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

to deal; of what is destined for home consumption, as well as of

what is destined for exportation; and consequently to degrade the

cultivation of the whole country, and to reduce the number of its

inhabitants. It tends to reduce the quantity of every sort of

produce, even that of the necessaries of life, whenever the

servants of the country choose to deal in them, to what those

servants can both afford to buy and expect to sell with such a

profit as pleases them.

From the nature of their situation, too, the servants must be

more disposed to support with rigourous severity their own

interest, against that of the country which they govern, than

their masters can be to support theirs. The country belongs to

their masters, who cannot avoid having some regard for the

interest of what belongs to them; but it does not belong to the

servants. The real interest of their masters, if they were

capable of understanding it, is the same with that of the

country; {The interest of every proprietor of India stock,

however, is by no means the same with that of the country in the

government of which his vote gives him some influence. - See book

v, chap. 1, part ii.}and it is from ignorance chiefly, and the

meanness of mercantile prejudice, that they ever oppress it. But

the real interest of the servants is by no means the same with

that of the country, and the most perfect information would not

necessarily put an end to their oppressions. The regulations,

accordingly, which have been sent out from Europe, though they

have been frequently weak, have upon most occasions been well

meaning. More intelligence, and perhaps less good meaning, has

sometimes appeared in those established by the servants in India.

It is a very singular government in which every member of the

administration wishes to get out of the country, and consequently

to have done with the government, as soon as he can, and to whose

interest, the day after he has left it, and carried his whole

fortune with him, it is perfectly indifferent though the whole

country was swallowed up by an earthquake.

I mean not, however, by any thing which I have here said, to

throw any odious imputation upon the general character of the

servants of the East India company, and touch less upon that of

any particular persons. It is the system of government, the

situation in which they are placed, that I mean to censure, not

the character of those who have acted in it. They acted as their

situation naturally directed, and they who have clamoured the

loudest against them would probably not have acted better

themselves. In war and negotiation, the councils of Madras and

Calcutta, have upon several occasions, conducted themselves with

a resolution and decisive wisdom, which would have done honour to

the senate of Rome in the best days of that republic. The members

of those councils, however, had been bred to professions very

different from war and politics. But their situation alone,

without education, experience, or even example, seems to have

formed in them all at once the great qualities which it required,

and to have inspired them both with abilities and virtues which

they themselves could not well know that they possessed. If upon

some occasions, therefore, it has animated them to actions of

magnanimity which could not well have been expected from them, we

should not wonder if, upon others, it has prompted them to

exploits of somewhat a different nature.

Such exclusive companies, therefore, are nuisances in every

respect; always more or less inconvenient to the countries in

which they are established, and destructive to those which have

the misfortune to fall under their government.

CHAPTER VIII.

CONCLUSION OF THE MERCANTILE SYSTEM.

Though the encouragement of exportation, and the discouragement

of importation, are the two great engines by which the mercantile

system proposes to enrich every country, yet, with regard to some

particular commodities, it seems to follow an opposite plan : to

discourage exportation, and to encourage importation. Its

ultimate object, however, it pretends, is always the same, to

enrich the country by an advantageous balance of trade. It

discourages the exportation of the materials of manufacture, and

of the instruments of trade, in order to give our own workmen an

advantage, and to enable them to undersell those of other nations

in all foreign markets; and by restraining, in this manner, the

exportation of a few commodities, of no great price, it proposes

to occasion a much greater and more valuable exportation of

others. It encourages the importation of the materials of

manufacture, in order that our own people may be enabled to work

them up more cheaply, and thereby prevent a greater and more

valuable importation of the manufactured commodities. I do not

observe, at least in our statute book, any encouragement given to

the importation of the instruments of trade. When manufactures

have advanced to a certain pitch of greatness, the fabrication of

the instruments of trade becomes itself the object of agreat

number of very important manufactures. To give any particular

encouragement to the importation of such instruments, would

interfere too much with the interest of those manufactures. Such

importation, therefore, instead of being encouraged, has

frequently been prohibited. Thus the importation of wool cards,

except from Ireland, or when brought in as wreck or prize goods,

was prohibited by the 3rd of Edward IV. ; which prohibition was

renewed by the 39th of Elizabeth, and has been continued and

rendered perpetual by subsequent laws.

The importation of the materials of manufacture has sometimes

been encouraged by an exemption from the duties to which other

goods are subject, and sometimes by bounties.

The importation of sheep’s wool from several different countries,

of cotton wool from all countries, of undressed flax, of the

greater part of dyeing drugs, of the greater part of undressed

hides from Ireland, or the British colonies, of seal skins from

the British Greenland fishery, of pig and bar iron from the

British colonies, as well as of several other materials of

manufacture, has been encouraged by an exemption from all duties,

if properly entered at the custom-house. The private interest of

our merchants and manufacturers may, perhaps, have extorted from

the legislature these exemptions, as well as the greater part of

our other commercial regulations. They are, however, perfectly

just and reasonable; and if, consistently with the necessities of

the state, they could be extended to all the other materials of

manufacture, the public would certainly be a gainer.

The avidity of our great manufacturers, however, has in some

cases extended these exemptions a good deal beyond what can

justly be considered as the rude materials of their work. By the

24th Geo. II. chap. 46, a small duty of only 1d. the pound was

imposed upon the importation of foreign brown linen yarn, instead

of much higher duties, to which it had been subjected before,

viz. of 6d. the pound upon sail yarn, of 1s. the pound upon all

French and Dutch yarn, and of �2:13:4 upon the hundred weight of

all spruce or Muscovia yarn. But our manufacturers were not long

satisfied with this reduction: by the 29th of the same king,

chap. 15, the same law which gave a bounty upon the exportation

of British and Irish linen, of which the price did not exceed

18d. the yard, even this small duty upon the importation of brown

linen yarn was taken away. In the different operations, however,

which are necessary for the preparation of linen yarn, a good

deal more industry is employed, than in the subsequent operation

of preparing linen cloth from linen yarn. To say nothing of the

industry of the flax-growers and flaxdressers, three or four

spinners at least are necessary in order to keep one weaver in

constant employment; and more than four-fifths of the whole

quantity of labour necessary for the preparation of linen cloth,

is employed in that of linen yarn ; but our spinners are poor

people; women commonly scattered about in all different parts of

the country, without support or protection. It is not by the sale

of their work, but by that of the complete work of the weavers,

that our great master manufacturers make their profits. As it is

their interest to sell the complete manufacture as dear, so it is

to buy the materials as cheap as possible. By extorting from the

legislature bounties upon the exportation of their own linen,

high duties upon the importation of all foreign linen, and a

total prohibition of the home consumption of some sorts of French

linen, they endeavour to sell their own goods as dear as

possible. By encouraging the importation of foreign linen yarn,

and thereby bringing it into competition with that which is made

by our own people, they endeavour to buy the work of the poor

spinners as cheap as possible. They are as intent to keep down

the wages of their own weavers, as the earnings of the poor

spinners ; and it is by no means for the benefit of the workmen

that they endeavour either to raise the price of the complete

work, or to lower that of the rude materials. It is the industry

which is carried on for the benefit of the rich and the powerful,

that is principally encouraged by our mercantile system. That

which is carried on for the benefit of the poor and the indigent

is too often either neglected or oppressed.

Both the bounty upon the exportation of linen, and the exemption

from the duty upon the importation of foreign yarn, which were

granted only for fifteen years, but continued by two different

prolongations, expire with the end of the session of parliament

which shall immediately follow the 24th of June 1786.

The encouragement given to the importation of the materials of

manufacture by bounties, has been principally confined to such as

were imported from our American plantations.

The first bounties of this kind were those granted about the

beginning of the present century, upon the importation of naval

stores from America. Under this denomination were comprehended

timber fit for masts, yards, and bowsprits; hemp, tar, pitch, and

turpentine. The bounty, however, of �1 the ton upon

masting-timber, and that of �6 the ton upon hemp, were extended

to such as should be imported into England from Scotland. Both

these bounties continued, without any variation, at the same

rate, till they were severally allowed to expire; that upon hemp

on the 1st of January 1741, and that upon masting-timber at the

end of the session of parliament immediately following the 24th

June 1781.

The bounties upon the importation of tar, pitch, and turpentine,

underwent, during their continuance, several alterations.

Originally, that upon tar was �4 the ton ; that upon pitch the

same; and that upon turpentine �3 the ton. The bounty of �4 the

ton upon tar was afterwards confined to such as had been prepared

in a particular manner ; that upon other good, clean, and

merchantable tar was reduced to �2:4s. the ton. The bounty upon

pitch was likewise reduced to �1, and that upon turpentine to

�1:10s. the ton.

The second bounty upon the importation of any of the materials of

manufacture, according to the order of time, was that granted by

the 21st Geo. II. chap.30, upon the importation of indigo from

the British plantations. When the plantation indigo was worth

three-fourths of the price of the best French indigo, it was, by

this act, entitled to a bounty of 6d. the pound. This bounty,

which, like most others, was granted only for a limited time, was

continued by several prolongations, but was reduced to 4d. the

pound. It was allowed to expire