It may be said, however, that in three eventful centuries the world had been well explored. Colonies had been planted on every coast; great nations had sprung up in vast solitudes or in countries inhabited only by savage or decadent races of men; the most haughty and exclusive of ancient nations had opened their ports to foreign merchantmen; and all parts of the world been brought into habitual commercial intercourse. The seas, subdued by the progress of navigation to the service of man, had begun to yield their own riches in great abundance; and the whale, seal, herring, cod, and other fisheries, prosecuted with ample capital and hardy seamanship, had become the source of no small traffic in themselves. The lists of imports and exports and of the places from which they flowed to and from the centres of trade, as they swelled in bulk from time to time, show how busily and steadily the threads of commerce had been weaving together the labour and interests of mankind, and extending a security and bounty of existence unknown in former ages.
Apart from wars, which commerce directly tends to avert, but which often spring from forces more powerful for the time than commercial interest, there remained little more by which a rapid extension of international trade could be impeded, save causes arising from ignorance or impolicy; and among these deserves chiefly to be noticed the prevailing practice of nations, in promoting their own several industries and trade, to wage a subtle war in times of peace on the industries and trade of each other. That foreign imports, and even domestic exports, should contribute some quota to the public revenue is in itself a reasonable proposition. The custom-house, which has to register goods coming in and going out, and to exercise an official regulation in the ports, should defray at the least its own expense, like any other necessary mercantile function. The convenience of raising public revenue by duties on imports and exports is amply evinced by the universal adoption of this expedient; and the convenience will always be materially modified by the more or less crude or scientific form which the system of taxation has assumed, by the financial exigency of states, and by the degree in which other objects than those of revenue have been permitted to enter into the general policy. It has been argued with much plausibility that there are certain stages and conditions of some branches of industry, in which it is politic to protect them against unequal competition in their own markets with the more advanced arts and appliances of foreign countries, until they have by this means acquired ability to stand upon their own merits; and this being once admitted, the transition is easy to the general doctrine that, since every nation always finds that there are commodities which other nations can produce much better and cheaper than it can produce them for itself, it is wise and expedient to place the admission of nearly all foreign goods and produce under a custom duty protective of the native industry. The interest of the public revenue is here lost in another line of policy, because protective duties carry the consequence that several parts of a nation have to pay to several other parts more of their own means for what they need than they should have had to pay to the foreigner, and under a system of this kind the sources of public revenue, so far from being increased, are certain of being impaired. On the other hand, there are imports so entirely of foreign origin, and so free from considerations of competition with domestic industry, that a large revenue may be raised upon them in the custom-house, without disturbing the freedom or equity of international trade. The immense customs revenue of the United Kingdom from duties on tea, coffee, and tobacco (duties on wines and foreign spirits may be excluded since they are set off by excise duties on native liquors) is a remarkable example of the power of levying public revenue in the ports without infringing any commercial or economic principle. The question of tariffs thus appears to be capable of reasonable solution as long as it is kept within the circle of what is permanently expedient to the public revenue. When it passes beyond these bounds it launches into a sea of complicated errors. The idea or self-interest that has force to discourage the imports of foreign commodities by protective duties passes naturally onward to bounties on the export of some favoured articles of domestic produce, under which the same practical result is conversely produced, and one part of the nation has to pay in taxes to the state some proportion of the price necessary to effect a sale abroad of the produce of another part of the nation. When bounties are given, they have to be accompanied with a series of compensations or “drawbacks;” and the confusion has often become so great, as when the export bounty is on the manufactured article and the protective duty on the imported raw material, or as, say, when there is a duty on foreign wool, and woollen goods on export are entitled to a drawback, that the state has been reduced to a dilemma, and anything it did seemed only to make the condition worse. This medley of cross-purposes is increased by the means adopted by parent states on one hand to bolster, on another to monopolize to themselves, the trade of their colonies, and by the elaborate rules of preference and exclusion by which maritime nations have attempted to favour their own ships in the carrying trade of the seas.
All the mischief of the protective and prohibitory system was exhibited by the Orders in Council of the British Government, and the Berlin and Milan decrees of Bonaparte, fulminated in the passion and fury of war; and if these high acts of power were seen to be not only futile and sublimely ridiculous, but in their aim and effects destructive of all commercial civilization, it would argue little reason on the part of nations to carry out the same objects through the more calm, systematic, and insidious operation of mutually hostile tariffs. Though nothing dies more slowly than the spirit of monopoly in trade, yet from many signs it may be hoped that this obstacle to commerce will gradually disappear like others.
