The free development then of Agri culture in a country requires the admis sion of foreign grain. If foreign grain is absolutely excluded, land is made to produce grain which would be better em ployed in some other way, as in pasturage or planting. Corn thus becomes dear; and agriculture is encouraged or pro tected, as it is termed, to the injury of the mass of the people, and to its own injury also, for experience shows that those branches of industry receive most improvements which are neither re strained nor encouraged ; in other words, industry to be most productive to a nation must have no other direction than what the hope of profit will make individuals give it. If foreign grain is not excluded, but admitted on paying certain dues, the evil is much less than in the case of abso lute exclusion, provided the duties are not high, and provided they are uniform. For nothing except a uniform duty can regu late the foreign trade and give it that steadiness which is most particularly the interest of the agriculturist. A uniform duty is equivalent, so far as concerns the foreign trade, to an addition to the pro ductive powers of the soil of the import ing country. If trade is free, the export ing country can send its rain whenever the cost of production and the cost of trans port do not raise the cost price of such grain above that of the grain raised in the importing country. A miraculous addi tion to the productive powers of the soil of the importing country or a sudden im provement in its agriculture, without any corresponding change in the exporting country, would at once lower the selling price of grain in the importing country, and diminish the supply from the export ing country. The effect is just the same as to the supply from the foreign country, if a duty is laid on foreign grain ; for that duty will, in certain stages of the agri culture of both countries, just make the difference that prevents the foreign grain from being sold in the importing country at the same price as the native grain. In such case the foreign grain cannot enter the country till the price of the native grain has risen by an amount equal to such fixed duty : the mode in which this rise operates is considered in a subsequent part of this article. But there is this important difference be tween the supposed cases of miraculous addition to the fertility of the soil or a sudden improvement in agriculture, and the case of a fixed duty, that in either of the first two cases the country has an in creased supply of grain, in the other it has not. However, a fixed duty has the advantage of determining the precise terms on which foreign and native corn shall enter into competition ; and if the duty is moderate, and is considered neces sary for the purposes of revenue, some people that a country is not ill ad ministered in which such a duty is raised, though, if it is a manufacturing country rich in capital, such a necessary tax is an obstacle to the full development of its manufacturing powers.
If the duty is variable, the trade can not be steady, and consequently the price of corn will vary to every degree within very wide limits ; an assertion which is not a conjecture, but a fact ascertained by ex perience. [Coax TRADE.] If there is a duty, either variable or fixed, it gives to soils a value which they would not have if the trade in corn were free ; for the demand for food calls poor soils into cultivation, and the price of food is regu lated by the cost of producing food on the poor lands, and food is consequently dear. The cost of producing food on the rich lands is less, either owing to their supe riority, fertility, or the less labour and manure that they require, or owing to both causes. This superiority of rich
lands over poor lands gives to them an increased value either as objects of sale or objects of hire : the selling price of such lands is raised, and the letting price is raised ; and other lands also acquire a value that they would not otherwise have.
In a rich country it matters little if a capitalist who wishes to have land gives for it more than its value : such must be the result of the competition for land when the amount is limited and the desire and the power to purchase are constantly increasing. But the effect of a tax on foreign grain in a manufacturing coun try, when all the best soils are under cultivation, is directly to increase the value of land and to add to the income of the landholder by making land capable of profitable production and of bearing a rent, which without the tax could not be profitably cultivated or give a rent to the owner. The price at which the cultivator must sell his grain in order to continue to cultivate includes his profit and the owner's rent; and the price is paid by him who consumes the grain.
It remains to consider the effect of taxation on the exporting and importing countries. If both are free from taxa tion, or if the taxation is equal in both, or nearly equal, no nation is well admi nistered which does not allow the impor tation of grain to be as free as is con sistent with raising the necessary amount of revenue. It is not, however, hereby admitted that a tax on the importation of foreign grain is like any other tax, for such a tax is doubly injurious ; first in raising the price of food, secondly in impeding the full development of all branches of industry, agriculture in. eluded. But if the exporting and im porting countries are unequally taxed, it might be said that the agriculturists cannot enter into fair competition, if we suppose their facilities for production are the same ; for if the importing country is more highly taxed, the cost of pro ducing grain is thereby increased, and the exporting country has an advantage over the importing country to the amount of the difference in taxation in the two countries. But agriculture is not the only branch of industry that is taxed in a highly taxed country : all other branches of industry are also highly taxed. There is nearly always a duty on all raw pro duce that is introduced into it for the purpose of supplying the manufactures, as well as a duty on grain ; other taxes also affect directly and indirectly the cost of other manufactured articles. Now as taxes must by the supposition be raised in such a country, the question is in what manner can they be raised with least injury to the general productive power of the nation ? If a heavy tax is laid on any raw produce which is required in the country, whether it be corn which is re quired for bread, or cotton, or other raw articles which are required to supply the manufactories, the productive industry of the country will be checked. If a manu facturing country is in such a condition that it does import foreign grain to some amount, notwithstanding heavy duties upon it, this is a sure indication that the importing country, in the present condi tion of its agriculture, has passed thelimit of production which is profitable to the community. In like manner, if foreign manufactured articles of the same kind with those manufactured in this country should be imported to a considerable amount, notwithstanding the payment of heavy duties, it would at least be a clear indication that these branches of domestic industry could not supply the demand ; and it might be that such branches of industry were wholly unprofitable to the community.