ration of farms, whilst many had a suspicion that it was owing to the fall in the value of silver. But, in truth, the seasons had proved most unfavourable for many years through the greater part of Europe, whilst the disorders in Poland increased the scarcity in all the countries usually supplied from that market. Unfortunately, no means yet existed for obtaining the average price of grain in England. It was only in 1770,12 that the first act was passed for obtaining returns of such average prices. And in 17733 the first comprehensive corn law was enacted, which allowed the importation of wheat at a duty of 6d. per quarter when the price reached 488., and the exportation of the same when the price fell to 448.; the preamble of the act throwing much stress evidently on the influence of the corn laws on the advancement of tillage and navigation.

The beau idéal of government at that time seems to have been to exercise a certain paternal superintendence over the transactions of society, to endeavour to repair by artificial means the shortcomings of private industry, and even to hamper or interfere if need be with the management of business, with a view to the advancement of certain interests which were deemed deserving of public support. Fortunate it was that the advocates of such measures did not always succeed. For a considerable time a tax was levied on all stuff made of cotton, or of cotton and linen mixed; and complaints were made against such a tax. The Manchester manufacturers and Glasgow operative weavers strongly urged the repeal of all duties on manufactures, and called upon Parliament, as Heaven's trustees for the nation, not to strangle an infant industry. The petition was successful, and the duties were repealed. Would that the woollen manufacture had been left as free from legislative interference as the cotton has been. The cotton manufacture was not born under an atmosphere of protection, was never the petted child of Government or Parliament, and yet grew and prospered most vigorously. The woollen, the object of so much care, was for years weak and slow in its progress. Nothing could have been more suicidal than the action of the woollen manufacturers. They were not content to shut out all foreign woollen goods from the British market. They went much further. The long-stapled or English combing wool being superior for some manufacturing purposes to that of any other country, the most severe laws were passed, prohibiting the exportation of English wool.14 Nay, more.

12 10 Geo. III. c. 39, an act for registering the prices at which corn is sold in the several counties of Great Britain, and the quantity exported and imported. Justices at general or quarter sessions next after September 29 yearly to order weekly returns to be made of the prices of wheat, rye, barley, oats, beans, and big.

19 13 Geo. III. c. 43.

14 Onling, or the offence of transporting wool or sheep out of the kingdom, was forbidden at common law and by 11 Edw. III. c. 1. The statute 8 Eliz.

An act was passed, in 1788,15 prohibiting the exportation of live sheep, imposing all kinds of restrictions on the carriage of wool from one part of the country to the other, and even prohibiting sheep-shearing within five miles of the sea. This was, indeed, carrying the protective policy to its legitimate results; but what were the consequences? Trade and industry were hampered and misdirected; the interest of the consumer was disregarded, in the vain hope of favouring the producer; and even the processes of agriculture were unduly interfered with. So that blunder was heaped upon blunder, producing in the end nothing but disappointment and loss. To some extent the policy of obtaining, free of duty, the raw materials of industry was acknowledged and acted upon. Indigo, cochineal, and logwood, necessaries for dyers, were allowed to come in free, and the duties on oak and bark were lowered. But the prohibition of foreign goods was very general, and bounties were freely given to encourage the exportation of British manufactures. These were the times when apprenticeship was everywhere prescribed, when workmen were kept by force in the country, and when the combination laws were in full ope

ration.

Much need, indeed, there was of a master mind to seize the real bearing of such legislation, and to enlighten both manufacturers and workmen on the result of their clamour. And happy was it that just at that moment a work was published entitled An Enquiry into the Nature and Causes of the Wealth of Nations,' which removed much error, revealed much truth, and reduced many scattered and disconnected ideas into a homogeneous and and compendious system. To understand what Adam Smith has accomplished we must briefly trace the history of political economy at least in its main features.1 Adam Smith 17 was not the

16

c. 3 made the transportation of live sheep, or embarking them on board any ship, for the first offence, forfeiture of goods and imprisonment for a year, and that at the end of the year the left hand should be cut off in some public market and should be there nailed up in the openest place; and the second offence was felony. The statutes 12 Car. II. c. 32 and 7 & 8 Will. III. c. 28 made the exportation of wool, sheep, or fuller's earth liable to pecuniary penalties, and three years' imprisonment to the master and all the mariners. And the statute 4 Geo. I. c. 11, amended by 12 Geo. II. c. 21 and 19 Geo. III., made it transportation for seven years if the penalties should not be paid. By the 28 Geo. III. c. 38, and by 5 Geo. IV. c. 47, all the former statutes respecting the exportation of sheep and wool were repealed.

28 Geo. III. c. 38.

Blanqui, Histoire de l'Economie politique en Europe. Paris, 1837-8.

Adam Smith was born in Kirkaldy (Fife) in 1723. He entered the Glasgow University in 1737. He gave a course of lectures on rhetoric and belles lettres in Edinburgh in 1748, was elected to fill the chair of Logic in 1751, and in the following year the chair of Moral Philosophy, in the University of Glasgow; but he resigned the same on his undertaking a journey to the Continent in 1763. Returned to Kirkaldy, he published his work on the Wealth of Nations in 1776. In 1783 he was nominated Rector of the University of Glasgow, and he died in 1790.

first enquirer into the causes of wealth. Doubtless in every age, in one way or another, nations have endeavoured to ameliorate their physical or material condition, but they appear to have been wonderfully ignorant of the means for attaining the object. The Greeks, though indifferent to riches, indulged far too much in idleness, and were, moreover, for ever looking for help from the state. In their opinion the government was bound to feed them, and the problem with their statesmen was, how they could best enrich the people with the property of the state, then regarded as common property. The Romans never thought of the advantage of promoting national wealth. For a long time they gave themselves wholly to wars and conquests; and, when Augustus introduced order and civilisation into the empire, all that the people sought was an abundant distribution of food. The Roman statesmen did not descend into the study of industrial details. They did not understand their importance.

After the fall of the Roman Empire, and during the disorder. caused by the irruption of hordes of barbarians, no attempt was made to create or preserve wealth; but as the Italian cities, the birthplace of modern society, rose to power and affluence solely by their commerce and industry, the importance of manufacture and foreign trade began to dawn in the minds of thinkers and writers on economic questions; and the idea was suggested that these were the only real source of wealth. But in what manner commerce and manufacture contributed to the production and distribution of wealth, was a mystery not yet fathomed. Was it because they led to the importation of gold and silver? If so, the truest policy would be by all means to promote the export of merchandise, and to hinder as much as possible the export of the precious metals. The French economists, or the Physiocrates, as they were called, started the suggestion, that trade cannot of itself be productive of wealth, since it only promotes the transport or distribution of the products of the earth. According to them agriculture is the only source of wealth. But if so, how did it happen that foreign trade appeared to be the means of creating much wealth, whilst agriculture seemed scarcely able to lift people up from a state of poverty? Then the doctrine of the balance of trade was suggested. The advocates of this theory did not contend that wealth consisted exclusively in gold and silver, but that wealth depended on the profitable exchange of native for foreign products, on our ability to sell goods for more than they cost, and on the excess of gold and silver obtained by the transaction. In truth, at the time when Adam Smith wrote his famous work, the most erroneous conceptions existed as regards the relative functions of agriculture, commerce, and the precious metals on the production of wealth.

Nor was there any complete treatise on the subject. In Italy several works had been published on several branches of economic

science. Davanzati and Scaruffi wrote some able works on money, in consequence of the frequent alterations and falsifications of the coinage resorted to by the petty sovereigns who reigned in the different states. Bandini and Broggia advocated freedom as the basis of public prosperity, and condemned monopolies. Galiani, Beccaria, and Verri contributed valuable works on value, capital, and labour. With them free trade in corn was a primary condition of national prosperity, and they boldly condemned the usury laws. The French economists wrote much; Quesnay,18 Mirabeau, De la Rivière, Dupont de Nemours, Turgot, and many others were the forerunners of Adam Smith. Yet none of them constructed like him what we may call the science of political economy.

Happily, too, the Wealth of Nations' recognised, though not as fully as more modern economists, the value of statistics in economic enquiries. The method I take,' said Sir William Petty, is not yet very usual, for instead of using only comparative and superlative words and intellectual arguments, I have taken the course as a specimen of political arithmetic I have long aimed at, to express myself in terms of number, weight, or measure; to use only argument of sense, and to consider only such causes as have visible foundations in nature, leaving thus what depends upon the unstable minds, opinions, appetites, and passions of particular men to the consideration of others.' Statistics were thus early recognised as a means of verifying the conclusions and deductions of political economy. It is by the use of statistics that political economy has acquired the character of a fixed science; and by it, that it has ceased to be tentative, and has become to a large extent an inductive or experimental science. Adam Smith availed himself largely of statistics, and hence the solidity and permanent utility of his works. And what has the Wealth of Nations' taught? It established, in a most distinct manner, that labour is the only true source of wealth; it destroyed the theory that wealth consisted in the abundance of gold and silver; it abolished the theory of the mercantile system; and laid down sound principles for the economic policy of the country.

19 See Quesnay's Tableau économique, Paris, 1758; Physiocratie, ou Constitution naturelle du Gouvernement, publié par Dupont, Yverdun, Paris, 1758; and Mauvillon, Physiokratische Briefe an Dobom, Braunschweig, 1780.

CHAPTER III.

PROGRESS OF FOREIGN TRADE.

Extent of British Commerce.-Trade of the Hanse Towns.-Trade of Prussia. -Trade of Russia, Sweden, and Denmark.-Trade of Spain and Portugal.-Trade of France.-Trade of the East Indies.-Trade of the West Indies. The Slave Trade.-Customs Duties.-Navigation Laws.-The Board of Trade and its Functions.

ACCUSTOMED, as we now are, to dimensions so extended, and to figures of enormous magnitude, it needs an effort of the imagination to realise the narrow limits and meagre proportions of the commerce of England about one hundred years ago. In truth, England had then but little to give to foreign nations, and consequently her means of obtaining foreign products were just as circumscribed. If the 3,000,000 lbs. of tea then imported have swollen to 130,000,000 lbs., and the 4,000,000 lbs. of cotton into 1,400,000,000 lbs. and upwards, it is because British industry has succeeded in giving a wonderful development to national resources. Twenty-eight millions is the official annual value of all the imports and exports in 1763-4; but that included some 2,500,000l. of trade with Ireland, which is now part of our inland trade. Of the character and extent of British commerce at that time we have but meagre information. The official value given of both the imports and exports affords no reliable data, whilst the comparative isolation of the commerce of England from that of Scotland and Ireland up to 1778, and of Great Britain from Ireland up to 1800, renders all comparison with subsequent accounts unattainable. It was only in 1801 that the declared real value of British exports was first ascertained, and from that date the accounts refer to the trade of the United Kingdom. What was the course of trade from year to year, from 1760 to 1820, will best be seen in the diagram herein annexed. The navigation of British ports was equally contracted, and though British seamen had already acquired a great reputation for bravery and daring, as well as for a spirit of discovery and indefatigable industry, the British had not yet quite supplanted the Dutch and other maritime nations as the common carriers of the world's traffic. The period we are now surveying refers to a time of transition. Ancient commerce, with all its adventures and romance, had passed away. A new era had begun;