The Rise of Protection in England, 1689-1786

Author(s): Ralph Davis

Source: The Economic History Review, New Series, Vol. 19, No. 2 (1966), pp. 306-317
Published by: Wiley on behalf of the Economic History Society
Stable URL: http://www.jstor.org/stable/2592254 .
Accessed: 05/01/2014 11:43

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp

.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact [email protected].

Wiley and Economic History Society are collaborating with JSTOR to digitize, preserve and extend access to
The Economic History Review.

http://www.jstor.org

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
 The Rise of Protection
in England,I689-I7861
BY RALPH DAVIS

The system of protective duties which was swept away by the Free Trade
agitation of the nineteenth century was not, as many people believe, something
ancient, encrusted with tradition, sacred by virtue of its antiquity. On the
contrary, its beginnings date only from the very last years of the seventeenth
century. Nor was it a product of the period when mercantilist argument was in
full flood, for it grew up when, for the first time, a modest flow of works was
appearing that extolled in one way or another the virtues of free trade. The
i690's were not, as Ashley once suggested,2 the years when the turn towards
free trade began; they were the years when protection began.
There is a considerable literature on the eighteenth century customs system.
The minute details of its administration have been explained by Atton and
Holland, Hall, and Hoon,3 but the broader field of customs policy has been
almost ignored except by writers concerned with studying the death throes of
mercantilist thought, taking their cues from the economic literature of the day.
But customs collection was a sphere of public action, in which the intentions of
government were expressed in detailed legislation, and the springs of policy
may be seen the more clearly by looking at what was actually done - at what
legislators were induced by ministers to enact, and at what officials enforced
- rather than at the writings of pamphleteers at varying removes from influence
on policy. Examination of the legislation itself brings out an unfamiliar picture
of government motives: one revealing the influence neither of economists'
theories nor ministers' long-term commercial policies, but simply of urgent
fiscal needs. The strongest influence on the creation of a new tariff structure
at the end of the seventeenth century was the need of government for money to
pay for costly wars; tariffs were the response to these needs, rather than the im-
plementation of a policy derived from economic theories of that or any otherday.
This fiscal legislation pushed up the general level of customs duties from al-
most negligible to very substantial proportions, by a series of steps accomplished
within a few years of William III's accession in i688. The general level of duties
on import trade was roughly quadrupled between i690 and I 704, and it may
be argued not only that all the changes in tariff policy in the course of the
eighteenth century were in total less important than this rapid succession of
increases, but also that later changes arose as much from the new tariff situation
1 Based on a paper read to the Annual Conference of the Economic History Society at the University
of Sussex, April I 965. I am greatly indebted to Prof. A. W. Coats for valuable criticisms of the original
draft.
2 W. J. Ashley, 'The Tory Origins of Free Trade Policy', Surveys,Historicand Economic( o900).
3 H. Atton and H. H. Holland, The King's Customs( I908); H. Hall, A Historyof the Custom-Revenue in
England (i885); E. E. Hoon, The Organisationof the EnglishCustomsSystem,i696-I786 (New York, I938).

306

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
 PROTECTION 307
created in these few brief years as they did from the suggestions of economic
theory or from the course of development of British industry. For this abrupt
increase in the general tariff level gave rise to quite unforeseen consequences.
It exposed, in numbers of individual trades, problems which had been un-
important when duties were low. These problems were dealt with by a series
of exemptions and modifications designed to temper the wind of high taxation
to particularly tender interests. Such negative responses to a new tax environ-
ment, reliefs from an increasingly high level of general taxation on trade, were
secured through lobbying by the interests involved, and this process led easily
and naturally to the organization of pressures for a further series of measures
that would contribute in positive ways to the promotion of industrial interests;
measures in the nature of bounties and discriminatory import duties. All these
modifications, exemptions, bounties, fill the pages of the customs statutes of the
eighteenth century; in total they were important and I shall discuss them; but
despite their notorious and fascinating complexity they are not the things that
matter most. The most important part of customs legislation of the period was
accomplished in three or four lines in half a dozen acts - the successive rises in
the general level of duties. In sum: in the fifteen years after the accession of
William III to the English throne, the English tariff structure was transformed
from a generally low-level, fiscal system into a moderately high-level system
which, though still fiscal in its purposes, had become in practice protective;
and which was then endlessly and minutely modified in ways that added
marginally to this protective element.

II

The old English tariff system, varied only in its details before i690, was a
simple one designed for producing revenue. There were still in force, it is true,
several very ancient statutes which had banned the import of a considerable
number of manufactured articles; notably those of I 464 prohibiting such things
as tennis balls, girdles, dripping pans, buskins and copper rings, and of I563
which added bits, daggers, harness, pins and a few other accessories of the good
life to the banned list. The only one of these old measures which ever had much
importance was Edward III's statute of I337 which prohibited the import of
woollen cloth; and whatever the significance of this in the fourteenth century,
we cannot suppose seventeenth-century trade would have been very different
without it.1 These surviving relics of ancient legislation had little relevance to
the situation of the Stuart age, and the appearance of continuing industrial
protection which they present is a false one.
The chief element in the old tariff structure, as it stood at the accession of
William III, was a tax of 5 per cent on the value of most imports and exports.2
The value on which the duty was calculated was not the true cost but an
officially fixed value (generally laid down in a public document known as the
1 It was still in force, quoted by the customs manuals of the eighteenth century as prohibiting cloth
imports.
2 Its basis was the first grant of customs duties to Charles II in i66o (I2 Charles II, c. 4).

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
308 RALPH DAVIS

Book of Rates),1 so that the apparently ad valorem duty was in fact a fixed duty.
Two important categories of goods did not pay this general 5 per cent duty.
One comprised those kinds of exported woollen goods that were still known as
'old draperies', then constituting nearly half of all exports of woollens; these
bore a very slight specific duty. The other was imported wines and spirits,
which bore duties that already, in I688, accounted for well over half the London
wholesalers' selling prices. Two further observations are necessary. The valu-
ation of commodities for the purpose of the 5 per cent duty was not particularly
accurate, but this had little effect on trade except in the case of tobacco, which
was deliberately valued excessively so as to impose on the British colonial
product a true level of duty, in relation to its real cost, of around ioo per cent.
And, in i685, additional duties had been imposed on imported wine, sugar and
tobacco.2
The absence of any idea of industrial protection in this tariff is evidenced by
the fact that the high duties were on wine and brandy, which could not be
produced in England; and on tobacco, the production of which was forbidden
in order that customs revenue from its import should not be impaired. These
were taxed because they were luxuries; anyone who could afford to buy them
was evidently owner of a purse deep enough for the state to dip into. The only
important element of discrimination in this tariff system is seen in the prohibi-
tive duties on foreign, as compared with colonial, sugar and tobacco, brought
about by totally unrealistic valuation of the foreign products. This was a quid
pro quogiven to the colonists, who were prevented by the Navigation Acts from
sending their goods directly to European markets; what they lost by the Navi-
gation Acts they were to be handsomely compensated for by being given a near-
monopoly of the English market. It was a benefit to colonists, not to inhabitants
of England. In a similar category was the exemption of Irish linen imports from
duty after i696,3 in some degree a compensation to the Irish for the prohibition
placed, in English interests, upon the export of Irish woollen goods to foreign
countries.4
In the tariff system which William III inherited there was little direct
protection for English industry,5 just as there was little or no manipulation
of the balance of payments through tariff measures. Indeed, to realize how
little William III's predecessors had acted in pursuance of abstract mercantilist
principles it is only necessary to look at the background of the two important
deliberately protective measures of his reign. The East India trade had been
criticized since the early years of the seventeenth century because it was well
known - and in this case accurately known - to be a great exporter of bullion
1 The Book of Rates in operation at this time was printed as a schedule to I 2 Charles II, C. 4. A
supplementary schedule was attached to I I Geo. I, c. 7.
2 I James II, c. 3 and 4.
3 7 & 8 William III, c. 39 relieved Irish linen of duties, but (presumably by oversight) in the act of
I696 imposing a new general 5 per cent duty Irish linen was not excepted; consequently it paid this
5 per cent until relieved in 1703 by I Anne (2), c. 8.
4 Io William III, c. I6.
5 There was some agricultural protection, in the prohibitions of the import of certain livestock
products from Ireland; and this was reinforced in I 690 by the enactment of a subsidy on the export of
corn.

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
 PROTECTION 309
to pay for all kinds of mainly luxury imports. Yet the repeated attacks on the
East India Company, on general mercantilist grounds, produced no results at
all; indeed, the limitation on its export of bullion to the East, imposed at the
beginning of the trade, was lifted in i662. Only in the very last years of the
century, when political changes had temporarily broken the Company's influ-
ence on government, and the trade had been thrown open to all comers - in the
expectation of expanding it - only then did a particularpressure by a particular
interest, and this the woollen industry, the most powerful of English commercial
interests, produce protective measures. The threat to the woollen industry from
cheap Indian and Chinese textiles, increasingly remarked on from the I 68o's,
led in i690 to the imposition on them of a special duty of 20 per cent 1 and in
I70I to a prohibition,2 under an act entitled 'An Act for the more effective
employing the Poor by incourageing the Manufactures of this Kingdom' of the
import of these textiles for English use. Similar prohibitions were being imposed
around this time, in most European countries. This was the first important
modern example of a deliberate industrial protection - though by an old-
fashioned prohibition, not a high tariff - and, if its practical effects were
limited by smuggling, it certainly aided the development of native cotton and
silk industries. An immediate threat to an industry which was generally re-
garded as the mainstay of English prosperity had led to a protectionist measure
in this trade, after a century's writing of hostile economic literature on general
lines had failed to influence policy.
Even more important in its protective effect was the imposition of prohibi-
tive duties on French goods in I693-96,3 which were kept in force for nearly
a century. But this, like the temporary prohibition of French goods that had
preceded it in i678 and i689 4 was less an economic than a political measure,
deriving its main support from the fear of France as the rising aggressive power
of Europe. At the time the prohibition was first imposed it protected no im-
portant industrial interest; even the false statistics which were published at the
time 5 showed that France sent wine, brandy and fine linens rather than goo ds of
kinds which were then produced in England. But while this was not a genuine
piece of economic policy it did have important effects, for under its special
protection new branches of British industry grew up which substituted British
silks, linens and white paper for the produce of France. When it was proposed
in I7I3 to abolish these prohibitive duties as part of the general peace settle-
ment, new vested interests had grown up and protectionist ideas had developed,
and between them may have exerted the decisive pressures that caused a House
of Commons that was politically oriented towards making a long-term settle-
ment with France to throw out these commercial clauses of the Treaty of
1 2 William & Mary (2), C. 4. Even in this case protection was entangled with the seeking of revenue;
this duty was imposed as part of a large general measure of war taxation.
2 I I William III, c. IO.
3 In the general taxation measure of 4 William & Mary, c. 5, and the special act of 7 & 8 William III,
C. 20. These imposed two duties, each of 25 per cent in addition to the regular customs duties, on French
goods.
4 29 & 30 Charles II, c. I and I William & Mary, c. 34.
5 B.M. Add. MSS. 36,785. On their falseness, see R. Davis, 'English Foreign Trade, i66o-I700',
Econ. Hist. Rev. n.s. VII (I954), I54-8.

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
3I0 RALPH DAVIS

Utrecht. Even so, economic motives only tipped a balance, in I7I3, in which
the main weight of argument on both sides still derived from political attitudes
to French power. After the long series of Anglo-French wars ended in I 783,
with honours even enough to abate the motives of fear and hatred, the special
duties were at length withdrawn in accordance with the terms of the Eden
Treaty of I786.
These two special cases, dealt with by special means, both bear witness in
their different ways to the absence of any general protectionist element in the
tariff system inherited by William III. In considering whether such an element
emerged in his reign, there is eloquent evidence in the new customs legislation
of the early I 690's. The government was in urgent need of money to fight an
enormously expensive war. Providentially, new political conditions at home
had relieved it from fears that tampering with the tax structure would under-
mine the delicate relation between Crown and Parliament. Looking for means to
augment the revenue in these new circumstances, it at once lighted on possibili-
ties offered by the low rates at which customs duties were levied. In conse-
quence two early measures of the new administration, in I690 and I693, for
.... the necessary defence of your Realms the perfect reduceing of Ireland and
the effectual prosecution of the warr against France',1 imposed additional
import duties, generally at rates of 5 or Io per cent, but occasionally at 20 per
cent, on long lists of commodities, affecting about two-thirds of the total value
of imports. Nearly all important manufactured imports were given extra duties,
whether or not they competed with English industries. Most raw materials for
industry, some 6o per cent of all raw material imports in value, were given
heavier duties to bear - and they included many of the vital dyestuffs of the
woollen industry. And of the foodstuffs which did not already (like wine,
tobacco and sugar) bear a special tax burden, well over two-thirds in value were
given additional duties by these two acts. Some discrimination was certainly
exercised, but it is evident that much the most important criterion for inclusion
among the additionally taxed items of I690 and I693 was, will this bring in
money? There is no sign here of deliberate industrial protection.
These two acts raised the level of duties over a wide field, and were the first
in the long series which, in each successive war, raised the tariff barrier higher.
The process continued for well over a century, but its most rapid stage was
during William and Anne's reigns; in addition to the duties just mentioned, the
general 5 per cent level of duty on all ordinary imports were raised to I o per
cent in i6972 and to I5 per cent in I704-5 .3 These measurescreated a real pro-
tection for British industry; they provided the foundation, and most of the
superstructure as well, of the tariff wall that nineteenth-century Free Trade
demolished.
1 2 Will. & Mary (2), C. 4, and 4 Will. & Mary, c. 5.
2 8 & 9 William III, c. 24, a duty granted for only two years but extended by 9 William III, C. 23.
The Act declared the Commons were 'desirous to raise so much Money as may be sufficient for the
Defence of your Majesties Realmes and for carrying on the Warr against France'. In this and subsequent
acts, the specific duties on wines and spirits were raised at least correspondingly with the ad valorem
duties.
3 2 & 3 Anne, c. I 8, and 3 & 4 Anne, c. 3. There were many further additions to duties on particular
commodities during Anne's reign, but these were the counterparts of internal excises on the same things.

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
 PROTECTION 3II

Whatever the anomalies of the old tariff system had been, they could not
have very important effects on trade when most commodities were only taxed
at 5 per cent. The raising of levels of import duty to at least i5 per cent and on
most goods to 20-25 per cent or more, to levels that could make great difficulties
for trade, magnified the anomalies so that they could no longer be ignored.
One of the first anomalies to be highlighted by the new tariff arrangements
was the duty on exports. It may be thought surprising that in seventeenth-
century England, where every bookstall groaned under the weight of books
and pamphlets expressing the urgency of the need to secure a favourable
balance of payments, exports continued to be taxed at all. Yet, as we have seen,
they still bore a small duty, as they had done for over three centuries. To leave
untouched an old duty, however, was one thing; to set about deliberately
raising it was another, and when the general level of 5 per cent duties was
raised to io per cent in i697, exports for the first time came under scrutiny
and secured inequality of treatment; their duty was left unaltered at 5 per cent.
This was the first real break in the principle of the purely fiscal general tariff.
And once the anomaly of export taxes had been spotlighted through this need
to consider their exclusion from a general increase, the way was open to further
change. Criticisms of export duties, notably those on woollens, began to appear1
- as they had not, I think, before the nineties - and a much more deliberate,
positive, step was taken in I700, with the abolition of all export duties upon
woollen cloth. The enactment justifying this measure declared 'The wealth and
Prosperity of this Kingdom doth in a great measure depend on the Improve-
ment of its woollen Manufactures and the profitable Trade carried on by the
Exportation of the same'.2 By I 707 the House of Commons was ready to pass a
resolution that 'It will be for the advantage of the Trade of this Kingdom that
the Duties upon all Goods exported, be not continued for any longer term than
are already granted by Act of Parliament'.3 But though minor exemptions from
export duties were made in the next few years, the general abolition of them
had to await Walpole's great customs reform of I7722.4
Secondly, the taxation of the raw materials of British industry, which was
not of much consequence when the tax was only 5 per cent, attracted cries of
anguish as this level was raised. After I704 all raw materials bore i5 per cent
duty, and a great many of them 25 per cent or more. There were many pressures
for adjustment of these duties, but in fact little was done. The textile industries
were given an early concession in the abolition of duty on cochineal and some
minor dyestuffs in I714 5 and a lowering of duty on Turkish silk and mohair
yarn in I7i8.6 Again, the Walpole measures of I722 were more substantial,
removing all duties from the remaining dyestuffs, and from a few odd articles
such as rags used in paper-making.
Another anomaly brought into the open by general tariff increases was in the
1 E.g. J. Cary, An Essay on the State of England (i695); Anon. Dum SpiroSpero(1700).
2 I I William III, c. 20.
3 House of CommonsJournals, XV, 351.
4 8 Geo. I, c. I .
5 I Geo. I (2), C. 40.
6 4 Geo. I, c. 7.

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
3I2 RALPH DAVIS

matter of drawback, that is, the repayment of customs duties when imported
goods that had paid duty were re-exported. This is a complicated subject; but
generally speaking half of the old pre- I 688 duty, and the whole of all subsequent
duties, would be repaid on the re-export of most goods. That is, in I 720 a com-
modity paying 20 per cent duty would get seven-eights of this back on re-export.
Drawbacks, in association with the new level of import duties, specifically
brought up the matter of industrial protection. If imported raw materials were
re-exported, the foreigner living in a low-duty country might get them cheaper
than the Englishman - if they were goods with low transport costs in relation to
their value. This argument had relevance only to goods for which Britain was
an important entrepot - notably colonial and Eastern goods for Europe, and
European goods for the colonies - otherwise the foreigner could import them
directly from the source. It was a particularly strong argument before export
taxes were abolished in I 722; thus it was complained in I708 that foreign
cordage re-exported to the colonies paid only 4d. a cwt. duty after drawback,
while English-made cordage paid 6d. a cwt. duty on export - and its raw ma-
terial, hemp, had already borne a heavy tax when it came into the country.1
The general complaints about drawbacks on raw materials were loudest in
relation to dyestuffs, and when the duties on the import of these were abolished
in I 722, ending this particular problem, the government even went out of its
way to put a special 21 per cent duty on their re-export.2
Another issue arising from drawback specifically concerned colonial trade.
The Navigation Acts of i66o and onward fulfilled the purpose of confining all
important trade with the colonies to Britain, and while foreign goods could go
to the colonies through Britain, the indirect route and the British customs
duties would add to the costs. The rising level of customs duties in Britain did
not in fact affect the situation, for new duties nearly always carried full draw-
back. But the very existence of these higher duties on goods coming into Britain
offered a demonstration of the potential measure of protection for British goods
in colonial trade, and one which was not lost on interested parties. In the field
of colonial trade, where the British trader had always had privileges and the
British industrialist special advantages, explicit demands emerged, time after
time, for strengthening the protection of particular industries. These demands
were generally to the effect that the British producer should be given the full
protection in colonial markets which higher levels of duty were giving him in
the home market, by the abolition of drawback on the re-export of particular
foreign goods to the colonies. Evidence before the inquiry into the linen industry
in I 738, for example, repeatedly suggested that suppression of drawback on
foreign linens would raise their price in the colonies by i2 per cent and turn
the advantage of price to the British product.3 The first big success for this line
of argument, however, had been won as early as I 705, when drawback had
been removed from the re-export of foreign iron and ironware to the colonies.4

1 House of CommonsJournals, XV, 51 1.

2 8 Geo. I, c. I5-
3 House of Commons Journals, XXIII, 76-8I.
4 2 & 3 Anne, c. I 8 ('For the Encouragement of the iron Manufacture of this Kingdom'). See also

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
 PROTECTION 3I3

In a number of cases of this kind we see issues being raised, comparisons being
drawn, advantages for special interests being weighed and pursued, which
would have been too trivial to attract attention in the seventeenth century, but
which the ever-increasing rates of duty were giving substance to in the eigh-
teenth.
Walpole's customs reform of I722 extended towards their logical limits some
of the main lines of the protectionist system which had grown up haphazardly.
His reforming measure embraced great simplifications of the tariff, abolishing
nearly all export duties, and allowing free entry to imports of dyestuffs and a
few minor materials for industry, but it left the levels of import duties otherwise
unchanged at the rates established by the legislation of William III and Anne.
It consolidated and rationalized the results of thirty-two years of piecemeal,
unco-ordinated concessions to protectionism;1 by I722 industrial protection
had plainly arrived and been recognized. Economic historians should under-
stand better than most the sentiments of Walpole's eighteenth-century bio-
grapher:
None of the English historians have paid a due tribute of applause to these
beneficial exertions of ministerial capacity; while some of them enter, with a
tedious minuteness, into a detail of foreign transactions, and echo from one to
the other the never failing topic of Hanoverian influence; while they dwell with
malignant pleasure on those parts of his conduct, which in their opinion, prove
the ascendancy of influence and corruption; while they respect the speeches
and reproaches of opposition, they suffer the salutary regulations, which ought
to render the name of Walpole dear to every Englishman, to be principally
confined to books of rates and taxes, and only to be mentioned by commercial
writers.2

III

After I722 the story is one of extension of protection already created. It was
strengthened in each war by further additions to the basic level of import
duties, made for fiscal reasons but having wholly protective effects in this new
tariff structure. In I747 another 5 per cent duty was added,3 and in I759
another 5 per cent 4- making a regular 25 per cent, added to which there was
for most goods, the 5-20 per cent of i690 or i693. The barrier was now be-
coming a high one.5
In addition to this, however, in the half century between Walpole's reforms
and the American war, many other changes of an explicitly protectionist
character - though many of them of only small importance - were slowly being
introduced. It was worth while for particular interest to devote a good deal of
9 Anne, c. 6 (iron and steel). Similarly drawback was removed from all re-exports of foreign cordage
from 1708 (6 Anne, c. 73).
1 8 Geo. I, c. 15.
2 W. Coxe, Memoirs ... of Sir RobertWalpole(I798), I, i 64-5.
3 2i Geo. II, c. 2.
4 32 Geo. II, C. io.
5 A measure of I779 increased confusion by increasing all existing duties by 5 per cent (i9 Geo. III,
C. 25).

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
3I4 RALPH DAVIS

effort to promoting such changes, because the gains to be secured by exemptions

from raw material tariffs at the new levels were very substantial. Often the
effort was put forth in vain; but each exemption granted to one interest made
it more difficult to resist similar pressures from others. The textile industries
made the most powerful bids for favour. Thus the duties on flax were abolished
in I 732,1 on Irish woollen yarn in I 740,2 those on linen yarn were reduced in
I752 3 and abolished in I 756,4 and the raw silk duty abolished in I 765 .5Under
similar pressure export bounties began - the first important ones in I722 on
English silk wares (on the excuse that imported raw and thrown silk bore a
duty) 6 and in I 732 on sailcloth (but by this time the government was ready to
accompany an export bounty by the abolition of the import duty on the raw
material, flax) ;7 in I742 on linen sent to certain foreign and colonial desti-
nations,8 extended in I 756.9
These measures and lesser ones of the same kind are thinly scattered over the
forty years after Walpole's customs reforms. If there was a powerful wave of
deliberate and conscious protectionism, a time when the building up of the
protective system showed signs of becoming a general and recognized policy,
it was in the decade in which Adam Smith was collecting material and writing
his great blast against commercial regulation, The Wealth of Nations. Between
I 763 and I 776 there was a concentration of new protective legislation. There
were numbers of new prohibitions on import - of foreign silk and leather gloves,
of stockings, velvets and other silk goods, along with increased duties on linens
and some kinds of paper.lO On the other side were reductions of duty on a new
range of raw materials - beaver skins, and raw silk. It may be significant in this
context that these years also saw the well-known prohibition on the export of
textile machinery and tools, in I774.11
Adam Smith's father, who in the later years of his life was a customs officer,
presided over the change to protection in the Scottish port of Kirkaldy from
I713 to I723. Adam Smith himself, the flayer of mercantilism, was born in I723
when protection had only just been firmly established as a comprehensive and
more or less acknowledged system. At the time he was writing his great work the
system was well developed, was extending and - still primarily under fiscal
influences - was to be strengthened further in the war years at the end of the
eighteenth century, though the real burden was then being offset by rising
prices. Pitt's great Customs Act of I787 simply codified a mass of legislation
which was threatening to become ineffective through sheer complexity: 'The

1 4 Geo.II, c. 27.
2 Geo. II, C. 21.
12
3 24 Geo. II, c. 46.
4 29 Geo. II, c. I5.
5 6 Geo. III, c. 28.
6 8 Geo. I, c. I5-
7 4 Geo. II, c. 27.
8 15 Geo. II, C. 29.
9 29 Geo. II, c. 15.
10 Silks and velvets: 3 Geo. III, c. 2i and 5 Geo. III, C. 48. Leather gloves: 6 Geo. III, c. i9. Linens:
7 Geo. III, c. 28 and 58. Paper: I3 Geo. III, c. 6i.
11 14Geo. III, c. 7i.

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
 PROTECTION 3I5

present Mode of charging and computing the several Duties of Customs and
Excise... is in many Instances intricate and complicated and productive of
much Embarrassment to the Persons who pay the same, as well as of great
Perplexity in the Accounts of the Public Revenue'.1 It left the level of duties,
and the various exemptions, prohibitions, drawbacks and bounties unchanged.

IV
It is difficult to judge the influence on trade of this transformation of the
customs system. The abolition of export duties cannot have been altogether
without effects; but no boom, great or small, in the export of woollens followed
the abolition of duty on them in I700, and no sharp rise in general exports
followed the general repeal of duties in I 722. But these export duties were small.
Those big movements of import trade which the customs officials did record
were slow and owed much to other forces besides changes in duty. The great
expanding imports were colonial sugar, tobacco, rice, coffee and other foods
and drinks, and these flooded in, despite the duties, to the full extent of the
colonists' capacity to produce them. Demand curves were shifting under the
influence of changes in incomes and in tastes, and the results of changing costs
of supply to the consumer are obscured. Duties and the changes in them imposed
no check; the consumer paid what he was asked. Extremity might drive trade
into the hands of smugglers - prohibited silks and cambrics, and heavily taxed
wine, went into such channels - but much wine was imported paying the full
duties of several hundred per cent of its first cost, and the great part of tobacco
consumption seems to have been imported legally despite simiilar duties. The
import of sugar, which became the greatest of eighteenth-century imports, was
increased fourfold between the I 66o's and the I 760's, though it became a more
costly commodity in the producing islands, though the duty on it went up
from IS. 4d. to 45. Iod. a hundredweight, and though its price in London went
up rapidly through the middle decades of the eighteenth century. Colonial
food, drink, and tobacco, along with wine, provided much the greatest part of
the customs revenue in the eighteenth century. The effects of tariffs on the
import of raw materials are equally uncertain. Nearly half the total value of
raw materials imported in the I 770's came under categories for which duties
had been specially reduced or abolished by individual protectionist measures
during the preceding half-century - notably silk, flax and textile yarns - and it
is possible that the industries concerned, and therefore these imports, would not
have grown as fast if those special exemptions had not been given. But British
industry also took growing amounts of many heavily taxed raw materials, such
as timber, hemp and iron. The duty on imported iron, for example, went up
in a series of steps from under ten shillings a ton in I 688 to 48s. 6d. a ton after
I 759. Thus it was coming to bear a tax burden that was really heavy in relation
to its landed price of well under (io a ton; yet the import of iron continued to
mount, despite the high and increasing duties, until very late in the century,
1 27 Geo. III, c. 13.

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
3i6 RALPH DAVIS

while it was not until after mid-century that domestic production began to grow
at all rapidly.
The inelasticity of demand which these facts indicate was, of course, essential
to the working of the fiscal system. These were still, on the whole, revenue tariffs,
and if their weight had seriously depressed the volume of trade in the commodi-
ties concerned the prime object of raising the tariff level would have been de-
feated. But this did not happen, at least in the case of any major food or raw
material import. Even wine, the legal import of which did fall sharply under
the burden of enormous taxes, produced a far greater total revenue to the
Crown in, say, I772, when I5,000 tons were imported, than it did a hundred
years earlier when legal imports were twice as large. Indeed, I have seen no
indication that the possibility of higher duties producing a declining yield ever
entered the head of any official. Most of the imported raw materials and
foodstuffs were non-substitutable, though we might have expected the rising
duty on iron to bring forward more British producers, and the taxation of
beverages to limit the rise in their use.
The products of industry, on the other hand, could be reproduced in
England - apart from some high-quality luxuries such as cambrics and lace -
and the marked turn towards a greater industrial self-sufficiency, which the
trade statistics make plain, owed a good deal to protection of industry's markets
at home and in the colonies. Because the changes in tariffs were taken in a
series of small steps their total effect is obscured, but their overall protective
effect was probably far from negligible. Certainly the linen industry in England
and Scotland was slowly and painfully built up and the heavy imports of
foreign linens for British and colonial use greatly reduced, with the support of a
long series of measures of protection, export subsidy, and reduction of duties
on its raw materials. The silk industry established itself behind the barrier of
the special duties against import from France, and it, too, was further assisted
in the eighteenth century by a series of specific tariff adjustments in its favour.
As woollens was the great British industry, so linen and silk were the great
textile industries of continental Europe, old and fully developed, which had
captured the British market in the sixteenth and seventeenth centuries and
might well have held it into the eighteenth if the old conditions of nearly-free
trade had been continued. Foreign linen was in fact very hard-pressed in
British and colonial markets, by duties and bounties, and both linen and silk
were raised to great industries in eighteenth-century Britain; both are fairly
clear examples of infant industries reared to maturity under protection. But it
was the eighteenth century, when mercantilist ideas were being challenged,
that raised them; and they were first protected most effectively by tariffs
created for fiscal purposes, and by politically inspired anti-French legislation.
Deliberate economic policy, fostered by their own agitation, only gradually
secured for these industries some modifications in the tariff system that assisted
them further.I
1 Thus the silk industry secured a temporary act in I766 prohibiting the import of foreign silks
(5 Geo. III, c. i8). Yet it is hard to see what protection this was expected to add to the long-established
prohibition of oriental silks, and the old duties on French silks which added about two-thirds to their
imported price.

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions
 PROTECTION 3I7

Even so, the demand for foreign linens was sufficiently inelastic to ensure that
the customs revenue from the much reduced import of them in the I 7 70's was
far higher than it had been before duties began to be raised after i690. The
imports of other manufactures were never large enough for the duties on them
to make a great contribution to revenue. If protection and revenue needs had
ever clashed very seriously, it is by no means certain which would have won;
but with the exception of the largely politically inspired prohibitive duties on
trade with France, none of the special protective measures very seriously
affected the revenue. Industrial protection was, on the whole, a side-effect of the
raising of revenue; it was secured alongside, not in conflict with, the success of
fiscal policy.
Industrial protection became possible, and became a reality, during the
decades after i689, for a number of reasons. Political rivalry with a great
industrial power, France, favoured discrimination against its products; a
number of industries were arguing with louder political voices as they grew, and
each concession to one of them was a precedent for concession to others; such
popular economic ideas as were in circulation, were, as usual, a generation or
two behind the leaders of economic thought and firmly favoured protection.
The new relation between Crown and Parliament made possible new ar-
rangements for taxation at a time when war demanded that taxes should be
levied on an entirely new scale of magnitude, and wartime borrowing required
these taxes to be largely continued in peace. Peacetime taxation never reached
two millions before I688; in I786 it was fifteen millions. The impact of greater
taxation was felt everywhere, and not least in the field of overseas trade. To an
important extent, protection was the incidental result of actions taken to meet
the financial needs of government. Though much of industry had no need of
protection by the time Adam Smith wrote his masterpiece; though the minds of
statesmen gradually became permeated, as a result of the work of Smith and his
successors, by new, Free Trade ideas, reform was long in coming, because the
needs of government remained. The dismantling of the protective system in the
second quarter of the nineteenth century was, unlike its creation more than a
hundred years earlier, a deliberate act of policy; but it was one that could
hardly have been carried to completion if the revenue problem had not been
solved by that most salutary nineteenth-century innovation, the Income Tax.

Universityof Leicester

This content downloaded from 103.242.78.101 on Sun, 5 Jan 2014 11:43:58 AM

All use subject to JSTOR Terms and Conditions