I.

next. Money, on the contrary, is a steady friend, CHA P. which, though it may travel about from hand to hand, yet if it can be kept from going out of the country, is not very is not very liable to be wafted and confumed. Gold and filver, therefore, are, according to him, the most solid and substantial part of the moveable wealth of a nation, and to multiply thofe metals ought, he thinks, upon that account, to be the great object of its political œconomy.

Others admit, that if a nation could be feparated from all the world, it would be of no con-.. fequence how much, or how little money circulated in it. The confumable goods which were circulated by means of this money, would only be exchanged for a greater or a fmaller number of pieces; but the real wealth or poverty of the country, they allow, would depend altogether upon the abundance or fcarcity of thofe confumable goods. But it is otherwife, they think, with countries which have connections with foreign nations, and which are obliged to carry on foreign wars, and to maintain fleets and armies in diftant countries. This, they fay, cannot be done, but by fending abroad money to pay them with; and a nation cannot fend much money abroad, unless it has a good deal at home. Every fuch nation, therefore, muft endeavour in time of peace to accumulate gold and filver, that, when occafion requires, it may have wherewithal to carry on foreign wars.

In confequence of thefe popular notions, all the different nations of Europe have ftudied, though to little purpofe, every poffible means of

ac

IV.

BOOK accumulating gold and filver in their refpective countries. Spain and Portugal, the proprietors of the principal mines which fupply Europe with thofe metals, have either prohibited their exportation under the fevereft penalties, or fubjected it to a confiderable duty. The like prohibition seems anciently to have made a part of the policy of most other European nations. It is even to be found, where we should leaft of all expect to find it, in fome old Scotch acts of parliament, which forbid, under heavy penalties, the carrying gold or filver forth of the kingdom. The like policy anciently took place both in France and England.

When thofe countries became commercial, the merchants found this prohibition, upon many occafions, extremely inconvenient. They could frequently buy more advantageously with gold and filver than with any other commodity, the foreign goods which they wanted, either to import into their own, or to carry to fome other foreign country. They remonftrated, therefore, against this prohibition as hurtful to trade.

They reprefented, firft, that the exportation of gold and filver in order to purchase foreign goods, did not always diminish the quantity of thofe metals in the kingdom. That, on the contrary, it might frequently increase that quantity; because, if the confumption of foreign goods was not thereby increased in the country, thofe goods might be re-exported to foreign countries, and, being there fold for a large profit, might bring back much more treasure

than

THE MERCANTILE SYSTEM.

143

than was originally fent out to purchase them. C HAP. Mr. Mun compares this operation of foreign trade to the feed-time and harveft of agriculture. "If we only behold," fays he, "the actions of "the hufbandman in the feed time, when he ❝ cafteth away much good corn into the ground, "we fhall account him rather a madman than a "hufbandman. But when we confider his " labours in the harveft, which is the end of his « endeavours, we shall find the worth and plenti"ful increase of his actions."

They reprefented, fecondly, that this prohibition could not hinder the exportation of filver, which, on account of the

IV.

BOOK otherwise might have been; the merchant who purchased a bill upon the foreign country being obliged to pay the banker who fold it, not only for the natural risk, trouble, and expence of fending the money thither, but for the extraor dinary risk arifing from the prohibition. But that the more the exchange was against any country, the more the balance of trade became neceffarily against it; the money of that country becoming neceffarily of fo much lefs value, in comparison with that of the country to which the balance was due. That if the exchange between England and Holland, for example, was five per cent. against England, it would require a hundred and five ounces of filver in England to purchase a bill for a hundred ounces of filver in Holland: that a hundred and five ounces of filver in England, therefore, would be worth only a hundred ounces of filver in Holland, and would purchase only a proportionable quantity of Dutch goods: but that a hundred ounces of filver in Holland, on the contrary, would be worth a hundred and five ounces in England, and would purchafe a proportionable quantity of English goods that the English goods which were fold to Holland would be fold fo much cheaper; and the Dutch goods which were fold to England, fo much dearer, by the difference of the exchange; that the one would draw fo much lefs Dutch money to England, and the other fo much more English money to Holland, as this difference amounted to: and that the balance of trade, therefore, would neceffarily be

fo

fo much more against England, and would c require a greater balance of gold and filver to be exported to Holland.

Thofe arguments were partly folid and partly fophiftical. They were folid fo far as they afferted that the exportation of gold and filver in trade might frequently be advantageous to the country. They were folid too, in afferting that no prohibition could prevent their exportation, when private people found any advantage in exporting them. But they were fophiftical in fuppofing, that either to preferve or to augment the quantity of thofe metals required more the attention of government, than to preferve or to augment the quantity of any other ufeful commodities, which the freedom of trade, without any fuch attention, never fails to fupply in the proper quantity. They were fophiftical too, perhaps, in afferting that the high price of exchange neceffarily increafed, what they called, the unfavourable balance of trade, or occafioned the exportation of a greater quantity of gold and filver. That high price, indeed, was extremely disadvantageous to the merchants who had any money to pay in foreign countries. They paid fo much dearer for the bills which their bankers granted them upon thofe countries. But though the rifk arifing from the prohibition might occafion fome extraordinary expence to the bankers, it would not neceffarily carry any more money out of the country. This expence would generally be all laid out in the country, in fmuggling the money out of it, and could seldom occafion

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