AWARD OF THE FISHERY COMMISSION 1625 



Mill says in another passage, in volume 2, page 397 : 



We may suppose two islan 's, which, being alike in extent, in natural fertility, and 

 industrial advancement, have up to a certaiu time been equal in population and capi- 

 tal, and have had equal rentals, and the same price of corn. Let us imagine a tithe 

 imposed in one of these islands, but not in the other. There will be immediately a 

 difference in the price of corn, and therefore, probably, in profits. 



I am almost through with this tediousness, but there is a good Scotch 

 book on political economy, by John McDonald, of Edinburgh, published 

 in 1871 and we have always had sound political economy from Scot- 

 land from which I must read a few lines : 



In the third place [McDonald says, on page 351], it may be possible to impose custom 

 duties which will permanently be paid, either wholly or partly, not by the consumers 

 but by the importers or producers. Assume that we draw our stock of sugar from a 

 country engaged in the growth of sugar, and capable of selling it with profit to us 

 gome shillings cheaper than any other country can, the former will of course sell the 

 BDgars to us at a price slightly below what would attract other competi r ors. Impose 

 a duty of some shillings a cwt., without altogether destroying the peculiar advantages 

 of the trade, while we will pay no dearer for our sugar, the importers will pay the tax 

 at the expense of their profits. If we add to these considerations the difficulty of as- 

 certaining the actual incidence of many such taxes, distrust of sharp contrasts between 

 direct and indirect taxes will be inspired. 



Customs duties sometimes fall on the importer, not on the consumer. And if this 

 were a common occurrence, it might seriously impair the doctrine that protective duties 

 are the taxing of the home consumer for the sake of the home producer. But this in- 

 cidence is confined to the following rare circumstances : If the sole market open to the 

 importer of the staple goods of one country is the country imposing the duties. 

 Secondly, if the other market open to him was so distant or otherwise disadvantageous 

 that it would be preferable to pay the tax ; or, thirdly, if the only available place for 

 procuring commodities of vital moment to the importing country, was the country im- 

 posing the duty. Wherever the profits are such as to admit of a diminution without 

 tailing below the usual rate, it may be possible for a country to tax the foreigner 

 (p. 393). 



I was interested some years ago in an article that I found translated 

 from the Revue de Deux Mondes of the 15th of October, 18G9, on "Pro- 

 tection and Free Trade," by a gentleman of the name of Louis Alby. I 

 do not know who he is, but on pages 40 and 41, of the pamphlet, he not 

 only states the doctrine, but he illustrates it : 



The free-traders believe and this is the foundation of their doctrine that when 

 the import duty on an article of foreign merchandise is reduced, this reduction of 

 taxes will at once cause an equal diminution in the price of the merchandise in the 

 market and an equal saving to the purchaser. In theory this consequence is just, in 

 practice it never takes place. If the reduction is considerable, a part, and that far the 

 smallest, profits the consumer; the larger portion is divided between the foreign pro- 

 ducer and the several intermediaries. If the reduction is small, these last entirely 

 absorb it, and the real consumer, he who makes the article undergo its last transform- 

 ation, is in no wise benefited. The real consumer of wheat is neither the miller nor 

 the baker, but he who eats the bread. The real consumer of wool is neither the draper 

 nor the tailor, but he who wears and uses the clothes. 



This discrepancy between the variations of custom-house duties and the selling prices 

 cannot be denied, and since the commercial treaty the experiment has been tried. All 

 prohibitions have been removed and all duties reduced ; but what article is there the 

 price of which has been sensibly lowered for consumption f When economist* de- 

 manded the free importation of foreign cattle, they hoped to see the price of meat 

 lowered, and for the same reason the agriculturists resisted with all their strength. 



As soon as the duties were removed, the graziers from the northern and eastern de- 

 partments hastened to the market on the other side of the frontier; but the sellers 

 were on their guard and held firm, and, competition assisting them, prices rose instead 

 of falling. All the advantage of the reduction of duty was for foreign raisers of cat- 

 tle, and meat is dearer than ever. The same result followed in reference to the wools 

 of Algiers ; and on this point I can give the opinion of the head of one of the oldest 

 houses in Marseilles, an enemy, moreover, to protection, like all the merchants of sea- 

 port towns : " When the duties on Algerian wools were removed," he paid to me. "ir 

 supposed that this u-ould cause wool to sell cheaper in France, but the contrary happened. 

 Tlit-re was more eagerness for purchasing in Africa; there was more competition, aud 

 the difference in the duties was employed in paying more for the wool to make sure of 



