time,
namely, the fall of cloth in the English, and, consequently, in the
German market. Even when cloth has fallen so low that its price with the
duty is only equal to what its price without the duty was at first, it
is not a necessary consequence that the fall will stop; for the same
amount of exportation as before will not now suffice to pay the
increased money value of the imports; and although the German consumers
have now not only cloth at the old price, but likewise increased money
incomes, it is not certain that they will be inclined to employ the
increase of their incomes in increasing their purchases of cloth. The
price of cloth, therefore, must perhaps fall, to restore the
equilibrium, more than the whole amount of the duty; Germany may be
enabled to import cloth at a lower price when it is taxed, than when it
was untaxed: and this gain she will acquire at the expense of the
English consumers of linen, who, in addition, will be the real payers of
the whole of what is received at their own custom-house under the name
of duties on the export of cloth.

Such are the extremely various effects which may result to ourselves,
and to our customers, from the imposition of taxes on our exports [3]:
and the determining circumstances are of a nature so imperfectly
ascertainable, that it must be almost impossible to decide with any
certainty, even after the tax has been imposed, whether we have been
gainers by it or losers. It is certain, however, that whatever we gain,
is lost by somebody else, and there is the expense of the collection
besides: if international morality, therefore, were rightly understood
and acted upon, such taxes, as being contrary to the universal weal,
would not exist. Moreover, the imposition of such a tax frequently will,
and always may, expose a country to lose this branch of its trade
altogether, or to carry it on with diminished advantage, in consequence
of the competition of untaxed exporters from other countries, or of the
domestic producers in the country to which it exports. Even on the most
selfish principles, therefore, the benefit of such a tax is always
extremely precarious.

5. We have had an example of a tax on exports, that is, on foreigners,
falling in part on ourselves. We shall, therefore, not be surprised if
we find a tax on imports, that is, on ourselves, partly falling upon
foreigners.

Instead of taxing the cloth which we export, suppose that we tax the
linen which we imp