ThecontinualimportationsfromPeruandBrazilexceedtheeffectualdemandofthosecountries,andsinkthepriceofthosemetalstherebelowthatintheneighbouringcountries。If,onthecontrary,inanyparticularcountrytheirquantityfellshortoftheeffectualdemand,soastoraisetheirpriceabovethatoftheneighbouringcountries,thegovernmentwouldhavenooccasiontotakeanypainstoimportthem。Ifitwereeventotakepainstopreventtheirimportation,itwouldnotbeabletoeffectuateit。Thosemetals,whentheSpartanshadgotwherewithaltopurchasethem,brokethroughallthebarrierswhichthelawsofLycurgusopposedtotheirentranceintoLacedemon。AllthesanguinarylawsofthecustomsarenotabletopreventtheimportationoftheteasoftheDutchandGottenburghEastIndiaCompanies,becausesomewhatcheaperthanthoseoftheBritishcompany。Apoundoftea,however,isaboutahundredtimesthebulkofoneofthehighestprices,sixteenshillings,thatiscommonlypaidforitinsilver,andmorethantwothousandtimesthebulkofthesamepriceingold,andconsequentlyjustsomanytimesmoredifficulttosmuggle。
Itispartlyowingtotheeasytransportationofgoldandsilverfromtheplaceswheretheyaboundtothosewheretheyarewantedthatthepriceofthosemetalsdoesnotfluctuatecontinuallylikethatofthegreaterpartofothercommodities,whicharehinderedbytheirbulkfromshiftingtheirsituationwhenthemarkethappenstobeeitheroverorunder—stockedwiththem。The。priceofthosemetals,indeed,isnotaltogetherexemptedfromvariation,butthechangestowhichitisliablearegenerallyslow,gradualanduniform。InEurope,forexample,itissupposed,withoutmuchfoundation,perhaps,thatduringthecourseofthepresentandprecedingcenturytheyhavebeenconstantly,butgradually,sinkingintheirvalue,onaccountofthecontinualimportationsfromtheSpanishWestIndies。Buttomakeanysuddenchangeinthepriceofgoldandsilver,soastoraiseorloweratonce,sensiblyandremarkably,themoneypriceofallothercommodities,requiressucharevolutionincommerceasthatoccasionedbythediscoveryofAmerica。
If,notwithstandingallthis,goldandsilvershouldatanytimefallshortinacountrywhichhaswherewithaltopurchasethem,therearemoreexpedientsforsupplyingtheirplacethanthatofalmostanyothercommodity。Ifthematerialsofmanufacturearewanted,industrymuststop。Ifprovisionsarewanted,thepeoplemuststarve。Butifmoneyiswanted,barterwillsupplyitsplace,thoughwithagooddealofinconveniency。
Buyingandsellinguponcredit,andthedifferentdealerscompensatingtheircreditswithoneanother,onceamonthoronceayear,willsupplyitwithlessinconveniency。Awell—regulatedpapermoneywillsupplyit,notonlywithoutanyinconveniency,but,insomecases,withsomeadvantages。Uponeveryaccount,therefore,theattentionofgovernmentneverwassounnecessarilyemployedaswhendirectedtowatchoverthepreservationorincreaseofthequantityofmoneyinanycountry。
Nocomplaint,however,ismorecommonthanthatofascarcityofmoney。Money,likewine,mustalwaysbescarcewiththosewhohaveneitherwherewithaltobuyitnorcredittoborrowit。Thosewhohaveeitherwillseldombeinwanteitherofthemoneyorofthewinewhichtheyhaveoccasionfor。Thiscomplaint,however,ofthescarcityofmoneyisnotalwaysconfinedtoimprovidentspendthrifts。Itissometimesgeneralthroughawholemercantiletownandthecountryinitsneighbourhood。Overtradingisthecommoncauseofit。Sobermen,whoseprojectshavebeendisproportionedtotheircapitals,areaslikelytohaveneitherwherewithaltobuymoneynorcredittoborrowit,asprodigalswhoseexpensehasbeendisproportionedtotheirrevenue。Beforetheirprojectscanbebroughttobear,theirstockisgone,andtheircreditwithit。Theyrunabouteverywheretoborrowmoney,andeverybodytellsthemthattheyhavenonetolend。Evensuchgeneralcomplaintsofthescarcityofmoneydonotalwaysprovethattheusualnumberofgoldandsilverpiecesarenotcirculatinginthecountry,butthatmanypeoplewantthosepieceswhohavenothingtogiveforthem。Whentheprofitsoftradehappentobegreaterthanordinary,overtradingbecomesageneralerrorbothamonggreatandsmalldealers。Theydonotalwayssendmoremoneyabroadthanusual,buttheybuyuponcredit,bothathomeandabroad,anunusualquantityofgoods,whichtheysendtosomedistantmarketinhopesthatthereturnswillcomeinbeforethedemandforpayment。Thedemandcomesbeforethereturns,andtheyhavenothingathandwithwhichtheycaneitherpurchasemoney,orgivesolidsecurityforborrowing。Itisnotanyscarcityofgoldandsilver,butthedifficultywhichsuchpeoplefindinborrowing,andwhichtheircreditorsfindingettingpayment,thatoccasionsthegeneralcomplaintofthescarcityofmoney。
Itwouldbetooridiculoustogoaboutseriouslytoprovethatwealthdoesnotconsistinmoney,oringoldandsilver;butinwhatmoneypurchases,andisvaluableonlyforpurchasing。
Money,nodoubt,makesalwaysapartofthenationalcapital;butithasalreadybeenshownthatitgenerallymakesbutasmallpart,andalwaysthemostunprofitablepartofit。
Itisnotbecausewealthconsistsmoreessentiallyinmoneythaningoodsthatthemerchantfinditgenerallymoreeasytobuygoodswithmoneythantobuymoneywithgoods;butbecausemoneyistheknownandestablishedinstrumentofcommerce,forwhicheverythingisreadilygiveninexchange,butwhichisnotalwayswithequalreadinesstobegotinexchangeforeverything。
Thegreaterpartofgoods,besides,aremoreperishablethanmoney,andhemayfrequentlysustainamuchgreaterlossbykeepingthem。Whenhisgoodsareuponhand,too,heismoreliabletosuchdemandsformoneyashemaynotbeabletoanswerthanwhenhehasgottheirpriceinhiscoffers。Overandaboveallthis,hisprofitarisesmoredirectlyfromsellingthanfrombuying,andheisuponalltheseaccountsgenerallymuchmoreanxioustoexchangehisgoodsformoneythanhismoneyforgoods。
Butthoughaparticularmerchant,withabundanceofgoodsinhiswarehouse,maysometimesberuinedbynotbeingabletosellthemintime,anationorcountryisnotliabletothesameaccident。
Thewholecapitalofamerchantfrequentlyconsistsinperish,ablegoodsdestinedforpurchasingmoney。Butitisbutaverysmallpartoftheannualproduceofthelandandlabourofacountrywhichcaneverbedestinedforpurchasinggoldandsilverfromtheirneighbours。Thefargreaterpartiscirculatedandconsumedamongthemselves;andevenofthesurpluswhichissentabroad,thegreaterpartisgenerallydestinedforthepurchaseofotherforeigngoods。Thoughgoldandsilver,therefore,couldnotbehadinexchangeforthegoodsdestinedtopurchasethem,thenationwouldnotberuined。Itmight,indeed,suffersomelossandinconveniency,andbeforceduponsomeofthoseexpedientswhicharenecessaryforsupplyingtheplaceofmoney。
Theannualproduceofitslandandlabour,however,wouldbethesame,orverynearlythesame,asusual,becausethesame,orverynearlythesame,consumablecapitalwouldbeemployedinmaintainingit。Andthoughgoodsdonotalwaysdrawmoneysoreadilyasmoneydrawsgoods,inthelongruntheydrawitmorenecessarilythanevenitdrawsthem。Goodscanservemanyotherpurposesbesidespurchasingmoney,butmoneycanservenootherpurposebesidespurchasinggoods。Money,therefore,necessarilyrunsaftergoods,butgoodsdonotalwaysornecessarilyrunaftermoney。Themanwhobuysdoesnotalwaysmeantosellagain,butfrequentlytouseortoconsume;whereashewhosellsalwaysmeanstobuyagain。Theonemayfrequentlyhavedonethewhole,buttheothercanneverhavedonemorethantheone—halfofhisbusiness。Itisnotforitsownsakethatmendesiremoney,butforthesakeofwhattheycanpurchasewithit。
Consumablecommodities,itissaid,aresoondestroyed;
whereasgoldandsilverareofamoredurablenature,and,wereitnotforthiscontinualexportation,mightbeaccumulatedforagestogether,totheincredibleaugmentationoftherealwealthofthecountry。Nothing,therefore,itispretended,canbemoredisadvantageoustoanycountrythanthetradewhichconsistsintheexchangeofsuchlastingforsuchperishablecommodities。Wedonot,however,reckonthattradedisadvantageouswhichconsistsintheexchangeofthehardwareofEnglandforthewinesofFrance;andyethardwareisaverydurablecommodity,andwereitnotforthiscontinualexportationmight,too,beaccumulatedforagestogether,totheincredibleaugmentationofthepotsandpansofthecountry。Butitreadilyoccursthatthenumberofsuchutensilsisineverycountrynecessarilylimitedbytheusewhichthereisforthem;thatitwouldbeabsurdtohavemorepotsandpansthanwerenecessaryforcookingthevictualsusuallyconsumedthere;andthatifthequantityofvictualsweretoincrease,thenumberofpotsandpanswouldreadilyincreasealongwithit,apartoftheincreasedquantityofvictualsbeingemployedinpurchasingthem,orinmaintaininganadditionalnumberofworkmenwhosebusinessitwastomakethem。Itshouldasreadilyoccurthatthequantityofgoldandsilverisineverycountrylimitedbytheusewhichthereisforthosemetals;thattheiruseconsistsincirculatingcommoditiesascoin,andinaffordingaspeciesofhouseholdfurnitureasplate;thatthequantityofcoinineverycountryisregulatedbythevalueofthecommoditieswhicharetobecirculatedbyit:increasethatvalue,andimmediatelyapartofitwillbesentabroadtopurchase,whereveritistobehad,theadditionalquantityofcoinrequisiteforcirculatingthem:thatthequantityofplateisregulatedbythenumberandwealthofthoseprivatefamilieswhochoosetoindulgethemselvesinthatsortofmagnificence:
increasethenumberandwealthofsuchfamilies,andapartofthisincreasedwealthwillmostprobablybeemployedinpurchasing,whereveritistobefound,anadditionalquantityofplate:thattoattempttoincreasethewealthofanycountry,eitherbyintroducingorbydetaininginitanunnecessaryquantityofgoldandsilver,isasabsurdasitwouldbetoattempttoincreasethegoodcheerofprivatefamiliesbyobligingthemtokeepanunnecessarynumberofkitchenutensils。
Astheexpenseofpurchasingthoseunnecessaryutensilswoulddiminishinsteadofincreasingeitherthequantityofgoodnessofthefamilyprovisions,sotheexpenseofpurchasinganunnecessaryquantityofgoldandsilvermust,ineverycountry,asnecessarilydiminishthewealthwhichfeeds,clothes,andlodges,whichmaintainsandemploysthepeople。Goldandsilver,whetherintheshapeofcoinorofplate,areutensils,itmustberemembered,asmuchasthefurnitureofthekitchen。Increasetheuseforthem,increasetheconsumablecommoditieswhicharetobecirculated,managed,andpreparedbymeansofthem,andyouwillinfalliblyincreasethequantity;butifyouattempt,byextraordinarymeans,toincreasethequantity,youwillasinfalliblydiminishtheuseandeventhequantitytoo,whichinthosemetalscanneverbegreaterthanwhattheuserequires。
Weretheyevertobeaccumulatedbeyondthisquantity,theirtransportationissoeasy,andthelosswhichattendstheirlyingidleandunemployedsogreat,thatnolawcouldpreventtheirbeingimmediatelysentoutofthecountry。
Itisnotalwaysnecessarytoaccumulategoldandsilverinordertoenableacountrytocarryonforeignwars,andtomaintainfleetsandarmiesindistantcountries。Fleetsandarmiesaremaintained,notwithgoldandsilver,butwithconsumablegoods。Thenationwhich,fromtheannualproduceofitsdomesticindustry,fromtheannualrevenuearisingoutofitslands,labour,andconsumablestock,haswherewithaltopurchasethoseconsumablegoodsindistantcountries,canmaintainforeignwarsthere。
Anationmaypurchasethepayandprovisionsofanarmyinadistantcountrythreedifferentways:bysendingabroadeither,first,somepartofitsaccumulatedgoldandsilver,or,secondly,somepartoftheannualproduceofitsmanufactures;
or,lastofall,somepartofitsannualrudeproduce。
Thegoldandsilverwhichcanproperlybeconsideredasaccumulatedorstoredupinanycountrymaybedistinguishedintothreeparts:first,thecirculatingmoney;secondly,theplateofprivatefamilies;and,lastofall,themoneywhichmayhavebeencollectedbymanyyears’parsimony,andlaidupinthetreasuryoftheprince。
Itcanseldomhappenthatmuchcanbesparedfromthecirculatingmoneyofthecountry;becauseinthattherecanseldombemuchredundancy。Thevalueofgoodsannuallyboughtandsoldinanycountryrequiresacertainquantityofmoneytocirculateanddistributethemtotheirproperconsumers,andcangiveemploymenttonomore。Thechannelofcirculationnecessarilydrawstoitselfasumsufficienttofillit,andneveradmitsanymore。Something,however,isgenerallywithdrawnfromthischannelinthecaseofforeignwar。Bythegreatnumberofpeoplewhoaremaintainedabroad,feweraremaintainedathome。Fewergoodsarecirculatedthere,andlessmoneybecomesnecessarytocirculatethem。Anextraordinaryquantityofpapermoney,ofsomesortorother,suchasexchequernotes,navybills,andbankbillsinEngland,isgenerallyissueduponsuchoccasions,andbysupplyingtheplaceofcirculatinggoldandsilver,givesanopportunityofsendingagreaterquantityofitabroad。Allthis,however,couldaffordbutapoorresourceformaintainingaforeignwarofgreatexpenseandseveralyearsduration。
Themeltingdowntheplateofprivatefamilieshasuponeveryoccasionbeenfoundastillmoreinsignificantone。TheFrench,inthebeginningofthelastwar,didnotderivesomuchadvantagefromthisexpedientastocompensatethelossofthefashion。
Theaccumulatedtreasuresoftheprincehave,informertimes,affordedamuchgreaterandmorelastingresource。Inthepresenttimes,ifyouexceptthekingofPrussia,toaccumulatetreasureseemstobenopartofthepolicyofEuropeanprinces。
Thefundswhichmaintainedtheforeignwarsofthepresentcentury,themostexpensiveperhapswhichhistoryrecords,seemtohavehadlittledependencyupontheexportationeitherofthecirculatingmoney,oroftheplateofprivatefamilies,orofthetreasureoftheprince。ThelastFrenchwarcostGreatBritainupwardsofninetymillions,includingnotonlytheseventy—fivemillionsofnewdebtthatwascontracted,buttheadditionaltwoshillingsinthepoundland—tax,andwhatwasannuallyborrowedofthesinkingfund。Morethantwo—thirdsofthisexpensewerelaidoutindistantcountries;inGermany,Portugal,America,intheportsoftheMediterranean,intheEastandWestIndies。ThekingsofEnglandhadnoaccumulatedtreasure。Weneverheardofanyextraordinaryquantityofplatebeingmelteddown。Thecirculatinggoldandsilverofthecountryhadnotbeensupposedtoexceedeighteenmillions。Sincethelaterecoinageofthegold,however,itisbelievedtohavebeenagooddealunder—rated。Letussuppose,therefore,accordingtothemostexaggeratedcomputationwhichIremembertohaveeitherseenorheardof,that,goldandsilvertogether,itamountedtothirtymillions。Hadthewarbeencarriedonbymeansofourmoney,thewholeofitmust,evenaccordingtothiscomputation,havebeensentoutandreturnedagainatleasttwiceinaperiodofbetweensixandsevenyears。Shouldthisbesupposed,itwouldaffordthemostdecisiveargumenttodemonstratehowunnecessaryitisforgovernmenttowatchoverthepreservationofmoney,sinceuponthissuppositionthewholemoneyofthecountrymusthavegonefromitandreturnedtoitagain,twodifferenttimesinsoshortaperiod,withoutanybody’sknowinganythingofthematter。Thechannelofcirculation,however,neverappearedmoreemptythanusualduringanypartofthisperiod。Fewpeoplewantedmoneywhohadwherewithaltopayforit。Theprofitsofforeigntrade,indeed,weregreaterthanusualduringthewholewar;butespeciallytowardstheendofit。Thisoccasioned,whatitalwaysoccasions,ageneralovertradinginallthepartsofGreatBritain;andthisagainoccasionedtheusualcomplaintofthescarcityofmoney,whichalwaysfollowsovertrading。Manypeoplewantedit,whohadneitherwherewithaltobuyit,norcredittoborrowit;andbecausethedebtorsfounditdifficulttoborrow,thecreditorsfounditdifficulttogetpayment。Goldandsilver,however,weregenerallytobehadfortheirvalue,bythosewhohadthatvaluetogiveforthem。
Theenormousexpenseofthelatewar,therefore,musthavebeenchieflydefrayed,notbytheexportationofgoldandsilver,butbythatofBritishcommoditiesofsomekindorother。Whenthegovernment,orthosewhoactedunderthem,contractedwithamerchantforaremittancetosomeforeigncountry,hewouldnaturallyendeavourtopayhisforeigncorrespondent,uponwhomhehadgrantedabill,bysendingabroadrathercommoditiesthangoldandsilver。IfthecommoditiesofGreatBritainwerenotindemandinthatcountry,hewouldendeavourtosendthemtosomeothercountry,inwhichhecouldpurchaseabilluponthatcountry。Thetransportationofcommodities,whenproperlysuitedtothemarket,isalwaysattendedwithaconsiderableprofit;
whereasthatofgoldandsilverisscarceeverattendedwithany。
Whenthosemetalsaresentabroadinordertopurchaseforeigncommodities,themerchant’sprofitarises,notfromthepurchase,butfromthesaleofthereturns。Butwhentheyaresentabroadmerelytopayadebt,hegetsnoreturns,andconsequentlynoprofit。Henaturally,therefore,exertshisinventiontofindoutawayofpayinghisforeigndebtsratherbytheexportationofcommoditiesthanbythatofgoldandsilver。ThegreatquantityofBritishgoodsexportedduringthecourseofthelatewar,withoutbringingbackanyreturns,isaccordinglyremarkedbytheauthorofThePresentStateoftheNation。
Besidesthethreesortsofgoldandsilverabovementioned,thereisinallgreatcommercialcountriesagooddealofbullionalternatelyimportedandexportedforthepurposesofforeigntrade。Thisbullion,asitcirculatesamongdifferentcommercialcountriesinthesamemannerasthenationalcoincirculatesineveryparticularcountry,maybeconsideredasthemoneyofthegreatmercantilerepublic。Thenationalcoinreceivesitsmovementanddirectionfromthecommoditiescirculatedwithintheprecinctsofeachparticularcountry:themoneyofthemercantilerepublic,fromthosecirculatedbetweendifferentcountries。Bothareemployedinfacilitatingexchanges,theonebetweendifferentindividualsofthesame,theotherbetweenthoseofdifferentnations。Partofthismoneyofthegreatmercantilerepublicmayhavebeen,andprobablywas,employedincarryingonthelatewar。Intimeofageneralwar,itisnaturaltosupposethatamovementanddirectionshouldbeimpresseduponit,differentfromwhatitusuallyfollowsinprofoundpeace;thatitshouldcirculatemoreabouttheseatofthewar,andbemoreemployedinpurchasingthere,andintheneighbouringcountries,thepayandprovisionsofthedifferentarmies。ButwhateverpartofthismoneyofthemercantilerepublicGreatBritainmayhaveannuallyemployedinthismanner,itmusthavebeenannuallypurchased,eitherwithBritishcommodities,orwithsomethingelsethathadbeenpurchasedwiththem;whichstillbringsusbacktocommodities,totheannualproduceofthelandandlabourofthecountry,astheultimateresourceswhichenabledustocarryonthewar。Itisnaturalindeedtosupposethatsogreatanannualexpensemusthavebeendefrayedfromagreatannualproduce。Theexpenseof1761,forexample,amountedtomorethannineteenmillions。Noaccumulationcouldhavesupportedsogreatanannualprofusion。Thereisnoannualproduceevenofgoldandsilverwhichcouldhavesupportedit。ThewholegoldandsilverannuallyimportedintobothSpainandPortugal,accordingtothebestaccounts,doesnotcommonlymuchexceedsixmillionssterling,which,insomeyears,wouldscarcehavepaidfourmonth’sexpenseofthelatewar。
Thecommoditiesmostproperforbeingtransportedtodistantcountries,inordertopurchasethereeitherthepayandprovisionsofanarmy,orsomepartofthemoneyofthemercantilerepublictobeemployedinpurchasingthem,seemtobethefinerandmoreimprovedmanufactures;suchascontainagreatvalueinasmallbulk,andcan,therefore,beexportedtoagreatdistanceatlittleexpense。Acountrywhoseindustryproducesagreatannualsurplusofsuchmanufactures,whichareusuallyexportedtoforeigncountries,maycarryonformanyyearsaveryexpensiveforeignwarwithouteitherexportinganyconsiderablequantityofgoldandsilver,orevenhavinganysuchquantitytoexport。Aconsiderablepartoftheannualsurplusofitsmanufacturesmust,indeed,inthiscasebeexportedwithoutbringingbackanyreturnstothecountry,thoughitdoestothemerchant;thegovernmentpurchasingofthemerchanthisbillsuponforeigncountries,inordertopurchasetherethepayandprovisionsofanarmy。Somepartofthissurplus,however,maystillcontinuetobringbackareturn。Themanufacturers,duringthewar,willhaveadoubledemanduponthem,andbecalledupon,first,toworkupgoodstobesentabroad,forpayingthebillsdrawnuponforeigncountriesforthepayandprovisionsofthearmy;and,secondly,toworkupsuchasarenecessaryforpurchasingthecommonreturnsthathadusuallybeenconsumedinthecountry。Inthemidstofthemostdestructiveforeignwar,therefore,thegreaterpartofmanufacturesmayfrequentlyflourishgreatly;and,onthecontrary,theymaydeclineonthereturnofthepeace。Theymayflourishamidsttheruinoftheircountry,andbegintodecayuponthereturnofitsprosperity。
ThedifferentstateofmanydifferentbranchesoftheBritishmanufacturesduringthelatewar,andforsometimeafterthepeace,mayserveasanillustrationofwhathasbeenjustnowsaid。
Noforeignwarofgreatexpenseordurationcouldconvenientlybecarriedonbytheexportationoftherudeproduceofthesoil。Theexpenseofsendingsuchaquantityofittoaforeigncountryasmightpurchasethepayandprovisionsofanarmywouldbetoogreat。Fewcountriesproducemuchmorerudeproducethanwhatissufficientforthesubsistenceoftheirowninhabitants。Tosendabroadanygreatquantityofit,therefore,wouldbetosendabroadapartofthenecessarysubsistenceofthepeople。Itisotherwisewiththeexportationofmanufactures。
Themaintenanceofthepeopleemployedinthemiskeptathome,andonlythesurpluspartoftheirworkisexported。Mr。HumefrequentlytakesnoticeoftheinabilityoftheancientkingsofEnglandtocarryon,withoutinterruption,anyforeignwaroflongduration。TheEnglish,inthosedays,hadnothingwherewithaltopurchasethepayandprovisionsoftheirarmiesinforeigncountries,buteithertherudeproduceofthesoil,ofwhichnoconsiderablepartcouldbesparedfromthehomeconsumption,orafewmanufacturesofthecoarsestkind,ofwhich,aswellasoftherudeproduce,thetransportationwastooexpensive。Thisinabilitydidnotarisefromthewantofmoney,butofthefinerandmoreimprovedmanufactures。BuyingandsellingwastransactedbymeansofmoneyinEnglandthenaswellasnow。Thequantityofcirculatingmoneymusthavebornethesameproportiontothenumberandvalueofpurchasesandsalesusuallytransactedatthattime,whichitdoestothosetransactedatpresent;orratheritmusthaveborneagreaterproportion,becausetherewasthennopaper,whichnowoccupiesagreatpartoftheemploymentofgoldandsilver。Amongnationstowhomcommerceandmanufacturesarelittleknown,thesovereign,uponextraordinaryoccasions,canseldomdrawanyconsiderableaidfromhissubjects,forreasonswhichshallbeexplainedhereafter。Itisinsuchcountries,therefore,thathegenerallyendeavourstoaccumulateatreasure,astheonlyresourceagainstsuchemergencies。Independentofthisnecessity,heisinsuchasituationnaturallydisposedtotheparsimonyrequisiteforaccumulation。Inthatsimplestate,theexpenseevenofasovereignisnotdirectedbythevanitywhichdelightsinthegaudyfineryofacourt,butisemployedinbountytohistenants,andhospitalitytohisretainers。Butbountyandhospitalityveryseldomleadtoextravagance;thoughvanityalmostalwaysdoes。EveryTartarchief,accordingly,hasatreasure。ThetreasuresofMazepa,chiefoftheCossacsintheUkraine,thefamousallyofCharlestheXII,aresaidtohavebeenverygreat。TheFrenchkingsoftheMerovingianraceallhadtreasures。Whentheydividedtheirkingdomamongtheirdifferentchildren,theydividedtheirtreasuretoo。TheSaxonprinces,andthefirstkingsaftertheConquest,seemlikewisetohaveaccumulatedtreasures。Thefirstexploitofeverynewreignwascommonlytoseizethetreasureoftheprecedingking,asthemostessentialmeasureforsecuringthesuccession。Thesovereignsofimprovedandcommercialcountriesarenotunderthesamenecessityofaccumulatingtreasures,becausetheycangenerallydrawfromtheirsubjectsextraordinaryaidsuponextraordinaryoccasions。Theyarelikewiselessdisposedtodoso。Theynaturally,perhapsnecessarily,followthemodeofthetimes,andtheirexpensecomestoberegulatedbythesameextravagantvanitywhichdirectsthatofalltheothergreatproprietorsintheirdominions。Theinsignificantpageantryoftheircourtbecomeseverydaymorebrilliant,andtheexpenseofitnotonlypreventsaccumulation,butfrequentlyencroachesuponthefundsdestinedformorenecessaryexpenses。WhatDercyllidassaidofthecourtofPersiamaybeappliedtothatofseveralEuropeanprinces,thathesawtheremuchsplendourbutlittlestrength,andmanyservantsbutfewsoldiers。
Theimportationofgoldandsilverisnottheprincipal,muchlessthesolebenefitwhichanationderivesfromitsforeigntrade。Betweenwhateverplacesforeigntradeiscarriedon,theyallofthemderivetwodistinctbenefitsfromit。Itcarriesoutthatsurpluspartoftheproduceoftheirlandandlabourforwhichthereisnodemandamongthem,andbringsbackinreturnforitsomethingelseforwhichthereisademand。Itgivesavaluetotheirsuperfluities,byexchangingthemforsomethingelse,whichmaysatisfyapartoftheirwants,andincreasetheirenjoyments。Bymeansofitthenarrownessofthehomemarketdoesnothinderthedivisionoflabourinanyparticularbranchofartormanufacturefrombeingcarriedtothehighestperfection。Byopeningamoreextensivemarketforwhateverpartoftheproduceoftheirlabourmayexceedthehomeconsumption,itencouragesthemtoimproveitsproductivepowers,andtoaugmentitsannualproducetotheutmost,andtherebytoincreasetherealrevenueandwealthofthesociety。Thesegreatandimportantservicesforeigntradeiscontinuallyoccupiedinperformingtoallthedifferentcountriesbetweenwhichitiscarriedon。Theyallderivegreatbenefitfromit,thoughthatinwhichthemerchantresidesgenerallyderivesthegreatest,asheisgenerallymoreemployedinsupplyingthewants,andcarryingoutthesuperfluitiesofhisown,thanofanyotherparticularcountry。Toimportthegoldandsilverwhichmaybewantedintothecountrieswhichhavenominesis,nodoubt,apartofthebusinessofforeigncommerce。Itis,however,amostinsignificantpartofit。Acountrywhichcarriedonforeigntrademerelyuponthisaccountcouldscarcehaveoccasiontofreightashipinacentury。
ItisnotbytheimportationofgoldandsilverthatthediscoveryofAmericahasenrichedEurope。BytheabundanceoftheAmericanmines,thosemetalshavebecomecheaper。Aserviceofplatecannowbepurchasedforaboutathirdpartofthecorn,orathirdpartofthelabour,whichitwouldhavecostinthefifteenthcentury。Withthesameannualexpenseoflabourandcommodities,Europecanannuallypurchaseaboutthreetimesthequantityofplatewhichitcouldhavepurchasedatthattime。Butwhenacommoditycomestobesoldforathirdpartofwhathadbeenitsusualprice,notonlythosewhopurchaseditbeforecanpurchasethreetimestheirformerquantity,butitisbroughtdowntothelevelofamuchgreaternumberofpurchasers,perhapstomorethanten,perhapstomorethantwentytimestheformernumber。SothattheremaybeinEuropeatpresentnotonlymorethanthreetimes,butmorethantwentyorthirtytimesthequantityofplatewhichwouldhavebeeninit,eveninitspresentstateofimprovement,hadthediscoveryoftheAmericanminesneverbeenmade。SofarEuropehas,nodoubt,gainedarealconveniency,thoughsurelyaverytriflingone。Thecheapnessofgoldandsilverrendersthosemetalsratherlessfitforthepurposesofmoneythantheywerebefore。Inordertomakethesamepurchases,wemustloadourselveswithagreaterquantityofthem,andcarryaboutashillinginourpocketwhereagroatwouldhavedonebefore。Itisdifficulttosaywhichismosttrifling,thisinconveniencyortheoppositeconveniency。NeithertheonenortheothercouldhavemadeanyveryessentialchangeinthestateofEurope。ThediscoveryofAmerica,however,certainlymadeamostessentialone。ByopeninganewandinexhaustiblemarkettoallthecommoditiesofEurope,itgaveoccasiontonewdivisionsoflabourandimprovementsofart,whichinthenarrowcircleoftheancientcommerce,couldneverhavetakenplaceforwantofamarkettotakeoffthegreaterpartoftheirproduce。Theproductivepowersoflabourwereimproved,anditsproduceincreasedinallthedifferentcountriesofEurope,andtogetherwithittherealrevenueandwealthoftheinhabitants。ThecommoditiesofEuropewerealmostallnewtoAmerica,andmanyofthoseofAmericawerenewtoEurope。Anewsetofexchanges,therefore,begantotakeplacewhichhadneverbeenthoughtofbefore,andwhichshouldnaturallyhaveprovedasadvantageoustothenew,asitcertainlydidtotheoldcontinent。ThesavageinjusticeoftheEuropeansrenderedanevent,whichoughttohavebeenbeneficialtoall,ruinousanddestructivetoseveralofthoseunfortunatecountries。
ThediscoveryofapassagetotheEastIndiesbytheCapeofGoodHope,whichhappenedmuchaboutthesametime,openedperhapsastillmoreextensiverangetoforeigncommercethaneventhatofAmerica,notwithstandingthegreaterdistance。TherewerebuttwonationsinAmericainanyrespectsuperiortosavages,andtheseweredestroyedalmostassoonasdiscovered。
Therestweremeresavages。ButtheempiresofChina,Indostan,Japan,aswellasseveralothersintheEastIndies,withouthavingricherminesofgoldorsilver,wereineveryotherrespectmuchricher,bettercultivated,andmoreadvancedinallartsandmanufacturesthaneitherMexicoorPeru,eventhoughweshouldcredit,whatplainlydeservesnocredit,theexaggeratedaccountsoftheSpanishwritersconcerningtheancientstateofthoseempires。Butrichandcivilisednationscanalwaysexchangetoamuchgreatervaluewithoneanotherthanwithsavagesandbarbarians。Europe,however,hashithertoderivedmuchlessadvantagefromitscommercewiththeEastIndiesthanfromthatwithAmerica。ThePortuguesemonopolizedtheEastIndiatradetothemselvesforaboutacentury,anditwasonlyindirectlyandthroughthemthattheothernationsofEuropecouldeithersendoutorreceiveanygoodsfromthatcountry。WhentheDutch,inthebeginningofthelastcentury,begantoencroachuponthem,theyvestedtheirwholeEastIndiacommerceinanexclusivecompany。TheEnglish,French,Swedes,andDaneshaveallfollowedtheirexample,sothatnogreatnationinEuropehaseveryethadthebenefitofafreecommercetotheEastIndies。NootherreasonneedbeassignedwhyithasneverbeensoadvantageousasthetradetoAmerica,which,betweenalmosteverynationofEuropeanditsowncolonies,isfreetoallitssubjects。TheexclusiveprivilegesofthoseEastIndiacompanies,theirgreatriches,thegreatfavourandprotectionwhichthesehaveprocuredthemfromtheirrespectivegovernments,haveexcitedmuchenvyagainstthem。Thisenvyhasfrequentlyrepresentedtheirtradeasaltogetherpernicious,onaccountofthegreatquantitiesofsilverwhichiteveryyearexportsfromthecountriesfromwhichitiscarriedon。Thepartiesconcernedhaverepliedthattheirtrade,bythiscontinualexportationofsilver,mightindeedtendtoimpoverishEuropeingeneral,butnottheparticularcountryfromwhichitwascarriedon;because,bytheexportationofapartofthereturnstootherEuropeancountries,itannuallybroughthomeamuchgreaterquantityofthatmetalthanitcarriedout。BoththeobjectionandthereplyarefoundedinthepopularnotionwhichIhavebeenjustnowexamining。Itisthereforeunnecessarytosayanythingfurtherabouteither。BytheannualexportationofsilvertotheEastIndies,plateisprobablysomewhatdearerinEuropethanitotherwisemighthavebeen;andcoinedsilverprobablypurchasesalargerquantitybothoflabourandcommodities。Theformerofthesetwoeffectsisaverysmallloss,thelatteraverysmalladvantage;bothtooinsignificanttodeserveanypartofthepublicattention。ThetradetotheEastIndies,byopeningamarkettothecommoditiesofEurope,or,whatcomesnearlytothesamething,tothegoldandsilverwhichispurchasedwiththosecommodities,mustnecessarilytendtoincreasetheannualproductionofEuropeancommodities,andconsequentlytherealwealthandrevenueofEurope。Thatithashithertoincreasedthemsolittleisprobablyowingtotherestraintswhichiteverywherelaboursunder。
Ithoughtitnecessary,thoughatthehazardofbeingtedious,toexamineatfulllengththispopularnotionthatwealthconsistsinmoney,oringoldandsilver。Moneyincommonlanguage,asIhavealreadyobserved,frequentlysignifieswealth,andthisambiguityofexpressionhasrenderedthispopularnotionsofamiliartousthateventheywhoareconvincedofitsabsurdityareveryapttoforgettheirownprinciples,andinthecourseoftheirreasoningstotakeitforgrantedasacertainandundeniabletruth。SomeofthebestEnglishwritersuponcommercesetoutwithobservingthatthewealthofacountryconsists,notinitsgoldandsilveronly,butinitslands,houses,andconsumablegoodsofalldifferentkinds。Inthecourseoftheirreasonings,however,thelands,houses,andconsumablegoodsseemtoslipoutoftheirmemory,andthestrainoftheirargumentfrequentlysupposesthatallwealthconsistsingoldandsilver,andthattomultiplythosemetalsisthegreatobjectofnationalindustryandcommerce。
Thetwoprinciplesbeingestablished,however,thatwealthconsistedingoldandsilver,andthatthosemetalscouldbebroughtintoacountrywhichhadnominesonlybythebalanceoftrade,orbyexportingtoagreatervaluethanitimported,itnecessarilybecamethegreatobjectofpoliticaleconomytodiminishasmuchaspossibletheimportationofforeigngoodsforhomeconsumption,andtoincreaseasmuchaspossibletheexportationoftheproduceofdomesticindustry。Itstwogreatenginesforenrichingthecountry,therefore,wererestraintsuponimportation,andencouragementstoexportation。
Therestraintsuponimportationwereoftwokinds。
First,restraintsupontheimportationofsuchforeigngoodsforhomeconsumptionascouldbeproducedathome,fromwhatevercountrytheywereimported。
Secondly,restraintsupontheimportationofgoodsofalmostallkindsfromthoseparticularcountrieswithwhichthebalanceoftradewassupposedtobedisadvantageous。
Thosedifferentrestraintsconsistedsometimesinhighduties,andsometimesinabsoluteprohibitions。
Exportationwasencouragedsometimesbydrawbacks,sometimesbybounties,sometimesbyadvantageoustreatiesofcommercewithforeignstates,andsometimesbytheestablishmentofcoloniesindistantcountries。
Drawbacksweregivenupontwodifferentoccasions。Whenthehomemanufacturesweresubjecttoanydutyorexcise,eitherthewholeorapartofitwasfrequentlydrawnbackupontheirexportation;andwhenforeigngoodsliabletoadutywereimportedinordertobeexportedagain,eitherthewholeorapartofthisdutywassometimesgivenbackuponsuchexportation。
Bountiesweregivenfortheencouragementeitherofsomebeginningmanufactures,orofsuchsortsofindustryofotherkindsassupposedtodeserveparticularfavour。
Byadvantageoustreatiesofcommerce,particularprivilegeswereprocuredinsomeforeignstateforthegoodsandmerchantsofthecountry,beyondwhatweregrantedtothoseothercountries。