Bounty, a term applied to any sum granted by the legislature towards creating or encouraging some kind of undertaking believed to be of national importance. At one time the system of granting such bounties was very prevalent, and it still continues in some countries. There were bounties on the tonnage of vessels employed in the herring and whale fisheries; on the importation of materials of manufactures; on the importation of indigo from the colonies; on the exportation of Irish and Scotch linen. That this system was a costly and factitious process for fostering commerce, manufactures, and agriculture was ably contended by Adam Smith in his Wealth of Nations (1776). With regard to the herring-fishery in particular, the drift of his remarks is to show that in consequence of the bounty the herrings cost more to the government than the price they fetched in the market. The bounty on linen, which was not abolished till 1830, had before that time averaged £150,000 a year. The bounty on the exportation of grain from England, abolished in 1814, had for some years averaged £160,000. The French still give bounties to encourage their cod-fishery on the Banks of Newfoundland, and to stimulate the building and running of ships, both of iron and wood. In 1881 the French bounties on shipping amounted to £400,000. In 1888 the Argentine Republic granted a bounty on the export of live cattle and preserved meat. The most important form of the existing bounty system, however, is that on sugar, which prevails in Germany, France, Austria, Holland, and Belgium. The bounty on sugar is not a direct one, but is paid on the principle of returning on exportation the sum charged as inland duty. In consequence of mechanical improvements, the quantity of sugar actually extracted from the beetroot is greater than the estimated yield on which duty is paid. Thus the government paid as drawback a sum greater than what it received as revenue, and, accordingly, spends a considerable amount in artificially encouraging the production of sugar. The annual average of sugar bounties in 1887 was in France about £600,000, in Belgium £170,000, in Holland £150,000. This state of things having been found unsatisfactory, a conference of European powers on the bounty system was held in London in 1887-88; and the governments represented accepted the view that the bounty system ought to be abolished by levying duty on sugar as it goes into consumption. The bounty designed to stimulate exportation must be distinguished from the Drawback (q.v.), meant to put in a fair position for exportation those commodities more heavily taxed at home than abroad. See FREE TRADE.
An annual grant of £2000 to the Church of Scotland for mission purposes is called the Royal Bounty. Another annual grant called the Royal Bounty has long been given in Britain for improving the breed of horses. It has been generally expended in prizes at race meetings; but a Royal Commission in 1887 recommended that it should be given in prizes for thoroughbred stallions at horse-shows. The name Queen's Bounty is popularly given to a charitable donation bestowed on the mother of triplets. For Queen Anne's Bounty, see that article.
Bounty is also the familiar name for the sum of money given to induce men to enter the army or navy. In time of peace, when there is little or no need to augment the forces, the bounty sinks to a minimum; but in cases of exigency, it is raised according to the difficulty and urgency of the circumstances. In the British army, no bounty was paid to recruits until the nineteenth century; the temptations offered to them, if any, were of some other character. The highest bounty ever paid during the great wars against Napoleon was in 1812, when it amounted to £18, 12s. 6d. for limited service, and £23, 17s. 6d. for life; but these sums were subject to many unfair and absurd deductions; and even so late as 1849, when the bounty to an infantry recruit was nominally £4, he received little more than one-eighth of that amount. In 1855 the bounty was £7 per head (for line infantry); in 1856, only £2; in 1858, £3; and it afterwards underwent further changes. It was always higher in the cavalry and artillery than in the infantry, and higher in Highland than other line regiments, on account of matters connected with dress and personal ornaments. It was supposed that recruits were tempted more by immediate bounty than by prospective pay and pensions; so that while the rate of bounty varied frequently, that of pay and pensions underwent little change. For some time it was customary to offer a bounty to men belonging to a regiment ordered home from abroad in order to induce them to continue there; and in 1887 a bounty of £2 was offered to men who prolonged their service with the colours. The name is now in use in the militia for the £2 a year given to each efficient man who enters what is called the 'Militia Reserve,' and thereby renders himself liable to service in the ranks of the regular army if required. The term bounty is also used in the navy to signify the distribution of money made to the officers and crews on particular occasions of active service. See BOOTY, PRIZE, SALVAGE.
Bounty, in the United States, is a term for grants of land to soldiers and sailors, their widows and children, for services in the army and navy. It is also applied to sums of money paid by government to owners of fishing-vessels, by Act of Congress of July 29, 1813, for the encouragement of that industry, and to sums of money appropriated by different state legislatures for the destruction of wild beasts and destructive birds, when the country was comparatively new and sparsely settled. The amounts now paid to companies and corporations which carry the mails by land and water have been called bounties, but are more properly termed appropriations for carrying the mails. See PENSIONS.