FREE TRADE

   the name given to the commercial policy of England, first elaborately set forth with cogent reasoning by Adam Smith in his "Wealth of Nations," and of which the repeal of the Corn Laws in 1846 was the first step towards its adoption. Strictly used, the term is applicable only to international or foreign trade, and signifies a policy of strict non-intervention in the free competition of foreign goods with home goods in the home markets. Differential duties, artificial encouragements (e. g. bounties, drawbacks), to the home producer, all of which are characteristic of a protective system of trading, are withheld, the belief being entertained by free-traders that the industrial interests of a country are best served by permitting the capital to flow into those channels of trade into which the character and resources of the country naturally dispose it to do, and also by bringing the consumer as near as possible to the cheapest producer. But it is not considered a violation of the Free Trade principles to impose a duty for revenue purposes on such imported articles as have no home competitor, e. g. tea.