means
of gain which it could seldom be advisable to adopt, being so easily
counteracted by a precisely similar proceeding on the other side.

If England, in the case already supposed, sought to obtain for herself
more than her natural share of the advantage of the trade with Germany,
by imposing a duty upon cloth, Germany would only have to impose a duty
upon linen, sufficient to diminish the demand for that article about as
much as the demand for cloth had been diminished in England by the tax.
Things would then be as before, and each country would pay its own tax.
Unless, indeed, the sum of the two duties exceeded the entire advantage
of the trade; for in that case the trade, and its advantage, would cease
entirely.

There would be no advantage, therefore, in imposing duties of this kind,
with a view to gain by them, in the manner which has been pointed out.
But so long as any other kind of taxes on commodities are retained, as a
source of revenue, these may often be as unobjectionable as the rest. It
is evident, moreover, that considerations of reciprocity, which are
quite unessential when the matter in debate is a protecting duty, are of
material importance when the repeal of duties of this other description
is discussed. A country cannot be expected to renounce the power of
taxing foreigners, unless foreigners will in return practise towards
itself the same forbearance. The only mode in which a country can save
itself from being a loser by the duties imposed by other countries on
its commodities, is to impose corresponding duties on theirs. Only it
must take care that these duties be not so high as to exceed all that
remains of the advantage of the trade, and put an end to importation
altogether; causing the article to be either produced at home, or
imported from another and a dearer market.

It is not necessary to apply the principles which we have stated to the
case of bounties on exportation or importation. The application is easy,
and the conclusions present nothing of particular interest or
importance.

6. Any cause which alters the exports or imports from one country into
another, alters the division of the advantage of interchange between
those two countries. Suppose the discovery of a new process, by which
some article of export, or some article not previously exported, can be
produced so cheap as to occasion a great demand for it in other
countries. This of course produces a great influx of money from