IV. BOOK in value, perhaps, to the prime coft of the whole French goods imported. What has frequently been faid of the Eaft India trade might poffibly be true of the French; that though the greater part of Eaft India goods were bought with gold and filver, the re-exportation of a part of them to other countries, brought back more gold and filver to that which carried on the trade than the prime cost of the whole amounted to. One of the most important branches of the Dutch trade, at prefent, confifts in the carriage of French goods to other European countries. Some part even of the French wine drank in Great Britain is clandeftinely imported from Holland and Zealand. If there was either a free trade between France and England, or if French goods could be imported upon paying only the fame duties as thofe of other European nations, to be drawn back upon exportation, England might have fome fhare of a trade which is found fo advantageous to Holland. THIRDLY, and laftly, there is no certain criterion by which we can determine on which fide what is called the balance between any two countries lies, or which of them exports to the greateft value. National prejudice and animofity, prompted always by the private intereft of particular traders, are the principles which generally direct our judgment upon all queftions concerning it. There are two criterions, however, which have frequently been appealed to upon fuch occafions, the custom-house books and the courfe of exchange. The custom-house books, I think, III. I think, it is now generally acknowledged, are CHAP. a very uncertain criterion, on account of the inaccuracy of the valuation at which the greater part of goods are rated in them. The course of exchange is, perhaps, almost equally fo. WHEN the exchange between two places, fuch as London and Paris, is at par, it is faid to be a fign that the debts due from London to Paris are compensated by thofe due from Paris to London. On the contrary, when a premium is paid at London for a bill upon Paris, it is faid to be a fign that the debts due from London to Paris are not compensated by thofe due from Paris to London, but that a balance in money must be fent out from the latter place; for the risk, trouble, and expence of exporting which, the premium is both demanded and given. But the ordinary state of debt and credit between those two cities must neceffarily be regulated, it is faid, by the ordinary courfe of their dealings with one another. When neither of them imports from the other to a greater amount than it exports to that other, the debts and credits of each may compenfate one another. But when one of them imports from the other to a greater value than it exports to that other, the former neceffarily becomes indebted to the latter in a greater fum than the latter becomes indebted to it: the debts and credits of each do not compenfate one another, and money must be sent out from that place of which the debts over-balance the credits. The ordinary courfe of exchange, therefore, being an indication of the ordinary. . P 3 ftate IV. BOOK state of debt and credit between two places, muft likewife be an indication of the ordinary course of their exports and imports, as thefe neceffarily regulate that ftate. BUT though the ordinary courfe of exchange fhould be allowed to be a fufficient indication of the ordinary state of debt and credit between any two places, it would not from thence follow, that the balance of trade was in favour of that place which had the ordinary ftate of debt and credit in its favour. The ordinary state of debt and credit between any two places is not always entirely regulated by the ordinary courfe of their dealings with one another; but is often influenced by that of the dealings of either with many other places. If it is ufual, for example, for the merchants of England to pay for the goods which they buy of Hamburgh, Dantzic, Riga, &c. by bills upon Holland, the ordinary state of debt and credit between England and Holland will not be regulated entirely by the ordinary courfe of the dealings of those two countries with one another, but will be influenced by that of the dealings of England with thofe other places. England may be obliged to send out every year money to Holland, though its annual exports to that country may exceed very much the annual value of its imports from thence; and though what is called the balance of trade may be very much in favour of England. IN the way, besides, in which the par of exchange has hitherto been computed, the ordinary courfe of exchange can afford no fufficient indi 2 cation 111. 'cation that the ordinary state of debt and credit CHAP. is in favour of that country which feems to have, or which is supposed to have, the ordinary courfe of exchange in its favour: or, in other words, the real exchange may be, and, in fact, often is fo very different from the computed one, that from the courfe of the latter, no certain conclufion can, upon many occafions, be drawn concerning that of the former. WHEN for a fum of money paid in England, containing, according to the ftandard of the English mint, a certain number of ounces of pure filver, you receive a bill for a fum of money to be paid in France, containing, according to the standard of the French mint, an equal number of ounces of pure filver, exchange is faid to be at par between England and France. When you pay more, you are fuppofed to give a premium, and exchange is faid to be against England, and in favour of France. When you pay lefs, you are fuppofed to get a premium, and exchange is faid to be against France, and in favour of England. BUT, firft, we cannot always judge of the value of the current money of different countries by the standard of their respective mints. In fome it is more, in others it is lefs worn, clipt, and otherwise degenerated from that standard. But the value of the current coin of every country, compared with that of any other country, is, in proportion not to the quantity of pure filver which it ought to contain, but to that which it actually does contain. Before the reformation of IV. BOOK the filver coin in king William's time, exchange between England and Holland, computed, in the usual manner, according to the standard of their respective mints, was five and twenty per cent. against England. But the value of the current coin of England, as we learn from Mr. Lowndes, was at that time rather more than five and twenty per cent. below its ftandard value. The real exchange, therefore, may even at that time have been in favour of England, notwithstanding the computed exchange was fo much against it; a smaller number of ounces of pure filver, actually paid in England, may have purchased a bill for a greater number of ounces of pure Gilver to be paid in Holland, and the man who was fuppofed to give, may in reality have got the premium. The French coin was, before the late reformation of the English gold coin, much lefs worn than the English, and was, perhaps, two or three per cent. nearer its standard. If the computed exchange with France, therefore, was not more than two or three per cent. against England, the real exchange might have been in its favour. Since the reformation of the gold coin, the exchange has been constantly in favour of England, and against France. SECONDLY, in fome countries, the expence of coinage is defrayed by the government; in others, it is defrayed by the private people who carry their bullion to the mint, and the government even derives fome revenue from the coinage. Iņ England, it is defrayed by the government, and you carry a pound weight of standard filver to the |