Ch. xi. Bounties upon Exportatio)i. 177 



tation of corn must enlarge the demand for it and 

 encourage its production in the same manner, if 

 not in the same degree, as a bounty upon the ex- 

 portation of any other commodity. 



But it has been urged further, that this in- 

 creased production of corn must necessarily occa- 

 sion permanent cheapness; and a period of con- 

 siderable length, during the first 64 years of the 

 last century, while a bounty was in full operation 

 in this country, has been advanced as a proof of it. 

 In this conclusion, however, it may be reasonably 

 suspected, that an eifect, in its nature temporary, 

 though it may be of some duration, has been 

 mistaken for one which is permanent. 



According to the theory of demand and supply, 

 the bounty might be expected to operate in the 

 following manner : 



It is frequently stated in the Wealth of Nations 

 that a great demand is followed by a great supply ; 

 a great scarcity by a great plenty ; an unusual 

 dearness by an unusual cheapness. A great and 

 indefinite demand is indeed generally found to 

 produce a supply more than proportioned to it. 

 This supply as naturally occasions unusual cheap- 

 ness; but this cheapness, when it comes, must in 

 its turn check the production of the commodity ; 

 and this check, upon the same principle, is apt to 

 continue longer than necessary, and again to oc- 

 casion a return to high prices. 



This appears to be the manner in whicli a 

 bounty upon the exportation of corn, if granted 



VOL. II. N 



