British capitals, and, in a great measure, owned by proprietors residing in Great Britain. Therefore, the outward cargoes are to be considered as the stock employed in the culture of the plantations; and the homeward cargoes are, in fact, the proceeds of that culture, the excess of which is not a loss to the nation, but the real amount of the net profits coming into the pockets of the proprietors, and giving a very comfortable demonstration how much the amount of the product is more than the prime cost. In other words, the outward cargoes are the seed, and the inward cargoes are the harvest. . . . The same reasoning will also hold good with the trade to Hudson's Bay, and several others, wherein the excess of the imports is the real profit, and a continuation of favourable balances would, in a few years ruin the trade. In some branches of business, the goods exported are merely the charges of trade, as is the case in all fisheries..

"There is another kind of deceptive inference to be drawn from the custom-house entries, if not duly guarded against. It is necessary to advert, that the exports to some countries constitute the prime cost of cargoes to be shipped off from them to a third country. Thus, the wines of Madeira are sent to the British settlements in the East and West Indies, and, even if intended for Britain, are often carried by the circuitous route of those distant regions before they are brought home. The bulk of the cargoes from Africa consists of the miserable natives, who are sold in the West Indies; and the proceeds are generally remitted to great Britain in bills of exchange, which do not appear at all in the custom-house books. And, in like manner, most of the cargoes, carried from Newfoundland and the adjacent countries, consist of fish, which never come to Great Britain, but are sold in Spain, Portugal, and other Roman Catholic countries, and their proceeds also brought home in bills of exchange.

"Were we to estimate the prosperity of a country merely from the balance of trade in the custom-house books, Scotland must be pronounced to be in a ruinous state ever since the American war, the imports from foreign countries being frequently more

than the exports to them, as will appear by the accounts to be found in the subsequent part of this work. But the truth is, that since that event the people of Scotland have paid more attention than formerly to manufactures, which (by land carriage and coasting navigation, neither of which appear in the custom-house books) are carried to every part of Great Britain, and enter to a much greater amount into the exports of London than into those of Glasgow; and that, upon the whole, the trade of Scotland is now more flourishing than ever.

"From what has been said it will appear, that all arguments, calculations, or arrangements, founded upon the supposed balance of trade, are very fallacious; and that those founded upon the balance with any particular country, are generally much more fallacious than those deduced from the general balance of the whole foreign trade of the nation."*

Thus far I have followed the statements of Mr. Macpherson, whose observations appear to me to form a very interesting and instructive comment on that part of Mr. Smith's reply to the Mercantile system, in which he reasons with its advocates on their own fundamental principle. I now proceed to a still more important part of Mr. Smith's argument, in which he endeavours to show that the whole doctrine of the balance of trade is absurd.

It is now a considerable number of years since these liberal principles came to be adopted by all the most enlightened writers of Europe. Mr. Hume was one of the first in this country who stated them in such a form as to attract to them some share of the public favour; and he had undoubtedly the merit of encouraging, by his example, his friend Mr. Smith to devote his profound and comprehensive genius to a systematical illustration of them. His Political Discourses were first printed in the year 1752, and, according to himself, were the only part of his works which were successful on the first publication. They have undoubtedly very great merit, and although erroneous in some fundamental maxims, may justly be regarded, on the whole, as one of the most valuable performances of the author. ✦ [Annals of Commerce, &c., 1805, Part III. Vol. iii. pp. 341-344.]

The Essay on the Jealousy of Trade concludes with the following very striking reflections:-"Were our narrow and malignant politics to meet with success, we should reduce all our neighbouring nations to the same state of sloth and ignorance that prevails in Morocco and the coast of Barbary. But what would be the consequence? they could send no commodities; they could take none from us; our domestic commerce itself would languish for want of emulation, example, and instruction; and we ourselves should soon fall into the same abject condition to which we had reduced them. I shall therefore venture to acknowledge, that, not only as a man, but as a British subject, I pray for the flourishing commerce of Germany, Spain, Italy, and even France itself. I am at least certain, that Great Britain and all those nations would flourish more did their sovereigns and ministers adopt such enlarged and benevolent sentiments towards each other."*

At the period when this passage first appeared, it was considered as among the most paradoxical and dangerous parts of Mr. Hume's political writings; and yet it assumes nothing more than what a moment's consideration might have taught to any man of a plain and unprejudiced understanding, that a commercial nation has precisely the same interest in the wealth of its neighbours which a tradesman has in the wealth of his customers. It is to the general progress of civilized nations in the arts and improvements of social life, that the prosperity of England is chiefly owing. Nor is it going too far to say, with a late writer, "that not one acre is brought into cultivation in the wilds of Siberia which has not widened the market for English goods." On the other hand, it is no less manifest, that the benefits of this extended commerce are reciprocal; and that while English industry is thus encouraged by the progressive prosperity of its neighbours, it amply repays whatever it receives. It can only be employed in advancing civilisation and enjoyment over the whole earth; and it is actually exerted at this present moment, in consequence of the obstacles presented by the laws of nature to the impotent tricks of govern[Essays, Vol. I.]

If they

ment, to revive the industry of those very nations who have been the loudest in their outcries against its progress. obtained their wishes for the destruction of English prosperity, this would have no other effect than to reduce those nations themselves, who now ascribe their present depression to its influence, to a state of complete ruin.

The same liberal principles concerning trade, which were advanced by Mr. Hume, were soon after adopted, and very zealously enforced, by Dean Tucker, in various judicious performances; and, particularly, in a small work entitled Four Tracts on Political and Commercial Subjects, published in the year 1774. Much about the same time they attracted still more general attention, at least among practical men, in consequence of the sanction which they received from the pen of Dr. Franklin, a writer unrivalled in his own peculiar and characteristical style of composition, but unqualified, it is probable, by the habits of his early education, for that systematical arrangement of principles which we remark in the writings of Mr. Smith; while, however, he is eminently fitted to seize the valuable results of the speculations of others, and to present them in a strong light to the common sense of mankind. I shall only quote one passage from this writer, which I select merely from its more immediate connexion with the doctrines which I have been just stating." Perhaps, in general, it would be better if government meddled no farther with trade than to protect it, and let it take its course. Most of the statutes, or acts, edicts, arrêts, and placarts of parliaments, princes, and states, for regulating, directing, or restraining of trade, have, we think, been either political blunders, or jobs obtained by artful men for private advantage, under pretence of public good. When Colbert assembled some wise old merchants of France, and desired their advice and opinion how he could best serve and promote commerce, their answer after consultation was, in three words only, Laissez nous faire, 'Let us alone.' It is said by a very solid writer of the same nation, that he is well advanced in the science of politics who knows the full force of that maxim, Pas trop gouverner, 'Not to

VOL. IX.

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govern too much ;'—which, perhaps, would be of more use when applied to trade, than in any other public concern. were therefore to be wished that commerce was as free between all the nations of the world, as it is between the several counties of England; so would all, by mutual communication, obtain more enjoyments. These counties do not ruin one another by trade, neither would the nations. No nation was ever ruined by trade, even seemingly the most disadvantageous.'

It would require more time than we can now afford to bestow, to trace historically the origin and progress of those liberal and enlightened ideas which abound in Mr. Smith's writings. I shall content myself, therefore, with remarking, that although it was by some French writers that they were first presented to the world in a systematical manner, yet the earliest hints of them seem to have been suggested in this country. I shall, perhaps, have an opportunity of producing some additional proofs of this statement afterwards. In the meantime, I shall only quote some remarks from a pamphlet on Money, published in the year 1734, [by Jacob Vanderlint:]"All nations have some commodities peculiar to them, which, therefore, are undoubtedly designed to be the foundation of commerce between the several nations, and produce a great deal of maritime employment for mankind, which probably, without such peculiarities, could not be; and in this respect, I suppose, we are distinguished, as well as other nations; and I have before taken notice, that if one nation be by nature more distinguished in this respect than another, as they will, by that means, gain more money than such other nations, so the prices of all their commodities and labour will be higher in such proportion, and consequently, they will not be richer or more powerful for having more money than their neighbours.

"But, if we import any kind of goods cheaper than we can now raise them, which otherwise might be as well raised at home, in this case, undoubtedly, we ought to attempt to raise such commodities, and thereby furnish so many new branches of employment and trade for our own people, and remove the * [Principles of Trude, sect. 38; Works, by Sparks, Vol. II. p. 401.]