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 and keep down the price of the produce of some other branch of industry—generally speaking, of agriculture—to the prejudice of those who carry it on, and though, if it be really essential to the prosperity of any very important national manufacture, it may happen that those who are injured in the first instance may be eventually indemnified by the superior steadiness of an extensive domestic market, depending on that prosperity; yet in a matter in which there is so much room for nice and difficult combinations, in which such opposite considerations combat each other, prudence seems to dictate that the expedient in question ought to be indulged with a sparing hand.

4.

This has been found one of the most efficacious means of encouraging manufactures, and is in some views the best. Though it has not yet been practiced upon by the Government of the United States (unless the allowance on the exportation of dried and pickled fish and salted meat could be considered as a bounty), and though it is less favored by public opinion than some other modes, its advantages are these:

(1) It is a species of encouragement more positive and direct than any other, and for that very reason has a more immediate tendency to stimulate and uphold new enterprises, increasing the chances of profit and diminishing the risks of loss in the first attempts.

(2) It avoids the inconvenience of a temporary augmentation of price which is incident to some other modes, or it produces it to a less degree, either by making no addition to the charges on the rival foreign articles, as in the case of protecting duties, or by making a smaller addition. The first happens when the fund for the bounty is derived from a different object (which may or may not increase the price of some other article, according to the nature of that object), the second when the fund is derived from the same or a similar object of foreign manufacture. One per cent duty on the foreign article converted into a bounty on the domestic will have an equal effect with a duty of 2 per cent exclusive of such bounty, and the price of the foreign commodity is liable to be raised in the one case m the proportion of 1 per cent; in the other, in that of 2 per cent. Indeed, the bounty, when drawn from another source, is calculated to promote a reduction of price because, without laying any new charge on the foreign article, it serves to introduce a competition with it and to increase the total quantity of the article in the market.

(3) Bounties have not, like high protecting duties, a tendency to produce scarcity. An increase of price is not always the immediate, though where the progress of a domestic manufacture does not counteract a rise it is commonly the ultimate, effect of an additional duty. In the interval between the laying of the duty and the proportional increase of price it may discourage importation by interfering with the profits to be expected from the sale of the article.

(4) Bounties are sometimes not only the best but the only proper expedient for uniting the encouragement of a new object of agriculture with that of a new object of manufacture. It is the interest of the farmer to have the production of the raw material promoted by counteracting the interference of the foreign material of the same kind. It is the interest of the manufacturer to have the material abundant and cheap. If, prior to the domestic production of the