* [The abstract here alluded to by Mr. Bridges, as given in the notes taken by Mr. Bonar, is as follows:-" It was for a long time the opinion of statesmen, that as the wealth of an individual consists in the quantity of money which he possesses, or can command, and that as the more this is increased, the more is his wealth augmented, so the same thing must hold true of a nation; and, therefore, that the more gold and silver which can be accumulated in a nation, the more will its opulence and prosperity be increased. Hence one great object of government was, by means of laws and regulations, to prevent the exportation of gold and silver out of a country, and to draw into the country as much specie as possible. Experience, however, at last proved that all such attempts were unavailing; that where a superfluity of gold and silver was accumulated in a country, no laws or regulations could prevent its being sent abroad for the purchase of commodities. This is clearly proved in the case of Spain and Portugal, where all their sanguinary laws against carrying gold and silver out of the country have never prevented their exportation, as they come into these countries in greater abundance than their own necessities require. It has been computed that the Lisbon packet brings over to Britain on an average no less than £50,000 worth of gold and silver weekly. This may not be accurate, but there can be no doubt that all the laws and regulations that were made, never had the effect of detaining in the country the superfluous gold and silver that could not be made use of if it remained.

"Governments finding it impossible

to restrain by force the exportation of gold and silver from a country, came next to turn their attention to what was termed the balance of trade. It was thought, that according to the value which these commodities imported by a nation bear to the commodities exported by it, as greater or less, so would the prosperity of the country rise or fall. If it was found that the value of the goods sent out was greater than that of those imported, then it was of course reckoned that the country was in a prosperous state, but if it was otherwise, the country was deemed to be declining.

"For the ascertaining of the value of the commodities sent out and received, two methods were had recourse to, one was the Custom House books, the other the Rate of Exchange."

(After referring to Mr. Macpherson's views given in the text on the Custom House entries as testing a nation's prosperity, Mr. Bonar proceeds :)" The other criterion resorted to for this purpose, the Rate of Exchange, though perhaps not quite so fallacious, yet is by no means a certain test. Many circumstances often occasion a rise or fall in the course of the Exchange, independent of the amount of goods actually exported and imported.

Notwithstanding the fallacy of the modes of ascertaining the proportional value of commodities exported and imported, still the balance of trade, as it has been called, has been constantly the object of solicitous attention to governments. With a view to guard against what is supposed an unfavourable bal

could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.

"To give the monopoly of the home market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in almost all cases, be either a useless or a hurtful regulation. If the produce of domestic can be brought there as cheap as that of foreign industry, the regulation is evidently useless. If it cannot, it must generally be hurtful. It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor. The farmer attempts to make neither the one nor the other, but employs those different artificers. All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbours, and to purchase with a part of its produce, or what is the same thing, with the price of a part of it, whatever else they have occasion for.

have some advantage. The general industry of the country being always in proportion to the capital which employs it, will not thereby be diminished, no more than that of the above mentioned artificers', but only left to find out the way in which it can be employed with the greatest advantage. It is certainly not employed to the greatest advantage when it is thus directed towards an object which it can buy cheaper than it can make. The value of its annual produce is certainly more or less diminished when it is thus turned away from producing commodities evidently of more value than the commodity which it is directed to produce: according to the supposition, that commodity could be purchased from foreign countries cheaper than it can be made at home. It could therefore have been purchased with a part only of the commodities, or what is the same thing, with a part only of the price of the commodities, which the industry employed by an equal capital would naturally have produced at home. . .

"By means of such regulations, indeed, a particular manufacture may sometimes be acquired sooner than it could have been otherwise, and after a certain time may be made at home as cheap or cheaper than in the foreign country. But it will by no means follow that the sum total either of its industry or of its revenue can ever be augmented by any such regulation. . . Though for want of such regulations the society should never acquire the proposed manufacture, it would not upon that account necessarily be the poorer in any one period of its duration. Its whole capital and industry might still have been employed, though upon different objects, in the manner the mos advantageous at the time...

"The natural advantages which one country has over another in producing particular commodities, are sometimes so great, that it is acknowledged by all the world to be in vain to struggle with them. By means of glasses, hot-beds, and hot walls, very good grapes can be raised in Scotland; and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of Claret and Burgundy in Scotland? But if there would be a manifest absurdity in turning towards any employment, thirty times more of the capital and industry of the country, than would be necessary to purchase from foreign countries an equal quantity of the commodities wanted, there must be an absurdity, though not altogether so glaring, yet exactly of the same kind, in turning towards any such employment a thirtieth, or even a three hundredth part more of either.'*

"The reasoning through all this passage appears to me clear and satisfactory; and from the whole it is plain, and may be assumed as certain truth, that the system of forcing, by restraints upon foreign commodities, a part of the capital of a nation from its natural direction, instead of being beneficial, must be highly prejudicial.

One exception only is made by Mr. Smith, that is, when some particular sort of industry is necessary for the defence of the country. The defence of Great Britain, for example, depends very much upon the number of its sailors and ship

[Ibid. pp. 181-185.]

ping. The Act of Navigation, therefore, very properly endeavours to give the sailors and shipping of Great Britain the monopoly of the trade of their own country, in some cases, by absolute prohibitions, and in others by heavy burdens upon the shipping of foreign countries.'"+

(After Mr. Stewart's remarks on this exception, Mr. Bonar continues :) — "Besides the restraining, or totally prohibiting the importation of certain species of commodities for the encouragement of domestic production, the Commercial System has devised another expedient for the purpose of preventing what has been supposed the unfavourable balance of trade; that is, the granting extraordinary encouragements to the exportation of commodities by the means of drawbacks and bounties.

"Of these,' Mr. Smith justly remarks, 'drawbacks seem to be the most reasonable. To allow the merchant to draw back upon exportation either the whole, or a part of whatever excise or inland duty is imposed upon domestic industry, can never occasion the expor tation of a greater quantity of goods than what would have been exported had no duty been imposed. Such encouragements do not tend to turn towards any particular employment a greater share of the capital of the country, than what would go to that employment of its own accord, but only to hinder the duty from driving away any part of that share to other employments.

"The same thing may be said of the drawbacks upon the re-exportation of foreign goods imported.'

"The case, however, is different in