CHAPTERVI
OfTreatiesofCommerceWHENanationbindsitselfbytreatyeithertopermittheentryofcertaingoodsfromoneforeigncountrywhichitprohibitsfromallothers,ortoexemptthegoodsofonecountryfromdutiestowhichitsubjectsthoseofallothers,thecountry,oratleastthemerchantsandmanufacturersofthecountry,whosecommerceissofavoured,mustnecessarilyderivegreatadvantagefromthetreaty。Thosemerchantsandmanufacturersenjoyasortofmonopolyinthecountrywhichissoindulgenttothem。Thatcountrybecomesamarketbothmoreextensiveandmoreadvantageousfortheirgoods:moreextensive,becausethegoodsofothernationsbeingeitherexcludedorsubjectedtoheavierduties,ittakesoffagreaterquantityoftheirs:moreadvantageous,becausethemerchantsofthefavouredcountry,enjoyingasortofmonopolythere,willoftenselltheirgoodsforabetterpricethanifexposedtothefreecompetitionofallothernations。
Suchtreaties,however,thoughtheymaybeadvantageoustothemerchantsandmanufacturersofthefavoured,arenecessarilydisadvantageoustothoseofthefavouringcountry。Amonopolyisthusgrantedagainstthemtoaforeignnation;andtheymustfrequentlybuytheforeigngoodstheyhaveoccasionfordearerthanifthefreecompetitionofothernationswasadmitted。Thatpartofitsownproducewithwhichsuchanationpurchasesforeigngoodsmustconsequentlybesoldcheaper,becausewhentwothingsareexchangedforoneanother,thecheapnessoftheoneisanecessaryconsequence,orratherthesamethingwiththedearnessoftheother。Theexchangeablevalueofitsannualproduce,therefore,islikelytobediminishedbyeverysuchtreaty。Thisdiminution,however,canscarceamounttoanypositiveloss,butonlytoalesseningofthegainwhichitmightotherwisemake。Thoughitsellsitsgoodscheaperthanitotherwisemightdo,itwillnotprobablysellthemforlessthantheycost;nor,asinthecaseofbounties,forapricewhichwillnotreplacethecapitalemployedinbringingthemtomarket,togetherwiththeordinaryprofitsofstock。Thetradecouldnotgoonlongifitdid。Eventhefavouringcountry,therefore,maystillgainbythetrade,thoughlessthaniftherewasafreecompetition。
Sometreatiesofcommerce,however,havebeensupposedadvantageousuponprinciplesverydifferentfromthese;andacommercialcountryhassometimesgrantedamonopolyofthiskindagainstitselftocertaingoodsofaforeignnation,becauseitexpectedthatinthewholecommercebetweenthem,itwouldannuallysellmorethanitwouldbuy,andthatabalanceingoldandsilverwouldbeannuallyreturnedtoit。ItisuponthisprinciplethatthetreatyofcommercebetweenEnglandandPortugal,concludedin1703byMr。Methuen,hasbeensomuchcommended。Thefollowingisaliteraltranslationofthattreaty,whichconsistsofthreearticlesonly。
ART。I。
HissacredroyalmajestyofPortugalpromises,bothinhisownname,andthatofhissuccessors,toadmit,foreverhereafter,intoPortugal,thewoollencloths,andtherestofthewoollenmanufacturesoftheBritish,aswasaccustomed,tilltheywereprohibitedbythelaw;neverthelessuponthiscondition:
ART。II。
Thatistosay,thathersacredroyalmajestyofGreatBritainshall,inherownname,andthatofhersuccessors,beobliged,foreverhereafter,toadmitthewinesofthegrowthofPortugalintoBritain;sothatatnotime,whetherthereshallbepeaceorwarbetweenthekingdomsofBritainandFrance,anythingmoreshallbedemandedforthesewinesbythenameofcustomorduty,orbywhatsoeverothertitle,directlyorindirectly,whethertheyshallbeimportedintoGreatBritaininorhogsheads,orothercasks,thanwhatshallbedemandedforthelikequantityormeasureofFrenchwine,deductingorabatingathirdpartofthecustomorduty。Butifatanytimethisdeductionorabatementofcustoms,whichistobemadeasaforesaid,shallinanymannerbeattemptedandprejudiced,itshallbejustandlawfulforhissacredroyalmajestyofPortugal,againtoprohibitthewoollencloths,andtherestoftheBritishwoollenmanufactures。
ART。III。
Themostexcellentlordstheplenipotentiariespromiseandtakeuponthemselves,thattheirabovenamedmastersshallratifythistreaty;andwithinthespaceoftwomonthstheratificationsshallbeexchanged。
BythistreatythecrownofPortugalbecomesboundtoadmittheEnglishwoollensuponthesamefootingasbeforetheprohibition;thatis,nottoraisethedutieswhichhadbeenpaidbeforethattime。Butitdoesnotbecomeboundtoadmitthemuponanybettertermsthanthoseofanyothernation,ofFranceorHollandforexample。ThecrownofGreatBritain,onthecontrary,becomesboundtoadmitthewinesofPortugaluponpayingonlytwo—thirdsofthedutywhichispaidforthoseofFrance,thewinesmostlikelytocomeintocompetitionwiththem。Sofarthistreaty,therefore,isevidentlyadvantageoustoPortugal,anddisadvantageoustoGreatBritain。
Ithasbeencelebrated,however,asamasterpieceofthecommercialpolicyofEngland。PortugalreceivesannuallyfromtheBrazilsagreaterquantityofgoldthancanbeemployedinitsdomesticcommerce,whetherintheshapeofcoinorofplate。Thesurplusistoovaluabletobeallowedtolieidleandlockedupincoffers,andasitcanfindnoadvantageousmarketathome,itmust,notwithstandinganyprohibition,besentabroad,andexchangedforsomethingforwhichthereisamoreadvantageousmarketathome。AlargeshareofitcomesannuallytoEngland,inreturneitherforEnglishgoods,orforthoseofotherEuropeannationsthatreceivetheirreturnsthroughEngland。Mr。Barettiwasinformedthattheweeklypacket—boatfromLisbonbrings,oneweekwithanother,morethanfiftythousandpoundsingoldtoEngland。Thesumhadprobablybeenexaggerated。Itwouldamounttomorethantwomillionssixhundredthousandpoundsayear,whichismorethantheBrazilsaresupposedtoafford。
OurmerchantsweresomeyearsagooutofhumourwiththecrownofPortugal。Someprivilegeswhichhadbeengrantedthem,notbytreaty,butbythefreegraceofthatcrown,atthesolicitationindeed,itisprobable,andinreturnformuchgreaterfavours,defenceandprotection,fromthecrownofGreatBritainhadbeeneitherinfringedorrevoked。Thepeople,therefore,usuallymostinterestedincelebratingthePortugaltradewerethenratherdisposedtorepresentitaslessadvantageousthanithadcommonlybeenimagined。Thefargreaterpart,almostthewhole,theypretended,ofthisannualimportationofgold,wasnotonaccountofGreatBritain,butofotherEuropeannations;thefruitsandwinesofPortugalannuallyimportedintoGreatBritainnearlycompensatingthevalueoftheBritishgoodssentthither。
Letussuppose,however,thatthewholewasonaccountofGreatBritain,andthatitamountedtoastillgreatersumthanMr。Barettiseemstoimagine;thistradewouldnot,uponthataccount,bemoreadvantageousthananyotherinwhich,forthesamevaluesentout,wereceivedanequalvalueofconsumablegoodsinreturn。
Itisbutaverysmallpartofthisimportationwhich,itcanbesupposed,isemployedasanannualadditioneithertotheplateortothecoinofthekingdom。Therestmustallbesentabroadandexchangedforconsumablegoodsofsomekindorother。
ButifthoseconsumablegoodswerepurchaseddirectlywiththeproduceofEnglishindustry,itwouldbemorefortheadvantageofEnglandthanfirsttopurchasewiththatproducethegoldofPortugal,andafterwardstopurchasewiththatgoldthoseconsumablegoods。Adirectforeigntradeofconsumptionisalwaysmoreadvantageousthanaround—aboutone;andtobringthesamevalueofforeigngoodstothehomemarket,requiresamuchsmallercapitalintheonewaythanintheother。Ifasmallershareofitsindustry,therefore,hadbeenemployedinproducinggoodsfitforthePortugalmarket,andagreaterinproducingthosefitfortheothermarkets,wherethoseconsumablegoodsforwhichthereisademandinGreatBritainaretobehad,itwouldhavebeenmorefortheadvantageofEngland。Toprocureboththegold,whichitwantsforitsownuse,andtheconsumablegoods,would,inthisway,employamuchsmallercapitalthanatpresent。Therewouldbeasparecapital,therefore,tobeemployedforotherpurposes,inexcitinganadditionalquantityofindustry,andinraisingagreaterannualproduce。
ThoughBritainwereentirelyexcludedfromthePortugaltrade,itcouldfindverylittledifficultyinprocuringalltheannualsuppliesofgoldwhichitwants,eitherforthepurposesofplate,orofcoin,orofforeigntrade。Gold,likeeveryothercommodity,isalwayssomewhereoranothertobegotforitsvaluebythosewhohavethatvaluetogiveforit。TheannualsurplusofgoldinPortugal,besides,wouldstillbesentabroad,andthoughnotcarriedawaybyGreatBritain,wouldbecarriedawaybysomeothernation,whichwouldbegladtosellitagainforitsprice,inthesamemannerasGreatBritaindoesatpresent。
InbuyinggoldofPortugal,indeed,webuyitatthefirsthand;
whereas,inbuyingitofanyothernation,exceptSpain,weshouldbuyitatthesecond,andmightpaysomewhatdearer。Thisdifference,however,wouldsurelybetooinsignificanttodeservethepublicattention。
Almostallourgold,itissaid,comesfromPortugal。Withothernationsthebalanceoftradeiseitheragainstus,ornotmuchinourfavour。Butweshouldrememberthatthemoregoldweimportfromonecountry,thelesswemustnecessarilyimportfromallothers。Theeffectualdemandforgold,likethatforeveryothercommodity,isineverycountrylimitedtoacertainquantity。Ifnine—tenthsofthisquantityareimportedfromonecountry,thereremainsatenthonlytobeimportedfromallothers。Themoregoldbesidesthatisannuallyimportedfromsomeparticularcountries,overandabovewhatisrequisiteforplateandforcoin,themoremustnecessarilybeexportedtosomeothers;andthemorethatmostinsignificantobjectofmodernpolicy,thebalanceoftrade,appearstobeinourfavourwithsomeparticularcountries,themoreitmustnecessarilyappeartobeagainstuswithmanyothers。
Itwasuponthissillynotion,however,thatEnglandcouldnotsubsistwithoutthePortugaltrade,that,towardstheendofthelatewar,FranceandSpain,withoutpretendingeitheroffenceorprovocation,requiredtheKingofPortugaltoexcludeallBritishshipsfromhisports,andforthesecurityofthisexclusion,toreceiveintothemFrenchorSpanishgarrisons。HadthekingofPortugalsubmittedtothoseignominioustermswhichhisbrother—in—lawthekingofSpainproposedtohim,BritainwouldhavebeenfreedfromamuchgreaterinconveniencythanthelossofthePortugaltrade,theburdenofsupportingaveryweakally,sounprovidedofeverythingforhisowndefencethatthewholepowerofEngland,haditbeendirectedtothatsinglepurpose,couldscarceperhapshavedefendedhimforanothercampaign。ThelossofthePortugaltradewould,nodoubt,haveoccasionedaconsiderableembarrassmenttothemerchantsatthattimeengagedinit,whomightnot,perhaps,havefoundout,forayearortwo,anyotherequallyadvantageousmethodofemployingtheircapitals;andinthiswouldprobablyhaveconsistedalltheinconveniencywhichEnglandcouldhavesufferedfromthisnotablepieceofcommercialpolicy。
Thegreatannualimportationofgoldandsilverisneitherforthepurposeofplatenorofcoin,butofforeigntrade。A
round—aboutforeigntradeofconsumptioncanbecarriedonmoreadvantageouslybymeansofthesemetalsthanofalmostanyothergoods。Astheyaretheuniversalinstrumentsofcommerce,theyaremorereadilyreceivedinreturnforallcommoditiesthananyothergoods;andonaccountoftheirsmallbulkandgreatvalue,itcostslesstotransportthembackwardandforwardfromoneplacetoanotherthanalmostanyothersortofmerchandise,andtheyloselessoftheirvaluebybeingsotransported。Ofallthecommodities,therefore,whichareboughtinoneforeigncountry,fornootherpurposebuttobesoldorexchangedagainforsomeothergoodsinanother,therearenonesoconvenientasgoldandsilver。Infacilitatingallthedifferentround—aboutforeigntradesofconsumptionwhicharecarriedoninGreatBritainconsiststheprincipaladvantageofthePortugaltrade;andthoughitisnotacapitaladvantage,itisnodoubtaconsiderableone。
Thatanyannualadditionwhich,itcanreasonablybesupposed,ismadeeithertotheplateortothecoinofthekingdom,couldrequirebutaverysmallannualimportationofgoldandsilver,seemsevidentenough;andthoughwehadnodirecttradewithPortugal,thissmallquantitycouldalways,somewhereoranother,beveryeasilygot。
Thoughthegoldsmith’stradebeveryconsiderableinGreatBritain,thefar。greaterpartofthenewplatewhichtheyannuallysellismadefromotheroldplatemelteddown;sothattheadditionannuallymadetothewholeplateofthekingdomcannotbeverygreat,andcouldrequirebutaverysmallannualimportation。
Itisthesamecasewiththecoin。Nobodyimagines,I
believe,thateventhegreaterpartoftheannualcoinage,amounting,fortenyearstogether,beforethelatereformationofthegoldcoin,toupwardsofeighthundredthousandpoundsayearingold,wasanannualadditiontothemoneybeforecurrentinthekingdom。Inacountrywheretheexpenseofthecoinageisdefrayedbythegovernment,thevalueofthecoin,evenwhenitcontainsitsfullstandardweightofgoldandsilver,canneverbemuchgreaterthanthatofanequalquantityofthosemetalsuncoined;becauseitrequiresonlythetroubleofgoingtothemint,andthedelayperhapsofafewweeks,toprocureforanyquantityofuncoinedgoldandsilveranequalquantityofthosemetalsincoin。But,ineverycountry,thegreaterpartofthecurrentcoinisalmostalwaysmoreorlessworn,orotherwisedegeneratedfromitsstandard。InGreatBritainitwas,beforethelatereformation,agooddealso,thegoldbeingmorethantwopercentandthesilvermorethaneightpercentbelowitsstandardweight。Butifforty—fourguineasandahalf,containingtheirfullstandardweight,apoundweightofgold,couldpurchaseverylittlemorethanapoundweightcouldofuncoinedgold,forty—fourguineasandahalfwantingapartoftheirweightcouldnotpurchaseapoundweight,andsomethingwastobeaddedinordertomakeupthedeficiency。Thecurrentpriceofgoldbullionatmarket,therefore,insteadofbeingthesamewiththemintprice,orL4614s。6d。,wasthenaboutL4714s。andsometimesaboutL48。Whenthegreaterpartofthecoin,however,wasinthisdegeneratecondition,forty—fourguineasandahalf,freshfromthemint,wouldpurchasenomoregoodsinthemarketthananyotherordinaryguineas,becausewhentheycameintothecoffersofthemerchant,beingconfoundedwithothermoney,theycouldnotafterwardsbedistinguishedwithoutmoretroublethanthedifferencewasworth。LikeotherguineastheywereworthnomorethanL4614s。6d。Ifthrownintothemeltingpot,however,theyproduced,withoutanysensibleloss,apoundweightofstandardgold,whichcouldbesoldatanytimeforbetweenL47
14s。andL48eitherofgoldorsilver,asfitforallthepurposesofcoinasthatwhichhadbeenmelteddown。Therewasanevidentprofit,therefore,inmeltingdownnewcoinedmoney,anditwasdonesoinstantaneously,thatnoprecautionofgovernmentcouldpreventit。Theoperationsofthemintwere,uponthisaccount,somewhatlikethewebofPenelope;theworkthatwasdoneinthedaywasundoneinthenight。Themintwasemployed,notsomuchinmakingdailyadditionstothecoin,asinreplacingtheverybestpartofitwhichwasdailymelteddown。
Weretheprivatepeople,whocarrytheirgoldandsilvertothemint,topaythemselvesforthecoinage,itwouldaddtothevalueofthosemetalsinthesamemannerasthefashiondoestothatofplate。Coinedgoldandsilverwouldbemorevaluablethanuncoined。Theseignorage,ifitwasnotexorbitant,wouldaddtothebullionthewholevalueoftheduty;because,thegovernmenthavingeverywheretheexclusiveprivilegeofcoining,nocoincancometomarketcheaperthantheythinkpropertoaffordit。Ifthedutywasexorbitantindeed,thatis,ifitwasverymuchabovetherealvalueofthelabourandexpenserequisiteforcoinage,falsecoiners,bothathomeandabroad,mightbeencouraged,bythegreatdifferencebetweenthevalueofbullionandthatofcoin,topourinsogreataquantityofcounterfeitmoneyasmightreducethevalueofthegovernmentmoney。InFrance,however,thoughtheseignorageiseightpercent,nosensibleinconveniencyofthiskindisfoundtoarisefromit。
Thedangerstowhichafalsecoineriseverywhereexposed,ifhelivesinthecountryofwhichhecounterfeitsthecoin,andtowhichhisagentsorcorrespondentsareexposedifhelivesinaforeigncountry,arebyfartoogreattobeincurredforthesakeofaprofitofsixorsevenpercent。
TheseignorageinFranceraisesthevalueofthecoinhigherthaninproportiontothequantityofpuregoldwhichitcontains。ThusbytheedictofJanuary1726,themintpriceoffinegoldoftwenty—fourcaratswasfixedatsevenhundredandfortylivresninesousandonedenierone—eleventh,themarkofeightParisounces。ThegoldcoinofFrance,makinganallowancefortheremedyofthemint,containstwenty—onecaratsandthree—fourthsoffinegold,andtwocaratsonefourthofalloy。
Themarkofstandardgold,therefore,isworthnomorethanaboutsixhundredandseventy—onelivrestendeniers。ButinFrancethismarkofstandardgoldiscoinedintothirtyLouisd’orsoftwenty—fourlivreseach,orintosevenhundredandtwentylivres。
Thecoinage,therefore,increasesthevalueofamarkofstandardgoldbullion,bythedifferencebetweensixhundredandseventy—onelivrestendeniers,andsevenhundredandtwentylivres;orbyforty—eightlivresnineteensousandtwodeniers。
Aseignoragewill,inmanycases,takeawayaltogether,andwill,inallcases,diminishtheprofitofmeltingdownthenewcoin。Thisprofitalwaysarisesfromthedifferencebetweenthequantityofbullionwhichthecommoncurrencyoughttocontain,andthatwhichitactuallydoescontain。Ifthisdifferenceislessthantheseignorage,therewillbelossinsteadofprofit。
Ifitisequaltotheseignorage,therewillneitherbeprofitnorloss。Ifitisgreaterthantheseignorage,therewillindeedbesomeprofit,butlessthaniftherewasnoseignorage。If,beforethelatereformationofthegoldcoin,forexample,therehadbeenaseignorageoffivepercentuponthecoinage,therewouldhavebeenalossofthreepercentuponthemeltingdownofthegoldcoin。Iftheseignoragehadbeentwopercenttherewouldhavebeenneitherprofitnorloss。Iftheseignoragehadbeenonepercenttherewouldhavebeenaprofit,butofonepercentonlyinsteadoftwopercent。Wherevermoneyisreceivedbytale,therefore,andnotbyweight,aseignorageisthemosteffectualpreventativeofthemeltingdownofthecoin,and,forthesamereason,ofitsexportation。Itisthebestandheaviestpiecesthatarecommonlyeithermelteddownorexported;becauseitisuponsuchthatthelargestprofitsaremade。
Thelawforencouragementofthecoinage,byrenderingitduty—free,wasfirstenactedduringthereignofCharlesIIforalimitedtime;andafterwardscontinued,bydifferentprolongations,till1769,whenitwasrenderedperpetual。TheBankofEngland,inordertoreplenishtheircofferswithmoney,arefrequentlyobligedtocarrybulliontothemint;anditwasmorefortheirinterest,theyprobablyimagined,thatthecoinageshouldbeattheexpenseofthegovernmentthanattheirown。Itwasprobablyoutofcomplaisancetothisgreatcompanythatthegovernmentagreedtorenderthislawperpetual。Shouldthecustomofweighinggold,however,cometobedisused,asitisverylikelytobeonaccountofitsinconveniency;shouldthegoldcoinofEnglandcometobereceivedbytale,asitwasbeforethelaterecoinage,thisgreatcompanymay,perhaps,findthattheyhaveuponthis,asuponsomeotheroccasions,mistakentheirowninterestnotalittle。
Beforethelaterecoinage,whenthegoldcurrencyofEnglandwastwopercentbelowitsstandardweight,astherewasnoseignorage,itwastwopercentbelowthevalueofthatquantityofstandardgoldbullionwhichitoughttohavecontained。Whenthisgreatcompany,therefore,boughtgoldbullioninordertohaveitcoined,theywereobligedtopayforittwopercentmorethanitwasworthaftercoinage。Butiftherehadbeenaseignorageoftwopercentuponthecoinage,thecommongoldcurrency,thoughtwopercentbelowitsstandardweight,wouldnotwithstandinghavebeenequalinvaluetothequantityofstandardgoldwhichitoughttohavecontained;thevalueofthefashioncompensatinginthiscasethediminutionoftheweight。
Theywouldindeedhavehadtheseignoragetopay,whichbeingtwopercent,theirlossuponthewholetransactionwouldhavebeentwopercentexactlythesame,butnogreaterthanitactuallywas。
Iftheseignoragehadbeenfivepercent,andthegoldcurrencyonlytwopercentbelowitsstandardweight,thebankwouldinthiscasehavegainedthreepercentuponthepriceofthebullion;butastheywouldhavehadaseignorageoffivepercenttopayuponthecoinage,theirlossuponthewholetransactionwould,inthesamemanner,havebeenexactlytwopercent。
Iftheseignoragehadbeenonlyonepercentandthegoldcurrencytwopercentbelowitsstandardweight,thebankwouldinthiscasehavelostonlyonepercentuponthepriceofthebullion;butastheywouldlikewisehavehadaseignorageofonepercenttopay,theirlossuponthewholetransactionwouldhavebeenexactlytwopercentinthesamemannerasinallothercases。
Iftherewasareasonableseignorage,whileatthesametimethecoincontaineditsfullstandardweight,asithasdoneverynearlysincethelastrecoinage,whateverthebankmightlosebytheseignorage,theywouldgainuponthepriceofthebullion;
andwhatevertheymightgainuponthepriceofthebullion,theywouldlosebytheseignorage。Theywouldneitherlosenorgain,therefore,uponthewholetransaction,andtheywouldinthis,asinalltheforegoingcases,beexactlyinthesamesituationasiftherewasnoseignorage。
Whenthetaxuponacommodityissomoderateasnottoencouragesmuggling,themerchantwhodealsinit,thoughheadvances,doesnotproperlypaythetax,ashegetsitbackinthepriceofthecommodity。Thetaxisfinallypaidbythelastpurchaserorconsumer。Butmoneyisacommoditywithregardtowhicheverymanisamerchant。Nobodybuysitbutinordertosellitagain;andwithregardtoitthereisinordinarycasesnolastpurchaserorconsumer。Whenthetaxuponcoinage,therefore,issomoderateasnottoencouragefalsecoining,thougheverybodyadvancesthetax,nobodyfinallypaysit;
becauseeverybodygetsitbackintheadvancedvalueofthecoin。
Amoderateseignorage,therefore,wouldnotinanycaseaugmenttheexpenseofthebank,orofanyotherprivatepersonswhocarrytheirbulliontothemintinordertobecoined,andthewantofamoderateseignoragedoesnotinanycasediminishit。Whetherthereisorisnotaseignorage,ifthecurrencycontainsitsfullstandardweight,thecoinagecostsnothingtoanybody,andifitisshortofthatweight,thecoinagemustalwayscostthedifferencebetweenthequantityofbullionwhichoughttobecontainedinit,andthatwhichactuallyiscontainedinit。
Thegovernment,therefore,whenitdefraystheexpenseofcoinage,notonlyincurssomesmallexpense,butlosessomesmallrevenuewhichitmightgetbyaproperduty;andneitherthebanknoranyotherprivatepersonsareinthesmallestdegreebenefitedbythisuselesspieceofpublicgenerosity。
Thedirectorsofthebank,however,wouldprobablybeunwillingtoagreetotheimpositionofaseignorageupontheauthorityofaspeculationwhichpromisesthemnogain,butonlypretendstoinsurethemfromanyloss。Inthepresentstateofthegoldcoin,andaslongasitcontinuestobereceivedbyweight,theycertainlywouldgainnothingbysuchachange。Butifthecustomofweighingthegoldcoinshouldevergointomisuse,asitisverylikelytodo,andifthegoldcoinshouldeverfallintothesamestateofdegradationinwhichitwasbeforethelaterecoinage,thegain,ormoreproperlythesavingsofthebank,inconsequenceoftheimpositionofaseignorage,wouldprobablybeveryconsiderable。TheBankofEnglandistheonlycompanywhichsendsanyconsiderablequantityofbulliontothemint,andtheburdenoftheannualcoinagefallsentirely,oralmostentirely,uponit。Ifthisannualcoinagehadnothingtodobuttorepairtheunavoidablelossesandnecessarywearandtearofthecoin,itcouldseldomexceedfiftythousandoratmostahundredthousandpounds。Butwhenthecoinisdegradedbelowitsstandardweight,theannualcoinagemust,besidesthis,fillupthelargevacuitieswhichexportationandthemeltingpotarecontinuallymakinginthecurrentcoin。Itwasuponthisaccountthatduringthetenortwelveyearsimmediatelyprecedingthelatereformationofthegoldcoin,theannualcoinageamountedatanaveragetomorethaneighthundredandfiftythousandpounds。Butiftherehadbeenaseignorageoffourorfivepercentuponthegoldcoin,itwouldprobably,eveninthestateinwhichthingsthenwere,haveputaneffectualstoptothebusinessbothofexportationandofthemeltingpot。Thebank,insteadoflosingeveryyearabouttwoandahalfpercentuponthebullionwhichwastobecoinedintomorethaneighthundredandfiftythousandpounds,orincurringanannuallossofmorethantwenty—onethousandtwohundredandfiftypounds,wouldnotprobablyhaveincurredthetenthpartofthatloss。
TherevenueallottedbyParliamentfordefrayingtheexpenseofthecoinageisbutfourteenthousandpoundsayear,andtherealexpensewhichitcoststhegovernment,orthefeesoftheofficersofthemint,donotuponordinaryoccasions,Iamassured,exceedthehalfofthatsum。Thesavingofsoverysmallasum,oreventhegainingofanotherwhichcouldnotwellbemuchlarger,areobjectstooinconsiderable,itmaybethought,todeservetheseriousattentionofgovernment。Butthesavingofeighteenortwentythousandpoundsayearincaseofaneventwhichisnotimprobable,whichhasfrequentlyhappenedbefore,andwhichisverylikelytohappenagain,issurelyanobjectwhichwelldeservestheseriousattentionevenofsogreatacompanyastheBankofEngland。
Someoftheforegoingreasoningsandobservationsmightperhapshavebeenmoreproperlyplacedinthosechaptersofthefirstbookwhichtreatoftheoriginanduseofmoney,andofthedifferencebetweentherealandthenominalpriceofcommodities。
Butasthelawfortheencouragementofcoinagederivesitsoriginfromthosevulgarprejudiceswhichhavebeenintroducedbythemercantilesystem,Ijudgeditmorepropertoreservethemforthischapter。Nothingcouldbemoreagreeabletothespiritofthatsystemthanasortofbountyupontheproductionofmoney,theverythingwhich,itsupposes,constitutesthewealthofeverynation。Itisoneofitsmanyadmirableexpedientsforenrichingthecountry。
CHAPTERVII
OfColoniesPART1
OftheMotivesforestablishingnewColoniesTHEinterestwhichoccasionedthefirstsettlementofthedifferentEuropeancoloniesinAmericaandtheWestIndieswasnotaltogethersoplainanddistinctasthatwhichdirectedtheestablishmentofthoseofancientGreeceandRome。
AllthedifferentstatesofancientGreecepossessed,eachofthem,butaverysmallterritory,andwhenthepeopleinanyoneofthemmultipliedbeyondwhatthatterritorycouldeasilymaintain,apartofthemweresentinquestofanewhabitationinsomeremoteanddistantpartoftheworld;thewarlikeneighbourswhosurroundedthemonallsides,renderingitdifficultforanyofthemtoenlargeverymuchitsterritoryathome。ThecoloniesoftheDoriansresortedchieflytoItalyandSicily,which,inthetimesprecedingthefoundationofRome,wereinhabitedbybarbarousanduncivilisednations:thoseoftheIoniansandAeolians,thetwoothergreattribesoftheGreeks,toAsiaMinorandtheislandsoftheAegeanSea,ofwhichtheinhabitantsseematthattimetohavebeenprettymuchinthesamestateasthoseofSicilyandItaly。Themothercity,thoughsheconsideredthecolonyasachild,atalltimesentitledtogreatfavourandassistance,andowinginreturnmuchgratitudeandrespect,yetconsidereditasanemancipatedchildoverwhomshepretendedtoclaimnodirectauthorityorjurisdiction。Thecolonysettleditsownformofgovernment,enacteditsownlaws,electeditsownmagistrates,andmadepeaceorwarwithitsneighboursasanindependentstate,whichhadnooccasiontowaitfortheapprobationorconsentofthemothercity。Nothingcanbemoreplainanddistinctthantheinterestwhichdirectedeverysuchestablishment。
Rome,likemostoftheotherancientrepublics,wasoriginallyfoundeduponanAgrarianlawwhichdividedthepublicterritoryinacertainproportionamongthedifferentcitizenswhocomposedthestate。Thecourseofhumanaffairsbymarriage,bysuccession,andbyalienation,necessarilyderangedthisoriginaldivision,andfrequentlythrewthelands,whichhadbeenallottedforthemaintenanceofmanydifferentfamilies,intothepossessionofasingleperson。Toremedythisdisorder,forsuchitwassupposedtobe,alawwasmaderestrictingthequantityoflandwhichanycitizencouldpossesstofivehundredjugera,aboutthreehundredandfiftyEnglishacres。Thislaw,however,thoughwereadofitshavingbeenexecutedupononeortwooccasions,waseitherneglectedorevaded,andtheinequalityoffortuneswentoncontinuallyincreasing。Thegreaterpartofthecitizenshadnoland,andwithoutitthemannersandcustomsofthosetimesrendereditdifficultforafreemantomaintainhisindependency。Inthepresenttime,thoughapoormanhasnolandofhisown,ifhehasalittlestockhemayeitherfarmthelandsofanother,orhemaycarryonsomelittleretailtrade;andifhehasnostock,hemayfindemploymenteitherasacountrylabourerorasanartificer。ButamongtheancientRomansthelandsoftherichwereallcultivatedbyslaves,whowroughtunderanoverseerwhowaslikewiseaslave;sothatapoorfreemanhadlittlechanceofbeingemployedeitherasafarmerorasalabourer。Alltradesandmanufacturestoo,eventheretailtrade,werecarriedonbytheslavesoftherichforthebenefitoftheirmasters,whosewealth,authority,andprotectionmadeitdifficultforapoorfreemantomaintainthecompetitionagainstthem。Thecitizens,therefore,whohadnoland,hadscarceanyothermeansofsubsistencebutthebountiesofthecandidatesattheannualelections。Thetribunes,whentheyhadamindtoanimatethepeopleagainsttherichandthegreat,puttheminmindoftheancientdivisionoflands,andrepresentedthatlawwhichrestrictedthissortofprivatepropertyasthefundamentallawoftherepublic。Thepeoplebecameclamoroustogetland,andtherichandthegreat,wemaybelieve,wereperfectlydeterminednottogivethemanypartoftheirs。Tosatisfytheminsomemeasuretherefore,theyfrequentlyproposedtosendoutanewcolony。ButconqueringRomewas,evenuponsuchoccasions,undernonecessityofturningouthercitizenstoseektheirfortune,ifonemaysayso,throughthewideworld,withoutknowingwheretheyweretosettle。SheassignedthemlandsgenerallyintheconqueredprovincesofItaly,where,beingwithinthedominionsoftherepublic,theycouldneverformanindependentstate;butwereatbestbutasortofcorporation,which,thoughithadthepowerofenactingbye—lawsforitsowngovernment,wasatalltimessubjecttothecorrection,jurisdiction,andlegislativeauthorityofthemothercity。Thesendingoutacolonyofthiskindnotonlygavesomesatisfactiontothepeople,butoftenestablishedasortofgarrison,too,inanewlyconqueredprovince,ofwhichtheobediencemightotherwisehavebeendoubtful。ARomancolonytherefore,whetherweconsiderthenatureoftheestablishmentitselforthemotivesformakingit,wasaltogetherdifferentfromaGreekone。Thewordsaccordingly,whichintheoriginallanguagesdenotethosedifferentestablishments,haveverydifferentmeanings。TheLatinword(Colonia)signifiessimplyaplantation。TheGreekwordapoikia,onthecontrary,signifiesaseparationofdwelling,adeparturefromhome,agoingoutofthehouse。But,thoughtheRomancolonieswereinmanyrespectsdifferentfromtheGreekones,theinterestwhichpromptedtoestablishthemwasequallyplainanddistinct。Bothinstitutionsderivedtheirorigineitherfromirresistiblenecessity,orfromclearandevidentutility。
TheestablishmentoftheEuropeancoloniesinAmericaandtheWestIndiesarosefromnonecessity:andthoughtheutilitywhichhasresultedfromthemhasbeenverygreat,itisnotaltogethersoclearandevident。Itwasnotunderstoodattheirfirstestablishment,andwasnotthemotiveeitherofthatestablishmentorofthediscoverieswhichgaveoccasiontoit,andthenature,extent,andlimitsofthatutilityarenot,perhaps,wellunderstoodatthisday。
TheVenetians,duringthefourteenthandfifteenthcenturies,carriedonaveryadvantageouscommerceinspiceries,andotherEastIndiagoods,whichtheydistributedamongtheothernationsofEurope。TheypurchasedthemchieflyinEgypt,atthattimeunderthedominionoftheMamelukes,theenemiesoftheTurks,ofwhomtheVenetiansweretheenemies;andthisunionofinterest,assistedbythemoneyofVenice,formedsuchaconnectionasgavetheVenetiansalmostamonopolyofthetrade。
ThegreatprofitsoftheVenetianstemptedtheavidityofthePortuguese。Theyhadbeenendeavouring,duringthecourseofthefifteenthcentury,tofindoutbyseaawaytothecountriesfromwhichtheMoorsbroughtthemivoryandgolddustacrossthedesert。TheydiscoveredtheMadeiras,theCanaries,theAzores,theCapedeVerdeIslands,thecoastofGuinea,thatofLoango,Congo,Angola,andBenguela,and,finally,theCapeofGoodHope。
TheyhadlongwishedtoshareintheprofitabletrafficoftheVenetians,andthislastdiscoveryopenedtothemaprobableprospectofdoingso。In1497,VascodeGamasailedfromtheportofLisbonwithafleetoffourships,andafteranavigationofelevenmonthsarriveduponthecoastofIndostan,andthuscompletedacourseofdiscoverieswhichhadbeenpursuedwithgreatsteadiness,andwithverylittleinterruption,fornearlyacenturytogether。
Someyearsbeforethis,whiletheexpectationsofEuropewereinsuspenseabouttheprojectsofthePortuguese,ofwhichthesuccessappearedyettobedoubtful,aGenoesepilotformedtheyetmoredaringprojectofsailingtotheEastIndiesbytheWest。ThesituationofthosecountrieswasatthattimeveryimperfectlyknowninEurope。ThefewEuropeantravellerswhohadbeentherehadmagnifiedthedistance,perhapsthroughsimplicityandignorance,whatwasreallyverygreatappearingalmostinfinitetothosewhocouldnotmeasureit;or,perhaps,inordertoincreasesomewhatmorethemarvellousoftheirownadventuresinvisitingregionssoimmenselyremotefromEurope。ThelongerthewaywasbytheEast,Columbusveryjustlyconcluded,theshorteritwouldbebytheWest。Heproposed,therefore,totakethatway,asboththeshortestandthesurest,andhehadthegoodfortunetoconvinceIsabellaofCastileoftheprobabilityofhisproject。HesailedfromtheportofPalosinAugust1492,nearlyfiveyearsbeforetheexpeditionofVascodeGamasetoutfromPortugal,and,afteravoyageofbetweentwoandthreemonths,discoveredfirstsomeofthesmallBahamasorLucayanislands,andafterwardsthegreatislandofSt。Domingo。