Key Arguments

• Smith argues it 'does not seem necessary that the expense of those public works should be defrayed from that public revenue ... assigned to the executive power,' because 'The greater part of such public works may easily be so managed, as to afford a particular revenue, sufficient for defraying their own expense without bringing any burden upon the general revenue of the society.'
• He notes that 'A highway, a bridge, a navigable canal, for example, may, in most cases, be both made add maintained by a small toll upon the carriages which make use of them; a harbour, by a moderate port-duty upon the tonnage of the shipping which load or unload in it.'
• He broadens the class of such self‑financing institutions: 'The coinage, another institution for facilitating commerce, in many countries, not only defrays its own expense, but affords a small revenue or a seignorage to the sovereign. The post-office, another institution for the same purpose, over and above defraying its own expense, affords, in almost all countries, a very considerable revenue to the sovereign.'
• Smith defends the equity of such tolls: 'When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them. It seems scarce possible to invent a more equitable way of maintaining such works.'
• He also stresses that although the carrier advances the toll, 'this tax or toll ... is finally paid by the consumer, to whom it must always be charged in the price of the goods,' but because these works reduce transport costs, 'the goods, notwithstanding the toll, come cheaper to the consumer than they could otherwise have done.'
• Thus, 'The person who finally pays this tax, therefore, gains by the application more than he loses by the payment of it. His payment is exactly in proportion to his gain... It seems impossible to imagine a more equitable method of raising a tax.'

Source Quotes

The depth and the supply of water for a navigable canal must be proportioned to the number and tonnage of the lighters which are likely to carry goods upon it; the extent of a harbour, to the number of the shipping which are likely to take shelter in it. It does not seem necessary that the expense of those public works should be defrayed from that public revenue, as it is commonly called, of which the collection and application are in most countries, assigned to the executive power. The greater part of such public works may easily be so managed, as to afford a particular revenue, sufficient for defraying their own expense without bringing any burden upon the general revenue of the society.

It does not seem necessary that the expense of those public works should be defrayed from that public revenue, as it is commonly called, of which the collection and application are in most countries, assigned to the executive power. The greater part of such public works may easily be so managed, as to afford a particular revenue, sufficient for defraying their own expense without bringing any burden upon the general revenue of the society. A highway, a bridge, a navigable canal, for example, may, in most cases, be both made add maintained by a small toll upon the carriages which make use of them; a harbour, by a moderate port-duty upon the tonnage of the shipping which load or unload in it.

The greater part of such public works may easily be so managed, as to afford a particular revenue, sufficient for defraying their own expense without bringing any burden upon the general revenue of the society. A highway, a bridge, a navigable canal, for example, may, in most cases, be both made add maintained by a small toll upon the carriages which make use of them; a harbour, by a moderate port-duty upon the tonnage of the shipping which load or unload in it. The coinage, another institution for facilitating commerce, in many countries, not only defrays its own expense, but affords a small revenue or a seignorage to the sovereign.

The post-office, another institution for the same purpose, over and above defraying its own expense, affords, in almost all countries, a very considerable revenue to the sovereign. When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them. It seems scarce possible to invent a more equitable way of maintaining such works.

When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them. It seems scarce possible to invent a more equitable way of maintaining such works. This tax or toll, too, though it is advanced by the carrier, is finally paid by the consumer, to whom it must always be charged in the price of the goods.

As the expense of carriage, however, is very much reduced by means of such public works, the goods, notwithstanding the toll, come cheaper to the consumer than they could otherwise have done, their price not being so much raised by the toll, as it is lowered by the cheapness of the carriage. The person who finally pays this tax, therefore, gains by the application more than he loses by the payment of it. His payment is exactly in proportion to his gain. It is, in reality, no more than a part of that gain which he is obliged to give up, in order to get the rest.

It is, in reality, no more than a part of that gain which he is obliged to give up, in order to get the rest. It seems impossible to imagine a more equitable method of raising a tax. When the toll upon carriages of luxury, upon coaches, post-chaises, etc. is made somewhat higher in proportion to their weight, than upon carriages of necessary use, such as carts, waggons, etc. the indolence and vanity of the rich is made to contribute, in a very easy manner, to the relief of the poor, by rendering cheaper the transportation of heavy goods to all the different parts of the country.

Key Concepts

• It does not seem necessary that the expense of those public works should be defrayed from that public revenue, as it is commonly called, of which the collection and application are in most countries, assigned to the executive power.
• The greater part of such public works may easily be so managed, as to afford a particular revenue, sufficient for defraying their own expense without bringing any burden upon the general revenue of the society.
• A highway, a bridge, a navigable canal, for example, may, in most cases, be both made add maintained by a small toll upon the carriages which make use of them; a harbour, by a moderate port-duty upon the tonnage of the shipping which load or unload in it.
• When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them.
• It seems scarce possible to invent a more equitable way of maintaining such works.
• The person who finally pays this tax, therefore, gains by the application more than he loses by the payment of it. His payment is exactly in proportion to his gain.
• It seems impossible to imagine a more equitable method of raising a tax.

Context

Early in Article I of Part III, Smith develops a general principle that commerce‑facilitating infrastructure and related institutions can be supported by user‑based charges that align cost with use and still yield net gains to consumers.