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

that of those which were imported from foreign countries ;

because, by means of proper duties, they might be rendered always

somewhat dearer than the former, and yet a good deal cheaper than

the latter. By confining such commodities to the home market,

therefore, it was proposed to discourage the produce, not of

Great Britain, but of some foreign countries with which the

balance of trade was believed to be unfavourable to Great

Britain.

The prohibition of exporting from the colonies to any other

country but Great Britain, masts, yards, and bowsprits, tar,

pitch, and turpentine, naturally tended to lower the price of

timber in the colonies, and consequently to increase the expense

of clearing their lands, the principal obstacle to their

improvement. But about the beginning of the present century, in

1703, the pitch and tar company of Sweden endeavoured to raise

the price of their commodities to Great Britain, by prohibiting

their exportation, except in their own ships, at their own price,

and in such quantities as they thought proper. In order to

counteract this notable piece of mercantile policy, and to render

herself as much as possible independent, not only of Sweden, but

of all the other northern powers, Great Britain gave a bounty

upon the importation of naval stores from America; and the effect

of this bounty was to raise the price of timber in America much

more than the confinement to the home market could lower it; and

as both regulations were enacted at the same time, their joint

effect was rather to encourage than to discourage the clearing of

land in America.

Though pig and bar iron, too, have been put among the enumerated

commodities, yet as, when imported from America, they are

exempted from considerable duties to which they are subject when

imported front any other country, the one part of the regulation

contributes more to encourage the erection of furnaces in America

than the other to discourage it. There is no manufacture which

occasions so great a consumption of wood as a furnace, or which

can contribute so much to the clearing of a country overgrown

with it.

The tendency of some of these regulations to raise the value of

timber in America, and thereby to facilitate the clearing of the

land, was neither, perhaps, intended nor understood by the

legislature. Though their beneficial effects, however, have been

in this respect accidental, they have not upon that account been

less real.

The most perfect freedom of trade is permitted between the

British colonies of America and the West Indies, both in the

enumerated and in the non-enumerated commodities Those colonies

are now become so populous and thriving, that each of them finds

in some of the others a great and extensive market for every part

of its produce. All of them taken together, they make a great

internal market for the produce of one another.

The liberality of England, however, towards the trade of her

colonies, has been confined chiefly to what concerns the market

for their produce, either in its rude state, or in what may be

called the very first stage of manufacture. The more advanced or

more refined manufactures, even of the colony produce, the

merchants and manufacturers of Great Britain chuse to reserve to

themselves, and have prevailed upon the legislature to prevent

their establishment in the colonies, sometimes by high duties,

and sometimes by absolute prohibitions.

While, for example, Muscovado sugars from the British plantations

pay, upon importation, only 6s:4d. the hundred weight, white

sugars pay �1:1:1; and refined, either double or single, in

loaves, �4:2:5 8/20ths. When those high duties were imposed,

Great Britain was the sole, and she still continues to be, the

principal market, to which the sugars of the British colonies

could be exported. They amounted, therefore, to a prohibition, at

first of claying or refining sugar for any foreign market, and at

present of claying or refining it for the market which takes off,

perhaps, more than nine-tenths of the whole produce. The

manufacture of claying or refining sugar, accordingly, though it

has flourished in all the sugar colonies of France, has been

little cultivated in any of those of England, except for the

market of the colonies themselves. While Grenada was in the hands

of the French, there was a refinery of sugar, by claying, at

least upon almost every plantation. Since it fell into those of

the English, almost all works of this kind have been given up;

and there are at present (October 1773), I am assured, not above

two or three remaining in the island. At present, however, by an

indulgence of the custom-house, clayed or refined sugar, if

reduced from loaves into powder, is commonly imported as

Muscovado.

While Great Britain encourages in America the manufacturing of

pig and bar iron, by exempting them from duties to which the like

commodities are subject when imported from any other country, she

imposes an absolute prohibition upon the erection of steel

furnaces and slit-mills in any of her American plantations. She

will not suffer her colonies to work in those more refined

manufactures, even for their own consumption ; but insists upon

their purchasing of her merchants and manufacturers all goods of

this kind which they have occasion for.

She prohibits the exportation from one province to another by

water, and even the canriage by land upon horseback, or in a

cart, of hats, of wools, and woollen goods, of the produce of

America; a regulation which effectually prevents the

establishment of any manufacture of such commodities for distant

sale, and confines the industry of her colonists in this way to

such coarse and household manufactures as a private family

commonly makes for its own use, or for that of some of its

neighbours in the same province.

To prohibit a great people, however, from making all that they

can of every part of their own produce, or from employing their

stock and industry in the way that they judge most advantageous

to themselves, is a manifest violation of the most sacred rights

of mankind. Unjust, however, as such prohibitions may be, they

have not hitherto been very hurtful to the colonies. Land is

still so cheap, and, consequently, labour so dear among them,

that they can import from the mother country almost all the more

refined or more advanced manufactures cheaper than they could

make them for themselves. Though they had not, therefore, been

prohibited from establishing such manufactures, yet, in their

present state of improvement, a regard to their own interest

would probably have prevented them from doing so. In their

present state of improvement, those prohibitions, perhaps,

without cramping their industry, or restraining it from any

employment to which it would have gone of its own accord, are

only impertinent badges of slavery imposed upon them, without any

sufficient reason, by the groundless jealousy of the merchants

and manufacturers of the mother country. In a more advanced

state, they might be really oppressive and insupportable.

Great Britain, too, as she confines to her own market some of the

most important productions of the colonies, so, in compensation,

she gives to some of them an advantage in that market, sometimes

by imposing higher duties upon the like productions when imported

from other countries, and sometimes by giving bounties upon their

importation from the colonies. In the first way, she gives an

advantage in the home market to the sugar, tobacco, and iron of

her own colonies; and, in the second, to their raw silk, to their

hemp and flax, to their indigo, to their naval stores, and to

their building timber. This second way of encouraging the colony

produce, by bounties upon importation, is, so far as I have been

able to learn, peculiar to Great Britain: the first is not.

Portugal does not content herself with imposing higher duties

upon the importation of tobacco from any other country, but

prohibits it under the severest penalties.

With regard to the importation of goods from Europe, England has

likewise dealt more liberally with her colonies than any other

nation.

Great Britain allows a part, almost always the half, generally a

larger portion, and sometimes the whole, of the duty which is

paid upon the importation of foreign goods, to be drawn back upon

their exportation to any foreign country. No independent foreign

country, it was easy to foresee, would receive them, if they came

to it loaded with the heavy duties to which almost all foreign

goods are subjected on their importation into Great Britain.

Unless, therefore, some part of those duties was drawn back upon

exportation, there was an end of the carrying trade; a trade so

much favoured by the mercantile system.

Our colonies, however, are by no means independent foreign

countries; and Great Britain having assumed to herself the

exclusive right of supplying them with all goods from Europe,

might have forced them (in the same manner as other countries

have done their colonies) to receive such goods loaded with all

the same duties which they paid in the mother country. But, on

the contrary, till 1763, the same drawbacks were paid upon the

exportation of the greater part of foreign goods to our colonies,

as to any independent foreign country. In 1763, indeed, by the

4th of Geo. III. c. 15, this indulgence was a good deal abated,

and it was enacted, ” That no part of the duty called the old

subsidy should be drawn back for any goods of the growth,

production, or manufacture of Europe or the East Indies, which

should be exported from this kingdom to any British colony or

plantation in America; wines, white calicoes, and muslins,

excepted.” Before this law, many different sorts of foreign goods

might have been bought cheaper in the plantations than in the

mother country, and some may still.

Of the greater part of the regulations concerning the colony

trade, the merchants who carry it on, it must be observed, have

been the principal advisers. We must not wonder, therefore, if,

in a great part of them, their interest has been more considered

than either that of the colonies or that of the mother country.

In their exclusive privilege of supplying the colonies with all

the goods which they wanted from Europe, and of purchasing all

such parts of their surplus produce as could not interfere with

any of the trades which they themselves carried on at home, the

interest of the colonies was sacrificed to the interest of those

merchants. In allowing the same drawbacks upon the re-exportation

of the greater part of European and East India goods to the

colonies, as upon their re-exportation to any independent

country, the interest of the mother country was sacrificed to it,

even according to the mercantile ideas of that interest. It was

for the interest of the merchants to pay as little as possible

for the foreign goods which they sent to the colonies, and,

consequently, to get back as much as possible of the duties which

they advanced upon their importation into Great Britain. They

might thereby be enabled to sell in the colonies, either the same

quantity of goods with a greater profit, or a greater quantity

with the same profit, and, consequently, to gain something either

in the one way or the other. It was likewise for the interest of

the colonies to get all such goods as cheap, and in as great

abundance as possible. But this might not always be for the

interest of the mother country. She might frequently suffer, both

in her revenue, by giving back a great part of the duties which

had been paid upon the importation of such goods; and in her

manufactures, by being undersold in the colony market, in

consequence of the easy terms upon which foreign manufactures

could be carried thither by means of