An Inquiry into the Nature and Causes of the Wealth of Nations Part 40

In consequence of such fictions, it came, in many cases, to depend altogether upon the parties, before what court they would choose to have their cause tried, and each court endeavoured, by superior dispatch and impartiality, to draw to itself as many causes as it could. The present admirable const.i.tution of the courts of justice in England was, perhaps, originally, in a great measure, formed by this emulation, which anciently took place between their respective judges: each judge endeavouring to give, in his own court, the speediest and most effectual remedy which the law would admit, for every sort of injustice.

Originally, the courts of law gave damages only for breach of contract.

The court of chancery, as a court of conscience, first took upon it to enforce the specific performance of agreements. When the breach of contract consisted in the non-payment of money, the damage sustained could be compensated in no other way than by ordering payment, which was equivalent to a specific performance of the agreement. In such cases, therefore, the remedy of the courts of law was sufficient. It was not so in others. When the tenant sued his lord for having unjustly outed him of his lease, the damages which he recovered were by no means equivalent to the possession of the land. Such causes, therefore, for some time, went all to the court of chancery, to the no small loss of the courts of law. It was to draw back such causes to themselves, that the courts of law are said to have invented the artificial and fict.i.tious writ of ejectment, the most effectual remedy for an unjust outer or dispossession of land.

A stamp-duty upon the law proceedings of each particular court, to be levied by that court, and applied towards the maintenance of the judges, and other officers belonging to it, might in the same manner, afford a revenue sufficient for defraying the expense of the administration of justice, without bringing any burden upon the general revenue of the society. The judges, indeed, might in this case, be under the temptation of multiplying unnecessarily the proceedings upon every cause, in order to increase, as much as possible, the produce of such a stamp-duty. It has been the custom in modern Europe to regulate, upon most occasions, the payment of the attorneys and clerks of court according to the number of pages which they had occasion to write; the court, however, requiring that each page should contain so many lines, and each line so many words. In order to increase their payment, the attorneys and clerks have contrived to multiply words beyond all necessity, to the corruption of the law language of, I believe, every court of justice in Europe. A like temptation might, perhaps, occasion a like corruption in the form of law proceedings.

But whether the administration of justice be so contrived as to defray its own expense, or whether the judges be maintained by fixed salaries paid to them from some other fund, it does not seen necessary that the person or persons entrusted with the executive power should be charged with the management of that fund, or with the payment of those salaries.

That fund might arise from the rent of landed estates, the management of each estate being entrusted to the particular court which was to be maintained by it. That fund might arise even from the interest of a sum of money, the lending out of which might, in the same manner, be entrusted to the court which was to be maintained by it. A part, though indeed but a small part of the salary of the judges of the court of session in Scotland, arises from the interest of a sum of money. The necessary instability of such a fund seems, however, to render it an improper one for the maintenance of an inst.i.tution which ought to last for ever.

The separation of the judicial from the executive power, seems originally to have arisen from the increasing business of the society, in consequence of its increasing improvement. The administration of justice became so laborious and so complicated a duty, as to require the undivided attention of the person to whom it was entrusted. The person entrusted with the executive power, not having leisure to attend to the decision of private causes himself, a deputy was appointed to decide them in his stead. In the progress of the Roman greatness, the consul was too much occupied with the political affairs of the state, to attend to the administration of justice. A praetor, therefore, was appointed to administer it in his stead. In the progress of the European monarchies, which were founded upon the ruins of the Roman empire, the sovereigns and the great lords came universally to consider the administration of justice as an office both too laborious and too ign.o.ble for them to execute in their own persons. They universally, therefore, discharged themselves of it, by appointing a deputy, bailiff or judge.

When the judicial is united to the executive power, it is scarce possible that justice should not frequently be sacrificed to what is vulgarly called politics. The persons entrusted with the great interests of the state may even without any corrupt views, sometimes imagine it necessary to sacrifice to those interests the rights of a private man.

But upon the impartial administration of justice depends the liberty of every individual, the sense which he has of his own security. In order to make every individual feel himself perfectly secure in the possession of every right which belongs to him, it is not only necessary that the judicial should be separated from the executive power, but that it should be rendered as much as possible independent of that power. The judge should not be liable to be removed from his office according to the caprice of that power. The regular payment of his salary should not depend upon the good will, or even upon the good economy of that power.

PART III. Of the Expense of public Works and public Inst.i.tutions.

The third and last duty of the sovereign or commonwealth, is that of erecting and maintaining those public inst.i.tutions and those public works, which though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual, or small number of individuals; and which it, therefore, cannot be expected that any individual, or small number of individuals, should erect or maintain.

The performance of this duty requires, too, very different degrees of expense in the different periods of society.

After the public inst.i.tutions and public works necessary for the defence of the society, and for the administration of justice, both of which have already been mentioned, the other works and inst.i.tutions of this kind are chiefly for facilitating the commerce of the society, and those for promoting the instruction of the people. The inst.i.tutions for instruction are of two kinds: those for the education of the youth, and those for the instruction of people of all ages. The consideration of the manner in which the expense of those different sorts of public works and inst.i.tutions may be most properly defrayed will divide this third part of the present chapter into three different articles.

ARTICLE I.--Of the public Works and Inst.i.tutions for facilitating the Commerce of the Society.

And, first, of those which are necessary for facilitating Commerce in general.

That the erection and maintenance of the public works which facilitate the commerce of any country, such as good roads, bridges, navigable ca.n.a.ls, harbours, etc. must require very different degrees of expense in the different periods of society, is evident without any proof. The expense of making and maintaining the public roads of any country must evidently increase with the annual produce of the land and labour of that country, or with the quant.i.ty and weight of the goods which it becomes necessary to fetch and carry upon those roads. The strength of a bridge must be suited to the number and weight of the carriages which are likely to pa.s.s over it. The depth and the supply of water for a navigable ca.n.a.l must be proportioned to the number and tonnage of the lighters which are likely to carry goods upon it; the extent of a harbour, to the number of the s.h.i.+pping which are likely to take shelter in it.

It does not seem necessary that the expense of those public works should be defrayed from that public revenue, as it is commonly called, of which the collection and application are in most countries, a.s.signed to the executive power. The greater part of such public works may easily be so managed, as to afford a particular revenue, sufficient for defraying their own expense without bringing any burden upon the general revenue of the society.

A highway, a bridge, a navigable ca.n.a.l, for example, may, in most cases, be both made add maintained by a small toll upon the carriages which make use of them; a harbour, by a moderate port-duty upon the tonnage of the s.h.i.+pping which load or unload in it. The coinage, another inst.i.tution for facilitating commerce, in many countries, not only defrays its own expense, but affords a small revenue or a seignorage to the sovereign. The post-office, another inst.i.tution for the same purpose, over and above defraying its own expense, affords, in almost all countries, a very considerable revenue to the sovereign.

When the carriages which pa.s.s over a highway or a bridge, and the lighters which sail upon a navigable ca.n.a.l, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them. It seems scarce possible to invent a more equitable way of maintaining such works. This tax or toll, too, though it is advanced by the carrier, is finally paid by the consumer, to whom it must always be charged in the price of the goods. As the expense of carriage, however, is very much reduced by means of such public works, the goods, notwithstanding the toll, come cheaper to the consumer than they could otherwise have done, their price not being so much raised by the toll, as it is lowered by the cheapness of the carriage. The person who finally pays this tax, therefore, gains by the application more than he loses by the payment of it. His payment is exactly in proportion to his gain. It is, in reality, no more than a part of that gain which he is obliged to give up, in order to get the rest. It seems impossible to imagine a more equitable method of raising a tax. When the toll upon carriages of luxury, upon coaches, post-chaises, etc. is made somewhat higher in proportion to their weight, than upon carriages of necessary use, such as carts, waggons, etc. the indolence and vanity of the rich is made to contribute, in a very easy manner, to the relief of the poor, by rendering cheaper the transportation of heavy goods to all the different parts of the country.

When high-roads, bridges, ca.n.a.ls, etc. are in this manner made and supported by the commerce which is carried on by means of them, they can be made only where that commerce requires them, and, consequently, where it is proper to make them. Their expense, too, their grandeur and magnificence, must be suited to what that commerce can afford to pay. They must be made, consequently, as it is proper to make them. A magnificent high-road cannot be made through a desert country, where there is little or no commerce, or merely because it happens to lead to the country villa of the intendant of the province, or to that of some great lord, to whom the intendant finds it convenient to make his court.

A great bridge cannot be thrown over a river at a place where n.o.body pa.s.ses, or merely to embellish the view from the windows of a neighbouring palace; things which sometimes happen in countries, where works of this kind are carried on by any other revenue than that which they themselves are capable of affording.

In several different parts of Europe, the toll or lock-duty upon a ca.n.a.l is the property of private persons, whose private interest obliges them to keep up the ca.n.a.l. If it is not kept in tolerable order, the navigation necessarily ceases altogether, and, along with it, the whole profit which they can make by the tolls. If those tolls were put under the management of commissioners, who had themselves no interest in them, they might be less attentive to the maintenance of the works which produced them. The ca.n.a.l of Languedoc cost the king of France and the province upwards of thirteen millions of livres, which (at twenty-eight livres the mark of silver, the value of French money in the end of the last century) amounted to upwards of nine hundred thousand pounds sterling. When that great work was finished, the most likely method, it was found, of keeping it in constant repair, was to make a present of the tolls to Riquet, the engineer who planned and conducted the work.

Those tolls const.i.tute, at present, a very large estate to the different branches of the family of that gentleman, who have, therefore, a great interest to keep the work in constant repair. But had those tolls been put under the management of commissioners, who had no such interest, they might perhaps, have been dissipated in ornamental and unnecessary expenses, while the most essential parts of the works were allowed to go to ruin.

The tolls for the maintenance of a highroad cannot, with any safety, be made the property of private persons. A high-road, though entirely neglected, does not become altogether impa.s.sable, though a ca.n.a.l does.

The proprietors of the tolls upon a high-road, therefore, might neglect altogether the repair of the road, and yet continue to levy very nearly the same tolls. It is proper, therefore, that the tolls for the maintenance of such a work should be put under the management of commissioners or trustees.

In Great Britain, the abuses which the trustees have committed in the management of those tolls, have, in many cases, been very justly complained of. At many turnpikes, it has been said, the money levied is more than double of what is necessary for executing, in the completest manner, the work, which is often executed in a very slovenly manner, and sometimes not executed at all. The system of repairing the high-roads by tolls of this kind, it must be observed, is not of very long standing.

We should not wonder, therefore, if it has not yet been brought to that degree of perfection of which it seems capable. If mean and improper persons are frequently appointed trustees; and if proper courts of inspection and account have not yet been established for controlling their conduct, and for reducing the tolls to what is barely sufficient for executing the work to be done by them; the recency of the inst.i.tution both accounts and apologizes for those defects, of which, by the wisdom of parliament, the greater part may, in due time, be gradually remedied.

The money levied at the different turnpikes in Great Britain, is supposed to exceed so much what is necessary for repairing the roads, that the savings which, with proper economy, might be made from it, have been considered, even by some ministers, as a very great resource, which might, at some time or another, be applied to the exigencies of the state. Government, it has been said, by taking the management of the turnpikes into its own hands, and by employing the soldiers, who would work for a very small addition to their pay, could keep the roads in good order, at a much less expense than it can be done by trustees, who have no other workmen to employ, but such as derive their whole subsistence from their wages. A great revenue, half a million, perhaps {Since publis.h.i.+ng the two first editions of this book, I have got good reasons to believe that all the turnpike tolls levied in Great Britain do not produce a neat revenue that amounts to half a million; a sum which, under the management of government, would not be sufficient to keep, in repair five of the princ.i.p.al roads in the kingdom}, it has been pretended, might in this manner be gained, without laying any new burden upon the people; and the turnpike roads might be made to contribute to the general expense of the state, in the same manner as the post-office does at present.

That a considerable revenue might be gained in this manner, I have no doubt, though probably not near so much as the projectors of this plan have supposed. The plan itself, however, seems liable to several very important objections.

First, If the tolls which are levied at the turnpikes should ever be considered as one of the resources for supplying the exigencies of the state, they would certainly be augmented as those exigencies were supposed to require. According to the policy of Great Britain, therefore, they would probably he augmented very fast. The facility with which a great revenue could be drawn from them, would probably encourage administration to recur very frequently te this resource. Though it may, perhaps, be more than doubtful whether half a million could by any economy be saved out of the present tolls, it can scarcely be doubted, but that a million might be saved out of them, if they were doubled; and perhaps two millions, if they were tripled {I have now good reason to believe that all these conjectural sums are by much too large.}. This great revenue, too, might be levied without the appointment of a single new officer to collect and receive it. But the turnpike tolls, being continually augmented in this manner, instead of facilitating the inland commerce of the country, as at present, would soon become a very great inc.u.mbrance upon it. The expense of transporting all heavy goods from one part of the country to another, would soon be so much increased, the market for all such goods, consequently, would soon be so much narrowed, that their production would be in a great measure discouraged, and the most important branches of the domestic industry of the country annihilated altogether.

Secondly, A tax upon carriages, in proportion to their weight, though a very equal tax when applied to the sole purpose of repairing the roads, is a very unequal one when applied to any other purpose, or to supply the common exigencies of the state. When it is applied to the sole purpose above mentioned, each carriage is supposed to pay exactly for the wear and tear which that carriage occasions of the roads. But when it is applied to any other purpose, each carriage is supposed to pay for more than that wear and tear, and contributes to the supply of some other exigency of the state. But as the turnpike toll raises the price of goods in proportion to their weight and not to their value, it is chiefly paid by the consumers of coa.r.s.e and bulky, not by those of precious and light commodities. Whatever exigency of the state, therefore, this tax might be intended to supply, that exigency would be chiefly supplied at the expense of the poor, not of the rich; at the expense of those who are least able to supply it, not of those who are most able.

Thirdly, If government should at any time neglect the reparation of the high-roads, it would be still more difficult, than it is at present, to compel the proper application of any part of the turnpike tolls. A large revenue might thus be levied upon the people, without any part of it being applied to the only purpose to which a revenue levied in this manner ought ever to be applied. If the meanness and poverty of the trustees of turnpike roads render it sometimes difficult, at present, to oblige them to repair their wrong; their wealth and greatness would render it ten times more so in the case which is here supposed.

In France, the funds destined for the reparation of the high-roads are under the immediate direction of the executive power. Those funds consist, partly in a certain number of days labour, which the country people are in most parts of Europe obliged to give to the reparation of the highways; and partly in such a portion of the general revenue of the state as the king chooses to spare from his other expenses.

By the ancient law of France, as well as by that of most other parts of Europe, the labour of the country people was under the direction of a local or provincial magistracy, which had no immediate dependency upon the king's council. But, by the present practice, both the labour of the country people, and whatever other fund the king may choose to a.s.sign for the reparation of the high-roads in any particular province or generality, are entirely under the management of the intendant; an officer who is appointed and removed by the king's council who receives his orders from it, and is in constant correspondence with it. In the progress of despotism, the authority of the executive power gradually absorbs that of every other power in the state, and a.s.sumes to itself the management of every branch of revenue which is destined for any public purpose. In France, however, the great post-roads, the roads which make the communication between the princ.i.p.al towns of the kingdom, are in general kept in good order; and, in some provinces, are even a good deal superior to the greater part of the turnpike roads of England.

But what we call the cross roads, that is, the far greater part of the roads in the country, are entirely neglected, and are in many places absolutely impa.s.sable for any heavy carriage. In some places it is even dangerous to travel on horseback, and mules are the only conveyance which can safely be trusted. The proud minister of an ostentatious court, may frequently take pleasure in executing a work of splendour and magnificence, such as a great highway, which is frequently seen by the princ.i.p.al n.o.bility, whose applauses not only flatter his vanity, but even contribute to support his interest at court. But to execute a great number of little works, in which nothing that can be done can make any great appearance, or excite the smallest degree of admiration in any traveller, and which, in short, have nothing to recommend them but their extreme utility, is a business which appears, in every respect, too mean and paltry to merit the attention of so great a magistrate. Under such an administration therefore, such works are almost always entirely neglected.

In China, and in several other governments of Asia, the executive power charges itself both with the reparation of the high-roads, and with the maintenance of the navigable ca.n.a.ls. In the instructions which are given to the governor of each province, those objects, it is said, are constantly recommended to him, and the judgment which the court forms of his conduct is very much regulated by the attention which he appears to have paid to this part of his instructions. This branch of public police, accordingly, is said to be very much attended to in all those countries, but particularly in China, where the high-roads, and still more the navigable ca.n.a.ls, it is pretended, exceed very much every thing of the same kind which is known in Europe. The accounts of those works, however, which have been transmitted to Europe, have generally been drawn up by weak and wondering travellers; frequently by stupid and lying missionaries. If they had been examined by more intelligent eyes, and if the accounts of them had been reported by more faithful witnesses, they would not, perhaps, appear to be so wonderful. The account which Bernier gives of some works of this kind in Indostan, falls very short of what had been reported of them by other travellers, more disposed to the marvellous than he was. It may too, perhaps, be in those countries, as it is in France, where the great roads, the great communications, which are likely to be the subjects of conversation at the court and in the capital, are attended to, and all the rest neglected. In China, besides, in Indostan, and in several other governments of Asia, the revenue of the sovereign arises almost altogether from a land tax or land rent, which rises or falls with the rise and fall of the annual produce of the land. The great interest of the sovereign, therefore, his revenue, is in such countries necessarily and immediately connected with the cultivation of the land, with the greatness of its produce, and with the value of its produce. But in order to render that produce both as great and as valuable as possible, it is necessary to procure to it as extensive a market as possible, and consequently to establish the freest, the easiest, and the least expensive communication between all the different parts of the country; which can be done only by means of the best roads and the best navigable ca.n.a.ls. But the revenue of the sovereign does not, in any part of Europe, arise chiefly from a land tax or land rent. In all the great kingdoms of Europe, perhaps, the greater part of it may ultimately depend upon the produce of the land: but that dependency is neither so immediate nor so evident. In Europe, therefore, the sovereign does not feel himself so directly called upon to promote the increase, both in quant.i.ty and value of the produce of the land, or, by maintaining good roads and ca.n.a.ls, to provide the most extensive market for that produce.

Though it should be true, therefore, what I apprehend is not a little doubtful, that in some parts of Asia this department of the public police is very properly managed by the executive power, there is not the least probability that, during the present state of things, it could be tolerably managed by that power in any part of Europe.

Even those public works, which are of such a nature that they cannot afford any revenue for maintaining themselves, but of which the conveniency is nearly confined to some particular place or district, are always better maintained by a local or provincial revenue, under the management of a local and provincial administration, than by the general revenue of the state, of which the executive power must always have the management. Were the streets of London to be lighted and paved at the expense of the treasury, is there any probability that they would be so well lighted and paved as they are at present, or even at so small an expense? The expense, besides, instead of being raised by a local tax upon the inhabitants of each particular street, parish, or district in London, would, in this case, be defrayed out of the general revenue of the state, and would consequently be raised by a tax upon all the inhabitants of the kingdom, of whom the greater part derive no sort of benefit from the lighting and paving of the streets of London.

The abuses which sometimes creep into the local and provincial administration of a local and provincial revenue, how enormous soever they may appear, are in reality, however, almost always very trifling in comparison of those which commonly take place in the administration and expenditure of the revenue of a great empire. They are, besides, much more easily corrected. Under the local or provincial administration of the justices of the peace in Great Britain, the six days labour which the country people are obliged to give to the reparation of the highways, is not always, perhaps, very judiciously applied, but it is scarce ever exacted with any circ.u.mstance of cruelty or oppression. In France, under the administration of the intendants, the application is not always more judicious, and the exaction is frequently the most cruel and oppressive. Such corvees, as they are called, make one of the princ.i.p.al instruments of tyranny by which those officers chastise any parish or communeaute, which has had the misfortune to fall under their displeasure.

Of the public Works and Inst.i.tution which are necessary for facilitating particular Branches of Commerce.

The object of the public works and inst.i.tutions above mentioned, is to facilitate commerce in general. But in order to facilitate some particular branches of it, particular inst.i.tutions are necessary, which again require a particular and extraordinary expense.

Some particular branches of commerce which are carried on with barbarous and uncivilized nations, require extraordinary protection. An ordinary store or counting-house could give little security to the goods of the merchants who trade to the western coast of Africa. To defend them from the barbarous natives, it is necessary that the place where they are deposited should be in some measure fortified. The disorders in the government of Indostan have been supposed to render a like precaution necessary, even among that mild and gentle people; and it was under pretence of securing their persons and property from violence, that both the English and French East India companies were allowed to erect the first forts which they possessed in that country. Among other nations, whose vigorous government will suffer no strangers to possess any fortified place within their territory, it may be necessary to maintain some amba.s.sador, minister, or consul, who may both decide, according to their own customs, the differences arising among his own countrymen, and, in their disputes with the natives, may by means of his public character, interfere with more authority and afford them a more powerful protection than they could expect from any private man. The interests of commerce have frequently made it necessary to maintain ministers in foreign countries, where the purposes either of war or alliance would not have required any. The commerce of the Turkey company first occasioned the establishment of an ordinary amba.s.sador at Constantinople. The first English emba.s.sies to Russia arose altogether from commercial interests. The constant interference with those interests, necessarily occasioned between the subjects of the different states of Europe, has probably introduced the custom of keeping, in all neighbouring countries, amba.s.sadors or ministers constantly resident, even in the time of peace. This custom, unknown to ancient times, seems not to be older than the end of the fifteenth, or beginning of the sixteenth century; that is, than the time when commerce first began to extend itself to the greater part of the nations of Europe, and when they first began to attend to its interests.

It seems not unreasonable, that the extraordinary expense which the protection of any particular branch of commerce may occasion, should be defrayed by a moderate tax upon that particular branch; by a moderate fine, for example, to be paid by the traders when they first enter into it; or, what is more equal, by a particular duty of so much per cent.

upon the goods which they either import into, or export out of, the particular countries with which it is carried on. The protection of trade, in general, from pirates and freebooters, is said to have given occasion to the first inst.i.tution of the duties of customs. But, if it was thought reasonable to lay a general tax upon trade, in order to defray the expense of protecting trade in general, it should seem equally reasonable to lay a particular tax upon a particular branch of trade, in order to defray the extraordinary expense of protecting that branch.

The protection of trade, in general, has always been considered as essential to the defence of the commonwealth, and, upon that account, a necessary part of the duty of the executive power. The collection and application of the general duties of customs, therefore, have always been left to that power. But the protection of any particular branch of trade is a part of the general protection of trade; a part, therefore, of the duty of that power; and if nations always acted consistently, the particular duties levied for the purposes of such particular protection, should always have been left equally to its disposal. But in this respect, as well as in many others, nations have not always acted consistently; and in the greater part of the commercial states of Europe, particular companies of merchants have had the address to persuade the legislature to entrust to them the performance of this part of the duty of the sovereign, together with all the powers which are necessarily connected with it.

These companies, though they may, perhaps, have been useful for the first introduction of some branches of commerce, by making, at their own expense, an experiment which the state might not think it prudent to make, have in the long-run proved, universally, either burdensome or useless, and have either mismanaged or confined the trade.

When those companies do not trade upon a joint stock, but are obliged to admit any person, properly qualified, upon paying a certain fine, and agreeing to submit to the regulations of the company, each member trading upon his own stock, and at his own risk, they are called regulated companies. When they trade upon a joint stock, each member sharing in the common profit or loss, in proportion to his share in this stock, they are called joint-stock companies. Such companies, whether regulated or joint-stock, sometimes have, and sometimes have not, exclusive privileges.

Regulated companies resemble, in every respect, the corporation of trades, so common in the cities and towns of all the different countries of Europe; and are a sort of enlarged monopolies of the same kind. As no inhabitant of a town can exercise an incorporated trade, without first obtaining his freedom in the incorporation, so, in most cases, no subject of the state can lawfully carry on any branch of foreign trade, for which a regulated company is established, without first becoming a member of that company. The monopoly is more or less strict, according as the terms of admission are more or less difficult, and according as the directors of the company have more or less authority, or have it more or less in their power to manage in such a manner as to confine the greater part of the trade to themselves and their particular friends. In the most ancient regulated companies, the privileges of apprentices.h.i.+p were the same as in other corporations, and ent.i.tled the person who had served his time to a member of the company, to become himself a member, either without paying any fine, or upon paying a much smaller one than what was exacted of other people. The usual corporation spirit, wherever the law does not restrain it, prevails in all regulated companies. When they have been allowed to act according to their natural genius, they have always, in order to confine the compet.i.tion to as small a number of persons as possible, endeavoured to subject the trade to many burdensome regulations. When the law has restrained them from doing this, they have become altogether useless and insignificant.

The regulated companies for foreign commerce which at present subsist in Great Britain, are the ancient merchant-adventurers company, now commonly called the Hamburgh company, the Russia company, the Eastland company, the Turkey company, and the African company.

The terms of admission into the Hamburgh company are now said to be quite easy; and the directors either have it not in their power to subject the trade to any troublesome restraint or regulations, or, at least, have not of late exercised that power. It has not always been so.

About the middle of the last century, the fine for admission was fifty, and at one time one hundred pounds, and the conduct of the company was said to be extremely oppressive. In 1643, in 1645, and in 1661, the clothiers and free traders of the west of England complained of them to parliament, as of monopolists, who confined the trade, and oppressed the manufactures of the country. Though those complaints produced no act of parliament, they had probably intimidated the company so far, as to oblige them to reform their conduct. Since that time, at least, there have been no complaints against them. By the 10th and 11th of William III. c.6, the fine for admission into the Russia company was reduced to five pounds; and by the 25th of Charles II. c.7, that for admission into the Eastland company to forty s.h.i.+llings; while, at the same time, Sweden, Denmark, and Norway, all the countries on the north side of the Baltic, were exempted from their exclusive charter. The conduct of those companies had probably given occasion to those two acts of parliament.

Before that time, Sir Josiah Child had represented both these and the Hamburgh company as extremely oppressive, and imputed to their bad management the low state of the trade, which we at that time carried on to the countries comprehended within their respective charters. But though such companies may not, in the present times, be very oppressive, they are certainly altogether useless. To be merely useless, indeed, is perhaps, the highest eulogy which can ever justly be bestowed upon a regulated company; and all the three companies above mentioned seem, in their present state, to deserve this eulogy.

The fine for admission into the Turkey company was formerly twenty-five pounds for all persons under twenty-six years of age, and fifty pounds for all persons above that age. n.o.body but mere merchants could be admitted; a restriction which excluded all shop-keepers and retailers.

By a bye-law, no British manufactures could be exported to Turkey but in the general s.h.i.+ps of the company; and as those s.h.i.+ps sailed always from the port of London, this restriction confined the trade to that expensive port, and the traders to those who lived in London and in its neighbourhood. By another bye-law, no person living within twenty miles of London, and not free of the city, could be admitted a member; another restriction which, joined to the foregoing, necessarily excluded all but the freemen of London. As the time for the loading and sailing of those general s.h.i.+ps depended altogether upon the directors, they could easily fill them with their own goods, and those of their particular friends, to the exclusion of others, who, they might pretend, had made their proposals too late. In this state of things, therefore, this company was, in every respect, a strict and oppressive monopoly. Those abuses gave occasion to the act of the 26th of George II. c. 18, reducing the fine for admission to twenty pounds for all persons, without any distinction of ages, or any restriction, either to mere merchants, or to the freemen of London; and granting to all such persons the liberty of exporting, from all the ports of Great Britain, to any port in Turkey, all British goods, of which the exportation was not prohibited, upon paying both the general duties of customs, and the particular duties a.s.sessed for defraying the necessary expenses of the company; and submitting, at the same time, to the lawful authority of the British amba.s.sador and consuls resident in Turkey, and to the bye-laws of the company duly enacted. To prevent any oppression by those bye-laws, it was by the same act ordained, that if any seven members of the company conceived themselves aggrieved by any bye-law which should be enacted after the pa.s.sing of this act, they might appeal to the board of trade and plantations (to the authority of which a committee of the privy council has now succeeded), provided such appeal was brought within twelve months after the bye-law was enacted; and that, if any seven members conceived themselves aggrieved by any bye-law which had been enacted before the pa.s.sing of this act, they might bring a like appeal, provided it was within twelve months after the day on which this act was to take place. The experience of one year, however, may not always be sufficient to discover to all the members of a great company the pernicious tendency of a particular bye-law; and if several of them should afterwards discover it, neither the board of trade, nor the committee of council, can afford them any redress. The object, besides, of the greater part of the bye-laws of all regulated companies, as well as of all other corporations, is not so much to oppress those who are already members, as to discourage others from becoming so; which may be done, not only by a high fine, but by many other contrivances. The constant view of such companies is always to raise the rate of their own profit as high as they can; to keep the market, both for the goods which they export, and for those which they import, as much understocked as they can; which can be done only by restraining the compet.i.tion, or by discouraging new adventurers from entering into the trade. A fine, even of twenty pounds, besides, though it may not, perhaps, be sufficient to discourage any man from entering into the Turkey trade, with an intention to continue in it, may be enough to discourage a speculative merchant from hazarding a single adventure in it. In all trades, the regular established traders, even though not incorporated, naturally combine to raise profits, which are noway so likely to be kept, at all times, down to their proper level, as by the occasional compet.i.tion of speculative adventurers. The Turkey trade, though in some measure laid open by this act of parliament, is still considered by many people as very far from being altogether free. The Turkey company contribute to maintain an amba.s.sador and two or three consuls, who, like other public ministers, ought to be maintained altogether by the state, and the trade laid open to all his majesty's subjects. The different taxes levied by the company, for this and other corporation purposes, might afford a revenue much more than sufficient to enable a state to maintain such ministers.

Regulated companies, it was observed by Sir Josiah Child, though they had frequently supported public ministers, had never maintained any forts or garrisons in the countries to which they traded; whereas joint-stock companies frequently had. And, in reality, the former seem to be much more unfit for this sort of service than the latter. First, the directors of a regulated company have no particular interest in the prosperity of the general trade of the company, for the sake of which such forts and garrisons are maintained. The decay of that general trade may even frequently contribute to the advantage of their own private trade; as, by diminis.h.i.+ng the number of their compet.i.tors, it may enable them both to buy cheaper, and to sell dearer. The directors of a joint-stock company, on the contrary, having only their share in the profits which are made upon the common stock committed to their management, have no private trade of their own, of which the interest can be separated from that of the general trade of the company. Their private interest is connected with the prosperity of the general trade of the company, and with the maintenance of the forts and garrisons which are necessary for its defence. They are more likely, therefore, to have that continual and careful attention which that maintenance necessarily requires. Secondly, The directors of a joint-stock company have always the management of a large capital, the joint stock of the company, a part of which they may frequently employ, with propriety, in building, repairing, and maintaining such necessary forts and garrisons.

But the directors of a regulated company, having the management of no common capital, have no other fund to employ in this way, but the casual revenue arising from the admission fines, and from the corporation duties imposed upon the trade of the company. Though they had the same interest, therefore, to attend to the maintenance of such forts and garrisons, they can seldom have the same ability to render that attention effectual. The maintenance of a public minister, requiring scarce any attention, and but a moderate and limited expense, is a business much more suitable both to the temper and abilities of a regulated company.

Long after the time of Sir Josiah Child, however, in 1750, a regulated company was established, the present company of merchants trading to Africa; which was expressly charged at first with the maintenance of all the British forts and garrisons that lie between Cape Blanc and the Cape of Good Hope, and afterwards with that of those only which lie between Cape Rouge and the Cape of Good Hope. The act which establishes this company (the 23rd of George II. c.51 ), seems to have had two distinct objects in view; first, to restrain effectually the oppressive and monopolizing spirit which is natural to the directors of a regulated company; and, secondly, to force them, as much as possible, to give an attention, which is not natural to them, towards the maintenance of forts and garrisons.