Life of Adam Smith
IN 1779 Smith was consulted by various members of the Government with respect to the probable effects of the contemplated concession of free trade to Ireland, and two letters of Smith still remain—one to the Earl of Carlisle, First Lord of Trade and Plantations, and the other to Henry Dundas—which state his views on this subject. A few preliminary words will explain the situation. The policy of commercial restriction has probably never been used with more cruelty or more disaster than it was used against the people of Ireland between the Restoration and the Union. They were not allowed to trade as they would with Great Britain or her colonies, because they were aliens, and they were not allowed to trade as they would with foreign countries, because they were British subjects. There were various industries they had special advantages for establishing, but the moment they began to export the products the English Parliament, or their own Irish Parliament under English influence, closed the markets against them. Living in an excellent grazing country, their first great product was cattle, and the export of cattle was prohibited. When stopped from sending live meat, they tried to send dead, but the embargo was promptly extended to salt provisions. Driven from cattle, they betook them-selves to sheep, and sent over wool; that was stopped, allowed, and stopped again. When their raw wool was denied a market, they next tried cloth, but England then bargained for the suppression of the chief branches of Irish woollen manufacture by promising Ireland a monopoly of the manufacture of linen. Other infant industries which gave signs of growing to prosperity were by the same means crushed in the cradle, and Ireland was in consequence never able to acquire that nest-egg of industrial capital and training which England won in the eighteenth century.
All this systematic oppression of national industry had produced its natural fruit in a distressing scarcity of employment, and in 1778, though it was a year of plenty, and meal was at its cheapest, many thousands of the population were starving because they had not the means to buy it; the farmers were unable to pay their rents because they got such poor prices; processions of unemployed paraded the streets of Dublin carrying a black fleece in token of their want; and the Viceroy from the Castle warned the English ministry that an enlargement of the trade of Ireland had become a matter of the merest necessity, without which she could never pay her national obligations to the English Exchequer.
But it was neither the voice of justice nor the cry of distress that moved the Government; it was the alarm of external danger. The strength of England was then strained as it has never been before or since in an unequal war with the combined forces of France, Spain, and America, and it was no time either to feed or to neglect discontent at home. Ireland had already sent many recruits to the revolutionary army in America, and at this very moment the Irish Protestants, incensed at the indifference of Government to the protection of their ports, had, under the lead of Lord Charlemont, raised an illegal army of 42,000 volunteers, and placed them under arms without the consent of the Crown.
The demand of free trade for Ireland came therefore with sanctions that could not be ignored, and Lord North's first idea was to give Ireland the same rights of trading with the colonies and foreign countries as England enjoyed, except in the two particulars of the export of wool and glass and the import of tobacco. This proposal was not satisfactory to the Irish, because it failed to remove their chief grievance, the restriction on their trade in woollen goods, but it provoked a storm of indignation in Liverpool, Manchester, Glasgow, and all the great manufacturing and trading centres of Great Britain. They petitioned the Government declaring that the proposed measure would ruin them, for a reason with which we are still very familiar, because it would be impossible for any English or Scotch manufacturer to compete against the pauper labour of Ireland. Lord North, frightened, as Burke said, into some concessions by the menaces of Ireland, was now frightened out of them again by the menaces of England, and he cut down his original proposals till the Irish thought he was merely trifling with their troubles, and their whole island was aflame. Associations were formed, commotions broke out; a great meeting in Dublin in April 1779 pledged itself to buy nothing of English or Scotch manufacture; many of the county meetings instructed their representatives in Parliament to vote no money bill for more than six months till Irish grievances were redressed; and the Lord-Lieutenant wrote the Government that popular discontent was seriously increasing, that French and American emissaries were actively abroad, that the outlook was black indeed if next session of Parliament passed without giving the Irish a satisfactory measure of free trade, and that "nothing short of permission to export coarse woollen goods would in any degree give general satisfaction."
As soon as the Irish Parliament met in October a new member of the House, who was presently to become a new power in the country, Henry Grattan, rose and moved an amendment to the address, urging the necessity for a free export trade; and the amendment was, on the suggestion of Flood, extended to a general demand for free trade, including imports as well as exports, and in this form was carried without a division. The reply to the address, however, seemed studiously ambiguous, and inflamed the prevailing discontent. On King William's birthday the statue of that monarch in Dublin was hung over with expressive placards, and the city volunteers turned out and paraded round it; a few days later a mob from the Liberties attacked the house of the Attorney-General, and proceeding to Parliament, swore all the members they found to vote only short money bills till free trade were conceded; and then Grattan, in his place in the House, carried by three to one a resolution to grant no new taxes and to give only six months' bills for the appropriated duties.
The Government was now thoroughly alarmed; they must at last face the question of free trade for Ireland in dead earnest, and applied themselves without delay to learn from all who understood the subject what would be the real effect on England of removing the Irish restrictions. They requested many of the leading public men whom they trusted in Ireland—Lord Lifford, Hely Hutchinson, Henry Burgh, and others—to prepare detailed statements of their views on the commercial grievances of their country and the operation of the proposed remedies. Mr. Lecky, who has seen those statements at the Record Office, says they are conspicuous for their clear grasp of the principles of free trade, and I think that they may with great probability be considered a fruit of Smith's then recently published work, because Hely Hutchinson's statement, or its substance, has been published—it was, indeed, the last book publicly burned in this country—and it makes frequent quotations from the Wealth of Nations. It was in these circumstances that the Board of Trade made a double applicatión to Adam Smith for his opinion on the subject. Lord Carlisle, the head of the Board, applied to him through Adam Ferguson, who had been Secretary of the Commission, of which Lord Carlisle had been President, sent out to America the year before to negotiate terms of peace; and Mr. William Eden, Secretary of the Board, applied to him through Henry Dundas. With Eden (afterwards the first Lord Auckland) Smith became later on well acquainted; he was married in 1776 to a daughter of Smith's old friend, Sir Gilbert Elliot, but at the date of this correspondence their personal acquaintance does not seem to have been intimate.
Smith's letter to Lord Carlisle is as follows:—
MY LORD—My friend Mr. Ferguson showed me a few days ago a letter in which your Lordship was so good as to say that you wished to know my opinion concerning the consequence of granting to the Irish that free trade which they at present demand so importunately. I shall not attempt to express how much I feel myself flattered by your Lordship's very honourable remembrance of me, but shall without further preface endeavour to explain that opinion, such as it may be, as distinctly as I can.
Till we see the heads of the bill which the Irish propose to send over, it is impossible to know precisely what they mean by a free trade.
It is possible they may mean by it no more than the freedom of exporting all goods, whether of their own produce or imported from abroad, to all countries (Great Britain and the British settlements excepted) subject to no other duties or restraints than such as their own Parliament may impose. At present they can export glass, tho' of their own manufacture, to no country whatever. Raw silk, a foreign commodity, is under the same restraint. Wool they can export only to Great Britain. Woollen manufactures they can export only from certain ports in Ireland to certain ports in Great Britain. A very slender interest of our own manufacturers is the foundation of all these unjust and oppressive restraints. The watchful jealousy of those gentlemen is alarmed least the Irish, who have never been able to supply compleatly even their own market with glass or woollen manufactures, should be able to rival them in foreign markets.
The Irish may mean by a free trade to demand, besides, the freedom of importing from wherever they can buy them cheapest all such foreign goods as they have occasion for. At present they can import glass, sugars of foreign plantations, except those of Spain or Portugal, and certain sorts of East India goods, from no country but Great Britain. Tho' Ireland was relieved from these and from all restraints of the same kind, the interest of Great Britain could surely suffer very little. The Irish probably mean to demand no more than this most just and reasonable freedom of exportation and importation; in restraining which we seem to me rather to have gratified the impertinence than to have promoted any solid interest of our merchants and manufacturers.
The Irish may, however, mean to demand, besides, the same freedom of exportation and importation to and from the British settlements in Africa and America which is enjoyed by the inhabitants of Great Britain. As Ireland has contributed little either to the establishment or defence of these settlements, this demand would be less reasonable than the other two. But as I never believed that the monopoly of our Plantation trade was really advantageous to Great Britain, so I cannot believe that the admission of Ireland to a share in that monopoly, or the extension of this monopoly to all the British islands, would be really disadvantageous.
Over and above all this, the Irish may mean to demand the freedom of importing their own produce and manufactures into Great Britain, subject to no other duties than such as are equivalent to the duties imposed upon the like goods of British produce or manufacture. Tho' even this demand, the most unreasonable of all, should be granted, I cannot believe that the interest of Britain would be hurt by it. On the contrary, the competition of Irish goods in the British market might contribute to break down in part that monopoly which we have most absurdly granted to the greater part of our own workmen against ourselves. It would, however, be a long time before this competition could be very considerable. In the present state of Ireland centuries must pass away before the greater part of its manufactures could vie with those of England. Ireland has little coal, the coallieries about Lough Neagh being of little consequence to the greater part of the country; it is ill provided with wood: two articles essentially necessary to the progress of great manufactures. It wants order, police, and a regular administration of justice, both to protect and to restrain the inferior ranks of people: articles more essential to the progress of industry than both coal and wood put together, and which Ireland must continue to want as long as it continues to be divided between two hostile nations, the oppressors and the oppressed, the Protestants and the Papists.
Should the industry of Ireland, in consequence of freedom and good government, ever equal that of England, so much the better would it be not only for the whole British Empire, but for the particular province of England. As the wealth and industry of Lancashire does not obstruct but promote that of Yorkshire, so the wealth and industry of Ireland would not obstruct but promote that of England.
It makes me very happy to find that in the midst of the public misfortunes a person of your Lordship's rank and elevation of mind doth not despair of the commonwealth, but is willing to accept of an active share in administration. That your Lordship may be the happy means of restoring vigour and decision to our counsels, and in consequence of them, success to our arms, is the sincere wish of, my Lord, your Lordship's most obliged and most obedient servant,
EDINBURGH, 8th November 1779.
The letter to Dundas was published in the English Historical Review for April 1886 (p. 308), by Mr. Oscar Browning, from a copy in the Auckland papers then in his possession. Mr. Browning gives at the same time the previous letters of Dundas to Eden and Smith respectively. To Eden he writes:—
MELVILLE, 30th October 1779.
MY DEAR SIR—I received yours last night and have sent it this morning to Smith. When I see or hear from him you shall hear again from me upon the different parts of your letter. The enclosed is a copy of my letter to Smith, which will show you what are my present crude ideas upon the subject of Ireland.—Yours faithfully,
His letter to Smith is as follows:—
MELVILLE, 30th October 1779.
DEAR SIR—I received the enclosed last night from Mr. Eden. The questions he puts would require a Volume to answer them in place of a Letter. Think of it, however, and let me have your ideas upon it. For my own part I confess myself little alarmed about what others seem so much alarmed. I doubt much if a free trade to Ireland is so very much to be dreaded. There is trade enough in the World for the Industry both of Britain and Ireland, and if two or three places either in South or North Britain should suffer some damage, which, by the bye, will be very gradual, from the loss of their monopoly, that is a very small consideration in the general scale and policy of the country. The only thing to be guarded against is the people in Ireland being able to undersell us in foreign mercates from the want of taxes and the cheapness of Labour. But a wise statesman will be able to regulate that by proper distribution of taxes upon the materials and commodities of the respective Countrys. I believe a Union would be best if it can be accomplished; if not the Irish Parliament might be managed by the proper distribution of the Loaves and Fishes, so that the Legislatures of the two countrys may act in union together. In short, it has long appeared to me that the bearing down of Ireland was in truth bearing down a substantial part of the Naval and Military strength of our own Country. Indeed, it has often shocked me in the House of Commons for these two years past, when anything was hinted in favour of Ireland by friends of giving them only the benefit of making the most of what their soil and climate afforded them, to hear it received as a sufficient answer that a town in England or Scotland would be hurt by such an Indulgence. This kind of reasoning will no longer do. But I find, in place of asking yours, I am giving you my opinion. So adieu.—Yours sincerely,
To this manly, but somewhat inconsistent letter, acknowledging the full right of a people to make the most of what their soil and climate afforded, but yet afraid to give them the whole advantage of their cheapness of labour, Smith sent the following reply, probably on the 1st of November:—
MY DEAR LORD*51—I am very happy to find that Your Lordship's opinion concerning the circumstance of granting a free trade to Ireland coincides so perfectly with my own.
I cannot believe that the manufacturers of Great Britain can for a century to come suffer much from the Rivalship of those of Ireland, even though the Irish should be indulged in a free trade. Ireland has neither the skill nor the stock which would enable Her to rival England, and tho' both may be acquired in time, to acquire them completely will require the opperation of little less than a Century. Ireland has neither coal nor wood; the former seems to have been denied to her by nature; and though her Soil and Climate are perfectly suited for raising the Latter, yet to raise it to the same degree as in England will require more than a Century. I perfectly agree with your Lordship too that to Crush the Industry of so great and so fine a Province of the Empire in order to favour the monopoly of some particular Towns in Scotland or England is equally injurious and impolitic. The general opulence and improvement of Ireland must certainly, under proper management, afford much greater Resources to Government than can ever be drawn from a few mercantile or manufacturing Towns.
Till the Irish Parliament sends over the Heads of their proposed Bill, it may perhaps be uncertain what they understand by a Free Trade.
They may perhaps understand by it no more than the power of exporting their own produce to the foreign country where they can find the best mercate. Nothing can be more just and reasonable than this demand, nor can anything be more unjust and unreasonable than some of the restraints which their Industry in this respect at present labours under. They are prohibited under the heaviest penalties to export Glass to any Country. Wool they can export only to Great Britain. Woolen goods they can export only from certain Ports in their own Country and to certain Ports in Great Britain.
They may mean to demand the Power of importing such goods as they have occasion for from any Country where they can find them cheapest, subject to no other duties and restraints than such as may be imposed by their own Parliament. This freedom, tho' in my opinion perfectly reasonable, will interfere a little with some of our paltry monopolies. Glass, Hops, Foreign Sugars, several sorts of East Indian goods can at present be imported only from Great Britain.
They may mean to demand a free trade to our American and African Plantations, free from the restraints which the 18th of the present King imposed upon it, or at least from some of those restraints, such as the prohibition of exporting thither their own Woolen and Cotton manufactures, Glass, Hatts, Hops, Gunpowder, etc. This freedom, tho' it would interfere with some of our monopolies, I am convinced, would do no harm to Great Britain. It would be reasonable, indeed, that whatever goods were exported from Ireland to these Plantations should be subject to the like duties as those of the same kind exported from England in the terms of the 18th of the present King.
They may mean to demand a free trade to Great Britain, their manufactures and produce when Imported into this country being subjected to no other duties than the like manufactures and produce of our own. Nothing, in my opinion, would be more highly advantageous to both countries than this mutual freedom of trade. It would help to break down that absurd monopoly which we have most absurdly established against ourselves in favour of almost all the different Classes of our own manufacturers.
Whatever the Irish mean to demand in this way, in the present situation of our affairs I should think it madness not to grant it. Whatever they may demand, our manufacturers, unless the leading and principal men among them are properly dealt with beforehand, will probably oppose it. That they may be so dealt with I know from experience, and that it may be done at little expense and with no great trouble. I could even point to some persons who, I think, are fit and likely to deal with them successfully for this purpose. I shall not say more upon this till I see you, which I shall do the first moment I can get out of this Town.
I am much honoured by Mr. Eden's remembrance of me. I beg you will present my most respectful compliments to him, and that you will believe me to be, my dear Lord, most faithfully yours,
1st November 1779.
I cannot explain the allusion in the closing parts of the letter to the writer's personal experience of the case with which the opposition of manufacturers to proposed measures of public policy could be averted by sagacious management and a little expenditure of money. Nor can I say what persons he had in view to recommend as likely to do this work successfully; but his advice seems to imply that he agreed with the political maxim that the opposition of the pocket is best met through the pocket.
He takes no notice of Dundas's suggestion of a union with Great Britain, but we know from the Wealth of Nations that he was a strong advocate of a union—not, of course, on Dundas's ground that a union would better enable the English Parliament to counteract the effects of the competition of Irish pauper labour, but for a reason which will sound curiously perhaps in the middle of our present agitations, that a union would deliver the Irish people from the tyranny of an oppressive aristocracy, which was the great cause of that kingdom being then divided into "two hostile nations," to use his words to Lord Carlisle, "the oppressors and the oppressed." He avers in the Wealth of Nations that "without a union with Great Britain the inhabitants of Ireland are not likely for many ages to consider themselves one people."*52
Notes for this chapter
The Lord Advocate is usually addressed as My Lord.
Book V. chap. iii.
End of Notes
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