home market. We cannot force foreigners 
to buy their goods as we have done our 
own countrymen. The next best expedient
it has been thought, therefore, is to pay them 
for buying. It is in this manner that the 
mercantile system proposes to enrich the whole 
country, and to put money into all our pockets 
by means of the balance of trade
Bounties, it is allowed, ought to be given 
to those branches of trade only which cannot 
be carried on without them. But every branch 
of trade in which the merchant can sell his 
goods for a price which replaces to him, with 
the ordinary profits of stock, the whole capital 
employed in preparing and sending them 
to market, can be carried on without a bounty
Every such branch is evidently upon a level 
with all the other branches of trade which are 
carried on without bounties, and cannot, therefore, 
require one more than they. Those 
trades only require bounties in which the 
merchant is obliged to sell his goods for a 
price which does not replace to him his capital, 
together with the ordinary profit, or in 
which he is obliged to sell them for less than 
it really costs him to send them to market
The bounty is given in order to make up this 
loss, and to encourage him to continue, or, 
perhaps, to begin a trade, of which the expense 
is supposed to be greater than the returns
of which every operation eats up a part 
of the capital employed in it, and which is of 
such a nature, that if all other trades resembled 
it, there would soon be no capital left in 
the country. 
The trades, it is to be observed, which are 
carried on by means of bounties, are the only 
ones which can be carried on between two nations 
for any considerable time together, in 
such a manner as that one of them shall always 
and regularly lose, or sell its goods for 
less than it really costs to send them to market
But if the bounty did not repay to the merchant 
what he would otherwise lose upon the 
price of his goods, his own interest would soon 
oblige him to employ his stock in another 
way, or to find out a trade in which the price 
of the goods would replace to him, with the 
ordinary profit, the capital employment in sending 
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 
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 of grain
In years of plenty, it has already been observed
the bounty, by occasioning an extraordinary 
exportation, necessarily keeps up the 
price of corn in the home market above what 
it would naturally fall to. To do so was the 
avowed purpose of the institution. In years 
of scarcity, though the bounty is frequently 
suspended, yet the great exportation which it 
occasions in years of plenty, must frequently 
hinder, more or less, the plenty of one year 
from relieving the scarcity of another. Both 
in years of plenty and in years of scarcity
therefore, the bounty necessarily tends to raise 
the money price of corn somewhat higher 
than it otherwise would be in the home market
That, in the actual state of tillage, the bounty 
must necessarily have this tendency, will not