Adam Smith's Simplified Wealth of Nations, Book 4, Chapter 5e: Digression on the Wheat Trade -- foreign markets and footnote

Chapter 5e: Digression on the wheat trade and wheat laws on foreign markets

62 The 15th of Charles II. c 7 authorizes two very absurd popular prejudices.

  1. 63 It supposes that when wheat prices rise to 576 pence the quarter, wheat is likely to be so engrossed as to hurt the people.


  1. 64 It supposes that there is a certain price at which wheat will be forestalled or bought to be re-sold in the same market, to hurt the people.
 

65 "The popular fear of engrossing and forestalling may be compared to the popular terrors and suspicions of witchcraft."  

66 Despite all the imperfections of the 15th of Charles II. c. 7, it has perhaps contributed more than any other law in the statute book to increase the: The inland wheat trade has derived all the liberty and protection from this law.  

67 According to Charles Smith, the proportion of grain imported into Great Britain to the grain consumed does not exceed 1:570.  

69 I have no great faith in political arithmetic computations.  

70 A few words will explain the wheat trade's other three branches.

  1. 71 The merchant importer of foreign wheat for home consumption contributes to the home market's immediate supply.


  72 The 22nd of Charles II. c. 13, imposed a duty of 192 pence the quarter on wheat imports whenever the home price did not exceed 640 pence the quarter.
Footnote

Before the 13th of the present king, the following were the duties payable upon the importation of the different sorts of grain:

Grain. Duties.
Beans to 336 pence per qr.
Barley to 336 pence
238 pence after till 480 pence
238 pence after till 384 pence
200 pence then 12 pence
192 pence then 12 pence
Malt is prohibited by the annual Malt-tax Bill.
Oats to 192 pence
Peas to 480 pence
Rye to 432 pence
Wheat to 528 pence
5s. 10d. after
16s. 0d. after
19s. 10d. till 40s.
21s.  9d.  till   53s. 4d.
9 1/2d.
9 3/4d.
16s. 8d. then 12d.
17s. then   8s.
till 4l. and after that about 1.s 4d.
Buck wheat to 32s. per qr. to pay 16s.

These duties were imposed, partly by:

  • the 22nd of Charles II, in place of the Old Subsidy,
  • the New Subsidy
  • the One-third and Two-thirds Subsidy
  • the Subsidy 1747

The table of duties in this note is an exact copy of that in Charles Smith, Three Tracts on the Corn Trade, 2nd ed., 1766. p. 83

  • That author
    • took the figures from "Mr. Saxby, in his Book of Rates" (i.e. Henry Saxby, The British Customs, containing an Historical and Practical Account of each branch of that Revenue, 1757, pp. 111-114)
    • He rounded off Saxby's fractions of a penny in an inaccurate and inconsistent way
    • He miscopied:
      • the second duty on barley
      • the first duty on peas
      • the third duty on wheat
    • The "Old Subsidy" consisted of the 5% or 1s. poundage imposed by 12 Car. II., c. 4, on to the Act
    • According to this, imported beans, barely and malt were to be rated at 26s. 8d. the quarter when the actual price at the place of importation did not exceed 28s.
    • When the actual price was higher than that, they were to be rated at 5s. the quarter.
    • Oats and peas were to be rated at 4s. the quarter.
    • Rye when not over 36s. was to be rated at 26s. 8d., and when over that price at 5s.
    • Wheat when not over 44s. was to be rated at 40s., and when over that price at 6s. 8d.

So under the Old Subsidy:

  • Beans, barley and malt at prices up to 28s. were to pay 1. 4d., and when above that price 3 pence
  • Oats and pease to pay 2.4d
  • Rye up to 36s. to pay 1s. 4d., and when above, 3 pence
  • Wheat up to 44s. to pay 2s., and when above, 4 pence.

The Act 22 Car. II., c. 13, took off these duties and substited the following scheme:

  • Beans to 40s to pay 16s., and above that price, 3d.
  • Barley and malt to 32s. to pay 16s., and above, 3d.
  • Oats 16s. to pay 5s. 4d., and above, 2.4d.
  • Pease and rye the same as beans.
  • Wheat to 53s. 4d. to pay 16s., then to 80s. to pay 8s., and above that price, 4d.
  • Buckwheat to 32s. to pay 16s.

But 9 and 10 Will. III., c. 23, imposed a "New Subsidy" exactly equal to the Old, so that:

  • duties equal to those of 12 Car. II., c.4, were superimposed on those of 22 Car. II, c. 13.
  • By 2 and 3 Ann., c. 9, an additional third
  • by 3 and 4 Ann., c. 5, an additional two-thirds of the Old Subsidy were imposed,
  • by 21 Geo. II., c. 2, another amount equal to the Old Subsidy ("the impost 1747") was further imposed

So between 1747 and 1773 the dtuies were those of 22 Car. II., c. 13, plus three times those of 12 Car. II., c. 4

This gives the following scheme:

  • Beans to 28s. pay 20s. and after till 40s. pay 16s. 9d. then 1s.
  • Barley to 28s. pays 20s. and after till 32s. pays 16s. 9d. then 1s.
  • Oats to 16s. pay 5s. 11.2d. and then pay 9.6d.
  • Pease to 40s. pay 16s. 7.2d. and then pay 9.6d.
  • Rye to 36s. pays 20s. and after till 40s. pays 16s. 9d. then 1s.
  • Wheat to 44s. pays 22s. and after till 53s. 4d. pays 17s. then 9s. till 80s., and after that 1s. 4d.

Saxby's figures are slightly less, as they take into account a 5% discount obtainable on all the subisdies except one.


Next: Chapter 5f, Digression: Carrying trade of wheat