An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader macos .TXT) 📕

possible to turn all at once the whole farming stock of the

kingdom to its proper business, the cultivation of land,

withdrawing it from every other employment into which any part of

it may be at present diverted; and were it possible, in order to

support and assist, upon occasion, the operations of this great

stock, to provide all at once another stock almost equally great;

it is not, perhaps, very easy to imagine how great, how

extensive, and how sudden, would be the improvement which this

change of circumstances would alone produce upon the whole face

of the country.

The statute of Edward VI. therefore, by prohibiting as much as

possible any middle man from coming in between the grower and the

consumer, endeavoured to annihilate a trade, of which the free

exercise is not only the best palliative of the inconveniencics

of a dearth, but the best preventive of that calamity ; after the

trade of the farmer, no trade contributing so much to the growing

of corn as that of the corn merchant.

The rigour of this law was afterwards softened by several

subsequent statutes, which successvely permitted the engrossing

of corn when the price of wheat should not exceed 20s. and 24s.

32s. and 40s. the quarter. At last, by the 15th of Charles II.

c.7, the engrossing or buying of corn, in order to sell it again,

as long as the price of wheat did not exceed 48s. the quarter,

and that of other grain in proportion, was declared lawful to all

persons not being forestallers, that is, not selling again in the

same market within three months. All the freedom which the trade

of the inland corn dealer has ever yet enjoyed was bestowed upon

it by this statute. The statute of the twelfth of the present

king, which repeals almost all the other ancient laws against

engrossers and forestallers, does not repeal the restrictions of

this particular statute, which therefore still continue in force.

This statute, however, authorises in some measure two very absurd

popular prejudices.

First, It supposes, that when the price of wheat has risen so

high as 48s. the quarter, and that of other grain in proportion,

corn is likely to be so engrossed as to hurt the people. But,

from what has been already said, it seems evident enough, that

corn can at no price be so engrossed by the inland dealers as to

hurt the people; and 48s. the quarter, besides, though it may be

considered as a very high price, yet, in years of scarcity, it is

a price which frequently takes place immediately after harvest,

when scarce any part of the new crop can be sold off, and when it

is impossible even for ignorance to suppose that any part of it

can be so engrossed as to hurt the people.

Secondly, It supposes that there is a certain price at which

corn is likely to be forestalled, that is, bought up in order to

be sold again soon after in the same market, so as to hurt the

people. But if a merchant ever buys up corn, either going to a

particular market, or in a particular market, in order to sell it

again soon after in the same market, it must be because he judges

that the market cannot be so liberally supplied through the whole

season as upon that particular occasion, and that the price,

therefore, must soon rise. If he judges wrong in this, and if the

price does not rise, he not only loses the whole profit of the

stock which he employs in this manner, but a part of the stock

itself, by the expense and loss which necessarily attend the

storing and keeping of corn. He hurts himself, therefore, much

more essentially than he can hurt even the particular people whom

he may hinder from supplying themselves upon that particular

market day, because they may afterwards supply themselves just as

cheap upon any other market day. If he judges right, instead of

hurting the great body of the people, he renders them a most

important service. By making them feel the inconveniencies of a

dearth somewhat earlier than they otherwise might do, he prevents

their feeling them afterwads so severely as they certainly would

do, if the cheapness of price encouraged them to consume faster

than suited the real scarcity of the season. When the scarcity is

real, the best thing that can be done for the people is, to

divide the inconvenience of it as equally as possible, through

all the different months and weeks and days of the year. The

interest of the corn merchant makes him study to do this as

exactly as he can; and as no other person can have either the

same interest, or the same knowledge, or the same abilities, to

do it so exactly as he, this most important operation of commerce

ought to be trusted entirely to him; or, in other words, the corn

trade, so far at least as concerns the supply of the home market,

ought to be left perfectly free.

The popular fear of engrossing and forestalling may be compared

to the popular terrors and suspicions of witchcraft. The

unfortunate wretches accused of this latter crime were not more

innocent of the misfortunes imputed to them, than those who have

been accused of the former. The law which put an end to all

prosecutions against witchcraft, which put it out of any man’s

power to gratify his own malice by accusing his neighbour of that

imaginary crime, seems effectually to have put an end to those

fears and suspicions, by taking away the great cause which

encouraged and supported them. The law which would restore entire

freedom to the inland trade of corn, would probably prove as

effectual to put an end to the popular fears of engrossing and

forestalling.

The 15th of Charles II. c. 7, however, with all its

imperfections, has, perhaps, contributed more, both to the

plentiful supply of the home market, and to the increase of

tillage, than any other law in the statute book. It is from this

law that the inland corn trade has derived all the liberty and

protection which it has ever yet enjoyed ; and both the supply of

the home market and the interest of tillage are much more

effectually promoted by the inland, than either by the

importation or exportation trade.

The proportion of the average quantity of all sorts of grain

imported into Great Britain to that of all sorts of grain

consumed, it has been computed by the author of the Tracts upon

the Corn Trade, does not exceed that of one to five hundred and

seventy. For supplying the home market, therefore, the importance

of the inland trade must be to that of the importation trade as

five hundred and seventy to one.

The average quantity of all sorts of grain exported from Great

Britain does not, according to the same author, exceed the

one-and-thirtieth part of the annual produce. For the

encouragement of tillage, therefore, by providing a market for

the home produce, the importance of the inland trade must be to

that of the exportation trade as thirty to one.

I have no great faith in political arithmetic, and I mean not to

warrant the exactness of either of these computations. I mention

them only in order to show of how much less consequence, in the

opinion of the most judicious and experienced persons, the

foreign trade of corn is than the home trade. The great cheapness

of corn in the years immediately preceding the establishment of

the bounty may, perhaps with reason, be ascribed in some measure

to the operation of this statute of Charles II. which had been

enacted about five-and-twenty years before, and which had,

therefore, full time to produce its effect.

A very few words will sufficiently explain all that I have to say

concerning the other three branches of the corn trade.

II. The trade of the merchant-importer of foreign corn for home

consumption, evidently contributes to the immediate supply of the

home market, and must so far be immediately beneficial to the

great body of the people. It tends, indeed, to lower somewhat the

average money price of corn, but not to diminish its real value,

or the quantity of labour which it is capable of maintaining. If

importation was at all times free, our farmers and country

gentlemen would probably, one year with another, get less money

for their corn than they do at present, when importation is at

most times in effect prohibited ; but the money which they got

would be of more value, would buy more goods of all other kinds,

and would employ more labour. Their real wealth, their real

revenue, therefore, would be the same as at present, though it

might be expressed by a smaller quantity of silver, and they

would neither be disabled nor discouraged from cultivating corn

as much as they do at present. On the contrary, as the rise in

the real value of silver, in consequence of lowering the money

price of corn, lowers somewhat the money price of all other

commodities, it gives the industry of the country where it takes

place some advantage in all foreign markets and thereby tends to

encourage and increase that industry. But the extent of the home

market for corn must be in proportion to the general industry of

the country where it grows, or to the number of those who produce

something else, and therefore, have something else, or, what

comes to the same thing, the price of something else, to give in

exchange for corn. But in every country, the home market, as it

is the nearest and most convenient, so is it likewise the

greatest and most important market for corn. That rise in the

real value of silver, therefore, which is the effect of lowering

the average money price of corn, tends to enlarge the greatest

and most important market for corn, and thereby to encourage,

instead of discouraging its growth.

By the 22d of Charles II. c. 13, the importation of wheat,

whenever the price in the home market did not exceed 53s:4d. the

quarter, was subjected to a duty of 16s. the quarter; and to a

duty of 8s. whenever the price did not exceed �4. The former of

these two prices has, for more than a century past, taken place

only in times of very great scarcity ; and the latter has, so far

as I know, not taken place at all. Yet, till wheat has risen

above this latter price, it was, by this statute, subjected to a

very high duty; and, till it had risen above the former, to a

duty which amounted to a prohibition. The importation of other

sorts of grain was restrained at rates and by duties, in

proportion to the value of the grain, almost equally high. Before

the 13th of the present king, the following were the duties

payable upon the importation of the different sorts of grain :

Grain. Duties. Duties Duties.

Beans to 28s. per qr. 19s:10d. after till 40s. 16s:8d. then 12d.

Barley to 28s. - 19s:10d. - 32s. 16s. - 12d.

Malt is prohibited by the annual malt-tax bill.

Oats to 16s. - 5s:10d after - 9�d.

Pease to 40s. - 16s: 0d.after - 9�d.

Rye to 36s. - 19s:10d. till 40s. 16s:8d - 12d.

Wheat to 44s. - 21s: 9d. till 53s:4d. 17s. - 8s.

till �4, and after that about 1s:4d.

Buckwheat to 32s. per qr. to pay 16s.

These different duties were imposed, partly by the 22d of Charles

II. in place of the old subsidy, partly by the new subsidy, by

the one-third and two-thirds subsidy, and by the subsidy 1747.

Subsequent laws