Conclusion on Mercantilism

¹ The mercantile system proposes to enrich every country through two great engines:

• The encouragement of exportation
• The discouragement of importation

But the mercantile system follows an opposite plan with some commodities:

• To discourage exportation
• To encourage importation

It pretends that its ultimate object is always the same – to enrich the country by an advantageous balance of trade.

It discourages the exportation of raw materials and the instruments of trade, in order to:

• give our own workers an advantage, and
• enable them to undersell those of other nations in all foreign markets.

It proposes to increase the quantity and value of most exported goods by restraining the exportation of some other goods.

It encourages the importation of raw materials so that our own people can:

• work them up more cheaply, and
• prevent a greater and more valuable importation of the manufactured goods.

I cannot see any encouragement given to the importation of the instruments of trade, at least in our Statute Book. When manufactures have advanced to a certain greatness, the development of the instruments of trade becomes itself the object of many very important manufactures.

To encourage the importation of such instruments would be to interfere too much with the interest of those manufactures. Such importation has frequently been banned. The importation of wool cards, except from Ireland, or when brought in as wreck or prize goods, was banned by 1463. This ban was renewed by 1597. It has been made perpetual by subsequent laws.

² The importation of raw materials was sometimes encouraged by:

• bounties, and
• an exemption from the duties to which other goods are subject.

³ The importation of the following was encouraged by an exemption from all duties, if properly entered at the custom house:

• Sheep’s wool
• Cotton wool
• Undressed flax
• Most of the dying drugs
• Most of the undressed hides from Ireland or the British colonies
• Sealskins from the British Greenland fishery
• Pig and bar iron from the British colonies
• Several other raw materials

The private interest of our merchants and manufacturers might have extorted these exemptions and other commercial regulations from the legislature. They are perfectly just and reasonable.

If they could be extended to all the other materials of manufacture, consistent with the necessities of the state, the public would certainly be a gainer.

⁴ In some cases, the avidity of our great manufacturers extended these exemptions much beyond their needed raw materials.

By 1750, Chap. 46, a small duty of 1 penny the pound was imposed on the importation of foreign brown linen yam. Its previous duty was:

• 6 pence the pound on sail yarn
• 12 pence the pound on all French and Dutch yarn
• 640 pence on the hundredweight of all spruce or Muscovia yarn.

But our manufacturers were not satisfied with this reduction.

The 1755 Chap. 15 removed this small duty. The making of linen yarn needs more work than the making of linen cloth from linen yarn.

To keep one weaver in employment, the following are needed=

• Flax-growers,
• Flax-dressers, and
• Three or four spinners

More than 4/5 of the work needed for making linen cloth is employed in making linen yarn.

But our spinners are poor people. They are women scattered in different parts of the country, without support or protection.

Our master manufacturers profit by the sale of the complete work of the weavers, not the spinners. It is the interest of our manufacturers to sell the complete work as dear and to buy the the materials as cheap as possible.

They sell their own goods as dear as possible by extorting from the legislature:

• Bounties on the exportation of their linen
• High duties on the importation of all foreign linen
• A total prohibition of the home consumption of some French linen

By encouraging the importation of foreign linen yarn, they bring it into competition with the yarn made by our own people.

Our manufacturers can buy the work of the poor spinners as cheap as possible. They are as intent to keep down the wages of their own weavers as they keep down the earnings of the poor spinners. They try to=

• raise the price of the complete work, or
• lower the price of the raw materials for their own benefit.

Our mercantile system principally encourages the industry which is carried on for the benefit of the rich and the powerful.

• The industry which is carried on for the benefit of the poor is too often neglected or oppressed.

⁵ The bounty on linen exportation and the exemption of foreign yarn from import duties were granted only for 15 years.

• They were continued by two different prolongations.
• They will expire with the end of the parliament session immediately following June 24, 1786.