the society must annually decay in proportion to this deficiency。
The expense of the society in this case exceeds its revenue； and
necessarily encroaches upon its capital。 Its capital； therefore；
must necessarily decay； and together with it the exchangeable
value of the annual produce of its industry。
This balance of produce and consumption is entirely
different from what is called the balance of trade。 It might take
place in a nation which had no foreign trade； but which was
entirely separated from all the world。 It may take place in the
whole globe of the earth； of which the wealth； population； and
improvement may be either gradually increasing or gradually
decaying。
The balance of produce and consumption may be constantly in
favour of a nation； though what is called the balance of trade be
generally against it。 A nation may import to a greater value than
it exports for half a century； perhaps； together； the gold and
silver which comes into it during an this time may be all
immediately sent out of it； its circulating coin may gradually
decay； different sorts of paper money being substituted in its
place； and even the debts； too； which it contracts in the
principal nations with whom it deals； may be gradually
increasing； and yet its real wealth； the exchangeable value of
the annual produce of its lands and labour； may； during the same
period； have been increasing in a much greater proportion。 The
state of our North American colonies； and of the trade which they
carried on with Great Britain； before the commencement of the
present disturbances； may serve as a proof that this is by no
means an impossible supposition。
CHAPTER IV
Of Drawbacks
MERCHANTS and manufacturers are not contented with the
monopoly of the home market； but desire likewise the most
extensive foreign sale for their goods。 Their country has no
jurisdiction in foreign nations； and therefore can seldom procure
them any monopoly there。 They are generally obliged； therefore；
to content themselves with petitioning for certain encouragements
to exportation。
Of these encouragements what are called Drawbacks seem to be
the most reasonable。 To allow the merchant to draw back upon
exportation； either the whole or a part of whatever excise or
inland duty is imposed upon domestic industry； can never occasion
the exportation of a greater quantity of goods than what would
have been exported had no duty been imposed。 Such encouragements
do not tend to turn towards any particular employment a greater
share of the capital of the country than what would go to that
employment of its own accord； but only to hinder the duty from
driving away any part of that share to other employments。 They
tend not to overturn that balance which naturally establishes
itself among all the various employments of the society； but to
hinder it from being overturned by the duty。 They tend not to
destroy； but to preserve what it is in most cases advantageous to
preserve； the natural division and distribution of labour in the
society。
The same thing may be said of the drawbacks upon the
re…exportation of foreign goods imported； which in Great Britain
generally amount to by much the largest part of the duty upon
importation。 By the second of the rules annexed to the Act of
Parliament which imposed what is now called the Old Subsidy；
every merchant； whether English or alien； was allowed to draw
back half that duty upon exportation； the English merchant；
provided the exportation took place within twelve months； the
alien； provided it took place within nine months。 Wines；
currants； and wrought silks were the only goods which did not
fall within this rule； having other and more advantageous
allowances。 The duties imposed by this Act of Parliament were at
that time the only duties upon the importation of foreign goods。
The term within which this and all other drawbacks could be
claimed was afterwards （by the 7th George I； c。 21； sect。 10）
extended to three years。
The duties which have been imposed since the Old Subsidy
are； the greater part of them； wholly drawn back upon
exportation。 This general rule； however； is liable to a great
number of exceptions； and the doctrine of drawbacks has become a
much less simple matter than it was at their first institution。
Upon the exportation of some foreign goods； of which it was
expected that the importation would greatly exceed what was
necessary for the home consumption； the whole duties are drawn
back； without retaining even half the Old Subsidy。 Before the
revolt of our North American colonies； we had the monopoly of the
tobacco of Maryland and Virginia。 We imported about ninety…six
thousand hogsheads； and the home consumption was not supposed to
exceed fourteen thousand。 To facilitate the great exportation
which was necessary； in order to rid us of the rest； the whole
duties were drawn back； provided the exportation took place
within three years。
We still have； though not altogether； yet very nearly； the
monopoly of the sugars of our West Indian Islands。 If sugars are
exported within a year； therefore； all the duties upon
importation are drawn back； and if exported within three years
all the duties； except half the Old Subsidy； which still
continues to be retained upon the exportation of the greater part
of goods。 Though the importation of sugar exceeds； a good deal；
what is necessary for the home consumption； the excess is
inconsiderable in comparison of what it used to be in tobacco。
Some goods； the particular objects of the jealousy of our
own manufacturers； are prohibited to be imported for home
consumption。 They may； however； upon paying certain duties； be
imported and warehoused for exportation。 But upon such
exportation； no part of these duties are drawn back。 Our
manufacturers are unwilling； it seems； that even this restricted
importation should be encouraged； and are afraid lest some part
of these goods should be stolen out of the warehouse； and thus
come into competition with their own。 It is under these
regulations only that we can import wrought silks； French
cambrics and lawns； calicoes painted； printed； stained or dyed；
etc。
We are unwilling even to be the carriers of French goods；
and choose rather to forego a profit to ourselves than to suffer
those； whom we consider as our enemies； to make any profit by our
means。 Not only half the Old Subsidy； but the second twenty…five
per cent； is retained upon the exportation of all French goods。
By the fourth of the rules annexed to the Old Subsidy； the
drawback allowed upon the exportation of all wines amounted to a
great deal more than half the duties which were； at that time；
paid upon their importation； and it seems； at that time； to have
been the object of the legislature to give somewhat more than
ordinary encouragement to the carrying trade in wine。 Several of
the other duties too； which were imposed either at the same time；
or subsequent to the Old Subsidy… what is called the additional
duty； the New Subsidy； the One…third and Two…thirds Subsidies；
the impost 1692； the coinage on wine… were allowed to be wholly
drawn back upon exportation。 All those duties； however； except
the additional duty and impost 1692； being paid down in ready
money； upon importation； the interest of so large a sum
occasioned an expense； which made it unreasonable to expect any
profitable carrying trade in this article。 Only a part；
therefore； of the duty called the impost on wine； and no part of
the twenty…five pounds the ton upon French wines； or of the
duties imposed in 1745； in 1763； and in 1778； were allowed to be
drawn back upon exportation。 The two imposts of five per cent；
imposed in 1779 and 1781； upon all the former duties of customs；
being allowed to be wholly drawn back upon the exportation of all
other goods； were likewise allowed to be drawn back upon that of
wine。 The last duty that has been particularly imposed upon wine；
that of 1780； is allowed to be wholly drawn back； an indulgence
which； when so many heavy duties are retained； most probably
could never occasion the exportation of a single ton of wine。
These rules take place with regard to all places of lawful
exportation； except the British colonies in America。
The 15th Charles II； c。 7； called An Act for the
Encouragement of Trade； had given Great Britain the monopoly of
supplying the colonies with all the commodities of the growth or
manufacture of Europe； and consequently with wines。 In a country
of so extensive a coast as our North American and West Indian
colonies； where our authority was always so very slender； and
where the inhabitants were allowed to carry out； in their own
ships； their non…enumerated commodities； at first to all parts of
Europe； and afterwards to all parts of Europe south of Cape
Finisterre； it is not very probable that this monopoly could ever
be much respected； and they probably； at all times； found means
of bringing back some cargo from the countries to which they were
allowed to carry out one。 They seem； however； to have found some
difficulty in importing European wines from the places of their
growth； and they could not well import them from Great Britain
where they were loaded with many heavy duties； of which a
considerable part was not drawn back upon exportation。 Maderia
wine； not being a European commodity； could be imported directly
into America and the West Indies； countries which； in all their
non…enumerated commodities； enjoyed a free trade to the island of
Maderia。 These circumstances had probably introduced that general
taste for Maderia wine； which our officers found established in
all our colonies at the commencement of the war； which began in
1755； and which they brought back with them to the mother
country； where that wine had not been much in fashion before。
Upon the conclusion of that war； in 1763 （by the 4th George III；
c。 15； sect。 12）； all the duties； except L3 10s。； were allowed to