Part 25

Smuggling is hurtful to the State; it deprives government of the duties on the articles smuggled into or out of the kingdom; but is it so very advantageous to succeed in the measures adopted to prevent it, if by bartering a great number of honest smugglers against a great number of informers and a great number of custom-house imps, you make so many thieves of the first, so many much more contemptible wretches of the second, a rabble almost equally vile as the third; and succeed, at the same time, in debasing in the hands of several manufacturers and landed proprietors, the value of all those articles, which were before taken from them by the smugglers to their mutual benefit?

England, it is true, suffered no damage, when a prodigious quantity of English goods, which are not comprehended in the modest balance with France, as stated by Sir Charles Whitworth, because they were introduced into France by smugglers, were sold nevertheless, without much ado, all over that kingdom, and particularly in Paris, publicly advertised on the shop-boards, in large gold letters;—but had not France some reason to think herself ill used, when an equal quantity of French goods, introduced also by smugglers into England, without any information given to Sir Charles, ceased to pay the value of the goods smuggled from England, and sold publicly all over France, and when, instead of a small balance, sometimes given, sometimes received, France found herself obliged to remit to London an enormous sum in hard cash, for payments which she had hitherto discharged in merchandise?

It is a pitiful policy on the part of France, (as remarked very justly in all the English papers after the first of August, 1785) to deprive herself of a thousand English luxuries which she is so fond of, and which she is so able to procure;—but is English policy much better, in rejecting thousands of French luxuries, which she finds so pleasing, and which she is so able to pay for?

Smuggling is but a very poor corrective, a partial corrective, of the iniquity ever attendant on Monopoly;—a feeble compensation for the restrictions and prohibitions obtained in its favour: Smuggling, duly considered in this light, is but too just; and it is shocking to be obliged to punish so barbarously the unhappy men who gain a living by it. But will not this necessity be removed, together with smuggling itself, at the very moment that to those absurd regulations which encourage that practice, shall be substituted a system of bartering, equally advantageous to the nations which now find a benefit in smuggling?—a system, which would mutually furnish to all parties interested, all the means of introducing and procuring, in the best condition, at the cheapest rate, with the least risk, and with the greatest advantage to the Treasury, every article which before was introduced and procured at a greater risk, almost always dearer, of the worst quality, and to the detriment of the public revenue.

Let me ask whether that mass of prohibitions and restrictions, which legally establishes monopoly in England, be any thing more than a mass of privileges granted to a chosen few, to the prejudice of the whole community? Were we to look at every particular regulation, and consider it distinctly, is there one which would not find the whole nation against it, except the humble Petitioners who share in the benefit? And must it not be very strange to imagine, very absurd to say, and above human power to effect, that a system of regulations, not one of which favours above one man against thousands, should, upon the whole, be serviceable to the State?

Independent of the advantages which would arise from a truly free and judicious system of commerce, viz. 1st, That of procuring what we have not, by means of some article which we have in abundance, and which our neighbours want;—2dly, The bartering of the superfluity of our best articles in one kind, for the superfluity of what is best in a different kind;—3dly, Not to barter what we can make cheaper than others, except for goods which would cost us more were we to manufacture them;—independent, I say, of these three, advantages, where would be the inconvenience, though our bartering should be confined merely to the innocent folly of exchanging one toy for another, or one rag for another? The great, the true, the only advantage, of an exchange of property, would not even in this case be lost to mankind; the man who is employed only in marking the game, while two persons are amusing themselves, whole days, in tossing a ball from one to the other in a tennis-court, is nevertheless supported at the expence of the players. And are not the owner of the court, his wife and children, maintained likewise at their cost? If, having considered the Exchequer metaphorically, under the type of the Keeper of the Tennis Court, we afterwards, without a metaphor, consider this Keeper as a poor man who chooses this way of subsistence, do not the players pay this tax (which they impose on themselves) in favour of the poor, with more pleasure, though the tax may be greater, than a certain other tax, which perhaps becomes necessary, only from the difficulties with which we embarrass both the game of passing from one parish to another, and the game of imports and exports, which is as innocent, and more lucrative than that of tennis?

The nominal Value of the generality of Exports, considered in different Periods, and with respect to its Effect on foreign Correspondence.

When a manufacturer is compelled, by the general augmentation of prices, arising from taxation, to pay his workmen and materials ten per cent. I suppose, dearer than usual, and he exports 1000 hats, upon each of which a draw-back of 6 shillings, I will suppose, is allowed him on exportation, he does not reflect on the difference of 10 per cent. diffused through the general run of prices, by the mechanical reaction of the total of the taxes on all that is not taxed; he remembers well the effect of this reaction in the account which he makes out for himself, to know at what rate he must in future sell his hats in foreign markets; he only considers the draw-back, the remittance of the 6 shillings duty, and concludes that it puts him in a situation to deal with foreigners on the same terms as he did previous to the taxes, which have increased every thing to the amount of 10 per cent. Nevertheless, the thousand hats, with which, previous to the taxes, he furnished his foreign friends for 1000l. I will suppose, are now raised to 1200l.—Point out this circumstance to him, he will tell you he cannot sell his hats cheaper, and that foreigners must pay 1200l. instead of 1000l. since the foreigner wants them. “Besides, (says he) what is the sum of two hundred pounds more, divided among a thousand persons, who will purchase the hats from the merchant abroad, to whom he sells them?” The manufacturer does not want to look further; and the writer who from the nature of his subject, or his manner of considering it, wants only to reflect a little more, will only add, Thus it is that foreigners pay our taxes, and never suspect that they do so. This is the truth, but not the whole truth. I shall endeavour to find it out.

The general trade of England with the rest of Europe is not confined to some thousands of pounds sterling, to be settled once for all; it is an immense sum, which must be renewed every year. Let us begin by being thoroughly convinced of this necessity, in order to submit to its consequences: we shall find moreover that these consequences are not destructive.

The annual exports of England amount to about a fifth of the products of her industry, and consequently represent about a fifth of the labour of her artificers.

If the taxes, after the war of 1755, had raised the price of every thing at the rate of 10 per cent. (I can err but by a little more or less) the total of her exports, which, before that war, amounted, on a medium of ten years, (see Sir Charles Whitworth) only to a sum of 12,776,614 pounds sterling, let us say 13 millions, amounted, after the peace, to 14 millions 300 thousand.

Let us now suppose the trade of England exhibiting to its foreign correspondents, in the year 1762, this total in exports of 13 millions (at the old prices) under the name of 14 millions 300 thousand pounds, (a price rendered unavoidable by the advance in the prices of all commodities, on account of the taxes); and let us suppose these correspondents to have, really and annually, no more to pay them than 13 millions of their own manufactures, indicated by this modest number, because they had not the honour to support, during seven years, a war the most brilliant and successful in the memory of man, in Germany, America, and India. I think one of the three following consequences must be the result:

Either

That the total of English exports must have been reduced from 14 millions 300 thousand pounds to 13 millions, for want of means in our foreign buyers to pay the whole amount of English exports at their advanced price:

Or,

That England must have been complaisant enough to call 13 millions, in a foreign market, the amount of her exports, which the effects of her new taxes obliged her to call 14 millions 300 thousand pounds at home:

Or,

That England must have allowed her foreign connexions to call 14 millions 300 thousand pounds the same quantity and quality of their manufactures, which, before the effect of English taxation, they called only 13 millions, and which, till then, had made the balance of what they imported from England.

In the first case, the English manufactories, which furnish the exports, would have been necessarily reduced one tenth; upon which it is necessary to observe, that the tenth of the English exportation makes a fiftieth of the total value of the product of her industry, and that the inutility of the fiftieth of those products, occasioned by the impossibility of their being purchased by foreigners at the price occasioned by the English new taxes, must have deprived of subsistence, as well as of employment, a fiftieth of the English artisans, and rendered useless a fiftieth of the capitals appropriated to exportation.

In the second case, the prices of commodities would not be perceptibly increased any where else but in England; the prices of her correspondents would have been, ten years after the peace, almost as they were in 1754.

In the third case, the prices would have increased, among the foreign correspondents of the English, nearly in the same proportion as in England.

The first case is evidently false, since Sir Charles Whitworth’s Statements prove that the exports of England, which amounted, as we have before observed, upon a medium of 10 years before the war, only to 12 millions 776,614 pounds sterling, amounted, upon a medium of 10 years after the peace, to 14 millions 921,067 pounds sterling, and even to 15 millions 11,211 pounds sterling, if we take a medium of 12 years from the peace to 1773, at which period Sir Charles Whitworth’s Statements conclude; (which exhibits, independently of the nominal augmentation supposed to have been occasioned by the taxes, a real augmentation of about a 17th, notwithstanding the real vacuum owing to the loss of those men who would have increased this exportation, if they had not perished in ~Germany~, ~India~, ~America~, and at sea.)

The second case is more universally acknowledged to be false, since there is not a single country in Europe where the price of every thing has not, upon a medium, increased at least 10 per cent. from 1754 to 1770;—which proves the truth of the third case:—thus it happens that foreigners have paid the old taxes of England, without suspecting it; as England does not, in the least, suspect that those taxes are no longer paid either in England or elsewhere, although their produce returns nevertheless to the public creditor.

Let us consider, however, whether this general increase of prices could finally prove prejudicial to England, or to her connexions abroad.

It could not prove so to England, because she was obliged to submit to this increase, or else to give up the manufacturing of a tenth of the commodities she exported to foreign countries (where she exports nothing of what she can sell at home), and because a deficiency of a 10th of her exports would have inevitably deprived a 50th of her artisans of sustenance, and rendered useless a 50th of the capitals devoted to exportation. Besides, considering this object in another light, what loss would England sustain by receiving, under the denomination of 14, I suppose, the same commodities which before were furnished for 13, while she gave for the purchase, only 13 (old prices) which the effect of taxation made her call 14?

It could not prejudice her foreign connexions, because this increase of prices, which abroad was not owing to taxation, was only an encouragement to labour, which must in general have increased its products, always entitled to a profit over and above the price paid for that labour.

A circumstance which was necessary for England, without doing her the least harm, has, then, proved useful to the rest of Europe.⸺

But let up remark two very essential points: