Book IV: Chapter 4

CHAPTER IV.

OF DRAWBACKS.

Merchants and manufacturers are not contented with the monopoly
of the home market, but desire likewise the most extensive
foreign sale for their goods. Their country has no jurisdiction
in foreign nations, and therefore can seldom procure them any
monopoly there. They are generally obliged, therefore, to content
themselves with petitioning for certain encouragements to
exportation.

Of these encouragements, what are called drawbacks seem to be the
most reasonable. To allow the merchant to draw back upon
exportation, either the whole, or a part of whatever excise or
inland duty is imposed upon domestic industry, can never occasion
the exportation of a greater quantity of goods than what would
have been exported had no duty been imposed. Such encouragements
do not tend to turn towards any particular employment a greater
share of the capital of the country, than what would go to that
employment of its own accord, but only to hinder the duty from
driving away any part of that share to other employments. They
tend not to overturn that balance which naturally establishes
itself among all the various employments of the society, but to
hinder it from being overturned by the duty. They tend not to
destroy, but to preserve, what it is in most cases advantageous
to preserve, the natural division and distribution of labour in
the society.

The same thing may be said of the drawbacks upon the
re-exportation of foreign goods imported, which, in Great
Britain, generally amount to by much the largest part of the duty
upon importation. By the second of the rules, annexed to the act
of parliament, which imposed what is now called the old subsidy,
every merchant, whether English or alien. was allowed to draw
back half that duty upon exportation ; the English merchant,
provided the exportation took place within twelve months; the
alien, provided it took place within nine months. Wines,
currants, and wrought silks, were the only goods which did not
fall within this rule, having other and more advantageous
allowances. The duties imposed by this act of parliament were, at
that time, the only duties upon the importation of foreign goods.
The term within which this, and all other drawbacks could be
claimed, was afterwards (by 7 Geo. I. chap. 21. sect. 10.)
extended to three years.

The duties which have been imposed since the old subsidy, are,
the greater part of them, wholly drawn back upon exportation.
This general rule, however, is liable to a great number of
exceptions; and the doctrine of drawbacks has become a much less
simple matter than it was at their first institution.

Upon the exportation of some foreign goods, of which it was