Th e
Lo
n
Ec o o m i c
d
%U i r i ty f L o do %
H o g h t o S t r t Al d w y h L o d o
do
n
c oo l
S h
o
f
n ve s
n
u
ee
f
S
c rc
a
e
Tra
ct
s
an
o
n
n
c
,
NO
o
n
.
n
,
Pol mca l
Scl e ncc
n,
3
t
I n S en es of R ep r i n s
s in E
n mi
a n d P o l m ca l
S c w n ce
co o c
T R A N S M I S S I O N O F T H E P RE C I O U S
M ET A L S F ROM C O U N T R Y
T O C O U N T RY
ET
y
by
N AS SAU
b
O
.
A M
.
.
T H R E E L EC T UR E S
ON TH E
TR A N S M I S S I O N O F
T H E P R E C I O U S M ET AL
F R O M C O U N T R Y TO C O U N T R Y
D TH E
AN
W EAL TH
M ER C A N T I L E T H EORY O F
DEL I V E R E D
BEF
O RE
TH E
UNI V E R SIT Y
OF
O XF O R D
IN J
UN E
1 82 7
,
.
BY
W I L L I AM
N AS S AU
L AT E
F EL L
OW
0 F M A G DA L EN C
O
S E N I O R,
OJ %
L L EG E, A . M
P O L I T I C A L EC
O OM
N
.
PR
,
O
F ES S
O
R
OF
Y.
e ed me a e ry e xcel l en t a rg u me n t to pro e th a t ou i mpo t mg l e
t h an w e e
po rt do no t i m po er i h t he k mg dom w h ic h th o g h t be parado
a nd th a t I d o not r emembe r t he
r g u men t yet meth o g ht the r e w as a g re t d eal
i n w h a t h e sa id
P py
M m
ol i p 2 8 4
H e sh w
v
v
x
v
s
,
a
%
.
e
’
ss
e
oz r s , v
,
.
u
a
a
L O N DO N
%
J O H N M URR A Y , A L BEM A R L E S T R EET
M DC C C X X V I U
.
x,
a
.
.
ss
r
u
,
.
r
.
,
%Wa d e
a nd
I’ r m t ed
ro
or r o o
r or
r tB
R ep l z h a P c ess i n G ea
nd , H u mp hr z es 69 C o L t d
ne , L nd n, E C 4
3 A me n C
a nd a t B a df
d
t he
r z ta
m by
A DV E R T I S E M E N T
.
T H E S t a t u t e b y w h i c h t h e P r o fes s o r s h i p
of
P o l i t i c a l E c o n o m y i s fou n d e d
t h e P r o fes s o r t o p u b l i s h
a
e
y
r
In
.
I h ave
c o mp
l i an c e
with this
l c t e d fr o m t h e
,
to
As
m e l ea s t
a
,
u nfi t
fo r
fr ag m en t i t i s
se
n ec es s
r
t
p
a a e
n ec es s a
S t at u t e
.
i t y i mp o s ed
N
M A GDA L EN C O L L E GE ,
M a r ch 2 0, 1 8 2 8
.
.
v e ry
r eq u i s i t i o n
w h i c h a p p ea r e d
l i cat i on
.
.
.
t o th e P u b l i c
on
W
p
ub
r i l y i m p e r fec t
M y a p o l o g y fo r p r e sen t i n g i t
i s the
e
r s e d e l i v e r ed
cou
i n Ju n e 1 8 2 7 th e p o r t i on
r e qu i r e s
L ect u re
a
se e
,
m e by
th e
SEN I O R
.
L EC T UR E I
T R A N SM I SS I ON
OF TH E
CO UNTR Y
.
P R E C I O US M ETA LS F R O M
TO
COU NTRY
.
I P R O P O S E in th e p re sent L ecture t o consid er
the e ffec t of th e actu al t r an smissi o n o f th e p re
,
,
ci o n s m e tals fr o m
one
c o unt r y t o an o ther
.
An
inquiry peculiarly interesting at present as i t
,
l e ads to c o ncl u sions decisiv e
n o w eagerly m aintain e d
on
of
the c o ntr o versy
Free Trad e
Th e
.
argu m e nt runs generally in th e fo ll o wing fo rm
Th e adv ocat e
fit
of
fr e ed o m
.
dwells o n the bene
of
ma k ing full use of o u r own p e culiar ad
vantages of situation wealth and skill and
,
,
,
availing ou rselves to the u tm o st o f th o se p o s
sessed by o u r neighb o u rs H e asks whether
.
T R A N SM I SS I O N
2
or
T H E P R E C I O U S M ET A LS
should a c t wisel y i f we were t o declar e
ourselves ind e pendent o f foreigne r s for wine
we
,
,
to dev o te ou r mineral tr e asu res and ou r i n
d us t r y to t h e for c ing o f grapes for the pr od u c
,
,
tion
h
o
m
e
made
f
o
t i nu e
fo r
port and c laret and disc o n
the m anufactu r e o f c o tt o ns and w oo ll e ns
the mar ke ts
,
of
O p o rt o
a nd
B o u rdeau x ?
A nd h e ur ges that th e same abs ur dity i n k ind
belongs t o ev e ry pr o te c ting duty and
ti o n
S mith
He
.
p
r oh ibi
ob serv e s i n the words o f A dam
that it i s th e m axi m o f e very pr u dent
’
,
of
,
a family
e v e r t o m ak e at h om e
wha t it will c o st h im m o re t o mak e than t o bu y
mast e r
The tail or d o es
n ot
,
n
m ake
his
b u ys th e m o f th e s h oe ma ke r
d oes
of
n ot
make his
th e tail o r
ow n
,
.
shoes but
,
The sh oe ma k er
.
c lothes b u t buys them
own
,
The fa r m er att e m pts t o make
n e ith e r th e one n or t h e oth er but e mploys th o se
,
differe nt
ar t i fi c er s
.
A ll
of
t hem find i t their
i nte r est t o e mpl o y th e ir wh ol e industr y i n a
way
in
which th ey have s o m e a dv antage
Book i v
.
ch a
2
p
.
o
ver
F ROM
C O U NT R Y
TO
C O U NT R Y
their neighb o urs and t o p urchas e
,
of
fo r
,
3
.
w i th
a pa r t
its produce what e v e r e lse they hav e o ccasi o n
,
A nd h e in fers that what i s pru de nce in
t h e c ondu c t o f every privat e fam ily can scar c e l y
b e folly in that o f a great kingdo m
.
,
,
,
.
Th e advocate o f rest ri c tion and pr o hibiti o n
adm its that i f the in te rests o f th e c o nsum ers
,
w e re alone t o be considered the law ou ght
not
,
t o fo rce the p ro ducti o n a t h o me of what can
b e o btained b e tt e r o r m o r e cheaply from
,
,
,
abroad B u t h e urg e s that the opulen c e of
the whole co mm u nity i s be st pr o m o ted by en
,
.
i
n
i
g g ts
c ou r a
industry
of
c ou r a g ed
d o mestic ind u st r y
each clas s
of
.
A nd that th e
pr od u cers is best
by giving th e m the c o m man d
of
en
the
hom e mar k et undist u rbed by fo r e ign c o mp e ti
,
ti o n
.
H is
o ppon e nt replies that it is i mp o s s ible t o
,
enc o u r age th e industry
d u c er s ,
of
b y m eans
of
one clas s
pro
of
co mm er cial r e st r icti o ns
,
with ou t disc o uraging to an eq u al d egree the
exerti o ns of others That ev ery p ro hibi t ion of
,
,
.
im p or tation is a p ro hib ition
of
exportation
.
4
T R A N S M I SSI O N
or
TH E
P REC I O U S
M ETA L S
That eve r y restri c ti o n o n the imp o rtation
F ren c h
of
silks i s a restriction
on
of
the exportation
th o se arti c l es with which those silks w o uld
have been pur c hased
That
.
it b e n e fit the
if
E nglish silk m anu factur e r i t inj ur e s
,
an equal amount i n the whol e
to
,
at l e ast
tho u gh
,
th e
inj ury i s l ess per c eptible be c ause mor e widely
,
di ffused th e c o tton spin ne r
-
,
c l o thier
,
Of
the
That the whole body
.
t here fo r e as
c ity
,
an
cutler
or
,
the
producers
Of
,
aggregate su ffer in their capa
,
co ns u m er s with o u t c o mp e nsation
The r e ally candid d e fe nd e r
of
.
restricti o n
and
I
am
incl
ined
t
o
think
that
such
persons
%
do exist % adm its perhaps the force o f this
,
,
argument as appl ied t o nations willing t o take
,
in ex c h ange
ou r
c omm o dities
.
TO
them h e is
willing to open our m ark e t o n a fo oting as he
,
c alls it
,
Of
recipr oc ity
.
B ut h e
there are m any who r e fu s e
ou r
u
rges that
,
c o mmodities ;
and while they persist i n this ungrate ful r efusal
,
h e retaliates b y n o t acce pting theirs
,
.
The advocate of free trade replies that the
benefit O f c ommer c e c onsists no t in what i s
,
,
F R O M C O U N T RY T O C O U N T RY
5
.
given but i n what i s r e ceived % t hat
,
foreigner
re fuse
to
fo r
l i ti on
the
a cc ept our c ommodities he
,
m u st either re fuse u s his
us
if
ow n,
or give them to
nothing ; that in the first c ase the abo
,
,
Of
c ommer c ial restri c tions c an p rodu c e
no evil i n the se c ond it must prod u c e a mani
,
,
fest
good
H e would do neithe r repl ies his adversary
.
,
he would del u ge
payment
T he
w hi c h
fo r
us
with his go ods and r ec eive
,
the m in our money
dispute whi c h
I
.
have su pposed and
,
c orresponds step by step with almost
,
all those whi c h
I
,
have wi tnessed
this ques
on
tion c oin c ides at this point with the subj e c t
Of
,
th e
present
i
r
n
a
g
y
,
L e c ture
A nd qu itting m y ima
.
,
Opponent and respondent
c onsider t he e ffe c t
of
pre c iou s metals from
,
I
pro c eed to
t he transm i ss i on
o ne
of
the
country to another
.
I will s u ppose that all the prote c ting d uties
,
wi t h whi c h we have c logged our commer c e
with F ran c e are suddenly removed and tha t
,
,
the r e m o val is i mmediately followed by an
T RA N SM I SS I O N
6
OF
T H E P REC I O U S
M
ET A L S
inc r eased importa t ion O f French c ommodities
to the am o unt o f five millions s t erling A nd I
.
will supp o se the commercial res t ri c tions on
Fran c e %and she is at least o ur eq u al
i n pr o tecting h er o w n industry by inter fering
th e part
Of
w ith its natural direction % t o r e m ain unaltered
I will s upp o s e t oo that the fi ve milli o ns in
.
,
,
question ar e actually rem itt e d in m o ney
It m us t be ad mitted that the
.
efil u x
of
so
large a sum from E ngland and its influx in t o
F r an c e must sink all E ngl ish pri ce s and occa
,
,
,
sion a general rise
Of
pri ce s i n Fran c e
I ndeed
.
it did not the trans a ction w o uld be one
pu r e b e n e fit t o E ngland and o f pure lo s s
if
,
,
F r anc e
A s money is
.
n ot
a sour c e
of
g
Of
to
r a t ifi c a
ti o n but a mere instru m e nt of commerce
,
,
,
i f ou r
prices were not affected b y parti n g with a por
ti o n
our
O f o ur
money we sh o uld b e ins e nsible
,
of
l o ss ; or rather we sh o uld have s u stained
no loss whatev e r and have ga in ed the five
,
’
milli o ns w o rth
of
Fr e nch commodities wi thout
any real sac r ific e whil e F ranc e would have
,
F R O M C O U N T RY
C O U N TRY
TO
7
.
parted with those commoditi e s and r e c e i ved
,
sensible eq uivalent
no
.
B ut th o se who fear that a nati o n may b e
inj ured by parting with its money a r e c ertainly
,
right in supposing that the transm ission
m illions in specie
from
Of
fiv e
E ngland to Fr a n c e
wou l d o cc asion a general fall
Of
E ng
pri c es i n
land and a gene r al rise i n France
,
.
T he
,
steps
,
by whi c h these e ffects w ou ld b e pr o du c ed i n
each co untry cannot pr o perly b e s t ated in this
,
Of
part
my
L e c tur e s
,
but
I
‘
su
os
e
pp
t here is no
one present who doubts that s u ch w ou ld be th e
case
.
Th e c o ns eque nc e s w ou l d b e an immediat e
and u niv er sal incr e as e
ti o n
Of
of
imports and
,
d i minu
exports i n France and an imme d i at e
,
,
and u ni v ersal increase
ti o n
Of
Of
exp o rts and
,
imp ort s in E ngla nd
,
which any c o u ntry carries
.
on
The co mmerc e
,
.
of
,
with its neigh
bours m u st d e p e nd o n th e p ri ce s
respective exp o rtable c o mmodities
c o mm o diti e s
d i mi n u
th e same q u al ity
,
or
their
W hen
of
whi c h may
T RA N S M I SS I O N
8
be substitutes
T H E P R E C I O US M E T A L S
or
another c an b e i mp o rted
from di ffe r ent quarters a sl ight variation O f
price will de c ide which shall be pre ferred If
fo r
o ne
,
,
.
l in e n
Of
S outh
the sam e qu ality can be i mport e d i nto
A merica indi fferently fr o m Germany
fr o m F r an c e and the c ost
,
Of
an d
tr ansport fr o m
each country is the same wh ile the price p e r
,
yard is als o the same
S outh
,
A merica will p r o
bably i mpo r t i nd i ffer en t l y from ea c h c ountry ;
but i f the infl ux O f money should raise t he
w
,
pri c e
of
lings to
linen
two
Of
a given quality from two shil
shilli n gs and a farthing per y ard
in F ran c e while i t re mained at two shillings i n
,
Germany
,
S o uth
A meri c a w o uld instantl y de
sert th e Fren c h market and confine her linen
,
t r ad e t o G e rmany
W ith every commercial rival
Franc e was fo rmerly
,
with whom
a par sh e w o uld now
on
,
be at a disadvantage and many w o uld
,
meet
her in mar k ets from whi c h she had
me rly exclu d ed them
.
now
fo r
The same co nsequen c es
,
th ough t o a l e ss e xt e nt w ou ld foll o w e ve n in
,
,
F R O M C O U N T RY
TO
C O U N T RY
9
.
th e cas e s in which France had e xclusiv e p o w e rs
of
p ro d uc ti o n
.
E very commodity has among
its purchasers some whose d e sire
l e ast
fo r
fo r
it
,
or
at
that v ariable q uantity o f i t which they
co nsume indu ce s them t o spend on it a give n
,
po r ti o n
Of
th e ir in c ome and
,
slightest rise
or
of
no
On
.
t he
pri c e they e i t her dis c ontinue
dim inish their c onsumption
rise in the price
more
of
.
,
A very slight
c lare t would o ccasion some
to drin k less and others to d rink none
,
.
Pre
c i s el
l
the
sam
e
causes
whi
c
h
wou
d
diminish
y
th e exports O f F ran c e would in c rease her i m
,
ports
.
H o w eve r
v o ur to sec u r e t o
e arnestly a nation m ay endea
i ts
own
productive c lasses t he
mon o p oly in what they r e spectively produ c e
,
it c annot really pr o t e ct them against foreign
c omp e tition by any measure sh o rt o f the p r o h i
bitio u of all fo re ign c o mmer c e The co nsumer
.
c annot be forced to bu y the dear e r or i n ferior
h o me made article I f h e is p r ohibited fro m
-
.
imp o rting precisely what he wants h e may s t ill
,
mak e
his purchase ab ro ad
.
The incre ased
T RA N SM I SS I O N
lo
T H E P R EC I O U S
or
M E T A LS
pri c e in F r anc e O f all home comm o diti e s w oul d
Of
,
cou rse stimulate the consum pti o n of fo r e i gn
on e s Th e bills o n Fran c e in o ther c ou ntri e s
,
.
wo u ld inc re as e th o se
,
o t h er c ou ntri e s in
on
Franc e w o ul d dim inish
an d th e e xchan ge
,
would b e against Franc e thr o ugh o u t th e c o m
mer c i al
w o rld
I t is im po ssibl e that u nde r
,
.
s uc h c ir c umstances
month
sh e c ou l d ret ai n for a
,
the five m illions which I have s u ppos e d
t o have been paid t o
from
h er
Th e y w o uld fl o w
.
her in every dire c ti o n
.
I n fa c t until she parted with the m o ney
,
France would have deri ved n o t benefit
rather evil
,
fr o m
her export t o E ngland
,
but
,
That
.
m o ney is a means not an end that no g r a t ifi
cation is a fforded by a n i ncreas e in th e quantity
,
n e cessary to e ffe ct a
iv
e
n
purpos
e
that
it
i
s
;
g
j ust as pleasant to purchase a given comm o dity
for
five
shillings as
fo r
fi fty are tru isms but
,
,
tr u isms so o ft e n im pliedly deni e d
cann o t b e
too
o ft en re p e ated
.
,
t hat th e y
The r ise
of
p r ic e s in F r ance whil e it laste d must have
,
,
T RA NSM ISS I O N
12
b e fo re
fr o m
%
TH E
or
P R EC I O U S M E T A L S
it w o uld a d mit them t o many oth e rs
which th e y were pr e viously e xcluded
It
.
w o uld exclude fr o m the E nglish mar k et many
foreign
t a i ned
co
mmod i t i eS
,
which c o uld
m o re ch e aply at h o m e
.
be
n ow
Ob
W hile th e bills
in E ngland o n foreign c ou ntries wer e
i nc r ea s
ing the foreign bills on E ngland w o uld d iminish
,
,
t he ex c hange would be i n o ur fav o u r w ith the
whole world and the five milli o ns would c o me
,
bac k as
ra
“
i
dl
p
y
that the level
as
they went out
of
the pre c ious metals i n the
TO
.
sup po s e
commer c ial world c an be perm an e ntly disturb e d
by taking money from
one
country to another
,
is as absurd as to s u ppose tha t the level o f
a pond c an be al t ered by t aking a bu c ket full
from one pla c e and pouring i t i n at another
T he water instan t ly rushes to t h e pl a c e from
whi c h t he bu c ket full has been drawn j us t as
it rushes from the pla c e into w hi c h i t has bee n
p o u red E very c oun t ry t o wh i c h F ran c e ex
-
,
.
-
,
.
ported any
Of
E ngland would
the money she re c eived
,
to
that ex tent
money than her habitual stat e
,
of
from
have more
p
r Ic es
c ould
P
a
ll o w
R O M C O UN T R Y
fl o w
I t w oul d
.
TO
C O U NT R Y
l3
.
fro m her e ith er d i re ctly
to E nglan d o r t o those co u nt ries which wer e
,
i n want
of
m o n e y in c o ns e q uenc e o f hav ing
pre v i ou sl y exp o rt e d it t o E ngland
.
I t appears there fore that even i n t he ext ra
vagant case whi c h I ha v e supposed O f an e xport
O f five millions i n m oney t he l oss i f it can be
.
,
,
,
c alled
o ne ,
w o uld be immediately repaired
.
The only in co nvenie n c e that we sh o uld su ffe r
from
the r e fusal
Of
F ran c e
and ou r hardware i n return
be that instead
lish
for
of
the
t o tak e
for
our
c ottons
her silks would
,
dire c t e x c hange
Of
E ng
French co mmodities w e should give to
,
France m o ney
Franc e would export that mo
ney t o Germany
Germany
,
,
H olland
H olland
and
and
R ussia
that m o ney in ex c hange
fo r
R ussia
and
;
would return us
our manu factures
that o u r tr ade would i n sh o rt be circ uitous
instead o f d ire c t
,
.
Fo r
the sa k e
of
illustra t ion I hav e s u pposed
a sudden and great transmission
of
money %
e ffe c t s the same in kin d t hough less in degree
,
would
of
c ourse follow a more gradual one
.
.
If
T RA N S MI S S I O N
l4
Of
a bal ance
TH E
or
P REC I O U S M E T A L S
only
s o v e r e ig ns a y e a r
we re s e nt to Franc e
similar cons eque nc es
,
,
th o ugh less palpabl e w ou ld foll o w e ith er i m
,
mediatel y
,
or as
soon as th e ann u al efll ux of mo
n e y from th e one c o unt ry t o th e o th er am o u nt e d
t o a s u ffici e nt s u m t o a ffe ct th e p r i ce s
c ou nt ry
,
or Of
b o th
of
eith er
.
I t w o uld app e ar th e r e fore that th e e xchange
,
,
between two c ountries c an neve r l o ng de v iat e
fr o m its c o mmEr c i al par
.
There are h o wev e r ex ce ptions t o this rul e ;
,
,
som e re al o thers m erely nominal
,
A
.
nominal deviation fr o m the par
of
e x c hange
arises from the d i ffi culty o f changing mer c antil e
l anguag e
The ex is ting com mer c ial par
.
c han ge betw ee n
2 5 fra n c s 4 7
L o ndon
Of
ex
and Pa r is is about
centimes %say 2 5 fra ncs and a half%
a s o ve r eign
on
which this par is c alculated be changed
.
B u t sh o uld any
Of
fo r
should the q uantity
of
th e data
,
bullion co ntained in the
money o f either nati o n be altered without the
denomination Of the pieces being c hanged — i f
,
we should
,
fo r
instanc e put o nly
,
56 %
g r ains
Of
P
RO M
C O U N TRY
p ure gold instead
of
TO
1 13
C OU N T R Y
int o
o ur
and s till c all th e m sover e igns
r e lati ve values
Of
gold and
sil v e r exchange for
s t e ad O f i t s
pr e sent
S
or
,
15
.
g o l d pi e c e s
,
sh ou ld the
ilv er alte r sh o uld
,
its weight in g o ld i h
about 34 t h i t is
v al u e
Of
,
3
,
clea r that the par betwe e n the c ountries would
b e alter e d I n e ither c as e the real par would
p r obabl y b e only 1 2 fran c s for the sov er eign
.
,
an d
this is the r ate at which bills w o uld b e e x
change d wh e n the c o mmerc e
tries was
in
equ ilibri o
.
B ut
Of
if
the t wo c oun
m er c antile lan
guage were t o rem ai n unaltered and
,
and a half
pa r
r ate
Of
of
for
a s o vereign were still c alled the
exchange it is C lear that the ordinary
,
e x c hange between E ngland and F ran c e
woul d be
50
fav ou r
of
Fran c e ;
par
excha n ge would vary
of
2 5 francs
per c e nt against E ngland and i n
.
t he n ominal par
.
or ,
,
i n o ther words the r e al
E ngland
,
50
per c ent fro m
.
would su ffer no evil
,
and F ran c e would reap no advantage from t hi s
state O f things whi c h would be merely the
continuan c e o f an Obsolete n o men c la t ure The
,
.
only inconveni e n c e w o uld be t he c hance
Of
T RA NSM I SS I O N
l6
TH E
or
P REC I O U S M E T A LS
misleading s ubs eque nt writ e rs o n exchang e
,
who might n o t be aware that d uring th e pe r i o d
in que sti o n comm ercial languag e
p r esente d th e facts
Of
th e case
h ad mi s re
.
A gain t h e re al exchange betw ee n tw o nati o ns
,
m ay
b e and in deed m u st b e p er manently u nfa
,
,
vo u r a b l e
to t h e
and c o nse que ntl y fa vo u r
o ne,
able to th e other
,
if
th e re be any ca u s e which
oc c asions the precious metals to fl o w c o nstantly
fr o m the o ne to the o t her
Thi s must b e the
‘
.
c ase between the mining c o unt r ies an d th o s e
c o untries with which th e y m ai ntain a d i re c t
interc o urs e
A s the prin c ipal t r ade
.
is th e pr o ducti o n and exportation
value
of
Of
Of
M exi co
silv e r th e
,
silv e r es t imated i n silver must al w ays
,
,
be lower i n Me xic o t han i n the cou nt r ies to
which it has been exported from M exi c o j ust
,
as it must always be lowe r at
than at the door
of
of
del Mo nt e
the M exican M int
lower at the M int than at
tial result
R eal
V era C ruz
.
,
and
A par
t he same k ind must b e pr o du ce d
i n th o se c ountries through which t h e pr ec i o us
metals pass
.
R u ssia
is on e
of
th e principal
F ROM
C OUN T R Y
To
C O U N T RY
17
.
ch ann el s th rou gh which th e preci ou s m e t als
p ass fr o m A m e rica t o A sia
.
The re al e xc hang e
m ust th e r e fo re b e i n gen e ral in h er fa vou r o n
,
,
her E u ro p e an fro nti e r by whi c h she receives
,
the m e tals and against her
,
fr o nti e r ,
her A siati c
on
b y which she exports th e m
.
The m ining c o u ntries are the only exc e pti o n
t o the rul e that no c o untry can ha ve an e x
change p e rmanently fav o urable o r un fav our ab le
with the whole world
,
W e hav e s e en that a
.
u niversal balanc e in fa v o u r
of
any c ou ntry must
soon so raise all her pric e s as t o e xclud e all
,
her co mmodities fro m every fo reign mark et
and to O ffer irresistibl e t e m pta t ion
ducti o n
market
of
.
foreign
the intr o
c o mm o d iti e s into h e r
Of
I nstead
to
h er stoc k
of
,
o wn
t he pr e cious
metals increas ing i t must diminish
,
.
A u ni
versal balan c e against any country must s oo n
so
e
xhaust her st o ck
of
t he pre c ious metals
,
and conseq uently l o we r her prices as t o dimi
,
nish
a nd
gradually d e str o y he r m o tiv e s
pu rch a sing foreign c o mm o d iti e s whil e it
,
c r eased the m o tives
of
fo r
ih
all o the r countri e s to
T RA N S M I SS I ON
18
p urchas e h er s
to
s
TO
.
fo r
n
o
o
g
OF
T H E P R EC I OUS
s u p pos e that
s e ll
u
o
y
it
i s p o s s ib le
eve r b u ying with ou t s e lli ng
e lli ng with ou t buyin g
than
or
,
s
or
,
But th oug h
u
o
y
buy
,
c ou nt r y e xcept a m i ni n g
no
c o unt r ies pe rman e ntly fav our abl e
Of
abl e th e tend e n c y
,
al l
e very e fflu x
or
o th e r
u nfa vour
Of
th e
r
e
p
w
to
o ccasi o n a p rop o rti o nate in fl u x
on e ex cepti o n ; nam e ly th e cas e
,
Of
ti o n in which th e st o c k
large r
or
.
c ou ntry can ha v e its e xchan ge with
h as
,
eve n b uy ing m ore
e l l in g m ore than
a re al l equ all y i rr ati o na l
ci ons met al s
E TA L S
M
of
,
a na
m o n e y has b e c o m e
small er than is re quisit e t o enabl e
or
her pri c es t o bear thei r natural propo r ti o n
Of
to those
t h e rest
Th e fu ncti o ns
e x pr essi o n
q
uat el y
of
of
m o ney as a m e asu r e
,
a nd
O ne
.
an
,
suppl i e d els e where % bu t th e am ou nt
small pr opo rti o n
.
the c o mme rc ial w o rld
val u e are incapable of b e in g a de
m o n ey n e c e s sary
try
of
to
to
of
pe rfo rm th e m b e a r s a v e ry
th e t r an sacti o ns O f th e c ou n
milli o n of s o v er eigns w o uld i n gen e r al
b e am ply su ffici e nt t o p e r fo r m t h e s e services in
E ngla nd
.
They a re
n ow
e ffe ct e d i n
S cotla nd
T R A N S M I SS I O N
20
The Obsta cl e
c
to
OF TH E
P R EC I O U S M ET A LS
e xt e nsi ve t rans fers
Of
cred it
o nsists in th e di ffic u l ty O f satis fying every suc
v e n do r
c es s i v e
charact e r
t e n dered
Of
th e ci rcu mstanc e s and
th e per s o n
on
—a
class
of
p e rs o ns wh o having
,
Oh
ge neral c o nfide nce th e ms e l ve s l e t out
,
to o t her persons the benefit
O ne
wh o m the c re dit is
This inc o nv e nienc e is re m e di e d by
.
B an ke rs
t a i ned
to
as
of
that co nfi d en c e
.
mode in whi c h they d o this is by lending
,
to th eir
scraps
c
u sto mers promissory notes that is
paper c ontaining promis e s
Of
,
,
on
th e p art
of
the banker to pay on demand a giv e n
of
m oney
,
,
su
m
.
long as th e pro mise i s believ e d o r in
As
,
,
o ther words as long as th e note is su pp o s ed t o
,
b e co nvertible at pleasur e int o m o n e y i t p er
,
forms
th e functions
u nless
for
Of
m o ney and as it is
,
,
,
a v e ry small val u e m o r e p o rtable
,
and le s s subj ect to l o ss o r r o bbery it is O ften
,
pre ferred t o m o n e y and may circulate
,
years e x c hanged perhap s
,
,
on
fo r
many
an average every
,
other day and o n every ex c hange e ffecting a
,
ne w
t ransfer o f c redi t un t il when i t has be c ome
,
,
F RO M
t oo
dirty an d
C OUNT R Y
TO
to be
ra gged
too
C OUN T R Y
21
.
safe l y h a ndl e d
paym e nt is at las t re q u ire d fro m th e ban ker
,
.
The issuing Of n o t e s h o wever , is n o t the
,
facili tate
principal means b y whic h banke rs
th e t rans fer
of
credit
As
.
of
pr o m iss o ry n o te s and bills
they ar e
u
sually termed
,
s oo n
of
as
t he
use O f
‘
exchange or as
,
,
paper c redit has
,
b e come familiar e very individ u al wh o d e als
,
,
m u ch in mo n e y finds i t con ve nient t o ke e p an
,
acc o u nt with a ban ke r and t o make his pay
,
ments
by d r afts
or
c hec k s that is by writt e n
dire c tions to his bank e r
If
the r ec eiver
Of
,
,
th e
to
mak e th e paym e nt
dr a ft ma k e us e
of
.
t he
same ban ke r h e pla ce s it in his hands and the
,
,
dra ft is satisfied with o ut an y i nter v e nti o n
,
’
money by a transfer in th e ban k er s b oo k s
,
he employ a d i fferent ban k e r the dra ft
,
is
.
of
If
stil l
probably satisfied with o ut the interv e nti o n Of
money by pe riodic al meetings Of the d i ffere nt
,
ban k ers who having ea c h m any drafts t o re
,
c e ive
and
,
to
pay set them
,
o ff a
gainst
o ne
ano
ther and pay onl y the balan c e I t is calc ulated
t hat payment s are mad e a t the clearing h o use in
,
.
-
T RA N S M I S S I O N
22
L o mbard S tree t
P REC I O U S
TH E
to th e am o unt
sterling every day
amou nt
OF
a nd
,
M E T A LS
of
s o me days
on
the
to
and that the balance
of
a c t u ally paid s e ld o m exceed s
A nd
e ve n that balanc e is n o t paid in m o ney but in
,
of
n o t e s o f the B an k
E ngland
.
W hen a nation has rea c hed a high stat e
of
c ommer c ial improvement wh e n it p o ssesses in
,
,
eve ry d is t ri c t banki n g establishments enj oy
,
,
ing per fect co nfiden c e and the use
,
orders and promises
of
,
or ,
Of
written
comm o n language
in
paper c red it has become famili ar th e u se
,
,
m o ney as a med ium
t i r el y
of
exchange may be
fo r
disp ensed with ex c ept
,
n s ed
e
p
T he
A nd
.
if
t hose smal l
,
Of
money
,
as
repeated
,
,
fo r
it c annot be
the
defi c ien c ies
wheneve r t h ose
of
ba rte r
d efi C Ie nme s
,
a nd
c an
Of
.
,
t oo
affords no gratifi c ation
It is a troublesome and c ostly mode
ing
so
I have O ft en said be fore
and shall O ften say again
frequently
of
it can be dis
wi th we m ay b e sure tha t it will be
use
of
en
payments whi c h are not worth the tr o uble
issuing a note or a d r a ft
,
.
su pply
is abandoned
be su pplie d
at
F R OM
C O U N T RY
TO
C O U N TRY
l e ss inc o nve nien ce o r ex p e nse
and sil v er m o n e y
%
23
.
T he
.
Obser ve s Ad am
,
which circ u lates in any country
g o ld
S mith
be
may
,
,
com par e d to a highway which wh il e i t c i r
,
e nl
at e s and c ar ri e s
,
mar k et all the gras s
to
and cor n o f t h e country produ c e s its e lf not
a single pile o f either The o pe rati o ns O f
,
.
ban k ing by providing a s o rt
,
of
wagg o n wa y
-
through th e air enable the c ou ntry to con
,
v e r t as it were a great part
,
,
into go od
of
its highways
pastures and c orn
-
fie l d s
a nd
,
thereby to en c rease very c onsiderably the
annual produ c e O f its land and labou r
,
,
”
.
”
h e adds t hat th e c om merce and i n
d u s t r y o f the co unt ry though they may be
B ut
,
,
,
so mewhat augment ed cann o t be al togethe r
,
so
U
secu r e w hil e they are thus suspended
,
p o n the Daad al i a n wings
of
paper as when
,
they tra vel about u po n th e sol id gro und
Of
%
g o ld and sil ve r
The intrinsi c c au ses wh ich give value to a
.
sovereign are those whi c h occasion gold to
cont r ibu t e
to
the gratifi c ati on
Of
mankind and
,
T R A NS M I SS I ON
24
of
ma k e it d i fficul t
ac qu i s iti o n
may va ry an d th e v al ue
of
a
u bj e c t
not o
n
for
o te
v ary
to
o ne
in
,
nl y with th e m o ne y wh ich it pr o mis e s
is s ue r
It
.
fi fty
,
may be w orth
or
taini n g its
p aym e nt
,
n
o thing
f
va u e
a nd
c o n ve ni e nce
of
Th e gr ou nd s
to
to
r e l in qu ish
,
an
to
olve nc y O f th e
h u n d red s overe ign s
in gol d is
pa per
b e r e s ort e d
a
and s
Th e o nly m od e
.
t hus
is
v alue i n c orre s p o nd e nc e
,
no t
B ut th e
.
h u ndr e d s overe igns
p ay b u t w ith th e h one s t y
or
LS
E ither o f th e se
.
x p e ri e nc e a c orr e s po nd ing v a r iati o n
v al ue
s
M ET A
the s ove r e ign will
Of
,
e
P REC I O U S
O F TH E
,
of as c er
p r esent i t
p
ro
,
t a nt o,
fo r
th e
ex p ed i e nt wh ich will
while c o nfiden ce exists
which m o st pers o ns r e st their
on
c o nfidenc e mu st
be
e xc e edingl y vague
hav e s e ld o m th e m e ans
taining th e circ umstanc e s
accu rat e ly
Of
or
They
.
a s c er
the c h aract er
Of
th o se on wh o m they bestow it and th e ir anxi e ty
,
to
e ffect sal e s l e ad s th e m oft e n
to
acc e pt with
,
littl e sc ru tiny th e m ed i u m in which pay m ent
,
is
pro p o s e d
The co nfid e nce thu s bl indly
given mu s t b e s ubj e c t
drawn
.
to
be as b l indly with
Th e man wh o has take n notes
as
F ROM
C OUNT R Y
To
C OU N T R Y
25
.
r ea dily as mo n e y b e ca u s e h e saw th e m
,
t ak en
Of
by o th e rs is as r ea d y to fo ll o w t h e e x ampl e
,
o th er s i n r ej e cting th e m
c r o w d t o the ban k e r
The rej e ct e d n o t e s
.
w ho has
is s ue d th e m
If
.
t hey e xc ee d i n am ou nt the m o n e y whic h h e
s
hi s
erve s i n
Of
r e se rve
s e ld o m
a
c offer s for th e ir payment
,
re
th e
a nd
e v e n th e m o st cauti o u s ban ke r
m ou nts t o a thi r d
Of
th e de mands t o
which he is liable h e must p rov id e funds by
,
i mm e diat e ly callin g in th o s e d e bts of which h e
can d emand imm e diat e payment I n times o f
.
c
o mmerc ial pro sperity a ban ke r wh o s e
,
,
p
ro
p e rty is equ al to h is e ngag e m e nts and who has
,
managed his affairs with t oler able p r ud e nce
wil l
so
find
no
d i ffic u lty th o ugh h e may s u stain
,
me loss in th u s meet ing a de mand
,
the c o mm o n expre ssi o n a
r un
,
,
or ,
to
,
,
h e have pa r t ed with n o
n
previously re c e i ved th e full v al ue
of
,
what he s o r e c e iv e d in loans
of
If
what that
n o te pr o mis ed t o pay and hav e always
,
.
o t e with o u t having
‘
secu r ity c a p able
us e
upo n him fo r
money h o w ev e r e xt r a ord inary and s u d d en
v an c ed
,
on
ad
g oo d
being i mm ed iately calle d
T RA N S M I SS I O N O F
26
in
TH E
P RE C I O U S
M ET
A LS
s ol d %and th e s e are th e e l e m e nt ar y rule s
for a b anker s c o nduct % h e may i nd eed l o s e h i s
or
,
’
,
pro fit b u t it is s ca rc ely probab le that h is c re
,
d i t or s
sh ou l d s u ffe r
a ti m e
of
B u t if th e
.
c o mm er c i al d ist re ss
,
ru n
and
o cc ur in
still m ore
it b e oc c as i oned by c o mm er cial dist re s s
fi tab l e
ban k ing
,
prop e rty which
v idual or
,
a ban k er
ar e
ii
ev e
to
or
likely t o b el o ng to
a
H is
.
few indivi d uals ,
m ee t th e demands
entitl e d t o c al l
m e nt
p
ro
the large st am ou nt Of su rp l u s
is
to
no t
,
th e u tm o st ca u ti o n that is c o m p atibl e with
if
on
him
fo r
Of
in d i
o ne
will enable
all th o se wh o
imm e diat e p ay
debt o rs find i t di ffi c ult t o make
thei r regular and accustomed payments and
impossible to answer a n unexpected call The
,
.
secu r iti e s whi c h he sells are su n k i n valu e by
,
t he co nc u rren c e
of
an inc re as e d n u mbe r Of
s e llers and a diminish ed n u mb er
,
He
c e as e s t o p ay hi s
th e y
do
n
otes
a
u y er s
de m and
on
,
.
and
n o t m ere ly sin k i n v al ue th e y b e c o m e
,
for a tim e u tte r ly v al ue l e ss
a nd
Of b
l o ss
s
.
Th e i nc o n ve ni e nc e
u stain ed by th e i r h o l der s
S pr e ad s
l ar m am o ng al l p o ss e ss ed Of p ap e r cur r ency
.
28
T RA N SM I S S I O N O F T H E
th e p re ci o us me t als
,
P R EC I O U S M ET A LS
fo r
whi c h it affo rd e d a
s u bstit u te will be re exported
-
,
.
I hav e selected this fr o m a mo ng th e many
cas e s i n which th e am o u nt O f th e preciou s metals
in a nati o n may re q uire su d d e n inc re as e or
d imin u ti o n n o t b e caus e i t is o ne O f the most
,
fr eque nt o nes b ut becaus e i t i s a t o l e rably
,
acc urat e representation
c ountry so
,
th at year
of
this
During the th ree y e ars
’
.
and i n d eed in the b e ginning
of
this co unt r y enj o yed remar k able
co mmer c ial prosperity
taken
of
,
1 82 5,
,
the stat e
as respects money d uring th e
fa r
last eight e en nt o n t h s
pr e ceding
Of
A dvantag e had bee n
.
that prosperity
,
or
rathe r O f the general
co nfiden c e which it pr od uced to s u bstitute to
,
a great degree a paper c urrency
which previou sly c ir c ulated
fo r
T he
.
a
the gold
m o unt
co untry bank not e s in circ ulati o n in
fa r
1 822 ,
Of
as
as can be i n ferred from the stam p O ffi c e
r et u r n s ,
T
w as
about t w elve millions and
,
Thi s w a s
'
t T oo k e s
e
k
n i n J u ne, 1 8 2 7
p
C u rr enc y, p 3 9
S
o
.
.
.
,
in
FRO M
1 8 2 5,
C O U N T RY
CO U N TRY
TO
29
.
had risen to between e ighte e n and ni n e
te e n millions
Gold to
.
of
am o u nt
t he
abov e
st e rling was exported i n o ne year
1 824 ,
,
it
a part O f i t even to S o u th A meri c a I
quoted i n my third L ectu re M r Tooke s acc ount
o f the commercial insanity whi c h prevailed i n
.
’
.
the b eginning O f 1 8 2 5
and so extensive
,
Of
I nstan c es so numerous
.
the misdire c tion O f indus t ry
have I su pp o se nev e r o cc u rre d
,
,
forei gn
,
O ur
.
loans
to
states which as far as we are c on c erned
,
,
,
,
have de c lared themselve s insolven t t he waste
o f o u r m ining spe c ul ations in A meri c a and i n
,
ou r o w n
of S O
Of
domi nions t he d issipation
,
t he fund s
many j oint s t o c k c ompanies all t hese are
-
,
among t he mos t pal pable but no t t he most
,
i mp o rtant instances
The greatest losses were
.
prob ably sustained from
ou r
e x c essive importa
tion Of foreign c o mmodi t ies at pri c es
,
n
t
l
a
g
y
e x t r av a
raised by the mu t ual c om pe t i t ion
im porters and from an u ndue extensi o n
,
t i c ul a r
fo r
bran c hes
i nstance
,
of
manu facture
-
,
t
hat
Of
Of
Of
t he
par
silks
r o m a miscal c ulation o n t he par t
—f
M u sh e tt C u rr e n c y p 1 7 2
,
,
.
.
30
of
T R A N S M I SS I O N
OF
T H E P R EC I O U S
th e m anu fact urer e ith er
Of
TA LS
ME
th e q u antit y for
which th e p u blic w ere r e ady t o pay an
le nt
,
O r of
ad d iti o nal s u pp l y
C omm er c ia l
s
of
th e ex t e n t
equ i v a
th e wh o l e c onc urre nt
.
bl u nd e rs
SO
g ro ss
a nd s o
e xt e n
iv e ne c e ssa r ily pro duc e d wid e e mba rr as s m e nt
and r uin % e vils
no t
c o n fi ne d t o th o s e wh o s e
mi scal c ulation ha d fi r st o ccasioned th e m
,
a nd
even to their i m m ediate w o rk peopl e
-
or
de
w
p e nden ts
,
b u t i nvo l v i n g
many wh o hav ing a c te d
.
,
with app ar e nt prudenc e suddenly foun d th e ir
,
mar k et destroyed by th e ruin
Of
th e i r e x pe cte d
c ustomers I t was under these c i rc u mst an c e s
O f c omme r cial distress t hat a cc ident o r malic e
.
,
.
o c casioned a sudden run up o n a c onsid er abl e
bank in the w e st
t he c redi t
Of
Of
E ngland
a great
I ts failur e sh ook
.
L ondon
whi c h after struggling through
,
Of
u pwards
banking h o us e
-
d ifii c u l t i es fo r
a wee k d uring whi c h i t paid away
,
i t is said m o re than
,
st o pp e d p ay
,
ment ear ly i n De cemb e r
,
.
The
o t o riety
n
of
t h e se d i fficulties in the first instan c e and t h e
,
eventual fail ur e spread te rr or among th e c r e
,
F
TO
C O UN T RY
31
the co unt r y ban k s ab ov e thi r ty
of
d i to r s
R O M C O U N T RY
,
in
numb e r c o nn e cted with that hous e and many
,
,
Of
th e m w e re unable t o stand the run whic h
followed
The failure
.
of
Y o rkshir e
a great
ban k alarmed the n o rth e rn part O f the k i ngdo m ;
the
and
c o nsternation becam e general n o t only
,
among the h o lders
lo c al n o tes bu t among
of
,
dep o sitors as well in th e metr o polis as i n the
,
country
Then followed that dread fu l wee k
.
”
which h as been c alled the pani c i n whi c h
the questi o n every morni ng was not w h o has
,
,
fallen
but who stands
?
fort y
of
-
which nearly
in
—
,
seventy banks
state
?
spended their payments % a
Su
things whi c h
,
if
i t had c ontinued only
eight hours longer would a c c o rding to
,
,
M r H u s k i s s on f
.
have put a stop t o all dealings
betw e en man and man ex c ept by barter ; i n
,
whi c h in
,
arrival
of
fa c t
,
nothing b u t the u nexp ec te d
sovereigns from F ran c e
about
the discovery in the cellars
,
E ngland
,
of
one
b e fore c ondemned t o
be
F eb 1 0t h 1 8 2 6
.
,
.
t he Bank
of
po u nd not e s
,
Of
l o ng
burn t and t h e int er
,
P a rl
.
H is t
.
l 99
.
,
T R A N S M I SS I O N O F T H E
32
v en t i on
failur e
of
Of
a
S unday
P R EC I O U S M E T A LS
pre v ented the m anife st
,
an establishm en t which w e have b e en
,
Of
a c c ust o med alm o st to c o nsi d er a part
co nstit u ti o n
th e
.
M ost happily t h e Bank
,
of
E nglan d did n o t
de cid e dly st o p payment and
,
,
most happily
,
its n o t e s re taine d their c urre ncy and happily
,
,
also th e directors had th e c o u rag e t o incr ease
,
their issues
That increase however did n o t
.
nearl y e q ual
in
a mo u n t
th e country n o tes which
*
had c eased to circulate
w as
if
th e same as
of
c u rrency
cu rrency
Th e e ffect there for e
.
,
a c onsid e rable portion
of
,
th e
a c o untry having o nl y a metall ic
,
had
,
,
,
be e n
s
udd e nly ann ihilated
.
Prices fell ; the ex c hange s whi c h had been
agai nst u s in o u r prosperity becam e fa vo urable
,
,
in
ou r
adversity and g o ld fl o wed i n i n every
,
directi o n
M any
.
Of
the boxes
Of
s o v e reigns
,
wh i c h had been ex p o rted t o Pari s in the pre
v i o n s year r eturn e d with o u t e ve r ha v ing bee n
u npacked I belie ve the in flu x O f g o ld has now
,
.
c eased bu t it c o ntin u ed du r in g the
,
part
of
last year
.
g r e ate r
F RO M
C O UN T RY
TO
C O U N T RY
33
.
A s our mis for t u nes w e re attributed chi e fly t o
o ur
Of
pape r c urrency e spe c ially to t he porti o n
,
it consisting
Of
small notes an attempt was
,
m ade imm e diat e ly to limit and ultimately to
,
extinguish them A n a c t was p assed prohibit
ing the iss u e in E ngland o f any small n o tes
s t amped or dated a fte r t w o peri ods in th e y e a r
1 8 2 6 and absolutely forbidding their use i n
.
,
,
E ngl and a ft er th e
5 th
Of
A pril
,
1829
.
S c o tland
and I r eland we r e t o ha v e been in c lud e d in thes e
enactm e nts but su c cess fully resisted th e m
I f these ena c tments are persist e d in and if the
.
,
,
om issi o n
of
S c o t land
and I reland do not rend e r
th e m nugatory we shall r e tain the g o ld which
,
o u r d istress force d up o n u s and probably r e
,
quire a fu rther su pply If we r ever t t o o u r
fo rmer syst e m we shall again pa r t with that
porti o n Of o u r g o ld whi c h the returning u se O f
.
,
paper will have rendered unne c essary
This is not the place to inquire whether ou r
small notes really produced the evils attributed
to them or whether the security affo rded by an
increased metalli c c urren c y is worth the expense
.
,
34
of
T RA N S M I SS I O N
k e e p i ng
in te r e st
It
an d
TH E
OF
P REC I O U S M E T A L S
d i ffi c u lty b u t wil l
,
I t is
.
th e
g re at
their place
b e ginning
Of
my
clear howev er that as a ques
,
,
a nd
t i o n o f imm ed iate profit
of
find
,
ra ther at th e cl o s e than at
L ectures
of
u p % they a re subjects
,
l o ss th e ne c essity
,
imp o rting s o m uch g o ld du r ing the l as t y e ar
m u st hav e c o nsi d erably ag g r avated the distress
of
c ou ntry
t he
I t could have be e n Obtaine d
.
o nly by the sa c rific e
of
ou r
industry
Of
a nd
of
t he r esu l t s
nat u ral advantages t o
,
o btain what ? mer e ly the pri v i l ege
s
o v ere ign w he r e
,
we
a p o rti o n
Of
giving
a
had p re viously gi ve n a
o t e or a ch e c k I t is c lea r a ls o that if w e
agai n su ffe r small n o tes t o fo r m a considerable
n
.
p ort ion
of
,
,
o ur curren c y t he i mmediate
,
c o ns e
l
w
il
be
t
hat
we
shall
exp
o
rt
s
o
me
m
i
l
q
li o ns o f sovereigns not only with o u t i nc onve
u en c e
,
,
ni en c e ,
b u t precisely becaus e we find the us e
the notes m o re c o nve nient an d shall rec e iv e
,
the m
an
every o ne
ment
fo reign
Of
be a s o ur c e
wh i c h
N othing
.
S mith
equi v alent in
’
c an
s i l l ustration
.
W i ll
of
fo r
c omm o dities
Of
,
enjoy
be more corre c t than A dam
Th e u se
of
the prec iou s
L E C T UR E II
M E R C A N T I L E T H EO R Y
AN
e min e nt write r
.
W E A LT H
OF
th e
perha p s
‘
,
.
o nl y man
whose a c q u irements and v irt ue s d o h o n o u r b o th
to a S panis h and an E nglish U niv e rsity while
,
c o mmenting
the H isto r y
t ion
Of
o
Of
ff
that extraordinary pass age i n
H u man %
n o wledg e the
,
i n att en
the anci e nts t o th e phil o s o phy O f wealth
has co mpared their state
of
mind to tha t
,
Of
c h ildren in the ho use of an opulent trade r who
finding the ne c essaries and c om forts o f li fe su p
plied to them wi t h me c hani c al regul arity never
,
,
,
inqu ire into the m a c hin e ry by wh i c h these
e ffe c ts are produ c ed or i f t hey eve r d o think
,
,
bout it su ppose t ha t break fast dinner and
su pper su cc eed o n e another by the spon t aneous
a
,
,
,
,
Of
bounty
a
ut u mn
na t ure like spring
,
,
summer and
,
.
T he Re v Bl a n c o \V hi t e
.
.
M ERCA NT I L E T H E O R Y O F
If I
W EA L T H
37
.
mi g ht ve nt ure to car r y a littl e fa r th er th e
pa ra l l e l whic h has b ee n b e g u n by s o mast e rly
a h a nd I sh o uld say that wh e n fi r st the chil
,
,
dren turned th e ir attenti o n to th e s o u r ces O f
th e ir c o mfor ts fin d ing that th e ir fath er O ft e n
,
tal ke d
of
s e ldom
Of
th e diffi culty
Of
th e
diffi culty
of
gen e rally sp o k e
h is
of
g e tting money and
,
spending it that
,
fo rt u n e
as
c o nsisting
be
Of
th e m o n e y h e was w o rth an d that th e m o tiv e
,
which h e gen e rally as s i g n e d
for
r e fu sing them
any luxu r y was that h e had not money e n o ugh
,
to afford it they con c luded that th e ir enj o y
,
m e nts dep e nded rath er o n the m o n e y which
their
fathe r
rec e ived than on that which h e
,
sp e nt ; that their abundanc e d e pend e d
am o u nt
Of
m o ney
for
on
th e
the tim e being i n his
,
str o ng b o x and would b e increased indefinitel y
,
,
provided that amount c o uld be ind e finitely
augmen te d and retained
of
.
Th e Ob v i o us m od e
e ffecting this wise Obj e c t s e e m e d to be to
c ause as much money as possible t o c ome in
,
and as l ittle as p o ssible t o g o o ut ; t o e nc o urag e
e
very exchange in wh i c h their father r ec e iv e d
38
M
mo n e y
,
ERC A N T I LE T H E O RY
and
to
OF
.
disc o urage e ve ry o ne in
h e part e d with i t % t o fav o ur
own
W EA L T H
hi s
w hi c h
t r a de with his
c ust o m er s and t o restrain ev ery tr ade in
,
h e w as a cu st o m e r hims e l f % t o fo rb id his
w hich
a
r
ting
with
a
single
shill
ing
tha
he
rec
ei
ve
d
t
p
and
t he
t o put an end t o
me r c e
u
,
n fav ou r a ble c o m
which he car ri ed o n with
hi s
g r ee n
o
r
g
-
cer and h is sh oeblac k by tu rn ing h is manu fac
t ories int o a p ot at oe garden maki n g his wea
,
,
v e rs d ig
an d
,
blac k ing his
re q ue sting hi m to empl o y in
,
ow n
sh oes s o m e of th e time which
,
h e fo rm e rly d e v o ted t o his S h o p
I fear t hat t he absu r dity
of
.
my s u ppositi o n
may app e ar alm o st farcical S O tru e i t is t hat
th e fo lli e s o f r eal li fe are t oo gr o ss n o t m e rely
.
fo r
fi c tion
but
,
a
lm o st
whole na t i o ns m ay
v
fo r
fo r
hypo thesi s and that
ce nturies ac t
,
,
or
end e a
ou r t o act u p o n p r in c iples whi c h i t se e ms a
,
mere b urlesqu e to att r ibut e to an individual
.
For in what do e s t he mercanti l e syst e m with
,
its prohibi t ion
me tals
,
Of
t h e exp o rta t ion o f the pre c ious
i t s commer c ial t rea t ies wi t h those
t ions wh ic h
ar e
na
su pp o sed mos t li k e l y t o s u pply
M
E R C A N T I LE
T H EO RY
WEA LT H
or
39
.
gold and silve r i t s pr o hibiti o n an d re st r iction
,
of
the im p o rta t i o n Of t h o se c o m m o diti e s which
a re su ppos e d to occasi o n an
u
n fa vourabl e
ba
lanc e O f trade or i n oth e r wo r ds a trade in
which th e pre c i ou s metals are exp or ted and
,
,
,
,
its b o u ntie s
mod i ti es
on
t he
e xp o rtation
Of
th o se com
whic h a re supp o s e d to be paid
fo r
in
gold and silver and its attempts t o rende r u s
,
ind e p e nd e nt as it
,
by forci n g us
to
term e d
is
,
oreign nati o ns
Of f
,
pr o d u c e at home what co ul d
be Obtained b e tter o r more abundantly fr o m
ab road ; i n whi c h O f these att e mpts and th e y
,
c o nstitut e its e ssenc e d o es th e m e rcanti le sys
,
tem d i ffe r fr o m t h e c o nduct
childre n
?
If
n
of
my s u ppos e d
o thing sh ou ld o cc u r t o chec k
the w o rld in its pr e s e nt stat e Of i mp ro v e m e nt
and
1 000
y e ars henc e when all trac e s
,
Of
,
th e
mer c antile system which at pres e nt cl o gs all
and distu rbs all o u r r easo nin g s
our actions
,
,
sh all have vanished wh e n th e r ul er s Of e ve r y
,
nation s hall pe r mit their subj ects to u se t o th e
u tmost their ow n advantage s and p r ofit t o th e
utmost O f the a d vantages p o ss e ss e d by th e i r
,
M ERC A N T I LE T H E O R Y O F WEA L T H
40
.
neighbours ; i f in that mill e nium o f go o d sense
a copy o f these lectures shall b e dis c over ed I
,
,
,
shall be conside re d pr o bably a r e cluse a c a
demic totall y unac q uainte d with th e re al busi
n e ss Of th e w o rld and declaiming fro m my
,
,
C loist er against Opini o ns and con d uct t o o mon
st rou s t o ha ve had any b u t a visi o nary e xist e nce
in my o wn imaginati o n
.
I n e ed n o t give m ysel f m uch tr o uble ab o ut
.
th e o pinion
h av e
of
Of
a right
M
s t er i t ,
o
p
y
to
but my present hearers
requ ir e from m e s o me ac co unt
the cau s e s that enabled a s e t
Of
whi c h do n o t ev e n admit
Of
O pini o ns
bein g plausibly
stat e d t o prevail so u niversally and t o re main
fo r S O many centuri e s unquesti o ned
I am i n
,
,
.
c l i ned
t o ascribe t h eir immediate o rigin m o r e
to th e use
to
its
u se
Of
m o ney as a measu re o f v alu e th an
as a m e dium
Of
e xchang e
.
A man
possessed O f an e xtraordinary numb e r O f val n a
ble things is ri c h ; b ut th e cl e arest mode O f
s t a t ing his c ompara t i ve weal t h is t o s t ate the
aggregate
11 1 8
Of
t he sums
Of
poss e s sion s wo u ld sell
.
for
whi c h all
s ay ,
perhaps
money
We
.
~
L
E
T 1 1 EO R Y
TI
M ERC A N
that he
OF
p ou nds
has
su c h is th e aggregate amo unt
WEA L T H
41
.
m e anin g that
;
of
th e sums
of
money fo r which all his pr o p er ty might b e s o ld
.
W hen applied to an individual this language
leads t o no misap p rehension W e kn o w that th e
pers o n whom we have des c ribed as possessing
pounds d o es n o t in fa c t p o ssess twenty ;
.
tha t he d o es not habitually k eep wi t h him as
mu c h m o n e y as a petty sh o p k e e per
t e nth
we
or
o ne
of
hun d redth
if
q uite aware that
ar e
of
not
h i s fortune
.
o ne
A nd
we c ould force him
t o in c r e a se the money i n his c ustody to t e n
times its usual amount we sho u ld i mpoverish
,
r ath e r than e n rich him
u pon
n
ational
w e alth ,
B ut wh e n men reason
.
th e y se e m to forget tha t
it is mer e ly the aggregate
sessed by individuals
of
the wealth
os
p
Th e ir minds are con
.
fused b y i t s magnitude and c omplex ity ; be c aus e
the wealth
Of
Of
a na t ion like the separate mass e s
,
which it is com posed may be c omputed in
,
mon e y they suppose that it co nsists
,
-
as
a
Of
m oney ;
m istake as gross and p e rhaps as natu ral
that
,
of
a child who
,
h earing
,
that a g iv e n
42
M
ERC A N T I L E T H E O R Y
merchant had
OF
W E A LT H
.
p ou nds sho u ld supp o s e
,
t hat he ha d a b o x c o ntainin g th at su m i n g o ld
and sil ver
.
Of
W h e n this st r ange misa ppre h e ns i o n
natu re O f w e al th had p r ev ail ed
that it
w as
for
i nde bt ed
,
I
have n o d o ubt
its c o nti nu anc e pri nci
pally t o th e imp o ssibilit y O f redu cin g
ci
s to
l
e
p
p r actice
withou t buyi n g
,
We ha ve
e
or
th e
ve n
to
se
i ts
p rin
en that t o s e l l
c o ntinu e s e lling
m o r e than i i b uy that is t o e ffect th e obj e ct
pr o p o sed by the m e rcantil e system the for cing
,
,
,
a constantly fav o urable b alanc e Of trad e
pra ct icabl e
.
B ut
if
,
is im
i t had b ee n practic abl e
a giv e n extent and for a giv e n time ;
to
i f b y for c e
prohibiti o ns r estri c tions and b ou nti e s w e
had been able fo r t wenty y e ar s toge t her t o m a ke
Of
ou r
,
,
exp o rts e xce e d i n v al ue ou r i mp or ts t o th e
,
am o unt we will say
,
,
of
fiv e millions sterling
,
and t o rec e ive and retain the balance w e sh o uld
,
have found ours e lv e s in tim e p o ssessed
hundred m illi o ns st erli ng
in
Of a
g old and sil v e r
,
in
additi o n t o o u r m o ney pre v iously in c i rculati o n
,
whi c h has never probably e x c eed e d fo rty mil
.
OF
M ERC A N T I LE T H E O RY
44
WE A L T H
.
te m is u nattainabl e b e ca u s e a b alanc e O f t r ade
,
be
ni v ers ally fav oura bl e can no t
ord in ary c i r c u ms tanc e s or
u
not
for
,
u
if
,
,
cr e a t ed u n de r
c re at e d c ou l d
,
n der ord ina ry c i rc u mstanc e s b e re ta in ed
,
a m o u th that th e abs ur dit y O f th is system
,
r e main e d
so
lo n g u n de t e ct ed an d is still ge n e
,
r ally u nac k n o w ledged
wisp which
,
only s o l o ng
c an
as
It
.
r e main
follo ws a wi ll
of
Obj e ct
an
-
O
B ut it may b e said
,
,
as to the p ra ctic abil ity
-
the
pur suit
its re al n at u re is u nkn o wn
“
’
.
n
ra
ting
th
e
delusi
o
n
g
and
th e utility
Of
th e
end pr opo sed by th e m e rcantil e system t o h av e
been u niv er sal
and
,
and
u niv er sal i t c er tain l y was
alm o st c ontinu es t o
be
,
,
y e t as th e m e ans
are s o c learly produ c tiv e O f imm e diate inj u r y
how c ame they to b e s o re adily acc ed ed t o ?
,
H OW
c omes it that any d e p a rt ure fro m
sub mitted t o with such relu ctanc e
co m e s it that people ar e s o
stance al o ne
hop e
Of
,
futu re
an
?
th e m
H ow
x i ou s i n this
,
is
ih
t o sacrific e imm e diate to the
b e n e fit ;
to
s
u bm it e ag e rly t o
gen er al and imm ed iat e p r i v ati o n in th e h o pe of
a nati o nal b e n e fit h e r e aft e r ?
ME R CA NT I LE T H E O R Y O F WEA LT H
45
.
Th e answ e r is that th ou gh r e stricti o ns and
,
Of
pr o hibiti o ns
imp or tati o n
,
and bou nties
on
e xp or tati o n always o ccasion p u bl i c l o ss they
p rodu ce or are s u ppo sed to pr o duce ind i v idual
,
,
,
gain
,
A nd th e prep o nderance in am ou nt
.
Of
the lo ss o ve r th e gain is more t han co m pensated
so
far
as eith e r acts
c o ncen t ration
of
on
publi c o pini o n b y the
,
the gain and the
,
'
d i fi us i on
Of
the l o ss A restri c tion or p ro hibiti o n O f the
imp o rtati o n of any foreign comm odity o c casions
a l o ss t o th o se persons who would h ave pro
.
d uc ed
the E nglish commodity wi t h whi c h t he
e xcluded for eign c ommodity w o uld have be en
p u rchase d
but th e s e
;
ar e
un ascertain e d per
s o ns N 0 man fe e ls that h e is o ne of the per
s o ns peculiarly e ntitl ed to co mpl ain I t occa
.
.
si o ns als o a loss to all th o se wh o are forced t o
pu r ch as e the deare r o r the inferior E n g lish
co mm odity B ut though the sum of these i n
c o nv e niences is m o st o ppressive the evil in
each pa rticular instan c e is g e ne rally trifling
O n th e o the r hand the pr o duc e r O f the E nglish
.
,
.
c o mm od ity
,
for
which the fo re ign one migh t be
M E RCA N T I LE T H EO R Y
46
OF
WEA LT H
.
a substit u te is an asc er tained person fully e sti
,
mating an d g e n e rally o v e r e sti mating the loss
,
,
to which th e adm issi o n O f a ri v al wo u ld subj ect
him and i f p o ssible e xagg e rating his ow n t er
,
in
r or s
of
e xpressi o n
hi s
N o thin g
th e m
.
O f our
b u t inqu iry i nto th e d e tails
c o m me r ci al law will c o nvinc e th o s e am o ng my
h e ar ers
to
wh o m the subj e ct
is
no t
familia r
h o w triflin g may b e th e in d i v id u al gai n that
,
is
o ffer ed and ad mitte d as an e ffe ctual c ount er
po ise t o a p u b l ic l o ss
W e submi t t o a l o s s
.
,
e xce ed i ng pr o b abl y a mi lli o n st e rl ing e v er y
y e ar o ccasion ed b y
,
r t a t i on
o
p
i n oc u late
m ills
t he
re stricti o n
on
th e i m
Of B alti c ti mbe r ; and v oluntarily
ou r
ho u se s wi t h d r y r o t le st
s aw
N o rt h
A me
,
i n C anada ,
and
s
hi ps in th e
ric an tim be r t ra d e the ag g re g a t e va lue
,
d oe s n o t am o unt
to
Of
whic h
a milli o n st e rling sh ou ld
,
b ec o me l e ss pr o ductive
th e i r o wners
to
We
.
pr ohibi t sugar refin ed in the col o ni e s and
,
co m
s eq ue ntly imp o r t it in a s tat e m o re bu l k y and
m o re perishable l e st
,
r e finers should
be
t he p rofits
l e s s e ned
.
of
a
O th er
fe w
sug ar
selfishn es s
M ERCA NT I LE T H E O RY
be
may
as
i nt e n s e b u t
,
OF
WEA LT H
o e is
n n
so
u nb lu shing
b e ca u s e n o ne is s o toler ated as that
,
no
i
o
l
s
t
p
inj u ry
47
.
of
,
a mo
cl a iming a v e s t e d int e r e st i n a publ ic
.
Th e subj e ct is still fu r th e r o bsc ur e d by tha t
p o w e rful instrument
l ou sy
ou r
c o n fusi o n nati o nal j ea
,
Fre e trade is n o t only
.
to
deprive u s
m oney it is also t o carry it t o
,
hours ;
s
of
ou r
of
n e igh
i t is t o d o w o rse than impov e rish our
elve s i t is t o e nrich the m
,
.
The trade with a
c ou nt r y is li k ely t o be advantage o us in pr o p o r
ti o n t o its e xt e nt pr o du ct iveness and p ro x imity
,
The t ra de b e tween M iddlese x and
m or e
a
ent
is
d v antage o us to both parties than that
betwe e n M iddlesex
a nd
v e ry circ u mstan ce s are
j e al ou sy
an d
%
.
.
C aith ne ss
t he
.
causes
B ut th o s e
Of
national
Th e t ra de betwe e n Great B rit ain
Franc e w o uld b e the mo st beneficial that
either c ount r y could c ar ry on they are coun
tri e s of g r e at e xt e nt and p o w e rs o f produ c tion ;
th e i r re sp e cti v e wa nts and supplies ar e h appily
a d a p te d to e ach o t her a nd th e S hor t sea whi c h
t
h
a
n
u
i
t
es
n
for c ommer ci al pur pos e s ra ther
,
,
,
,
48
M
TH EORY
E RC A N T I LE
W E A LT H
OF
.
s e pa rat e s th e m r edu c e s th e e x pe nse of ca rr i age
,
T h e w i ne s O f th e Ga r ro nne
alm o s t
to
n o thi n g
w ould
na
t ur a l ly b e c h e ape r
P a ri s
i n Lo ndo n t h an i n
of
T h e m ine ra l t re as u r e s
.
C or nw all
Lo i re
.
to
as
fi nd
w ou l d
th e i r way
th e Th am e s
as
F or
.
W al e s
e asily
and
to t he
th e s e very
r ea
s o ns e ac h nati o n has alway s exer ci s e d h er per
ve rse in g e n u ity t o e xclu de th e c o m m od iti e s of
h er n e ighb o u r
c eed ed
A nd
.
that th e I mp or ts
of
F ranc e inste ad
,
w ou ld
do
not
t em
a thi r d
do ,
w e ll ha ve th ey
so
of
fo rming
or
e x c e ed a fifti e th
G r eat B ritain fro m
,
th e y n atu ral ly
as
o f al l
fo u r th
j e al o u sy
have re e choed
i m po rt s
,
,
and
nati o nal
-
,
N eq u i c q u a m Deu s
P r u d e ns
T e r r as
N on
our
Th e m e rc an til e sys
.
s ee ms to h ave p ro claim ed
to
su c
,
oce a no
si
a bs ci
dit
dis s oc i a b i l i
ta men i mp i e
t a ng end a
t
t r a ns il i u n t v a d a
'
r a es
.
A nothe r m ost e ffi c ient fallac y cons ist s i n a
”
w or d
i ndep e n de nt
T o b e inde
pend e nt o f for eig n s u ppl y i n c o ns e q u e n c e o f
u se of
th e
.
,
th e ab u n d anc e
o f o u r own ,
is
u nque s ti o nabl y a
M E R A N TI L E
C
b e ne fi t
TH EOR Y
OF
WEA L TH
49
.
uld g i ve to ou r s o i l and c l i
m at e th e p rod u c t i ve po w er s of t he ri ches t pl ain s
If
.
i n M e xi c o ,
of
re t u r n
grai n
s
co
and
ni n
of
%
i ns t e ad
e ty
or
of
th e b e n efit
of
w ou l d
fo r
,
,
a
e ver y
th e e a rt h we
to
,
fo r e ig n gram ; b u t
i n d epe nd
consis t n o t i n the
e nc e b u t i n th e ab un d ance
Of t he
h u ndred
o ne
i ndepe nde nt
ten, O b ta i n
e i g ht or
w h e at co mmitted
be
h ould
we
Th e in de pe n de nc e
.
m e rc an til e s y st e m is acc o m p anie d
no t
b y ab un d ance b u t by p r ivati o n ; it a r is e s
not
,
fro m the e x t e nt b u t fro m the m i s manag e m e n t
o f o u r res o urces ; n o t fr o m o u r rich e s b u t fro m
,
,
our
s e lf i nfl i c t ed po v erty
It
-
d e nc e
of
S wi ft , w h o
th e l as t y e ars
re ading
,
of
.
is
th e
i nde pen
d e p r i ved hi ms el f dur i ng
,
his sanity Of
,
pow e r
t he
of
b y an o bsti n at e r e s o l u ti o n nev er t o
u s e gl asses
It
.
p o s e d t r ader
ia
is th e ind e pend e nc e
blac k ing his
t o b e indep e nd e nt
i n th e ke n ne l
of
ow n
of
m y su p
S h o es
.
I t is
the foo tpath b y w a l k i ng
,
.
I nd ep e n d enc e
o f ou r
h as , h o w
n e ighb our s
ev e r s o m e ti mes b ee n re c o m mend e d n o t as a
,
m e ans
,
of
wealth but
,
of
s e c ur ity
.
This view
MERC A N T I LE T H E O R Y
50
of
th e subj ec t is
tical Ec o no my
s
n ot
WE A LT H
Sco
wi t hi n th e
If I
.
OF
.
e
p
of Pol i
might v entur e to t ravel
o mewhat b e yond m y sph er e I sh o uld r e ply
,
that i t
w el l
se
fo rg o tt e n
e ms
tha t d e pe n dence as
,
ind e p e nd e nc e m u s t b e m u tual
as
,
w e can no t
be
habit u all y depe n de n t
on
;
tha t
anoth er
nati o n for a la rge po r ti o n of our an nu al suppli es
w ith o ut
u
that nati o n s b ei n g equ all y depe nd e nt
’
po n us
sh o ul d
.
That
i nc r eaSe
if
su c h a m utu al d e p e ndenc e
the inc o nveni enc e s
Of
war t o
the o ne it would eq uall y inc re as e th e m t o th e
,
other
.
That
if
th e su pp o s e d i nt e rc ou rse w e re
o ne in whi c h E ngland re c e i ve d raw produce
in
r etu rn fo r h e r m an u fact u r e s o r ev e n her g o ld
and
such
are
th
e
c
ases
in
whi
c
h
this
argum
e
t
n
%
,
,
is chiefly used % s u ch a n interc o u rse w o uld bind
t o he r th e fo re ign c ou nt r y in que sti o n by th e
s tr o ngest of all p o ssibl e ti e s th e imm e diate i n
,
,
t er es t
of
the
o w ner s
of
th e s o il th e m o st p o w
,
cl ass in ev ery c o m munity and the o nly
c las s possessing p o wer in a p oo r country I
er fo l
,
.
S h ou ld
illustr ate the argu ment by
with th e B altic state s
.
ou r
rel ation s
I s h ou ld Obser ve that
52
ME
al l
imp ort a ti o n and
,
fo u n d ed
as
o th er w ord s
of
,
OF
b ou nties
the m erc antil e
on
an d
gold
TH E O R Y
RCA N T I L E
e xp or ta tion
on
s
.
ys t e m ;
or ,
,
in
th e b e li e f th at w ea lth c o nsists
on
sil ver
,
and
th at th e am ou nt
g ol d an d silv er in a c o unt r y is
b y s e c urin g
W EA LTH
th e
be incr e as e d
to
fav o u rabl e ba lan c e
h er a
to
of
of
trad e ; that is a tra de in wh ich he r e x po rts
,
shall always b e
of
great e r valu e than h er i m
p o rts and th e balanc e be paid t o h e r in m o n e y
I ha ve d o n e S O becau s e with thr e e e xc e pti o ns
,
,
,
.
,
which I shal l m e ntion h ere afte r n o plausibl e
,
of
defenc e
be
m ad e
l
a us i bl e
p
a wish
any inter fe re nc e with c o mm e rc e
de fe n c e b e ca u se I sh ou ld
to
,
fa vou r one cl as s
the ex pens e
th e
W h o le
I
no t
do
any o the r principle
on
of
of
.
I
no t
c an
say
no
c o nsid er
the c o mmunity at
an o the r or at the expense
,
c o mmunity
,
of
a plau sible de fenc e
.
c o ns id e r th e m o n o p o l i e s which E liza
beth i n th e ign o rance
,
of
her times though t o r
,
,
pre tended to think c heap rewards to her fa
d e fe nsible N o r d o I think a m ono
v ou r i t es
,
.
,
p o ly in fav o u r
of
a class m o re de fensible than
one i n fav o u r o f an ind i v idual
.
M
I
E RC AN TI LE
TH EO R Y
kno w in deed that th ere
,
,
of
m aintain er s
of a
WEA L TH
OF
53
.
m any ho ne s t
are
th e Opi ni o n that th e p ro s per ity
c ou nt ry is best pr o m o t ed by p ro te ctin g
h e r industry fro m fo r e ign c o mp e tition and
,
of
de r i ng h e r ind e p e ndent
do
for mally
not
til e th e ory
or ,
,
admit th e t r uth
supply
of
the mercan
,
S u ch
.
p er s o ns
a re m e r e repe at ers by ro t e
,
of
d ic e s ca u ght u p in c o n vers ati o n an d
,
e v e r s e a r ch
for
a r e as o n
nden c e ;
e
p
to
—
ar e s
j
they
re u
atisfi e d w ith find
pr o t e cti o n and
in de
,
,
of
wh at th ey c al l c o mm on
W h e n it is p ossibl e h o w eve r
,
.
if
in
,
s o unds th ey thin k e ntitling the m
th e c ou nt e nanc e
s e ns e
,
p
”
ing one in th e s ou nds
”
w ho
,
m or e fre q u e ntly are i g n ora nt
that s u ch a th eo ry ex ists
g e n e ral
fo re ig n
r en
or t o s e duc e th e m int o
a
,
to
d ri ve
r g u m e nt th e i r first
,
or
s e c o nd m o v e l e ad s th e m in ev ita bly as I re
,
m a rke d i n m y l as t l e c t ure t o th e m e rcantile
th eo ry They cann o t d en y th a t t h e c o mmod i
ties which they would ex cl u d e m u st be giv e n
,
.
to us g ratu it ou sly or i n e x change fo r o ur own
pr o duc e or fo r m o n e y The first s up p o si t i o n
granting that we c ould b e s u ffere rs by it is
,
,
.
,
,
M ERCA N TI LE T H E O RY O F WE A L T H
54
t oo
abs urd eve n
d esc r ibing
If
.
for
.
th e re as o ners wh o m I am
they adop t th e s e c o n d th ey
,
m u st a d m it that th e l os s t o th e pr od uc e rs
,
wh o s e expor ts w e i n d ir e ctl y p ro hibit b alanc e s
,
th e g ai n t o th o s e wh o m we for cibly e ncourage
l e av ing th e l o ss
th e pu blic
to
th e y ar e driv e n th ere fore
,
,
to
un
,
c o m p e nsat e d %
maintai n that th e
payment wou l d b e m ade in m o ne y ; and t o
su ppose that su c h a paymen t co uld c ontinue
an d w o ul d b e an ev il
is
,
the m er cantil e theo r y
,
.
I ha v e obs erved h o we v e r that th e r e are thre e
,
,
cas e s i n whi c h an int er fe rence w ith the nat u ral
c o urse o f trad e m ay b e de fended withou t r e
co urs e to th e m e rcantil e theory T he first is
,
.
where the de fen c e rests
se c urity
p o sed
T he
th e gr o unds
of
This argument I have al re ad y dis
.
of
.
se c ond c ase is where a l o ng p e rsistance
,
i n the system
formation
of
of
excl u sion has o ccasioned the
expensiv e domesti c establishments
of
and t he edu c ation
w hom
on
,
the admission
would be inj uriou s
.
of
n u merous
a r t i fic e r s ,
,
to
the foreign comm o dity
The answer to this argu
M ERC A N T I LE T HE O RY
m e nt
no m
,
y
on
,
WE A L T H
OF
th e m ere pr i nci pl e s Of
is o b v i o us
55
.
P o l itic a l Ec o
of
Th e only pu r p o s e
.
the
suppo s ed e stablishm e n ts and s k ill is th e pro
d u c i ng the c o mm o dity i n q ue sti o n
If th at
,
.
c o mm od ity or a s u bstit u t e which is pr e fe rred
to it can be o btained with o u t their as sistan c e
,
,
,
they are as u seless as a machine which has
been su perseded by a bett e r inventi o n ; as
u
seless as a fer r y a ft e r the e rection
In
of
o ne
of
a brid g e
.
th e debates on the silk trade in the
,
beginning of the last s e ssi o n t he M ember fo r
C oventry
stat e d that th e r e we r e i n that c ity
‘
,
l oo ms
97 00
of
7 5 00 o f wh ich
,
w e re in the hands
ope rati v e w e a v ers who applied their ma
u u al
,
labou r as w e ll as th e i r machin er y
,
“the manu fact u r e
of
r ibands
were for the m o st part
of
,
to
These looms
.
th e worst p o ssibl e
c onstru c ti o n ; and it would
s
carcely b e
be
that the im pro ved lo o m i n France
would in a given time produ c e five times as
l i ev ed
,
,
mu c h riband as th e c ommon loom in E ngland
of
w i t h th e sam e d e g ree
1 Pa rl
.
man u a l labour
H i s t 1 8 2 6 , p 3 89
.
.
.
,
He
M ERCA N T I LE T H E O RY O F
56
W EA L T H
.
c ou l d a ls o stat e t hat ther e exist e d an i mpr o ved
m an u fa ctu re in G e rm any by which o n e man
,
c ou ld m ake fo rty e ight times as m u ch v e l v et
-
c ou ld
as
be
ma de i n
E n gl ish m ac hi n e
eq ual tim e b y an
an
W hat chance
.
w as
th ere
that th e E nglis h man u factu rer c ou ld m aintain
such a c o m pe titi o n
?
A s a mer e q u e sti o n
”
Of
w e alth th e answ e r is
,
,
what Obj ect is there in su c h a competition ?
T o p e rpetu ate th e Old system be c ause when
,
it
eve r
,
is abandone d particular int e rests m u st
su ffer is a p ri n c i ple which if fairly appli e d
,
,
w o uld l e ad t o th e suppressi o n
ment what e v e r
NO
.
of
,
every i mpr o v e
improvemen t c an possibly
b e made which shall not be i mmedi at e l y inj u
ri o n s t o someb ody
a nd
i s ts ;
Printing ruined the Co py
.
the Turks t o protec t their inter e sts
pr o hibited i t
,
.
V accination
t o medi c al m e n
.
was deeply inj uri o us
S t e am - boats
our c oa s t ers and packets
,
A nd
.
interfer e with
if
t he va c u u m
engine sh o uld b e per fe c ted i t will i n their turn
deteri o at e the v alu e o f the existing steam
,
r
b oats
.
B ut w o uld
no t
any legislator have b e en
M ERCA N TI LE T H E O R Y
boot ed from
h is p o st
O F W E A LT H
w ho
sh ou l d
57
.
these
on
,
grou nds have pr o hibit e d or re st r ict e d p r inting
,
vacc ina t i o n
tors
of
or
,
steam b o ats ?
,
W ill th e proprie
-
coal mines be hea r d if they pray that M r
P erk ins b e
.
r e strict e d from making any improve
m e nts in th e st e am engin e which shall diminish
-
t he
c o nsumption
the substitution
Of
of
coal ?
A nd in what d o es
fo r
a fo re ign
a do m e stic
of
on e
If
the
c o mm o dity di ffe r fro m th e substituti o n
d o m e stic c o mm odity
pow e rs
Of
fo r
an o th er
'
the Fren c h and G e rman l oo ms had
b e en su c h as t hey w e re stated t o b e by th e Me m
ber
for C o ventry ,
r e m o val
of
we sh o uld c e rtainly
on
,
th e
the e xisting imp e dim e nts have pr o
,
cur e d fr o m France and G e rm any all o u r rib ands
and
ve l ve ts
We sh ou ld
.
h ave
by extending s o m e b r anches
pr o cur e d the m
o f o ur
d o mestic
manu factur e s in ord e r to produce co mm o diti e s
t o b e s e nt e ith e r t o France and Germa ny i n
,
e xchang e
for
the ribands and velvets o r t o
,
s o m e o th e r c o u nt r y t o pur c has e m o ney with
,
which t h e ribands and vel v e ts w o uld have been
p u rchas ed
The dimin u ti o n in th e p r ice of
.
M ER C A N T I L E T H E O RY
58
OF
W EA L T H
.
ribands an d velv e ts w ou l d h av e enab led th e
co ns u mers
of
th o s e c o m m od iti e s
to
d evo t e t o
o ther p urpo s e s a l a rger p o r ti o n o f th e i r inc o mes
which w ou ld ha v e
of
aff
or d ed m e ans
,
fu rth e r
extending th e wh o le i ndustry o f t h e c o u nt r y
.
W ith o ut d o ubt th e s e cha ng e s c ou ld n o t ha v e
ta k en plac e with ou t p e c u l iar s u ffe r ing as w e ll
as peculiar benefit
of
.
Th e E nglish man u fact ur er s
ribands and velve t s must hav e be e n inj u red
j ust as th e E nglish pro d ucers
of
th o s e articles
for which th e de mand was incre as e d
have b ee n b e n e fite d
S o, if
.
impr o v e m e nts ta k e plac e
,
duction
fa c tures
of
of ou r
Mr
.
m u st
,
P er k i ns
Of
c oal
We
.
-
,
,
A nd
.
to
dis
c o ntinue o r c ur t ail some other branches
of
I n this c ase as i n t he last ther e
,
,
will be partial individual su ffering
partial individ ual benefit
S i d es
s
steam engines and to th o s e m anu
in which they c an b e s er vi c eable
.
’
labo ur t o th e p ro
t o do this w e shall probably be obliged
ind ustry
,
w e shall pe r haps
c e as e t o r aise th e sam e q u antity
shall also de v ote more
,
.
,
as
well as
I n bo t h cases
,
be
th e partial S u ffering and t he partial be nefit
,
M E RC A N TI LE T H E O R Y O F WEA L T H
60
.
th e l o ss is a great er e v il th an the g ai n is a good
I
r e sis t the inte r p o siti o n
of
g over nm e nt agains t
of
th e m o st b e n e ficial di re cti o n
or in o th er w o r d s
,
p u blic grou n d s
.
,
I
o ur industry
defe n d fr ee t ra de s o l e ly
,
S ol e l y
.
,
on
b e ca us e to p ro hibit
ev e ry ch ange which is acc o mp a ni e d by
i nd i v i
dual inj ury wo u ld b e t o pr o hib it ever y impr ove
ment whatev e r
.
Of
B ecause the e ffe ct
bar bar ou s poli c y wo u ld be at best
to
such
keep u s
at th e p o int at whi c h w e st oo d whe n it
i nt rod uc e d
of
—
w as
t o sacrific e in fact the v ery e nd
,
,
r n m e nt
o
v
e
g
a
F or what is th e e nd o f go ve rn
.
m e nt but t o pr o m o te the hap p in e ss o f th e wh o l e
by fo rcing the int e rests
t o th o se
to
o f the
Of
co mmu nity
individuals to ben d
—
th e
th e many
I am aware h o we v er that
,
state
of
,
few
t o s u bmit
i n the
e xisti ng
knowl e dge and fe e l i ng in this c ou nt r y
any att e mpt to apply at o nc e t o for eign
merce the principl e s
as a m att e r
of
on
b e u ns u ccess ful
t o med
in
ou r
c om
which w e act and that
,
c our se i n ou r i nt ern al trade
w ou ld
,
.
,
W e ha ve b ee n
inte r n al t r ad e
to
aec u s
s e e eve ry i m
,
M ERCA N T I LE T H E O R Y O F
W EA LT H
61
.
provement ac c ompani e d by individual su ffering
,
bu t we hav e also been accu st o med to c ons ider
the gen e ral b e nefit as o verbalan c ing the partial
inj ury
and at o nce to stifle c omplain t s by
,
replying
trade ;
d u c ed
,
these are the ordinary c han c es o f
when y ou r manu fa c ture was intro
o
u inj ured somebody else and i f we
y
,
were to prohibit o r restri c t whatever inter
feres with existing inte r ests we must remain
,
stationary
fo r
eve r
”
.
U n fortu nately
the prej u dic e s of the mercan
tile theory have prevented the application o f
this reasoni ng to foreign co mmer c e
have done m o re
.
They
they have turned against i m
prov e men t the v e ry argu ment whi c h
be d e cisive i n its fav o u r
.
O ugh t
to
They have enabl e d
th o se who fear that they may su ffer individual
inj u ry
fr o m fo reign
c om petiti o n
m e r e ly deprecating that inj ury
th e sac rifice
of
,
or
instead
,
of
p r aying that
their int e rests to th o se
of
th e
pu blic may b e as much so ftened to them as
po ssibl e
rou
d
s
n
g
to
,
;
fou nd th e ir o pposition
on
publi c
to proclaim that every departure
62
M
fro m
ER C A N T I L E T H EO RY
of
our syste m
OF
WEA LT H
.
exclusion will ma k e u s
dependent on fore i gn e rs and deprive us
,
money and i n short to call in aid
,
of
our
Of
what
t h ey
suppose to be thei r own imm ed iate ad vantage
all the abs u r dities
of
that monstrous theory
.
I n a representative government where ea c h
,
i ndividual ma y procl aim in th e ir utm o st
g er a t i o n
ex a g
his s u fferings and his fea rs wh e re the
,
powe r a rbi t r a r ily to do go o d is chained by the
same fetters which restrain the power arb itra rily
to do evil where i n sho rt p u bli c Opinion
,
,
,
is
Om n ipotent and is on these subj e cts so ill
,
,
in formed and
t
,
here fore
,
so
easily m isdirecte d
,
there appears at first sigh t no limit to the
,
,
extent t o whi c h individual interest
prej ud i c e
,
and national j ealousy
,
,
p o pular
might
no t
c arry the s y stem o f exclusion There app e ars
at first si g ht no reason why t h e dread O f foreign
.
c om pe t i t i o n fel t in t urn by ea c h cla s s o f pro
d u c e r s should not h a ve l e d us at las t to t he
,
,
per fec t non inter c ou r s e
-
fa r
Of
J apan
.
I n fa ct as
,
as legis l a t ion c ould e ffect this Obj ect i t
seems nearly
,
to
have been a t t ained by t he sta
M ERCA N T I LE T H E O RY
WEA LT H
OF
tut e pass ed in the third year
E dward
of
IV
.
M r Daines
.
Of
63
.
the re ign
Of
B arrington s abstract
’
this statute is in the following words
T he fourth
m erchandizes
c hapter i s intitl ed
no t
c ertain
,
law fu l to be brought re a dy
wrought into the king dom
I t enumera t es
almost every kind o f goods whi c h c an be
’
.
im ported and may now b e looked u po n as
,
the fundamental law O f the c ustoms ; founded
u
pon t he best principles
of
c ommer c e
”
.
S uch
were our prin c iples o f c ommer c ial
legislation in t h e fi ft een t h c entury and s o li tt le
were they i mproved in the eighteenth that a man
of M r
B arrington s high station p ubli c spirit
,
’
,
.
,
and general knowledge belie v ed that a
,
p
r o hi b
i
tion o f almost every kind O f wr o ught goods t ha t
can
be
import e d
best prin c iples
”
,
Of
w as
founded u pon th e
c ommer c e
”
A nd so
.
sl
ow
has been the s u bsequen t di ffusion of kno w led g e
that fo r repeal in g t hat statute i n o u r o w n t i m es
,
M r H uskisson has been c alled
.
a
har d
-
he a r te d
t heoris t e x c eedin g the devil himse l f i n m a li g
,
M E R C A N TI L E T H E O R Y
64
mity
and in c ontem pt
m ankind
,
OF
W E A LT H
.
th e happiness
fo r
of
”
.
H appily
,
howe v er there is i n th e politi c al
,
as i n the hu man bod y a
,
,
medi ca t r i a
vi s
,
whic h
'
,
fo r e x traordinary evils produ ce s e x tra o rdinary
re med ies
.
The absu rd ities o f the E ngl ish l aws
respe c ting landed p r operty pr od u c e d uses an d
t ru sts
the violence
%
of
the feu dal tim e s ga ve
rise to knight errantry % when ex c lu sion b e cam e
-
the
fu ndament al
l aw
of
the c ust o ms it was
,
necessarily foll o w e d by smu ggling
.
The smu g
gi e r is a rad i c al an d j u dic i o u s re forme r
H is
.
l abours are unhappily c onfined t o th e least
bulky arti c les bu t as
fa r
,
as this fi e ld extends
they are always d ire ct ed to that part o f the
h i b i t iv e
p
ro
system wh i c h m ay b e broke n thr o u gh
,
with the greatest advantage be c au se i t is mai n
,
t a i n ed
at t he greatest loss
.
I n those c ou ntries
whi c h have c arried the prohib itive system to
t he ex t ent wh i c h M r Dai nes B arrington thought
.
t he per fection
of
c ommer c e in
,
s t an c e at this instant and i n
,
,
S pain fo r i n
he r
,
c olonies
,
be
~
M
E R CA N T I L E T H E O R Y
or
W E A LT H
65
.
fo r e that system had d epri v ed he r o f th e m
,
the smuggl e r is e ssential t o the well b e ing of
-
the wh o le nati o n
p e nds
him
on
p re s e nt
I
,
Al l
.
external commerce de
B ut in this c ountry and at
.
,
am fa r from thinking that the direct
e ffect o f his exe rti o ns m g i v mg u s a free trade
i n th o se c om modities whi c h from thei r bul k
,
and val ue
fall
,
within his province a re any
,
fo r
c o m p e nsati o n
th e crim e the mis e ry and
the p u blic e xp e nse
and the victim
,
of
H is
.
,
,
whi c h he is the o c c asion
merit is that
of
having
suppl ied the only argument whi c h c ould hav e
enable d t he im pr o vement
c ode
u
g
y
If Mr
.
ment s
ou,
.
H usk iss o n
of
ou r c o mmerc ial
had had no better ar
than th o se wh ich I have ad d ress e d t o
h e w o uld ha v e appli e d in v ai n to the
of
H ou s e
C om mons
a nd
th e c o unt r y
They
.
ha v e b e e n be fo re the publi c u nanswered and
,
u nsub mitted t o fro m t he ti me
,
of
A dam
S mit h
u ntil n ow
M r H uskisson s argumen t was
were proh ibitions right or wrong wise or
foolish — were they attempts t o prote c t and
foster the i ndustry o f our o w n c o un t ry o r t o
‘
.
.
.
,
,
,
66
M
ERC A N TI LE
r u no a v o r
W EA
sac r ific e th e p er man e nt i nt ere st
L IH
' ‘
.
the wh o le
of
c o mm u nit y t o th e tem por a r y a dv antage
po rti o n
ti ve
of
its memb er s
—
,
l aw fu l t r a der but it was o nly
,
of
c o nve rt
to
a
i no per a
th ey w ere
Th e y m i g ht annihi l at e th e ca l ling
.
of
th e
hi m
int o a sm ug gl er ; t o e xc han ge fo r l e gitimat e
of
c o mm er c e th e c r im e and lawl e ssn e ss
ban d
q
W hat
.
of
u enc e
”
,
“
he as ke d
was th e c o u s e
,
s u c h a system ?
A
n
famili e s that wo u l d o th er w i s e b e
,
and
v
of
al u ab le
,
th e i r
chil dre n
in
p er p e t u al wa rfa re with th e law
ins e nsibly
a
ou tlaws sta ndi n g to th e re st
,
fellow - s u bj e cts
syste m
to
a stat e
of
till th e y
,
c qu i red th e habits and fe e l i n g s
m u nity r ath er in
of
u mb er
i nd u st r i ou s me mb e rs o f s o ci e ty ex ist ed
and t r ain ed u p
of
c o nt r a
th e
.
r e lati o n
of
of
th e c o m
pi r at e s tha n
A nd was this a b o m i na b l e
b e t o l er at e d
,
no t
to
u
ph ol d th e
r e ve nue but t o its inj u ry m ere ly b e ca u s e
,
,
in
a few s e c o ndary branch e s o f m anu fact u r e w e
,
d id
or
no t
posse s s th e sam e n atu ra l adva n ta g e s
the same d e g re e
bo ur s
of
s k ill as
our
n e igh
,
L EC T UR E II I
M E R C A NT I L E T H EO R Y
I REMA R% ED
,
in
.
WE A LT H
OF
C O N C L UDE D
.
my l ast l e ct ure that th ere a r e
,
th ree gr o u nds o n wh ich an int er fere nc e with
th e nat ur al channels o f comme r ce may i n s o m e
,
c as e s b e d e fen d ed with o ut havin g r e cours e t o
,
th e m er cantil e th eo r y
Tw o
.
o f th e s e secu rity
,
i n cas e o f wa r and th e i mm ed iate inj ur y to th e
,
d o mestic p ro d uce r w ith wh o m
t he
i mp o rted
commod ity w o uld inte r fe r e I have co nside r ed
,
.
I n o w p ro ceed to the last whi c h is taxation %
Th e principle o f fre e trade i s non i nt er fer
,
-
e nc e % i t is t o su ffe r every man to empl o y his
indust r y in the manner wh i c h he thin k s most
ad v antageou s w ithou t a preten c e
,
on
the part
the l e gislato r to c ontro ul o r d i re c t his oper
B u t when a tax is l aid o n any d o
a t i on s
of
.
m es t i c
p ro duct
for
whi c h a substitute
c an
be
obtain e d fro m ab ro ad if the tax e xc eed the
,
M
E RC A N T I L E TH E O R Y
W E A LT H
or
69
.
di ffe re n c e b etw ee n th e p r ic e at h o m e and
abr o ad and th e exp e ns e o f imp o rtati o n i t
,
m ay
,
,
b esides th e gen er al e vils n e cessa r ily inc i
dent to a tax als o op er at e as an inte rfe r enc e
,
with the na tu r al e mpl o ym e nt
of
industry
.
It
may o ccasion the home pr o duce r t o aband o n
his b usiness and d e v o t e h ims e l f t o the p ro d u c
ti o n
tio n
of
s o m e o ther c omm od ity b y the expor ta
,
of
whi c h h e may b e e nab led to im po rt
tax free the fore ign c o m m od ity
,
.
A
,
h e avy tax
is i mposed o n the domestic manu fa c tu re o f
gl ass — i f n o r estri c ti o ns were i mp o s e d on th e
importati o n
m anu factu re
t i o n al
ture
foreign
glass we sh o ul d c e ase to
glass at h o m e
portion
of
dire c t
of
o f ou r
,
an d
d e vote an addi
i ndustry t o the man u fac
c ommoditi e s to b e exp o rted in exchang e
or
ind ir e ct for th e glass
,
Germany
The ob v ious mode
of
F r ance and
.
levy an equ ivalent
t er v a i l i n g
d uty
on
,
or ,
of
p r ev e nting this is to
as i t is c alled a coun
,
the foreign c ommodity % and
we may easil y believe that no gove r nmen t is
l ikely to be wanting in this p re cauti o n
.
The
70
M
E RC A N T I L E
faul t is uni for ml y
T H EO R Y
OF
W E A LT H
th e o th er side
on
.
Pa r tl y
.
with a v i e w t o re concile t o the tax the do m e s
tic p r o d u c er ; pa r tly in the hope
ad d iti o nal
of
reve nu e ; an d pa r tl y w ith th e pat r i o tic
of
t ion
tax
p ro t e cting d o m e stic ind u st r y a sp e cific
,
any h o m e p ro d uct is a l ways
on
n i ed
,
heavie r tax
of
sary ev ils
i t a p r et e x t
i f th e
in g
mpa
m u ch
a
the foreign c o mm o d ity wh ich
on
fo r
m ight b e a substi t u t e
But
ac c o
not b y an equ ival e nt b u t b y
,
i nt en
it
A n d the
.
a
c c es
th e
ta x a re augm e nt e d b y ma k ing
fo r
n e w re st r icti o ns
du t y b e
on
c o m m er c e
.
m ore than a c o unt erv ail
no
equ ival e nt o ne i t i s subj e ct t o the e x
c ep t i o n s wh i c h I shall mention i n a subsequent
or
part
o
,
f
m y le c tu r es
of
prin c i ples
,
n ot
free trad e
,
a departu re fr o m
bu t
t he
an applicati o n
of
them
Thi s a r gu ment h o w e v er i s o fte n ma de u se
.
,
o
f
,
to san c tion th e g r oss e st v iolati o n
principles
.
on
t i o n ab l e
axi o m that th e w e alth
is
th o s e
W e have seen that free t rad e is
fou nded
nation
of
n on -
,
i nt erfe r e nce ;
on
the
of
un
u es
q
the wh ol e
best pr o mote d b y allowing e ach i n d i
M
v
E RC A N T I L E T H EO R Y
or
W E A LT H
71
.
id u a l to employ himsel f in the way which
he
thinks most advantageo u s t o himself w ithou t
,
th e
in fluen c e
of
motiv e s a r tificiall y sup p l ied by
p a rtial taxation
s
B ut taxati o n can su pply
.
u c h m o tiv e s o nl y while i t
tax is laid g e ne r all y
on
is
partial
all employments i t
,
obviousl y c an oc c asion n o t rans fer
from
one employment
sion
of
,
,
of
parti c ular one
A n e xclu
.
mity
O n the
.
,
or
a
W e have seen that s uc h a
.
,
if
it we re p o ssible inst e ad
,
itsel f a fresh and a
be
su c h
on
,
diminishing the necessa r y evil
would
indust r y
c o urs e e ith er b e general
general ex c l usion
of
t o ano the r
of
for eign comm o diti e s fou n ded
a tax must
W he n a
.
,
far
of
the ta x
s e verer cala
o ther hand a particula r e x c l u sion
,
would b e an attemp t to fav o u r some particula r
class
or
c lasses
the c o mm unity
of
.
pr o d uc e rs at the expense
of
The fi r st would be simply
mischie vo u s ; th e sec o nd m ischievou s and
un
j ust
The same answe r is t o be made to the
d emand by a pa r ticular class to be all o wed a
.
72
M
E RC A N T I L E T H E O R Y
m o nopoly
of
i n c o nside rati o n
WEA L T H
OF
.
th e inj ury which
th e y s u ffe r fr o m the m o n o pol ies granted to
o the r s
I t is t r u e the y are su ffer e r s and s o i s
.
,
th e whole c o m m un ity b u t where w o ul d b e the
,
j ustic e Of an attem pt to e xemp t th e m fr o m
t hei r
Of
sha r e
a new e vil
on
th e gen er al su ffe r ing by i n fl icting
?
th e c o m m u n ity at large
A s a fallacy cannot b e c l e arly e x p osed w ith
o ut
il lust r ations I will ven ture to sele c t a few
,
e xam p l e s fr o m the debate in the
C o m m o ns ,
i n Feb ruary
admission
Of
fo reign
,
1 826 ,
silks
on
H o use
of
the prop o s e d
T he M emb e r wh o
.
Op e n e d i t said
I t was u tterl y imp o ssible to
c o mpete w i th French silks W i t h a load o f
deb t hangi ng l ike a m ill st o n e around the
,
.
-
,
,
n ec k
Of
the nati o n w ere they rati o nal m en
,
w h o c ou l d p ro p o s e a c o m petiti o n w ith a
pe o pl e w h o s e d eb t w as al m o st no bu rthen at
?
”
all
T h e Me mber
they go back
v ail ed i n
fo r C o ve ntry
to
the r ate
?
C o uld
1 7 92
of
aske d
,
C ould
wages whi c h p re
they int ro du c e the
M
ERCA N T I L E
“sam e scal e
of
T H EO R Y
pr ices ?
OF
W EA LT H
73
.
th e y co ul d n o t
If
,
h o w co u ld th e manu factur er c omp e te with
the fo r e igne r ?
”
The M embe r
fo r L in co ln
said
L et
,
g o ds
“d e st ro y tim e taxes and poor rates and
,
,
,
then let any newly enlightened mini s ter open
his eage r arms to admit the u nrestrained
c ommer c e o f the world
B u t u ntil that were
.
don e to talk o f free trade what was it bu t
to propose that a man b o und i n fetter s should
try his strength and agil i t y with one whose
,
,
,
l imbs w e re wh o l ly free ?
”
E ven M r B ar in g u r ged as an Obj e c tion to
.
the m easu r e the advantage poss e ssed by the
,
for eigne r
i n the ch e apness
t ho ught
th is an o the r pr o o f i n additi o n
m any
of
labou r ; and
to
,
which al ready e xist e d
on
the
the same
subj ec t w hi c h in his Opini o n p roved beyond
,
,
the possibil ity
of
a doubt that i t would be
,
im p o ssible for the E ngl ish manu fa c tu rers
e ve r to bring d o wn t h e ir goods to su c h a
pri c e as woul d enable them to c ompe t e
w ith the wo r kmen
of
other
ations
n
%
.
He
M E RC A N T I L E
74
w e nt
on
to
T H E O RY
th at
sa y ,
OF
WEA L T H
.
R ight H o n ou rab le
th e
Gentl e man was p ro c eed ing on w ro ng grou n d s
wi th re s p ect t o his wh o le c o mm e rcial syst e m
He
O
u ght
t he
De bt
s i o n,
a re
sam e
or
,
.
ar e
an
L aws
and th e
rather th e taxati o n w hich they oc c a
t r em e n do u s evils
Th e
.
C or n L aws
e v il n o t s o great perhaps as eithe r
,
,
.
.
N ational
th e for me r bu t m or e gall ing fr o m thei r
tic e
”
th e s e ar g u ments th e answ er
Th e P oor
.
C orn L aws
begin w ith th e
o ne o f
To ev e r y
is
to
.
of
B ut do an y
these
a ffe ct the manu fa ctur er s
of
e
of
i nj u s
vils peculiarl y
sil k ?
I f foreign
sil k s were freel y admitt e d m u st th e y n o t b e
pai d fo r d irectl y o r indire c tl y with E nglish
m anu factures an d if these b urthens d isable ou r
,
,
,
silk man u fa c tu rers
r ei g n er s ,
fro m
fo
co mpeting w ith
must they not e quall y disable o u r
On
o th er manu factu re rs
m u st n o t th e s e b urthens
of
most effect u al p ro h ibition
this su pp o sitio n
,
th e mselves for m th e
Of
fo reign
silks by
,
preventing the exp or tation o f E nglish e qu i v a
l e nts ? A gai n b e cause we a r e prohibited from
,
obtaining b re ad
on
the best t er ms
,
a re
we
,
76
M
E RC A N T I L E
T H E O RY
c ause which enabl e s
the p r oduc e
day
fou r
,
H indoos ;
of
or
or
.
fo r
t o Obtain i n re t ur n
E ngl ishm an s lab ou r
a m o nth c o m m o d ities
,
Of
b y the lab o u r
d u c ed
men
,
WEA LT H
’
o f o ne
a w ee k
or
,
us
OF
p er haps
t wo
fo r
a
r
o
p
F re nch
fi ve P o les an d m o r e than ten
,
nam e ly th e sup er i or produ cti ve n e ss
,
E ngl ish lab ou r
.
I am aware that this pr o p o siti o n ma y b e t o
many
Of
my readers pa radox ical
at this place
,
c o nvinced m e
Of
Of
A stat e ment
.
the arg u ments which have
its t r u th would b e an
,
i nc o n
d ig r ession b e sides inv o lving man y o th er
v en i en t
,
pre positi o ns whic h a r e
far fr o m
el e mentary
I ndeed I have intr o d u c e d i t here th o u gh
,
,
necessa r y
to
.
un
my r easoning only t o s u gge st
,
to those among m y h e ar e rs wh o are an xi o us to
e x t e n d th e li mits
and
v
of
th e sc i e nce
e ry n e gl e c t e d
subj e c t
,
imp or tant
an
Of
i n q u i ry
,
nam e l y th e di ffe r e nc e s in th e am ou nt o f m o n e y
,
wag e s in d i ffer e nt c o u nt r i e s
th o se di ffe r enc es
,
a nd
th e ca u s e s
of
.
W i th th e se r emark sI m i ght cl o s e
hav e t o say o n the me r ca ntile th e o r y
al l
of
t h at
I
wealth
,
M
E RC A N T I L E
T H E O RY
or
WEA LT H
77
.
and on th e practice which that th eor y has
o ccasi o ned ; bu t I have disc u ssed it at s o much
length and t h e r e is such di ffic u lty in fo llowing
,
a l o ng d isc u ssi o n in th e fo r m
of
L e ctu r es
,
that
I should wish to c o ncl u d e by a re capitulation o f
of
th e h e a d s
th e argu m e nt
F o rtunately
.
,
I
can do this and that in languag e far bet t er than
my own by re ading to y ou the m o st impo rtant
,
,
of
docum e nt o n the sc i e nc e
e v er be e n mad e publ ic
t ra de which has
—
,
the P e tition
of
the
B r itish Mer chants presented to Parl iament in
M ay 1 8 2 0 That Petiti o n conv e ys the d el ibe
.
,
rate j udgment
Of
or
of
the first c omme r cial members
th e g re atest comm er cial country that exists
ever has e xist e d
.
,
I t c o nveys the ir j udgment
u p o n facts constantly b efo r e th e i r ey e s ; c o m
plains o f evil s b y which they m ust have be e n
p rincipal ly affecte d ; an d p o ints o u t remedies O f
which th e experim e nt was t o b e t r ied o n them
s e l ve s B esid e s its m e rits as a c o m pos ition
.
,
b e si de s its fulness p er spicu ity and p re cision
b e si de s the c o nvicti o n which its c o nclusions
,
m u st ha ve c ar r i e d
,
i f th e i r for c e
,
had d epend e d
,
M ERCA N T I LE T H E O RY
78
l ike that
of
my
ow n,
solel y
m ises i t has all th e weight
,
fu l
testimon y
Of
—
W E A LT H
OF
of
on
.
thei r p re
the most power
the testimony o f pers o ns who
could n o t easily be d e ceived since they were
,
stating the r esults
of
their
own
long and dail y
e xp er ience and could have had
,
no
m o tiv e to
d ec eive oth er s si nce th e y w o ul d have them
,
selves be e n the earli e st and m ost extensive
su ffer er s
n eo n s
,
if
thei r c on c lusions had b ee n e rro
.
A s th e Obj ec t
of
tain the re moval
c o unt
fo r
th e petiti o n e rs was to
e xisting evils
of
,
no t
to
Oh
ac
the i r origin they have not tra c ed the
,
restrictive syste m to the mer c antile theory
Of
weal t h I n every other respe c t their reasonings
will be found to di ffer from th o se whi c h I have
add ressed t o you onl y in the su periori t y o f
.
t heir ex pression
.
The Peti t ion s t a t e s
That foreign c ommer c e is eminen t ly c on
d u c i v e t o the weal t h and pr o speri t y O f a
c oun t ry by enabling i t t o import t he c om
mo d i t i es fo r t he produ ct ion o f whi c h t he
M ERC A N T l L F
.
soil
c limate
,
,
T H EO RY
“A LT
’
OF
B
U
c apital and ind u st r y
.
of
other
c o untries are best c al c ula t ed and to expor t
,
in payment those arti c les
situation is better adapted
for
which i t s
Ow n
.
That freedom from restraint is best c al eu
lat ed
give the u tmost extension to forei g n
to
trade and the bes t d ire c tion to the c apital
,
and industry
of
the c ountry
.
That the m axi m o f b uying in
t he
che a p es t
mark et and sell in g i n the dearest whi c h
,
regulates every mer c hant i n h is indi v id u a l
t he
dealings is stri c tly
a
rule
t he whole nation
the trade
fo r
of
ppl i c able as
,
be s t
.
Th at a pol i c y founded on the s e prin c i pl es
w o ul d render the c omm erce o f the world a n
“inter c hange o f mu tual a dvantages and d if
,
fu se
an in c re a s e
of
w eal t h and enj oyment s
among t he inhabitan t s O f ea c h state
T ha t u n for t una t el y a pol i c y the very
.
,
,
re
verse o f t his h a s b een and i s more o r l e s
adopted and a c ted u p on b y t h e g o v er n m en t
,
o
f
this and
“trying
to
of
s
,
ever y o t h e r c o u n t r y ;
e x c l u de
the pr o d u
ct i on s
of
,
ea c h
o
t he r
80
M
E RC A N TI L E
T H E O RY
OF
WEA LT H
.
co u ntries w ith th e speciou s and well m e ant
-
,
design
Of
encouraging its
thus i nflicting
on
ow n
th e b u l k
who a re c o nsu m e rs
Of
p ro ductions ;
its subj ects
the n ec essity
,
m ittin g t o pri vati o ns i n the quantity
l ity
what ough t to b e t he source
benefi t and
y
sub
or
qua
c o mm o dities ; and thus rend e ring
of
s t a ntl
of
,
of
m utual
harmony among states a c on
,
of
re c urring o c casion
hostili ty
of
j ealousy and
.
That th e prevailing prej udices in favou r
th e prote c tive
or
of
restrictive system m ay b e
tra c ed to the erroneou s supposition that eve r y
im portation
of
foreign
commod iti e s o c casi o ns
a d im inu tion o r dis c ou ragement o f o u r o wn
prod u c tions to the sam e ex tent ; wh e reas it
may be clearl y shown that alth o ugh the par
,
t i c ul a r
no t
description
of
produ c tion wh i c h c o uld
stand against u nrestrain e d foreign c o m
petition w oul d be d iscourage d y e t as no
,
,
im portation could be continu e d
l e ngth
p
of
or ta t i o n ,
fo r
any
tim e witho ut a co rre sp o nding ex
di re c t or indire c t the r e w o uld b e
,
ME
82
RC A N TI L E T HE O RY
or
WEA LT H
.
are fo und e d we r e followed o u t c o nsistentl y it
,
wo u ld
foreign
t r ain
not
st op short
of
ex cl uding u s fr o m all
c o m me r c e whatso e v er
of
A nd
.
argu ment which with c orr esp o ndi n g
,
p ro hi biti o ns an d p r otectiv e d u ties
e xcl u d e u s
from
foreign
t rade
b rou ght forward t o j usti fy the
of
the sam e
sh o ul d
,
m igh t b e
,
re
-
e nactm e nt
of
rest rictions u pon th e int er change
p ro
d u c t i o ns
n
un
c
o
ne
c
ted
with
publ
i
c
revenue
%
%
am o n g t he k ingdoms com p o sing the uni o n
,
or
am o ng th e c o u nti e s
of
That an inv esti gati o n
the sam e k ingdom
of
th e e ffects
of
.
th e
re stri ctiv e syst e m at this time is peculiarl y
called
fo r
,
as
it may in th e Opinion
,
of
you r
Petiti o ne r s lead to a str o ng p re su mption that
,
the d i st re ss w hich n o w s o gene ral l y p revails
,
is c onsid erabl y au gm e nt e d by that system
;
and that s o m e rel i e f may b e o bt ain e d by th e
ea rliest p racticabl e rem o val
r e st r aints
as
of
su c h
of
m ay be sh e wn t o be most
th e
in
“j u ri o n s to the capi ta l and ind ustry O f the
c ommu nity an d t o b e attend e d w i t h n o c om
,
p
e n s a t i ng
benefit to the public revenue
.
M E R C A N T I L E T H EO R Y
OF
W E A LTH
.
That a d e c la ration against the anti c om
-
mer c i al
is
of
of
prin c iples
o ur restrictiv e system
th e mo re imp o rtan ce at th e pres e nt
j unc tu re inasmu c h as in several instan c es
,
of
r ec e nt o ccu rrenc e the me rc hants and manu
,
fac t u r er s
in forei gn states have assail e d thei r
respective governments with appli c a t i o ns
furth e r
p ro tective
or
for
prohibit o ry duti e s and
regulations urging t he example and auth o ri ty
,
Of
this cou n t r y against whi c h th e y a r e
,
most exclusiv e l y dire c ted as a san c tion
,
the poli c y o f su c h measures
if
.
the reasoning u pon whi c h
al
e
fo r
A nd ce rta inly
,
o ur
,
r est r ictions
have b e en de fended is wo r th an y thing it will
,
appl y in b e hal f
of
stat e s against us
th e re gulations
.
of
fore ign
They i nsist u p o n o u r
sup e ri o rity in c apital and machin e ry
,
as
we
d o u p o n thei r c ompa r ative ex e mpti o n fro m
taxation and with e q ual foundati o n
,
.
That nothing would t e nd more to count er
a c t the co mmercial hostility
t han t he adoption
of
of
for e ign
states
a more enl ighten e d and
84
M ERCA N T I LE T H E O R Y
mor e c o nciliat o ry pol icy
country
or
on
WEA LT H
.
th e pa r t
of
this
.
That alth o ugh as a matt er
ma c y
i t may som e tim e s ans w er
,
th e re m o val
duties
Of
,
of
me re di pl o
to
h ol d
particular p ro h ibiti o ns
as d e pend ing
u
or
out
high
pon c orresp o nd ing
concessions by othe r states i n
fav o u r
ou r
does not follo w tha t we should maintain
,
it
ou r
re stricti o ns in c ases wh er e the desired c on
c e ssi o ns
O ur
on
thei r part c annot be Obtained
.
r est r ictions would not be less prej udi c ial
“to o u r o w n c apital and industry beca u se
other g o ve r nments persisted i n p re s e rving
i mp o l itic regulations
That u pon the whole t he most l ib eral
would pr o ve to be the m o st pol iti c c ou rse
o n such o ccasions
That indep e n d e nt o f the di re c t benefit to
be derived by this c ount r y on ev er y o cc asion
o f su c h
c on c ession o r relaxa t ion a great
“incidental Obj e c t woul d be gained by the
recognition o f a sou nd principle o r standard
.
.
,
,
,
E RC A N T I L E
M
T H E O RY
or
WEA L T H
85
.
t o which all subseq uent a rrangements might
b e r e fe rre d ; and by the salutary in fl uence
wh ich a p r omulgation
Of
j ust v iews by the
legislatur e and by t he nation at large c ould
,
,
n o t fail to have on the poli c y
That
,
“j usti c e
othe r states
.
thus de c laring as you r Petition e rs
in
do their
Of
,
hv i c t i o n
of
co
of
the impoli c y and
in
the restri c tive syst e m and in de
,
siring every pra c ticable relaxation
of
it they
,
have in v ie w only su c h parts o f it as are not
c onne c ted o r are only subordinately so
wi t h the publ i c revenue A s long as the
,
,
.
ne c essity
fo r
t he present amount
revenue
of
s ubsists yo ur Petitione r s c annot expect so
,
important a b ran c h
of
it as the
C ustoms
to
be giv e n u p nor to be materially dimin ished
,
unless some substitute
be suggested
.
BUT
,
IT
R E S TR IC T I V E RE G U LA T I O N
SE N T I A L
To
THE
l ess Obj ec t ionable
IS
A G A I N ST
OF
T RA D E
R E V E N U E A GA I N ST
,
EV E
,
,
RY
N OT
ES
A LL
DU
T I E S M ERELY P R O T E C TI VE F R O M F O R E I G N C O M
O F S UC H
S
S
E
T
T
I
O
N
A
N
D
A
A
I
N
S
T
T
H
E
E
C
E
X
G
I
P
,
D U T I ES
AS
A R E PA RTLY
FO R
TH E
P U R P O SE
OF
86
M ERC A NT I LE T H E O R Y O F W EA LT H
RE V E N U E
AND
P A R T LY
FO R
TH AT
.
OF
P R O T EC
“T I O N T H A T T H E P R A Y E R O F T H E P R ES EN T
P E T I T I O N I S R ES P EGT F U L LY S U BM I T TE D T O T H E
W I S DO M O F P A RL I A M EN T
Y our P e titi o n er s there fore humbly p ray
that y our H o n ou rabl e H o u se will be pleas ed
“t o ta ke th e s u bj e c t int o c o nsi d e ration and
t o adopt such m eas u res as m ay be calculat e d
t o give g reat er fre e dom to fo reign co mmer c e
a n d th ere by t o in c r ease the r es o u rc e s O f the
stat e
I ca nn o t re s i s t the t e mptation O f add ing
th o u gh i t m u st b e un n ecessary to the testi
m o n y O f the P etitio ne r s t hat o f one o f the
w isest an d m o st patrio t i c statesmen whose
services t his co u nt r y h a s eve r e nj oyed o f tha t
ex c ellent a nd enl i ght en ed man w hom disease
h as n o w s o re c entl y snatc hed fr o m the national
c ou n c il s Be fo re this Petition was presented
t o P arl iamen t i t w as sub mi tted to L ord L i ver
pool by a d ep u tati o n o f the mos t e minent o f
t he Peti t ioners L ord L iv e rpool read i t aloud
t o t hem probabl y to mark t h at no par t o f its
,
.
,
,
,
,
,
”
.
,
,
,
—
,
.
,
.
,
M
ERCA N T I LE T H E O R Y
OF
W EA LT H
87
.
c o nte nts co u ld hav e escape d hi s n o tice a nd
the n add ed
T H A T W I T H EV ERY S EN T I M EN T
A N D EVERY
P R I NC I P LE C O N T A I N E D I N T H E P E
,
,
TITION H E
A ND
TH AT
IF
U N R ES ER V E DLY A G R EE D
,
H E WER E T H EN T O
C O DE T H O SE WE R E
M ER C I A L
ON
F ULLY A N D
FO R M A
TH E
WH IC H H E W O U L D E ST A B L I S H I T
I have to
a
pologize
fo r
COM
P RI NC I P LES
”
.
having detain e d you
s o l ong a nd that at the v er y ou tset o f my
Le ctur e s o n a single point
A vi ew o f the
me r cantile theory o f we al t h w a s essen t ial b u t
the symmet r y O f my c ou rse wou l d have been
,
,
.
,
improved
if
I
ha d
d isposed
m ight have done more
,
Of
b r i efl y
i t as I c ertainly
,
if
—
,
I had c on
tented m ysel f with ex posing the absu rdi ty
of
that theory and o m itted al l conside rati o n o f
i ts pra c ti c al c onsequen c es M y reasons fo r
,
.
going in t o i t at so m u c h length were first
,
,
that the mer c an t il e theory is a de t a c hed sub
i n P o l itical
j
any othe r
ec t
E co nomy
more c apable t han
being submitted to t hose who are
not familiar with the s c ien c e or what is t he
of
,
same as
fa r
as my
L e c tu re s
,
are c on c erned
.
86
M ERC A NT I LE T H E O R Y
RE V E N U E
AND
“T I ON T H A T
W I S DO M
Y our
FO R
W EA LT H
THAT
OF
.
OF
P R O T EC
TH E
P R ES EN T
R ES P EC T F U LLY S U BM I T TE D
IS
OF
.
TH E P RA Y E R
,
P ET I T I O N
P A RTI Y
OF
P A RL I A M E N T
To
TH E
.
P e titi o n er s ther e fo r e hu mbl y p r ay
,
that y o u r
,
H o n o u rabl e H o u s e W ill
,
be pleas ed
t o ta k e th e s u bj e c t i nt o c o nsid e ration an d
,
t o ad o pt such m e asu r es as m ay b e calculat e d
to
give g r eat er fr eedom to fo r eign com mer c e
and th e r e by
”
stat e
to
i n c r e ase the resou rces
Of
,
the
.
I ca nn o t re s i s t the t e m ptation
of
add ing
,
thou gh i t m u s t b e u n n ec essary to the tes ti
,
m on y
Of
th e P etitio ne r s
,
t hat
of
one
Of
the
w isest an d m o st patrioti c statesmen whose
services this co un try h a s ev e r e nj oyed o f that
—
,
ex c ellent and en l ight en ed man whom d isease
h as n o w s o re c ently snatc hed from the national
c ou n c ils Be fore this Petition was presented
t o P arl iament i t w as su bmitted to L ord L i ver
.
pool by a d ep u tation
,
t he Peti t ioners
.
of
the mos t e minent
L ord L iv e rpool
read i t aloud
t o t he m probabl y to mark t h at no part
,
of
of
i ts
88
M ERC A N T I LE T H E O RY
w ith the view whi c h I take
c ond l
y
it
A nd s e
.
,
system shall b e aband o n e d o r shall b e
a g g r avat e d and e xt e nded ;
que stion
for mati o n
t he
of
.
b e c ause the q uesti o n wheth e r the mer
,
c an t i l e
t he
WE A L T H
OF
,
of
fre e
i n oth er w or ds
or ,
trad e is
,
n
n e x t to the qu e stion
ext to the
of
fre e
Re
religion
,
m o st m o m e nto u s that has e v e r been sub
mi t t ed
to h u man d ecisi o n
.
I f the unhappy prej u d i c es that now ex ist
this s u bj e c t s h ou ld c ontinu e and
,
s ion
,
of
if
the exten
re p re s e ntative gov e r nm e nts should
c re as e th e p o w e r
Of
on
in
public Op i n i on o ve r the
p o licy O f nations I fear that c ommer c e may no t
,
l o ng b e e nabled to retain ev e n tha t degree
free d o m
that sh e now enj oys
e v e ry thin g dep e nds
,
by this c ou nt ry
.
on
.
M uch
th e exam ple
,
perhaps
to
I hav e p e r fect rel ian c e
k n o wledge and g o od i ntenti o ns
ministers ; b u t v er y l ittl e
on
Of
of
be s e t
on
th e
ou r presen t
th e knowledge
p o ssessed by th e c o un try at lar g e
.
A nd
if
m inisters are u nsu pported by the c omm u n ity
at l arge
,
if e ach
a c o m p le t e
or
class in turn is to be perm it t ed
a pa r tial m o n o p o l y
,
a nd
bribed
M ERC A NT I LE T H E O R Y
of
by this sacrifice
of
interest
89
.
th e public to its
own
,
,
to
par tial and
allo w others
to
cl a
the power to exercise a similar
fo r
p re ssion
WE A L T H
the ge ne r al and p er man e nt
immed iat e ad v antage
m ou r
OF
—
,
if
m iniste r s are
no t
aided b y th e
i nd i v i
publ i c voic e in th e i r stru ggles aga i n st
d ual rapa c ity
we
—
,
op
shall tread backw a r d s and
with gr e ater r apid ity the few s t e ps which w e
have s o lab or i o u sl y gained
S l o wl y
.
an d re
l u c t an t l y ,
and as if pa r ting fro m o u r d e are st
friend we hav e b e gu n t o w ithd r aw fro m the
,
r e st r ictive syst e m I f on c e we begin t o t e
app ro ach it I am j ustifi e d b y all e xp e ri e nc e
.
,
in the fea r that in
shal l not
nall y set
s te
o ut
p
.
o ur
retrog r ade m o ti o n we
at th e po int at which w e or igi
I t will have b e en an u nsu c c e ss
fu l re bellion against p o p u la r prej udice an d li ke
,
all u nsuccess ful re b e ll i o ns strength e n and c o n
sol idate th e rul ing power W e shall again
,
.
adopt an d w i t h m or e sk ill to en fo r ce it th e
third o f E dwar d IV as th e fund a m e ntal law
,
,
.
of
the c ustoms and co nsider with Mr Dain e s
B a rrington a system o f general an d abs o lute
,
,
,
.
M E RC A N T I LE T H E O RY
90
p r ohibition to be founded
ci
l
es
p
of
c omme r ce —
borrow the w o rds
that
of
a
Mr
A ll i nter c hange
,
m o d i t i es
OF
on
WEA LT H
the wis e st p r in
system
whi c h
,
H uskisson
.
of
.
,
pro c laims
their respe c tive c o m
be t w een the d i fferent nations
world is a sou rce
Of
to
,
evil to the one
of
the
or
to
t he othe r ; that ea c h country ought to shu t
“itsel f u p within itsel f ma k ing the m ost o f
,
its own resources re fusing all c ommer c e wi t h
,
any other c o untry
“
,
ba r ba r ously c onten t to
“su ffer wants which this c o mmer c e m ight
easily su ppl y and t o wast e its
,
fl uo u s
ow n
su per
prod u cti o ns at home be c ause to ex
,
change them for the sup e rfluou s advantages
o f that other coun try would be ruinou s to
b o th
I t is
”
.
no t
en o ugh t o say that such a state
of
hings %an d it is a state to whi c h between our
o w n p r o hibitions and restri c ti o ns and t he re t a
t
meas u r es o f other c ountries we w er e
rap idly a pproa c hing % would be m is c hie v ou s to
t h is c ountry ; i t wo uld c ar r y W i t h i t t otal and
l iat o r y
,
,
i r r t med i a bl e
ruin
.
The i nha bi t an t s
o
f
c oun
M E RC A N T I LE T H E O RY
90
p ro hib ition to b e fo unded
c i pl e s
Of
c omme rc e —
borro w the w o rds
that
Of
a
mo d i t i es
.
the wis e st p r in
system
which
,
to
,
,
.
Of
be t w een the
Of
world is a sou rce
on
W E A LT H
M r H us k isson p r o c laims
A ll i nterchange
,
OF
their respe ctive c o m
d ifl er en t
nations
e vil t o the
o ne
of
the
or
to
t he othe r ; that each cou nt r y o ught to shu t
“itsel f u p within itsel f ma k ing the most O f
,
its
ow n
res o urces re fusing all c o mmerce wi t h
,
any
c o u ntry
,
barba r ously c onten t to
“s u ffer wants which this c o mmerce m ight
e asily su pply and t o wast e its
,
fl uous
ow n
su per
prod u cti o ns at home because to ex
,
change them fo r the sup e rfluous advantages
O f that oth e r c o untry would be ruin o us to
b o th
I t is
”
.
no t
e n o ugh to say that su c h a state
Of
h ings %and it i s a state to whi c h bet w een our
o w n p rohibitions and restri c ti o ns and the re t a
t
other c ountries we w er e
rap idly a pproa c hin g % would be m is c hievous to
t h is c ount r y ; i t w ould c arry wi t h i t total and
l i at o ry
measu res
i r r t med i a bl e
ruin
of
.
,
T he i nha bi t an t s
o
f
c oun
M ER
tri e s
soil
Of
C A N T I LE T H E O RY
OF
WE A L T H
91
.
vast extent poss e ssing ev ery va r i e ty
an d
,
climate l ike
,
R ussia
of
and C h ina th o ugh
,
thei r e nj o yments might b e m u ch inc re as e d by
fo re i gn c o mme r ce can y e t exist with o ut it
,
A nd
.
the re ar e o th e r c ountri e s which fr o m thei r
,
p o v e rty
or
thei r situ ation the s mall val ue
,
of
the e qu ival e nts which t h e y have t o o ffer or
,
thei r di ffi culties
it
of
acc e ss a re u nable t o enj oy
,
Bu t b o th natu ra l c auses an d the cours e
.
Of
e vents whil e they have admi ra bly fitted G reat
,
B ritai n
h er
fo r
extensive com merce have rendered
,
totall y dependen t
h e r in the cen t re
of
on
it
.
N atu r e
has p laced
civil izati o n between the
,
tw o worlds bu t nearer t o t he m o re
,
hemisph ere has su r r ou nded h er with
,
O pulent
S ea
ports
and interse c ted her by navigable rive r s S he
has g iven to her a cl imat e e min e ntly favour
.
able
b o dy and mind
,
and enriched her with m inerals more ab u ndant
,
mo r e va r ied and better adapted to one another
,
to
c o ntinued ex e rtion
,
of
92
ME RC A N T I LE T H E O RY
of
te rr it o ry is
WE A L T H
.
limited extent and still mo r e
,
l imited fertility
O ur
.
of
na r r o w ra nge
OF
what we ha v e
cl imate confines us to a
vegetabl e productions
ar e
,
and
not d istinguished by thei r
exc e llen c e o r their abundance
,
W hat would
.
be the food an d what would be the cl o thing
,
of
even
fo rmed
our
only
po o r e st p op ulation
Of
if
,
they w er e
indigen o u s mate rials
?
W hat
h o uses o r what ships co uld we b uild fro m o u r
inte rn al resou rc e s
On
?
th e o th er hand the absenc e
o f u nn ec es
sa r y r el igio us r est r aint th e s e c ur ity Of pe r s o n
,
and property the freedom
of
o ur im munity from hostile
In
,
nonc i al
e xisten c e
Of
internal t rad e
vasion and the
,
privileged orders o r
,
Obsta c l es t o the ambition
,
o f a r t ifi
th e humblest
of
individual all these n e ga tive a d vantage s which
,
,
i t might have been s u pposed that ev e ry nation
would secu re t o its e l f b u t whi c h in fa c t have
,
,
,
neve r been fully e nj o y e d by any
ex t e i s i v e
c o unt r y exc e pt Great B ritain and the nation
,
which G r eat B r itain has founded all this
,
senc e
Of
ah
a r ti fic ial evil has enabled u s d u r i n g
94
c o mm erc e
fro m
,
it in re t ur n
t he
B ut
.
l it tle c ou ld h ave b ee n Obtain e d
as
d i re ct ed l ab o u r
c
W E A LT H
MERC A N T I L E T H E O RY O F
th e p rod uc e
fo r
of
ou r i ll
.
c our s e which w e ha ve
has
r un ,
o mbi ned increased nu mb er s wi t h mor e v a r i ed
w a nts
an d
i nc re ase d
tast e
wh i c h o u r
Of
g r eat e r p o w er s
ow n
for
p ro d u cti o n ;
th o s e com for ts
a nd
s o il an d cl imate d e n y
,
an
l u xuri e s
and
stil l
more in c r eas ed means o f pu rc hasing th e m Th e
.
w e ll d i r ected lab o u r O f an E ngl ishman is w o rth
-
t wi c e as m u ch
as
that
of
any oth e r inhabitant O f
E urope i t is w or th fo u r or fi ve times
,
as t he lab our
of
as
much
the l e ss advanc e d E ur o pean
distri c ts % it is w orth twelve
fi fteen times as
or
m uch as th e labour o f t he most c ivilized A siati c
n a ti o ns
I t is t rue that th e l o ng c o urse
.
Of
perverse c omme r c ial legisl ation from whi c h we
a re bu t beginn i ng to emanc ipate o u rselves has
,
prevented us from tu rning these ad vantages to
the best a cco unt
.
C r am ped
have been we have so
,
far
that a ve ry la r ge p o rti o n
,
h o wever as we
,
made
Of
us e
o ur
Of
th e m
labou ring
c lasses are emplo y ed dire c tl y o r i nd i re ctly
,
,
,
M ERC A N T I LE T H E O R Y
OF
W EA L T H
95
.
in Obtainin g fore ign co mmodities ; that w e
sc ar c e ly ma ke a m e al
or
,
put o n a dress o r
,
e nt er a h ou s e for med s o lely
r ials
We
.
of
d o mestic
mat e
de pe ndent o n foreign count r i e s
are
,
n o t mere ly fo r what is agreeable bu t fo r what
c u st o m has re ndered necessar y Do I regre t
?
this de p en d ence
Far fr o m it fo r it is th e
ne c e ssa r y c o nseq ue n ce o f tw o gr e at b e nefits
,
.
,
,
the in cre ase
ou r
wealth
Of
.
o u r numb e rs and the inc rease Of
I t i s th e n e cessa r y dependenc e
th e ric h o n th e po or
r ounding c ountry
.
,
of
a m e t r op o l is
hal f
The
-
on
Of
the su r
nak ed subj ects
of
C ara c ta c us
were doubtl e ss independent o f fo
reign su pplies and so is th e semi barbarian
-
,
who burrows i n the ruins
of
c ultivates h is da t es among
t he
la c es
.
E very approach
Ou
Pers e polis
remains
,
of
a nd
a
p
our part t o a simil ar
independen c e m ust be Obtai ned by an approa c h
to a similar c ond iti o n
.
But
i f we
t o u se and improve t o the u tmost
and a c qu ired advantages
buy what
o ur
,
i f we
only consent
o ur
natural
only c o nsent to
neighb ou rs are willing t o sell
we c e ase to re fuse what they O ffer us
on
,
if
the
ME
96
RC A N T I L E T H E O R Y
OF
W EA L T H
.
gro u nd that they o ffe r it t oo cheaply if
,
the words wh ich
tended
for
th e
o ur
,
th e u n re st ri ct e d c o mm er c e
of
c ome
and
,
us
n
I
.
se e
e ag er ar ms to
,
of
p ro sp e rity
no ca u se that fo r ages t o
,
e e d che c k th e p ro g re ss
ou r
u se
th e w or ld I s ee
n o defi ni t e t erm t o the cou r se
b e for e
to
fo r L incoln i h
M emb er
i ro ny we Open
,
populati o n
.
of o u r
w e al th
I se e n o re as on
W hy
E nglan d w hi c h now su pports in virtu e and in
,
happin e ss mo re human beings than any other
di s t r i c t
of
eq ual e xt e nt sh o uld not c ontain a
,
m u ch
an d
l ar ge r population with stil l gr e at e r mo ral
physical advantages
.
T H E EN
D
.