I apprehend, be disputed by any reasonable
person. But it has been thought by many
people, that it tends to encourage tillage, and
that in two different ways; first, by opening a
more extensive foreign market to the corn of
the farmer, it tends, they imagine, to increase
the demand for, and consequently the production
of, that commodity; and, secondly,
by securing to him a better price than he
could otherwise expect in the actual state of
tillage, it tends, they suppose, to encourage
tillage. This double encouragement must,
they imagine, in a long period of years, occasion
such an increase in the production of
corn, as may lower its price in the home market,
much more than the bounty can raise it,
in the actual state which tillage may, at the
end of that period, happen to be in.
I answer, that whatever extension of the
foreign market can be occasioned by the bounty
must, in every particular year, be altogether
at the expense of the home market; as every
bushel of corn, which is exported by means of
the bounty, and which would not have been
exported without the bounty, would have remained
in the home market to increase the
consumption, and to lower the price of that
commodity. The corn bounty, it is to be observed,
as well as every other bounty upon exportation,
imposes two different taxes upon
the people; first, the tax which they are obliged
to contribute, in order to pay the bounty;
and, secondly, the tax which arises from
the advanced price of the commodity in the
home market, and which, as the whole body
of the people are purchasers of corn, must, in
this particular commodity, be paid by the
whole body of the people. In this particular
commodity, therefore, this second tax is by
much the heaviest of the two. Let us suppose
that, taking one year with another, the
bounty of 5s. upon the exportation of the
quarter of wheat raises the price of that commodity
in the home market only 6d. the bushel,
or 4s. the quarter higher than it otherwise
would have been in the actual state of
the crop. Even upon this very moderate supposition,
the great body of the people, over
and above contributing the tax which pays
the bounty of 5s. upon every quarter of wheat
exported, must pay another of 4s. upon every
quarter which they themselves consume. But
according to the very well informed author of
the Tracts upon the Corn Trade, the average
proportion of the corn exported to that consumed
at home, is not more than that of one
to thirty-one. For every 5s. therefore, which
they contribute to the payment of the first
tax, they must contribute L.6, 4s. to the payment
of the second. So very heavy a tax
upon the first necessary of life must either reduce
the subsistence of the labouring poor,
or it must occasion some augmentation in
their pecuniary wages, proportionable to that
in the pecuniary price of their subsistence. So
far as it operates in the one way, it must reduce
the ability of the labouring poor to educate
and bring up their children, and must,
so far, tend to restrain the population of the
country. So far as it operates in the other,
it must reduce the ability of the employers of
the poor, to employ so great a number as they
otherwise might do, and must so far tend to
restrain the industry of the country. The extraordinary
exportation of corn, therefore, occasioned
by the bounty, not only in every
particular year diminishes the home, just as
much as it extends the foreign market and
consumption, but, by restraining the population
and industry of the country, its final tendency
is to stint and restrain the gradual extension
of the home market; and thereby, in
the long-run, rather to diminish than to augment
the whole market and consumption of
corn.
This enhancement of the money price of
corn, however, it has been thought, by rendering
that commodity more profitable to the
farmer, must necessarily encourage its production.
I answer, that this might be the case, if the
effect of the bounty was to raise the real price
of corn, or to enable the farmer, with an equal
quantity of it, to maintain a greater number
of labourers in the same manner, whether liberal,
moderate, or scanty, than other labourers
are commonly maintained in his neighbourhood.
But neither the bounty, it is evident,
nor any other human institution, can
have any such effect. It is not the real, but
the nominal price of corn, which can in any
considerable degree be affected by the bounty.
And though the tax, which that institution
imposes upon the whole body of the people,
may be very burdensome to those who pay it,
it is of very little advantage to those who receive
it.
The real effect of the bounty is not so much
to raise the real value of corn, as to degrade
the real value of silver; or to make an equal
quantity of it exchange for a smaller quantity,
not only of corn, but of all other home made
commodities; for the money price of corn regulates
that of all other home made commodities.
It regulates the money price of labour,
which must always be such as to enable the
labourer to purchase a quantity of corn sufficient
to maintain him and his family, either
in the liberal, moderate, or scanty manner, in
which the advancing, stationary, or declining
circumstances of the society, oblige his employers
to maintain him.
It regulates the money price of all the
other parts of the rude produce of land,
which, in every period of improvement, must
bear a certain proportion to that of corn,
though this proportion is different in different
periods. It regulates, for example, the money
price of grass and hay, of butcher's meat, of