An inquiry into the nature and causes of the wealth of

733

Adam Smith

In 1774, the country excise................£1,246,373: 14:  5½

                  The London brewery          320,601: 18:  0¼

In 1775, the country excise................£1,214,583:  6:  1¼

                  The London brewery          463,670:  7:  0¼

                                         4)             £6,547,832: 19:  2¼

Average of these four years  ...............£1,636,958:  4:  9½

To which adding the average malt tax..   958,895:  3:  0¼

The whole amount of those different taxes comes out to

be......................................................£2,595,835:  7: 10

But, by trebling the malt tax, or by raising it from six to eighteen

shillings upon the quarter of malt, that single tax would pro-

duce...................................................£2,876,685:  9:  0

A sum which exceeds the foregoing by.... 280,832:  1:  3

Under the old malt tax, indeed, is comprehended a tax of four

shillings upon the hogshead of cyder, and another of ten shillings

upon the barrel of mum. In 1774, the tax upon cyder produced

only £3,083:6:8. It probably fell somewhat short of its usual

amount; all the different taxes upon cyder, having, that year, pro-

duced less than ordinary. The tax upon mum, though much heavier,

is still less productive, on account of the smaller consumption of

that liquor. But to balance whatever may be the ordinary amount

of those two taxes, there is comprehended under what is called the

country excise, first, the old excise of six shillings and eightpence

upon the hogshead of cyder; secondly, a like tax of six shillings

and eightpence upon the hogshead of verjuice; thirdly, another of

eight shillings and ninepence upon the hogshead of vinegar; and,

lastly, a fourth tax of elevenpence upon the gallon of mead or

metheglin. The produce of those different taxes will probably much

more than counterbalance that of the duties imposed, by what is

called the annual malt tax, upon cyder and mum.

Malt is consumed, not only in the brewery of beer and ale, but

in the manufacture of low wines and spirits. If the malt tax were to

be raised to eighteen shillings upon the quarter, it might be neces-

sary to make some abatement in the different excises which are

imposed upon those particular sorts of low wines and spirits, of

which malt makes any part of the materials. In what are called

malt spirits, it makes commonly but a third part of the materials;

the other two-thirds being either raw barley, or one-third barley

and one-third wheat. In the distillery of malt spirits, both the op-

portunity and the temptation to smuggle are much greater than

either in a brewery or in a malt-house; the opportunity, on ac-

count of the smaller bulk and greater value of the commodity, and

the temptation, on account of the superior height of the duties,

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734

The Wealth of Nations

which amounted to 3s. 10 2/3d. upon the gallon of spirits. {Though

the duties directly imposed upon proof spirits amount only to 2s.

6d per gallon, these, added to the duties upon the low wines, from

which they are distilled, amount to 3s 10 2/3d. Both low wines

and proof spirits are, to prevent frauds, now rated according to

what they gauge in the wash.}

By increasing the duties upon malt, and reducing those upon

the distillery, both the opportunities and the temptation to smuggle

would be diminished, which might occasion a still further aug-

mentation of revenue.

It has for some time past been the policy of Great Britain to

discourage the consumption of spiritous liquors, on account of

their supposed tendency to ruin the health and to corrupt the

morals of the common people. According to this policy, the abate-

ment of the taxes upon the distillery ought not to be so great as to

reduce, in any respect, the price of those liquors. Spiritous liquors

might remain as dear as ever; while, at the same time, the whole-

some and invigorating liquors of beer and ale might be consider-

ably reduced in their price. The people might thus be in part re-

lieved from one of the burdens of which they at present complain

the most; while, at the same time, the revenue might be consider-

ably augmented.

The objections of Dr. Davenant to this alteration in the present

system of excise duties, seem to be without foundation. Those

objections are, that the tax, instead of dividing itself, as at present,

pretty equally upon the profit of the maltster, upon that of the

brewer and upon that of the retailer, would so far as it affected

profit, fall altogether upon that of the maltster; that the maltster

could not so easily get back the amount of the tax in the advanced

price of his malt, as the brewer and retailer in the advanced price

of their liquor; and that so heavy a tax upon malt might reduce

the rent and profit of barley land.

No tax can ever reduce, for any considerable time, the rate of

profit in any particular trade, which must always keep its level

with other trades in the neighbourhood. The present duties upon

malt, beer, and ale, do not affect the profits of the dealers in those

commodities, who all get back the tax with an additional profit,

in the enhanced price of their goods. A tax, indeed, may render

the goods upon which it is imposed so dear, as to diminish the

consumption of them. But the consumption of malt is in malt

liquors; and a tax of eighteen shillings upon the quarter of malt

could not well render those liquors dearer than the different taxes,

amounting to twenty-four or twenty-five shillings, do at present.

Those liquors, on the contrary, would probably become cheaper,

and the consumption of them would be more likely to increase

than to diminish.

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