1

oyed in CHA P. merchant

ith regard gard to the a greater ed, in order ifh manufacix and hemp, had the manuDeen directly exhe whole capital

round-about

will generally give port to the producthan an equal capital et trade of the fame

foreign commodity with is for home-confumption occafion no effential differture of the trade, or in the fupport which it can give to ur of the country from which If they are purchased with the r example, or with the filver of and filver, like the tobacco of have been purchafed with fomeer was the produce of the industry y, or that had been purchased with fe that was fo. So far, therefore, tive labour of the country is conreign trade of confumption which by means of gold and filver, has all

the

V.

BOOK of domeftic industry, or with fomething elfe II. that had been purchased with it; for, the cafe of

war and conqueft excepted, foreign goods can never be acquired, but in exchange for fomething that had been produced at home, either immediately, or after two or more different exchanges. The effects, therefore, of a capital employed in fuch a round-about foreign trade of confumption, are, in every refpect, the fame as thofe of one employed in the most direct trade of the fame kind, except that the final returns are likely to be still more diftant, as they must depend upon the returns of two or three diftinct foreign trades. If the flax and hemp of Riga are purchased with the tobacco of Virginia, which had been purchased with British manufactures, the merchant muft wait for the returns of two diftinct foreign trades before he can employ the fame capital in repurchafing a like quantity of British manufactures. If the tobacco of Virginia had been purchased, not with British manufactures, but with the fugar and rum of Jamaica which had been purchafed with thofe manufactures, he muft wait for the returns of three. If those two or three diftinct foreign trades fhould happen to be carried on by two or three diftinct merchants, of whom the fecond buys the goods imported by the firft, and the third buys those imported by the fecond, in order to export them again, each merchant indeed will in this cafe receive the returns of his own capital more quickly; but the final returns of the whole capital employed in the trade will be just as flow as

V.

ever. Whether the whole capital employed in c HA P. fuch a round-about trade belong to one merchant or to three, can make no difference with regard to the country, though it may with regard to the particular merchants. Three times a greater capital must in both cafes be employed, in order to exchange a certain value of British manufactures for a certain quantity of flax and hemp, than would have been neceffary, had the manufactures and the flax and hemp been directly exchanged for one another. The whole capital employed, therefore, in fuch a round-about foreign trade of confumption, will generally give lefs encouragement and fupport to the productive labour of the country, than an equal capital employed in a more direct trade of the fame kind.

WHATEVER be the foreign commodity with which the foreign goods for home-confumption are purchased, it can occafion no effential difference either in the nature of the trade, or in the encouragement and fupport which it can give to the productive labour of the country from which it is carried on. If they are purchased with the gold of Brazil, for example, or with the filver of Peru, this gold and filver, like the tobacco of Virginia, muft have been purchafed with fomething that either was the produce of the induftry of the country, or that had been purchased with fomething else that was fo. So far, therefore, as the productive labour of the country is concerned, the foreign trade of confumption which is carried on by means of gold and filver, has all

the

BOOK the advantages and all the inconveniencies of any 11. other equally round-about foreign trade of confumption, and will replace just as faft or just as flow the capital which is immediately employed in fupporting that productive labour. It seems even to have one advantage over any other equally round-about foreign trade. The tranfportation of those metals from one place to another, on account of their small bulk and great value, is less expensive than that of almost any other foreign goods of equal value. Their freight is much lefs, and their infurance not greater; and no goods, befides, are lefs liable to fuffer by the carriage. An equal quantity of foreign goods, therefore, may frequently be purchafed with a fmaller quantity of the produce of domestic industry, by the intervention of gold and filver, than by that of any other foreign goods. The demand of the country may frequently, in this manner, be fupplied more completely and at a finaller expence than in any other. Whether, by the continual exportation of those metals, a trade of this kind is likely to impoverish the country from which it is carried on, in any other way, I fhall have occafion to examine at great length hereafter.

THAT part of the capital of any country which is employed in the carrying trade, is altogether withdrawn from fupporting the productive labour of that particular country, to fupport that of fome foreign countries. Though it may replace by every operation two diftinct capitals, yet neither of them belongs to that particular country.

V.

Country. The capital of the Dutch merchant, CHA P. which carries the corn of Poland to Portugal, and brings back the fruits and wines of Portugal to Poland, replaces by every fuch operation two capitals, neither of which had been employed in fupporting the productive labour of Holland; but one of them in fupporting that of Poland, and the other that of Portugal. The profits only return regularly to Holland, and conftitute the whole addition which this trade neceffarily makes to the annual produce of the land and labour of that country. When, indeed, the carrying trade of any particular country is carried on with the ships and failors of that country, that part of the capital employed in it which pays the freight, is diftributed among, and puts into motion, a certain number of productive labourers of that country. Almost all nations that have had any confiderable fhare of the carrying trade have, in fact, carried it on in this manner. The trade itself has probably derived its name from it, the people of fuch countries being the carriers to other countries. It does not, however, feem effential to the nature of the trade that it fhould be fo. A Dutch merchant may, for example, employ his capital in tranfacting the commerce of Poland and Portugal, by carrying part of the furplus produce of the one to the other, not in Dutch, but in British bottoms. It may be prefumed, that he actually does fo upon fome particular occafions. It is It is upon this account, however, that the carrying trade has been fuppofed peculiarly advantageous to fuch a country as Great VOL. II.

F

Britain,