, Protection may be accomplished by ac tual prohibition of the import of particu lar articles, by exorbitant duties which amount to prohibition, or by such duties only as give the home producer an ad vantage. Duties may also discriminate between the produce of different coun tries, and give the preference to some, to the injury and exclusion of others. In this country all these modes of protec tion have been resorted to : but their im policy has been recognised by the legis lature, which, within the last few years, has advanced rapidly in the adoption of a more sound system of taxation. [Thum) Duties are called discriminating or differential when they are not levied equally upon the produce or manu factures of different countries. The object of them is to give an advantage to the country on whose commodities the tax is lightest, as compared with others. To obtain such a preference has been the object of various negotiations and commercial treaties between different states, as it opens extensive markets to the industry of the favoured nation. By the present commercial policy of Eng land, the principle of discrimination may be said to be confined to the protection of our colonies against the competition of foreign countries. As regards each other, all foreign countries enjoy equal commercial advantages in their inter course with England. It may be con tended that colonies form an integral part of the mother-country, and that the com mercial intercourse between the several parts of the British empire ought to be viewed as a vast coasting-trade. If this principle were acted upon, it would certainly present a grand fiscal union worthy of admiration; but the existing system does not partake in any degree of the character of a coasting-trade. To put it upon such a footing, the duties on colonial produce imported into the United Kingdom should be little more than nominal, and we should rely upon pro. ductive imposts upon foreign produce for our revenue. Our practice is the reverse of this. Where our taxes dis criminate, we derive our revenue from the colonial produce ; and we either exclude foreign produce altogether, or limit its introduction so much as to pre vent it from contributing materially to the revenue. The object of the duties upon the foreign produce, which would enter into competition with the colonies, is not revenue, but exclusion, for the sake of creating a monopoly in favour of the latter. There are two great articles of consumption, sugar and timber, upon which the discriminating duties have been most mischievous in their results. The question of sugar is now (July, 1816) under consideration, and will doubtless be satisfactorily settled. Though the population of the country has rapidly increased, and with it the demand for most articles of consumption, the supply of sugar is so restrained by onr com mercial policy that, in 1831, 3,781,011 cwts. were retained for home consump tion, and in 1840 only 3,594.832 cwts. So inadequate have the colonies alone been to ,supply our wants, that their exports have actually been diminishing. In 1831 thi West Indies exported to the United Kingdom 4,103,800 cwts. In no succeeding year has their export been so great; and in 1840 it had sunk so low as 2,214,764 cwts. During this period the consumption of coffee, cocoa, and tea had considerably increased, and the people must therefore have suffered a serious privation on account of the limited supply of sugar. The community is a loser by the colonial monopoly ; and the falling off of the produce of the West Indies, in spite of an increasing demand for it, is not the only proof that they have not gained much by their protection: meanwhile the revenue has lost incal culable sums by the exclusion of foreign sugar, which, with moderate duties, might be imported at a low price in un limited quantities.
The discriminating duties upon timber have been very considerably modified. On the 5th April, 1847, the duty upon foreign timber will be reduced to 20s. the load, and on the 5th April, 1848, to 15s. The duty upon colonial timber is
Is. a load. The effect of these alterations will be to reduce the bounty upon colo nial timber from 45s. the load to 148.
Export .Duties.—Duties levied upon goods exported to foreign countries are ultimately paid by the foreign consumer, and thus have the efect of making the subject of one state bear the burthens of another. However desirable this may appear to the state, whose treasury is enriched at the expense of foreigners, the expediency of such duties will depend upon peculiar circumstances, and great nicety is required in the regulation of them. If a country possesses within itself some produce or manufacture much in request abroad, and for the production of which it has peculiar advantages, a moderate export duty may be very desir able. In this manner Russia, which almost alone supplies tallow to the rest of Europe, derives a considerable revenue from an export duty upon that article. Upon the same principle a duty upon machinery exported from Great Britain would have been politic. British ma chinists far excelled all others in skill and ingenuity, and foreign manufacturers were willing to pay almost any price for their machinery. Notwithstanding the prohibition, large quantities have been smuggled abroad at an enormous cost, bat the difficulty and expense of evasion have been so great that foreigners have latterly almost confined their purchases, in this country, to models and drawings, and have made the machinery themselves, with the assistance of British artizans, whom they have enticed abroad by ex travagant wages. (Reports of Committees of the House of Commons on Articans and Machinery, in 1824 and 1825, and On the Exportation of Machinery, 1841.) If, instead of prohibiting the export, a duty of 711 or 10 per cent. ad valorem had been imposed, foreign manufacturers would have paid much less for the ma chinery purchased by them in England than they could have had it made for abroad ; there would have been a large export trade from this country, and a considerable revenue. The partial re laxation of the prohibitory law in 1825, by granting licences to export certain kinds of machinery, has shown the ex tent to which the trade might have been carried under a more liberal policy. The official value of machinery exported under licence in 1840 was 893,0841., in addition to various tools allowed by law to be exported, of which no account was taken. (Seas. Paper, 1841, No. 201, p. 257.) Though moderate export duties upon articles of which a country has almost the exclusive supply may be advisable, heavy duties will check the demand abroad in the same manner as they affect the consumption of commodities at home. In the same manner also they are in jurious to trade and unprofitable to the revenue.
All duties whatever should be avoided upon the export of produce or manufac tures which may be also sent from other countries to the same markets. They would discourage trade and offer a pre mium to foreign competition.
Although the temptation is great to shift taxes from one country to another by means of export duties, this temptation is equally great in all countries ; and if their several governments should be actuated by the desire to make foreigners contribute to their revenue, their oppor tunities for carrying out such a system would probably be equal, and thus re taliations might be made upon each other, which, after all, would neutralize their efforts to tax foreigners, and leave them in the same position as if they had been contented to tax none but their own subjects, In this power of retaliation lies the antidote to the evil of one state being forced to bear the burthens of another as well as its own. Every state would naturally resist such an imposition upon its subjects, and export duties can therefore only be safely resorted to in such peculiar cases as we have noticed, where foreigners are willing to pay an increased price for commodities which they must have, and which they cannot obtain so good or so cheap from any other place.