fall to it in the natural or
spontaneous course of trade.

The answer is, it can. By taxing exports, for instance, we may, under
certain circumstances, produce a division of the advantage of the trade
more favourable to ourselves. In some cases, we may draw into our
coffers, at the expense of foreigners, not only the whole tax, but more
than the tax: in other cases, we should gain exactly the tax,--in
others, less than the tax. In this last case, a part of the tax is borne
by ourselves: possibly the whole, possibly even, as we shall show, more
than the whole.

Suppose that England taxes her export of cloth: the tax not being
supposed high enough to induce Germany to produce cloth for herself. The
price at which cloth can be sold in Germany is augmented by the tax.
This will probably diminish the quantity consumed. It may diminish it so
much, that even at the increased price, there will not be required so
great a money value as before. It may diminish it in such a ratio, that
the money value of the quantity consumed will be exactly the same as
before. Or it may not diminish it at all, or so little, that, in
consequence of the higher price, a greater money value will be purchased
than before. In this last case, England will gain, at the expense of
Germany, not only the whole amount of the duty, but more. For the money
value of her exports to Germany being increased, while her imports
remain the same, money will flow into England from Germany. The price of
cloth will rise in England, and consequently in Germany; but the price
of linen will fall in Germany, and consequently in England, We shall
export less cloth, and import more linen, till the equilibrium is
restored. It thus appears, what is at first sight somewhat remarkable,
that, by taxing her exports, England would, under some conceivable
circumstances, not only gain from her foreign customers the whole amount
of the tax, but would also get her imports cheaper. She would get them
cheaper in two ways,--for she would obtain them for less money, and
would have more money to purchase them with. Germany, on the other hand,
would suffer doubly: she would have to pay for her cloth a price
increased not only by the duty, but by the influx of money into England,
while the same change in the distribution of the circulating medium
would leave her less money to purchase it with.

This, however, is only one of three possible cases. If, after the
imposition of the duty, Germany