This,however,thoughithappensseldom,issaidtohappensometimes,andmorefrequentlywithregardtogoldthanwithregardtosilver,onaccountofthehigherwarehouse—rentwhichispaidforthekeepingofthemorepreciousmetal。*ThefollowingarethepricesatwhichtheBankofAmsterdamatpresent(September,1775)receivesbullionandcoinofdifferentkind:—
SILVER
MexicodollarsGuildersB—22permarkFrenchcrownsGuildersB—22permarkEnglishsilvercoinGuildersB—22permarkMexicodollarsnewcoin2110
Ducatoons3
Rixdollars28
Barsilvercontainingeleven—twelfthsfinesilver21permark,andinthisproportiondownto1/4fine,onwhich5
guildersaregiven。
Finebars,93permark。
GOLD
PortugalcoinB—310permarkGuineasB—310permarkLouisd’orsnewB—310permarkDittoold300
Newducats4198perducatBaroringotgoldisreceivedinproportiontoitsfinenesscomparedwiththeaboveforeigngoldcoin。Uponfinebarsthebankgives340permark。Ingeneral,however,somethingmoreisgivenuponcoinofaknownfineness,thanupongoldandsilverbars,ofwhichthefinenesscannotbeascertainedbutbyaprocessofmeltingandassaying。
Thepersonwhobymakingadepositofbullionobtainsbothabankcreditandreceipt,payshisbillsofexchangeastheybecomeduewithhisbankcredit;andeithersellsorkeepshisreceiptaccordingashejudgesthatthepriceofbullionislikelytoriseortofall。Thereceiptandthebankcreditseldomkeeplongtogether,andthereisnooccasionthattheyshould。
Thepersonwhohasareceipt,andwhowantstotakeoutbullion,findsalwaysplentyofbankcredits,orbankmoneytobuyattheordinaryprice;andthepersonwhohasbankmoney,andwantstotakeoutbullion,findsreceiptsalwaysinequalabundance。
Theownersofbankcredits,andtheholdersofreceipts,constitutetwodifferentsortsofcreditorsagainstthebank。Theholderofareceiptcannotdrawoutthebullionforwhichitisgranted,withoutreassigningtothebankasumofbankmoneyequaltothepriceatwhichthebullionhadbeenreceived。Ifhehasnobankmoneyofhisown,hemustpurchaseitofthosewhohaveit。Theownerofbankmoneycannotdrawoutbullionwithoutproducingtothebankreceiptsforthequantitywhichhewants。
Ifhehasnoneofhisown,hemustbuythemofthosewhohavethem。Theholderofareceipt,whenhepurchasesbankmoney,purchasesthepoweroftakingoutaquantityofbullion,ofwhichthemintpriceisfivepercentabovethebankprice。Theagiooffivepercenttherefore,whichhecommonlypaysforit,ispaidnotforanimaginarybutforarealvalue。Theownerofbankmoney,whenhepurchasesareceipt,purchasesthepoweroftakingoutaquantityofbullionofwhichthemarketpriceiscommonlyfromtwotothreepercentabovethemintprice。Thepricewhichhepaysforit,therefore,ispaidlikewiseforarealvalue。Thepriceofthereceipt,andthepriceofthebankmoney,compoundormakeupbetweenthemthefullvalueorpriceofthebullion。
Upondepositsofthecoincurrentinthecountry,thebankgrantsreceiptslikewiseaswellasbankcredits;butthosereceiptsarefrequentlyofnovalue,andwillbringnopriceinthemarket。Uponducatoons,forexample,whichinthecurrencypassforthreeguildersthreestiverseach,thebankgivesacreditofthreeguildersonly,orfivepercentbelowtheircurrentvalue。Itgrantsareceiptlikewiseentitlingthebearertotakeoutthenumberofducatoonsdepositedatanytimewithinsixmonths,uponpayingone—fourthpercentforthekeeping。Thisreceiptwillfrequentlybringnopriceinthemarket。Threeguildersbankmoneygenerallysellinthemarketforthreeguildersthreestivers,thefullvalueoftheducatoons,iftheyweretakenoutofthebank;andbeforetheycanbetakenout,one—fourthpercentmustbepaidforthekeeping,whichwouldbemerelosstotheholderofthereceipt。Iftheagioofthebank,however,shouldatanytimefalltothreepercentsuchreceiptsmightbringsomepriceinthemarket,andmightsellforoneandthree—fourthspercent。Buttheagioofthebankbeingnowgenerallyaboutfivepercentsuchreceiptsarefrequentlyallowedtoexpire,orastheyexpressit,tofalltothebank。
Thereceiptswhicharegivenfordepositsofgoldducatsfalltoityetmorefrequently,becauseahigherwarehouse—rent,orone—halfpercentmustbepaidforthekeepingofthembeforetheycanbetakenoutagain。Thefivepercentwhichthebankgains,whendepositseitherofcoinorbullionareallowedtofalltoit,maybeconsideredasthewarehouse—rentfortheperpetualkeepingofsuchdeposits。
Thesumofbankmoneyforwhichthereceiptsareexpiredmustbeveryconsiderable。Itmustcomprehendthewholeoriginalcapitalofthebank,which,itisgenerallysupposed,hasbeenallowedtoremaintherefromthetimeitwasfirstdeposited,nobodycaringeithertorenewhisreceiptortotakeouthisdeposit,as,forthereasonsalreadyassigned,neithertheonenortheothercouldbedonewithoutloss。Butwhatevermaybetheamountofthissum,theproportionwhichitbearstothewholemassofbankmoneyissupposedtobeverysmall。TheBankofAmsterdamhasforthesemanyyearspastbeenthegreatwarehouseofEuropeforbullion,forwhichthereceiptsareveryseldomallowedtoexpire,or,astheyexpressit,tofalltothebank。
fargreaterpartofthebankmoney,orofthecreditsuponthebooksofthebank,issupposedtohavebeencreated,forthesemanyyearspast,bysuchdepositswhichthedealersinbullionarecontinuallybothmakingandwithdrawing。
Nodemandcanbemadeuponthebankbutbymeansofarecipeorreceipt。Thesmallermassofbankmoney,forwhichthereceiptsareexpired,ismixedandconfoundedwiththemuchgreatermassforwhichtheyarestillinforce;sothat,thoughtheremaybeaconsiderablesumofbankmoneyforwhichtherearenoreceipts,thereisnospecificsumorportionofitwhichmaynotatanytimebedemandedbyone。Thebankcannotbedebtortotwopersonsforthesamething;andtheownerofbankmoneywhohasnoreceiptcannotdemandpaymentofthebanktillhebuysone。Inordinaryandquiettimes,hecanfindnodifficultyingettingonetobuyatthemarketprice,whichgenerallycorrespondswiththepriceatwhichhecansellthecoinorbullionitentitieshimtotakeoutofthebank。
Itmightbeotherwiseduringapubliccalamity;aninvasion,forexample,suchasthatoftheFrenchin1672。Theownersofbankmoneybeingthenalleagertodrawitoutofthebank,inordertohaveittheirownkeeping,thedemandforreceiptsmightraisetheirpricetoanexorbitantheight。Theholdersofthemmightformexpectations,and,insteadoftwoorthreepercent,demandhalfthebankmoneyforwhichcredithadbeengivenuponthedepositsthatthereceiptshadrespectivelybeengrantedfor。
Theenemy,informedoftheconstitutionofthebank,mightevenbuythemup,inordertopreventthecarryingawayofthetreasure。Insuchemergencies,thebank,itissupposed,wouldbreakthroughitsordinaryruleofmakingpaymentonlytotheholdersofreceipts。Theholdersofreceipts,whohadnobankmoney,musthavereceivedwithintwoorthreepercentofthevalueofthedepositforwhichtheirrespectivereceiptshadbeengranted。Thebank,therefore,itissaid,wouldinthiscasemakenoscrupleofpaying,eitherwithmoneyorbullion,thefullvalueofwhattheownersofbankmoneywhocouldgetnoreceiptswerecreditedforinitsbooks;payingatthesametimetwoorthreepercenttosuchholdersofreceiptsashadnobankmoney,thatbeingthewholevaluewhichinthisstateofthingscouldjustlybesupposedduetothem。
Eveninordinaryandquiettimesitistheinterestoftheholdersofreceiptstodepresstheagio,inordereithertobuybankmoney(andconsequentlythebullion,whichtheirreceiptswouldthenenablethemtotakeoutofthebank)somuchcheaper,ortoselltheirreceiptstothosewhohavebankmoney,andwhowanttotakeoutbullion,somuchdearer;thepriceofareceiptbeinggenerallyequaltothedifferencebetweenthemarketpriceofbankmoney,andthatofthecoinorbullionforwhichthereceipthadbeengranted。Itistheinterestoftheownersofbankmoney,onthecontrary,toraisetheagio,inordereithertoselltheirbankmoneysomuchdearer,ortobuyareceiptsomuchcheaper。Topreventthestock—jobbingtrickswhichthoseoppositeinterestsmightsometimesoccasion,thebankhasoflateyearscometotheresolutiontosellatalltimesbankmoneyforcurrency,atfivepercentagio,andtobuyitinagainatfourpercentagio。Inconsequenceofthisresolution,theagiocannevereitherriseabovefiveorsinkbelowfourpercent,andtheproportionbetweenthemarketpriceofbankandthatofcurrentmoneyiskeptatalltimesveryneartotheproportionbetweentheirintrinsicvalues。Beforethisresolutionwastaken,themarketpriceofbankmoneyusedsometimestorisesohighasninepercentagio,andsometimestosinksolowaspar,accordingasoppositeinterestshappenedtoinfluencethemarket。
TheBankofAmsterdamprofessestolendoutnopartofwhatisdepositedwithit,but,foreveryguilderforwhichitgivescreditinitsbooks,tokeepinitsrepositoriesthevalueofaguildereitherinmoneyorbullion。Thatitkeepsinitsrepositoriesallthemoneyorbullionforwhichtherearereceiptsinforce,forwhichitisatalltimesliabletobecalledupon,andwhich,inreality,iscontinuallygoingfromitandreturningtoitagain,cannotwellbedoubted。Butwhetheritdoessolikewisewithregardtothatpartofitscapital,forwhichthereceiptsarelongagoexpired,forwhichinordinaryandquiettimesitcannotbecalledupon,andwhichinrealityisverylikelytoremainwithitforever,oraslongastheStatesoftheUnitedProvincessubsist,mayperhapsappearmoreuncertain。AtAmsterdam,however,nopointoffaithisbetterestablishedthanthatforeveryguilder,circulatedasbankmoney,thereisacorrespondentguilderingoldorsilvertobefoundinthetreasureofthebank。Thecityisguaranteethatitshouldbeso。Thebankisunderthedirectionofthefourreigningburgomasterswhoarechangedeveryyear。Eachnewsetofburgomastersvisitsthetreasure,comparesitwiththebooks,receivesituponoath,anddeliversitover,withthesameawfulsolemnity,tothesetwhichsucceeds;andinthatsoberandreligiouscountryoathsarenotyetdisregarded。Arotationofthiskindseemsaloneasufficientsecurityagainstanypracticeswhichcannotbeavowed。AmidstalltherevolutionswhichfactionhaseveroccasionedinthegovernmentofAmsterdam,theprevailingpartyhasatnotimeaccusedtheirpredecessorsofinfidelityintheadministrationofthebank。Noaccusationcouldhaveaffectedmoredeeplythereputationandfortuneofthedisgracedparty,andifsuchanaccusationcouldhavebeensupported,wemaybeassuredthatitwouldhavebeenbrought。In1672,whentheFrenchkingwasatUtrecht,theBankofAmsterdampaidsoreadilyasleftnodoubtofthefidelitywithwhichithadobserveditsengagements。Someofthepieceswhichwerethenbroughtfromitsrepositoriesappearedtohavebeenscorchedwiththefirewhichhappenedinthetown—housesoonafterthebankwasestablished。Thosepieces,therefore,musthavelaintherefromthattime。
Whatmaybetheamountofthetreasureinthebankisaquestionwhichhaslongemployedspeculationsofthecurious。
Nothingbutconjecturecanbeofferedconcerningit。Itisgenerallyreckonedthatthereareabouttwothousandpeoplewhokeepaccountswiththebank,andallowingthemtohave,onewithanother,thevalueoffifteenhundredpoundssterlinglyingupontheirrespectiveaccounts(averylargeallowance),thewholequantityofbankmoney,andconsequentlyoftreasureinthebank,willamounttoaboutthreemillionssterling,or,atelevenguildersthepoundsterling,thirty—threemillionsofguilders—agreatsum,andsufficienttocarryonaveryextensivecirculation,butvastlybelowtheextravagantideaswhichsomepeoplehaveformedofthistreasure。
ThecityofAmsterdamderivesaconsiderablerevenuefromthebank。Besideswhatmaybecalledthewarehouse—rentabovementioned,eachperson,uponfirstopeninganaccountwiththebank,paysafeeoftenguilders;andforeverynewaccountthreeguildersthreestivers;foreverytransfertwostivers;andifthetransferisforlessthanthreehundredguilders,sixstivers,inordertodiscouragethemultiplicityofsmalltransactions。Thepersonwhoneglectstobalancehisaccounttwiceintheyearforfeitstwenty—fiveguilders。Thepersonwhoordersatransferformorethanisuponhisaccount,isobligedtopaythreepercentforthesumoverdrawn,andhisorderissetasideintothebargain。Thebankissupposed,too,tomakeaconsiderableprofitbythesaleoftheforeigncoinorbullionwhichsometimesfallstoitbytheexpiringofreceipts,andwhichisalwayskepttillitcanbesoldwithadvantage。Itmakesaprofitlikewisebysellingbankmoneyatfivepercentagio,andbuyingitinatfour。Thesedifferentemolumentsamounttoagooddealmorethanwhatisnecessaryforpayingthesalariesofofficers,anddefrayingtheexpenseofmanagement。Whatispaidforthekeepingofbullionuponreceiptsisalonesupposedtoamounttoaneatannualrevenueofbetweenonehundredandfiftythousandandtwohundredthousandguilders。Publicutility,however,andnotrevenue,wastheoriginalobjectofthisinstitution。Itsobjectwastorelievethemerchantsfromtheinconvenienceofadisadvantageousexchange。Therevenuewhichhasarisenfromitwasunforeseen,andmaybeconsideredasaccidental。Butitisnowtimetoreturnfromthislongdigression,intowhichIhavebeeninsensiblyledinendeavouringtoexplainthereasonswhytheexchangebetweenthecountrieswhichpayinwhatiscalledbankmoney,andthosewhichpayincommoncurrency,shouldgenerallyappeartobeinfavouroftheformerandagainstthelatter。Theformerpayinaspeciesofmoneyofwhichtheintrinsicvalueisalwaysthesame,andexactlyagreeabletothestandardoftheirrespectivemints;thelatterisaspeciesofmoneyofwhichtheintrinsicvalueiscontinuallyvarying,andisalmostalwaysmoreorlessbelowthatstandard。
PART2
OftheUnreasonablenessofthoseextraordinaryRestraintsuponotherPrinciplesINtheforegoingpartofthischapterIhaveendeavouredtoshow,evenupontheprinciplesofthecommercialsystem,howunnecessaryitistolayextraordinaryrestraintsupontheimportationofgoodsfromthosecountrieswithwhichthebalanceoftradeissupposedtobedisadvantageous。
Nothing,however,canbemoreabsurdthanthiswholedoctrineofthebalanceoftrade,uponwhich,notonlytheserestraints,butalmostalltheotherregulationsofcommercearefounded。Whentwoplacestradewithoneanother,thisdoctrinesupposesthat,ifthebalancebeeven,neitherofthemeitherlosesorgains;butifitleansinanydegreetooneside,thatoneofthemlosesandtheothergainsinproportiontoitsdeclensionfromtheexactequilibrium。Bothsuppositionsarefalse。Atradewhichisforcedbymeansofbountiesandmonopoliesmaybeandcommonlyisdisadvantageoustothecountryinwhosefavouritismeanttobeestablished,asIshallendeavourtoshowhereafter。Butthattradewhich,withoutforceorconstraint,isnaturallyandregularlycarriedonbetweenanytwoplacesisalwaysadvantageous,thoughnotalwaysequallyso,toboth。
Byadvantageorgain,Iunderstandnottheincreaseofthequantityofgoldandsilver,butthatoftheexchangeablevalueoftheannualproduceofthelandandlabourofthecountry,ortheincreaseoftheannualrevenueofitsinhabitants。
Ifthebalancebeeven,andifthetradebetweenthetwoplacesconsistaltogetherintheexchangeoftheirnativecommodities,theywill,uponmostoccasions,notonlybothgain,buttheywillgainequally,orverynearequally;eachwillinthiscaseaffordamarketforapartofthesurplusproduceoftheother;eachwillreplaceacapitalwhichhadbeenemployedinraisingandpreparingforthemarketthispartofthesurplusproduceoftheother,andwhichhadbeendistributedamong,andgivenrevenueandmaintenancetoacertainnumberofitsinhabitants。Somepartoftheinhabitantsofeach,therefore,willindirectlyderivetheirrevenueandmaintenancefromtheother。Asthecommoditiesexchanged,too,aresupposedtobeofequalvalue,sothetwocapitalsemployedinthetradewill,uponmostoccasions,beequal,orverynearlyequal;andbothbeingemployedinraisingthenativecommoditiesofthetwocountries,therevenueandmaintenancewhichtheirdistributionwillaffordtotheinhabitantsofeachwillbeequal,orverynearlyequal。
Thisrevenueandmaintenance,thusmutuallyafforded,willbegreaterorsmallerinproportiontotheextentoftheirdealings。
Iftheseshouldannuallyamounttoanhundredthousandpounds,forexample,ortoamilliononeachside,eachofthemwouldaffordanannualrevenueintheonecaseofanhundredthousandpounds,intheotherofamillion,totheinhabitantsoftheother。
Iftheirtradeshouldbeofsuchanaturethatoneofthemexportedtotheothernothingbutnativecommodities,whilethereturnsofthatotherconsistedaltogetherinforeigngoods;thebalance,inthiscase,wouldstillbesupposedeven,commoditiesbeingpaidforwithcommodities。Theywould,inthiscasetoo,bothgain,buttheywouldnotgainequally;andtheinhabitantsofthecountrywhichexportednothingbutnativecommoditieswouldderivethegreatestrevenuefromthetrade。IfEngland,forexample,shouldimportfromFrancenothingbutthenativecommoditiesofthatcountry,and,nothavingsuchcommoditiesofitsownaswereindemandthere,shouldannuallyrepaythembysendingthitheralargequantityofforeigngoods,tobacco,weshallsuppose,andEastIndiagoods;thistrade,thoughitwouldgivesomerevenuetotheinhabitantsofbothcountries,wouldgivemoretothoseofFrancethantothoseofEngland。ThewholeFrenchcapitalannuallyemployedinitwouldannuallybedistributedamongthepeopleofFrance。ButthatpartoftheEnglishcapitalonlywhichwasemployedinproducingtheEnglishcommoditieswithwhichthoseforeigngoodswerepurchasedwouldbeannuallydistributedamongthepeopleofEngland。ThegreaterpartofitwouldreplacethecapitalswhichhadbeenemployedinVirginia,Indostan,andChina,andwhichhadgivenrevenueandmaintenancetotheofthosedistantcountries。Ifthecapitalswereequal,ornearlyequal,thereforethisemploymentoftheFrenchcapitalwouldaugmentmuchmoretherevenueofthepeopleofFrancethanthatoftheEnglishcapitalwouldtherevenueofthepeopleofEngland。FrancewouldinthiscasecarryonadirectforeigntradeofconsumptionwithEngland;whereasEnglandwouldcarryonaround—abouttradeofthesamekindwithFrance。
Thedifferenteffectsofacapitalemployedinthedirectandofoneemployedintheround—aboutforeigntradeofconsumptionhavealreadybeenfullyexplained。
Thereisnot,probably,betweenanytwocountriesatradewhichconsistsaltogetherintheexchangeeitherofnativecommoditiesonbothsides,orofnativecommoditiesononesideandofforeigngoodsontheother。Almostallcountriesexchangewithoneanotherpartlynativeandpartlyforeigngoods。Thatcountry,however,inwhosecargoesthereisthegreatestproportionofnative,andtheleastofforeigngoods,willalwaysbetheprincipalgainer。
IfitwasnotwithtobaccoandEastIndiagoods,butwithgoldandsilver,thatEnglandpaidforthecommoditiesannuallyimportedfromFrance,thebalance,inthiscase,wouldbesupposeduneven,commoditiesnotbeingpaidforwithcommodities,butwithgoldandsilver。Thetrade,however,would,inthiscase,asintheforegoing,givesomerevenuetotheinhabitantsofbothcountries,butmoretothoseofFrancethantothoseofEngland。ItwouldgivesomerevenuetothoseofEngland。ThecapitalwhichhadbeenemployedinproducingtheEnglishgoodsthatpurchasedthisgoldandsilver,thecapitalwhichhadbeendistributedamong,andgivenrevenueto,certaininhabitantsofEngland,wouldtherebybereplacedandenabledtocontinuethatemployment。ThewholecapitalofEnglandwouldnomorebediminishedbythisexportationofgoldandsilverthanbytheexportationofanequalvalueofanyothergoods。Onthecontrary,itwouldinmostcasesbeaugmented。Nogoodsaresentabroadbutthoseforwhichthedemandissupposedtobegreaterabroadthanathome,andofwhichthereturnsconsequently,itisexpected,willbeofmorevalueathomethanthecommoditiesexported。Ifthetobaccowhich,inEngland,isworthonlyahundredthousandpounds,whensenttoFrancewillpurchasewinewhichis,inEngland,worthahundredandtenthousand,thisexchangewillequallyaugmentthecapitalofEnglandbytenthousandpounds。IfahundredthousandpoundsofEnglishgold,inthesamemanner,purchaseFrenchwinewhich,inEngland,isworthahundredandtenthousand,thisexchangewillequallyaugmentthecapitalofEnglandbytenthousandpounds。Asamerchantwhohasahundredandtenthousandpoundsworthofwineinhiscellarisarichermanthanhewhohasonlyahundredthousandpoundsworthoftobaccoinhiswarehouse,soishelikewisearichermanthanhewhohasonlyahundredthousandpoundsworthofgoldinhiscoffers。Hecanputintomotionagreaterquantityofindustry,andgiverevenue,maintenance,andemploymenttoagreaternumberofpeoplethaneitheroftheothertwo。Butthecapitalofthecountryisequaltothecapitalsofallitsdifferentinhabitants,andthequantityofindustrywhichcanbeannuallymaintainedinitisequaltowhatallthosedifferentcapitalscanmaintain。Boththecapitalofthecountry,therefore,andthequantityofindustrywhichcanbeannuallymaintainedinit,mustgenerallybeaugmentedbythisexchange。
Itwould,indeed,bemoreadvantageousforEnglandthatitcouldpurchasethewinesofFrancewithitsownhardwareandbroadcloththanwitheitherthetobaccoofVirginiaorthegoldandsilverofBrazilandPeru。Adirectforeigntradeofconsumptionisalwaysmoreadvantageousthanaroundaboutone。Butaround—aboutforeigntradeofconsumption,whichiscarriedonwithgoldandsilver,doesnotseemtobelessadvantageousthananyotherequallyround—aboutone。Neitherisacountrywhichhasnominesmorelikelytobeexhaustedofgoldandsilverbythisannualexportationofthosemetalsthanonewhichdoesnotgrowtobaccobythelikeannualexportationofthatplant。Asacountrywhichhaswherewithaltobuytobaccowillneverbelonginwantofit,soneitherwillonebelonginwantofgoldandsilverwhichhaswherewithaltopurchasethosemetals。
Itisalosingtrade,itissaid,whichaworkmancarriesonwiththealehouse;andthetradewhichamanufacturingnationwouldnaturallycarryonwithawinecountrymaybeconsideredasatradeofthesamenature。Ianswer,thatthetradewiththealehouseisnotnecessarilyalosingtrade。Initsownnatureitisjustasadvantageousasanyother,thoughperhapssomewhatmoreliabletobeabused。Theemploymentofabrewer,andeventhatofaretaileroffermentedliquors,areasnecessarydivisionsoflabourasanyother。Itwillgenerallybemoreadvantageousforaworkmantobuyofthebrewerthequantityhehasoccasionforthantobrewithimself,andifheisapoorworkman,itwillgenerallybemoreadvantageousforhimtobuyitbylittleandlittleoftheretailerthanalargequantityofthebrewer。Hemaynodoubtbuytoomuchofeither,ashemayofanyotherdealersinhisneighbourhood,ofthebutcher,ifheisaglutton,orofthedraper,ifheaffectstobeabeauamonghiscompanions。Itisadvantageoustothegreatbodyofworkmen,notwithstanding,thatallthesetradesshouldbefree,thoughthisfreedommaybeabusedinallofthem,andismorelikelytobeso,perhaps,insomethaninothers。Thoughindividuals,besides,maysometimesruintheirfortunesbyanexcessiveconsumptionoffermentedliquors,thereseemstobenoriskthatanationshoulddoso。Thoughineverycountrytherearemanypeoplewhospenduponsuchliquorsmorethantheycanafford,therearealwaysmanymorewhospendless。Itdeservestoberemarkedtoo,that,ifweconsultexperience,thecheapnessofwineseemstobeacause,notofdrunkenness,butofsobriety。
TheinhabitantsofthewinecountriesareingeneralthesoberestpeopleinEurope;witnesstheSpainards,theItalians,andtheinhabitantsofthesouthernprovincesofFrance。Peopleareseldomguiltyofexcessinwhatistheirdailyfare。Nobodyaffectsthecharacterofliberalityandgoodfellowshipbybeingprofuseofaliquorwhichisascheapassmallbeer。Onthecontrary,inthecountrieswhich,eitherfromexcessiveheatorcold,producenograpes,andwherewineconsequentlyisdearandararity,drunkennessisacommonvice,asamongthenorthernnations,andallthosewholivebetweenthetropics,thenegroes,forexample,onthecoastofGuinea。WhenaFrenchregimentcomesfromsomeofthenorthernprovincesofFrance,wherewineissomewhatdear,tobequarteredinthesouthern,whereitisverycheap,thesoldiers,Ihavefrequentlyhearditobservedareatfirstdebauchedbythecheapnessandnoveltyofgoodwine;butafterafewmonths’residence,thegreaterpartofthembecomeassoberastherestoftheinhabitants。Werethedutiesuponforeignwines,andtheexcisesuponmalt,beer,andaletobetakenawayallatonce,itmight,inthesamemanner,occasioninGreatBritainaprettygeneralandtemporarydrunkennessamongthemiddlingandinferiorranksofpeople,whichwouldprobablybesoonfollowedbyapermanentandalmostuniversalsobriety。Atpresentdrunkennessisbynomeanstheviceofpeopleoffashion,orofthosewhocaneasilyaffordthemostexpensiveliquors。A
gentlemandrunkwithalehasscarceeverbeenseenamongus。TherestraintsuponthewinetradeinGreatBritain,besides,donotsomuchseemcalculatedtohinderthepeoplefromgoing,ifImaysayso,tothealehouse,asfromgoingwheretheycanbuythebestandcheapestliquor。TheyfavourthewinetradeofPortugal,anddiscouragethatofFrance。ThePortugese,itissaid,indeed,arebettercustomersforourmanufacturesthantheFrench,andshouldthereforebeencouragedinpreferencetothem。Astheygiveustheircustom,itispretended,weshouldgivethemours。
Thesneakingartsofunderlingtradesmenarethuserectedintopoliticalmaximsfortheconductofagreatempire:foritisthemostunderlingtradesmenonlywhomakeitaruletoemploychieflytheirowncustomers。Agreattraderpurchaseshisgoodsalwayswheretheyarecheapestandbest,withoutregardtoanylittleinterestofthiskind。
Bysuchmaximsasthese,however,nationshavebeentaughtthattheirinterestconsistedinbeggaringalltheirneighbours。
Eachnationhasbeenmadetolookwithaninvidiouseyeupontheprosperityofallthenationswithwhichittrades,andtoconsidertheirgainasitsownloss。Commerce,whichoughtnaturallytobe,amongnations,asamongindividuals,abondofunionandfriendship,hasbecomethemostfertilesourceofdiscordandanimosity。Thecapriciousambitionofkingsandministershasnot,duringthepresentandtheprecedingcentury,beenmorefataltothereposeofEuropethantheimpertinentjealousyofmerchantsandmanufacturers。Theviolenceandinjusticeoftherulersofmankindisanancientevil,forwhich,Iamafraid,thenatureofhumanaffairscanscarceadmitofaremedy。Butthemeanrapacity,themonopolizingspiritofmerchantsandmanufacturers,whoneitherare,noroughttobe,therulersofmankind,thoughitcannotperhapsbecorrectedmayveryeasilybepreventedfromdisturbingthetranquillityofanybodybutthemselves。
Thatitwasthespiritofmonopolywhichoriginallybothinventedandpropagatedthisdoctrinecannotbedoubted;andtheywhofirsttaughtitwerebynomeanssuchfoolsastheywhobelievedit。Ineverycountryitalwaysisandmustbetheinterestofthegreatbodyofthepeopletobuywhatevertheywantofthosewhosellitcheapest。Thepropositionissoverymanifestthatitseemsridiculoustotakeanypainstoproveit;
norcoulditeverhavebeencalledinquestionhadnottheinterestedsophistryofmerchantsandmanufacturersconfoundedthecommonsenseofmankind。Theirinterestis,inthisrespect,directlyoppositetothatofthegreatbodyofthepeople。Asitistheinterestofthefreemenofacorporationtohindertherestoftheinhabitantsfromemployinganyworkmenbutthemselves,soitistheinterestofthemerchantsandmanufacturersofeverycountrytosecuretothemselvesthemonopolyofthehomemarket。HenceinGreatBritain,andinmostotherEuropeancountries,theextraordinarydutiesuponalmostallgoodsimportedbyalienmerchants。Hencethehighdutiesandprohibitionsuponallthoseforeignmanufactureswhichcancomeintocompetitionwithourown。Hence,too,theextraordinaryrestraintsupontheimportationofalmostallsortsofgoodsfromthosecountrieswithwhichthebalanceoftradeissupposedtobedisadvantageous;thatis,fromthoseagainstwhomnationalanimosityhappenstobemostviolentlyinflamed。
Thewealthofaneighbouringnation,however,thoughdangerousinwarandpolitics,iscertainlyadvantageousintrade。Inastateofhostilityitmayenableourenemiestomaintainfleetsandarmiessuperiortoourown;butinastateofpeaceandcommerceitmustlikewiseenablethemtoexchangewithustoagreatervalue,andtoaffordabettermarket,eitherfortheimmediateproduceofourownindustry,orforwhateverispurchasedwiththatproduce。Asarichmanislikelytobeabettercustomertotheindustriouspeopleinhisneighbourhoodthanapoor,soislikewisearichnation。Arichman,indeed,whoishimselfamanufacturer,isaverydangerousneighbourtoallthosewhodealinthesameway。Alltherestoftheneighbourhood,however,byfarthegreatestnumber,profitbythegoodmarketwhichhisexpenseaffordsthem。Theyevenprofitbyhisundersellingthepoorerworkmenwhodealinthesamewaywithhim。Themanufacturersofarichnation,inthesamemanner,maynodoubtbeverydangerousrivalstothoseoftheirneighbours。
Thisverycompetition,however,isadvantageoustothegreatbodyofthepeople,whoprofitgreatlybesidesbythegoodmarketwhichthegreatexpenseofsuchanationaffordsthemineveryotherway。Privatepeoplewhowanttomakeafortuneneverthinkofretiringtotheremoteandpoorprovincesofthecountry,butresorteithertothecapital,ortosomeofthegreatcommercialtowns。Theyknowthatwherelittlewealthcirculatesthereislittletobegot,butthatwhereagreatdealisinmotion,someshareofitmayfalltothem。Thesamemaximswhichwouldinthismannerdirectthecommonsenseofone,orten,ortwentyindividuals,shouldregulatethejudgmentofone,orten,ortwentymillions,andshouldmakeawholenationregardtherichesofitsneighboursasaprobablecauseandoccasionforitselftoacquireriches。Anationthatwouldenrichitselfbyforeigntradeiscertainlymostlikelytodosowhenitsneighboursareallrich,industrious,andcommercialnations。Agreatnationsurroundedonallsidesbywanderingsavagesandpoorbarbariansmight,nodoubt,acquirerichesbythecultivationofitsownlands,andbyitsowninteriorcommerce,butnotbyforeigntrade。ItseemstohavebeeninthismannerthattheancientEgyptiansandthemodernChineseacquiredtheirgreatwealth。TheancientEgyptians,itissaid,neglectedforeigncommerce,andthemodernChinese,itisknown,bolditintheutmostcontempt,andscarcedeigntoafforditthedecentprotectionofthelaws。
Themodernmaximsofforeigncommerce,byaimingattheimpoverishmentofallourneighbours,sofarastheyarecapableofproducingtheirintendedeffect,tendtorenderthatverycommerceinsignificantandcontemptible。
ItisinconsequenceofthesemaximsthatthecommercebetweenFranceandEnglandhasinbothcountriesbeensubjectedtosomanydiscouragementsandrestraints。Ifthosetwocountries,however,weretoconsidertheirrealinterest,withouteithermercantilejealousyornationalanimosity,thecommerceofFrancemightbemoreadvantageoustoGreatBritainthanthatofanyothercountry,andforthesamereasonthatofGreatBritaintoFrance。FranceisthenearestneighbourtoGreatBritain。InthetradebetweenthesoutherncoastofEnglandandthenorthernandnorth—westerncoastsofFrance,thereturnsmightbeexpected,inthesamemannerasintheinlandtrade,four,five,orsixtimesintheyear。Thecapital,therefore,employedinthistradecouldineachofthetwocountrieskeepinmotionfour,five,orsixtimesthequantityofindustry,andaffordemploymentandsubsistencetofour,five,orsixtimesthenumberofpeople,whichanequalcapitalcoulddointhegreaterpartoftheotherbranchesofforeigntrade。BetweenthepartsofFranceandGreatBritainmostremotefromoneanother,thereturnsmightbeexpected,atleast,onceintheyear,andeventhistradewouldsofarbeatleastequallyadvantageousasthegreaterpartoftheotherbranchesofourforeignEuropeantrade。Itwouldbe,atleast,threetimesmoreadvantageousthantheboastedtradewithourNorthAmericancolonies,inwhichthereturnswereseldommadeinlessthanthreeyears,frequentlynotinlessthanfourorfiveyears。France,besides,issupposedtocontaintwenty—fourmillionsofinhabitants。OurNorthAmericancolonieswereneversupposedtocontainmorethanthreemillions;andFranceisamuchrichercountrythanNorthAmerica;though,onaccountofthemoreunequaldistributionofriches,thereismuchmorepovertyandbeggaryintheonecountrythanintheother。
France,therefore,couldaffordamarketatleasteighttimesmoreextensive,and,onaccountofthesuperiorfrequencyofthereturns,four—and—twentytimesmoreadvantageousthanthatwhichourNorthAmericancolonieseverafforded。ThetradeofGreatBritainwouldbejustasadvantageoustoFrance,and,inproportiontothewealth,population,andproximityoftherespectivecountries,wouldhavethesamesuperiorityoverthatwhichFrancecarriesonwithherowncolonies。Suchistheverygreatdifferencebetweenthattrade,whichthewisdomofbothnationshasthoughtpropertodiscourage,andthatwhichithasfavouredthemost。
Buttheverysamecircumstanceswhichwouldhaverenderedanopenandfreecommercebetweenthetwocountriessoadvantageoustoboth,haveoccasionedtheprincipalobstructionstothatcommerce。Beingneighbours,theyarenecessarilyenemies,andthewealthandpowerofeachbecomes,uponthataccount,moreformidabletotheother;andwhatwouldincreasetheadvantageofnationalfriendshipservesonlytoinflametheviolenceofnationalanimosity。Theyarebothrichandindustriousnations;
andthemerchantsandmanufacturersofeachdreadthecompetitionoftheskillandactivityofthoseoftheother。Mercantilejealousyisexcited,andbothinflames,andisitselfinflamed,bytheviolenceofnationalanimosity;andthetradersofbothcountrieshaveannounced,withallthepassionateconfidenceofinterestedfalsehood,thecertainruinofeach,inconsequenceofthatunfavourablebalanceoftrade,which,theypretend,wouldbetheinfallibleeffectofanunrestrainedcommercewiththeother。