Some particular branches of commerce, which are carried on with barbarous and uncivilised nations, require extraordinary protection.An ordinary store or counting-house could give little security to the goods of the merchants who trade to the western coast of Africa.To defend them from the barbarous natives, it is necessary that the place where they are deposited should be, in some measure, fortified.The disorders in the government of Indostan have been supposed to render a like precaution necessary even among that mild and gentle people; and it was under pretence of securing their persons and property from violence that both the English and French East India Companies were allowed to erect the first forts which they possessed in that country.Among other nations, whose vigorous government will suffer no strangers to possess any fortified place within their territory, it may be necessary to maintain some ambassador, minister, or counsel, who may both decide, according to their own customs, the differences arising among his own countrymen, and, in their disputes with the natives, may, by means of his public character, interfere with more authority, and afford them a more powerful protection, than they could expect from any private man.The interests of commerce have frequently made it necessary to maintain ministers in foreign countries where the purposes, either of war or alliance, would not have required any.The commerce of the Turkey Company first occasioned the establishment of an ordinary ambassador at Constantinople.The first English embassies to Russia arose altogether from commercial interests.The constant interference which those interests necessarily occasioned between the subjects of the different states of Europe, has probably introduced the custom of keeping, in all neighbouring countries, ambassadors or ministers constantly resident even in the time of peace.This custom, unknown to ancient times, seems not to be older than the end of the fifteenth or beginning of the sixteenth century; that is, than the time when commerce first began to extend itself to the greater part of the nations of Europe, and when they first began to attend to its interests.
It seems not unreasonable that the extraordinary expense which the protection of any particular branch of commerce may occasion should be defrayed by a moderate tax upon that particular branch; by a moderate fine, for example, to be paid by the traders when they first enter into it, or, what is more equal, by a particular duty of so much per cent upon the goods which they either import into, or export out of, the particular countries with which it is carried on.The protection of trade in general, from pirates and freebooters, is said to have given occasion to the first institution of the duties of customs.But, if it was thought reasonable to lay a general tax upon trade, in order to defray the expense of protecting trade in general, it should seem equally reasonable to lay a particular tax upon a particular branch of trade, in order to defray the extraordinary expense of protecting that branch.
The protection of trade in general has always been considered as essential to the defence of the commonwealth, and, upon that account, a necessary part of the duty of the executive power.The collection and application of the general duties of customs, therefore, have always been left to that power.But the protection of any particular branch of trade is a part of the general protection of trade; a part, therefore, of the duty of that power; and if nations always acted consistently, the particular duties levied for the purposes of such particular protection should always have been left equally to its disposal.
But in this respect, as well as in many others, nations have not always acted consistently; and in the greater part of the commercial states of Europe, particular companies of merchants have had the address to persuade the legislature to entrust to them the performance of this part of the duty of the sovereign, together with all the powers which are necessarily connected with it.
These companies, though they may, perhaps, have been useful for the first introduction of some branches of commerce, by ******, at their own expense, an experiment which the state might not think it prudent to make, have in the long run proved, universally, either burdensome or useless, and have either mismanaged or confined the trade.
When those companies do not trade upon a joint stock, but are obliged to admit any person, properly qualified, upon paying a certain fine, and agreeing to submit to the regulations of the company, each member trading upon his own stock, and at his own risk, they are called regulated companies.When they trade upon a joint stock, each member sharing in the common profit or loss in proportion to his share in this stock, they are called joint stock companies.Such companies, whether regulated or joint stock, sometimes have, and sometimes have not, exclusive privileges.