162 ADAM SMITH. 



only balance to be considered by rational men as affect- 

 ing the progress of any nation's riches, is that of produc- 

 tion and consumption: when it consumes more goods 

 than it produces, it will be impoverished; when it con- 

 sumes less, it will be enriched by accumulation. But 

 this accumulation will be going on, and the national 

 wealth be increasing, while the exportation of specie by 

 the balance of trade is going on during the whole time. 

 For half a century together this appears to have gone on 

 in the North American States before the Revolution; 

 and yet, though the currency was almost entirely paper, 

 no part of the world had made greater or more rapid 

 strides towards wealth and prosperity. 



iii. It does not appear that drawbacks are exposed to 

 serious objections upon any principle. If any commodity 

 is taxed at home, and cannot be re-exported with the 

 weight of the duty upon it, there seems no reason why 

 the whole or the greater part of the tax or duty should 

 not be repaid upon the exportation. Care must, of 

 course, be taken to prevent clandestinely retaining or 

 re-landing the goods for home consumption; and Dr. 

 Smith considers the exportation to our colonies, which 

 can only receive goods through us, as not a case for 

 drawback, because the impost must be paid by the 

 colonists, if they want the goods. 



iv. Bounties stand in a very different predicament, if 

 we take care to distinguish between real and only appa- 

 rent bounties. A real bounty is the payment of some- 

 thing to encourage the exportation of goods not subject 

 to any such impost at home. An apparent bounty is 

 the payment of something to encourage the exportation 

 of goods which are either directly subject to a tax, or 



