BOOK twenty-five guilders. The person who orders a IV. transfer for more than is upon his account, is obliged to pay three per cent. for the fum overdrawn, and his order is set aside into the bar. gain. The bank is supposed too to make a con. fiderable profit by the fale of the foreign coin or bullion which sometimes falls to it by the expiring of receipts, and which is always kept till it can be fold with advantage. It makes a profit likewife by felling bank money at five per cent. agio, and buying it in at four. Thefe different emoluments amount to a good deal more than what is necessary for paying the falaries of officers, and defraying the expence of management. What is paid for the keeping of bullion upon receipts, is alone supposed to amount to a neat annual revenue of between one hundred and fifty thousand and two hundred thousand guilders. Public utility, however, and not revenue, was the original object of this institution. Its object was to relieve the merchants from the inconve nience of a disadvantageous exchange. The revenue which has arisen from it was unforeseen, and may be confidered as accidental. But it is now time to return from this long digreffion, into which I have been insensibly led in endeavouring to explain the reasons why the exchange between the countries which pay in what is called bank money, and those which pay in common currency, should generally appear to be in favour of the former, and against the latter. The former pay in a species of money of which the intrinfic value is always the fame, and exactly agreeable III. agreeable to the standard of their refpective CHAP. mints; the latter is a fpecies of money of which the intrinfic value is continually varying, and is almost always more or less below that standard. PART II. Of the Unreasonableness of those extraordinary Restraints upon other Principles. IN N the foregoing Part of this Chapter I have endeavoured to shew, even upon the principles of the commercial system, how unneceffary it is to lay extraordinary restraints upon the importation of goods from those countries with which the balance of trade is supposed to be disadvantageous. Nothing, however, can be more abfurd than this whole doctrine of the balance of trade, upon which, not only these restraints, but almost all the other regulations of commerce are founded. When two places trade with one another, this doctrine supposes that, if the balance be even, neither of them either lofes or gains; but if it leans in any degree to one fide, that one of them loses, and the other gains in proportion to its declenfion from the exact equilibrium. Both suppositions are falfe. A trade which is forced by means of bounties and monopolies, may be, and commonly is disadvantageous to the country in whose favour it is meant to be established, as I shall endeavour to shew hereafter. But that trade воок trade, which, without force or constraint, is na. IV. turally and regularly carried on between any two places, is always advantageous, though not al. ways equally fo, to both. By advantage or gain, I understand, not the increase of the quantity of gold and filver, but that of the exchangeable value of the annual produce of the land and labour of the country, or the increase of the annual revenue of its inhabitants. If the balance be even, and if the trade between the two places confift altogether in the exchange of their native commodities, they will, upon most occafions, not only both gain, but they will gain equally, or very near equally: each will in this cafe afford a market for a part of the furplus produce of the other: each will replace a capital which had been employed in raifing and preparing for the market this part of the furplus produce of the other, and which had been distributed among, and given revenue and maintenance to a certain number of its inhabitants. Some part of the inhabitants of each, therefore, will indirectly derive their revenue and maintenance from the other. As the commodi. ties exchanged too are supposed to be of equal value, so the two capitals employed in the trade will, upon most occafions, be equal, or very nearly equal; and both being employed in raif. ing the native commodities of the two countries, the revenue and maintenance which their diftri. bution will afford to the inhabitants of each will be equal, or very nearly equal. This revenue and III. and maintenance, thus mutually afforded, will CHAP. be greater or smaller in proportion to the extent of their dealings. If these should annually amount to an hundred thousand pounds, for example, or to a million on each fide, each of them would afford an annual revenue in the one cafe of an hundred thousand pounds, in the other, of a million, to the inhabitants of the other. If their trade should be of fuch a nature that one of them exported to the other nothing but native commodities, while the returns of that other confifted altogether in foreign goods; the balance in this cafe, would still be supposed even, commodities being paid for with commodities. They would, in this cafe too, both gain, but they would not gain equally; and the inhabitants of the country which exported nothing but native commodities would derive the greatest revenue from the trade. If England, for example, should import from France nothing but the native commodities of that country, and, not having fuch commodities of its own as were in demand there, should annually repay them by fending thither a large quantity of foreign goods, tobacco, we shall suppose, and East India goods; this trade, though it would give some revenue to the inhabitants of both countries, would give more to those of France than to those of England. The whole French capital annually employed in it would annually be distributed among the people of France. But that part of the English capital only which was employed in producing the English commodities with which those foreign IV. воок foreign goods were purchased, would be annually diftributed among the people of England. The greater part of it would replace the capitals which had been employed in Virginia, Indostan, and China, and which had given revenue and maintenance to the inhabitants of those diftant countries. If the capitals were equal, or nearly equal, therefore, this employment of the French capital would augment much more the revenue of the people of France, than that of the English capital would the revenue of the people of Eng. land. France would in this cafe carry on a direct foreign trade of confumption with England ; whereas England would carry on a round-about trade of the fame kind with France. The different effects of a capital employed in the direct, and of one employed in the round-about foreign trade of confumption, have already been fully explained. : There is not, probably, between any two countries, a trade which confifts altogether in the exchange either of native commodities on both fides, or of native commodities on one fide and of foreign goods on the other. Almost all countries exchange with one another partly native and partly foreign goods. That country, however, in whose cargoes there is the greatest proportion of native, and the least of foreign goods, will always be the principal gainer. If it was not with tobacco and East India goods, but with gold and silver, that England paid for the commodities annually imported from France, the balance, in this cafe, would be fuppofed |