invested in 
 manufactures. Persons possessed of circulating or 
 moveable capital would therefore be anxious to 
 transfer it to the soil; and their competition to 
 obtain farms would cause them to bid against 
 each other, until all the difference between the 
 return obtained from agriculture, and the return 
 obtained from manufactures, was offered to the 
 land proprietor in the shape of rent. 
 
 From what has been said in the preceding 
 paragraphs it follows, that there are three causes 
 necessary to the appearance of rent. 
 
 1st, That power in human industry by which 
 it replaces, with a surplus, the wealth expended in 
 carrying it on. 
 
 2nd, That inequality in the effective powers of 
 industry, and in the difference between the pro- 
 ductive cost and value of commodities which 
 renders the surplus of reproduction above expen- 
 diture greater in one occupation than in another. 
 
 3rd, The law of competition, equaHsing the 
 rate of surplus or profit in the different investments 
 of capital. 
 
 The operation of these three causes in giving 
 
137 
 
 rise to rent requires no elucidation. It is self- 
 evident, that if agricultural industry did not re- 
 produce a greater quantity of wealth than that 
 which is expended in carrying it on, notliing could 
 ever be given to a proprietor for the use of land ; 
 that if the surplus of reproduction above expendi- 
 ture were not greater in some occupations than in 
 others, no person would have an inducement to 
 offer a premium for the privilege of investing his 
 stock in any particular situation, or employment ; 
 and, that if individuals had not the inclination and 
 the power to transfer their capital to the most 
 beneficial branches of business, rent would not 
 appear as profits fell, and the diminution of the 
 surplus, in one employment of stock, would not 
 compel the capitalist to acquiesce in the diminu- 
 tion of his surplus in another. 
 
 ^ 2. — Errors of' Mr. Ricardo and his followers on the 
 sid>ject of Rent, 
 
 The principles of rent which I have endeavoured 
 to unfold, are, in several important particulars, 
 essentially different from the recent doctrines 
 which have been advanced by some political eco- 
 nomists of great and deserved celebrity. I agree 
 
138 
 
 with Mr. Ricardo (Principles of Political Eco- 
 nomy, page 491), that " rent is that portion of the 
 produce of the earth which is given to the land- 
 lord for the use of the soil ;" but I cannot agree 
 with him when he says (page 571), that " rent is 
 the difference of produce obtained with equal 
 capitals, and with equal labour, on the same, or on 
 different qualities of land." 
 
 Neither the gradations of soil, nor the suc- 
 cessive applications of capital to land, with de- 
 creasing returns, are in any way essential either to 
 the appearance or to the rise of rents. If all soils 
 were of one uniform quality, and if land, after 
 having been adequately stocked, could yield no 
 additional produce on additional capital being laid 
 out upon it, still the rise in the value of raw pro- 
 duce, and the consequent fall in manufacturing and 
 commercial profits, would cause a portion of the 
 surplus produce of the soil to assume the form of 
 rent. Upon a careful examination of the facts, we 
 shall discover, that resorting to inferior soils, and 
 applying additional capital to land with a de- 
 creasing return, instead of being the causes which 
 create and elevate rents, are the limiting circum- 
 stances which prevent rent from rising so high as 
 
1.39 
 
 it otherwise would rise. I will proceed to demon- 
 strate this : — 
 
 Let us suppose that the whole of the lands of 
 first quality are appropriated, that the population 
 is so limited, that the cultivation of these lands is 
 sufficient to supply the demand for food and 
 material, and that the rate of profit, both in 
 agriculture and manufactures, is fifty per cent. 
 
 This being the previous state of things, we will 
 suppose, further, that population and capital gra- 
 dually increase, and that the consequent increasing 
 demand for food raises the value of agricultural 
 produce, in relation to wrought goods, until manu- 
 facturing profit falls from fifty to forty per cent., 
 while no inferior soils can be resorted to, and while 
 additional capital, applied to the land already 
 under tillage, cannot create an additional quantity 
 of produce sufficient to replace itself. 
 
 Under these circumstances, it is self-evident, that 
 the persons who possess disposable capital would 
 have an interest in giving the proprietors of land, 
 for the use of the soil, nine per cent, out of the 
 fifty per cent, which cultivation yielded ; because, 
 after making this deduction for rent, the capitalist 
 would have one per cent, more than if he en- 
 
140 
 
 gaged in manufactures or trade. Many proprie- 
 tors, and particularly those whose possessions were 
 extensive, would prefer tlie receipt of rent to 
 the care and anxiety of cultivating their own 
 estates, and thus the relation between landlord 
 and tenant would be formed. 
 
 Should population and capital have still a 
 tendency to increase, the growing demand for 
 food might raise the value of raw produce in 
 relation to wrought goods, until manufacturing 
 and commercial profits fell to thirty, to twenty, 
 to ten, and to five per cent., which I assume to 
 be the lowest rate of return, for the sake of 
 which the capitalist will engage in business. It 
 is perfectly self-evident, that during this j^rocess, 
 it may be the interest of those who possess dis- 
 posable capital to give to the proprietors, for 
 the use of the soil, twenty, thirty, forty, and 
 forty-five per cent, out of the surplus of fifty* 
 per cent, yielded by agricultural industry. Thus, 
 profits might fall to their mininum, and rents rise 
 to their maximum, though no soil of an inferior 
 
 * The rise in the value of raw produce in relation to 
 wrought goods, would render the surplus upon agricultural 
 industry much more than fifty per cent. This, however, is 
 sufficient for our illustration. 
 
141 
 
 quality were resorted to ; and though no addi- 
 tional capital were applied to the land with a 
 diminished return. 
 
 We will now take a different case, and sup- 
 pose, that while the increasing demand for food 
 raises the value of raw produce in relation to 
 wrought goods, until manufacturing profits fall 
 from fifty to forty per cent., there are extensive 
 tracts of unappropriated land of second-rate qua- 
 lity, capable of yielding to the cultivator a return 
 of forty per cent, upon his capital. It is self- 
 evident, til at the appropnation and culture of 
 these tracts, could not have the effect of creating 
 or of elevating rent. Resorting to these lands 
 of second-rate quality would have a tendency 
 directly the reverse, and would render it impos- 
 sible for rent to rise beyond ten per cent, upon 
 the capital employed on the first quality of land. 
 Though population and capital should continue 
 to increase ; and, though the growing demand for 
 food should periodically enhance the value of raw 
 produce in relation to wrought goods, until manu- 
 facturing profit fell below, and agricultural profit 
 rose above, forty per cent. ; yet so long as there 
 
142 
 
 remained to be reclaimed any land capable of 
 returning forty per cent, to the cultivator, the 
 disposable capital of the community would be 
 poured out upon it; the supply of raw produce 
 would be periodically increased, and its value 
 reduced, until manufacturing profits rose up, and 
 agricultural profits fell back, to forty per cent. ; 
 and, consequently, no motive could possibly exist 
 to induce the person possessing disposable capital, 
 to ofifer the proprietors of the first quality of land 
 a rent exceeding ten per cent, upon the capital 
 employed in cultivation. 
 
 As soon as it is found that the tracts of second- 
 rate quality are inadequate to supply the increasing 
 demand for food and material, the value of raw 
 produce, in relation to wrought articles, will 
 permanently rise, and the rate of manufacturing 
 profit permanently fall below forty per cent. When 
 this occurs, it will become the interest of those who 
 possess disposable capital to offer the proprietors 
 of the lands of second-rate quality, a portion of 
 the produce for the use of the soil. Should the 
 rise in the value of raw produce cause manufac- 
 turing profits to fall to thirty per cent., then 
 
143 
 
 disposable capital would flow upon the unappro- 
 priated lands of third-rate quality, which, by the 
 supposition, are capable of yielding thirty per 
 cent, to the cultivator. Here, it is self-evident, 
 that the cultivation of the lands of third-rate 
 quality is the consequent, and not the antecedent, 
 of the creation and of the rise of rent upon the 
 lands of second-rate quality. 
 
 It is unnecessary to detain the reader by pur- 
 suing the illustration further. In every increase 
 in the demand for food, beyond what the quality 
 of the land actually under cultivation can supply, 
 the necessary effect of resorting to soils of an 
 inferior grade, is, not to cause rent to rise, but 
 to prevent it from rising higher. 
 
 Mr. Ricardo contends, that rent is the differ- 
 ence between the quantity of produce obtained 
 by a given capital from lands of superior quality, 
 and the quantity of produce obtained by the same 
 given capital from the worst quality of land re- 
 sorted to. Thus, if there be three qualities of 
 land under cultivation, from which the same given 
 quantity of the ingredients of capital raises respec- 
 
1J4 
 
 tively 100, 90, and 80 quarters of corn, then 
 the rent upon the first quality of land will be 20 
 quarters ; that upon the second quality will be 
 10 quarters ; while the third and last quality will 
 pay no rent at all. The same principle is main- 
 tained by Mr. M^CuUoch and Mr. Mill ; and con- 
 stitutes, indeed, the distinguishing doctrine of the 
 Ricardo School on the important subject of rent. 
 
 This doctrine is erroneous. Rent is not the 
 difference in the quantities of produce obtained 
 by equal capitals from lands of different degrees 
 of fertility. Should three qualities of soil be 
 under tillage, and should the same identical 
 quantity of the ingredients of capital raise from the 
 first 100 quarters of com, from the second 90, and 
 from the last 80; then the last quality of soil 
 yielding the 80 quarters, instead of paying no 
 rent at all, may pay a higher rent than the first 
 quality which yields 100 quarters. This I will 
 now demonstrate. 
 
 We will suppose, that the land of third-ratr 
 quality is in the immediate vicinity of a large 
 manufacturing and commercial town, and that 
 
145 
 
 to raise from it a produce of eighty quarters of 
 corn, requires an expenditure of thirty quarters 
 as food and seed, with a quantity of clothing, 
 implements, and furniture, equiv^alent to thirty 
 quarters. In this case, the surplus of return 
 above expenditure, will be thirty-three per cent. 
 
 Now, let us suppose again, that the land of first- 
 rate quality is in a remdte, interior situation ; and 
 that to raise from it a produce of one hundred quar- 
 ters, requires an expenditure of 9e¥e»ty quarters as 
 food and seed, with a quantity of clothing, imple- 
 ments, and furniture, which is exactly equal to the 
 quantity of these things expended in raising eighty 
 quarters from the inferior land ; but which, in con- 
 sequence of the low comparative value of raw pro- 
 duce, and high comparative value of wrought goods, 
 in this remote and thinly peopled district, is here 
 equivalent not to thirty, but to fifty quarters of 
 corn. In this case, the whole expenditure is, by 
 the supposition, equivalent to eighty quarters ; the 
 whole return is one hundred quarters; conse- 
 quently, the surplus of return above expenditure is 
 only twenty-five per cent. But, in the preceding 
 case, we saw, that upon the most inferior soil 
 
 L 
 
146 
 
 under cultivation, the surplus of return above 
 expenditure amounted to thirty-three per cent. 
 Hence it necessarily follows, that the law of com- 
 petition, in equalising the rate of profit, will cause 
 the worst land under cultivation to pay a rent 
 greater by eight per cent, upon the capital em-» 
 ployed, than that paid by the best land under 
 cultivation. If the best land yielded the culti- 
 vator no more than the customary rate of profit 
 on his capital, and consequently paid no rent at 
 all, then the worst land under cultivation would 
 pay a rent equivalent to eight per cent, upon th^ 
 capital employed in its cultivation. 
 
 In his able and very valuable work upon Politi- 
 cal Economy, Mr. M'Culloch admits^ that lands 
 situated in the immediate vicinity of a great manu- 
 facturing town, will pay a higher money rent thaii 
 lands situated in a remote interior district ; but he 
 contends, that the former will not pay a higher 
 corn or produce rent than the latter. The argu- 
 ment of Mr. M'CuUoch on this important point 
 had best be stated in his own words : — 
 
 " If all the lands in the empire were equally 
 weU situated, or were equally contiguous to mar- 
 
147 
 
 kets, the corn rents, and the money rents, of those 
 of equal fertility, would he everywhere equal. But 
 the difference of situation occasions very great dif- 
 ferences in the money rents paid for lands of equal 
 fertility. Thus, suppose two farmers employ equal 
 quantities of capital, as five thousand quarters each, 
 in the cultivation of farms of equal goodness, the 
 one situated in the immediate vicinity of London, 
 and the other in Yorkshire ; and suppose, farther, 
 that London is the market to which the produce 
 of both farms must be sent, and that the cost 
 of conveying corn from Yorkshire to London is 
 five shillings a quarter : under these circumstances, 
 if the gross produce of each farm was one thou- 
 sand quarters, of which the landlord received 
 one-fifth part, or two hundred quarters, as rent, 
 the money rent of the farm near London would 
 be £.50 a-year more than the money rent of the 
 farm in Yorkshire. For, as the quantity of corn 
 raised near London is not adequate to supply the 
 effectual demand; its price in that city must suffice 
 to pay those who bring any portion of the neces- 
 sary supplies from the greatest distance, as well 
 for the expenses of carriage as for those of pro- 
 duction: and the farmer in the immediate vici- 
 
148 
 
 nity, who gets this increased price for his prodiice, 
 will have to pay a proportional increase of money 
 rent ; just as the occupier of good land has to pay 
 an increase of corn or produce rent, as soon as 
 inferior lands are taken into cultivation. 
 
 " It has been said, however, that the Middlesex 
 farmer must not only pay a higher money rent, 
 but that he must also pay a higher corn rent : for, 
 if he dcfes not, it is contended that a quantity 
 of corn will remain to him as profits equal to that 
 which remains to the Yorkshire farmer ; and as 
 the value of corn in Middlesex is greater than in 
 Yorkshire, his profits will also be proportionally 
 greater, which cannot be the case. But the cir- 
 cumstance of their paying equal corn rents would 
 not really cause any discrepancy in their profits. 
 I have supposed that both farmers employ eqiial 
 quantities of capital : but it must be kept in view, 
 that, to whatever extent the value of raw produce 
 in Middlesex may exceed its value in Yorkshire, 
 thB value of the capital belonging to the Mid- 
 dlesex farmer must be increased to the same ex- 
 tent : and hence it follows, that the increased 
 value or price of the produce belonging to the last 
 as profits, is no more than equal to the additional 
 
1J9 
 
 value of the capital he has employed ; and that he 
 is not, consequently, in any respect in a better 
 situation than the other*." 
 
 In this passage there is a very singular error with 
 respect to the matter of fact. Mr. M'Culloch 
 assumes, that the value of the farmer's capital 
 rises in the same proportion with the value of 
 raw produce. Now, it is obvious, nay, almost 
 self-evident, that this could not be the case, unless 
 all the ingredients of the farmer's capital consisted 
 of such produce. Were his return homogeneous 
 with his expenditure, an increase in the value of 
 his return would be th^ same thing as an increase 
 in the value of his capital; and, by necessary 
 consequence, no rise or fall in the value of the 
 produce he might bring to market could affect the 
 rate of his profit. But as long as any portion 
 of the capital which the farmer expends in culti- 
 vation consists of wrought articles, or of foreign 
 commodities purchased with wrought articles, the 
 value of such capital will not increase in the 
 same proportion as the value of his produce. 
 
 Were it true, according to Adam Smith, that 
 com always retains the same value ; or, were 
 
 ♦ Principles of Political Economy. — Page 28.'3. 
 
tdO 
 
 it tnie, according to the French Economists, that 
 the value of wrought goods is always equal to 
 the sum of the values of thp food and material 
 from which they are prepared ; then, in either 
 case, it might be correct, as stated by Mr. M*Cul- 
 loch, that the value of the farmer's capital rises 
 in the same proportion with the value of his 
 produce. But I have already fully shown that, 
 on these points, Adam Smith and the French 
 Economists are in error, and it is unnecessary 
 to traverse the ground again. 
 
 § 3. — ilrror cyfMr. Malihus respecting the Nature 
 of Rent. 
 
 Mr. Malthus says*, "It has been justly ob- 
 served by Adam Smith, that no equal quantity of 
 productive labour employed in manufactures can 
 ever occasion so great a reproduction as in agri- 
 culture. If we suppose the rents of land taken 
 throughout the kingdom to be one-fourth of the 
 :gross produce, it is evident, that to purchase the 
 same value of raw produce by means of manu- 
 factures, would require one-third more capital, 
 
 * Grounds of an Opinion on the Policy of restricting the 
 Importation of Foreign Agricultural Produce. — Page 35, 
 
151 
 
 Every five thousand pounds laid out on the land, 
 not only repays the usual profits of stock, but 
 generates an additional value which goes to the 
 landlord. And this additional value is not a 
 mere benefit to a particular individual, or set 
 of individuals, but affords the most steady home 
 demand for the manufactures of the country, the 
 most effectual fund for its financial support, and 
 the largest disposable force for its army and navy." 
 
 These few sentences abound with errors and 
 misconceptions. The shortest way of demon- 
 strating this, will be to state a case. 
 
 Let us suppose, that while land of the first 
 quality continues so abundant that no rent is 
 paid, A. and B., two farmers, expending each 
 one hundred quarters of corn, and one hundred 
 suits of clothing, raise between them eight hun- 
 dred quarters ; and C. and D., two master-manu- 
 facturers, expending each one hundred suits of 
 clothing, and one hundred quarters of corn, 
 fabricate between them eight hundred suits. In 
 this case, the surplus or profit will be one hundred 
 per cent. ; a quarter of corn will be of equal 
 value with a suit of clothing ; and half the com 
 
152 
 
 of our two farmers, and half the clothing of our 
 two manufacturers (should these commodities be 
 brought , to market) will become the reciprocal 
 equivalents and purchasers of each other. 
 
 Now, let us suppose that the land which A. 
 cultivates becomes so inferior, that his expenditure 
 of one hundred quarters of corn and one hundred 
 suits of clothing raises three hundred quarters, 
 instead of four hundred quarters ; and then B., 
 who continues to raise four hundred quarters, will 
 be compelled to pay one hundred quarters as 
 rent; and as the corn raised on the best farm 
 must be of equal value with that raised on the 
 worst, three hundred quarters of corn, which 
 formerly could purchase only three hundred suits 
 of clothing, will now purchase four hundred suits. 
 
 It is self-evident, that this diminution in the 
 productive powers of /igriculture will be injurious 
 to the society, and to every individual composing 
 the society, except the proprietor of the superior 
 farm, to whom a rent is paid. The society is 
 injured, because the quantity of agricultural pro- 
 duce annually raised is reduced from eight hun- 
 dred to seven hundred quarters of corn ; A., the 
 
153 
 
 cultivator of the inferior farm, has his profits 
 diminislied, in consequence of his being able to 
 produce only three hundred quarters of corn with 
 the same expenditure which formerly produced 
 four hundred quarters ; B., the cultivator of the 
 undeteriorated farm, is injured by having his profit 
 diminished, from the necessity of paying one hun- 
 dred quarters of corn as rent ; and C. and D. are 
 injured by that reduction in the rate of manufac- 
 turing profits which is the necessary consequence 
 of then- giving a greater quantity of their fabrics 
 for the same quantity of raw produce. 
 
 But let us suppose that a free trade is esta- 
 blished; that one hundred quarters of coni, and 
 one hundred suits of clothing, expended in manu- 
 factures, will give wrought goods sufficient to 
 purchase four hundred quarters of corn from the 
 foreign grower ; that A. transfers to manufactures 
 the capital of one hundred quarters and one hun- 
 dred suits, which were invested in the inferior 
 farm, yielding only three hundred quarters ; and 
 that B. is no longer under the necessity of paying 
 one hundred quarters as rent for the superior farm- 
 
 In this case it is obvious that the society, and 
 
i5i 
 
 tvery individual composing the society, except the 
 land proprietor, would receive an important be- 
 nefit. The general wealth would be increased by 
 one hundred quarters of com ; A. in transferring 
 his capital from the inferior farm to manufactures, 
 and exchanging his wrought goods for four hun- 
 dred quarters of corn, will acquire a higher rate 
 of profit, while he enriches the community. B., the 
 cultivator of the superior farm, will be enabled to 
 retain in his own hands the one hundred quarters 
 of com which he formerly paid as rent ; and C. 
 and D. will obtain a higher profit, in consequence of 
 being enabled to replace their expenditure of food 
 and material with a less quantity of their wrought 
 goods. The fall in the value of raw produce will 
 be accompanied not by a reduction, but by an 
 augmentation of wealth ; the revenue which ceases 
 to appear in the form of rent, will show itself 
 in the shape of higher profits ; and commodities, 
 increased in quantity by the improvement in the 
 distribution of industry, will be the reciprocal 
 equivalents and purchasers of each other, just as 
 effectually as when their quantity was diminished 
 by the cultivation of inferior soils. 
 
155 
 
 These illustrations, it is presumed, are sufficient 
 to demonstrate that the propositions contained in 
 our quotation from Mr. Malthus are conformable 
 to truth only when they are conversely stated. It 
 has been erroneously observed by Adam Smith, 
 that no quantity of productive labour employed 
 in manufactures can ever occasion so great a 
 reproduction as in agriculture. If we suppose the 
 rents of land taken throughout the kingdom to be 
 one-fourth of the gross produce, it is evident that 
 to purchase this value (quantity) of raw produce by 
 means of manufactures (for it would be purchased 
 only in countries where it was relatively cheaper), 
 would require less capital. The additional value 
 of raw produce, which causes the surplus return 
 upon capital to be separated into the distinct 
 channels of rent and profit, is a mere benefit 
 to individuals, and does not afford a more steady 
 demand for the manufactures of the country, nor 
 the most effective fund for its financial support, 
 and for the maintenance of a disposable force. 
 
 All the difference between the surplus obtained 
 upon those portions of capitals which are invested 
 in the most unfavourable situation, and the surplus 
 
156 
 
 obtained upon portions of capital which are in- 
 vested in more favourable situations, is rent. 
 Now, the more unfavourable the situations into 
 which the last portions of capital are forced, 
 the greater will be the difference between the 
 surpluses obtained from them, and the surpluses 
 obtained from those other portions of capital 
 which were previously invested in more favourable 
 situations ; or, in other words, the higher rent 
 will rise. But the necessity of investing capital 
 in more unfavourable situations, and the law of 
 competition, bringing the rate of profit throughout 
 all the employments of stock to an equality with 
 the surplus obtained in these more unfavourable 
 situations, must necessarily be injurious to every 
 individual in the society, except the land pro- 
 prietor. — He, and he only, can be benefited by 
 the necessity of resorting to soils of an inferior 
 quality. 
 
 \ 4. — Effect of a free Importation of Corn upon the 
 Interests of landed Proprietors. 
 
 Though the necessity of resorting to inferior 
 iils, if brought on by the progress of the country 
 
 soil 
 
157 
 
 in wealth and population, is highly beneficial to 
 the land proprietor, yet it will probably be found 
 that he can derive no advantage from forcing this 
 necessity prematurely upon us by restrictions on 
 the importation of foreign corn. That constant 
 desire on the part of individuals to turn their 
 capital to the best account, which equalises the 
 rate of profit throughout the different districts of 
 a country, tends also to equalise it throughout 
 the different countries of the world. If in France 
 the customary rate of profit were twenty per cent., 
 while in England it were only ten per cent., then, 
 allowing property to be equally secure in the two 
 countries, British capital would inevitably flow to 
 France. If the inequality in the rate of profit 
 arose from the higher degree of skill possessed by 
 France in the application of her labour, it would 
 be corrected as soon as England adopted the more 
 accurate divisions of employment, or copied the 
 superior machinery of her neighbour. But if the 
 inequality arose from England's having resorted to 
 soils inferior to those under cultivation in France, 
 it could not be corrected; and consequently the 
 efflux of British capital could not be checked. 
 
15S 
 
 until tlie progress of wealth and population in 
 France compelled her to obtain additional supplies 
 of agricultural produce from soils incapable of 
 returning a larger surplus than those under cul- 
 tivation in England. No superiority of skill in 
 the application of labour could enable England 
 to retain in tillage soils very much inferior to those 
 under the plough in France. The divisions of 
 employment, and the use of machinery, on which 
 the superiority in the application of labour depends, 
 would be speedily copied by an intelligent people 
 living under a free Government ; and when copied, 
 they would immediately raise the rate of profit in 
 France, in the same proportion in which they had 
 raised it in England : and the equilibrium which 
 had been established, when different degrees of 
 skill in the application of labour counterbalanced 
 different degrees of fertility in the soil, would be 
 again disturbed when skill became equal, and the 
 inequality in the soil resorted to for the supply 
 of food and material was left uncounteracted to 
 produce its natural effect. Should this inequality 
 be considerable, the rate of profit would be much 
 higher in France than in England ; and the desire 
 
159 
 
 of improving their condition becoming too power- 
 ful for those associations which bind men to their 
 native land, capitalists would emigrate with their 
 productive stock from the former to the latter 
 country. 
 
 This tendency of capital to pass from countries 
 in which the profits of capital are low, to those in 
 which they are high, renders it impossible to force 
 the rent of land to any considerable extent, or 
 for any considerable period, above its natural level 
 by means of restrictions on the importation of 
 foreign corn. Under any given powers of industry, 
 rate of wages, and vicinity to markets, the sur- 
 plus produce of the soil which supplies rent and 
 profit is a given quantity ; and any arrangement 
 which causes a greater portion of this surplus 
 to appear in the form of rent, necessarily de- 
 presses profits. But to depress profit is to force 
 capital abroad. Hence, in a country which has 
 started before her neighbours in wealth and 
 population, and which cannot obtain additional 
 supplies of food and material from her own terri- 
 tory, without resorting to soils inferior in quality 
 or situation to those cultivated in other growing 
 
160 
 
 countries, restriction on the importation of foreign 
 corn, instead of forcing inferior tracts into tillage, 
 and thereby raising the rent of the more fer- 
 tile and better situated lands, will cause capital 
 to emigrate. Profits tend to a common level, 
 not only throughout the districts of a country, 
 but also throughout the countries of the world. 
 When land proprietors endeavour to acquire by 
 artificial regulations a greater portion of the net 
 surplus derived from the soil, than in the actual 
 circumstances of the society would naturally flow 
 to them, they force productive capital abroad, and 
 check the prosperity of the country without en- 
 riching themselves. 
 
 It must be admitted, however, that in balancing 
 the advantages to be derived from removing our 
 capital to another country, the expectation of an 
 increase of wealth is not the only circumstance 
 which influences us. In all our practical conclu- 
 sions from the principle, that the profits of stock 
 throughout all the branches of domestic industry 
 conform to a common level, allowance must be 
 made for different degrees of security or risk, 
 I'espectability or discredit. When we extend the 
 
161 - 
 
 principle of the equalisation of profits to the 
 several commercial countries of the world, it is 
 liable to similar limitations. When the govern- 
 ment of France was an absolute monarchy, and 
 when those who embarked their stock in the use- 
 ful and, therefore, honourable enterprise of promot- 
 ing her manufactures or commerce, were depressed 
 and degraded in public estimation, an Englishman 
 would not have consented to transfer his capital to 
 France, unless he had been tempted by a rate 
 of profit very greatly exceeding that which he ob- 
 tained at home. But if a constitutional monarchy 
 should be permanently established in France, if 
 the absurd and pernicious maxims of feudal aristo- 
 cracy do not regain an ascendancy, and if the 
 property which is embarked in the great national 
 work of reproduction be permitted to exert its 
 natural influence, then a much less difference be- 
 tween the rate of profit obtained jn England and 
 in France will be sufficient to attract capital from 
 the former to the latter country. Under a free 
 constitution, in which property is fairly repre- 
 sented, the enjoyment of liberty, and the pride 
 and satisfaction resulting from a participation in 
 
 M 
 
162 
 
 political power, may be regarded as a species of 
 immaterial profits, counterbalancing the deficiency 
 in the mere material return, and forcing into cul- 
 tivation, by means of a moral bounty, soils very 
 far inferior to those under tillage in countries less 
 happily circumstanced. 
 
 These considerations lead to political conclusions 
 highly important and consolatory. Landed pro- 
 prietors have a direct pecuniary interest in main- 
 taining and extending the liberties of their country. 
 From the essential order of society, they are in the 
 constant receipt of a retaining fee for advocating 
 the cause of freedom. The more the principles of 
 economical science are understood, the more gene- 
 rally will it be acknowledged, that the proprietors 
 of the soil are the natural leaders of the people. 
 Every reform^ every amelioration of tlie institu- 
 tions of a country, has a tendency to check the 
 emigration of capital and to raise the rent of land. 
 
 But let us return from these incidental political 
 speculations to the question properly before us» 
 namely, whether the proprietors of the soil have 
 any real permanent interest in restricting the im- 
 portation of foreign agricultural produce. 
 
163 
 
 Facilities in the production of those manu- 
 factured articles which are expended in cultiva- 
 tion, are just as efficacious in enabling us to obtain 
 a surplus from the soil, as facilities in the pro- 
 duction of those articles which the soil itself sup- 
 plies. Every reduction in the value of wrought 
 necessaries and implements enables the farmer to 
 pay a higher rent. If we take the ordinary rate 
 of agricultural profit at ten per cent., then a farm 
 yielding one hundred quarters of corn, and re- 
 quiring an expenditure of fifty quarters for food 
 and seed, will pay a rent of twenty quarters, pro- 
 vided the value of the wrought articles consumed 
 upon the farm be thirty quarters*, and will pay 
 a rent of thirty quarters, provided the vahie of 
 the wrought expended on cultivation fkll to twenty 
 quarters. 
 
 The consideration of these principles cannot 
 fail to impress us with the conviction of the deej^ 
 interest which land proprietors have in the exten- 
 sion of manufactures and commerce. It is only 
 in densely peopled countries in which the com- 
 parative value of wrought necessaries is low, that 
 high corn, or produce rents can be paid. Thi» 
 
161 
 
 principle is of such vast practical importance, that 
 it will be proper to investigate it in detail. 
 
 Ina great manufacturing and commercial town, 
 supplies of agricultural produce of the same 
 quality will sell for the same price, whether they 
 come from a neighbouring, or from a remote 
 district. Consequently, if the neighbouring and 
 the remote districts should be of equal fertility, 
 and should they, upon the application of equal 
 quantities of the ingredients of capital, yield equal 
 quantities of produce, it is obvious that the former 
 would afford to the proprietor a much higher 
 rent than the latter; because, on the latter, the 
 surplus of return above expenditure would be less 
 than on the former, by the difference of the cost 
 of carriage upon sending produce to market, and 
 upon bringing back manufactured articles. 
 
 Both districts, upon the expenditure of one 
 hundred quarters of corn and one hundred suits 
 of clothing, yield three hundred quarters ; and in 
 the manufacturing town, a quarter of com and a 
 suit of clothing are of equal value. The culti- 
 vator of the near district, however, expends four 
 quarters in sending his disposable corn of two 
 
165 
 
 hundred quarters to market, and in bringing back 
 the wrought goods, for which he pays one hundred 
 quarters, so that his nett surplus will be ninety- 
 six; while the cultivator of the remote district 
 expends, for the like purpose, twenty quarters, 
 and, therefore, has a nett surplus of no more than 
 eighty quarters. But as competition equalises 
 the rate of profit, the farmer who expends sixteen 
 quarters less on carriage, will be obliged to pay 
 sixteen quarters more as rent. 
 
 Assuming the rate of profit to be twenty-five 
 per cent., then the farmer of the near district who 
 expended one hundred quarters on seed and food, 
 one hundred quarters in the purchase of wrought 
 goods, and four quarters on carriage, would, over 
 and above the profit of twenty-five per cent, upon 
 his whole expenditure, have an additional surplus of 
 forty-five quarters to pay to the proprietor as rent ; 
 while the farmer of the remote district, who, with 
 the same expenditure for food, seed, and wrought 
 articles, laid out twenty quarters on carriage, would, 
 over and above the profit of twenty-five per cent, 
 upon his whole expenditure, have an additional 
 surplus of only twenty-five quarters to pay as rent. 
 
166 
 
 Now we will suppose that the landed proprie- 
 tors, in the immediate neighbourhood of our ma- 
 nufacturing towns, are not satisfied with receiving 
 for the me of their land, a quantity of produce 
 greater, by the difference in the cost of carriage, than 
 that which is received for the use of land of equal 
 fertility in the remote districts ; and that they 
 enter into a successful qombination for excluding 
 the corn of the remote districts from the market. 
 
 The first effects of this combination, for limit' 
 ing the supply of raw produce, would be to raise 
 its value in relation to wrought goods, and, con- 
 sequently, to reduce the rate of manufacturing 
 profit. Assuming an expenditure of one hundred 
 quarters of com and one hundred suits of clothing 
 produces, indifferently, either three hundred quar- 
 ters, or three hundred suits ; then, if the combina- 
 tion of proprietors cause ten quarters to be equal 
 in value to nineteen suits, the profits of the 
 pianufacturer would be reduced to about five per 
 cent., while the surplus obtained on agricultural 
 industry would rise to about ninety -five per cent. 
 Now, as competition equalised the rate of profit, 
 (ill this surplus beyond five per cent, would appear 
 
167 
 
 hi tlie form of rent. The produce rent of a fann 
 yielding three hundred quarters to an expenditure 
 of one hundred quarters and one hundred suits, 
 would rise from forty-five quarters, the amount 
 formerly paid, to about one hundred and forty 
 quarters. 
 
 The land proprietors would continue to enjoy 
 these exorbitant rents if the manufacturing town 
 in their immediate vicinity retained its former 
 wealth and population. But this would be im- 
 possible. As the increasing value of food and 
 material reduced manufacturing profit from 
 twenty-five to five per cent., manufacturing 
 capital and skill would inevitably emigrate to 
 those remote districts, where the low value of 
 the products of the soil miglit enable them to 
 realise their former profits. The land proprietors 
 would speedily discover that they had destroyed 
 that advantageous market for their produce, 
 the exclusive supplying of which they had un- 
 justly endeavoured to secure. Their relative 
 position would be changed ; their districts would 
 now be the remote and unfavourably situated dis- 
 tricts, and their rents wotdd be reduced below 
 
168 
 
 what they had originally been by all the increased 
 cost of carriage which must now be incurred in 
 conveying their produce to a distant manufacturing 
 town, and in bringing back from thence the clothing 
 and other wrought goods required in cultivation. 
 
 Thus their selfish policy would counteract itself ; 
 and their unjustifiable combination, for the purpose 
 of enriching themselves, at the expense of the 
 industrious classes, would end in reducing their 
 rents considerably below what they would have 
 been under a system of free trade and open 
 competition. 
 
 Let us apply these principles: — The landed 
 proprietors of England possess the important 
 advantage of immediate vicinity to the largest 
 and most flourishing manufacturing towns in the 
 world ; and the consequence is, that, in proportion 
 to its fertility, land in England pays a higher 
 rent, whether estimated in produce or in money, 
 than in any other country. Let not senseless 
 avarice destroy the sources of the golden eggs. 
 Let not the proprietors of England, by restricting 
 the importation of foreign agricultural produce, 
 raise the value of such produce in our markets, and 
 
169 
 
 thus depress the rate of profit, until the seats of 
 manufacture are transferred to France, or Hol- 
 land, or Germany. No proposition in Euclid 
 admits of a more rigid demonstration, than that 
 the highest rents will be paid in countries in 
 which manufacturing industry is carried to the 
 greatest height. But it is obviously impossible 
 that manufactures should continue to flourish 
 in a country where restrictions upon the impor- 
 tation of corn raise the value of raw produce 
 in relation to wrought goods, and thereby depress 
 manufacturing profits below the rate prevailing in 
 the neighbouring countries. If we do not freely 
 import foreign produce, our manufacturing supe- 
 riority cannot be maintained, and, by necessary 
 consequence, our high comparative rents cannot 
 continue to be paid. 
 
 Hitherto, our arguments have been applied to 
 the rent of lands employed in the growing of corn 
 and other necessaries. The principle, however, 
 that the landed proprietors of a country excelling 
 in manufactures, are benefited, rather than injured, 
 by a free importation of foreign produce, has 
 incalculably greater force when applied to the 
 
iro 
 
 rents paid by those lands whicli are employed 
 in producing superfluities. 
 
 When considering the effects of monopolies, 
 I endeavoured to shew that they might mise 
 tlie exchangeable value of superfluities in a much 
 greater degree than it would be possible for them 
 to raise the value of necessaries. A day's sul> 
 sistence can never, for a permanency, be worth 
 more than the product obtained by the expendi- 
 ture of a capital consisting of a day's subsistence ; 
 because, if it became of greater value, the capitalist 
 who advanced a day's subsistence to a productive 
 labourer, instead of obtaining a profit, would sustain 
 a loss, and would discontinue a species of industry go 
 ruinous to him. An increase in the value of su}>er- 
 fluities has no real effect in absorbing profit. In 
 proportion as the exchangeable value of subsis- 
 tence risCvS, as compared with the value of the 
 products of a capital consisting of a day's sub- 
 sistence, profit must necessarily fall ; and a greater 
 portion of the surplus produce of the better soils 
 must as necessarily appear in the form of rent. 
 But, as we have just seen, there is a necessary 
 limit to this fall of profit and rise of rent, 
 
171 
 
 created by the bounty which it offers on the 
 tranference of capital. No monopoly of the home 
 piarket, therefore, whether natural or artificial, 
 can, for any considerable period, raise the value 
 pf corn, and the rent of com land, very much 
 above their level in other countries, equal with 
 respect to the quality of land under cultivation, 
 and to the degree of skill with which labour is 
 applied. 
 
 But a monopoly of the home market, whether 
 
 natural or artificial, when it affects superfluities, 
 may raise their value, and increase the rent of 
 the land which produces them, to almost any 
 conceivable extent above the level of otlier 
 countries. The reason is obvious: — an increase 
 in the value of superfluities does not diminish 
 profit. As subsistence is always a main ingre- 
 dient in the advance wliich puts productive 
 industry in motion, a rise in the value of sub- 
 sistence, as compared with superfluities, reduces 
 the profit upon preparing superfluities; while, 
 on the eontj^ry, an increase in the value of 
 superfluities, as compared with subsistence, raises 
 the profit obtained by preparing superfluities. 
 
172 
 
 Superfluities not being the things expended in 
 reproduction, increasing their value with reference 
 to the value of the things which are expended in 
 production, may cause, in the branches of in- 
 dustry which prepare them, the surplus of repro- 
 duction above expenditure to exceed the general 
 level by ten, or twenty, or one hundred per 
 cent. But the law of competition forbids that 
 the farmer who raises articles of superfluities 
 should obtain a higher rate of profit than the 
 farmer who cultivates the last quality of soil 
 resorted to for the supply of subsistence. AH 
 the difference between the surplus products which 
 they respectively create, will go, in the form 
 of increased rent, to the proprietor of the soil 
 upon which his superfluities are raised. 
 ^ From the principles I have here endeavoured 
 to establish, it follows that, in a rich and populous 
 country, the lands which supply fresh meat, fresh 
 butter, milk, vegetables, hay, and all those things 
 not strictly component parts of subsistence, which, 
 from their bulk or perishable nature, sell in the 
 home market at a monopoly price, may aiford the 
 proprietor a much higher rent than it is possible 
 
173 
 
 for him to obtain from any lands of equal quality 
 employed in raising corn. If an unrestricted 
 importation of corn were permitted, raising the 
 rate of profit, and thereby occasioning a rapid 
 increase of capital and population, no assignable 
 limits could be set to the growing intensity in 
 the demand for gardens, pleasure grounds, and 
 grass farms, nor to the progressive rise in the rental 
 of the country. 
 
 Thus, it appears, from abundant evidence, the 
 class of land proprietors have not, any more than 
 the class of capitalists and of labourers, a permanent 
 interest in imposing restrictions on the importation 
 of foreign corn. 
 
^art tifte ^econti. 
 
 ON THE EXCEPTIONS AND LIMITATIONS TO 
 WHICH THE GENERAL PRINCIPLES OF THE 
 EXTERNAL CORN TRADE ARE LIABLE* 
 
 CHAP. L 
 
 On the Question^ Are the Principles respecting 
 a free external Trade in Corn liable to any 
 Limitations in their Application to the parti-* 
 cular Case of a Country^ which, hy Restrictions 
 on Import^ and Bounties upon Export, in* 
 fringes on the Liherfy of Commerce, in other 
 Articles ? 
 
 1 HAT the irregularity of the seasons, in supply- 
 ing food, diminishes as territory extends: — that 
 equalising the supply of subsistence throughout 
 all the districts of the world, and periods of the 
 year ; accumulating grain in store-houses and gra* 
 
175 
 
 naries, and carrying forwaixi the sujK^ifluity of 
 abundant harvests to compensate the wants of 
 deficient ones, not only obviate the alternate re- 
 currence of superfluity and famine, but extend 
 cultivation, and augment the numbers of man- 
 kind : — that, in a country where the growing price 
 of corn is relatively low, and where relief from im- 
 portation cannot be obtained, until the markets are 
 ruinously elevated above the ordinary level, a free 
 export trade, occasioning, in average years, a sur- 
 plus produce, is the only means by which deficient 
 years can be provided for : — that, in countries where 
 the growing price of corn is so high, that, in year* 
 of overflowing crops, superfluity cannot be re- 
 moved, until the markets have sustained an ex- 
 traordinary fall, unrestricted importation, throwing 
 out of cultivation such inferior lands, as require for 
 the production of a given produce, a greater ex- 
 pense of labour and capital than is requisite in 
 other growing countries, is the most effectual 
 means of rendering prices steady : — and, that per- 
 fect freedom of intercourse, uninterrupted, either 
 directly or indirectly, by legislative interference. 
 
176 
 
 and allowing industry to take w hatever direction 
 individuals may find most conducive to their inte- 
 rest, accelerates the growth of wealth and the 
 accumulation of capital, elevates wages, profits, 
 and, ultimately, rents ; leads agricultural states, 
 by the shortest and surest road, to commercial 
 prosperity, and holds out, in countries which have 
 acquired manufacturing advantages, the only per- 
 manent and legitimate encouragement that agri- 
 culture can receive. — These are principles, the 
 abstract truth of which is as capable of as rigid a 
 demonstration, as any political or physical propo- 
 sition 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 inquire, 
 whether the principle of unrestricted freedom, in 
 the external corn trade be appUcable to the par- 
 
177 
 
 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 
 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 in com, appears, upon the face of it, singu- 
 larly preposterous. Those 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 
 
 N 
 
178 
 
 case of manufactures, 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 
 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 protecting duties 
 to manufacturing industry, is too important to 
 be dismissed with an examination so brief and 
 popular. We must view 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 
 
179 
 
 manufacturing class should, by restriction on the 
 importation of com, be compelled to pay the for- 
 mer something more for their bread. 
 
 This principle of equal dealing, and even-handed 
 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 inquire, 
 whether it may not prove a dangerous deserter 
 from the cause, into the service of which some 
 injudicious leaders have preposterously pressed it. 
 
 Protecting duties and bounties, do, indeed, com. 
 pel the agricultural interest to purchase some 
 articles at a dearer rate than if the trade in them 
 were lefl 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 houste-car- 
 penters, — in fact, the whole community, with the 
 e^iception of those persons who work up the arti- 
 cles which might be obtained cheaper from abroad, 
 
180 
 
 are equally partakers in the injury inflicted by 
 the exclusion of foreign manufactures from our 
 markets. 
 
 How, then, can the principle of equal dealing, 
 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 ? 
 Nay, 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 purchase some wrought 
 goods at a dearer rate than is necessary, would 
 cause them tojpurchase their bread dearer also ? 
 
 The case stands exactly thus : A. and B. 
 sustain 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 agricul- 
 turist for the monopoly granted to the manu- 
 
]8I 
 
 facturers, by granting a second monopoly, in the 
 important article of corn, against all other classes 
 of the community, instead of being conformable to 
 the principle of fair and impartial dealing, would 
 be a flagrant violation of it. Enlightened states- 
 men (and His Majesty's present ministers are 
 eminently entitled to the appellation), on ascertain- 
 ing that the agricultural interest, in common with 
 other orders of the state, sustained an injury from 
 the protection given to the manufacturers of those 
 particular articles which might be brought cheaper 
 from abroad, will, with all the caution which is 
 necessary in conducting political change, and with 
 a due regard to the interest and indemnification of 
 those who might have embarked their capital, or 
 served their time in the protected trades, seek to 
 remove the injurious restraints upon industry; 
 but surely it can never enter their contemplation, 
 to correct one evil by the infliction of a second ; or, 
 while proclaiming their belief in the benefits of 
 unrestricted intercourse, to establish, on the prin- 
 ciple of equal dealing, additional monopolies for 
 indemnifying a single class, at the general expense. 
 Those persons who are employed in the fabri- 
 
183 
 
 cation of such articles as we might obtain cheaper 
 from abroad, do not form a very large proportion, 
 even of our manufacturing population. But these 
 are the only persons on whom the exclusion of 
 foreign manufactures can possibly confer a be- 
 nefit ; and, therefore, even admitting the strange 
 doctrine, that the agriculturist 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 com- 
 mercial 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 com were exempted from all legislative inter- 
 ference, while other branches of industry con- 
 tinued to possess monopolies in the home market, 
 and bounties extending their foreign sales, such 
 exemptious would, indirectly, operate as the most 
 severe and prejudicial restraint, and cause those 
 engaged in the growing of corn, to withdraw their 
 
183 
 
 capital from that concern, for the purpose of em- 
 ploying it in those favoured channels to whjeh 
 such artificial advantages were continued. 
 
 This objection to admitting, under the present 
 circumstances of this country, the principle of an 
 unrestricted trade in com, 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 which 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 
 British 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 equal amount, the foreign demand for our other 
 manufactures. 
 
 Thus, then, it appears, that those legislative 
 measures of monopoly and bounty, which are sup- 
 
184 
 
 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, w^hich, under a free trade, he would 
 find, in carrying on the nicreased 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 
 capital of the country. 
 
 But we have not yet fully unfolded the injury 
 which the industrious classes sustain from the 
 duties laid on for their protection ; nor the extent 
 to which monopolies and bounties, instead of 
 drawing 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 situa- 
 
185 
 
 tion, and moral habits, give her an advantage, she 
 not only renders the labour and capital thus em- 
 ployed, 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, the quantity of labour and capital vi^hich 
 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 rr-^sume 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 
 
. 186 
 
 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 which, consequently, require for their esta- 
 blishment protecting duties and monopolies, can- 
 not 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 belong, will effectually beat us 
 out of foreign markets ; and, when we have satisp 
 fied the demand of the domestic consumer, all further 
 increase of manufacturing stock will be impossible. 
 To whatever extent we refuse to buy from 
 foreigners, 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- 
 
187 
 
 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 
 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 
 lowering 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 eiToneous, 
 the doctrine it has been brought forward to sup- 
 port falls instantly to the ground. These very 
 bounties and protecting duties, which, while iji- 
 tended 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 manu- 
 factures and commerce, must, in the most effectual 
 manner, withhold the grower of corn from trans- 
 
188 
 
 ferring his stock into those channels of industry 
 which receive such pernicious favour. Commerce 
 and manufactures receive, from legislative encou- 
 / ragement, no advantage ; requiring, in order to 
 restore a due equilibrium between the different 
 branches of industry, that artificial encouragement 
 should be extended to agriculture. On the con- 
 trary, the trading classes sustain the deepest injury 
 from every infringement on commercial liberty ; 
 and bounties on the exportation of domestic arti- 
 cles, and protecting duties laid on the introduction 
 of foreign ones, instead of being a reason for grant- 
 ing the corn grower a monopoly of the home 
 market, constitute an argument for leaving the 
 trade in corn free; and require that, as some com- 
 pensation for the peculiar injury the trading classes 
 sustain, in having a forced and unnatural direction 
 given to their industry, manufacturers and traders 
 should be permitted to purchase their food where- 
 ever it can be obtained at the cheapest rate. 
 
 It is hoped, that from these illustrations, it will 
 appear sufficiently evident, that the bounties and 
 protecting duties, by which our manufacturers 
 have been attempted to be favoured, cannot have 
 
189 
 
 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 
 domestic grower as an indirect and pernicious 
 restraint. 
 
 Bounties and protecting duties granted to our 
 silk manufactures 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 
 quantity of capital in some particular employment ; 
 but then, it is by diminishing the general mass 
 of capital that might be profitably turned to manu- 
 facture 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 
 
190 
 
 power of purchasing the articles, which we can 
 furnish at a cheaper rate than they ; and destroy 
 those international, and mutually beneficial divi- 
 sions of labour, that are at once the cause, and the 
 effect of foreign trade : while, if we were freely to 
 receive the productions of foreign industry, a much 
 greater quantity of domestic articles would be sent 
 abroad to pay for them ; and, in order to carry on 
 the increased intercourse with other nations, a 
 much larger portion 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 industry, have a tendency, not to enlarge, but 
 to choke up the channels of trade ; not to draw 
 capital from the growing of corn, but rather, by 
 limiting the quantity of stock that can be em- 
 ployed in international intercourse, to pour a 
 greater proportion of it upon the soil. Under the 
 enlightened system of commercial legislation which 
 is now beginning to prevail, it is to be hoped, that 
 all prohibitions and protecting duties for forcing 
 
191 
 
 exotic manufactures will be gradually abolished, 
 and all pretexts for continuing restrictions on the 
 trade in corn be removed. 
 
 It may be urged, perhaps, that if protecting 
 duties, laid on to favour domestic manufactures, 
 did not force industry from its natural direction, 
 the wrought goods, which, under a general free- 
 dom of intercourse, we received from abroad, 
 might be paid for, not by other wrought goods, 
 but by the produce of our soil; and that, there- 
 fore, the protecting 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. 
 In that country, com, from the cost of its pro- 
 duction being relatively low, forms the staple 
 article of foreign trade ; and, consequently, prohi- 
 bitory duties upon the import of wrought goods, 
 would there operate as interdictions upon the ex- 
 portation of agricultural produce. 
 
 But England is in a situation directly the reverse 
 of this. Here we have acquired extraordinary 
 advantages in manufacturing industry, while the 
 
192 
 
 growing price of our corn is relatively 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 increased, and, consequently, its price 
 reduced, until it could be sent abroad with a profit. 
 Such artificial encouragements, extended to agri- 
 culture, 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 
 com, only by increasing the cost of its production ; 
 that is, as cost of production 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 foreign demand for 
 agricultural produce ; and that prohibitory duties 
 on the importation of manufactures, can act as an 
 indirect restriction on the exportation of corn. 
 
implies absurdity, and contradiction ; and betrays 
 lamentable ignorance of the fundamental princi- 
 ples of political economy j namely, that relative 
 cost of production regulates the prices of the 
 market ; and that production miist cease when its 
 expenses are no longer repaid. 
 
 England cannot raise an independent supply of 
 corn fof 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 
 inferior lands, would require lYiofe capital and 
 labour tlian to raise it from the land under tillage 
 upon the Continent ; and, as our better soils would 
 acquire an increased value in proportion to their 
 superiority 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 
 
 o 
 
194 
 
 our increasing population, would raise the relative 
 cost and value of corn above their level in the sur- 
 rounding countries. Under such circumstances 
 we could not, even in an abundant year, remove 
 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 cost and price ; 
 and to trace the backward march, which must be 
 made before their object could be attained. 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 
 reduce our market prices, it is necessary that the 
 cost price of our com should be reduced. But 
 this reduction in the cost of producing com cannot 
 be effected, while, for lands of the same quality, 
 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 
 
195 
 
 and Jabour. Before, . therefore, we can reduce our 
 cost and market prices, and become an exporting 
 country again, landlords must a1)ate their rents to 
 a level with the rents paid in France, or Germany, 
 or Poland ; and population must be so thinnedj 
 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 sur- 
 plus 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 manufacturing population, shall have been 
 assimilated to Poland, she may employ her plains 
 in raising subsistence for her neighbours ; and the 
 objection, that prohibitory duties upon the impor- 
 tation of wrought goods check the exportation of 
 the produce which might have paid for them, and 
 thus operate as indirect 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 
 
196 
 
 encouraging other brandies of industry, forms an 
 exception to the principles formerly unfolded, 
 respecting the benefits of a free external trade in 
 com. We have seen, thait bounties, and protect- 
 ing 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 indemnify- 
 ing 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 cost of producing com already interdicts its 
 exportation, the prohibition of foreign manufac- 
 tures cannot destroy a foreign demand for agri- 
 cultural produce, or operate as an indirect re- 
 straint, withdrawing capital from the soil; but 
 that, on the contrary, in such a country, these 
 
197 
 
 prohibitions on foreign wrought goods destroy 
 the demand for home wrought goods which would 
 have paid for them ; and, by choking up the 
 channels of commerce, 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 cost price of corn is higher tlian in 
 others, bounties, and protecting duties, granted 
 to manufacturing industry, form no exception to 
 the principles of a free external trade in corn. 
 Such bounties, and protecting duties, indeed, are 
 injurious to the general wealth and prosperity of 
 the country ; and, with all due provision for thp 
 indemnification of the individuals who may have 
 embarked in the forced and exotic branches of 
 industry, ought gradually to be abolished; but 
 they cannot (except in a country where the low 
 cost price of corn renders it a staple article of 
 commerce, the export of which must diminish, as 
 the importation of foreign articles is restrained) 
 inflict any peculiar discouragement upon agricul- 
 ture, or require, in order to restore the profits of 
 
198 
 
 stock, in its different employments, to a just equir 
 librium, that the grower of corn should obtain a 
 monopoly of the home market. 
 
 Every view, therefore, which can be taken of 
 the question, confirms the conclusion, that, to the 
 particular case of a country, which infiinges the 
 freedom of commerce with respect to wrought 
 goods, the principle of uncontrolled external trade 
 in corn, applies with the fullest force. The exist- 
 ence of this infringement will diminish the 
 general wealth of the community; but whether 
 such infringement exist or not, — whether His 
 Majesty's Ministers may, or may not be enabled 
 to persevere in their enlightened system respecting 
 the importation of foreign fabrics, the trade in 
 corn should be unrestricted, and the merchant 
 left free to conduct those important operations 
 which rectify the irregularity of the seasons in 
 supplying food, and render dearth an improbable, 
 famine an impossible occurrence. 
 
CHAP. II. 
 
 On the Limitations to which the general Princi^ 
 pies 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 artijlcial Scale (f 
 Prices, and given a forced JExtensiofi to Agri- 
 culture, 
 
 Having, in the last chapter, shewn that legis- 
 lative interference, with respect to other branches 
 of commerce, forms an exception to the principles 
 of a free external trade in corn ; we have now to 
 enquire, whether these principles are liable to 
 any limitations in their application to the par- 
 ticular case of a country in which restrictions on 
 the commerce in grain have already turned capital 
 from its natural direction, and established an arti- 
 ficial scale of prices. This question, always 
 interesting, as involving the difficult problem re- 
 specting the introduction of political change. 
 
200 . 
 
 deiives, 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 induced, that 
 it has become necessary to legislate. 
 
 Dr. Smith, in stating the limitations to which 
 the general principle of complete freedom in trade 
 is liable, seems to consider the actual existence of 
 artificial encouragement as one. He urges, that 
 when any commodity of our own production has 
 been encouraged for some time by high duties and 
 protections, it would be injurious suddenly to restore 
 a free importation of the same kind of article. 
 " Humanity, in this case," he contends, " requires 
 that freedom of trade should be restored only by 
 slow gradations, and with caution and circumspec- 
 tion. Were these high duties and protections 
 taken away all at once, cheaper foreign goods, of 
 the same kind, might be poured so fast into the 
 home market, as to deprive, all at once, many 
 thousands of our people of their ordinary employ- 
 ipent, and means of subsistence." 
 
 This scarcely needs illustration. England, by 
 
201 
 
 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 other- 
 wise might have been. But, nevertheless, were 
 she, all at once, to attempt the introduction of 
 theoretic perfection into her commercial regula- 
 tions, and suddenly to repeal the high duties upon 
 the importation of articles not naturally adapted 
 to the country, very calamitous consequences 
 would, in the first instance at least, ensue. Under- 
 sold, 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 
 employments, 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 dis- 
 tress, and a considerable temporary reduction in 
 
202 
 
 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 attended with consequences so injurious, we 
 may form some estimate of the calamitous effects 
 which would ensue from a similar proceeding 
 with respect to the universal trade of agriculture. 
 In a country, accustomed to import a part of her 
 consumption 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 cul- 
 tivation 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 raises 
 the price of raw produce so high, that the reduced 
 rate of profit, now become customary, may be 
 obtained by the cultivation of tracts w^hich had 
 before remained untitled on account of their 
 sterility, a rate of profit, higher than the cus- 
 tomary, will be obtained by the cultivation of the 
 fertile districts which had been able to stand 
 
203 
 
 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 
 insure the farmer the customary profit, which, at the 
 actual price of raw produce is obtained in manu- 
 factures and trade. In a country, therefore, 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 landlord and 
 tenant. 
 
 Nor is this all. All the money transactions of 
 the land proprietors will be influenced by this in*- 
 crease of income ; mortgages, marriage settlements, 
 incumbrances for younger children, will all in- 
 crease with the increasing rent-roll. 
 
 Thus we see, that, while restrictions on the im- 
 portation of wrought goods, riot naturally adapted 
 to the country, would give a forced direction to 
 labour and capital, in a few manufacturing towns 
 and districts; restrictions on the introduction of 
 foreign corn, would, in a country, the circumstances 
 of which naturally led to the importation of grain, 
 pot only give, to an incalculably greater extent, ^ 
 
201 
 
 forced direction to capital and labour, but would 
 influence, to a considerable extent, the money- 
 transactions of individuals. In proportion to the 
 magnitude of the change, would be the evils in- 
 flicted by a sudden cessation of the restrictions 
 which had produced it. The nature of these evils 
 we will now examine. 
 
 In the first place, the removal of those obstacles 
 to the importation of foreign grain, which, by turn- 
 ing industry from its natural course, had forced 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 been forced 
 into cultivation by the artificial prices induced by 
 fettered commerce, be obtained at home. But 
 when prices were, in this manner, brought down 
 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 
 productive ; nay, even the stock which existed in 
 permanent implements, and buildings, would be 
 deprived, in a great measure, of its exchangeable 
 
205 
 
 value and productive power, and could not be dis- 
 posed of, or converted into other articles, or turned 
 into other employments, without considerable loss- 
 The agricultural labourers, too, who had been em- 
 ployed upon the land thus thrown out of tillage, 
 would lose all the benefit of the skill and dexterity 
 they might have acquired in their accustomed call- 
 ing; and, deprived of their moral capital, would 
 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 sud- 
 den 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 
 capital 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 
 
206 
 
 fall in the markets, the occupiers of such land >vill 
 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 obUged, 
 either to surrender their farms, or to become bank- 
 rupts. 
 
 The interest of the proprietor, and of the culti- 
 vator of the soil, though by no means identical, 
 are yet so intimately connected, that any serious 
 injury affecting the one, is likely to be commu- 
 nicated to the other. While a sudden reduction 
 of prices falls thus ruinously upon the tenant, it 
 occasions a distressing diminution in the income of 
 the landlord. Under such circumstances, and when 
 it is impossible to sustain prices, it is the wisest 
 plan in the proprietor to acquiesce in the reduction 
 of his fortune, to enter into some equitable com- 
 promise with his tenantry, and to grant new leases, 
 proportioning rent to the new scale of prices. 
 Should he have incurred debts, made settlements, 
 or entered into any money transactions, under the 
 
207 
 
 confidence of receiving an undiminished income », 
 and should the necessity of making good his en- 
 gagements, 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 embarrassment, or to defeat the cupidity, which 
 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 only 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 
 would trench upon the stock employed in cul- 
 tivation. 
 
 The important classes of land proprietors and 
 cultivators could not suffer so violent a convul- 
 sion of property, without a shock being communi- 
 cated to the whole community. The manufacturing 
 and commercial classes, indeed, would, at first, ex- 
 
208 
 
 peHence some encouragement from preparing and 
 exporting the articles whicli paid for ' the foreign 
 corn that unrestricted intercourse brought into the 
 country. But the benefit they received on the one 
 hand, would be counterbalanced, and much more 
 than counterbalanced, by the injury sustained upon 
 the otlier. No advantages acquired in the foreign 
 market could compensate the manufacturer and 
 merchant for the diminished demand of the do- 
 mestic market : proprietors and cultivators would 
 not have sustained a mere reduction of their money 
 income, which, accompanied and occasioned by a 
 corresponding rise in the value of money, left their 
 real wealth, and demand for commodities, un- 
 changed. Diminished cultivation would have left 
 them a reduced quantity of produce ; and, as the 
 throwing out of the inferior lands, and the reduc- 
 tion of rents, will have lowered the cost, as well 
 as the money price of this produce, the smaller 
 quantity, now in their hands, will have lost a por- 
 tion of its exchangeable value, not only with respect 
 to currency, but also with respect to commodities. 
 The real wealth, therefore, and the real power of 
 purchasing, possessed by the land-proprietor and 
 
209 
 
 farmer, will have sustained considerable diminu^ 
 tion. The home market, which is always the 
 nearest, the most secure, and the most extensive, 
 and which, for the smith, the carpenter, the brick- 
 layer, the mason, and the entire classes of artificers 
 and manufacturers who work upon the coarser 
 household articles which admit not a profitable ex- 
 portation, 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 theoretic 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 has heightened its productive powers ; and as 
 
210 
 
 the revenue of lands, and the profits of stock, decay, 
 the sources of financial prosperity dry up, — ^^are 
 propositions too evident to require illustration. In- 
 asmuch as a sudden removal of the restraints which 
 had existed on the importation of corn, deranged 
 the established course of industry, and checked 
 prosperity and wealth, it would, by a direct opera- 
 tion, render the taxes less productive. 
 
 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 
 given 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 
 
211 
 
 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 
 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 carnage, should be thrown out by 
 the competition of the foreign grower. Thus, 
 then, a cautious and progressiv^e introduction of 
 the principle of a free external trade in com, 
 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, 
 
212 
 
 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 capital, too, which obstructed 
 intercourse might have forced from its natural di- 
 rection, 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 eflfectually 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 
 
213 
 
 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- 
 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 land proprietors, would be 
 a measure of intolerable injustice. No land pro- 
 prietor, capable of comprehending the principles, 
 that a high price of corn lowers, universally, 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 extraor- 
 dinary 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. 
 
214 
 
 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 
 and gradually diminishing protection, offered to 
 the home grower, would throw no labour out of 
 employment, — would occasion no waste of capital, 
 and no reduction in that general opulence, in which 
 the sources of public revenue are found. 
 
 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 faD, 
 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 
 
215 
 
 not, at the level price of a free external trade, 
 repay the expenses of cultivation, would be a 
 great? 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 
 labour, more rapidly than natural causes dimi- 
 nished the supply ; would allow the capital, which 
 had been forced upon inferior lands, time to work 
 out an adequate return ; 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 strictly applicable ; but 
 
* 216 
 
 that, in order to obviate the individual suffering, 
 and temporary embarrassment, which a sudden 
 change in the direction of industry could ribt fail 
 to occasion, their application, under such circum- 
 stances, should be gradual. 
 
CHAP. III. 
 
 On the Question, Is the general Prmciple of a 
 free external Trade in Corn liable to Limita- 
 tion in its Applfcatio7i to the particular Ca^e 
 of a Country, ivhich is more heavily taxed 
 than other growing Cou?itries f 
 
 We are now to inquire, 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, taxation 
 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 production. Indirect taxation, however, has 
 two distinct operations ; it either, by being laid on 
 those ingredients of capital which are universally 
 employed in production, occasions a general rise 
 in productive cost ; or else, by being laid upon 
 
218 
 
 things peculiar to some branches of industry, it 
 occasions a partial rise in the expenses of pro- 
 duction. 
 
 The inquiry, 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 direct imposts ; a general rise in prices occa- 
 sioned by indirect imposts ; and a partial rise in 
 prices occasioned by indirect imposts. 
 
 These we shall consider in their order. 
 
 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 see, that a direct tax upon a 
 domestic article must turn foreign trade from its 
 accustomed channels. While such an internal tax 
 existed, a free importation of the foreign article 
 would act as a ruinous discouragement to the 
 domestic manufacturer, and would compel him to 
 
219 
 
 desist from the working of silk ; 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 duty, 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 
 accompanied 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 
 the exportation of the one, and re-exportation of 
 
220 
 
 the other, though it increased the price to the 
 consumer, yet, instead of checking, would restore 
 that equal intercourse between nations, which in- 
 cites 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. 
 
 As indirect imposts are often as efficacious in 
 raising the price of commodities, 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 
 employing capital, that countervailing duties 
 
221 
 
 should be imposed on imported articles. On a 
 closer examination, however, we shall find, that 
 the analogy between the high price occasioned by 
 direct, and the high price occasioned by indirect 
 taxation, is not sufficiently strict to authorise 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 same, taxes laid 
 upon the various necessaries of life so raise 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 importa- 
 tion, 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 absence of taxa- 
 tion, 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- 
 
222 
 
 thing must be sent abroad, to pay for the foreign 
 produce we have received. The foreign grower 
 will not give it to us for nothing. We must 
 return him a full equivalent. Commerce is reci- 
 procal. In whatever degree we import corn, in 
 the same degree must we export some other 
 article. But when internal taxation has increased 
 the expenses of production twenty per cent, 
 beyond the rate of other countries, what other 
 article can we export ? A general increase in 
 the cost of production communicates itself to 
 every species of agricultural produce, as well as 
 to corn; the exportation, consequently, of any 
 species of agricultural 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. The supposition is, that internal taxation 
 raises, universally, the value of every article raised 
 
223 
 
 or fabricated in the country. But, if the price of 
 all articles be equally raised, the exportation of 
 all would be equally checked. The advance in 
 our markets, which enables the French to undersell 
 us in the article of corn, would also enable them 
 to undersell 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 conclusion, therefore, that, if indirect 
 internal 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 
 exportation, 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 
 
221 
 
 goods. For, granting the fact, the necessary con- 
 sequence still would be, that foreign commodities 
 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 dimi- 
 nish, 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. 
 On the contrary, as the self-same process which 
 diminished our supply of money, and reduced our 
 prices, would increase 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 
 
225 
 
 by bills of exchange. Our bills would speedily 
 overstock the foreign market, and become depre- 
 ciated. Supposing, as before, that indirect internal 
 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 
 
 Q 
 
 / 
 
226 
 
 him from the British market; and if, to save 
 the exchange, he attempted to take back com- 
 modities (those being, by the supposition, twenty 
 per cent, dearer in England than in France), the 
 loss he would sustain upon them, independently 
 of carriage, would exactly counterbalance what 
 he gained upon the exchange. In whatever way 
 he endeavoured 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 
 expenses of production. 
 
 And now, it is hoped, it has been made suffi- 
 ciently 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 eiToneous, 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 
 
227 
 
 discouraging the exportation of whatever articles 
 might purchase foreign goods, check importation 
 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, 
 raise the price of all commodities beyond their 
 price in other countries less heavily burthened. 
 Indirect taxation, raising the expenses of produc- 
 tion, acts universally ; and, if it checks importa- 
 tion with respect to one commodity, checks it, 
 also, with respect to all. Hence, when the foreign 
 speculator enters the markets which have been 
 raised by indirect taxation, the advantage he gains 
 upon the high price of the article he brings, is 
 exactly counterbalanced 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 necessaries of life. 
 
 If, in order to realise high profits upon his sales, 
 
228 
 
 he 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 expenses of pro- 
 duction, increase the price of all commodities, 
 check exportation in the same degree that they 
 encourage importation ; and, therefore, in fact, they 
 discourage importation just as much as they encou- 
 r^e it. The effects they produce upon the one 
 hand, they counteract upon the other. They con- 
 stitute, in themselves, countervailing 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 produce 
 
229 
 
 above its price in the neighbouring countries, forms 
 no exception to the principle of a free external 
 trade in corn. Their existence does not require 
 that the domestic grower should be protected by- 
 legislative enactments in the home market. 
 
 Though the taxes which effect a general and 
 simultaneous 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 could have little tendency to 
 raise the price of the articles with which foreign 
 corn might be purchased. If imposts laid exclu- 
 sively on agriculture should raise the price of corn 
 nine per cent., then the merchant, paying no more 
 for the articles, with which he purchased foreign 
 com, 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- 
 
»30 
 
 mary rate of profit upon his stock, could not pos- 
 sibly do so. The equilibrium would be destroyed. 
 A bounty of nine per cent, would be granted on 
 the importation of corn ; and labour and capital 
 would thus be turned from those channels in which, 
 but for such unequal imposts, they would naturally 
 have flowed. The expenses heaped exclusively on 
 tillage would force us to import, rather than to 
 grow corn ; and would encourage foreign agricul- 
 ture, at the expense of our own. Indirect taxes, 
 therefore, falling exclusively on the soil, and con- 
 sequently raising the price of corn above its price 
 in other countries, must, free importation being 
 admitted, divert international intercourse 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 chaises that press unequally upon agricul- 
 ture, being, in this manner, so many indirect in- 
 fringements on equal intercourse, and on the liberty 
 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 generally been considered as a 
 
231 
 
 direct tax upon agriculture. But this is not the 
 correct way of viewing them. Rent is correctly 
 defined to be, that portion of the produce which is 
 given to the proprietor for the use of the soil. 
 The church, by a title antecedent to any other 
 which can now be shewn, is, to a certain extent, a 
 proprietor in common of the lands of the country ; 
 and that portion of the produce of land which the 
 cultivator pays to the church, for the use of the 
 soil, comes, in strictness, under the definition of rent. 
 
 It is no valjd objection to this view of the sub- 
 ject, that the church may exact, for the use of the 
 soil, one tenth of the whole produce, while the 
 landlord demands a fixed sum per acre. Landlords 
 might (and in point of fact frequently have done 
 so) require to be paid for the use of the soil, not a 
 fixed sum in money per acre, but a fixed propor- 
 tion of the whole produce. 
 
 But when the soil is paid for by a given propor- 
 tion of the gross produce, whether such mode of 
 payment be exacted by the church or by the land- 
 lord, agriculture suffers a positive discouragement. 
 Under such circumstances, if the farmer brings in 
 a new field, or bestows a heightened culture on the 
 
232 
 
 old, others become entitled to an increased share of 
 the fruits of his industry ; and, consequently, the 
 payment of a given proportion of the whole pro- 
 duce operates as an interdiction upon improve- 
 ment, and as a direct tax upon the gi-owing of corn. 
 But this evil, by some modification in the 
 manner of paying the church, might be com- 
 pletely obviated. If, for example, tithes, after a 
 fair valuation, wgre let at a stated sum, for a 
 given period, then their injurious influence upon 
 industry and cultivation would be entirely done 
 away. Under such a mode of collecting them, 
 the revenues of the church would operate exactly 
 as the revenues of the landlords now do. To 
 whatever extent tillage or improvement might be 
 carried, the clergy would not be enabled 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. It is obvious, that the lease granted by 
 the rector, as well as the lease granted by the land- 
 lord, ought to be of sufficient length to replace to 
 the cultivator, with the customary profit, whatever 
 capital he might sink in improvement. 
 
 But, though tithes, if fixed at a given sum for 
 
233 
 
 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 
 production of com. 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 erro- 
 neous. 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-regulated tithe, be a deduction from the 
 income of the land proprietor, not a tax upon the 
 capital of the cultivator. 
 
234 
 
 But poor rates do not fall exclusively upon the 
 landed interests. In England a very great pro- 
 portion of the population is collected into manu- 
 facturing towns; and the parishes of the towns 
 support their poor, as well as the parishes of the 
 country. The country parishes may probably 
 pay a higher rate than those situated in towns ; 
 but then, as all that part of the rate w^hich is 
 fixed or ascertained, at the time of taking leases, 
 would enter into the calculation of the capitalist 
 when he undertook his rent, and vested his 
 stock in cultivation, and would thus diminish the 
 revenue of the landlord, rather than operate as 
 a tax upon the tenant, it follows that charges for 
 the maintenance of the poor can have little ten- 
 dency to divert industry from the channels into 
 which it naturally would flow. It is only when 
 that part of the rate which, being recent, and too 
 uncertain to have entered into the calculation of 
 the cultivator when he took his farm, is more bur- 
 thensome in 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. 
 
235 
 
 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 excess is too recent and uncertain to 
 have entered into the calculation of the farmer 
 when he engaged for his rent, they heighten, 
 beyond the due proportion, 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 
 employed in agriculture. In short, every impost, 
 of whatever kind, and every arrangement, of 
 whatever nature, which tends to increase the 
 price of agricultural 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, — dis- 
 turbs the equilibrium which all occupations, if left 
 to themselves, have a perpetual inclination to 
 preserve, — diverts capital from the channels, in 
 
236 
 
 which, but for such interference, it would find its 
 most profitable occupation, and forms an indirect 
 infringement on the liberty of trade, and an 
 unfair restriction upon the farmer. 
 
 In the foregoing paragraphs, we have con- 
 sidered the imposts laid exclusively, or unequally, 
 upon the soil, as they diminish the revenue of the 
 land proprietor, and as they reduce the profits of 
 the stock employed in cultivation. Now, though 
 these operations of taxes imposed on land, have 
 frequently been confounded, and treated under the 
 common character of depressing the landed in- 
 terest, yet there is an important distinction 
 between them, which, if we would attain to any 
 accuracy in our reasonings, it is necessary to mark, 
 and to keep in view. 
 
 The revenues of the church, considered as a 
 portion of the rent of land, set apart, at a period 
 prior to the Conquest, grant, or purchase, under 
 which the proprietor holds, are neither unjust 
 towards individuals, nor injurious to the public; 
 while, in trenching, as from the mode o£ col- 
 lecting them they now do, upon the profits of 
 
237 
 
 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 injuiious and unjust. Injustice and 
 injury, however, have their degi'ees. While the 
 enlightened legislator will be careful to avoid any 
 measures which inflict partial evil, he will be soli- 
 citous to shun the arrangements which, in addi- 
 tion to their partial evil, hurt the general good. 
 
 * In a former chapter, it was shewn that whatever lowers 
 the rate of profit in agriculture, lowers it also in manufactures 
 and commerce. 
 
Mhtttm 
 
 m,m^ew<m^miimtrmH 
 
259 
 
 tbeir case, however deail^ nude oat^is not lo 
 strof^ as that wliidi is fermed of equal indbriihial 
 iDJmy, amjoined with great public eviL 
 
 ^Fhenef'er it can be made ^^Bear, that a 
 ifiiM ■iini III fiiHii w illi iini qnri a^rijrhr iipiiii tlif 
 of dK propfielcnv or on the profit of the cnidTatGr, 
 the landed luinrUi, both on die pdndple of im- 
 pafliad deifing, and on the ground of piriiiie pro- 
 iperity, are entided to redvoB and protection. Tbe 
 ■mt obirions lediuB^ the moot Miplp and iMlaral 
 pratecdon, nndonfatedlf woidd be» a repeal, or 
 evfaafisadonof die in^ort windi inflicted die un- 
 equal and injuriottft pveame. To such equaliMr 
 turn or repeal, diere oonld not be, dntx^^ioat the 
 oountiy, an objection caiiedL But when a mane 
 
 in Older to make good dK 
 to iqtore the diflncnt tn an die i 
 of imlniiij to their proper level, it is propoaodto 
 
240 
 
 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 going beyond 
 its object ; and whether, if it could be so appor- 
 tioned, the remedy might not be found more in- 
 jurious than the original evil it removed ? These 
 points we shall endeavour to ascertain. 
 
 Though in general the high price communicated 
 to a commodity by those indirect taxes, which, 
 falling partially, do not, by elevating the markets 
 universally, constitute, in themselves, a counter- 
 vailing duty, should be considered as precisely 
 analogous to the high price added to a commodity 
 by a direct impost, and though it could, with re- 
 spect to every other branch of industry, be proved 
 conformable to the best maxims of political eco- 
 nomy, 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 
 exerts so powerful and important an effect upon 
 the supply of subsistence, and on the profits of 
 capital, that it becomes necessary to inquire, whe- 
 
b 
 
 241 
 
 ther, with respect to it, the princi{)le of couiitei^ 
 vailing duties, for the purpose of restoring equality 
 of intercourse, and returning capital into the ori- 
 ginal channels from which it had been forced, may 
 not be found inapplicable. 
 
 We are to inquire 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 to ascertain precisely the degree of 
 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 Jiis former relative situation with 
 respect to the domestic manufacturer and the 
 foreign grower. But, as the sum which may be 
 <]emanded for tithes is, under the existing mode of 
 
 R 
 
242 
 
 collecting them, liable to perpetual variation, the 
 inquiry, 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 still 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 
 obtain 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 
 4)rices sufficiently high to cover all the increased 
 costs of tillage. Henc^, any thing which tends to 
 
213 
 
 keep foreign grain out of our nnarkets, will liave an 
 irresistible effect in raising the price of corn, witli 
 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 unequal 
 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 unequal burthen laid upon the foreign farmer, 
 that the landed proprietors have any claim to indem- 
 nity, 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 unequal burthens which are im- 
 posed upon land abroad. The difficulty of doing 
 this is obvious. AVhen we consider the various 
 facts which must be ascertained, and the different 
 
244 
 
 balances that must be struck ; when we take into 
 account the fluctuating operation of tithes, the un- 
 certainty of rates and assessments, the nicety of dis- 
 tinguishing how far they press more heavily upon 
 the soil than upon the towns ; and, above all, the dif- 
 ficulty of ascertaining the degree in which this ex- 
 cess exceeds the imposts laid on foreign agriculture, 
 we may safely pronounce, that, to determine, with 
 precision, the amount of the protecting duty which 
 would be sufficient to indemnify the landed interest 
 for unequal taxes, and to restore the equilibrium 
 they disturb, must be impossible. 
 
 The impossibility of ascertaining, with any pre- 
 cision, the amount of the countervailing duties 
 which it might be necessary to lay on importation, 
 is a sufficient objection against resorting to them 
 as a means of counteracting the operation of those 
 imposts 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 
 infliction of evil on the country, depriving the 
 people of the power of availing themselves of that 
 
245 
 
 admirable provision, which, in the uniformity of 
 her general results, nature has made for repairing 
 the mischief which might arise from her partial 
 irregularity; and exposing them to that uncer- 
 tainty in the supply of food, which, while the 
 seasons continue to vibrate between redundance 
 and deficiency, 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 
 as objections against attempting to rectify, by 
 restricted 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 appor- 
 tioned as just to reach, without going beyond 
 its object, and exactly to indemnify the proprie- 
 tors of land for the excess of taxation which 
 they pay, — such duty might, nevertheless, inflict 
 upon the country evils of greater magnitude 
 
246 
 
 than those which it removed. This I will en- 
 deavour to explain with all possible brevity and 
 clearness. 
 
 When taxation falls more heavily upon agricul- 
 ture than on other branches of industry, and raises 
 the price of corn in a greater degree than it 
 raises, at the same time, the prices of the other 
 articles with which foreign corn may be purchased, 
 then the following effects will necessarily be pro- 
 duced. The farmer, in the first instance, when 
 he finds the expenses of cultivation increased on 
 him, will either withdraw his capital from the soil 
 or else 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, 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 
 
247 
 
 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 gi'owing lands in the 
 neighbouiing 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 repay the 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 compe- 
 tition ; 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 increased foreign demand for our wrought 
 goods; and, as the uninterrupted circulation of 
 grain will keep the price of provisions both low 
 and steady, manufactures and commerce may 
 
248 
 
 flouiish, while the landed mterest is depressed and 
 agriculture discouraged. 
 
 This statement of the consequences which must 
 flow from taxation falling with disproportion ed 
 weight upon the soil, and raising the price of 
 corn in a greater degree than the price of other 
 articles, must instantly convince 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 com- 
 munity ; evidently impolitic to give, by unequal 
 imposts, the national industry a direction 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 employment 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 diminishing 
 
249 
 
 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 
 repealing 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 
 consequences more injurious than those which it 
 removed. 
 
 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 
 
250 
 
 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 stock, 
 will raise from it ample crops of corn, while, owing 
 to the inferiority of the other, and the greater 
 degree 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 further 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, compel 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 em- 
 ployed 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 
 
251 
 
 produced by lowering the quality of its soil, and 
 would reduce the productive powei^ of the capital 
 vested in its cultivation. 
 
 Taxes laid upon the land, having, in this manner, 
 the effect of defertilising the soil, we perceive 
 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, the 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 conse- 
 quence of various imposts pressing unequally upon 
 the land, the expenses of growing com are so 
 much increased, that a given quantity of capital, 
 
252 
 
 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 w^ealth and promote prosperity. It is 
 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 shewn, 
 that a country, the circumstances of which are 
 adverse to the exportation of produce, can escape 
 fluctuating supply and unsteady price, only by gi^ant- 
 ing perfect freedom in the import trade in com. 
 
 All the benefits, therefore, of unrestricted inter- 
 course, whether with respect to wealth and pro- 
 sperity, or to correcting the irregularity of the sea- 
 sons in supplying food, belong equally to the case 
 of a country where the production-price of com is 
 raised by natural sterility, and to the case of a 
 
253 
 
 country in which cost price is raised by taxes 
 lowering the productive powers of the capital 
 vested in cultivation. Such unequal taxes upon 
 latid, inflicting, as it were, an artificial sterility on 
 the country, cannot be too severely censured, or 
 too speedily repealed; but, during their conti- 
 nuance, a perfectly unrestricted external trade in 
 corn seems the most effectual means of mitigating, 
 whether with respect to the supply of subsistence, 
 or to 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 powders of the capital employed in cultiva- 
 tion ; or, 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, \vere 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 throwing out 
 land which, but for their operation, might be 
 
254 
 
 profitably tilled, they effi^t an unjust diminution in 
 the revenue of the land proprietor. The question 
 is, would these evils be remedied by laying a pro- 
 tecting duty on the importation of foreign corn ? 
 Let us inquire, a little farther, what tendency this 
 measure could have to counteract such injurious 
 effects ; let us, in concluding the cliapter, briefly 
 ' examine how far a restriction on importation 
 could diminish the quantity of capital required to 
 produce a given quantity of corn ; turn the capital, 
 forced from the soil, into a channel more conducive 
 to wealth and prosperity ; or restore to the land- 
 lord the income he had lost. 
 
 If,, after unequal taxation had diminished tillage, 
 and occasioned us to draw a part of our consump- 
 tion from the foreign grower, importation were 
 restricted, the diminution of the supply would 
 immediately elevate prices, until it again became 
 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 stiK 
 
255 
 
 increase the expenses of production, and compel 
 the farmer to employ a greater stock in cultiva- 
 tion. But further, the capital necessary to culti- 
 vate any given extent of land, would be increased, 
 not diminished. For, as inferior soils, requiring a 
 larger lay out of labour and capital, were resorted 
 to, rents on all the better lands would rise, and 
 thus the expenses of tillage would universally be 
 increased upon the farmer. 
 
 Restricted importation, therefore, instead of 
 reducing the quantity of stock which taxation 
 rendered necessary to the growing of com, 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 em- 
 ployed in cultivating inferior soils ; because, from 
 the natural protection afforded by the charge of 
 carriage, on an article so bulkj as corn, such em- 
 ployment was found most beneficial ; and subse- 
 quently, when unequal taxation increased the 
 expense of growing corn, without increasing, in a 
 
256 
 
 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 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 producing com 
 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 beneficial occupation, which, in conse- 
 quence of injudicious imposts, remains. To deprive 
 capital, therefore, of the most beneficial employ- 
 mient 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 thefirst instance, would be better. 
 As the foreign supply was cut off, and the prices rose 
 until the inferior lands were restored to tillage, the 
 rents already paid upon the better grounds, whose 
 fertility enabled them, notwithstanding the bur- 
 
257 
 
 thens upon production, to meet the competition of 
 the grower of other countries, 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 not 
 have diminished the quantity of capital necessary 
 to produce a given quantity of com from the 
 better lands ; and would not have restored, but 
 would still further have diminished, the productive- 
 ness of the capital turned back to the inferior soils. 
 The powers of industry would be lowered, profits 
 would fall, capital would emigrate, population 
 would decay, and the value of land, necessarily 
 suffering 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, 
 and population to increase, until the growing de- 
 mand for raw produce, and particularly for such 
 portions of it as did not consist of strict necessa- 
 ries, elevated, in the manner already shewn, the 
 
 s 
 
258 
 
 relative value of the soil, and compensated, in some 
 measure, the artificial sterility inflicted by taxation. 
 When such artificial sterility is inflicted, — when 
 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 economy. 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 
 
259 
 
 these taxes inflict, by stopping up the other chan- 
 nels into which capital had been forced ? 
 
 When, in consequence of accumulated taxation, 
 capital escapes from the soil to the more profitable 
 occupation of working up raw material, and pur- 
 chasing corn from other countries, the price of corn 
 is little advanced, and therefore the profits of 
 capital are little lowered. But when, the taxes 
 still continuing, we check importation, and force 
 into tillage, land on which the expenses of cultiva- 
 tion 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 productive 
 cost of corn is increased. The additional rent, too, 
 which will be now paid for sui^erior lands, will 
 increase its productive cost upon them, as well as 
 upon the inferior, forced into tillage. The price of 
 corn will consequently be increased throughout the 
 country. An increased price of corn, howerer, is 
 not only the same thing as a reduction in the pro- 
 ductive powers of agricultural capital, but occa- 
 sions a reduction in the productiveness of every 
 species of industry carried on by the consumers of 
 corn. In agriculture, in manufactures, and in 
 
260 
 
 commerce, a universal fall of profits will be ex- 
 perienced. 
 
 Here, restriction upon import, again forcing into 
 cultivation land from which taxation had driven 
 capital, would universally check production, and 
 send disposable capital abroad. With the failing 
 wealth of all consumers, the home demand would 
 fail. Prices would fall, until the inferior lands 
 could no longer be cultivated, nor the superior 
 ones afford 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 
 not remedy any of the evils inflicted by unequal 
 taxes upon land. On the contrary, it would aggi'a- 
 vate them all. In the first place, it would increase 
 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- 
 
261 
 
 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 which 
 he paid, would, in consequence of the powers of 
 industry being universally paralysed, 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- 
 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 natural 
 protection afforded by the expense of carriage, stand 
 the competition with foreign soils, we necessarily 
 raise our prices considerably beyond those of foreign 
 countries. 
 
 The consequence is, that, in abundant years, 
 
262 
 
 superfluity cannot be removed, until the markets 
 have sustained an extraordinary fall. If, by the 
 joint operation of taxes, and duties to countervail 
 taxation, 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 expor- 
 tation coidd 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 ex- 
 pense of carriage, and the exporting merchant's 
 profit, and then our markets must fall ten shillings 
 below forty, before our com can be sent abroad ; 
 that is, our markets must be in a perpetual state of 
 fluctuation, between sixty shillings, the price of 
 average years, and thiity 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. 
 
263 
 
 ill 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 countervail 
 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 
 revenue of the land proprietor, induce mischief far 
 greater than that which they were intended to 
 remove. 
 
 And now, to recapitulate the conclusions which 
 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 prices, do not increase the expenses of 
 growing corn, in a greater degree than they increase 
 the expenses of working up materials. Such taxes, 
 therefore, repel the foreign grower by the high 
 
264 
 
 price of tlie articles he must receive in payment, 
 full as much as they attract him by the high price 
 to be obtained upon his produce ; and, consequently, 
 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 
 branches of industry, and raising the price of 
 corn without raising, in a similar proportion, the 
 price of the goods with which it might be pur- 
 chased in other countries, give the foreign, an 
 undue advantage over the home gTower ; operate 
 as an injurious discouragement to domestic agri- 
 culture ; force capital from the channels in which 
 it found its most profitable occupation ; and, in 
 relation to the manufacturing and commercial 
 classes, 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, 
 capital should be allowed to take its most profitable 
 
265 
 
 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 v^^hich disturbed the 
 balance between the various departments of indus- 
 try ; that is, by reg^ulating the collection of tithes, 
 discontinuing all duties on the farmer's servants, 
 horses, and carriages ; and equalising 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 ; 
 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 
 universal 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, 
 
266 
 
 more heavily taxed than her neighbours, does not 
 constitute an exception to which the general prin- 
 ciple of a free external trade in com is inappli- 
 cable. On the contrary, during the continuance 
 of taxes, even in their most objectionable operation, 
 of unequal pressure upon the land, an unrestricted 
 commerce in grain mitigates the evils which they 
 inflict. 
 
^art tije ®i)trU* 
 
 THE APPLICATION OF THE PRINCIPLES OF THE 
 EXTERNAL CORN TRADE TO THE ACTUAL 
 CIRCUMSTANCES OF THESE COUNTRIES. 
 
 CHAP. I. 
 
 On the Fhictuatmis in the Supply and Price 
 of Corn which have been experienced under 
 the existing System of Restraijit and Pro- 
 tection. 
 
 Having, in the two former parts of this work, 
 endeavoured to unfold the general principles of 
 the external trade in corn, and also to examine 
 the limitations to which these principles are liable, 
 under those particular cases in which restrictions 
 are imposed on other branches of commerce ; in 
 which the actual existence of restrictions upon 
 the importation of grain have already occasioned 
 an artificial scale of prices, and given a forced ex- 
 tension to agriculture ; and in which taxation falls 
 with unequal pressure on the land ; we are now to 
 consider how far the doctrines which we have 
 
268 
 
 propounded explain the facts which have oc- 
 curred ; and to ascertain, by a reference to the 
 actual fluctuations in the supply and in the prices 
 of our markets, whether our theory coincides with, 
 and is a legitimate induction from, facts. 
 
 It is a matter of historical record, which any 
 person, by a reference to the proper documents, 
 can authenticate for himself, that, during the last 
 five and twenty years, the price of grain in the 
 British market has been subject to sudden and 
 most distressing fluctuations. Many persons, 
 indeed, whose names are of high authority, con- 
 ceive that these distressing fluctuations in the price 
 of the produce of land have been occasioned by 
 alterations in the value of our paper currency. 
 This supposition will, on a closer investigation, be 
 found to be erroneous ; — at once inconsistent with 
 general principles, and in dirfect contradiction 
 to facts. 
 
 In the first place, it is demonstrable — nay, it is 
 self-evident, that an alteration in the value of the 
 currency must equally, and contemporaneously, 
 alter the price of every commodity for which 
 currency is exchanged. If we were to raise the 
 value of our paper medium thirty per cent., then 
 
269 
 
 corn, and wine, and sugar, and cloth, and all 
 other articles, would, at the same instant, fall 
 thirty per cent, in their paper price. Now this 
 has not been the case. A fall, or a rise, in the 
 produce of land, and particularly in corn, has 
 not been accompanied by a corresponding and 
 contemporaneous fall, or rise, in other things. 
 It is impossible, therefore, that the fluctuations in 
 the value of agricultural produce should have been 
 occasioned by the increased or diminished value 
 of the paper currency. 
 
 In the second place, it is a fact which any person 
 who will inspect the price current for the last five 
 and twenty years may ascertain for himself, that 
 the fluctuations in the value of agricultural produce 
 have been not merely nominal, but real ; and that 
 corn, when estimated in bullion, has suflered 
 a considerable and a rapid change in price. In 
 the latter part of the year 1793, the bushel of 
 wheat sold for six shillings and four pence, and 
 the ounce of silver for five shillings ; that is, it re- 
 quired an ounce and something more than a fifth 
 of the metal to purchase a bushel of the grain. 
 But in 1801, wheat was twenty-two shillings and 
 a penny the bushel, and silver five shillings and 
 
270 
 
 nine pence the ounce ; or, in other words, it re- 
 quired very nearly four ounces of the metal to pur- 
 chase a bushel of the grain. Here, then, the price 
 ef wheat, when measured, not by the paper medium, 
 but by bullion, experienced a rise of more than two 
 hundred per cent. Again, in 1811, the bushel of 
 wheat had fallen to thirteen shillings, while the 
 ounce of silver, after some fluctuations, had risen 
 to six shillings and four pence ; that is to say, the 
 bullion price of com had sustained a fall of nearly 
 fifty per cent. Nay, the average price of the 
 bushel of wheat, from 1809 to 1813, both years 
 inclusive, was fourteen shillings, while the average 
 price of the ounce of silver, for the same period, 
 was six shillings ; or, in other words, the bushel 
 of wheat was, on the average, worth about two 
 ounces and a third of silver. In 1816, the bushel 
 of wheat was six shillings, being worth about an 
 ounce and a sixth of silver, at the then quoted 
 prices of that metal. Even leaving the extraor- 
 dinary prices of 1801 out of the calculation, the 
 bulUon value of the silver had sustained a fall of 
 about fifty per cent, below the average of the latter 
 years of the war. 
 
 Thus, then, it appears, from authentic and 
 
271 
 
 indisputable facts, that, independently of any 
 variations which may be supposed to have taken 
 place in the quantity or in the value of the 
 paper currency, the price of agricultural pro- 
 duce, as estimated in standard bullion, during 
 the period between 1793 and 1816, has been sub- 
 ject to great fluctuations ; first experiencing a rise 
 of nearly two hundred per cent., and then rapidly 
 sinking to something below the level of the year 
 1793. 
 
 It may possibly be objected, that as gold is the 
 standard of our currency, silver is to be regarded 
 only as a commodity ; and that, therefore, the fact, 
 that the value of corn, in relation to silver, has 
 fluctuated, is not conclusive of the question, whe- 
 ther the fluctuations in the price of corn are to be 
 ascribed to changes in the value of the currency. 
 
 To this objection, I would answer, in the first 
 place, that, until the passing of Mr. Peel's Bill in 
 1819, silver coin, when offered in payment, not by 
 tale, but by weight, was a legal tender to any 
 amount ; and that, as we had a double standard, 
 consisting indifferently either of gold or of silver, 
 the fluctuations in the value of corn, as compared 
 with silver, may fairly be considered as decisive of 
 
272 
 
 the fact, that such fluctuations were not occa- 
 sioned by changes in the value of the currency. 
 
 But it is not necessary to evade the objection by 
 a reference to the double standard which existed 
 previous to the resumption of cash payments. 
 Whether we take gold, or whether we take silver, 
 as the standard of our money, it will be found, 
 that in relation to that standard, the value of agri- 
 cultural produce, independently of its price, as 
 expressed in the paper currency, has been subject 
 to great and sudden fluctuation. This can be de- 
 monstrated as well by a reference to the compa- 
 rative value of corn and of gold, as by a reference 
 to the comparative value of corn and silv^er. 
 
 In the year 1800, the average market price of 
 gold (vide Mushet's tables) was £.3. 17^. lO^^. ; 
 while, for the same period, the average price of the 
 quarter of wheat (vide Parliamentary Papers) was 
 £.5. 13a'. 7^. One quarter of wheat being thus 
 worth nearly one ounce and a half of gold. 
 
 In the year 1803, the average price of gold rose 
 to £.4 the ounce, while the average price of wheat 
 fell to £.2. 16^. 6d. the quarter; the quarter of 
 wheat being now worth considerably less than 
 three-quarters of an ounce of gold, ^'hus^ in the 
 
273 
 
 space of two years, the value of wheat, as com. 
 pared with gold, fell more than fifty per cent. 
 
 From 1803 to 1809, the price of gold remained 
 stationary, while that of wheat suffered consider- 
 able fluctuations. In 1812, the average price of 
 the ounce of gold was £.4. 15*. 6c/., while the 
 average price of the quarter of wheat became 
 £.6. 5s. 5d. Thus, instead of a quarter of wheat 
 being worth something less than three-quarters of an 
 ounce of gold, as in 1803, it could purchase in the 
 market nearly an ounce and a half of gold. That 
 is, the value of wheat, in relation to gold, rose 
 about an hundred per cent. 
 
 To place these important facts in a still more 
 striking point of view, I subjoin a Table, shewing 
 the prices of gold and of all kinds of grain, from 
 1800 to 1825. The column shewing the prices 
 of gold is extracted from Muchet's Tables : those 
 expressing the prices of grain, are from the 
 Parliamentary Papers ; and, for the last year, 
 from the price current, no parliamentary return 
 of the price of grain for 1825 having yet been 
 made. 
 
274 
 
 An Account of the Average Price of Gold, and all Sorts 
 of Grain, in each Year, from the 5th January, 1 800, to 
 the 5th January, 1825. 
 
 
 
 GOLD, 
 
 WHEAT, 
 
 RYE, 
 
 barley, 
 
 oats. 
 
 BEANS, 
 
 PEASE, 
 
 YEAR 
 
 
 per oz. 
 
 perqr. 
 
 per qr. 
 
 per qr. 
 
 per qr. 
 
 per qr. 
 
 per qr. 
 
 £. 
 
 s. 
 
 d. 
 
 s. 
 
 d. 
 
 s. 
 
 d. 
 
 s. 
 
 d. 
 
 s. 
 
 d. 
 
 s. 
 
 d. 
 
 s, d. 
 
 1800 
 
 3 
 
 17 
 
 lOf 
 
 113 
 
 7 
 
 76 
 
 11 
 
 60 
 
 
 
 39 
 
 10 
 
 69 
 
 3 
 
 67 5 
 
 1801 
 
 4 
 
 5 
 
 
 
 118 
 
 3 
 
 79 
 
 9 
 
 67 
 
 9 
 
 36 
 
 6 
 
 62 
 
 8 
 
 67 8 
 
 1802 
 
 4 
 
 4 
 
 
 
 67 
 
 5 
 
 43 
 
 3 
 
 33 
 
 1 
 
 20 
 
 7 
 
 36 
 
 4 
 
 39 6 
 
 1803 
 
 4 
 
 
 
 
 
 56 
 
 6 
 
 36 
 
 11 
 
 24 
 
 10 
 
 21 
 
 3 
 
 34 
 
 8 
 
 38 6 
 
 1804 
 
 4 
 
 
 
 
 
 60 
 
 1 
 
 37 
 
 1 
 
 30 
 
 4 
 
 23 
 
 9 
 
 38 
 
 7 
 
 40 10 
 
 1805 
 
 4 
 
 
 
 
 
 87 
 
 10 
 
 54 
 
 4 
 
 44 
 
 8 
 
 28 
 
 
 
 47 
 
 5 
 
 48 4 
 
 1806 
 
 4 
 
 
 
 
 
 79 
 
 
 
 47 
 
 4 
 
 38 
 
 6 
 
 25 
 
 8 
 
 43 
 
 9 
 
 43 6 
 
 1807 
 
 4 
 
 
 
 
 
 72 
 
 3 
 
 47 
 
 6 
 
 38 
 
 4 
 
 28 
 
 1 
 
 47 
 
 3 
 
 55 11 
 
 1808 
 
 4 
 
 
 
 
 
 79 
 
 
 
 52 
 
 4 
 
 42 
 
 1 
 
 33 
 
 8 
 
 60 
 
 8 
 
 66 7 
 
 1809 
 
 4 
 
 
 
 
 
 95 
 
 7 
 
 60 
 
 9 
 
 47 
 
 3 
 
 32 
 
 8 
 
 60 
 
 9 
 
 60 2 
 
 1810 
 
 4 
 
 10 
 
 
 
 106 
 
 2 
 
 59 
 
 
 
 47 
 
 11 
 
 29 
 
 4 
 
 53 
 
 7 
 
 55 9 
 
 1811 
 
 '4 
 
 4 
 
 6 
 
 94 
 
 6 
 
 49 
 
 11 
 
 41 
 
 10 
 
 27 
 
 11 
 
 47 
 
 10 
 
 51 6 
 
 1812 
 
 4 
 
 15 
 
 6 
 
 125 
 
 5 
 
 75 
 
 11 
 
 66 
 
 6 
 
 44 
 
 
 
 72 
 
 8 
 
 73 7 
 
 1813 
 
 5 
 
 1 
 
 
 
 108 
 
 9 
 
 70 
 
 7 
 
 58 
 
 4 
 
 39 
 
 5 
 
 76 
 
 5 
 
 78 6 
 
 1814 
 
 5 
 
 4 
 
 
 
 73 
 
 11 
 
 44 
 
 6 
 
 37 
 
 4 
 
 26 
 
 6 
 
 46 
 
 7 
 
 50 
 
 1815 
 
 4 
 
 13 
 
 6 
 
 64 
 
 4 
 
 37 
 
 10 
 
 30 
 
 3 
 
 23 
 
 10 
 
 36 
 
 1 
 
 38 10 
 
 1816 
 
 4 
 
 13 
 
 6 
 
 75 
 
 10 
 
 43 
 
 2 
 
 S3 
 
 5 
 
 23 
 
 6 
 
 38 
 
 4 
 
 38 4 
 
 1817 
 
 4 
 
 
 
 
 
 94 
 
 9 
 
 56 
 
 6 
 
 48 
 
 3 
 
 32 
 
 1 
 
 52 
 
 
 
 51 5 
 
 1818 
 
 4 
 
 
 
 
 
 84 
 
 1 
 
 54 
 
 10 
 
 53 
 
 6 
 
 32 
 
 11 
 
 63 
 
 1 
 
 59 11 
 
 1819 
 
 4 
 
 1 
 
 6 
 
 73 
 
 
 
 49 
 
 
 
 46 
 
 8 
 
 29 
 
 4 
 
 55 
 
 5 
 
 56 
 
 1820 
 
 3 
 
 19 
 
 11 
 
 65 
 
 7 
 
 40 
 
 10 
 
 33 
 
 10 
 
 24 
 
 4 
 
 43 
 
 6 
 
 4>4! 11 
 
 1821 
 
 3 
 
 17 
 
 lOi 
 
 54 
 
 5 
 
 31 
 
 1 
 
 25 
 
 3 
 
 18 
 
 11 
 
 30 
 
 
 
 31 9 
 
 1822 
 
 3 
 
 17 
 
 loi 
 
 43 
 
 3 
 
 20 
 
 3 
 
 21 
 
 3 
 
 17 
 
 7 
 
 23 
 
 9 
 
 25 7 
 
 1823 
 
 3 
 
 17 
 
 lOi 
 
 51 
 
 6 
 
 30 
 
 6 
 
 30 
 
 8 
 
 22 
 
 3 
 
 32 
 
 
 
 33 10 
 
 1824 
 
 3 
 
 17 
 
 10| 
 
 61 
 
 12 
 
 
 
 
 
 
 
 
 
 
 1825 
 
 3 
 
 17 
 
 lOf 
 
 66 
 
 4 
 
 
 
 
 
 
 
 
 
 
275 
 
 The opinion, therefore, that the fluctuations in 
 the price of com took their rise from variations 
 in the value of the paper currency, being at 
 once inconsistent with general principles, and in 
 direct contradiction to known and recorded facts, 
 we must seek elsewhere for the causes of the ex- 
 traordinary elevation, and the sudden depression, 
 which agricultural produce has experienced. 
 
 The cost of production must always, on the 
 average, determine the prices of the market. 
 Hence, in a rich and populous country, where, in 
 order to raise the requisite supply of food, it is 
 necessary to cultivate inferior soils, which require 
 a great expenditure of labour and capital, the cost 
 of producing corn, and consequently its average 
 price in the market, will be considerably higher 
 than in a poor and thinly-peopled country, where 
 the culture of the first-rate soils is sufficient to 
 supply the grain for which there is demand. 
 Where commerce is unrestrained, the price of 
 corn in the rich country cannot, it is evident, 
 exceed its price in the poor country, to a greater 
 extent than is sufficient to replace, with the cus- 
 tomary profit, the expense of conveying it from 
 
276 
 
 the latter to the former; and the prices of the 
 poor country, increased by the expense of car- 
 riage, will constitute the level beyond which the 
 corn markets of the rich country cannot per- 
 manently rise. Now, it is self-evident, that 
 whatever interrupts the freedom of the com 
 trade must destroy this level ; and that a country 
 which is advancing in wealth and population 
 must, if she cannot procure a part of her supply 
 of food from the fertile soils of her neighbours, 
 gradually resort to her most sterile and worst 
 situated lands, and, consequently, bring her corn 
 to market at a perpetually increasing price. 
 
 These simple and incontrovertible principles 
 account, in the most satisfactory manner, for the 
 extraordinary rise which our agricultural produce 
 experienced during the last five and twenty years. 
 During this period, the numbers of our people, 
 as appears by the returns made to Parliament, 
 under the Population Act, rapidly increased ; while, 
 for a considerable portion of it, the heightened rate 
 of freight and of insurance, occasioned by the war, 
 with the decrees of the French ruler, and the Em- 
 , bargo and Non-importation Act of America, threw 
 
277 
 
 us almost entirely upon our own resources for the 
 supply of subsistence. The consequences were, 
 that tillage received a forced and artificial en- 
 couragement ; that lands of inferior quality, re- 
 quiring great expense of labour and capital, were 
 made to produce corn ; and that our markets rose 
 far above the level price of Europe. 
 
 This extraordinary elevation in the value of 
 our agricultural produce necessarily ceased with 
 the artificial circumstances which occasioned it. 
 As soon as the Continent became open to our 
 merchants, and foreign com could be obtained 
 at a moderate expense of carriage, our markets 
 sustained a sudden fall. The Corn Bill of 1815, 
 which was resorted to for the purpose of support- 
 ing our agriculture in its forced and artificial 
 state, only aggravated the evil it was intended 
 to remove. Merchants and cultivators were 
 ignorant of the principle, that restrictions on the 
 commerce in grain necessarily produce great fluc- 
 tuations in the market ; and, under the delusive 
 expectation that the Com Bill must immediately 
 elevate prices, the former imported, and the latter 
 cultivated, much more extensively than they other- 
 
278 
 
 wise would have done. An abundant harvest 
 followed, and contributed to overstock our markets 
 with corn. But this was not all. A second 
 delusion, of a directly opposite character, suc- 
 ceeded the first. Disappointed in their confident 
 calculations upon the Corn Bill, the people began 
 to believe that there existed some occult and 
 mysterious necessity for corn being cheap. Under 
 the impression that prices would continue to fall, 
 all became solicitous to sell, and averse to buy ; 
 and the force of public opinion, more, perhaps, 
 than the actual excess of the supply beyond the 
 consumption of the season, continued to depress 
 the value of land and of its produce. Indeed, it 
 is a well-established principle in political economy, 
 that, when the market is glutted with any commo- 
 dity, and particularly with a commodity like corn, 
 th^ consumption of which cannot be materially 
 increased by cheapness, prices fall far below the 
 ratio in which the supply exceeds the demand. 
 I^ 1816, a quarter of wheat was worth about 
 half the quantity of silver which it was worth in 
 1811, and about one-fourth the quantity of that 
 metal which it was worth in 1801 ; yet no person 
 
279 
 
 can maintain, that in 1816 there was, in relation 
 to the demand, four times the supply of grain 
 which we had in 1801, or twice the supply which 
 we possessed in 1811. The principle, that a glut 
 reduces prices below the ratio of excess, accounts, 
 in the most satisfactory manner, for our markets 
 having occasionally sustained a greater depression 
 than a comparison between the actual supply and 
 consumption would, at first sight, appear to justify. 
 
 During the last five and twenty years the 
 fluctuations in the supply and in the value of 
 agricultural produce have had so extensive and 
 so injurious an influence upon all the great 
 interests of the country, that it may be expedient 
 to enter into some further practical details respect- 
 ing them. 
 
 During this period, the population of the coun- 
 try, as is shewn by the parliamentary returns, 
 rapidly increased ; and, as a necessary consequence, 
 there was a great and growing demand for agri- 
 cultural produce. While the home demand thus 
 increased, the late war, assuming its extraordinary 
 an ti- commercial character, obstructed, and occa- 
 sionally prohibited, foreign supply. The year 1807 
 
280 
 
 found us, by the events of the war, excluded from 
 direct commercial intercourse with every country 
 in Europe (Sweden excepted) ; and there was 
 a prospect of a scarcity of every article of agri- 
 cultural produce, for the supply of which we 
 depended either wholly, or in part, upon impor- 
 tation from the Continent. 
 
 After the attack upon Copenhagen, and the 
 final withdrawing of our naVal and military force 
 from thence, Russia and Denmark joined in the 
 war against us. The Baltic being thus closed 
 against any direct commercial intercourse with 
 this country, it was not clear that any part of our 
 tisual supplies of necessary articles from thence 
 eould be obtained by any channel, however cir- 
 cuitous, or at any expense, however great. In 
 consequence, too, of the occupation of Spain by the 
 French, it was imagined that the exportation 
 of wool from thence would be rendered imprac- 
 ticable ; or that, at any rate, the unsettled state of 
 that kingdom would materially diminish the quan- 
 tity which could be obtained. 
 
 About the same time, too, began our disputes 
 with the United States of North America, which 
 
281 
 
 occasioned a very restricted and precarious com- 
 mercial intercourse with those countries, and 
 threatened to cut off altogether the usual supplies 
 of produce which we received from them. 
 
 The subjoined comparative statement of the 
 charges for freight and insurance, will enable us to 
 form some adequate idea of the degree of restric- 
 tion, amounting almost to prohibition, which the 
 anti-commercial character of the war imposed 
 upon the importation of foreign agricultural 
 produce. 
 
 The freight and tlie premium of insurance from 
 St. Petersburg to London, in 1809 and 1822, on 
 the average of the seasons, were as follows : — 
 
 1809. 1822. 
 
 £. s, d, £. s, d^ 
 On Hemp, jyer ton, ... SO 300 
 
 „ Tallow, ditto, .... 20 200 
 „ Linseed, j^er quarter, 2 5 4 6 * 
 
 While increasing population went on enlarging 
 the demand for agricultural produce, and while 
 
 * TooKE, on High and Low Prices; 
 
282 
 
 * such enormous charges upon importation excluded 
 foreign supply, we might, from general principles 
 alone, confidently conclude that the value of the 
 necessaries of life would advance ; and, by conse- 
 quence, that the rate of profit would fall, until 
 the reclaiming of land of less and less fertility 
 became the most beneficial employment which 
 disposable capital could obtain. This conclusion 
 from general principles is fully confirmed by facts- 
 During the period under review, tillage was 
 heightened and extended in a degree altogether 
 unexampled. The eager avidity with which new 
 accumulations of disposable capital were applied to 
 soil, was indicated by the rapid rise of rents and 
 increase of bills of enclosure. 
 
 It may be asserted, without the hazard of con- 
 tradiction, that during those years of the war, the 
 agriculture of England received a more powerful 
 stimulus than it can ever again experience until 
 the restrictive system be abolished, and until the 
 consequent increase of wealth and population shall 
 have created a very enlarged demand for those 
 productions of the soil which do not enter into 
 tlie labourer's subsistence, or which, from their 
 
283 
 
 bulk and perishable nature, cannot be imported 
 from abroad. Extraordinary circumstances, which 
 cannot be expected again to concur, contributed 
 to enhance the value of land. These it may be 
 proper to enumerate. 
 
 The improvements in manufacturing industry, 
 which, during this period, were in rapid progress, 
 diminished the productive cost of wrought goods ; 
 and thus, in the manner explained in a former 
 chapter, counteracted, to a certain extent, that 
 tendency towards a fall in the rate of profit which 
 the increasing difficulty of obtaining raw produce, 
 if operating singly and alone, would have occa- 
 sioned. 
 
 During the same period, improvements in agri- 
 culture contributed to counteract the effect which, 
 other things remaining the same, resorting to 
 inferior soils would have had in depressing the 
 rate of profit. 
 
 While these two circumstances concurred to pre- 
 vent the rate of profit from falling as the difficulty 
 of obtaining raw produce increased, the political 
 convulsions which shook the Continent of Europe 
 checked the emigration of capital. So destructive 
 
284 
 
 was the war, and so unstable were the govern- 
 ments in the neighbouring countries, that instead 
 of British capital seeking foreign investment, 
 foreign capital flowed into England for security. 
 
 Such were the circumstances which rendered 
 the period of the late war a particular exception 
 to the general principles, that an artificial elevation 
 in the value of food and of the materials of other 
 necessaries, lowers the rate of profit, forces capital 
 abroad, and, in its secondary, but not very remote 
 effects, diminishes the demand for the products of 
 the soil, and reduces the revenue of the proprietor 
 below the level which it might otherwise have 
 preserved. Never can the landed proprietors of 
 England expect such another concurrence of cir- 
 cumstances in their yfavour. It is not to be ex- 
 pected, that the future improvements in manufac- 
 turing industry will be equal in degree to those 
 which the steam engine has already effected. 
 Neither is it in any way probable, now that 
 France, and Bavaria, and Wirtemburg, and the 
 Netherlands, are tranquil and prosperous under 
 the influence of representative governments, that 
 a second series of political convulsions on the 
 
285 
 
 Continent should reverse the natural order of 
 events, and cause capital to flow, not from coun- 
 tries where it is relatively abundant to those in 
 which it is relatively deficient, but, on the contrary, 
 from places where it is scarce to those where it 
 abounds. During the late war, the landed interest 
 enjoyed in the home market a monopoly in sup- 
 plying a rapidly increasing population with the 
 first necessaries of life, and enjoyed this monopoly 
 (always complete, except during those intervals in 
 which scarcity bordered upon famine) under such 
 peculiar circumstances, that the high value of 
 the products of the soil did not reduce the rate of 
 profit; and by suspending the prosperity of the 
 country, create a re-action destructive of the high 
 scale of prices, and the forced extension of tillage. 
 But even under these, to them most favourable 
 circumstances, the landed interests could not 
 escape from the inherent and essential evils of a 
 restrictive system, namely, frequent and consider- 
 able fluctuations in the supply and in the price of 
 produce. 
 
 The seasons performed their cycles of scarcity 
 and abundance ; and, as commerce was not per- 
 
286 
 
 mitted to supply deficiency in one case, nor to 
 remove superfluity in the other, the deep and 
 irregular vibrations of the market confounded the 
 calculations of «the farmer, and rendered inevitable 
 the periodical visitations of agricultural distress. 
 The effects of the seasons, during the interruption 
 of commerce occasioned by the war, are worthy of 
 particular examination. 
 
 The summer* of 1792 was unusually wet, and 
 the crops of wheat were every where injured. In 
 the years 1793 and 1794, the seasons were unusu- 
 ally dry ; and the crops, particularly in the last of 
 those years, very generally failed. Thus the supply 
 of corn was diminished by three deficient harvests, 
 occurring in succession ; and, as a necessary conse- 
 quence, prices became excessive. In the early 
 part of 1795 the growing crops were again injured, 
 and in the August of that year wheat rose to 
 the enormous price of 117*. the quarter. The 
 severe dearth, approaching to famine, created the 
 greatest alarm throughout the country ; a bounty 
 
 * The facts and illustrations in the remainder of this 
 chapter are extracted from Mr. Tooke's very valuable work 
 on High and Low Prices. 
 
287 
 
 of 20^. the quarter was granted on the importation 
 of wheat ; and all neutral vessels conveying grain 
 to France, where the scarcity also prevailed, were 
 seized and brought into British ports, where their 
 cargoes were forcibly sold in order to increase 
 the supply of food. 
 
 During this period of deficient supply and high 
 prices, the farmer realised extraordinary profits, 
 and a new and powerful impulse was given to 
 heightened cultivation and extended tillage. The 
 number of enclosure bills, on the average of the 
 three years, ending in 1797, was nearly double 
 what it had been in 1792. 
 
 An abundant harvest in 1796, concurring with 
 extended cultivation, occasioned a large aggregate 
 produce ; and prices fell so rapidly that, on the 1st 
 of January, 1797, wheat was only 55s. the quarter, 
 or less than half its price in January 1796. The 
 crops in 1797 and 1798 were remarkably abun- 
 dant, and prices continued to fall ; until, in the 
 autumn of the latter year, wheat sunk to 47«y. the 
 quarter. Considerable suffering was now experi- 
 enced by the agricultural class, and complaints were 
 made that the farmers were unable to pay their 
 
288 
 
 tents. The extension of tillage received an imme- 
 diate check, and the number of bills of enclosure 
 which, in 1797, had been 85, fell to 48. 
 
 The season of 1799 was, perhaps, as unfriendly 
 to the productions of the earth as any upon record, 
 and that of 1800 was one of renewed and conti- 
 nued scarcity. Notwithstanding an importation 
 of wheat to the extent of 1,242,507 quarters, the 
 average price of that grain rose, on the 1st January, 
 1801, to IS 9*. In Mark Lane, in the course 
 of the season, the price of wheat reached the exor- 
 bitant sum of 180*. ; and, for four weeks, the 
 quartern loaf was at 1*. lO^tZ., being the highest 
 price ever known, either before or since. So great 
 was the alarm of the legislature at the terrific 
 threatening of continued dearth and famine, that 
 a bounty was voted for the importation of foreign 
 grain, so framed, as to secure to the importer the 
 high minimum price of 100.?. a quarter. 
 
 Mr. Tooke, in his invaluable work on High and 
 Low Prices, has entered into calculations which 
 shew, that the additional surplus return above 
 expenditure, divided during these two years of 
 extraordinary advance in the value of agricultural 
 
289 
 
 pTbrf6fc'4 ambbiiteTd' to '£f;i5,000,dod' ;^r ' iry^l^Sf! ' 
 tJnder these circumstances, there was an ea^er 
 resort of fresh capital to the land. The impulse 
 was irresistible ; and the number of enclosure billsV' 
 which in 1799 had been only 63, became in 1800, 
 80, and in 1801, rose to 122» 
 
 This flourishing state of agriculture Vas oi short 
 duration. The season of 1801 was favourable; 
 and as the orders given before the character of the 
 crops was ascertained, rendered the importation of 
 grain still very considerable, prices were rapidly 
 depressed. This depression commenced before the 
 preliminaries of peace with France were signed, 
 and before the public entertained the slightest ex- 
 pectation of such an event. The ci^ops of 1802 
 and 1803 were fair average crops ; and these, with 
 a slight importation, were sufficient to occasion a 
 gradual decline of prices. In MarcJi 1804, wheat 
 had fallen to 49^. 
 
 This fall of prices again occasioned great agi-icul- 
 tural distress; and in the session of 1804, it was 
 deemed necessary to pass a new Corn Bill, afford- 
 ing increased protection to the landed interest:' 
 The additional capital which had been applied t3^ 
 
290 
 
 the soil obtained no adequate return ; tlie extension 
 of tillage was once more checked ; and the number 
 of enclosure bills, in 1804, fell to fifty-two — exactly 
 one half of what they had been in the preceding 
 year. 
 
 An unusual sequence of unfavourable seasons 
 now occurred. The crops of 1807, 1808, 1809, 
 1810, 1811, and 1812, were all more or less de- 
 ficient. Agricultural produce continued at the 
 highest range of prices ever known. Wheat was as 
 follows : — 
 
 1809, January 1, 90^. 
 
 July 1, 88*. 
 
 1810, January 1, 102*. 
 
 July 1, 113*. 
 
 1811, January 1, 94*. 
 
 Julyl, 86*. 
 
 1812, January 1, 106*. 
 
 July 1, 140*. 
 
 1813, January 1, 119*. 
 
 July 1, 116*. 
 
 This period of deficient crops, and of high pnces, 
 was one of renewed prosperity to the landed 
 interest. The extension of tillage, and the applica- 
 
291 
 
 tion of fresh capital to land already under cultiva- 
 tion, proceeded in full proportion to the great gains 
 derived from the high value of the produce of the 
 soil. Under these circumstances, rents, upon the 
 expiration of leases, were advanced in full propor- 
 tion to the high range of the price of produce ; 
 and, in several instances, they were raised to treble 
 what they had been in 1792. Every purchase of 
 land, previous to 1812, whether made with or 
 without judgment, turned out favourably, according 
 to the then market rates ; and it was supposed, in 
 consequence, that money could in no way be so 
 profitably employed as in buying land. Specula- 
 tions, therefore, in land, or, as it is termed, land- 
 jobbing, became general, and credit came in aid of 
 capital for this purpose. The number of enclosure 
 bills was as follows : — 
 
 In 1808, 92. 
 
 1809, 122. 
 
 1810, 107- 
 
 1811, 133. 
 
 1812, 119. 
 
 1813, 111. 
 
 1814, 112. 
 
292 
 
 The flourishing state of agriculture, howevefj 
 was again suddenly suspended by the irregular 
 course of the seasons. The harvest of 1813 was 
 overflowing ; that of 1814 yielded a fair average ; 
 and that of 1 81 5 was remarkably abundant. Agri- 
 cultural produce now fell with ruinous rapidity to 
 half its former price. Wheat was, — 
 
 1814, January 1, 76^. 
 
 July 1, 67^. 
 
 1815, January 1, 65s, 
 
 July 1, . 67*. 
 
 1816, January 1, 53s. 
 
 July 1, 73s. 
 
 The suffering of the landed interest, from this 
 great and sudden fall of prices, was intense ; and the 
 Corn Bill of 1815, which was passed for their 
 relief and protection, proved ineffectual in averting 
 the depreciation of produce. The deficient harvest 
 of 1816, however, intervened, and gave that respite 
 from agricultural distress, which legislative enact- 
 ments failed to procure. Grain rose upwards of 
 100 per cent. ; wheat, which, in January 1816, had 
 been 53*., reaching in July 1817, 112!*. and con- 
 tinuing 80*. during 1818. 
 
293 
 
 This high range of prices, during the short 
 period which it lasted, afforded renewed prosperity 
 to agriculture, and tillage was resumed with in*- 
 creased spirit. But as the Corn Bill of 1815^ 
 enacted for the purpose of supplying the place of 
 those obstructions to importation which the peace 
 had removed, permitted the introduction of foreign 
 wheat, when the price reached 80*. considerable 
 supplies were received from abroad ; and these, in 
 conjunction with the unusually abundant crops of 
 1820, saturated the country with com, and threw 
 a decided glut upon our markets. The extreme 
 agricultural distress which followed must be in the 
 full recollection of the reader. So intense was the 
 suffering, that the most wild and dishonest projects 
 for relieving the landed interest were entertained ; 
 and proprietors and tenants evinced no unwil- 
 lingness to go the full length of breaking faith 
 with the public creditor, and of declaring a national 
 bankruptcy. 
 
 The review which has now been taken of the 
 course of the seasons, for the last thirty years, 
 gives our general reasonings the fullest sanction 
 of experience, and proves, by an extensive indue- 
 
294 
 
 tion from facts, that obstructions to the impor- 
 tation of foreign produce, even when pushed to 
 the verge of famine, are inadequate to correct 
 the fluctuations of the market, or to prevent the 
 periodical recurrence of agricultural distress. 
 
'.:y^ 
 
 CHAPITER II. 
 
 Examination of some of the Measures which 
 have heen proposed for correcting the Evils of 
 sudden and considerable Fluctuations in the 
 Supply and Price of Com, 
 
 During the periods of distress, the agricul- 
 turalists often contended, that the evil could not 
 arise from the excess of produce of home growth ; 
 because, if such had been the case, the excess of 
 quantity would have compensated the farmer for 
 the fall of price. They did not sufficiently attend to 
 the principle, that when the market is overstocked 
 with produce, prices fall in a ratio considerably 
 greater than that in which the supply is in excess. 
 If, in average years, our farmers, one with an- 
 other, grew a hundred quarters of wheat, at eighty 
 shillings the quarter, then each farmer would, for 
 this part of his produce, receive £.400. But if 
 a year of extraordinary abundance were to double 
 
296 
 
 the supply of wheat, then the farmer could not sell 
 his two hundred quarters at forty shillings the 
 quarter, and thus obtain the same sum as before. 
 As the people could consume very little more than 
 their ordinary quantity of food, almost the whole 
 of this extra supply would lie on hand ; and as 
 each farmer, in his solicitude to dispose of his 
 whole crop, would seek to undersell his neighbour, 
 a competition would necessarily arise, and occasion 
 an excessive fall in the markets. The varying 
 value of agricultural produce affoixls a striking 
 illustration of this principle. The bullion pric^ 
 of wheat in 1816 was only one-fourth of what it 
 was \n 1801, and only one-half of what it was in 
 1^1 1 ; but it is plainly impossible, that the quantity 
 of com in the country in 1816 should, with respect 
 to jthe demand, have b^^n four ti^s as great as in 
 1801, or twice as great as in 1811. — When an 
 abundant year overstocks the markets, the increase 
 in the quantity of produce can never (unless ip 
 cpuntries where the low natural price of cof i^ 
 allocs of prpmpt and extensive exportation) in- 
 .(dempify Xhe cultivator for the diminution in it^ 
 vejue. 
 
297 
 
 But though the agiicultuvalists have not beep 
 very successful in discovering the causes of distress, 
 yet they have not been backward in recommending 
 remedies. 
 
 In the Report of the Select Committee of the 
 House of Commons, on ,the Corn Trade i?f the 
 United Kingdom, plenty and low prices are re- 
 presented as connected with a system of restricte4 
 importation ; and it was confidently asserted, 
 that the measure of very high protecting duties, 
 which that Committee recommended, would ren- 
 de;* oiu: prices gradually lower and lower, until 
 we should beconje jam exporting country, and bp 
 eiiabled to sell corn as cheap as it can be sold in 
 the foreign markets. 
 
 The statements respecting the influence of re- 
 stricted iijiportation, in reducing prices, are as 
 rei)ugnant to the pijinciples of political economy, 
 as they are contrary to the maxims of common 
 sense. They involve a f]4i]damental error, arising 
 from a total forgetfulness of the connection be- 
 tween productive cost and market price. While 
 th^ former remains unabated, permanently to 
 reduce the latter, is impossible. Unless restric- 
 
298 
 
 tions upon importation could diminish the quantitj 
 of labour and capital necessary to the production 
 of a given quantity of corn, they could not possibly 
 effect a permanent reduction in our markets. 
 But, instead of diminishing the quantity of labour 
 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 
 afford a higher rent. Hence, the quantity of labour, 
 of capital, and of rent, which the farmer paid for 
 production, would be increased; and hence, the 
 average price of the markets would necessarily 
 rise. 
 
 Those who contended that the exclusion of 
 foreign grain would lower prices, seem 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, abun- 
 dant crops may be produced ; and seem not to 
 
•% 
 X 
 
 299 
 
 be aware, that the capital, which artificial prices 
 might force upon the soil, could be retained there, 
 only while the continuance of such prices should 
 secure to it the ordinary rate of profit. If, tempted 
 by the monopoly secured to them, the agricul- 
 turists should be led into the error of overtrading, 
 and produce a supply beyond the demand, then, 
 indeed, the market would sink below the natural \ 
 
 price. But the slightest knowledge of political 
 economy is sufficient to convince us that such a 
 state of things cannot last. If there be, in the 
 whole compass of this science, a principle imi- 
 versally admitted, and completely incontrovertible, 
 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 its 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 several Parliamentary Committees on the 
 corn trade, shews that our inferior lands must be 
 
 N 
 
300 
 
 thrown out of tillage, if' our prices are not main- 
 tained nearly a hundred per cent, above those of 
 other growing countries. If, therefore, restrictions 
 on the importation of corn could have the effect 
 of lowering prices, they would diminish cultiva- 
 tion, not extend it; and would counteract the 
 object they were meant to attain. The supposition, 
 that forced cultivation causes reduced prices, in- 
 volves a palpable contradiction. The two facts 
 are incompatible ; they are mutually destructive 
 of each other. 
 
 This subject has been ably handled by Dr. 
 Crombie. — " In order to quiet the apprehensions 
 of the public, and to reconcile them to this mea- 
 sure, the advocates for the new Act confidently 
 maintained, that its evident intention was, and its 
 necessary effect would be, to reduce the price. The 
 farmer was told, that he should receive a higher 
 remuneration than the old law was calculated to 
 afford; and the consumer was assured, that he 
 would have less to pay for his quarteni loaf. 
 How assertions so "contradictory are to be recon- 
 ciled, it is not for a common understanding to 
 comprehend. What the farmer receives, it is 
 
301 
 
 presumed, the consumer must pay. If the agri- 
 culturist is not, by the new Act, to receive a higher 
 remuneration, how is he to be benefited by its 
 enactment ? If he is to receive this In'gher remu- 
 neration, whence is it to come, but from the 
 pockets of the public? If the former Act fur- 
 nished the farmer with a sufficient protection, 
 and secured to him an adequate return for labour 
 and capital, then the new Act is manifestly a work 
 of supererogation. If the reverse was the fact, 
 then let it not be absurdly affirmed, that while the 
 farmer is to receive a higher price, the consumer 
 is to pay less. 
 
 " It may be replied, that though the immediate 
 effect of the new com law might be an augmenta- 
 tion of the price of wheat, yet its ultimate tendency 
 isjby increasing the supply, to lower the price. 
 The argument is fallacious. It could be just only 
 on the supposition, that the waste lands, when 
 once broken up, inclosed, and cultivated, and the 
 inferior soils, when ooce brought, as the farmers 
 say, into good heart, will continue to afford the 
 agriculturist a sufficient remuneration for labour 
 and capital, at tlie reduced price of grain which 
 
302 
 
 the advocates of the Act professed to have in con- 
 templation. The supposition is almost ridiculously 
 false. It is a notorious fact, that there are at pre- 
 sent in cultivation, inferior soils, requiring a con- 
 stant large expenditure of labour and capital, 
 which would not remunerate the farmer, unless he 
 should receive from ninety shillings to five pounds 
 for ev€ry quarter of wheat which they may pro- 
 duce. And much of that waste land, which 
 remains to be inclosed, is of the same character ; the 
 produce of which, therefore, if brought into tillage, 
 must, in order to indemnify the farmer, not only 
 now, but continue to fetch a high price. It is 
 not to be expected that he will expend labour and 
 capital without the prospect of remuneration ; and, 
 if he finds that the produce of inferior soils does 
 not continue to indemnify him, by reason of the 
 reduced price of agricultural produce, he suffers 
 them to relapse into their former state of waste and 
 infertility. It betrays, therefore, a most visionary 
 hope, to imagine that the price of wheat can ever 
 be reduced by the extension of agriculture over 
 inferior soils; on the contrary, it is self-evident, 
 that whatever is raised with greater labour and 
 
303 
 
 greater expense, must be sold for indemnification 
 at a higher price. Nor can we conceive a more 
 palpable absurdity, than to suppose that the price 
 of any article can be lowered by mixing it with 
 another of greater value *." 
 
 The advocates of restricted trade contend that 
 " While we depend, in any degree, upon a foreign 
 supply of com, the prices are constantly governed 
 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 
 
 * Letters on the Present State of the Agricultural Interest, 
 page 1 1 . This is a very sensible and able pamphlet, written 
 with Dr. Crombie's accustomed perspicuity and acuteness. 
 
304 
 
 fitnongst the importing merchants, still, the objec- 
 tion would be perfectly invalid ; nay, would com- 
 pletely refute itself. Supposing that free importa-^ 
 lion 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 cofti ; then, as soon as our importing 
 merchants began, as asserted in the objection, to 
 raise prices, the market, would exceed the growing, 
 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 pricJd 
 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 
 
305 
 
 bring in new lands, and extend tillage beyond its 
 former state. Thus, the two propositions, that 
 free importation would discourage domestic agri- 
 culture ; 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 keep- 
 ing prices low, such a system of freedom should 
 either immediately, or subsequently, occasion com- 
 binations 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 contending. 
 
 But the combination contemplated in the objec- 
 tion 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 com 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- 
 
306 
 
 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, occa- 
 sioned 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 
 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 coimtries : that is, 
 by enabling us to procure com at a cheaper rate 
 than 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 contra- 
 diction. 
 
 It has been maintained, by high authority, that 
 restrictions upon import, forcing an independent 
 supply, would be 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 whatever proportion we limit the ter-. 
 
S07 
 
 ritory from which we derive subsistence, in the 
 same proportion do we expose ourselves to the 
 uncertainty of the seasons, and deprive ourselves 
 of the benefit of the provision which, in the uni- 
 formity of her general results, Nature has made 
 for the correction of partial irregularity in her 
 operations. If we restrict importation, and, in 
 order to raise an independent supply of food 
 for our increasing population, force into tillage 
 lands which have not hitherto been adequate to re- 
 pay the charges of cultivation, then the expenses of 
 production will be increased, and the average price 
 of wheat will continue to rise. How, then, in 
 abundant years, could our superfluity be exported 
 so as to meet the competition of the continental 
 grower ? ^ Our markets must be completely glut- 
 ted, — 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 sup- 
 ply, therefore, instead of giving steadiness to prices, 
 would cause them to fluctuate perpetually, between 
 the average price and the highest price at which, 
 in abundant years, we could export, with a chance 
 
.308 
 
 f 
 
 of standing the corn petition of the continental 
 
 grower. 
 
 Having thus shewn the effect which a system of 
 
 restriction on the importation of corn must produce 
 upon our commerce and wealth, we are prepared 
 to resume the question, whether agriculture could 
 receive any permanent benefit from legislative pro- 
 tection giving the value of 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, is to sustain, and, while 
 the population continues on the increase, to extend 
 our tillage. The benefit, however, which agricul- 
 ture receives from such artificial encouragement, 
 can be but of short duration ; and bears within 
 itself the principle of its own destruction. Demand 
 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 conimerce decline in any 
 country, the demand for agricultural produce fails. 
 If we continue to exclude foreign com, we may for 
 
;509 
 
 a time have an increased consumption of, and 
 higher prices for corn of home growth; but, as 
 these higher prices would raise wages and depress 
 profits, and thereby shut out our manufacturers 
 and merchants from the foreign markets, the ulti- 
 mate consequence of restricted importation must 
 be, that the impoverished domestic consumer would 
 no longer have ability to replace to the farmer the 
 expenses of cultivation. 
 
 This consequence of a system of restriction on 
 the importation of corn, would not, probably, be 
 immediate. Corn is an article of such prime 
 necessity, that, if measures for keeping up its price 
 are persisted in, the people will dispense with 
 almost all other articles, in order to procure it. 
 Thus, while the demand for all other articles is 
 diminished, and their production, consequently, is 
 checked, the value of corn will be sustained, and 
 agriculture may flourish, for a time, amid the 
 general decay of wealth. To continue such a 
 state of things, however, will be evidently impos- 
 sible. As the high value of subsistence and 
 material deprives them of the power of seUing with 
 a profit at the low prices which foreigners find suffi- 
 
310 
 
 ciently remunerative, our manufacturers will be 
 deprived of employment, and, though willing to 
 give up all other articles, will find themselves 
 unable to purchase the same quantity of corn as 
 before. By emigration, or by death, their num- 
 bers will 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, affected 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 recompense, 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 ground will be 
 reduced in value, and yield a lower rent. The 
 landlord, the farmer, and all the persons to whom 
 they give employment, will be involved in the 
 general distress. 
 
 In a former chapter, we traced the calamitous 
 
311 
 
 effects which would follow a sudden opening of 
 the ports to foreign com, in a country where ob- 
 struction to importation had given a forced exten- 
 sion to tillage, and induced an artificial scale of 
 prices. The derangement and embarrassment, 
 however, occasioned by a rash and injudicious 
 application of the principle of free intercourse, wU\ 
 appear light and transient, when contrasted with 
 the depression and calamity which must ultimately 
 overtake the landed interests, in consequence of 
 the fall in the value of agricultural produce, which, 
 now that the state of the Continent affords en- 
 couragement to the emigration of skilled labour 
 and capital, manufacturers can no longer obtain the 
 war prices for their goods, will be indirectly occa- 
 sioned by the attempt to keep up the war price of 
 corn, and thereby to lower the rates of profit and 
 of interest in England. In the former case, the 
 temporary evil would be gradually, 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 injudiciously admitted. 
 
312 
 
 must, after the first calamitous shock and derange- 
 ment, occasion more accurate divisions of employ- 
 ment, give labour and stock a more productive 
 direction, and thus recreate the wealth it had de- 
 stroyed. Now, it is the neighbourhood of wealthy 
 markets which affords the best encouragement 
 to agriculture ; it is the quantity of other com- 
 modities offered in exchange for it, that deter- 
 mines the value of corn. As unrestricted inter- 
 course began to extend manufactures and com- 
 merce, our farmers, under the natural protection 
 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 extent 
 than could have been possible under artificial en- 
 couragements ; the necessary effects of which must 
 be, to narrow the home market, which the farmer 
 would monopolise. 
 
 While the direct injury inflicted on the landed 
 
 interest, by a hasty and injudicious application of 
 
 j sound general principles, would, after a period of 
 
 \ calamity, be corrected by the very causes which had 
 
 I produced it; in the evil which must be indirectly 
 
313 
 
 occasioned by an 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 
 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 
 accidental decay, and the public prosperity, after 
 each apparent check, receives a new impulse. A 
 sudden opening of the ports would, after a time, 
 increase 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 opulent 
 markets, the exclusive benefits of which, ignorance 
 had asserted they would secure, the agricultural 
 interest, in grasping at the shadow, would have lost 
 the substance ; in seeking for artificial, would have 
 deprived themselves of their natural encourage-^ 
 
311 
 
 ment; and no longer finding consumers in the 
 country, which their avarice had impoverished and 
 depopulated, would be compelled to go to foreign 
 markets for remunerating prices. 
 
 Thus then, it appears, that a permanent system 
 of restrictions on the importation of corn, and a 
 consequent continuation of the artificial prices of 
 the war, must ultimately diminish the home de- 
 mand for grain, and render us once more an ex- 
 porting country. This change, however, will be 
 produced by causes, and will be the result of a 
 process, very different from those which are con- 
 templated by the advocates of a restricted com 
 trade. These persons contend, that the high prices, 
 occasioned in the first instance by the exclusion of 
 foreign grain, will lead to an extension of tillage ; 
 and that the increased supply, raised from our own 
 soil, will reduce the price of corn, until it can be 
 sent to foreign markets with a profit. In arriving 
 at this conclusion, however, they totally omit the 
 distinction which exists between cost and price; 
 and seem absolutely unacquainted with the funda- 
 mental principle of political science, that it is im- 
 possible to increase the supply of ^y commodity so 
 
315 
 
 as permanently to reduce its price below what will 
 replace, with an adequate surplus, the capital em- 
 ployed in production. It is plainly impossible that, 
 at one and the same time, it should be profitable 
 to export com, and profitable to extend cultivation 
 to lands requiring, in order to yield a given pro- 
 duce, a greater quantity of labour and capital than 
 the lands cultivated 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 impossible for the same thing to be, and 
 not to be, it will also remain impossible for Eng- 
 land to become an exporting country, in the manner 
 contemplated by the advocates of a restricted ex- 
 ternal trade in corn. The real process, by which 
 restrictions upon the importation, may, at no very 
 remote period, lead to the exportation of corn, we 
 shall briefly state. 
 
 The high price of food and materials, occasioned 
 by restricted importation, will, in the first instance, 
 exclude our manufactures from the foreign market. 
 While ruin thus falls upon the manufacturing and 
 trading population, the home demand for corn will 
 
316 
 
 diminish, and its value become too low to replace 
 with a profit the capital, which the first temporary 
 rise in prices had forced upon inferior lands. 
 These, therefore, will no longer be cultivated ; and, 
 from the same cause, the value of fertile lands will 
 fall. In the progress of impoverishment and de- 
 population, a sufficient number of opulent con- 
 sumers will not be found, to pay the expense of 
 cultivation upon soils of third, or even of second- 
 rate quality. Cultivation will be limited to tracts 
 of first-rate quality: these requiring but a small 
 expense of dressing, the cost price of the corn 
 produced upon them will be lower than the cost 
 price of the grain produced in prosperous foreign 
 countries, which, being now nearer to populous 
 manufacturing districts and commercial towns, 
 can afford to cultivate second, or third-rate soils. 
 When things have arrived at this state, our corn 
 may be sent abroad with a profit ; and England, 
 bankrupt and depopulated, sunk from her place in 
 Europe, and, perhaps, deprived of her existence as 
 an independent nation, may again become an ex- 
 porting countiy. 
 
CHAP. III. 
 
 0}i the Manner in which our Restrictions on the 
 Importation of Foreign Agricultural Produce 
 contributed to bring on the present Commercial 
 Crisis. 
 
 In a judicious and able pamphlet, supposed to 
 come from authority, on the causes of the recent 
 crisis in the money market, and on the means of 
 preventing the recurrence of the evil, the following 
 remarkable passage occurs : — 
 
 " The first of these causes appears to have been 
 the great redundancy of capital in the early part 
 of the last year, and such a consequent reduc- 
 tion of the interest of money, and in the rates of 
 profits, as induced those possessed of it to seek 
 for extraordinary means to employ their accumu- 
 lations ; and, under the avidity of gain, to embark 
 in every perilous venture proposed to them. It 
 is totally unnecessary to insist upon a fact now 
 universally admitted. It is notorious that, under 
 this abundance of money, the rate of interest in 
 
318 
 
 the spring and summer of 1825 did not exceed 
 three, or three and a half per cent., and that bills 
 of high credit and short dates were discountable 
 in the market at a much lower rate. In a word, 
 money was so plentiful, that, consistently with 
 security, there was no competition in the demand 
 proportionate to the supply. The bankers were 
 more ready to afford discounts than the merchants 
 to solicit them. The best bills, instead of being 
 sent to the Bank of England, were carried upon 
 the Exchange, and there discounted at a lower 
 rate. All Government securities became affected 
 by this character of the markets ; Exchequer 
 bills, yielding only two and a quarter per cent., 
 were frequently sold at 50*. or 60*. premium, and 
 the three per cent, stock rose very nearly in the 
 same proportion." 
 
 In perusing this passage, the first thing which 
 strikes us is, that it does not go to the bottom of 
 the question. It is true, that in the early part of 
 last year, there was a great redundancy of capital, 
 with a low rate of interest and of profit. It is 
 also true, that the low rates of interest, and of 
 profit, induced individuals to risk extraordinary 
 
319 
 
 means for employing their accumulations ; and, as 
 the writer proceeds to shew, brought on the mania 
 for speculating in foreign loans, in mines, in joint 
 stock companies, in merchandise, and in discount, 
 upon long and inconvertible securities, until the 
 universal spirit of overtrading terminated in the 
 calamitous re-action which has been recently ex- 
 perienced. But to complete the chain of causes, 
 the first and the most important link is still 
 wanting. The ciisis was occasioned by over 
 speculation ; over speculation was occasioned by 
 the low rates of profit and of interest ; and the 
 low rates of profit and of interest — what was 
 it which occasioned those ? This is the primaiy 
 and fundamental question which it is necessary to 
 solve. 
 
 In the spring of 1825, all the elements of 
 national prosperity seemed working together in our 
 favour. Every circumstance, whether internal or 
 external, appeared calculated to open a boundless 
 field to British enterprise, and scope without limit 
 for the profitable investment of British capital. 
 Agriculture and trade had been to a considerable 
 extent relieved from the pressure of taxation ; our 
 increasing population, and our perpetually im- 
 
320 
 
 proving machinery, had given to our manufacturing 
 industry unrivalled, and almost miraculous, efficacy; 
 we were at peace with all the world, with the 
 exception of an obscure and semi-barbarous state in 
 the extremity of Asia ; while, in the vast regions of 
 America, new independent nations had arisen, 
 eager to give, upon the most free and favoured 
 terms, the rich and varied products of their unex- 
 hausted soil in exchange for British fabrics. In 
 the history of the world, no conjuncture ever had 
 occurred so favourable to the prosperity of a manu- 
 facturing and commercial country. Nevertheless, 
 during this extraordinary concurrence of the most 
 favourable circumstances, when there seemed no 
 natural bounds to the field of British enterprise, and 
 no necessary limit to the profitable investment of 
 British capital, there was in the country a great 
 redundancy of capital, which could not l^e bene- 
 ficially employed ; and the rates of profit, and the 
 interest of money, were so low, that those possessed 
 of disposable funds were induced to seek for extra- 
 ordinary means of employing their accumulations, 
 and to embark in every perilous venture which 
 was proposed. The question recurs, what was it 
 which could have occasioned such a state of things ? 
 
321 
 
 This momentous question, it is hoped, the reader 
 is now prepared to answer for himself. Commerce 
 is the exchange of equivalents; the bartering 
 between nations of the articles which each has 
 relative advantages in producing. England pos- 
 sesses relative advantages in the production of 
 almost every species of wrought goods ; other coun- 
 tries, particularly those of North and South Ame- 
 rica, have relative advantages in raising raw pro- 
 duce. But England refuses to exchange wrought 
 goods against raw produce. She closes against 
 herself the sources of interminable prosperity ; and, 
 while boundless scope for profitable enterprise re- 
 mains within her reach, she adheres to a barbarous 
 system of commercial policy, which brings her pre- 
 maturely to the limits of her resources, and to 
 the verge of decline. 
 
 Had we freely exchanged our wrought goods 
 for the raw produce of our neighbours, there could 
 not, while, in the commercial countries of the 
 world, there remained fertile and well-situated land 
 unreclaimed, have been a redundancy of capital, and 
 an inadequate rate of profit and of interest, in- 
 ducing individuals to employ their accumulations 
 
 Y 
 
322 
 
 in wild and hazardous adventures. But we would 
 not receive the cheap and good timber of Norway, 
 in order to enrich the timber merchants of Canada ; 
 we gave the exhausted soils of the West Indian 
 islands a monopoly for supplying the home market 
 with sugar, in order to enable the planter to per- 
 petuate slave cultivation ; and, above all, we closed 
 our ports against the admission of foreign com, in 
 order to enrich the proprietors of land by en- 
 abling them to lay a grievous and iniquitous tax 
 upon the food of the people. We forcibly con- 
 tracted the field of commercial enterprise ; we 
 choked up the advantageous channels in which 
 additional investments might have been made ; 
 we clung to measures, the necessary tendency of 
 which, is to reduce almost to nothing the surplus 
 of reproduction above expenditure ; and thus we 
 occasioned such a redundancy of capital, and such 
 a depression in the rates of profit and of interest, 
 that new and hazardous ventures presented the 
 only openings in which accumulations could be 
 employed. 
 
 In the preceding chapter of this work, as well 
 as in the Essay on the Production of Wealth, I 
 
323 
 
 have entered into ample illustrations of the im- 
 portant and fundamental principles, that the rate 
 of profit falls, as the cost and the value of raw 
 produce rise ; and that a densely-peopled country, 
 where additional supplies of food and material 
 cannot be raised without resorting to soils of less 
 and less fertility, must, unless she obtain supplies 
 of foreign produce, speedily approach that sta- 
 tionary state in which additional accumulations 
 cannot be productively employed. It is unneces- 
 sary, in this place, to repeat the demonstration of 
 those principles. In the succeeding pages I will 
 assume, as a matter proved, and therefore admit- 
 ted, that, in an old and well-peopled country, the 
 free importation of foreign agricultural produce is 
 that which keeps the rate of profit high, and flings 
 into viewless distance the ultimate limits of national 
 prosperity and wealth. 
 
 And now we have completed the chain of cause 
 and effect, by adding the prime link to which the 
 writer of the Government pamphlet omitted to 
 refer. By a system of commercial policy, dis- 
 graceful to the country and to the age, we re- 
 stricted the importation of foreign agricultural 
 produce, and thereby lowered the rates of profit 
 
324 
 
 and of interest, until capital, excluded from the 
 channels of beneficial investment and reproduc- 
 tion, existed in a state of redundancy ; the low 
 rates of profit and of interest, and the redundancy 
 of capital, induced those who were possessed of it 
 to employ their accumulations in every species of 
 hazardous venture which was proposed to them ; 
 this desire to engage in new ventures, for the 
 purpose of obtaining that adequate return for 
 money which the ordinary transactions of business 
 no longer afforded, rendered the spirit of specu- 
 lation epidemic throughout the country ; foreign 
 loans and foreign mines, joint-stock companies, and 
 inordinate speculations in merchandise, created an 
 unusual demand for accommodation and currency ; 
 the directors of the Bank of England, and the 
 country bankers, disregarding the legitimate prin- 
 ciples of their trade, made issues upon long and 
 unconvertible securities, and created a redundant 
 circulation ; the consequent high price of commo- 
 dities, encouraging import, and checking export, 
 with the engagements to be made good on account 
 of foreign loans, and foreign speculation, turned 
 the balance of payments, and the course of ex- 
 change, against us ; the Bank, in order to protect 
 
325 
 
 itself against the extraordinary demand for gold, 
 suddenly contracted its issues ; and the crash came. 
 
 When the series of cause and effect is thus com- 
 pleted, it appears obvious and self-evident, that the 
 measures contemplated by ministers for placing the 
 circulation of the country banks upon a more secure 
 foundation, can have little tendency to prevent the 
 recurrence of the calamitous re-action which is 
 now experienced. These measures may, perhaps, 
 be, to a certain extent, beneficial. My objection to 
 them is, that they do not go to the root of the evil > 
 and that, whether they be, or be not adopted by the 
 legislature, the country, after the present crisis has 
 passed away, will continue to be exposed to perio- 
 dical returns of regorgement and revulsion. The 
 progress of these ruinous alternations may readily 
 be traced. 
 
 Under the present universal pressure for money, 
 and destruction of confidence and credit, the mer- 
 cantile and trading classes venture upon no pur- 
 chases beyond those which are just sufficient to 
 supply the immediate and indispensable consump- 
 tion of the market. As the merchant and manu- 
 facturer cease to purchase, the manufacturer, from 
 
326 
 
 the same cause, must cease to produce; and in 
 consequence of the diminished production, the stock 
 of goods on hand, and particularly of such goods 
 as the foreign merchants may take off, will be 
 rapidly reduced. This is the first step towards 
 the removal of the present pressure. 
 
 After the stock of goods on hand has been in 
 some considerable degree diminished, prices will 
 recover ; confidence and credit will be restored ; 
 merchants and dealers will renew their purchases ; 
 •and, by a necessary consequence, the work of pro- 
 duction will be resumed. 
 
 As, during the suspension of industry, labour 
 must have been thrown out of employ, and 
 wages depressed, the return of ordinary prices 
 will, until wages recover their ordinary level, be 
 accompanied by a more than ordinary rate of 
 profit. Hence the capital lost or destroyed, during 
 the period of revulsion, will be replaced by new 
 accumulations. 
 
 A country which restricts the importation of 
 food and material, can employ only a given quan- 
 tity of capital in reproduction, and hence the new 
 accumulations will exist in a state of redundancy; 
 
327 
 
 the rate of profit, and the interest of money, will 
 again become very low, and persons possessed of 
 disposable funds will be again tempted to engage 
 in any hazardous venture which seems to hold 
 out a prospect of higher returns. The redundant 
 capital will seek investment in countries where 
 profits and interest are higher ; this will lead again 
 to the exportation of the metals, and to a drain 
 upon the Bank for gold ; the Bank, as a measure 
 of precaution, will contract the currency; and 
 another revulsion, as extensive and calamitous as 
 the former, will ensue. — To go at once to the 
 root of the evil, and thus to prevent the periodical 
 recurrence of these ruinous shocks to public and 
 private credit, we must abolish those absurd and 
 iniquitous restrictions on the importation of food and 
 material, which limit the quantity of capital which 
 can be beneficially invested in domestic industry ; 
 and which render profit and interest lower in 
 England than in other commercial countries. 
 
 Throughout this argument I have assumed, that 
 a very low rate of profit is accompanied with a 
 very low rate of interest. I do not, however, go 
 the length of Mr. M*Culloch, that interest rises as 
 
328 
 
 the rate of profit rises, and falls as it falls ; and 
 that the fact, whether the rate of profit is rising 
 or falling, can be learned from the rate of interest 
 paid for capital lent upon good security. Mr. 
 Tooke, in an excellent and most useful work, 
 which has just been published, clearly demon- 
 strates, that several other causes, besides the rate 
 of profit, contribute to determine the rate of in- 
 terest. All that I contend for, and all that is 
 necessary to my argument is, that the rate of profit 
 is one main cause, and limiting circumstance, in 
 regulating the market rate of interest. 
 
 Supposing that the surplus of reproduction, over 
 and above the expenditure which creates it, is 
 twenty per cent. ; then, upon the principles of 
 Mr. Tooke, the rate of interest might be five, or 
 ten, or fifteen per cent., according to the proportion 
 between the supply of, and the demand for, dis- 
 posable money capital. But it is self-evident, that, 
 under this supposition, the rate of interest could 
 not permanently rise to twenty per cent. ; because, 
 if it did, the passive lender of the capital would 
 obtain the whole of the surplus of reproduction 
 which it created, while the active borrower of the 
 
329 
 
 capital retained nothing to reward him for his 
 labour, his skill, his risk, and his connection. On 
 the same principle, if the surplus of reproduction 
 above expenditure fell to ten per cent., money 
 could not continue to be borrowed at so high an 
 interest as ten per cent. Were this surplus to fall 
 to five per cent., interest would necessarily be 
 below five per cent. ; and should the high value of 
 food, and of the materials of wrought necessaries, 
 reduce the surplus of reproduction above expendi- 
 ture to nothing, then, for the use of capital, nothing 
 could be paid, and interest would altogether dis- 
 appear. All this is self-evident, and requires no 
 illustration. 
 
 In obviating the evils inherent in a restrictive 
 system, which lowers the rates of profit and of 
 interest, measures only going the length of placing 
 ihe currency upon a secure foundation, must be 
 completely inadequate and abortive. Though the 
 provincial banks should be chartered companies, as 
 stable as the Bank of England ; nay, though the 
 whole circulation of the country consisted of standard 
 coin, yet still the next revulsion and regorgement 
 
330 
 
 may be more extensive and calamitous than the 
 present. 
 
 It has been justly observed, in the Government 
 pamphlet before alluded to, that, during the late 
 panic, there were many circumstances which were 
 favourable, both to the public and to the Bank ; and 
 which, if they had not existed in our condition at 
 that crisis, or had existed adversely to us, would 
 have extended the ruin to a most fearful point. If 
 a failure of the last harvest had required large im- 
 portations of foreign corn, or if any political convul- 
 sions of a menacing nature had occurred abroad, it is 
 obvious that the demand for the metals would have 
 been much more intense and protracted ; that the 
 consequent contraction of the currency would have 
 been much more considerable ; and that the Bank 
 of England itself might have been again com- 
 pelled to suspend its payments. It is easy to see 
 that, when the next revulsion occurs, one or more 
 of these adverse circumstances, operating in con- 
 junction with it, may aggravate the calamities of 
 the country in a much greater degree than the 
 increased security of the provincial banks can 
 
331 
 
 mitigate them. Measures for securing the public 
 against the risks attending the circulation of pro- 
 vincial paper, are, particularly at the present period 
 of alarm and distrust, just and expedient. All that 
 I contend for is, that they cannot, in the nature 
 of things, avert the recurrence of a crisis more 
 calamitous than that which we liave witnessed. 
 
 The speculations in foreign loans, in foreign 
 mines, in joint-stock companies, in merchandise, 
 and the departures from the legitimate principles 
 of banking, were all only secondary effects of the 
 great primaiy cause, which created a redundancy 
 of disposable capital, and reduced the rates of 
 profit and of interest. While this primary cause is 
 permitted to remain in operation, it must continue 
 to produce effects, different perhaps in mode and 
 in form from those which have recently appeared, 
 but certainly not less injurious to the wealth and 
 prosperity of the country. When the capital 
 lately destroyed has been replaced by new accu- 
 mulations, and when the next repletion and revul- 
 sion come, we may not have foreign loans, nor 
 excessive speculation in mines, in companies, in 
 merchandise, and in discounts upon long and 
 
332 
 
 inconvertible securities ; but, nevertheless, our 
 redundant accumulations, deprived by erroneous 
 legislation of advantageous employment at home, 
 will seek for profitable investment abroad. Under 
 such circumstances, our capital and our skilled 
 labour will emigrate ; the seats of manufactures, 
 and the marts of commerce, may be transferred 
 to other lands ; and, instead of temporary revul- 
 sion, we may experience a permanent decline. 
 To continue the present system of corn laws, 
 will be to apply the axe to the roots of England's 
 prosperity. The downward steps towards national 
 bankruptcy may easily be made. 
 
 It must be confessed, that 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 the landlord, confer, in their immediate operations, 
 an important benefit upon the landed interests. But 
 the landed interests, even upon the principle of the 
 narrowest selfishness, should look beyond the imme- 
 diate effects of restricted importation, and should in- 
 quire, whether the benefit to be derived from esta- 
 blishing an artificial scale of prices, may not carry in 
 
333 
 
 itself the seeds of its own destruction ? To answer 
 this important question, it is necessary previously 
 to shew, how far restrictions upon importation, and 
 an artificial scale of prices giving a forced extension 
 to agriculture, are calculated, under existing cir- 
 cumstances, to affect the wealth and commercial 
 prosperity of these countries, and, consequently, to 
 the demand for corn. 
 
 To those who have embraced the opinions of 
 the French Economists, it may appear somewhat 
 paradoxical to say, that a measure which should 
 extend agriculture, and increase the value of land, 
 would be injurious to prosperity, and diminish 
 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 must be diminished by restrictions upon 
 importation, forcing our inferior lands into tillage ; 
 and that, by the operation of such restrictions, the 
 national prosperity must be checked, in the exact 
 proportion in which agriculture may at first be 
 extended. Though it should be conceded, that 
 agriculture is the only source of wealth, yet it 
 
334 
 
 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 hundred ; 
 then, even on the agricultural theory, we must 
 increase our wealth by being, to this extent, a 
 manufacturing, rather thati 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 a 
 hundred quarters of com more than we could have 
 obtained by raising com from our own soU. 
 Though our manufacturers should not have in- 
 creased the general wealth of the world, yet they 
 would have increased the particular wealth of Eng- 
 land. They have given us a species of property in 
 the soil of Poland ; and, from the agriculture of that 
 country, have enabled us to draw a larger supply of 
 
3,35 
 
 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 remains true, that restrictions 
 upon importation, compelling us to raise at home 
 a less quantity of agricultural produce than might, 
 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 forced 
 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 
 continue a system of restriction on the importation 
 
336 
 
 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. 
 
 Should legislative restrictions for forcing an in- 
 dependent supply of agricultural produce be con- 
 tinued, it will become necessary, in order to feed 
 our increasing population, to bring into tillage lands 
 which, under the prices that have hitherto existed, 
 have been found inadequate to repay the expense 
 of tillage. The cost of producing will, therefore, 
 receive a considerable and a progressive increase ; 
 or, in other words, it will gradually require 
 greater quantities of labour and capital to procure 
 a given quantity of grain. Now, as the cost of 
 producing corn is increased ; as it requires greater 
 quantities of labour and capital to procure a given 
 quantity of grain, it is self-evident, that the pro- 
 ductive powers of the industry which supplies agri- 
 cultural produce will be lowered, and that wealth 
 and prosperity will decline. Every forced exten- 
 
337 
 
 sion given to tillage, which, in its progress, elevates 
 productive cost, does, in point of fact, inflict an 
 artificial sterility upon the country, and take from 
 us the advantages bestowed by nature. 
 
 In a former chapter it was shown that tlife: 
 ease or difficulty with which subsistence can be. 
 raised, is not only the measure of the productive 
 powers 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 labourers whom 
 he employe a quantity of the produce of their 
 labour, or (what is the same thing) of the value of 
 this produce, insufficient to purchase subsistence 
 for their families, population must decay, and 
 the supply of labour diminish, until the competi- 
 tion of employers should restore its market price 
 to a level with its cost. Hence, when corn forms 
 a part of the subsistence of the labourer, an 
 increase in its cost necessarily occasions an in- 
 crease in the cost 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, 
 
 z 
 
338 
 
 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 labourer, and is consumed by 
 him while at work, a smaller quantity of the 
 productions of labour will remain with the em- 
 ployer ; and any given quantity of manufacturing 
 capital will create a less surplus of production 
 above expenditure. 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 
 increases the cost price of corn, or, in other words, 
 renders a greater quantity of labour and capital 
 necessary to the production of the same quantity 
 of grain, increases, in the second place, the cost 
 of every article wrought up by the consumers 
 of corn, or, in other words, lowers the productive 
 powers of every species of manufacturing industry. 
 While restrictions upon the importation of corn 
 would thus, in every branch of industry, lower the 
 productive powers of our labour and capital, they 
 would tend to exclude our commodities from 
 every foreign market. Indeed, this, to a certain 
 
3.39 
 
 extent, at least, would be the effect of restriction, 
 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 cost of all things ; and, therefore, 
 as we increase the value of subsistence, and, 
 consequently, the rate of wages, we must, in 
 whatever proportion wages may enter into cost, 
 either increase the price of all commodities or 
 sell for a less profit. If we raise our prices, 
 we lose the foreign market ; if we do not raise 
 them, the manufacturer and merchant cannot 
 continue their business. Under such circum- 
 stances, enforcing regulations for the purpose of 
 increasing the price of subsistence, is little less 
 than madness. If the industrious classes are 
 compelled to purchase their com at an artificially- 
 elevated price, we must speedily cease to be manu- 
 facturing and commercial people. 
 
 This conclusion, which seems capable of being 
 supported by a process of reasoning self-evident 
 in all its steps, the advocates of restrictions on the 
 importation of foreign agricultural produce have 
 attempted to overthrow. 
 
540 
 
 " If it were true," it has been contended, " that 
 the price of labour did advance with the price 
 of com, it by no means follows, that such an 
 advance in the price of labour would expose our 
 manufacturers to be undersold in the foreign 
 market ; because, it is not the cheapness of labour 
 that has given us the superiority we have so long 
 possessed; on the contrary, the price of labour 
 has always been higher in this country than in 
 those countries in which we have established 
 fnarkets. The cause of our superiority is tb be 
 found in the greater skill, better machinery, and 
 more extended capital of this country, than exist 
 in any other country in the world. As we should 
 continue to possess these advantages, notwithstand- 
 ing the price of labour might still be enhanced, 
 such an enhancement of it could not be pro- 
 ductive of that injury to our manufactures, which 
 it has been hastily asserted must flow from it." 
 
 The error which this passage involves is very 
 obvious. A further enhancement of wages might 
 completely counteract all the advantages of our 
 skill, machinery, and capital. Supposing that, 
 in consequence of our skill, capital, and ma- 
 
341 
 
 chinery, a master manufacturer in England can, 
 with a hundred workmen, bring to market a thou- 
 sand 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 sup- 
 posing, on the other hand, that manufacturing 
 labour in France could be had for half the price 
 which it brought in England ; then the English 
 employer 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 productive cost 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, would be completely counter- 
 acted by the high value of subsistence and of 
 wages. 
 
 r In the above illustration, we have supposed, 
 that England is to retain her present decided su- 
 pericmty in skill, capital, and machinery. But 
 
342 
 
 this 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 productive cost of 
 all their articles. Now, if, while this process is going 
 on, and productive cost is becoming lower in the 
 rest of Europe, we permanently adopt an economi- 
 cal system, which must raise the wages of our 
 labour, and, consequently, increase the cost of 
 production, we shall be playing into the hands of 
 our rivals ; and the result will be, that we shall 
 exclude ourselves from our foreign market, and 
 that our manufacturing population will be reduced 
 to the alternative of emigrating, or of starving. 
 On this most momentous view of the question, 
 the advocates of an independent supply of com 
 perversely close their eyes. Contrary to all 
 sound theory, and in direct opposition to ex- 
 perience, those who would make provisions dear, 
 contend, that the price of corn has no influence on 
 wages, and cannot, therefore, give the foreign 
 any advantage over the home manufacturer. 
 Lord Lauderdale, after having stated to the 
 
313 
 
 Lords' Committee* his strong opinion, that the 
 price of labour, like the price of every other 
 commodity, was solely regulated by the proportion 
 between the 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 follow- 
 ing reasoning : — 
 
 " In dear years, a working manufacturer, find- 
 ing himself deprived of his usual enjoyments, is 
 naturally excited to greater industry, and is de- 
 sirous of working extra hours, for the purpose of 
 obtaining those comforts to which he has been 
 accustomed ; and this disposition of the manufac- 
 turers must necessarily increase the supply of 
 labour in the market. For example : supposing 
 there existed, in any country, a demand for a 
 thousand manufacturing labourers, who, on an 
 average, worked eight hours a day, it is obvious 
 that the stock of manufacturing labour, per week, 
 would be 48,0(X0 hours. If, in a dear year, the 
 desire of securing their usual enjoyments induced 
 
 •)v Vide Parliamentary Papers. 
 
344 
 
 them to work ten hours a day, the stock of manu- 
 facturing 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 family more 
 than supplied by the wages he usually 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 diminished, an 
 increase in the value of it must follow, upon the 
 supposition that the demand for it remains the 
 same." 
 
 15' In the above passage. Lord Lauderdale has 
 succeeded in placing, in a clear light, the obvious 
 and incontrovertible principle, that, with respect 
 to labour, as well as with respect to every thing 
 else> market will occasionally vary from cost 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 
 always, upon the average, determined by the cost 
 
345 
 
 of production. Labour, like every thing else, has 
 its production, or cost price. When the labourer 
 fails to obtain this, diminished births, and in- 
 creased 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. In- 
 deed, both his statement, and the argument which 
 accompanies it, are totally foreign to the question 
 at issue. In 1790, when wheat was at £.a 16^. 
 the quarter, it cost 15d. to weave an ell of muslin ; 
 and in 18l!9, when wheat was at £.6, the same 
 work Was done for 6d, ! This shews, that, when 
 provisions are scarce, and 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 manu- 
 facturing population would remain undiminished. 
 If the population 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 
 fluctuations, to have a powerful effect in raising 
 
346 
 
 money wages: but, on the contrary, if under the 
 dear provisions and low wages of 1812, our 
 manufacturing population could be kept up, then, 
 indeed, as the supply of labour would not be with- 
 di-awn, its value would not rise with the rising 
 price of corn. The question resolves itself into a 
 question of population. As long as abundant sub- 
 sistence increases, and deficient subsistence di- 
 minishes, the numbers of mankind, and, con- 
 sequently, the supply of labour, — so long will the 
 money wages of the labourer (making, of course, 
 allowance for occasional and temporary fluctua- 
 tions in the market) be mainly 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 J from the year 1792 to the year 
 
347 
 
 1812, 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 13*. its 
 price in 1792, to £.6. Ss, 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 coni 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 
 effect. 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- 
 
348 
 
 ment, shewing, that, from 1T90 to 1813 (while, as 
 appears from other documents, the quarter of wheat 
 rose from £.2. 16^. to £.6.), the wages of the labour, 
 necessary to cultivate an hundred acres, rose also, 
 from £.85. to £.161. The evidence of Mr/ Joyce 
 proves a similar fact, with respect to manufacturing 
 labour ; his worknien obtaining double their former 
 earnings. 
 
 But there is no necessity for further authorities, 
 as the facts which Lord Lauderdale has himself 
 stated to the Committee, afford a complete refu- 
 tation of the opinions he maintains. He says, that 
 " 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, " at the Union 
 the peck of oatmeal was 6f tZ. and a day's wages 
 §rf{j^ .while, *' at present, oatmeal is worth Is. 3d, 
 the peck," and the labourer can earn better than 
 " 2s, a day." 
 
 Here the rise in wages has been greater than 
 the 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 
 
349 
 
 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 fru- 
 gally 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 pro- 
 duced by a single one, it is not quite logical to infer; 
 that the single one produces no effect at all. The 
 circumstance, that, in Scotland, the rise in wages 
 has been greater than the rise in corn, has no con- 
 ceivable tendency to prove that this increased 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. 
 
 But let us assumefor a moment that Lord Lauder- 
 dale's theory is correct, and that an increase in the 
 price of com does not lead to an increase of money 
 wages. In this case, restrictions on importation, 
 enhancing the value of the necessaries of life, 
 would be as gross a violation of humanity and 
 justice as it is possible for the mind to conceive. 
 It is not wise to hold such language to the people ; 
 
/ 
 
 / 
 
 350 
 
 it is not safe to tell them, that regulations adopted 
 for the purpose of raising the money-price of bread 
 cannot have the effect of raising the money-price 
 of labour. Under this view of the question, those 
 who would uphold the system for keeping rents 
 and prices above their natural level, should be 
 prepared to meet the tremendous vengeance which 
 a] perishing population may take for the infliction 
 of artificial pauperism and famine. 
 
CHAP. IV. 
 
 On the Measures tv/iich, in revising the Corn 
 Laws, it would be expedient for the Legisla- 
 ture to adopt. 
 
 \ 1. Importation of Agricultural Pj'odtice. 
 
 It is abundantly evident, that where free 
 intercourse is permitted, no country, possessing 
 any articles which can profitably be sent abroad 
 in exchange for com, will cultivate lands very 
 much inferior to those under cultivation in ad- 
 jacent 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, subsistence will be imported. 
 
 Even long before all the lands of superior quality 
 have been brought under the plough, a country, 
 
352 
 
 though wholly exempt from legislative interference 
 with the direction of its industry, may yet be 
 naturally 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 un- 
 reclaimed districts, could afford to sell his produce 
 at as cheap a rate as the cultivator of Poland; 
 and it seems natural to conclude, that if industry 
 were left to take its most profitable direction, 
 <;apital would be employed in raising corn at 
 home, rather than in bringing it from Poland at 
 an equal prime cost, and 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 erro- 
 neous. If England should have acquired such a 
 xiegree of skill in manufactures, thit, with any 
 given portion of her capital, she could prepare a 
 quantity of cloth, for which the Polish cultivator 
 would give a gi'eater quantity of corn than she 
 
353 
 
 Could, with the same portion of capital, raise froiil 
 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 t 
 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 
 produce over the capital employed in cultivating 
 abroad, yet, under the supposition, the capital 
 which should be employed in manufacturing, 
 would obtain a still greater excess of produce ; and 
 this greater excess of produce would determine the 
 direction of our industry. 
 
 Thus we see, that when trade is left free, and 
 governments interfere neither directly nor in- 
 directly with the course of industry, art agricul- 
 tural country, though possessing within hei'self the 
 means of feeding her population, may be induced 
 to import a part of her supply of corn, by two 
 distinct circumstances: — namely, by a deficiency 
 in lands of first-rate quality ; or, by advantages in 
 manufacturing industry. In the present situation 
 of England, both these circumstances unite. Our 
 increased wealth, by rendering animal food a part 
 
 A A 
 
354 
 
 of the subsistence of all classes, and, consequently, 
 causing a great proportion of the soil to be kept 
 under pasture ; and our rapidly advancing popula- 
 tion, by creating a great and increasing demand 
 for corn, have contributed to occasion some scarcity 
 of land equal in quality to that under cultivation 
 [^^^^i' /^ > in the neighbouring countries ; while our accurate 
 ;^-^ ^^ divisions of employment, and the wonderful per- 
 fection of our machinery for abridging labour, have 
 \ increased, to such an astonishing extent, the pro- 
 
 \/ ductive powers of our manufacturing industry, that 
 
 y \ a given portion of our capital, when directed to sup- 
 
 * Paying the foreign demand for wrought goods, can 
 
 obtain, in return, a larger quantity of corn than it 
 could raise by cultivating wastes of the greatest fer- 
 tility. In this state of things, therefore, if the ob^ 
 structions to importation should be removed, it is 
 obvious, that we shall become dependent upon foreign 
 growing countries for a part of our supply of corn. 
 Now, from the principles established throughout 
 this work, it is abundantly evident, that all obstruc- 
 tions to importation should be abolished, and that 
 it is our safest and wisest policy, to receive from 
 foreign growing countries such portions of our 
 
355 
 
 supply of food and material, as they can furnish at 
 a cheaper rate than that at which similar articles can 
 be raised at home. With respect to an equable 
 and cheap supply of subsistence, to the wages of 
 labour, to the profits of capital, and ultimately to 
 the rent of land, which can be permanently higher 
 in England than in other countries, so long only 
 as England is superior to other countries in manu- 
 facturing population and wealth ; with respect, in 
 fact, to the upholding of all the great interests 
 of the country, it is necessary that the legislature 
 should adopt measures for the cautious and gradual 
 introduction of a free trade in all the productions 
 of the soil. 
 
 § 2. Popular Objections against the adoption of Free 
 Trade answered. 
 
 Against the adoption of this liberal system, 
 which has become necessary to our existence as 
 a great manufacturing and commercial nation, 
 some popular objections have been urged, which 
 it may be proper to refute. 
 
 The advocates of high duties on the importation 
 of foreign corn have attempted to terrify the public 
 by the assertion, that an unrestrained commerce 
 
356 
 
 in grain would lead to scarcity and famine. " If 
 we allow importation, and consequently become 
 dependent on foreign countries for a part of our 
 subsistence ; and if, when the failure of our crops 
 rendered their aid most necessary, these countries 
 should themselves have deficient harvests, and 
 require for their own consumption 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 the first place, this objection to a free trade 
 supposes a state of things, the occurrence of which 
 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- 
 
357 
 
 vent our obtaining, from some country or other, 
 the supply of which we stood 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 com, equalising sub- 
 sistence throughout the countries of the world, and 
 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 commer^ 
 
358 
 
 cial prosperity, had always in the stores of her 
 merchants a supply of subsistence which exceeded 
 her consumption ; and, though not a corn country, 
 became, by leaving the trade in corn free, the 
 granary 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 
 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 
 entre'pot 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 ingi'ess and 
 of egi^ess, to the important article of corn, our 
 
359 
 
 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 
 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 com, would 
 leave us nothing to fear, though the crops failing 
 at the same time throughout the wodd 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 insure us a steady supply of 
 corn, it may be proper to consider : " If any thing 
 resembling the state of Europe under the late 
 
360 
 
 Emperor of France should take place in future^ 
 when, instead of growing nearly our own supply 
 of corn, we depended on foreign countries for the 
 subsistence of some millions of our people, the 
 difficulty and danger which we lately escaped would 
 be n^othing, 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 received its impulse from a single 
 mind, and though America, with a consentaneous 
 n>ovement, closed her ports, yet Napoleon found it 
 impracticable to give efficacy to his system against 
 the trade of England ; and while his decrees were 
 eva^ded or suspended, we received supplies of corn 
 even from ^ France. Now, that the continental 
 system, the most extraordinary, and the most 
 wide-wasting species of despotism which the world 
 evei: 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 popu- 
 
361 
 
 lation of some millions; then, this very circum- 
 stance, 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 neces- 
 sarily become, under a free external trade, a great 
 granary and emporium of corn, the nations which, 
 on 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 
 benefits of which they so largely participated. In 
 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 com, which have been lately passed in France, 
 form any valid objection to the principle, that 
 
362 
 
 opening the ports of the United Kingdom would 
 render our supply of subsistence steady. In the 
 first place, the corn laws in France, prohibiting 
 exportation after grain rises to about forty-nine 
 shillings the quarter, have, with respect to their 
 influence upon British prices, a necessary tendency 
 to counteract 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 corn, the sudden withdrawing of which 
 might, it is apprehended *, occasion fluctuations in 
 our markets. In the second place, even supposing 
 that these laws should have no effect in checking 
 cultivation in France, and in preventing her from 
 growing such a surplus as could influence prices 
 in other countries, yet still the objection would be 
 nugatory ; because, as the inequality in the produc- 
 tiveness of the seasons diminishes — as the territory 
 from which we draw subsistence is increased, and 
 as the partial irregularities of Nature are rectified 
 
 * This apprehension is entertained by Mr. Malthus. See 
 The Grounds of an Opinion on tlie Pohcy of restricting the 
 Importation of Foreign Corn, p. IJ. 
 
363 
 
 in her general results, there is the strongest proba- 
 bility, that when a deficient harvest in France 
 deprived us of our customary supply of corn from 
 that country, an abundant harvest in other coun- 
 tries would indemnify us for the loss. Thirdly, 
 were we to adopt a system of freedom in the 
 external com trade, and, consequently, to receive 
 a part of our supply from France, the great accu- 
 mulations of grain wJiich we should have on hand 
 would (as was the case in Holland) at all times 
 exceed our consumption ; would render us inde- 
 pendent of the growth of a single season ; and 
 would prevent temporary suspensions of importa- 
 tion from France, or even from all Europe, from 
 inflicting any distressing fluctuations in our mar- 
 kets. Fourthly, and lastly, were it demonstrable 
 that the corn laws lately enacted in France could 
 have the effect of inflicting distressing fluctuations 
 in the British market, their existence might consti- 
 tute 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. 
 
 The great increase in the expenses of cultiva- 
 tion, which haye taken place in this country during 
 
364 
 
 the last thirty years, furnish the landed interests 
 with a favourite argument against the adoption of 
 a free trade in the products of the soil. They 
 contend, that unless the legislature shall secure to 
 them a degree of protection equal to the difference 
 between the expenses of growing corn in this, 
 and the expenses of growing it in the other 
 countries from which it might be imported, the 
 British will be unable to compete with the foreign 
 farmer, and tillage must be abandoned. 
 
 This obstruction to a free trade in the pro- 
 ductions of the soil involves two fundamental 
 errors. In the first place, it is not the difference 
 between the positive expenses of growing com 
 in England, and the positive expenses of growing 
 it in some other country (Poland, for example), 
 which causes corn to be imported from Poland 
 into England. It is only when, in England, the 
 difference between the expense of producing com, 
 and the expense of producing some other com- 
 modity (say cloth), is greater than is the difference 
 in Poland between the expense of producing corn 
 and the expense of producing cloth, that com and. 
 cloth will become articles of exchange between the 
 two countries. 
 
365 
 
 In the second place, the free importation of 
 foreign agricultural produce would immediately 
 reduce the expense of tillage. I will illustrate 
 this by a reference to a table shewing the compa- 
 rative expenses of cultivation in different years, 
 which the late Mr. Arthur Young, then Secretary 
 to the Board of Agriculture, laid before the Lords' 
 Committee. 
 
 The table is given below *, and shews how all the 
 items which enter into the expenditure of the farmer 
 have increased from the year 1790 to the year 1813. 
 
 * Comparison of the Expenses of cultivating a Hundred Acres 
 of Arable Land in 1790, 1803, and 1813. 
 
 
 1790. 
 
 1803. 
 
 1813. 
 
 Rent 
 
 Tithe 
 
 Rates 
 
 Wear and Tear 
 
 Labour 
 
 Seed 
 
 Manure 
 
 Team 
 
 Interest 
 
 Taxes 
 
 Total . . £ 
 
 £. «. d. 
 88 6 3k 
 20 14 11 
 17 13 10 
 15 13 5| 
 85 5 41 
 46 4 lOj 
 48 3 
 67 4 10 
 22 11 lU 
 
 
 £. s. d. 
 
 121 2 7J 
 26 8 Oi 
 31 7 71 
 22 11 10| 
 
 118 4 
 49 2 7 
 68 e 2 
 80 8 Oi 
 30 3 8i 
 
 
 £. 8. d. 
 
 161 12 75 
 38 17 31 
 38 19 21 
 31 2 101 
 
 161 12 llj 
 98 17 10 
 S7 7 Oj 
 
 134 19 8} 
 50 5 6 
 18 1 4 
 
 411 14 lU 
 
 547 10 lU 
 
 771 16 4j 
 
366 
 
 It will immediately appear, on an inspection of 
 this table, that in almost every item the increase 
 of expense can be occasioned only by an increase 
 in the value of agricultural produce. The charges 
 for rent, for tithes, for seed, for team, and, in a 
 great measure, for labour, must be determined by 
 the price of produce. The charges for the wear 
 and tear of tools and implements, and for that 
 portion of wages which consists of wrought neces- 
 saries, are determined by the value of raw mate- 
 rials, and by the efficacy of manufacturing indus- 
 try. But as the efficacy of manufacturing industry 
 has increased, not diminished, it also follows, that 
 the increase in the charges for wear and tear, and 
 the portion of wages, consisting of wrought neces- 
 saries, can be increased only by the increased 
 value of the produce of the soil. A return to 
 the prices of 1790 would, with the exception 
 of the two comparatively unimportant items of 
 rates and taxes, bring down the expenses of culti- 
 vation to what they were in 1790. The manner 
 in which a free trade in the products of the soil, 
 and the consequent reduction of our artificial 
 scale of prices, would reduce the expenses of culti- 
 
367 
 
 vatioTi, requires only to be stated in order to obtain 
 assent. 
 
 Thus, it appears, that the existing panic among 
 the friends of agriculture, lest, on the establishment 
 of free trade, the expenses of cultivation should 
 prevent the home from competing with the foreign 
 grower is entirely without foundation. The level 
 prices of unrestricted intercourse would, indeed, 
 in the first instance, 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 prepare the articles with 
 which foreign produce might be purchased, and to 
 bring such produce to the home market. But these 
 level prices could effect no further diminution in 
 our tUlage. On the contrary, they would, except 
 inasmuch as he might be pressed by a heavier 
 taxation, replace the domestic on his former equa- 
 lity with the foreign grower. Now we have seen 
 that taxation, except when it falls with dispro- 
 portioned weight upon the soil, does not give the 
 foreign grower any advantages in the home market. 
 On the contrary, taxes which fall on necessaries. 
 
368 
 
 atid occjlsion a rise in wages, advance the price of 
 wrought goods more than they advance the prifce 
 of raw produce, and rather tend to keep foreign 
 Com out of the market, by checking the expor- 
 tation of the articles which might purchase iti 
 The level prices, therefore, of unrestricted inter- 
 course, 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* 
 poly rents, and reduced the other items of his 
 expenditure, 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 
 
I 
 
 369 
 
 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 supplying the markets furnished by 
 the great manufacturing 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 France 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 car- 
 riage. With reference to the home market, land 
 in England is, by the whole amount of the expenses 
 incident to bringing corn from abroad, more valu- 
 able than foreign land, equal in fertility, and culti- 
 vated with equal skill. As soon as the production 
 price of our corn shall have been lowered by throw- 
 ing out of tillage, lands requiring an enormous 
 expense of labour and capital, British agriculture, 
 enjoying the great natural protection of vicinity to 
 
 B B 
 
370 
 
 the most opulent markets of the world, can have 
 nothing to apprehend from the freest competition 
 of the foreign grower. 
 
 An unanswerable and irresistible argument 
 against the alarm which at present exists amongst 
 the agricultural interests, has been furnished by 
 the most able and judicious of the writers on the 
 $ide of restriction, and one who is himself an 
 alarmist. Mr. Jacob, in his " Considerations on 
 the Protection required by British Agriculture," 
 enters into some judicious 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 ton ; and that, by the accounts laid before 
 Parliament, the whole shipping of the British 
 dominions, European and Colonial, amounts to 
 9,500,000 tons. If, therefore, every other branch 
 of commerce were abandoned, and all the shipping 
 of the British dominions freighted with grain, the 
 imported supply would amount to only 12,500,000 
 quarters ; — that is, to about three months' con- 
 sumption. Under this extreme case, this case of 
 absolutely impossible occurrence, the British farmer 
 
371 
 
 would have the supplyhig of the British market 
 for nine months of the year. But let us look at 
 the question, under circumstances of possible 
 occurrence. Mr. Jacob informs us, that, in 1800, 
 and 1801, years of the greatest scarcity and 
 liighest 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 difficulty, 
 nay, the impossibility, of importing any consider- 
 able portion 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 cul- 
 tivation any lands, except those of extremely 
 inferior quality. In what concerns subsistence^ 
 Providence has been our legislator. In rendering 
 
372 
 
 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. 
 
 § 3. — Comparative Effects of free and of restricted 
 Trade, 
 
 Having thus refuted the popular objections 
 against a free trade in the productions of the soil, 
 it may be proper, before we proceed to the con- 
 sideration of the specific measures which the 
 legislature should adopt, briefly to recapitulate 
 some of the leading arguments of the preceding 
 chapters, and to place in juxta-position and 
 prominent contrast the effects which would be 
 produced by imposing permanent restriction on 
 the external Corn Trade, and those which would 
 arise from giving perfect freedom to this important 
 branch of commerce. 
 
 In tracing the operations of restricted, and of 
 free intercourse, I 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 
 
373 
 
 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 discussions, 
 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 
 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 popu- 
 lation with a cheap supply of food, would be 
 
374 
 
 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, are occasionally driven to the 
 parishes, or to the compassionate, for relief. Hence, 
 the respectable pride of independence, and the 
 love of labour which it inspires, are gradually 
 lost; and the peasant and the manufacturer 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, extend tillage, and raise 
 the value of land ; but, in their second and indi- 
 rect operation, they must, in whatever degree they 
 may prove prejudicial to commerce and wealth, 
 again contract cultivation, and involve the landed 
 interest in the general decline. On the contrary. 
 
375 
 
 unrestrained intercourse would, at first, throw out 
 some inferior soils, and lower rents; but subse- 
 quently, in whatever degree it might be found to 
 raise the rate of profit 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, there- 
 fore, to the agriculture of the country, a free ex- 
 ternal trade in corn would, in its ultimate effects, 
 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, 
 would be worse. To increase the rent-roll of pro- 
 prietors, by compelling all other members of the 
 community to pay more for theii^ corn than they 
 otherwise need to do, would be as gross a viola* 
 
376 
 
 tion of natural justice as it is possible for the mind 
 to conceive. It would be tantamount to laying a 
 tax upon bread. It would be nothing better 
 than legalised 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 a combination of circumstances, similar to 
 that which was experienced during the late war, 
 can never be expected to recur. Artificial regula- 
 tions, for the purpose of keeping the value of land 
 above its natural level, must now, as has been 
 already unfolded, lower the rate of profit, force our 
 skilled labour and our capital abroad, and bring 
 the country, not only to the stationary, but to the 
 declining state. Such regulations ultimately de- 
 prive 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 impunity invert. In any country, to extend 
 
377 
 
 tillage beyond its actual state, two things are neces- 
 sary, viz. lands susceptible of improvement, and, 
 consumers able to pay, with an adequate profit, 
 the expenses of realising it. A high price of corn 
 can be permanent and 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 progress, would visit pro- 
 prietors and cultivators with all the evils which, at 
 the first step of their progress, they brought on the 
 other classes of the community. 
 
 The opposite system would produce diametri- 
 cally opposite effects. As soon as the first embar- 
 rassment 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 ; the 
 immediate vicinity of larger and more numerous 
 manufacturing towns, with the consequent im- 
 
 / 
 
/.\ 
 
 378 
 
 provements in the distHbution of labour, and ap- 
 plication of machinery, would increase the value of 
 agricultural produce in relation to wrought goods ; 
 while the growing demand of a wealthy population, 
 for those productions of the soil which do not 
 enter into the subsistence of labour, and which, 
 from their bulky and perishable nature, cannot be 
 brought from abroad, would give to the land a far 
 higher value than it could attain if devoted to 
 the growth of corn and other necessaries. These 
 constitute the only legitimate, the only permanent 
 encouragement, which agriculture can receive. It 
 cannot be too often repeated, that the interests of 
 the landed, and of the trading classes of the com- 
 munity, are identical. The rent of proprietors, 
 and the profits of cultivators, must ever be deter- 
 mined by the quantity of other commodities which 
 the manufacturer and merchant are able and willing 
 to give in exchange for agricultural produce. 
 Though it were possible (and, I firmly believe, it is 
 not) that the land-owners should be uninfluenced 
 by a regard for the good of the public, and for 
 their country's prosperity and power, yet a sensibi- 
 lity to their own true interests should render them 
 
379 
 
 solicitous for the adoption of an economical system, 
 which would increase the productive powers of 
 industry, and promote manufactures and commerce. 
 With the flourishing or declining state of these, the 
 value and the rent of land 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 analysis, 
 be estimated by its superiority in promoting wealth 
 and commerce. 
 
 3. Permanent prohibitory duties on the impor- 
 tation of foreign corn would almost annDiilate 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 a free external trade possesses 
 over a system of restriction. But if, in estimating 
 the benefits conferred by commerce, we were to 
 
380 
 
 confine our attention to the indirect influence 
 which it extends to agriculture, our views of the 
 subject would be extremely narrow and inadequate. 
 It may 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 supplying 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 advantages that a free ex- 
 ternal trade in corn possesses over a system of 
 restriction. 
 
 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 temtory 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 
 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 
 
381 
 
 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 
 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 'y/^ 
 of prosperity is, to a merely agricultural state, more-^ \ 
 tardy and operose than that which preceded it. 
 
382 
 
 Let us suppose, for example, that such a state 
 has so far surmounted the obstacles thrown in the 
 way of improvement by unfavourable 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 sub- 
 sistence, remain by the supposition unreclaimed, 
 it is evident that this state cannot, as yet, have 
 even approached the limits of its possible popu- 
 lation and power. Let us, therefore, suppose 
 further, that population has so increased, that it 
 becomes necessary to apply capital to land one 
 degree inferior to the first-rate and middling soils 
 already under tillage. Now, the necessary conse- 
 quences are, that these soils, as soon as it becomes 
 necessary to apply capital to inferior land, will 
 afford a higher rent ; and that the cost price of 
 corn throughout the country will be increased. 
 Now, a rise in the cost of producing com is not 
 only the same thing as a reduction in the pro* 
 
383 
 
 ductive powers of the labour and capital employed 
 in cultivation ; but is the same thing as a reduc- 
 tion in the productive powers of industry, in every 
 branch of business carried on by the consumers 
 of corn. In every department of industry the 
 surplus of reproduction above expenditure wiU be 
 reduced. 
 
 It is self-evident that, as the powers of produc- 
 tion, and the rate of profit, 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 
 cause lands in the next degree of inferiority to 
 be brought under tillage, could not be effected 
 without great and growing difficulty. But we 
 will suppose that this difficulty is surmounted ; we 
 will suppose that, in consequence of some circum- 
 stances 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. 
 
384 
 
 in order to raise a given produce, a greater 
 quantity 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 compo- 
 nent parts of the farmer's expenditure will, there- 
 fore, be again increased ; that is to say, the 
 productive powers of industry and the rate of profit 
 will be again diminished, and any other further 
 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 if, 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 of time which can form the basis of political 
 calculation, 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 
 
385 
 
 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. Unless Nature should prove ever favour- 
 able, and the neighbouring states ever just, a 
 country, merely agricultural, would not only cease 
 in a short period to advance, but would probably 
 become retrograde. 
 
 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, 
 instead of becoming every day more tardy, would 
 advance 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 opulent consumers would speedily bring into 
 c c 
 
386 
 
 cultivation 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, 
 adopting a more enlightened policy, would receive 
 a part of her subsistence from the foreign grower. 
 Hence, there would be no increase in the cost of 
 obtaining corn, and hence no diminution in the 
 productive powers of industry, and in the rate of 
 profit. The number of opulent consumers would 
 go on increasing, and capital would continue to 
 accumulate as rapidly as before. 
 
 As capital accumulated, and as commerce ex- 
 tended, more accurate divisions of employment 
 would multiply and cheapen all wrought goods. 
 Hence, while the increasing number of wealthy 
 consumers increased the demand for com, the 
 expenses of cultivation would diminish. Agricul- 
 ture would flourish beneath the reaction of an 
 enlightened commercial system; the soil would 
 acquire a higher relative value, from the abun- 
 dance of commodities ready to be exchanged for 
 its produce ; and, while the high effective powers of 
 manufacturing industry lowered the value of wrought 
 
387 
 
 goods, in relation to raw produce ; while the im- 
 mediate vicinity of extensive markets reduced the 
 expense of carriage, and while a wealthy popula- 
 tion created a growing demand for produce, not 
 consisting of necessaries, and too bulky and perish- 
 able to be imported from abroad, tracts of third, 
 fourth, and fifth-rate quality could be advantage- 
 ously tilled, and rents would experience a pro- 
 gressive rise without profits suffering a correspond- 
 ing fall. 
 
 Now it must be obvious, that, in a flourishing 
 commercial country, which freely imports the pro- fi 
 duce of her neighbours, the progressive reclaiming 
 of inferior soils, and the consequent rise in rents, y y 
 would proceed from causes, and would lead to 
 effects, 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 cost price of com, and of lowering the rate of 
 profit; but, in the commercial country, these 
 effects would not be produced. The competition 
 
388 
 
 ef an open trade would necessarily keep sub-, 
 sistence cheap. The cost price of com would 
 receive no increase, and, consequently, the pro- 
 ductive powers of industry sustain no diminution. 
 Prosperity would encounter no check. On the 
 contrary, manufactures, commerce, and population, 
 would acquire an heightened ratio of increase : 
 for, every addition made to the quantity of agri- 
 cultural produce imported, would, while it gave 
 employment to a greater number of workmen, 
 create, in the foreign market, an additional 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 Avhich, in point of opulence, popu- 
 lation, 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 
 Carthage; and, in modem times, Venice, Genoa, 
 Pisa, Florence, the Hanseatic Towns, and Flolland, 
 pot only acquired, by their industry and com- 
 merce, an opulence, of which there is no example 
 
389 
 
 amongst nations whose position or whose inslit\i- 
 tions have been unfriendly to foreign trade, but 
 attained a degree of political power and consider^- 
 ation, to which, had they been limited to th^ 
 resources of their own territories, they could never 
 have ventured to aspire. Venice, Hamburgh, and 
 Holland, if they had refused to cultivate com- 
 merce, must always have remained perfectly in- 
 significant states ; yet, by adopting an enlightened 
 system of external intercourse, 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 
 independence 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 territorial monarchies, and, deprived 
 even of their political existence, retain nothing of 
 their former splendour but the name. 
 
390 
 
 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 territory of her neighbours, and acquire acces- 
 sions of population, wealth, and power, which 
 would be unattainable if she confined herself 
 to her internal resources. The question, as it 
 
391 
 
 respected Venice, was, whether the inhabitants of a 
 few rocks in the Adriatic should remain in helpless 
 insignificance, exposed to the depredations of everj 
 horde of pirates; or, whether they should place 
 themselves in a condition to contend successfully 
 against the Ottoman Empire, when its power was 
 at its height, and when it seemed ready to sub- 
 jugate the mightiest 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 of France, 
 or Austria, or Russia ; but, whether, being inferior 
 to these great continental states in natural re- 
 sources, 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 for herself the means of 
 holding the ascendancy in Europe. 
 
 If the persons who, in their admiration of the 
 independent and permanent resources which are 
 derived from domestic agriculture, would adopt 
 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 
 
392 
 
 neighbours ;— ^if these persons possessed an en- 
 chanted wand, by the touch of which they could 
 change the waters between the British Islands 
 into fertile plains, and thus give us territorial 
 resources equivalent to the commercial ones they 
 seem solicitous to under-rate, and to destroy; — 
 then, indeed, their doctrine might patiently be 
 heard. But as long as the abandonment of com- 
 merce cannot create additional lands, so long must 
 we cherish that compensation, that substitute for 
 extended territory, which a flourishing external 
 trade confers. When the advocate of independent 
 and self-*derivcd power urges the instability of 
 commerce, instead of advancing a reason for neg- 
 lecting 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 maintained. 
 
 The argument respecting the expediency of 
 compensating, by the resources growing out of 
 commerce, the deficiency of territorial power, 
 ^applies, with peculiar cogency, to insular states. 
 Without extended commerce, there can be no naval 
 
393 
 
 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 contraiy, superiority 
 at sea is the best means of defence, and the only 
 tneans 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 occasionaly liable to 
 unsteadiness and excess, has, in general, a better 
 foundation in reason than the pride of philosophy 
 is wiUing to allow. The public voice, in favour of 
 our naval ascendancy, is the expression of consume 
 mate political wisdom. Our naval greatness is the 
 only foundation on which our military glory can 
 
394 
 
 rest. Our squadrons are not only floating fortifi- 
 cations drawn around our coasts, but constitute 
 the military roads 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. 
 
 ^ 4. — On the Specific Measures which, in revising the 
 Corn Laws, tlie Legislature should adopt. 
 
 And now, if we have been at all successful in 
 unfolding the principles of the external com trade, 
 in examining the exceptions to which these prin- 
 ciples are liable, and in tracing and comparing the 
 effects which freedom and restriction would re- 
 spectively produce, the irresistible conclusion must 
 be, that the introduction of a free trade in agri- 
 cultural produce is the great object which the legis- 
 lature should pursue. In effecting this most im- 
 portant improvement in our economical system, 
 however, difficulty and embarrassment may occur, 
 
395 
 
 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 precipi- 
 tate fall from an artificial scale of prices, has been 
 fully established, as well by general reasoning as 
 by a reference to facts. Now, in order to guard from 
 impending calamity a very numerous and a most 
 important class of the community, as well as to 
 prevent that waste of the national resources which C^fQ 
 must ever accompany a sudden breaking up of the 
 accustomed channels of industry, it becomes highly ^ ^ 
 necessary that the legislature, without ever losing f'^-tJt^ *^ 
 sight of the great ultimate object of introducing a ^^ 
 free trade in agricultural produce, should afford 
 the domestic grower a temporary protection. 
 
 In order to accomplish the double object of 
 affording the farmer temporary protection, and of 
 gradually introducing a free trade in the produc- 
 tions of the soil, the legislature should substitute 
 for the present system of averages a duty on the 
 importation of foreign corn, which duty should 
 annually diminish, and fall by degrees to nothing. 
 
 The fixing of the amount of the protecting duty. 
 
396 
 
 in the first instance, is of much less importance 
 than the adjusting of the graduated scale for its 
 ultimate cessation. It is obvious, that, at its com- 
 mencement, the duty should be sufficiently high to 
 secure, as far as legislative protection can securcj 
 the customary rate of profit on the capital already 
 invested in the soil. To determine, with precision, 
 the amount of duty which might attain, without 
 going beyond, this object, would, probably, be im- 
 practicable. But, of the two errors, it would be 
 better to begin with too high, than with too low a 
 duty. If we were to (Commit the error of fixing the 
 duty too low ; and if, after a considerable importa-^ 
 tion from abroad, an abundant harvest should fol- 
 low, an excessive supply, requiring years to absorb 
 it, might be thrown upon the market ; and the 
 country might be visited, for a period more or 
 less protracted, with severe agricultural distress^ 
 which no legislative measure could remove. On 
 the other hand, if we were to commit the error 
 of fixing the diity too high; and if a deficient 
 harvest followed, reducing the supply of com below 
 the ordinary consumption. Government might im- 
 mediately rectify the mistake by lowering, or, if 
 
397 
 
 the dearth were severe, by suspending for a short 
 period the duty upon importation. The advocates 
 of free trade, therefore, need not to be apprehensive 
 of granting the agriculturists, in the first instance, 
 whatever amount of duty may be deemed neces^ 
 sary to the protection of the capital already in- 
 vested in the soil. 
 
 The object about which we should be solicitous, 
 is the graduated scale by which we may provide for 
 the final and total abolition of all duties and restric- 
 tions on the importation of raw produce. On the 
 same principle, that the duty should not commence 
 too low, the scale should not decline too rapidly. 
 The object to be attained is, that, as the current 
 leases expire, and as the capital already invested 
 in the soil requires to be replaced, those who pos- 
 sess disposable capital should have due and timely 
 warning not to direct it to the cultivation of lands 
 too inferior in quality to be profitably tilled under 
 the natural protection afforded by the cost of 
 carriage. This object, a slowly declining scale 
 of duties would sufficiently attain, while it would 
 protect capital already invested from unequal 
 competition, and prevent, as far as foreign impor- 
 
598 
 
 tation might be concerned, that excessive supply 
 of produce, which, as often as it occurs, brings 
 distress and ruin on the cultivator. 
 
 It is ever to be remembered, however, that 
 periods of excessive supply, and consequently of 
 agricultural distress, are inherent in a restrictive 
 system. We may prevent foreign corn from coming 
 in, but we cannot prevent two or three abundant 
 harvests from occurring in succession, and suddenly 
 bringing down the high artificial prices which 
 protection had created, to that extreme point of 
 depression at which British corn may be sent with 
 a profit to the foreign market. So long as our 
 declining scale of duties shall continue to force an 
 independent supply of corn in average years, so 
 long in abundant years our markets will be glutted, 
 and agricultural distress will prevail. To mitigate 
 this distress, a bounty should be granted upon 
 exportation, equal in amount to the duty imposed 
 on importation. 
 
 In a former part of this work * it was shewn, 
 that when a tax is laid upon a domestic com- 
 
 * Page 219. 
 
399 
 
 modity, a duty of equal amount on the impor- 
 tation of the similar foreign article, accompanied 
 by a bounty, also of equal amount, on the exporta- 
 tion of the domestic commodity, is necessary in 
 order to restore domestic and foreign industry to 
 that equilibrium which they would have preserved 
 had no taxation been imposed. To whatever 
 extent ill-regulated tithes, poor rates, or other 
 charges, fall more heavily upon agriculture than 
 on other branches of industry, to that extent 
 the farmer, on the principle of equal dealing, is 
 entitled to a bounty upon exportation. He would 
 be entitled to a bounty to this extent even 'if 
 he could, as in the case of the manufacturer, 
 regulate with exactness the quantity of his pro- 
 ducts. But, in agriculture, the seasons have 
 a powerful influence in regulating the quantity of 
 products. When the farmer cultivates to such 
 an extent that, in average years, the supply of 
 corn is equal to the demand, then two or three 
 abundant years, following in succession, throw 
 a glut upon the markets, which glut, if it cannot be 
 removed by exportation, leads to protracted agri- 
 cultural distress. Now, if the unequal pressure 
 
400 
 
 of tithes, rates, and taxes, forms one of the causes 
 why British produce cannot be exported until it has 
 fallen ruinously below the remunerative price, the 
 landed interest have an equitable claim to a bounty 
 equivalent to the unequal burthen they sustain. 
 A bounty to this extent would be strictly conform- 
 able to the principles of free trade, as it would, 
 with respect to the supplying of foreign markets, 
 replace the British and foreign capital invested in 
 agriculture on the same relative footing upon which 
 they would have stood, had the British farmer 
 not been pressed by unequal taxation. 
 
 It is scarcely necessary to repeat, that the duty 
 on importation and the bounty upon exportation 
 are to be regarded as temporary measures, and 
 that, conformably to the correct principles of econo- 
 mical science, they can be tolerated only so long as 
 may be strictly necessary to protect such portions 
 of capital as our restrictive system has already 
 forced towards the soil. The declining scale 
 should be rigidly applied as well to the duty as to 
 the bounty, until both be finally extinguished, 
 and until the industry of this manufacturing and 
 commercial country be permitted to obtain its full 
 
401 
 
 developement under the influence of a free trade 
 in the productions of the soil. 
 
 In a former part of this work it was shewn, that 
 the only exception to a free trade in corn is formed 
 by the actual existence of a forced state of tillage, 
 and that even this exception is founded entirely 
 upon the derangement occasioned by precipitate 
 change. Precipitate change, therefore, is the only 
 evil against which, in conferring upon the country 
 the incalculable advantages of a free trade in corn, 
 the legislature has to guard. In doing this, no 
 difficulty can arise. While the gradually declining 
 scale of duties and bounties is in progress, the 
 Government will have abundant time to regulate 
 tithes, to repeal whatever taxes may fall with 
 disproportioned weight upon the soil, and to pro- 
 vide for an equalisation of all rates and assess- 
 ments. Should these desirable measures be effected 
 before the final extinction of the protecting duty, 
 then capital will every where flow into its natural 
 and most productive channels ; and the free ex- 
 ternal trade in corn, without inflicting depression 
 on any class of individuals, will, with respect tQ 
 agriculture, to manufactures, and to commerce, to 
 
 D D 
 
402 
 
 wages, to profits, and ultimately to rents, produce 
 those generally and greatly beneficial consequences 
 which we have, throughout this work, endea- 
 voured to unfold and to determine. 
 
 The principle of free trade which we have 
 applied to corn, is more or less applicable to 
 every species of agricultural produce, as well as to 
 every description of raw material, whether derived 
 from the soil, from forests, from mines, or from 
 fisheries. It is applicable in a peculiar manner to 
 sugar, as a general article of food ; and to timber, 
 and iron, as important ingredients of capital. 
 
 The application of the principles of free trade 
 to all the productions of the soil, and to all the 
 ingredients of capital, provided it be made with 
 sufficient caution to obviate the evils of precipitate 
 change, will afford unlimited scope for British 
 enterprise, and for the advantageous investment of 
 new accumulations ; and will effectually prevent 
 the recurrence of those low rates of profit and of 
 interest which led to the unproductive speculations 
 which we have recently witnessed, and brought on 
 the calamitous reaction which we now experience. 
 While the Legislature, by a cautious introduction 
 
403 
 
 of a liberal system of commercial policy, prevents 
 the recurrence of a crisis similar to the present, it 
 may adopt, with considerable advantage, imme- 
 diate measures for mitigating the existing distress. 
 Of these, the repeal of .the usury laws should 
 unquestionably be one. It is a singular fact, and 
 one which is calculated somewhat to abate our 
 expectations respecting the progress of enlightened 
 principles, that Mr. Bentham's very logical and 
 convincing Treatise on the Usury Laws should 
 have been so long before the public without having 
 effected that beneficial change in our monetary 
 system which it recommends. Every subsequent 
 writer distinguished for acute discernment and 
 profound inquiry, who has alluded to this import- 
 ant subject, concurs with Mr. Bentham in recom- 
 mending the repeal of the usury laws. 
 
 In his evidence given before the Committee 
 of the House of Commons on the Usury Laws, in 
 1818, Mr. Holland, partner of the house of 
 Baring, Brothers, and Company, and one of the 
 best informed merchants in the country, says, 
 " The laws against usury drive men in distress, 
 or in want of money, to much more disastrous 
 
404 
 
 modes of raising it than they would adopt if 
 no usury laws existed. The landowner requires 
 capital to increase his live stock, or improve his 
 land, or for any other purpose, at a period when 
 the Government is borrowing money at above 
 5 per cent., or when the funds give a greater 
 interest than 5 per cent. ; no one will then lend 
 to the lando^\Tier, because his money is worth 
 more to him than the law allows him to take ; the 
 landowner must, therefore, either give up his im- 
 provements, or borrow money on annuity interests, 
 on much more disadvantageous terms than he 
 could have done if no law existed against usury. 
 The man in trade, in want of money for an unex- 
 pected demand, or disappointed in his returns, 
 must fulfil his engagements, or forfeit his credit. 
 He might have borrowed money at 6 per cent., 
 but the law allows no one to lend it to him ; and 
 he must sell some of the commodity he holds at a 
 reduced price, in order to meet his engagements. 
 For example : he holds sugar which is worth 80*., 
 but he is compelled to sell it immediately for 70.?. 
 to the man who will give him cash for it, and thus 
 actually borrows money at twelve and a half per 
 
405 
 
 cent., which, had the law allowed him, he might 
 have borrowed from a money dealer at six per cent. 
 It is known to every merchant, that cases of this 
 hind are common occurrences in every commercial 
 town, and more especially in the metropolis, A 
 man in distress for money pays more interest, 
 owing to the usury laws, than he would if no such 
 laws existed ; because now he is obliged to go to 
 some of the disreputable money lenders to borrow, 
 as he knows the respectable money lender will 
 not break the laws of his country. The disre- 
 putable money lender knows that he has the 
 ordinary risk of his debtor to incur in lending his 
 money ; and he has further to encounter the 
 penalty of the law, for both of which risks the 
 borrower must pay. If no usury laws existed, in 
 common cases, and where a person is respectable, 
 he might obtain a loan from the respectable money 
 lender, who would then only have to calculate his 
 ordinary risk, and the compensation for the use of 
 his money." 
 
 The able author of the article " Interest," in 
 the Supplement to the Encyclopaedia Britannica, 
 tells us that — 
 
406 
 
 *' It is most absurdly supposed, that, were the 
 laws limiting the rate of interest repealed, every 
 individual who has capital to lend, would hence- 
 forth indulge in all those mean and disgraceful 
 practices which at present characterise the lowest 
 class of money brokers. But it might just as 
 Teasonably be supposed, that were country gentle- 
 men allowed to sell game, they would immediately 
 become addicted to all the vices of the poacher ! 
 The truth is, that if the rate of interest was left 
 to be adjusted by the unrestricted competition of 
 the parties, there would be almost no employment 
 for the inferior class of money dealers. Except 
 when the market rate of interest is below the legal 
 rate, the usury laws prevent all persons, whose 
 credit is not extremely good, from obtaining loans 
 from capitalists of the highest character, and force 
 them to have recourse to those who are less scru- 
 pulous. Supposing the market rate of interest to 
 be six or seven per cent., an individual, in ordinary 
 good credit, might, were the usury laws abolished, 
 easily obtain a loan at that rate. But the law 
 having declared, that no more than five per cent, 
 shall be taken, and consequently having affixed a 
 
407 
 
 species of stigma to those lenders who bargain for 
 a higher rate, necessarily excludes the rich and 
 more respectable capitalists from the market, and 
 obliges borrowers to resort to those of an inferior 
 character, who, in addition to the premium for the 
 risk incurred by entering into an illegal transac- 
 tion, must receive an indemnification for the odium 
 which, in such cases, always attaches to the lender. 
 It is idle and ridiculous to attempt to secure indi- 
 viduals against the risk of imposition in pecuniary, 
 more than in any other species of transactions. 
 But, although the object were really desirable, it 
 could not possibly be obtained by such inadequate 
 means- The usury laws generate the very mis- 
 chief they are intended to suppress. Far from 
 diminishing, they most unquestionably multiply 
 usurious transactions in a tenfold proportion, and 
 powerfully aggravate all the evils they were de- 
 signed either to mitigate or remove." 
 
 Dr. Crombie, in the judicious pamphlet alieady 
 referred to, says : — 
 
 " It might also materially contribute towards 
 alleviating the present distress, not only of the 
 agriculturist, but also of the manufacturer, if the 
 
408 
 
 existing statute against usury were either amended, 
 or repealed. This statute is impolitic in its views, 
 imjust in its principle, inefficient in its purpose, and 
 detrimental in its effect. While it aims at restrain- 
 ing the rapacity of individuals, it obstructs the 
 free circulation of floating capital. It is iniquitous ; 
 because the owner of money has as just a right to 
 fix a price on the use of his commodity, as the 
 landholder, or the manufacturer. It is inefficient, 
 because the statute is easily, and daily evaded ; 
 and it is detrimental, not only to the community, 
 but also to the very individuals, whom it aims at 
 protecting, by compelling them to resort to unprin- 
 cipled and rapacious usurers for pecuniary accom- 
 modation. Few capitalists will be inclined to lend 
 money on any mortgage, much less on precarious 
 security, who can obtain, as at present they may 
 do, a larger per centage in the public funds. The 
 amendment, or the total abolition of this statute, 
 would, it is conceived, be highly beneficial. Money, 
 like every other commodity, should be allowed a 
 free and open market." 
 
 Another beneficial measure which the Govern- 
 ment may immediately adopt for restoring confi- 
 
409 
 
 dence, and thereby shortening the duration of 
 distress, is that of placing the country banks of 
 circulation upon a basis of perfect security. 
 Hitherto, the legislature has restricted individuals, 
 under the severest penalties, from establishing 
 private mints, and uttering metallic money of 
 intrinsic and indestructible value; yet, with a 
 degree of inconsistency which strikes us as more 
 extraordinary the more attentively we consider it, 
 our law-makers have permitted individuals to 
 establish private banks of circulation, and to utter 
 paper money, possessed of only a conventional 
 value, which a breath of panic may at any time 
 destroy. On the self- same principle, that Govern- 
 ment protects the public against the probable in- 
 security which might arise from individuals being 
 permitted to utter metallic currency, it should also 
 guard the public against the more probable, nay, 
 certain insecurity, which is created when indivi- 
 duals utter a paper currency. In every civilised 
 country, supplying and regulating the circulating 
 medium is a function of the sovereign prerogative ; 
 and when, for the convenience of commerce, this 
 function of the prerogative is delegated to private 
 
410 
 
 individuals, every principle of justice and expe- 
 diency demands that this delegation of the sove- 
 reign authority should be made under restrictions 
 and securities completely adequate to the protec- 
 tion of the public, against the occasional insolvency 
 of those who are permitted to substitute, as the 
 circulating medium of the neighbouring markets, 
 their promissory paper for the sterling money of 
 the state. 
 
 The evil to be guarded against in placing the 
 private banks of circulation upon a basis of perfect 
 security, is that of a contraction of the currency. 
 Such contraction, by enhancing the value of any 
 specific sum in the circulating medium, would 
 necessarily; increase the real magnitude of the debt, 
 and heighten the pressure of taxation. Under ordi- 
 nary circumstances, a contraction of the currency 
 occasions embarrassment, by lowering prices and 
 reducing the accustomed amount of mercantile 
 discounts. It is unnecessary to add, that, at the 
 present crisis, the bare apprehension of such results 
 would bring on an increased access of embarrass- 
 ment and dismay. 
 
 Perhaps the best mode of affording security to 
 
411 
 
 the holders of provincial paper, without at the 
 same time risking a contraction of the ciu-rency, 
 would be to grant to such banking establishments, 
 whether now existing or hereafter to be formed, as 
 might apply for them, charters of incorporation 
 from the crown, upon the principles, that the acting 
 partners or directors should, as at present, be re- 
 sponsible to the whole amount of their fortunes ; 
 but that the dormant partners or shareholders 
 should be responsible only for double the amount 
 of their subscribed capital. In every populous and 
 opulent neighbourhood, there are individuals pos- 
 sessed of disposable funds, who would willingly 
 partake in the profits of banks of circulation, pro- 
 vided they could do so without risking more than 
 twice the sum subscribed ; but who would prefer 
 the lowest interest yielded by government securi- 
 ties or mortgage, to the highest profits rendered by 
 the banking business, should the receipt of such 
 profits compel them to stake their whole fortunes 
 upon the discretion and integrity of the acting 
 partners. 
 
 The chartered banks of circulation should be 
 called upon to give ample security on landed or 
 
412 
 
 funded property, for the payment of the notes they 
 issued ; and should be required to give, not only 
 to the shareholders, but to the public, half-yearly 
 statements of their affairs. Under such guaran- 
 tees, these banks would be placed upon indestruct- 
 ible foundations; and their superior security would 
 give them such a decided preference in public 
 estimation, that establishments conducted upon the 
 present narrow and tottering basis would be unable 
 to stand in competition with them. From the force 
 of public opinion, no bank of circulation could con- 
 tinue its transactions without applying for a charter, 
 and conducting its business under the securities 
 required. All such banks would become chartered 
 companies ; and the limitation of the responsibility 
 of the shareholders to twice the amount of their 
 shares, by rendering them the channels of safe and 
 profitable investment, would draw to them an 
 abundant portion of the disposable capital of their 
 neighbourhood. The public would obtain the 
 double advantage of a full and of a secure currency. 
 It is to be apprehended, that without some plan 
 similar in principle to that which has now been 
 sketched, the country banks of circulation cannot 
 
4i;j V 
 
 be regulated so as to attain the twofold object of 
 a full and secure currency. Many of the existing 
 establishments may not have a sufficient command 
 of capital to enable them at one and the same time 
 to give adequate security for the paper they circu- 
 late, and to conduct their business on a scale 
 commensurate to the legitimate demands of trade. 
 But while giving the securities necessary to pro- 
 tect the public would require capitals double 
 the amount of those at present employed by the 
 provincial banks of circulation, it is extremely 
 improbable that, after the example of such nume- 
 rous failures, these establishments should be able to 
 obtain the aid of additional funds without charters 
 limiting responsibility. Fortunately, the Act of 
 last session, facilitating the formation of chartered 
 companies, and the recent relinquishment by the 
 Bank of England of so much of its monopoly as 
 went to limit banking firms to six partners, have 
 removed the difficulties which were opposed to the 
 establishment of those extensive and duly regu- 
 lated associations, without which, provincial banks 
 of circulation must remain inadequate to afford to 
 
414 
 
 their respective neighbourhoods the combined 
 advantages of a cheap, a full, and a secure currency. 
 
 Having ventured to suggest that which, at the 
 present crisis, the Government should do for the 
 security of the public, it may not be impi^oper, in 
 conclusion, to point out that which the public 
 should do for the security of the Government. 
 
 For the first time in the history of the country, 
 the ministers of the crown have avowed themselves 
 the advocates of liberal and enlightened principles, 
 in whatever respects our commercial policy. The 
 present ministry have, in several instances, re- 
 moved the absurd regulations and restrictions 
 imposed in the olden times of comparative dark- 
 ness ; and they have given sufficient indications of 
 their intention to pursue still further the honor- 
 able course of commercial reform which they have 
 commenced. But in pursuing a course as glorious 
 to themselves as it must be ultimately beneficial to 
 the empire, ministers have to encounter the most 
 formidable opposition. The landed proprietors 
 deprecate the temporary reduction of rents which 
 a free trade in the productions of the soil might 
 
415 
 
 occasion ; tlie farmers, ignorant of their own true 
 interests, concur with their landlords in the demand 
 for protecting duties and high prices; the West 
 India proprietors contend, that they have a pre- 
 scriptive right to compel the people of England to 
 purchase dear sugar, in order that they may be 
 enabled to continue the cultivation of their ex- 
 hausted estates with the expensive instrument of 
 slave labour: in short, all classes of monopolists, 
 and all kinds of sinister interests, are prepared to 
 enter into a solemn league and covenant to coun- 
 teract, by all possible means, the introduction of 
 that liberal system of commercial policy upon 
 which the general prosperity depends. It is im- 
 possible that the enlightened members of the 
 Government should be able to make way against 
 this most formidable combination, unless they are 
 backed and supported by the country at large, and 
 borne along upon the resistless and all-prevailing 
 current of public opinion. All party questions, 
 nay, all other questions involving political prin- 
 ciple, sink at the present crisis into comparative 
 insignificance, when contrasted with the vital, the 
 all-important question of free trade. Should this 
 
416 
 
 great question be lost, the seats of manufacture, 
 and the marts of commerce, will depart from our ill- 
 fated country ; — should the voice of an enlightened 
 public cause it to prevail, paths of interminable 
 prosperity will open to us; — and England, still 
 advancing in opulence and grandeur, may continue 
 for ages the emporium of the world. 
 
 OF 
 
 FINIS. 
 
 LONDON : 
 PRINTED BY T. BIJETTELL, RUPKRT STREET, II/WM ARKIiT. 
 
14 DAY USE 
 
 RETURN TO DESK FROM WHICH BORROWED 
 
 LOAN DEPT. 
 
 RENEWALS ONLY—TEL. NO. 642-3405 
 
 This book is due on the last date stamped below, or 
 
 on the date to which renewed. 
 
 Renewed books are subject to immediate recall. 
 
 EP i 1 10702 6 
 
 REC'D LD SEP 3 7 - -7 PM 8 
 
 Ail TQ- DISC' 
 
 f\PR ?, 9 ^99^ 
 
 Rec'cf GSS 
 
 CIRCULATION 
 
 MH - '; 1979 
 
 ^UG 51^99 4 
 
 \ r ^ : no '^.^ 
 
 AUTO DISC CIRC SEpOS-ga 
 
 LD2lA-60m-3,'70 
 (N5382sl0)476-A-32 
 
 General Library 
 
 University of California 
 
 Berkeley 
 
lililll 
 
 ■liillHill 
 
 T^VT€ 
 
 . .T7