BOOK of domestic induftry, or with fomething else

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 muft 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 re-purchasing 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 purchased 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 first, 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 CHA 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-consumption 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, must have been purchased with fomething that either was the produce of the industry of the country, or that had been purchased with fomething elfe that was fo. So far, therefore, as the productive labour of the country is concerned, the foreign trade of consumption which is carried on by means of gold and filver, has all

the

BOOK the advantages and all the inconveniencies of any

II.

other equally round-about foreign trade of confumption, and will replace juft as fast or just as flow the capital which is immediately employed in fupporting that productive labour. It feems 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 smaller 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 smaller 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 support 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, CHAP. 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 constitute 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 upon this account, however, that the carrying trade has been fuppofed peculiarly advantageous to fuch a country as Great. VOL. II. F.. Britain,

BOOK Britain, of which the defence and fecurity depend

II.

upon the number of its failors and shipping. But the fame capital may employ as many failors and shipping, either in the foreign trade of confumption, or even in the home-trade, when carried on by coafting veffels, as it could in the carrying trade. The number of failors and shipping which any particular capital can employ, does not depend upon the nature of the trade, but partly upon the bulk of the goods in proportion to their value, and partly upon the distance of the ports between which they are to be carried; chiefly upon the former of thofe two circumftances. The coal-trade from Newcastle to London, for example, employs more shipping than all the carrying trade of England, though the ports are at no great diftance. To force, therefore, by extraordinary encouragements, a larger fhare of the capital of any country into the carrying trade, than what would naturally go to it, will not always neceffarily increase the Shipping of that country.

THE capital, therefore, employed in the hometrade of any country will generally give encouragement and support to a greater quantity of productive labour in that country, and increase the value of its annual produce more than an equal capital employed in the foreign trade of confumption and the capital employed in this latter trade has in both these refpects a ftill greater advantage over an equal capital employed in the carrying trade. The riches, and fo far as power depends upon riches, the power of every country,