Book IV: Chapter 5 - Page 2

them to
market. The effect of bounties, like that of all the other
expedients of the mercantile system, can only be to force the
trade of a country into a channel much less advantageous than
that in which it would naturally run of its own accord.

The ingenious and well-informed author of the Tracts upon the
Corn Trade has shown very clearly, that since the bounty upon the
exportation of corn was first established, the price of the corn
exported, valued moderately enough, has exceeded that of the corn
imported, valued very high, by a much greater sum than the amount
of the whole bounties which have been paid during that period.
This, he imagines, upon the true principles of the mercantile
system, is a clear proof that this forced corn trade is
beneficial to the nation, the value of the exportation exceeding
that of the importation by a much greater sum than the whole
extraordinary expense which the public has been at in order to
get it exported. He does not consider that this extraordinary
expense, or the bounty, is the smallest part of the expense which
the exportation of corn really costs the society. The capital
which the farmer employed in raising it must likewise be taken
into the account. Unless the price of the corn, when sold in the
foreign markets, replaces not only the bounty, but this capital,
together with the ordinary profits of stock, the society is a
loser by the difference, or the national stock is so much
diminished. But the very reason for which it has been thought
necessary to grant a bounty, is the supposed insufficiency of the
price to do this.

The average price of corn, it has been said, has fallen
considerably since the establishment of the bounty. That the
average price of corn began to fall somewhat towards the end of
the last century, and has continued to do so during the course of
the sixty-four first years of the present, I have already
endeavoured to show. But this event, supposing it to be real, as
I believe it to be, must have happened in spite of the bounty,
and cannot possibly have happened in consequence of it. It has
happened in France, as well as in England, though in France there
was not only no bounty, but, till 1764, the exportation of corn
was subjected to a general prohibition. This gradual fall in the
average price of grain, it is probable, therefore, is ultimately
owing neither to the one regulation nor to the other, but to that
gradual and insensible rise in the real value of silver, which,
in the first book of this discourse, I have endeavoured to show,
has taken place in the general market of Europe during the course
of the present century. It seems to be altogether impossible that
the bounty could ever contribute to lower the price