agreeable to the standard of their respective mints; the latter in a fpecies of money of which the intrinfic value is continually varying, and is almost always more or lefs below that standard.

PART. II.

Of the Unreasonableness of thofe extraordinary Reftraints upon other Principles.

IN the foregoing Part of this Chapter I have

endeavoured to fhow, even upon the principles of the commercial fyftem, how unneceffary it is to lay extraordinary restraints upon the importation of goods from thofe countries with which the balance of trade is fuppofed to be difadvantageous.

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 fuppofes 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 lofes, and the other gains in proportion to its declenfion from the exact equilibrium. Both fuppofitions are falfe. A trade which is forced by means of bounties and monopolies, may be, and commonly is difadvantageous to the country in whose favor it is meant to be established, as I fhall endeavour to fhow hereafter. But that

trade which, without force or constraint, is naturally and regularly carried on between any two places, is always advantageous, though not always 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 labor 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 moft 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 diftributed 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 commodities exchanged too are fuppofed to be of equal value, so the two capitals employed in the trade will, upon moft occafions, be equal, or very nearly equal; and both being employed in raifing the native commodities of the two countries, the revenue and maintenance which their distribution will afford to the inhabitants of each will be equal, or very nearly equal. This revenue

and maintenance, thus mutually afforded, will be greater or smaller in proportion to the extent of their dealings. If these fhould annually amount to a hundred thousand pounds, for example, or to a million on each fide, each of them would afford an annual revenue in the one case, of a 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 ftill be fuppofed 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, fhould import from France nothing but the native commodities of that country, and, not having fuch commodities of its own as were in demand there, fhould annually repay them by sending thither a large quantity of foreign goods, tobacco, we fhall fuppofe, and EaftIndia goods; this trade, though it would give fome revenue to the inhabitants of both countries, would give more to thofe of France than to those of England. The whole French capital annually employed in it would annually be diftributed among the people of France. But that part of the English capital only which was employed in producing the English commodities with which thofe

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, Indoftan, 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 England. France would in this cafe carry on a direct foreign trade of consumption 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. Almoft 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 leaft of foreign goods, will always be the principal gainer.

If it was not with tobacco and Eaft-India goods, but with gold and filver, that England paid for the commodities annually imported from France, the balance, in this cafe, would be fuppofed

uneven, commodities not being paid for with commodities, but with gold and filver. The trade, however, would, in this case, as in the foregoing, give some revenue to the inhabitants of both countries, but more to thofe of France than to those of England. It would give some revenue to those of England. The capital which had been employed in producing the English goods that purchased this gold and filver, the capital which had been diftributed among, and given revenue to, certain inhabitants of England, would thereby be replaced, and enabled to continue that employment. The whole capital of England would no more be diminished by this exportation of gold and filver, than by the exportation of an equal value of any other goods. On the contrary, it would, in moft cafes, be augmented. No goods are fent abroad but thofe for which the demand is fuppofed to be greater abroad than at home, and of which the returns confequently, it is expected, will be of more value at home than the commodities exported. If the tobacco which, in England, is worth only a hundred thousand pounds, when fent to France will purchase wine which is, in England, worth a hundred and ten thousand pounds, the exchange will augment the capital of England by ten thousand pounds. If a hundred thoufand pounds of English gold, in the fame manner, purchase French wine, which, in England, is worth a hundred and ten thoufand, this exchange will equally augment the capital of England by ten thousand pounds. As a merchant who has