<SPAN name="ch5pcb4"></SPAN>
<p>I cannot conclude this chapter concerning bounties, without observing,
that the praises which have been bestowed upon the law which establishes
the bounty upon the exportation of corn, and upon that system of
regulations which is connected with it, are altogether unmerited. A
particular examination of the nature of the corn trade, and of the
principal British laws which relate to it, will sufficiently demonstrate
the truth of this assertion. The great importance of this subject must
justify the length of the digression.</p>
<p>The trade of the corn merchant is composed of four different branches,
which, though they may sometimes be all carried on by the same person,
are, in their own nature, four separate and distinct trades. These are,
first, the trade of the inland dealer; secondly, that of the
merchant-importer for home consumption; thirdly, that of the
merchant-exporter of home produce for foreign consumption; and, fourthly,
that of the merchant-carrier, or of the importer of corn, in order to
export it again.</p>
<p>I. The interest of the inland dealer, and that of the great body of the
people, how opposite soever they may at first appear, are, even in years
of the greatest scarcity, exactly the same. It is his interest to raise
the price of his corn as high as the real scarcity of the season requires,
and it can never be his interest to raise it higher. By raising the price,
he discourages the consumption, and puts every body more or less, but
particularly the inferior ranks of people, upon thrift and good management
If, by raising it too high, he discourages the consumption so much that
the supply of the season is likely to go beyond the consumption of the
season, and to last for some time after the next crop begins to come in,
he runs the hazard, not only of losing a considerable part of his corn by
natural causes, but of being obliged to sell what remains of it for much
less than what he might have had for it several months before. If, by not
raising the price high enough, he discourages the consumption so little,
that the supply of the season is likely to fall short of the consumption
of the season, he not only loses a part of the profit which he might
otherwise have made, but he exposes the people to suffer before the end of
the season, instead of the hardships of a dearth, the dreadful horrors of
a famine. It is the interest of the people that their daily, weekly, and
monthly consumption should be proportioned as exactly as possible to the
supply of the season. The interest of the inland corn dealer is the same.
By supplying them, as nearly as he can judge, in this proportion, he is
likely to sell all his corn for the highest price, and with the greatest
profit; and his knowledge of the state of the crop, and of his daily,
weekly, and monthly sales, enables him to judge, with more or less
accuracy, how far they really are supplied in this manner. Without
intending the interest of the people, he is necessarily led, by a regard
to his own interest, to treat them, even in years of scarcity, pretty much
in the same manner as the prudent master of a vessel is sometimes obliged
to treat his crew. When he foresees that provisions are likely to run
short, he puts them upon short allowance. Though from excess of caution he
should sometimes do this without any real necessity, yet all the
inconveniencies which his crew can thereby suffer are inconsiderable, in
comparison of the danger, misery, and ruin, to which they might sometimes
be exposed by a less provident conduct. Though, from excess of avarice, in
the same manner, the inland corn merchant should sometimes raise the price
of his corn somewhat higher than the scarcity of the season requires, yet
all the inconveniencies which the people can suffer from this conduct,
which effectually secures them from a famine in the end of the season, are
inconsiderable, in comparison of what they might have been exposed to by a
more liberal way of dealing in the beginning of it the corn merchant
himself is likely to suffer the most by this excess of avarice; not only
from the indignation which it generally excites against him, but, though
he should escape the effects of this indignation, from the quantity of
corn which it necessarily leaves upon his hands in the end of the season,
and which, if the next season happens to prove favourable, he must always
sell for a much lower price than he might otherwise have had.</p>
<p>Were it possible, indeed, for one great company of merchants to possess
themselves of the whole crop of an extensive country, it might perhaps be
their interest to deal with it, as the Dutch are said to do with the
spiceries of the Moluccas, to destroy or throw away a considerable part of
it, in order to keep up the price of the rest. But it is scarce possible,
even by the violence of law, to establish such an extensive monopoly with
regard to corn; and wherever the law leaves the trade free, it is of all
commodities the least liable to be engrossed or monopolized by the forced
a few large capitals, which buy up the greater part of it. Not only its
value far exceeds what the capitals of a few private men are capable of
purchasing; but, supposing they were capable of purchasing it, the manner
in which it is produced renders this purchase altogether impracticable.
As, in every civilized country, it is the commodity of which the annual
consumption is the greatest; so a greater quantity of industry is annually
employed in producing corn than in producing any other commodity. When it
first comes from the ground, too, it is necessarily divided among a
greater number of owners than any other commodity; and these owners can
never be collected into one place, like a number of independent
manufacturers, but are necessarily scattered through all the different
corners of the country. These first owners either immediately supply the
consumers in their own neighbourhood, or they supply other inland dealers,
who supply those consumers. The inland dealers in corn, therefore,
including both the farmer and the baker, are necessarily more numerous
than the dealers in any other commodity; and their dispersed situation
renders it altogether impossible for them to enter into any general
combination. If, in a year of scarcity, therefore, any of them should find
that he had a good deal more corn upon hand than, at the current price, he
could hope to dispose of before the end of the season, he would never
think of keeping up this price to his own loss, and to the sole benefit of
his rivals and competitors, but would immediately lower it, in order to
get rid of his corn before the new crop began to come in. The same
motives, the same interests, which would thus regulate the conduct of any
one dealer, would regulate that of every other, and oblige them all in
general to sell their corn at the price which, according to the best of
their judgment, was most suitable to the scarcity or plenty of the season.</p>
<p>Whoever examines, with attention, the history of the dearths and famines
which have afflicted any part of Europe during either the course of the
present or that of the two preceding centuries, of several of which we
have pretty exact accounts, will find, I believe, that a dearth never has
arisen from any combination among the inland dealers in corn, nor from any
other cause but a real scarcity, occasioned sometimes, perhaps, and in
some particular places, by the waste of war, but in by far the greatest
number of cases by the fault of the seasons; and that a famine has never
arisen from any other cause but the violence of government attempting, by
improper means, to remedy the inconveniencies of a dearth.</p>
<p>In an extensive corn country, between all the different parts of which
there is a free commerce and communication, the scarcity occasioned by the
most unfavourable seasons can never be so great as to produce a famine;
and the scantiest crop, if managed with frugality and economy, will
maintain, through the year, the same number of people that are commonly
fed in a more affluent manner by one of moderate plenty. The seasons most
unfavourable to the crop are those of excessive drought or excessive rain.
But as corn grows equally upon high and low lands, upon grounds that are
disposed to be too wet, and upon those that are disposed to be too dry,
either the drought or the rain, which is hurtful to one part of the
country, is favourable to another; and though, both in the wet and in the
dry season, the crop is a good deal less than in one more properly
tempered; yet, in both, what is lost in one part of the country is in some
measure compensated by what is gained in the other. In rice countries,
where the crop not only requires a very moist soil, but where, in a
certain period of its growing, it must be laid under water, the effects of
a drought are much more dismal. Even in such countries, however, the
drought is, perhaps, scarce ever so universal as necessarily to occasion a
famine, if the government would allow a free trade. The drought in Bengal,
a few years ago, might probably have occasioned a very great dearth. Some
improper regulations, some injudicious restraints, imposed by the servants
of the East India Company upon the rice trade, contributed, perhaps, to
turn that dearth into a famine.</p>
<p>When the government, in order to remedy the inconveniencies of a dearth,
orders all the dealers to sell their corn at what it supposes a reasonable
price, it either hinders them from bringing it to market, which may
sometimes produce a famine even in the beginning of the season; or, if
they bring it thither, it enables the people, and thereby encourages them
to consume it so fast as must necessarily produce a famine before the end
of the season. The unlimited, unrestrained freedom of the corn trade, as
it is the only effectual preventive of the miseries of a famine, so it is
the best palliative of the inconveniencies of a dearth; for the
inconveniencies of a real scarcity cannot be remedied; they can only be
palliated. No trade deserves more the full protection of the law, and no
trade requires it so much; because no trade is so much exposed to popular
odium.</p>
<p>In years of scarcity, the inferior ranks of people impute their distress
to the avarice of the corn merchant, who becomes the object of their
hatred and indignation. Instead of making profit upon such occasions,
therefore, he is often in danger of being utterly ruined, and of having
his magazines plundered and destroyed by their violence. It is in years of
scarcity, however, when prices are high, that the corn merchant expects to
make his principal profit. He is generally in contract with some farmers
to furnish him, for a certain number of years, with a certain quantity of
corn, at a certain price. This contract price is settled according to what
is supposed to be the moderate and reasonable, that is, the ordinary or
average price, which, before the late years of scarcity, was commonly
about 28s. for the quarter of wheat, and for that of other grain in
proportion. In years of scarcity, therefore, the corn merchant buys a
great part of his corn for the ordinary price, and sells it for a much
higher. That this extraordinary profit, however, is no more than
sufficient to put his trade upon a fair level with other trades, and to
compensate the many losses which he sustains upon other occasions, both
from the perishable nature of the commodity itself, and from the frequent
and unforeseen fluctuations of its price, seems evident enough, from this
single circumstance, that great fortunes are as seldom made in this as in
any other trade. The popular odium, however, which attends it in years of
scarcity, the only years in which it can be very profitable, renders
people of character and fortune averse to enter into it. It is abandoned
to an inferior set of dealers; and millers, bakers, meal-men, and
meal-factors, together with a number of wretched hucksters, are almost the
only middle people that, in the home market, come between the grower and
the consumer.</p>
<p>The ancient policy of Europe, instead of discountenancing this popular
odium against a trade so beneficial to the public, seems, on the contrary,
to have authorised and encouraged it.</p>
<p>By the 5th and 6th of Edward VI cap. 14, it was enacted, that whoever
should buy any corn or grain, with intent to sell it again, should be
reputed an unlawful engrosser, and should, for the first fault, suffer two
months imprisonment, and forfeit the value of the corn; for the second,
suffer six months imprisonment, and forfeit double the value; and, for the
third, be set in the pillory, suffer imprisonment during the king's
pleasure, and forfeit all his goods and chattels. The ancient policy of
most other parts of Europe was no better than that of England.</p>
<p>Our ancestors seem to have imagined, that the people would buy their corn
cheaper of the farmer than of the corn merchant, who, they were afraid,
would require, over and above the price which he paid to the farmer, an
exorbitant profit to himself. They endeavoured, therefore, to annihilate
his trade altogether. They even endeavoured to hinder, as much as
possible, any middle man of any kind from coming in between the grower and
the consumer; and this was the meaning of the many restraints which they
imposed upon the trade of those whom they called kidders, or carriers of
corn; a trade which nobody was allowed to exercise without a licence,
ascertaining his qualifications as a man of probity and fair dealing. The
authority of three justices of the peace was, by the statute of Edward VI.
necessary in order to grant this licence. But even this restraint was
afterwards thought insufficient, and, by a statute of Elizabeth, the
privilege of granting it was confined to the quarter-sessions.</p>
<p>The ancient policy of Europe endeavoured, in this manner, to regulate
agriculture, the great trade of the country, by maxims quite different
from those which it established with regard to manufactures, the great
trade of the towns. By leaving a farmer no other customers but either the
consumers or their immediate factors, the kidders and carriers of corn, it
endeavoured to force him to exercise the trade, not only of a farmer, but
of a corn merchant, or corn retailer. On the contrary, it, in many cases,
prohibited the manufacturer from exercising the trade of a shopkeeper, or
from selling his own goods by retail. It meant, by the one law, to promote
the general interest of the country, or to render corn cheap, without,
perhaps, its being well understood how this was to be done. By the other,
it meant to promote that of a particular order of men, the shopkeepers,
who would be so much undersold by the manufacturer, it was supposed, that
their trade would be ruined, if he was allowed to retail at all.</p>
<p>The manufacturer, however, though he had been allowed to keep a shop, and
to sell his own goods by retail, could not have undersold the common
shopkeeper. Whatever part of his capital he might have placed in his shop,
he must have withdrawn it from his manufacture. In order to carry on his
business on a level with that of other people, as he must have had the
profit of a manufacturer on the one part, so he must have had that of a
shopkeeper upon the other. Let us suppose, for example, that in the
particular town where he lived, ten per cent. was the ordinary profit both
of manufacturing and shopkeeping stock; he must in this case have charged
upon every piece of his own goods, which he sold in his shop, a profit of
twenty per cent. When he carried them from his workhouse to his shop, he
must have valued them at the price for which he could have sold them to a
dealer or shopkeeper, who would have bought them by wholesale. If he
valued them lower, he lost a part of the profit of his manufacturing
capital. When, again, he sold them from his shop, unless he got the same
price at which a shopkeeper would have sold them, he lost a part of the
profit of his shop-keeping capital. Though he might appear, therefore, to
make a double profit upon the same piece of goods, yet, as these goods
made successively a part of two distinct capitals, he made but a single
profit upon the whole capital employed about them; and if he made less
than his profit, he was a loser, and did not employ his whole capital with
the same advantage as the greater part of his neighbours.</p>
<p>What the manufacturer was prohibited to do, the farmer was in some measure
enjoined to do; to divide his capital between two different employments;
to keep one part of it in his granaries and stack-yard, for supplying the
occasional demands of the market, and to employ the other in the
cultivation of his land. But as he could not afford to employ the latter
for less than the ordinary profits of farming stock, so he could as little
afford to employ the former for less than the ordinary profits of
mercantile stock. Whether the stock which really carried on the business
of a corn merchant belonged to the person who was called a farmer, or to
the person who was called a corn merchant, an equal profit was in both
cases requisite, in order to indemnify its owner for employing it in this
manner, in order to put his business on a level with other trades, and in
order to hinder him from having an interest to change it as soon as
possible for some other. The farmer, therefore, who was thus forced to
exercise the trade of a corn merchant, could not afford to sell his corn
cheaper than any other corn merchant would have been obliged to do in the
case of a free competition.</p>
<p>The dealer who can employ his whole stock in one single branch of
business, has an advantage of the same kind with the workman who can
employ his whole labour in one single operation. As the latter acquires a
dexterity which enables him, with the same two hands, to perform a much
greater quantity of work, so the former acquires so easy and ready a
method of transacting his business, of buying and disposing of his goods,
that with the same capital he can transact a much greater quantity of
business. As the one can commonly afford his work a good deal cheaper, so
the other can commonly afford his goods somewhat cheaper, than if his
stock and attention were both employed about a greater variety of objects.
The greater part of manufacturers could not afford to retail their own
goods so cheap as a vigilant and active shopkeeper, whose sole business it
was to buy them by wholesale and to retail them again. The greater part of
farmers could still less afford to retail their own corn, to supply the
inhabitants of a town, at perhaps four or five miles distance from the
greater part of them, so cheap as a vigilant and active corn merchant,
whose sole business it was to purchase corn by wholesale, to collect it
into a great magazine, and to retail it again.</p>
<p>The law which prohibited the manufacturer from exercising the trade of a
shopkeeper, endeavoured to force this division in the employment of stock
to go on faster than it might otherwise have done. The law which obliged
the farmer to exercise the trade of a corn merchant, endeavoured to hinder
it from going on so fast. Both laws were evident violations of natural
liberty, and therefore unjust; and they were both, too, as impolitic as
they were unjust. It is the interest of every society, that things of this
kind should never either he forced or obstructed. The man who employs
either his labour or his stock in a greater variety of ways than his
situation renders necessary, can never hurt his neighbour by underselling
him. He may hurt himself, and he generally does so. Jack-of-all-trades
will never be rich, says the proverb. But the law ought always to trust
people with the care of their own interest, as in their local situations
they must generally be able to judge better of it than the legislature can
do. The law, however, which obliged the farmer to exercise the trade of a
corn merchant was by far the most pernicious of the two.</p>
<p>It obstructed not only that division in the employment of stock which is
so advantageous to every society, but it obstructed likewise the
improvement and cultivation of the land. By obliging the farmer to carry
on two trades instead of one, it forced him to divide his capital into two
parts, of which one only could be employed in cultivation. But if he had
been at liberty to sell his whole crop to a corn merchant as fast as he
could thresh it out, his whole capital might have returned immediately to
the land, and have been employed in buying more cattle, and hiring more
servants, in order to improve and cultivate it better. But by being
obliged to sell his corn by retail, he was obliged to keep a great part of
his capital in his granaries and stack-yard through the year, and could
not therefore cultivate so well as with the same capital he might
otherwise have done. This law, therefore, necessarily obstructed the
improvement of the land, and, instead of tending to render corn cheaper,
must have tended to render it scarcer, and therefore dearer, than it would
otherwise have been.</p>
<p>After the business of the farmer, that of the corn merchant is in reality
the trade which, if properly protected and encouraged, would contribute
the most to the raising of corn. It would support the trade of the farmer,
in the same manner as the trade of the wholesale dealer supports that of
the manufacturer.</p>
<p>The wholesale dealer, by affording a ready market to the manufacturer, by
taking his goods off his hand as fast as he can make them, and by
sometimes even advancing their price to him before he has made them,
enables him to keep his whole capital, and sometimes even more than his
whole capital, constantly employed in manufacturing, and consequently to
manufacture a much greater quantity of goods than if he was obliged to
dispose of them himself to the immediate consumers, or even to the
retailers. As the capital of the wholesale merchant, too, is generally
sufficient to replace that of many manufacturers, this intercourse between
him and them interests the owner of a large capital to support the owners
of a great number of small ones, and to assist them in those losses and
misfortunes which might otherwise prove ruinous to them.</p>
<p>An intercourse of the same kind universally established between the
farmers and the corn merchants, would be attended with effects equally
beneficial to the farmers. They would be enabled to keep their whole
capitals, and even more than their whole capitals constantly employed in
cultivation. In case of any of those accidents to which no trade is more
liable than theirs, they would find in their ordinary customer, the
wealthy corn merchant, a person who had both an interest to support them,
and the ability to do it; and they would not, as at present, be entirely
dependent upon the forbearance of their landlord, or the mercy of his
steward. Were it possible, as perhaps it is not, to establish this
intercourse universally, and all at once; were it 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.</p>
<p>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 inconveniencies 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.</p>
<p>The rigour of this law was afterwards softened by several subsequent
statutes, which successively 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.</p>
<p>This statute, however, authorises in some measure two very absurd popular
prejudices.</p>
<p>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.</p>
<p>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 afterwards 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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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, he 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.</p>
<p>A very few words will sufficiently explain all that I have to say
concerning the other three branches of the corn trade.</p>
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