_A Thought substituted to that of a Reimbursement._
To write in _England_, nay, to write with obstinacy against the plan of
a reimbursement, the necessity of which is acknowledged by the whole
nation, who expect wonders from its execution; to write for the purpose
of persuading that such a step would equally militate against the
interest of the State, and that of the subject; and especially to hazard
such visionary ideas at the moment when _France_, so clear-sighted on
her own interests, is herself busy in effecting a like reimbursement ...
must surely be the attempt of a man hired by the _French_, to excite,
if possible, some ferment in those heads which are all wound up to
calculation; and to raise, during the little time the calculations will
require, some plausible doubts, in order at least to delay the effect, of
so salutary, so essential an operation; for, _France_ is so interested in
the ruin of _England_, that she ought to spare no means to stop her, were
it but for an instant, at that point which it has not been possible to
prevent her from attaining.
On the other hand, to write in _French_, and endeavour to introduce
into _France_, a pamphlet in which the author does not profess himself
an admirer of a reimbursement, the possibility of which, now clearly
demonstrated, has excited there a general enthusiasm, a kind of rapture
the more excusable, as the most evident disorder in all parts of the
finances, during the space of 80 years, did not permit even the humane
and sensible mind to form a single wish for that very measure of which
the execution is so certain, and the advantages pretended to be so
positive.... It is suing with impudence for the good graces of a nation,
to which I have, as it were, been turned over by the cession made to
it of the country where my fortune lies: it is ridiculously flattering
myself that I shall justify by a _trait_ of unbridled licence, the title
of _Englishman_, conferred on me by the treaty of peace.
It is certain, that more than once a man has been most secretly accused,
tried with the greatest expedition, condemned without being heard, and
punished with merciless severity, in consequence of charges much less
specious than the above; for I confess that there is a faint glimmer of
plausibility in the heads of accusation which I have brought. But, in
the end, justice must be done; and, thank heaven, my present trial is on
the very first instance, brought to its last stage; the public shall be
my judge; they shall be put in possession of all the documents relating
to the trial; and I presume to hope, that no one of those who shall
be able to bear the perusal of them, will suspect my sincerity when I
protest, that, without any other motive but that which has at all times
invariably guided me through life, I would burn this paper, if I could
find therein a single word that might be hurtful to _France_—I would
burn it, were I to find therein a single word that might be hurtful to
_England_—I would burn it, were I to find therein a single word that
might give offence to any individual of either of the two kingdoms.—But
I freely own, that my ambition would be far from receiving its full
gratification, were this work to prove useful only to those two parts
of the world, however brilliant the part they act therein.—URBI ET
ORBI.—_Shakespear_ says that the Warrior seeks “the bubble _glory_ in the
cannon’s mouth:” a man who presumes to think, looks for it in the bottom
of his inkstand: their hope is not always crowned with success; nay, very
often, the one meets only death, and the other contempt. Yet there are
some lucky chances: sometimes the former saves his country, the latter is
sometimes serviceable to all mankind.
Be it as it may, I intreat the reader to observe, that the principles
I lay down do not tend, by any means, to lessen the public credit,
to spread any doubt on the faculties which _France_ and _England_
have of effecting the reimbursement which both these nations have in
contemplation; I maintain, on the contrary, with the simplicity of a
_child_, that it is a _childish play_, for the one as well as for the
other. I say, that the one who appears the most distressed of the two,
and is the most taken up with her pretended distress, has only to take
from the _pocket_ of one, what he will be very _averse to give_, and put
it into the _hands_ of another, who will be equally _averse to receive_.
I say, with respect to the nation, which _now_ acts the most brilliant
part, that all she has to do, is to give, to those who do not ask for
it, a sum of money which she receives, and has no occasion for; _to give
it_, I say, for fear of being solicited, importuned, and teazed, to make
a bad use of it, or else be obliged to hoard it up, to the very great
detriment of circulation. I shall add now, that a business, which to
me, does not appear a _childish_ one, but really that of a man, would
be to examine, whether the 40 or 50 millions of livres annuity, which
are about to expire by degrees in _France_, and the million, or million
and half sterling of taxes to be levied in _England_, over and above the
sum necessary to pay the interest of the national debt, and other state
expenditures, will be better employed in the diminution of some private
revenue than in the increase of the general wealth in both States; that
is to say, whether it is most advantageous to pay off the creditors, who,
by such a reimbursement, will be compelled to place at 4 and at 3, what
brought them in 5 and 4 _per cent._ than to lay out the money, for the
purpose of increasing, perhaps by one fourth, the products of agriculture
and industry, by a faithful and judicious repartition of those sums upon
the cultivation of some millions of acres, which now yield nothing but
brambles, or yield only the half of what they ought to produce.—How many
of this description are to be found both in _England_ and _France_!⸺This
is not all: how many kinds of taxes, the effects of which have not been
sufficiently searched into! How many more, whose pernicious consequences
are fully known! How many more, the levying of which can be justified
only by reason of their produce being wanted, or by _the supposed_
impossibility of a commutation!—Ought the State to reimburse, before
those have been scrutinized, these repealed, and all commuted which shall
appear evidently to militate against sound principles?
The great art does not consist in finding, at pleasure, one million
sterling more in _France_ as well as in _England_, or _vice versâ_.
Heavens! what kind of minister would that man be, whose genius could
not discover, in either kingdom, in the multitude of objects truly
susceptible of taxation, a number of articles capable of furnishing that
million annually, without injuring the general consumption, beyond the
first year at the worst? The only difference which, in this respect, I
might point out between the two nations, is, that in _France_ the impost
would be registered, and paid after the usual remonstrances; and that in
_England_, were the tax to have been devised, even by Supreme Wisdom,
on the actual system, all those who might think themselves directly or
indirectly interested in the operation of the tax, would not fail to
clamour as loud as possible, and not without reason; for, after all, if
the objects taxed, are equitably taxed, and in a due proportion with
all the rest, why, out of 160 objects and upwards, already charged
with equity, should _ten_ be picked out to be overloaded with a new
burden?—Has at least a rotation been established for the future?—On
what principles? Or does it evidently appear that there can be no fixed
one adopted on so important a matter?—If a tax is offered to be laid on
such articles as have paid none hitherto, then _Opposition_ stands on
firmer ground; for, are not those objects, by their nature, evidently
as sacred as the ark of the Lord? Did ever the least scrupulous, the
boldest Minister of the finances, dare, to this day, to lay his hand upon
it?—Would he have respected it, if he had not trembled for his head;
that is, in plain _English_, for his place? For, thank Heaven, there
is no necessity, now, for the _English_ to be more hot-headed than any
other nation in _Europe_. It is generally acknowledged among themselves,
with true _English sang-froid_, that, on the part of those champions
of patriotism, who, according to the interest of the day, charge each
other by turns with selling the people, and betraying the _SACRED
constitution_, all terminates now in the most exact change of admirable
sarcasms, and exquisite railleries. The pleasure of being a Minister
because _the minister alone can do what is good_, and the concern at not
being a Minister, _because the minister alone can do what is good_, are
now productive of nothing more in _England_; and the People, as well
as the King, are not worse served for it, nor are they worse informed:
witness the speeches on both sides.
Amongst the questions which I have mentioned, and many others always
appropriated to the subject, there are some sufficiently weighty to
puzzle, in _England_ as well as in _France_, the respondent who should
be obliged, before a tax is laid, to answer them in a _satisfactory_
manner. Luckily, as I have already mentioned, in _France_, thanks
to the monarchical constitution, the King _commands_, the Parliament
remonstrates, registers, and the People pay: and, as is known to all
the world, thanks to the free constitution of _England_, there the King
_demands_, the parliament debates, grants, and the People pay. With that
facility which exists every where, of doing what is not palpably absurd,
I think it might be possible now, without bringing credit or authority
in question, to renounce the little vanity of devising a productive
tax; and that a man of common abilities ought to confine himself to the
establishing or maintaining order and clearness in the accounts, to
the diminution of expences in collecting the revenues, and to fidelity
in the use of them.—But the true, the unacquired glory to be obtained
by a financier, would be, I think, to hit upon a simple scheme, the
application of which might be obvious in all cases, a scheme productive
of no fruitless evil, permitting all possible good, and which might, by
degrees, be substituted to those vague taxations, to those _taxations_
founded on false principles, to those wild notions, which, by adding
_five_ to an article not worth _three_, raise nevertheless that object
to _eight_, and leave the trader at liberty to sell that for _fifteen_,
which he sold formerly at _four_. It is true that, on the first exigency
of the State, they pretend to remedy the abuse by an additional tax
called _licence_, or by any other name which answers the same purpose,
and compels the peculator to refund part of his extortion. But what does
this licence come to, after all?—_To sell to a man the right of ransoming
more severely the public, after having previously furnished him with the
means and pretence for doing it._
No one doubts, in _England_, but that the system of _French_ taxation
is a very bad one; nothing so self-evident as the reasons adduced in
proof; every thinking man in _France_ approves of those reasons:—but
does it clearly appear, that in _England_ some parts of that system are
not adopted?—Is it not true, on the contrary, that it has prevailed,
for a long time, in one point truly essential, in regard to which they
have but diminished its inconveniencies, without thinking perhaps of the
injustice, which is as inseparable from it, as it is from those wherein
it appears more evidently?—The advantage of taxing the consumption
is generally acknowledged; it is as generally believed that the way
of bringing this system to perfection is by taxing, above all, _the
consumption of the rich_:—yet, were it to happen that the poor should
be more injured, and that for a longer time, by a natural effect of the
very operation devised for their release, than he could be aggrieved if
nothing should escape the tax....
I shall venture to throw out some thoughts on these different objects,
after I have examined whether the necessity of a balance of trade,
constantly favourable, be not as doubtful as that of a reimbursement,
and a bankruptcy; and whether that balance is really such as many people
imagine it.
_General Balance of Trade in ~England~._
When the proprietor of a considerable sum in the _English_ funds examines
Sir _Charles Whitworth_’s truly valuable work, _State of the Trade of
Great-Britain_; he thanks his stars, and says, “I have nothing to fear
whilst the balance of trade continues in favour of this kingdom; but
the moment it shall turn against her, recourse must inevitably be had
to the expedient so long postponed: the application of the _sponge_ is
inevitable.”—
I have perhaps already said enough to animate the greater part of those,
who are concerned in the public funds of every enlightened nation,
against every other fear but that of a reimbursement; but, as it may
be believed, with regard to the public funds in _England_, that I have
reasoned on the supposition, generally admitted, of that balance in their
favour, of which the _English_ are so jealous, I would wish doubly to
strengthen the mind of the parties concerned, by proving to them that
their fortune rests on a basis much more solid than that of a pretended
_favour_, which the private interest of every merchant, vigilantly
repels, whilst the fancy of the body at large happily confines them to
believe in the idol, and to invoke it.
I am indebted to the details contained in Sir _Charles Whitworth_’s work,
for the advantage of applying to real facts, many reflexions which I had
digested before I had read that work; but I was, till then, reasoning on
_hypotheses_; I now reason on what so nearly approaches reality, that
it is necessary to controvert my arguments, instead of consigning their
foundation to the system of chimeras.
By means of that valuable work, I see, from the year 1700 to 1775,
and that in the greatest detail, strengthened by all the proofs that
the nature of the subject can admit of, a constant superiority of
exports, which, in the space of 75 years, amounts to the enormous sum
of 267,774,769_l._ (I have overlooked the fractions of each article.)
This is, in the total amount, much more than one half of the gold and
silver imported into _Europe_ from _America_, during the same lapse of
time; but, of this period of 75 years, 30 must be attended to, wherein
the superiority of _English_ exports comes up very nearly to five-sixths
of the general importation of those two precious metals, _which were to
make good so many other balances_. We should also observe, amongst those
years, a most flourishing one, wherein that _English favour_ absorbs,
as it were, all the silver imported into _Europe_; and five other years
still more wonderful, where it surpasses that general importation by
10, 12, and even 1,300,000_l._; for, in 1750 the general exportation
of _English_ goods exceeded the importation of foreign produce, by
7,359,964_l._ and yet all that product of the _mines_, belonging to
_Spain_ and _Portugal_, is estimated only at 6,000,000_l._ sterling _per
annum_.
I shall suppose, for a moment, that, during the space of time I have just
mentioned, the balance of trade did, in reality, produce to _England_ an
importation of money, to the amount of 267,774,769_l._ (for the reports
of the Custom-House, as stated by Sir _Charles Whitworth_, brought in
as a proof of that pretended, uninterrupted balance, in _favour_ of the
nation, mean what I have said, or mean nothing at all, in regard to this
matter; they do not prove one penny if they do not prove the whole sum).
It is true that, according to the same reports, we must deduct for the
money exported from _England_, during the course of those 75 years, about
105 millions, by which the nation at least got rid of a surplus which
would have strangely disparaged the price of that which was preserved in
the country: but is it very certain that the 162,774,969_l._ the precious
_nett_ of the pretended balance, was actually preserved? This appears to
me impossible, for the following reasons, which may perhaps furnish us
with the means of knowing, precisely enough, in what the true balance
consists.
Since the beginning of this century, the real and nominal value of
the revenue in the other parts of _Europe_, has doubled, as well as
in _England_. Now this augmentation, in the products and prices, has
required, every where, a proportionable increase of the means of
circulation; and _Spain_ and _Portugal_ are nearly the only two sources
from whence that increase of means could be procured.
In the supposition that the revenue of _England_ constitutes one tenth
of that of _Europe_ (it is a great deal), the other nations composing
that part of the world were of course obliged to endeavour to secure
the nine tenths of the money necessary for their own circulation; and
their success in this is the less questionable, as, in case any one of
them should be short of money for the circulation of its property, the
_English_ themselves would eagerly supply that part of the precious
balance, which it might want, because, in this case, the importation of
money into such country would prove more profitable than an importation
of fresh goods, whilst the old ones, carried there already, waited for
money to circulate them. Hence it may be concluded, that the _English_
never had, or at least have not preserved, more than their tenth,
twelfth, or rather, more than their natural portion in that absolute mass
of gold and silver necessary to the circulation.
I shall now say, that it is not even probable that they have preserved
that _quota_, necessary every where else for the circulation of a
revenue similar to theirs, because _England_ is, of all known nations,
the one where the circulation of property of all kinds, requires a
less quantity of real cash: the merciless severity of the laws against
debtors, the general credit which it encourages, the use and indubitable
value of paper currency, which are derived equally from both, are three
objects which, in this respect, set _England_ far above _par_, in
comparison with all the other nations who have neglected to secure to
themselves the same advantages.
Might we not further say, that _England_ evidently has not thought proper
to get that _quota_, which she might have claimed, since one third, and
perhaps half of her circulation, is effected by paper-money with more
dispatch, with more facility, and with as much solidity as if it were
effected by cash?
It will be asked, perhaps, if I pretend to infer at last, that the
exportation has not been so considerable as it ought to be supposed from
the statements of Sir _Charles Whitworth_? I shall answer to this, as
to many other queries; it may now be seen that a few millions more or
less, are a matter of perfect indifference, in regard to my main object.
The exportation from _England_ is clearly prodigious; its immensity is
proved by that of the tonnage of the shipping employed for her trade,
775,624 tons in the years 1771, 1772, and 1773, (see _Chalmers_’s
_Estimate_); this point is established beyond all equivocation. What I
refuse therefore to the imagination of the trader, is solely what appears
to me chimerical and useless in that favourable balance of money; and
this _I refuse_, because I cannot possibly but acknowledge, that every
trader has too much good sense to act against the general interest of
trade, when such operation must, at the same time, prove contrary to
his own interest. Nay, is much more than plain instinct wanted, not
to import money which yields a very trifling benefit when there is no
demand for it, whilst one may take up foreign goods, on which there is
a certain gain of 10 or 12 _per cent._ because they are eagerly sought
after? and when, besides, the nation, on a certainty, will not finally
pay for them but with national goods, since she has no mines of her own?
I must observe, indeed, that this very trader, guilty of such an act of
_impatriotism_, of this national crime of importing merchandize instead
of gold and silver, cries up, as loud as any other, _the necessity of
striking a favourable balance_; but private wisdom gets the better of
public folly; every one imports such goods as he is in hopes to sell
to advantage, and leaves to his neighbour the care of importing that
_favour_ on which no profit can be got.
What is then the quantity of bullion really imported every year into
_England_?
It is incontestably, in the first place, so much of it as is necessary to
answer the progressive increase of the prices and products, both of the
land and industry; the bank-notes cannot suffice to that augmentation,
but in their ordinary proportion to the real specie in circulation;
all supplement of bank-notes, which in the needful hour exceeds that
proportion, must soon be replaced by real specie; on this exactness
stand the credit of the Bank, and the vast advantage accruing therefrom
to the public, and to the State; but from thence also results a greater
inutility of accumulating money before it is wanted.
It is, in the second place, all the bullion necessary for the labouring
gold and silver-smiths, from the first gold-smith in _London_ to the last
plated-button maker at _Birmingham_.
It is, thirdly, all that importation which is required to make good
the _deficit_ occasioned by petty stock-jobbing, and the melting down
of guineas, which no workman will ever scruple, when there will be a
few more pence to be got that way, than by the purchase of bullion, or
as often as, having no bullion at hand, he shall find himself in the
immediate necessity of working.
It is, fourthly, all that which is wanted to replace the few guineas
carried away annually from _England_ by travellers, smugglers, or by
means of some inferior transactions in trade, and which cannot always
be exactly balanced by the contraband trade carried on elsewhere by the
nation.
Ever since the _English_ have acquired the immense landed revenue which
they possess in the _East-Indies_, it is probable they do not carry there
so much money; yet some must be sent there. The above five articles are
the only ones I know of, which may render necessary an annual importation
of money. The first of those articles is absolutely independent of the
caprice of any one; it is always subservient to the quantity of effects
to be put into circulation, as well as to their price; and can at no
time deprive the other parts of _Europe_ of their share in the mines of
_America_. The third and fourth are in a manner included in the first;
nor can they, when viewed separately, be very considerable: The second
alone is truly prodigious, but is likewise subservient to the demands
of that very silver when wrought, that is to say, converted into some
articles of luxury: But it is necessary to observe, in regard to this,
that great care is taken to find out purchasers for that metal thus
improved by the hands of the workman, not only in _England_, but wherever
people can possibly be found willing to take from her, that part of the
precious balance, which she had taken upon herself, only in hopes of
getting rid of it.
This I think is sufficient to demonstrate the impossibility of that
pretended _favourable balance_, amounting, in the space of 75 years, to
162,774,769_l._ the existence of which many people imagine to be real,
from the statements of Sir _Charles Whitworth_: for, if they would
confine themselves to say, that, in the course of 75 years, _England_
has profited in trade to the amount of 162,774,769_l_. I have proved
much more, since I proved (p. 17 to 22) that all the benefits which have
accrued, and might now be spent, form together a solid mass of clear and
palpable savings; and that this mass would now be, without doubt, 332
millions, instead of 162, had the 180 millions, lent by the subjects to
government, and swallowed up by the war, been laid out in the improvement
of lands and industry.
As to the inference that might be drawn from the apparent exportation of
105 millions of money, during the same period, according to the above
statement, it is also necessary to make an observation on this matter.
In any grand mercantile operation, where prompt and certain remittances
are required, be the motive of such operations what it may; if there goes
out of _England_, we shall suppose, 400,000_l._ in bullion, this very
same bullion, after the bargain is struck and fulfilled, either in goods
or in bills of exchange, comes back to _London_, to resume if necessary,
the same course three weeks afterwards: For the space of 40 years,
therefore, the same sum may an hundred times be placed in the catalogue
of exports, and perfectly answer to a capital of 40 millions, the place
of which it has really supplied: This is a well-known resource; nothing
then can be concluded in regard to the 105 millions of bullion exported,
according to Sir _Charles_, but, that there ever has been, and probably
ever will be, in _England_ all the bullion necessary to answer the
exigencies of the most unforeseen and extraordinary negociations of all
kinds, and industry enough to recall in time, that bullion which had only
been given as a pledge. It is like a jewel worth 100,000 crowns, which,
for the space of 20 years, is said to have passed ten times backwards
and forwards from _Paris_ to _Amsterdam_, but finally remained at
_Amsterdam_, by a reason contrary to that which keeps up the commercial
shuttle between _England_ and _Holland_.
In order to come as close to the point as it is necessary, on a matter,
besides, of which it is equally useless and impossible to obtain an exact
knowledge, here follow some facts, the essential results of which by no
means depend on more or less exaggeration in the exposition either of the
sale, or of the credit.
The period from 1764 to 1773, must be allowed to have been the most
flourishing era of _Great Britain_. During those ten years the
exportation of _English_ merchandises into _Spain_, has exceeded the
importations from _Spain_ into _England_, by 5,095,998_l._ In the same
space of time, the balance of trade between _England_ and _Portugal_ has
been 3,274,133_l._ in favour of the former. The two _favours_ united,
amount all together to 8,370,131_l._; add thereto the _favourable
balances_ of _Madeira_, and the _Canary_ Islands, paid probably in
_Spain_ and _Portugal_, amounting, in the same space of time, to
516,863_l._—the total presents us with the aggregate sum of 8,886,994_l._
which, divided by 10 years, proves an annual balance, _in favour_ of
_England_, of 888,699_l._ real money.
The light of probability now begins to dawn upon me: at least I here find
myself at the source of money; and, as I know, first, that _England_
must absolutely be provided with a certain quantity of it, whatever that
quantity may be, for the five articles before mentioned:
Secondly, That she exports, of her own goods, fifteen times as much as
she need to do for that purpose:
Thirdly, That gold and silver are to _Spain_ and _Portugal_, what wines
are to _France_, silks to _Piedmont_, hemp and timber to _Russia_; and
that, in order to procure those different articles at the easiest rates,
they must be fetched from _France_, _Piedmont_, and _Russia_:
Fourthly and lastly, that _Spain_ and _Portugal_ stand exactly in the
same need of making away with the surplus of their gold and silver,
as _England_ does of acquiring it, by getting rid of a surplus of her
manufactures: I cannot therefore entertain the least doubt, but that it
is at _Cadiz_ and _Lisbon_ that _England_ procures all that gold and
silver which is indispensably wanted for the five operations spoken
of; and I must positively conclude, that there she has taken the whole
quantity which she had occasion for; but I as positively conclude,
that she took up only so much of it as was wanted, when I see that it
depended entirely upon her to take more, and that she has not done it:
A decisive point, which I cannot by any means call in question, when I
have convinced myself, by Sir _Charles Whitworth_’s statements, that
this sum of 888,699_l._ which _England_, if so disposed, might have
procured annually during the ten years above mentioned, is no more than
the balance of 1,785,826_l._ in goods exported there, one year with
another, during the same space of time:—For, after all, why should not
_England_ have taken _in money_ the amount of 897,157_l._ of _Spanish_
and _Portuguese_ goods, taken by her ships in return, were it not that
the value of money, as that of all other kinds of merchandise, is always
tyrannically fixed by the demand?
It seems, therefore, probable enough, that the money annually imported by
_England_, during the period aforesaid, does not exceed the 888,698_l._
of the balance which appears against _Spain_, _Portugal_, _Madeira_,
and the _Canary_ Islands: But here follows a strong conjecture, that
it is not so considerable as it appears by those accounts.—It is
an uncontroverted fact, that the article of exportation is always
exaggerated more or less; the man who first bethought himself of this
harmless cunning, fancied that his own importance would appear more
conspicuous to the nation, by reason of the quantity of goods which he
might seem to export: this is now the secret of the play-house, every
body knows it; but this practice is in a manner become necessary: one
must unblushingly raise himself above his level, in order to be thought
in his real place; the only way of deceiving in this respect, would be to
speak the truth; and, in this case, the deceit would fall on the deceiver
himself, and that just regard which the exporter has a right to claim,
would be lost to him: Add to this necessary artifice, which is no longer
a cheat, the usual mode adopted in regard to importation, the value of
which is always a little under-rated, but only a little, because there
might be some inconvenience in cheating Government to excess. With these
trifling modifications, I think _England_ will be found not much above
the _par_ of her _quota_, in the gold and silver imported from _America_.
Now, out of these 6 or 700,000_l._ in money, which I believe are really
and annually imported into _England_, what quantity is sent to foreign
markets,—not, indeed, before its value is considerably advanced by
the workmanship?—But, if this metal be so precious, why part with it
when once acquired? Why not employ the workman upon objects, the price
of which would have received a ten-fold increase by his labour? Why
should these continual prophanations of the sacred metal be permitted?
Why give encouragement to that kind of prostitution of gildings of all
sorts, which daily consume such quantities of gold? It is said, that
in _Birmingham_ alone, they consume 30,000_l._ worth _per annum_:—And
shall it be on a metal thus lavished away, shall it be on that pretended
balance, that _England_ will build her resources, and the security of her
creditors?—In what consists, then, the wealth of the nation, that wealth
which is truly independent of all circumstances, and which will ever be
superior to the national wants?
It consists in any sum whatever, money and paper currency, which is
required to keep in the utmost activity, 3,000,000 of cultivators,
3,000,000 of tradesmen, and 3,000,000 of other consumers, as
indispensable to realise the value of the objects by them consumed, as
the tradesman and cultivator are necessary to produce them:—And if any
question should arise on the number of inhabitants,
It consists in the number of men necessary to furnish annually exports to
the value of fifteen or sixteen millions:—And if it should be urged that
this exportation is over-rated,
It consists in the number of men capable of making up that quantity of
exports, which is annually required for a trading navy of 775,024 tons,
on the statement of which there cannot arise a single doubt.
It consists in a population necessary (which doth really exist, and could
not be dispensed with) to find, without any other inconvenience but a
momentary sensation, the 100,000 seamen of the royal navy, the 70,000
national soldiers, and the 3 or 400,000 artificers, and other persons
employed in every way, who, by the last war, were for some years taken
away, from their daily and useful occupations, some monuments of which
would probably have been transmitted to posterity, in order to their
being employed in all the accidental operations that were requisite to
carry on those destructive plans, which have left nothing but a sad
remembrance behind: _A remembrance, nevertheless, of which the most
allowable pride should allay the bitterness._
It consists also, perhaps, in that revolution, which must have been
effected in the mind of every intelligent _Briton_, by the demonstration
grounded on experience, of the impossibility of doing beyond a few
minutes, with a given number of men, more than that same number is
capable of effecting habitually, and without fatigue.
It consists in the impossibility of not doing, even to the end of ages,
with a given number of industrious men, all that which the same number
have executed during 80 years, not only without exhausting themselves,
but rather, on the contrary, still increasing their strength and wealth.
It consists, in fine, in the demonstration which will become daily more
palpable, that labour alone is the source of that wealth; that the more
the sum of this labour shall augment, the greater will be the increase
of riches; but that this same labour will not reach its last degree of
activity in _England_, till it is nearly in the same state in _Siberia_;
and that there is no great harm in an _English_ mechanic creating a
cultivator in _Siberia_, or even in _France_, provided a _Siberian_ or
_French_ mechanic, create a cultivator or mechanic in _England_.
_Reflexions on some private Balances of ~England~, both of the favourable
and disadvantageous Kind._
In the small number of disadvantageous balances, the necessity of which
is so grievous to _England_, I distinguish that with _Russia_, which,
in the course of the ten years above mentioned, amounts upon an average
to 825,212_l._ annually. This, in fact, is more than enough to swallow
up the 6 or 700,000_l._ of the favourable balance, during the same
period, against _Spain_ and _Portugal_, the only sources almost of the
precious metals; luckily the expence of _Russia_ in gold and silver is
ascertained, as it is every where else, first, by the quantity of coin
in circulation, a quantity always proportioned to the price, as well as
to the number of objects to be circulated; and, secondly, by the degree
of ease, riches, and pomp, which the generality of private faculties can
admit of, in the articles of furniture, plate, and dress: The introducing
of gold and silver, above the quantity necessary to answer those various
purposes, would, as the case is every where else, prove entirely useless;
for it can hardly be imagined, that so wise a Princess as the Sovereign
who now holds the sceptre of _Russia_, should think of hoarding up,
before her 20,000,000 of subjects be as rich, that is, _do produce and
consume as much as a similar population might produce and consume in
France or in England_: Now, to hoard up would be the infallible means to
prevent it. Let us now suppose, that the annual importation of bullion
necessary for the circulation in _Russia_, amounts to one half, or even
to an equality of what is wanted by _England_ for the same object:—It is
probable that _England_ contributes thereto no more than her proportion,
as the other maritime States, who, like her, are obliged to provide
themselves in _Russia_; and, consequently, the disadvantageous balance of
_England_ with _Russia_, can no more demonstrate that the former exports
there annually 825,212_l._ than the balance in her favour against
_Flanders_, clearly proved by the accounts of Sir _Charles Whitworth_,
can demonstrate that the above province is by her stripped of 521,201_l._
annually.
A publication truly interesting, would be a work containing a particular
account of the trade of each country, were it only such as that which Sir
_Charles Whitworth_ has given on _the trade of England_; but though such
a treasure is wanting, yet it appears to me, that to have a clear idea
of such a work, would be sufficient to foresee what would be the result
of it. All men are alike: one may therefore, without fear of deceit,
suppose in the merchants of every country, the same attention to swell
up the list of articles which pay no duty, and which give a trader the
petty consequence of a more considerable exportation; every where might
be found the same exactness, _in a contrary sense_, in regard to goods
liable to an importation duty; consequently the balance struck at last
would be in favour of the nation whose accounts should be then inspected:
but deduct from all those favourable balances, that which might have been
farther declared on the articles which are duty-free; add to the total
of the exports, what has been declared short of the true amount on the
objects which must pay; it would then be found that (the five articles
excepted) all is paid literally without having laid out any cash, and
that each nation is wisely reduced to the only real advantage of trade,
the _exchange of want against fancy, the exchange of one fancy for
another, or the exchange of one want against another want_.[4]
In fact, how can it be supposed, that a nation who should not sell to
one, or to six others, exactly as much as she has purchased from a
seventh, should not be, a little sooner or a little later, compelled,
either to give up a trade which she must support with real specie, or to
sell that at home for _five_ in cash, which fetched ten before? Is it not
evident, that a nation which should not purchase from one or six others,
as much as she sells to a seventh, must, sooner or later, find herself
in the necessity, either to hide her money under ground, or to lower its
value, so far as to sell at home successively for 6, 8, 10, and 20, that
which was sold before at 5? This would exactly have been the case with
_Russia_, had the annual balance of 825,212_l._ been effectually paid to
her in coin, either by _England_, or by those who stand on the debtor
side with _England_, and had the former put it into circulation, instead
of laying out the surplus of that balance in the purchase of goods from
six other countries, to whom the _English_ sold articles to a similar
amount: Now the _Russian_ trader does not in _Russia_ charge 20, for that
which, 50 years ago, was sold there for 5: the value of money is not
debased there, though _Russia_ has annually a claim upon _England_ for a
balance of 825,212_l._ and, probably, demands not less considerable upon
the other maritime powers; _Russia_, therefore, has cautiously avoided
receiving those different balances in coin.
Besides, money fetches but its price in _Flanders_, although, according
to Sir _Charles_, that province is indebted to _England_ in a yearly
balance of 521,201_l._—Nor is money worth above its price in _Germany_,
though the latter owes likewise to _England_ a balance of 924,709_l._
annually.—In _Ireland_ it goes for no more than its worth, though there
is another balance due by that kingdom to _England_, to the yearly
amount of 770,916_l._—Nor is it above its value in _France_, who owes to
_England_ an annual balance of 108,073_l._—Now, if money is every where
nearly of the same value, we must conclude, that there does not exist
a nation which has not found in her annual importations of gold and
silver, either considered as money, or as materials for some articles of
luxury, all that she stood in need of to keep up circulation, and provide
for that degree of luxury, which the _actual_ degree of her industry
_requires, as much as it allows_; in this case the final balance, deemed
unexact, that is, in _favour of England_, has, in fact, been kept
perfectly even. Each has sold here or there, as much as he has purchased,
and _vice versâ_; and the prejudice _England_ entertains on the necessity
of a _favourable balance_, has not, in practice, dazzled the eyes of the
merchant who carried on her trade: He has rejected the gold tendered to
him, when his profit upon it would have been but trifling, with as much
judgement as he has, with care, sought after such goods as could then
yield him a greater benefit.
_State of the Balance between ~England~ and ~Holland~._
Sir _Charles Whitworth_, in his _State of the English Trade_, rates the
annual balance due by _Holland_ to _Great Britain_, at 1,372,258_l._
upon an average of 10 years: This is the most considerable. There can
be no illusion, in regard to the effect this balance has upon the money
in _England_; it is well known that it does not increase it; nay, it is
thought that the debt due to _Holland_, lessens it annually, not only
by the whole amount of the _favourable balance_ which would revert to
_England_ were she not indebted to the _Dutch_, but of one million more,
which must be found to pay them off.
I have already said, and repeated, that in every circumstance where it
is necessary to borrow or to displace a capital, it is better to borrow,
even at 5 _per cent._ than to remove a capital which returns double
that sum; and that, on the other hand, it is more advantageous to lend
any sum abroad upon good security at 5, or even at 3 _per cent._ than
to lend the same sum at home, where it would yield only 2 _per cent._
or to bury it in the abyss of a Bank, whence nothing returns. Now what
proves that _Great Britain_ and _Holland_ are in this case with regard
to each other, is, that _England_ seldom or never opens a loan, but what
the _Dutch_ take a share in. What do they give for the purchase? Nothing
more than the surplus of the ordinary profits arising from a trade, which
they cannot extend sufficiently to employ the whole amount of their
savings. And why has this part of the _English_ loan been given up to the
_Dutch_ by the national capitalists? Because the latter could find in
their own trade, susceptible of a farther extension, a way of employing
their capitals to greater advantage, that is to say, of reaping a benefit
superior to the interest offered by the loan: How can this be doubted,
when we see that the loan falls into the hands of a small number of
merchants, who soon afterwards make over their debt? Would they transfer
it to any one, were not the interest it brings in, interest secured by
the nation, inferior to the ordinary profits of their commerce?
Therefore, if the balance due to the _Dutch_ is thought _burdensome_,
only in the supposition that it serves to pay _burdensome_ interests,
it cannot be looked upon in the same light, when the matter rests upon
a debt, by which the borrower clears a benefit superior to the interest
that he has to pay.—I shall present this question under another point of
view.
In the war which was terminated by the treaty of _Paris_, the most
considerable part of the debt contracted for its support, was acquired
by the _Dutch_: Why so? Because the _English_, carrying on, without any
opposition, an exclusive trade with every part of the world open to them
alone, found therein the opportunity of employing their capitals to a
far greater advantage, than that held out by government in the interest
of the loan. During the last war, on the contrary, the _English_, being
more narrowly circumscribed in regard to their commercial operations, by
a navy, the possibility of which they did not even suspect, much less
its real existence, and being kept more circumspect by a new system
which opened a free navigation to all the powers not involved in war,
thought themselves happy to find, in the national loan, an employment for
that portion of their capitals, which, from circumstances, was become
useless. The interests of the last debt are then due and paid within,
and by _Great Britain_; but will it be said, that _England_ would not
be so rich, were the 3 millions additional interest, with which she is
burdened, due to _Holland_, and had the _English_, instead of employing
their capitals, as they have done, in support of the last war, made use
of them in the same profitable manner as in the year 1755? had that
money, for instance, been laid out in the improvement of their waste
lands in _Europe_, _whilst Dutch cash should have fought against French
money, to determine how many European nations ought to be permitted to
carry to North America, the goods of the other parts of the globe_!
As to the full acquittal in money, _real_ and _effective_, of the
2,000,000_l._ interest, due to _Holland_ for her previous loan, it is
improbable, impossible, and useless.
_It is improbable_, because _Holland_, being already overstocked with
money, and carefully intent on getting rid of her surplusage in this
particular, at the first opportunity of placing it with security, would
still lower the price of it at home, were she to increase its mass; and
that, on the contrary, whilst _Holland_ takes in goods instead of money,
she keeps up the interest of the one, by securing to herself a benefit
upon the other.
_It is impossible_, because _England_ importing bullion from _Spain_ and
_Portugal_, to the amount only of one third, and being very cautious,
as observed before, not to import more than _one third_ of what she
owes to the _Dutch_, and this, not to pay them, but because this third
answers sufficiently to the five articles of which I have spoken
before;—_England_, then, cannot give to the _Dutch_ what she has not
received from another, and which she has not of her own.
_It is useless_, in fine, because all accounts whatever are balanced
with more ease, in the age we live in, by bills of exchange, than with
cash, and because the claims of _Holland_ are more naturally paid off, by
another debt due to _Great Britain_, for the produce of her exports to
some other parts of _Europe_, from whence the _Dutch_ carefully avoid, as
much as possible, to import any thing but merchandise.
But _would it not be better to owe nothing to foreign nations_? For to
this one point we ought to confine all the lamentations about _Dutch_
creditors.
The above question, so apparently simple, so readily to be resolved in
the affirmative, would grow perhaps more intricate, were it ushered in by
some previous queries, which might permit us to foresee the effect of the
national wish, when accomplished, if it could be obtained by the easiest
answer that could be given; for the case, no doubt, is not to examine,
whether it would not be better to have borrowed, without being obliged
to return, than to pay an interest after the money has been borrowed. In
the state of things, the question alluded to, to be fair and within the
pale of common sense, must mean nothing more than this: _Would it not
be better, that the proprietors of the two millions interest, paid to a
foreign nation, should make their residence in England?_ And in this case
it leads us, by degrees, to the following query: _Would it not be better,
if all and every man in the world, who has money to spare, should come to
spend it in London?_ Then indeed _London_ would be a dear place to live
in! And this is, methinks, the most dreaded effect arising from taxes.
_O ye, whose covetousness knows no limits but the bounds of the earth!
do ye pretend to be the sole inhabitants thereof?_ Can ye draw off the
capitalists of a country, without completing its ruin? Can ye effect its
ruin, without losing both that portion which the produce of your soil
secures to you in the produce of that nation’s industry, and the share
which the produce of your industry has secured for you in those of her
soil?
What then appears to me to be the result of this _fatal_ interest of
two millions due annually to _Holland_?—That the latter is essentially
interested, not in an increase of the power of _England_, who might
make a bad use of it; not in an increase of specie in _England_, which,
by lowering its value, must compel her to return that of the _Dutch_,
already so much disparaged in their country; but to a further extension
of the _English_ trade, or rather of the general commerce, which can
alone, by advancing constantly, and every where, the quantity and price
of the objects that are to circulate, increase in the same proportion the
necessity of the _instruments_ indispensable to every kind of circulation
and undertaking, and keep up in every part, _for the interest of Spain
and Portugal, as well as for that of Holland_, the value of the sign
intended for a general representation, which _Holland_ in her proportion
will ever have in greater plenty than all other nations, thanks to the
narrow limits of her territories, and to the manners of her inhabitants,
which, in all probability, are the consequence of that limitation.
_Balance of ~France~ with ~England~._
Of all the balances of _England_ summed up by Sir _Charles Whitworth_,
that which is most to be wondered at every where but in _Japan_ and
_China_, where foreign trade is but poorly encouraged, is the balance
between _England_ and _France_, these two nations being parted, as they
are, only by a simple brook.
The wonder cannot but increase, if we consider with what eagerness those
two countries are intent upon improving their trade.
The wonder will still increase, when it is observed, that the _French_
carry to the highest pitch their rage for _English_ modes, whilst the
_English_ experience the same kind of frenzy for _French_ fashions.
The wonder must increase still further, when it is observed, that the
same nations, in possession of the most active and most intelligent
industry, are also possessed of all the cash necessary to give an
additional activity to that _industry_, which might be required to carry
on a branch of trade, as it were, at their door, but which is neglected,
out of regard for old and absurd prejudices.
Still must the wonder increase, if it is observed, that a first capital
of 200,000_l._ laid out in that trade by the two nations, would occasion
in both, more work in cultivation, as well as in the arts, than
600,000_l._ which each of them might employ in a trade to _China_, if it
were possible to lay out such a sum upon it?
The wonder will be still greater, when we consider that, _by favouring,
with equal care, the imports and exports to and from one country into the
other, the two nations would, without the least inconvenience, acquire
the means of increasing the revenue of their customs respectively,
according to their wants, by agreeing mutually upon a tarif, which would
be rated upon the average of those wants_; a tarif, which the rest
of _Europe_ might adapt to its circumstances, if it were the general
intention to increase, every where, the revenue of the State and the
industry of the people, in a like proportion.
This is certainly what the two nations might have compassed. That which
follows, is what they have done.
In the year 1699 the exports of _England_ to _France_ amounted to
287,050_l._ and her imports from _France_ to 94,641_l_:—
In 1773, the period at which Sir _Charles Whitworth_ closes his
statements, the exports from _England_ were rated at 285,776_l._ and
the imports from _France_ at only 44,484_l._—On this the enthusiastic
admirers of the Balance _in favour_ bless their stars that their country
imports now 50,157_l._ less in _French_ goods, than it did in 1699, and
that, in order to secure this advantage, _England_ experiences no other
damage than that the _French_ are fallen in their imports from _England_
only 1274_l._ since the year 1699.
_Further Reasons why all Ideas of a favourable Balance in Money,
different from that which I have supposed, should be rejected._
_Great-Britain_ is not the only nation that claims a right to that kind
of _favour_, which would reduce all _Europe_, in all transactions, to the
use of paper-money; but I only speak of _England_ in this place.
Money is not hid under ground in a country where administration is
convinced, both of the impossibility of the people paying exorbitant
taxes, without proportionable riches, and of the impossibility of being
as rich as is requisite for the discharge of enormous taxes, when
individuals are compelled to appear less rich, that they may be less
burdened with imposts.
Money is not laid under ground in a country, where the smallest sum, as
it were, equally with the largest, may be placed most securely, till
the very moment, when, led by fancy or want, one may think well to
withdraw it, and which, from the time when it has been placed, to that
of recalling it, produces nevertheless a sure interest, which never
was delayed a single minute; an interest, which is a matter neither of
reproach nor of shame.
Money is not laid under ground in a country, where the reputation of
being rich exposes not the subject to an arbitrary taxation, nor to
demands equally ruinous, to informations, extortions, or at least to some
injustice in case of a refusal.
Money is not laid under ground in a country, where regard is the
appendage not only of wealth, but of credit also, which carries the
appearance of, and can procure the former.
Nor is money hid under ground in a country, where it shews the value of
a man as positively as that of a piece of goods; in a country, where it
is frankly said, _this man is worth a million_; whether this expression
be made use of to signify that the possessor of a million is, at least,
by the whole extent of that million, far from being guilty of meanness
and injustice, or that it be understood that nothing but the offer of
another million could tempt him to commit anything base or unjust. Money
is never buried under ground in a country, where it acts so essential
a part; it cannot then be its fate in _England_: all the money in the
possession of _England_ stands in full evidence; it consists,—1st,
in objects of private luxury, the quantity of which is by no means
extravagant;—2dly, in the mass of cash in circulation. Now this very
_mass_ is despotically determined by the number of affairs transacted,
and likewise by the prices and quantity of the property which is to be
circulated; yet this mass is, perhaps, in _England_ one half less than it
would prove any where else, supposing the same objects to be attained;
that universal _mobile_ is too justly appreciated there, to be lavished,
that is to say, to be _turned into cash_, beyond what is required to give
credit to the paper currency substituted to _cash_.
I shall therefore ask, In what public funds abroad the _English_
merchants vest annually the four or five millions of that pretended
_favourable_ balance in money, since they do not bury it at home?—There
might, it is true, still exist another resource; the general balance is
only the aggregate of all private balances.⸺But is it very certain that,
upon an average, the private balances of all the merchants in _Europe_,
who correspond with _England_, are annually charged by one fourth of
the amount accruing from that correspondence? For if the _English_ send
them 16 every year, and every year import only 12, their correspondents
are consequently indebted to them annually 4 more than they were the
preceding year.
The _favourable balance_, as it is commonly understood, is then a mere
chimera, which, if realised, would produce no other effect than to
advance, at some period or other, the price of a pound of bread to that
of a pound weight of gold; yet it results, methinks, from the exports
of _England_, almost trebled within a century, that each nation, with
whom the former has trebled her trade, has increased her own, at least,
by the whole amount of the balance due by her to _England_; for it is
beyond a doubt, that one must have three times more to sell, in order to
be able to purchase constantly, and pay three times more than he used
to do. But from this principle may it not be inferred also, that every
nation, wishing to increase her trade, is interested in an increase of
the commerce of all those with whom she means to correspond?—If, in
order to reduce into practice, if to establish on the most equitable and
most solid foundation, a system so truly advantageous to society, Nature
had nothing more to combat than private _cupidities_—they balance each
other. But how many national prejudices, how many maxims sacred to each
nation, how many absurd regulations, springing from those very maxims and
prejudices, is she not obliged to modify, as it were, underhand, in their
effects! What a number of smugglers does that good mother employ, for the
purpose of bringing all things nearer to that _equilibrium_, from which
many are still persuaded it is so very material to deviate!
_Equilibrium necessary in all things.—On the surest means of establishing
it._
It is a difficult matter to guard against a prejudice in favour of
liberty, when we consider, that, thanks to the freedom which has always
very generally prevailed in those parts of Science, wherein policy
disdained to restrain it, we have been taught to weigh air, before any
precise idea was obtained on the rule of proportion, which ought to
regulate matters of exchange. Every thing, in this last particular, is
even still merely mechanical; and perhaps if the matter were thoroughly
examined, it would be found that there is never too much, nor too little
in one of the scales of the balance, but from an effect of the means
devised to establish or preserve the Equilibrium. I do not pretend to
lay down, for an absolute principle, that the hand of man, like that
of the harpies, is only capable of poisoning whatever comes within its
reach, and that the wisest conduct would be, to keep it with care from
every thing that one should wish to preserve from corruption; such a
proposition would, no doubt, prove rather too general; yet one cannot
help observing, that there are but few countries where administration
has not often, owing to the grossest ignorance, or some principle of
injustice, or of a cupidity almost equally blind, restrained some very
lucrative _cultures_, to which the nature of the soil and of the climate
would have given a perfection that could be attained no where else; or
have not encouraged some costly produce, to which Nature refuses those
qualities which she liberally bestows under another sky.
Neither can one refrain from remarking also, that from those regulations,
and from many more of the same kind relative to manufactories, no other
effect can result than that of buying up at home, very dear, and often of
a bad or indifferent quality, that which might be purchased abroad of an
excellent kind, and at a cheaper rate, and which might be paid for with
the productions of the earth and industry, better suited to the climate
of the purchaser.
It is also observed, that, without the interference of administration or
of philosophy, the balance between want and the relative quantity of the
different productions of the earth, is always, upon a medium, admirably
supported by the sole interest of the cultivator, ever perfectly and
solely guided by the common demand for each of these productions.
It is also remarked, that a second balance, and a very necessary
one, between the mean price of those different productions, is also
mechanically established, on the difference of labour and of the
capitals, which the same cultivator lays out upon each of them, without
any other motive but that of employing with discernment, his hands and
his capital, to derive from them the greatest benefit. He never thinks of
restoring the equilibrium between the general prices, when the price of
the product A has fallen, and when a continued advance on the product B
invites him to multiply the latter, by transferring to its cultivation,
a more considerable share of his labour and of his capital. Nor does he
think of it, when laying out new supplies of labour and money if the
price of the product B keeps up whilst that of the product A goes on
increasing; he does not think of it; and yet, without any other reason
or motive than his own interest, he restores that necessary equilibrium.
Much less still does he think that an increase maintained in the price
of one object, without diminution in that of other articles, bespeaks
an increase of the general consumption, which soon must raise the price
of every thing. Nay, it is very probable that he will not take notice
that he _sells_ all his goods at a higher rate, and that he will soon
complain of the general advance in the price of all those which he buys,
because his interest is his only guide: but this interest is opposed by
that of industry; and from this clashing, in spite of the two opponents,
arises a new balance, more loaded, no doubt, than the first, but not less
necessary, not less equitable, and yet no one has meddled with it.
All these things may be easily observed; but what ought to be more
particularly attended to, and what is most overlooked, is the
impossibility of ascertaining the difference between the hand-labour and
capitals to which we owe the productions of the earth, the knowledge of
which is within the reach of every one, and the labour and capitals
to which we owe the productions of industry, in which the workmanship
of an article often constitutes the half, and sometimes 99 hundredths
of its value: it is a disadvantage against which agriculture cannot be
effectually protected but by a competition, which can be the result
only of the greatest freedom. The absolute _passiveness_, which, in the
above stated circumstances, is sufficient, on the part of Government, to
effect the greatest good, appears here indispensable, to avoid acts of
injustice. Why should the trading part complain of that _passiveness_,
whilst a number of cultivators, proportioned to that of the artisans,
produce in the State a revenue equal to the maintenance and support of
industry? Now the fact appears the more certain, as, upon the least
reflexion, one may be sensible, that if an epidemic disorder should break
out amongst the husbandmen only, and thus deprive cultivation of one half
of its proper number of hands, the survivors would not fail to increase
the price of their labour, and the farmer that of his farm, by so much as
would indemnify agriculture for the loss which she might have sustained,
and that the advance in her prices would fall off only in proportion
as the handicraftsmen without employment, by the uselessness of that
portion of the produce of industry, hitherto consumed by the cultivators
who fell victims to the disease, would themselves turn cultivators; an
operation which would soon restore the proper balance between the two
revenues, as well as between the prices of labour, from which all kinds
of produce originate. Let the effects of the disease be transferred from
the cultivators to the handicraftsmen, the same manœuvre will be played
off by those who preside over industry.
Should another reason be wanted to strengthen my argument in its
most essential part, I could adduce an incontestable fact, as little
controverted in _France_ as it is in _England_, namely, that in both
countries the whole of the landed property does not yield three fourths
of what it ought to produce.—Then, either the respective industry of
the two nations ransoms agriculture, and binds her up, without being
suspected of doing so, to that state of mediocrity to which she is
reduced; in which case, single out of your regulations, those which
favour industry at the expence of cultivation, and endeavour to expunge
them, since agriculture stands clearly in want both of hands and
capitals; or your industry and agriculture are neither of them nearly
arrived to that degree of perfection which they are calculated to reach;
that is to say, you have not the number of cultivators which your land
can nourish, nor of course, so many artificers as your land can maintain;
in this case also, revise your regulations; there is not one of them
which does not affect your agriculture in a direct or indirect manner; by
her you must begin: cultivators, unthinkingly and without regret, give
birth to a race of artisans;—it is, on the contrary, as it were in spite
of industry, and by a kind of reaction which she spares no endeavours to
retard, that cultivators are produced by artisans. _Never will industry
lay out a shilling upon the land if she can employ it in any other
enterprise._
But, would the inland trade, without which agriculture cannot subsist,
flourish, if foreign commerce should not be encouraged in a particular
manner? And were any circumstances whatever, combined together so as to
occasion such an alteration in the price of necessaries, as would deprive
industry of the proper means to support abroad a competition which cannot
possibly subsist but by an equality of means; would it not then become
necessary for government, to shew a special favour to commerce, intrusted
with the care of that competition? _The manufacturers, in all countries,
insist so forcibly on such a necessity! The ruling powers in every nation
are so convinced of the truth of the above maxim!_
This question, truly important, requires some details on the different
causes productive of the alteration in the prices.
Although I may often appear, in the following suppositions, to lose sight
of the revenue arising from industry, and pay attention to that of the
land only, we must not forget the mechanical principle, or rather the
force of Nature, who, sooner or later, in spite of all the subtilty of
man, keeps an exact balance between those two sources of national wealth,
and causes all the revolutions of the one to be unavoidably felt by the
other.
_Various Causes of the Alteration in the Prices._
As long as we shall suppose, in a country standing by itself, the same
products, the same consumption, the same quantity of money, the same
freedom, no reason can ever be assigned for an increase or falling-off in
the price of any article generally known, and of general use; but,
_Second Hypothesis_,
Let us suppose, that population is doubled as well as the revenue; no
alteration can certainly take place in the real value of things;—that
value will remain for each article, the same as it was before; that is,
_the sum of the labour requisite for the production of that article_:[5]
neither will the relative value undergo any change; the quantity of
labour known, or supposed, in two different objects of a certain
consumption, will remain, as at first, the sole criterion for fixing the
difference of value in the one and the other. The essential relation
of general correspondence between the wants, and the real resources,
remaining also the same, there can likewise be no real difference in
the situation of any individual whatever; if there are every where two
_consumers_ to one, the same increase will be found in the number of
_productors_. The only palpable, and unavoidable alteration, always
grievous when it is sudden, is that which, in the present hypothesis,
must have taken place in the nominal value, that is to say, in the
money-price of every thing; for the quantity of coin which was in
circulation, being always the same in that country, standing by itself
as we have supposed, and without mines, whilst the objects representing
the said quantity, had successively doubled, it had been indispensable,
successively, either by degrees, or by starts, to come to the point of
giving for 2 in money, that which could not be given before for less
than 4, or rather of denominating 4, that same quantity of money which
hitherto had been denominated 2.—If you look for a precedent of the
first effects of a disproportion too considerable or too rapid, between
the wants and the demands, or between the mass of coin in circulation,
and the number of articles to be circulated, it will be found, in the
revolutions which took place in _England_, during the space of two years
_only_, 1288, 1289, the quarter of wheat rose from 1_s._ to 2_s._ then
to 3_s._ 9_s._ 12_s._ came down again to 2_s._ was then raised all at
once to 20_s._ and fell at last to 16_s._ where it seemed to support
itself for some years (see the excellent _Inquiry_ of Mr. _Smith_, _into
the Nature and Causes of the Wealth of Nations_); this is the man truly
capable of dissecting, as it were, that subject, of which I can, at best,
but mangle the _epidermis_.
_Third Hypothesis._
To remedy the evil in such circumstances, how many expedients are tried,
which only serve to increase it! How many avowed depredations upon
pretended usurers, before the Sovereign boldly ventures to partake with
them in the public execration by ordering a re-coinage, which, under the
same denomination, will give but a part of the weight, or of the quality
of the former coin! Yet this cannot be avoided. But by ascertaining, as
we have done before, a two-fold increase in the revenue, and supposing
one million and a half to have been sufficient to the circulation of
the first revenue; if the Prince with his 1,500,000_l._ instead of a
coinage of three millions, should have struck only 2,400,000_l._—after
some fluctuation, the balance will be restored between the price or
nominal value of the negociable articles, and the quantity of money in
circulation;—but what had been sold for 5 heretofore, will then go for
4; the prices will have fallen one fifth, and the circulation will be
clogged:—But above all, it should be observed, that _no one will be the
poorer, notwithstanding the diminution of the nominal value_.
_Fourth Hypothesis._
If the re-coinage has been in the proportion necessary to re-establish
exactly the former facility in all the channels of circulation, the
former prices will return after the inevitable fluctuations; the quarter
of wheat, for instance, which at some period of the revolution, will have
been raised to 20_s._ will fall back to 5_s._ as it was at the beginning,
although the shilling contains only half the silver that it contained
at that time, 130 grains we shall say, instead of the 260 or 264 it
contained in the year 1300.
_Fifth Hypothesis._
Now let us suppose, what has happened in all countries, that the Prince
and his Ministers have laid hold of the opportunity, the former, to pay
the debts he had incurred in the time of national distress and confusion,
the latter, to procure a more rapid increase of their fortunes, and
that, with the 1,500,000_l._ supposed in circulation, they have struck
6 millions, instead of the 3 wanted to answer the real increase of the
revenues and of population;—certainly when the calm returns, 10_s._ will
be the price of a quarter of wheat, which sold for 5_s._ in the _first
hypothesis_;—a most decisive argument this, for the manufacturer to sell
at 8 that very cloth which went for 4, and an uncontrovertible ground
of right in the working people to charge 4_d._ for that which before
they performed at 2_d._—In these two points center all the practical
inferences in which any individual in the State can be concerned: yet the
shilling will contain only 65 grains of silver, instead of 260;—and if
the price of every thing be doubled, it is not on account of the shilling
containing only 65 grains in lieu of 260, since, upon this principle,
the quarter of wheat must have fetched 20_s._ instead of 10_s._—but it
is because, in all cases, there are two pieces of money to answer the
purpose of one, and that _it was necessary, in order that the second
might acquire one half of its former value, that the first should lose
that very half_.
_Sixth Hypothesis._
At this period, let it be supposed, that an epidemical distemper sweeps
off three-fourths of the inhabitants, and consequently takes away as
much from the revenue:—After the terrors usual in such cases, and a
score of prophecies, foretelling that Doomsday is at hand, yet will it
appear that the world is not destroyed: it will also appear, that the
epidemical disorder has not carried off the money, and that it would
be wrong not to make use of it.—The specie must of course, lose nearly
three fourths of its value if the whole should continue in circulation,
because 4 pieces will present themselves to do the office which 1 could
perform before the time of the distemper;—the quarter of wheat, at first
rated at 5 shillings, sunk to 4 in the _second hypothesis_, then sold for
10 in the _fifth_, will in the present one, rise up to 40, _without any
one growing richer or poorer for it; for_, most assuredly, _the price of
labour will have increased in proportion to that of its own produce_.
_Seventh Hypothesis._
The effect would have been the same, if, instead of the distemper just
supposed, the general enthusiasm on the discovery of a gold or silver
mine, had induced the Sovereign to add to the circulation three times the
quantity of specie which had hitherto been sufficient.
_Eighth Hypothesis._
In the supposition of an event the most opposite to that of an epidemic
disease, viz. of the revenue being increased one half, one third, nay,
three fourths, if you please, as well as the population; yet the mine
yielding a great deal above what is necessary to answer to an increase
in all kinds, and the Sovereign being resolved upon a recoinage of the
specie, on principles entirely different from the former, that is, by
preserving exactly the same number, standard, and denomination of the
coin; the number, because it is sufficient; the denomination, because
there must be one, and that it is indifferent which it bears; and the
standard, because there is no further danger in fixing it; but, by
advancing the weight of a shilling from 65 to 86 grains, there will
certainly be no alteration in the prices; the wheat will keep up at 40
shillings, and other articles in the same proportion;—and _none will be
richer or poorer for it_, although, at the price of 40_s._ the quarter
of wheat, they give, without hesitation, 3440 grains of silver for an
article for which they gave 650 only, previous to the epidemic disease,
or the opening of the mine, which has produced the same effect.
_Ninth Hypothesis._
When such revolutions are brought about by slow degrees, no one is
sensible either of the effect, or of the cause; but, at last, both are
attended to. Let us then suppose, that the generality of the people
reflect that gold and silver, considered as coin, derive all their value
from imagination;—that money is, strictly speaking, nothing more than
a medium adopted to facilitate the division and transport of all other
kinds of property;—that it is but a sign, the place of which may be
easily supplied by any other, which by general consent may be honoured
with the same distinction, or ordered for the same use;—that its value,
in this point of view, rises or falls unavoidably, according to its
quantity, _without influencing the intrinsic or relative value of the
articles it represents, a value constantly determined by the sum of the
labour that produces them_, just as their relative, _common_ quantity
follows, servilely and closely, the demand.—All these remarks cannot
prevent us from observing a value far more essential in gold and silver,
considered as metals susceptible of all the forms that can be useful,
or can please the eye, while the nature and texture of their parts
secure them from accidents equally disagreeable and dangerous, to which
all other metals are liable: we should not therefore be surprised, if
some reflexions, suggested by wisdom and humanity, were to lead us to
that point which first originated in the extravagance of ambition, and
the rage of politics; I mean, that, after having considered that no
manner of good was produced by that disparagement of coin, which always
resulted from its multiplication, and that the health of man was, on
the contrary, interested in putting to a better use those metals, the
quantity of which, being doubled in circulation, only served to double
the price of every thing;—we should not be surprised, I say, not only
that nothing was spared to encourage the goldsmith’s trade, but even,
that half of the coin was melted down, and transformed into plate, and
the _deficit_ supplied by a quantity of _paper-currency_, answering to
that of the coin thus employed; a _paper-currency_, which it would be
sufficient to distinguish by some mark or token agreed upon, to give it
in circulation, exactly the same properties as that part of the metals
which was transferred to a more advantageous purpose.
In regard to the danger of paper-currency increasing above the quantity
wanted, it is as little to be feared, and its superabundance would soon
be made as sensible by its effect, as that of a superfluity of coin.—If
you double the mass of money intended for circulation, how will you
prevent such articles as sold for 4 only, from rising to 8, or the
additional 4 from becoming useless?—And if paper-currency be in question,
how will you prevent the extravagantly-avaricious wretch, who envies
others the enjoyments he denies to himself, how can you prevent him, I
say, from observing that paper rots in the ground, and that to bury his
wealth he must exchange it for cash?—how will you prevent this want of
money, immediately felt, from destroying, without resource, the credit
which that mass of buried money had hitherto given to paper-currency? So
long, therefore, as the paper keeps up its credit, one may rest assured
that the public is not over-loaded with it. I shall, in the sequel,
venture some reflexions on the true cause of that part of the increase
in prices, which is attributed to the quantity of paper-currency in
circulation; contenting myself here with a recapitulation of what I have
just said on the different causes of the alteration in prices, according
to the foregoing hypothesis, by concluding,
First, That a nation which should rejoice in being possessed (for the
convenience of covetous individuals) of a _vortex_, into which they could
cast, at pleasure, without profit, but also without anxiety, an immense
treasure, which was the produce of the pains taken by so many useful and
industrious hands, would, in fact, only congratulate herself on being
possessed of the effectual means of robbing the present and succeeding
ages, of all the advantages that must have accrued from the use made of
that money, _in any part of the world_, where it might have produced,
and encouraged a new branch of industry, _the reaction of which would
have turned to the profit of the nation in possession of such ~vortex~._
Secondly, That a nation, which should rejoice in being the owner of an
immense quantity of coin in circulation, would, in fact, congratulate
herself on that want of credit which renders such quantity indispensable.
Thirdly, That as soon as government, in such a nation, should have
solemnly given up the right, supposed to be unalienable, of paying its
debts, from no other motive but that of extreme honour and benevolence,
the nation might then part with half her coin, and without impeding the
circulation, increase her enjoyments and her wealth, which can be nothing
more than _the total of her annual labour, together with the monuments
still subsisting of the labour of preceding years_: a total, which could
not but increase in the case now supposed.
Fourthly, That, in regard to the coin, the most wretched paper-factory,
assisted with that credit which is founded, not on kindness, but on
justice and interest, is far preferable to the richest mine in _America_.
Fifthly, That the difference in the real value between one article and
another, is only the difference of the labour which produces it; and
that _all regulation, tending to throw a veil on the quantity of labour
contained in one article, is unjust_; since it turns to the prejudice of
any individual in the community, _who is not the author of this unknown
labour_.
Sixthly, That the nominal price of the _essential_ article, to which
that of the others must finally revert and conform, fixed at first by
its proportion in the quantity of articles to be represented, and by the
divisions and subdivisions of the mass of money then existing for that
use, this nominal _common_ price will certainly rise or fall, constantly,
and _without the least inconvenience_, just as that first quantity of
coin shall cease to answer, by more or by less, to the quantity of the
objects of which it was calculated to transfer the property.
Seventhly, That, supposing it to be a fact, proved incontestably by the
mint-registers, and the average price at _Windsor_, that from the year
1300 to 1309, wheat, at its highest rate, was not above 7_s._ _per_
quarter, the shilling weighing 264 grains of silver, which made the
quarter come only to 1848 grains; that in the year 1551, the same sold
for 8_s._ the shilling containing then only 60 grains, which made it
exactly 160 grains _per_ quarter; and that the same sells now, I will
say, at 40_s._ the shilling containing 86 grains, which is 3440 grains
for a quarter of wheat; yet, from these facts no inference can be drawn
that could affect any individual whatever, unless it should be proved,
that money makes part of our food, or that it is impossible, at this
present time, to procure, with any _given_ labour, more or less wheat
than that identical labour could procure at that period.
Eighthly, That the _real_ difference between 1848 grains of silver, and
3440, which is perceivable between the prices of the years 1300 and
1785, would not even be sufficient, were it considered by itself, to
invalidate, or confirm this futile proposition, that the mass or stock of
money is nearly doubled in _England_; for we have already found, that,
supposing the case of an epidemic distemper, which would have carried
off three fourths of the people, and consequently reduced the revenue
in the same proportion, the price of every thing must have increased
fourfold, if the three fourths of the coin had not been buried under
ground; we have seen, on the contrary, that it has been possible to
withdraw from circulation half of the current cash, and make good this
substraction in a very advantageous manner, by introducing scraps of
paper in its stead, without making any alteration in the general prices,
or in the least affecting the circumstances of any one, poor or rich,
unless some collateral incident should intervene to bring about a change;
and the least reflexion will convince us, that the mass of specie might
be quadruplicated in a nation, without any material variation in the
prices, _if the sum of labour, and of its products, as well as of the
consumption, should augment proportionably_.
But, in stating that the only—the infallible reason for the variations of
_common_ prices in the foregoing hypotheses, is the change of proportion
between the mass of specie, or of the paper-currency which represents
it, and the articles of which the one, or the other, is to transfer the
property, there is no inconsistency in persisting to pretend that taxes
add to the former prices, both the amount of the impost, and the profit
due to the trader who advances it. But, in both cases the progress is
different: in the former, it is the quantity of the specie actually in
being which necessitates and fixes the prices; in the latter, it is the
necessary advance in the prices, that _necessitates_ and _fixes_ the
quantity of specie, or paper-money which is substituted to it.—Luckily,
as we have already observed, it has been enough for _England_ to find,
once for all, money to the amount of 5 millions sterling, (cash and
paper) for discharging to the end of time, the interest of a debt
computed at 238 millions, the same currency.—But upon a supposition
that the debt incurred by _France_, from the year 1774, should amount
to 15 or 1600 millions _tournois_, and the yearly produce of _French_
industry in all its branches, (at the common rate of 1775) be of
2,400,000,000_l._—the interest of 80 millions and upwards, to be paid for
such a debt, requires an adequate increase of taxes:—now, 80 millions
_tournois_ constitute about the 30th part of the annual revenue produced
by _French_ industry, the nominal value of which must be increased by
those taxes;—but as paper-money does not supply in _France_ the place
of cash, it has been, of course, necessary to augment by one 30th,
the mass of specie, which proved sufficient before the rise in the
prices, occasioned by the impost;—this mass, it is said, was rated at
2,400,000,000 of _livres_, the 30th part of which is 66,666,666 13_s._
and 4_d._ _tournois_, a very considerable sum indeed; but nevertheless
nothing more has been necessary, to prevent any inquietude on the
subject, than to procure that sum, once for all; and, _once for all
likewise_, to add thereto the effect of some re-actions, of which I
shall speak presently; nothing more, I say, was wanted to secure, in
an indefensible manner, the interest of a loan of 1500 millions, and
to secure it so as to raise in the minds of the holders of stock to
so immense an amount, no other apprehension than that of their being
reimbursed.
Some will say, perhaps, “this reasoning is frivolous, and founded on
the absurd supposition of a general combination, a kind of universal
conspiracy, in order to raise the price of every thing proportionably
to the _taxes_.” I know that such a combination, such a conspiracy is
impossible; I know that there is not in _France_ a single edict, nor
any particular act of parliament in _England_, to enforce, or even to
permit it; but I am sensible that such an act, and such an edict, would
be perfectly useless, when I see, that in either of those countries there
is not a rational being, capable of reflexion, who will not say, _Taxes
occasion a dreadful advance in the prices of every thing_: it is true
that the order is sometimes inverted, and then the cry is—_How cruel
it is that the price of every article is increased, whilst the taxes
diminish our means of purchase!_—But if every article rises in a due
proportion, we must conclude that there is no alteration in the state
of the balance; for if every individual in a nation buys up, every one
sells also, one his labour, another his wares, a third his corn; and if
every thing grows dearer, except the article you have to sell, you must
own yourself completely in the wrong: luckily the landed proprietors
are as little in the wrong as they possibly can be; for as often as
they renew a lease, they increase their rental, just as if they had got
possession of my _little_ secret, or as if there were _corporations_ also
in agriculture.—The agents of industry are still less liable to be in the
wrong, for all their operations are founded on the following rule:—_For
purchase so much,—for freight so much,—so much for taxes,—to these add my
commission or profit—The balance is so much, which I must be paid, as I
shall settle with the members of my corporation._ Besides, the commercial
part of the nation is too well persuaded how necessary it is to secure _a
favourable general balance_, to be mistaken in the means of equipoising
their private ones.
It is my opinion, therefore, that one may, without being a conjurer,
foretell that the last dreadful and convulsive shock, almost generally
felt all over the world, will finally, and in a very little time, end in
the loose remembrance of some thousands of hands having been, foolishly
enough, taken from their peaceable occupations, very favourable to
population, to employ them in forwarding destructive plans, to which
many thousands of men have fallen a sacrifice; one might also add,
thousands of depredations, some of which, the most pardonable in their
nature, have been punished at the gallows: perhaps even they will say
modestly in _France_, _We have reduced the English, but we were four
to one_—and then _England_ will proudly answer, _We have been reduced,
but we were only one to four_; nor would it be at all unreasonable to
lament, that the value of 4 or 5 millions sterling in gold and silver,
fatuously ornamented with the escutcheons of _England_ and _France_,
_to consolidate for ever the interest of 140 or 150 millions, which
constitute the last debts contracted by the two rival nations_, be
not humbly stamped with the puncheon made use of to mark the plate in
_London_ and _Paris_ ... but, to suppose that there will be in _London_
or _Paris_ a single carriage less! that _France_ will lessen her
importation of _English_ goods, or that the demand for _French_ wines
will be less from _England_—is an idea which cannot, in my mind, coincide
with that of a population and industry which, hitherto had sufficed in
both nations to answer all those different purposes; of a population,
I say, and of an industry, which will, in all likelihood, go on still
increasing every day, wherever they shall not be checked by the laws.
One of the most fatal effects that spring from that increase in the
prices, occasioned by the impost, is, as they say, the impossibility
to which a country is reduced, of supporting abroad the rivalship, the
competition of a nation less burdened with taxes, who of course can, they
say, undersell every thing.
Such is, in fine, the question which I thought the fastidious details
I have entered into, ought to preface, and might render of more easy
solution. But I request the reader to examine previously,
1st, Whether an accession of wealth, an addition of gold and money to the
circulation, would not increase the prices of every thing, as necessarily
as taxes must do it;—2dly, If that increase in prices, procured by
wealth, would not be accompanied with the same inconveniences in regard
to the supporting of a competition abroad;—and, 3dly, If the stranger to
whom we should declare ourselves compelled to sell him our goods dearer,
_because we are grown richer than the rival nation_, would not have
the same answer to give us, as if he were told, _that the cause of the
advance in the price is, our being loaded more heavily with taxes_.
If these three questions cannot be answered but in the affirmative, we
should then be obliged to suspect that there is something inexplicable,
ill judged, and not better grounded in the clamours which resound in
every part of _England_ on this subject; and this surmise might perhaps
incline the reader to peruse, without prejudice, what I am going to set
down, with no other view, than to find out some useful truths.
_On the Influence of the National Prices on the Sales in Foreign Markets._
The impossibility of a competition in trade with those who can afford
cheaper, _in money_, the articles which are to be the object of such
a trade, is so affirmatively maintained, and this principle is so
self-evident, when applied to two manufacturers in the same town,
circumscribed in their selling as well as their buying, within the
precincts of the same country, where the one should always procure for
3, what the other would have the stupidity to buy constantly at 4, that
it becomes pardonable (if one carries the examination no farther) to
admit of this idea, taken in a most comprehensive manner, as one of those
trivial truths, which are not worth being searched into. But I must own,
that my reflexions on the pretended necessity of keeping the commercial
balance constantly in _favour_, have made me rather circumspect in giving
credit to opinions the most generally received.
It will not be in regard to the situation of a country, which might
allege a difference of 7 or 8 _per cent._ in its prices, as an
insurmountable bar to competition, that I shall examine in what manner
that very competition might be established; I shall suppose a nation
in the 6th, 7th, and 8th _hypotheses_, wherein wheat is rated at
40_s._ _per_ quarter, by a series of revolutions in the coin, or a
multiplication of taxes, or by an increase in wealth; and I shall place
it in opposition to another nation, considered as paying few or no taxes,
and humbly consuming her wheat at the rate of 26 or 27_s._ the quarter.
In order to render the effects of the disproportion more sensible,
I shall further suppose, that the shilling in both nations equally
contains 86 grains of silver at the same standard.
Before these two nations be represented as vying with each other in the
foreign markets, I shall, in the first instance, examine, whether it
might not be possible to settle between them a direct trade, equally
advantageous to both; for if this be practicable, why should not the
competition be so likewise?—Is not the trade of each competitor a direct
one with the nation, in which he vies?—And if, in this case, there be a
sure and equitable principle for one of the competitors, why should it
not be so for the other?
_A necessary Principle of Trade, considered both as ~direct~, and ~in
Competition~._
In all imaginable suppositions, Commerce is nothing more than the
exchange of one want against another want, or of one fancy against
another fancy; or, in fine, of a fancy against a want. All idea of a
commerce between two nations, as between man and man, carries with it
two objects different in their nature, or their form; and the relative
value of these objects must essentially be previously determined by some
general principle, if we mean not to transact business in the dark.
Now, the nation so rich, or, in other words, so over-loaded with money,
as to have raised, at home, the quarter of wheat to 40_s._ can certainly
have no real interest in taking away the small portion of the other,
so scantily provided, that she is obliged to sell for 24 or 27_s._
that which fetches 40_s._ to the former; for, after all, what would be
the consequence of this spoliation? It would serve only to lessen, in
the opulent country, the value of the precious metal already so much
disparaged there. What then will be the case, if both have sense enough
to prefer real enjoyments to chimerical possessions, or rather, profit to
loss?
After the first years, destined, since the establishment of Societies,
to be spent in endeavouring, if possible to cheat each other, it
will certainly become indispensable to agree upon a fixed rule of
appraisement, as unexceptionable for one country as for the other. Now,
in the supposed state of the question, money cannot be that rule; for
one of them demands none, and the other is not willing to part with any,
not out of regard for the _favourable balance_, but because she would
get less by the exportation of her money, than of her goods; it will
therefore become necessary, for the respective advantage of the parties
concerned, to agree, that the labour of 10, of 100, of 1000 men in one
country, shall be looked upon as repaid by the labour of the same number
of hands from the other, upon a tacit proviso nevertheless, that the
respective merchants in both nations shall have it in their power to
ransom their countrymen, according to the proportions established in both
countries, _a little_ by the degree of estimation in which commerce is
held, but a _great deal_ by the degree of foreign competition by which
the natives are or will be kept or called to order.—And what is required
to prevent any injustice, and, above all, any mistrust from the merchant
of one nation towards the merchant of the other?—Nothing more than to
follow the practice almost generally established all over _Europe_.—The
merchant in _Rome_, I suppose, will send his son to his friend in
_London_, and _vice versâ_. Now if the _Roman_ perceives that in
_London_, where a quarter of wheat costs 40_s._ the article he proposes
to buy is commonly sold at 80_s._ he will readily conceive, without
having gone through a course of algebra, that some other article, which
is bespoke of him in exchange, going for 54_s._ in _Rome_, where wheat is
at 27_s._ _per_ quarter, he will exactly pay, value for value, according
to the balance and weight of the commercial sanctuary, the 80 of _London_
with the 54 of _Rome_.
It appears to me that matters thus settled, might remain so for ever,
without inconvenience, without any alteration of prices, in either of
the two nations, had not Nature, either from mere caprice, or to make
men, in spite of themselves, dependent on each other, and oblige them to
look on one another as brethren, established certain unknown rules, in
consequence of which, that very same wheat, which would cost only 26 or
27_s._ at _Rome_, we have supposed, and 40_s._ in _London_, this same
wheat I say, the staff of life all over _Europe_, every where accounted
the standard of labour, and every where cultivated in proportion to its
common necessity, is at times nevertheless at one place in great plenty,
and very scarce at another. Now it seems to be a matter of perfect
indifference, that in regard to any other article a merchant should
ransom his wealthy fellow citizen, a landed proprietor, by charging
him, for instance, 30 crowns for an _English_ trinket, originally
purchased for no more than 10, as an equitable measure between labour
and labour: it is the younger son who robs the elder brother, to provide
against the right of primogeniture; or, in other words, it is no more
than the transferring of a few crowns, from a very valuable hand, that
of the consumer, to another equally precious, that of an agent of the
production: but it is of the utmost consequence for the Sovereign, that,
in a time of scarcity, insatiable men, were they even his subjects, do
not presume to ask 4000 grains of silver for a quarter of wheat, upon
pretence that in _England_, from whence it was imported, they have paid
for it 3440 grains, (for it is always upon such _victorious arguments_
that the national monopolist endeavours to defend his extortions, in
times of distress); the difference is so great between 4000 grains
of silver, and only 2200 or 2300, the common price by which that of
labour is regulated in my hypothesis, that all the treasure shut up
in the castle of _St. Angelo_ could not prevent half the inhabitants
from starving for want of food in a time of dearth. Luckily, however,
this misfortune may be obviated by one of the grandest operations in
finance, that can possibly be conceived; for the object is no less than
to oblige the people to pay in good earnest for their wheat in a moment
of scarcity, at the rate of 4000 grains of silver _per_ quarter, a price
so far above the means of that very people, to whom the intention is to
shew some favour. This financiering operation is founded on the following
remark, obvious to the meanest capacity, and perhaps not unworthy of
being deeply searched into by a judicious observer.
Were the wheat in _England_ to cost only from 26 to 27_s._ _per_ quarter,
the landed revenue, now called 63 millions, would, in fact, amount to no
more than 42; this cannot be controverted: in this case every thing would
be paid for in proportion, and certainly no one could gain or lose by it:
therefore if we invert the proportion, _i. e._ if the quarter of wheat
rise to 40_s._ at _Rome_, instead of 27_s._ and the other productions
of the earth and of industry rise in price in the same proportion,
as well as the labour by which they are procured, the revenue of the
Ecclesiastical State, which, in the present supposition, would be only
10 millions sterling, would swell suddenly up to 15 millions, without
any one being a sufferer.—When the question is, only to take a _nominal_
share in the most dreaded effects of the _English_ taxes, in order to
procure such an addition of wealth, and get rid, at the same time, of all
fear of scarcity, it would be very wrong to reject the expedient.—Money,
it is said, is wanted to carry on the whole circulation at that
rate;—but, in _England_, where, by a single nod, they attract money
from every part of the globe, do they not make guineas with paper?—Why
should they not, at _Rome_, make as many paper-crowns as are necessary to
facilitate a general circulation of the products there? These products
are so wisely raised in price from 27 to 40_s._ that the number of grains
of silver necessary to purchase a pound of wheat, made into a loaf, being
now nearly upon an equality in _Holland_, in _France_, and at _Rome_, the
national trader, whose business it will be to guard against scarcity,
_and the foreign merchants who will be invited to concur in remedying
the evil_, will no longer be able to add to the price of wheat, any more
than a reasonable compensation for his advance, trouble, risque, and the
quality of the service rendered: a compensation besides, on the extent
of which it will be much more difficult to impose upon the Sovereign, or
any one else, at least beyond a certain degree: to this advantage let us
add that of keeping the needy from the thoughts of destroying that wealth
which has been gleaned by former services.
In regard to the confidence necessary to favour that paper money, with
the same degree of value as that of _England_ has obtained, I confess
that I do not hesitate to suppose, that the paper-money of a Sovereign is
never deemed contemptible, but when an opinion prevails that he himself
will despise it; and I dare say (were I to be charged with a want of
modesty) that the public is too deeply interested in the inferences that
may be drawn from my arguments, for their consistency or absurdity not
to be very soon demonstrated: now, supposing them to be consistent,
I think it would be, _then_, beyond all possibility, even to imagine
a circumstance wherein the interest of a Prince could induce him to
dishonour himself. This great truth, generally acknowledged, could not
long remain ineffectual.—But this is not the matter in point.
The case in point is, to observe,
First, that, in the same manner as foreign coin is resolved into the
quantity and standard of the metals that compose it, in order to know how
much of the national coin may be given in exchange, just so all kinds of
foreign commodities are resolved into the quantity of labour contained
in them, or supposed to be so, that the quantity of national labour,
corresponding thereto, may be ascertained:
Secondly, that therefore, labour alone being the standard of value,
_labour_ is consequently the only _standard_ that can regulate the
exchanges between one nation and another:
Thirdly, that the national prices, or, to speak more properly, money is,
in fact, the most proper standard of labour between two manufacturers
in the same town; and that nothing but the misconduct and unrestrained
cupidity of the one, can prevent him from selling his goods at the price
by which the other clears a profit that satisfies him; but in each
country the common price of labour being arbitrarily determined by the
common price of the materials necessary to set the labourer at work, the
common price of wheat is, in fact, the measure of the common price of
labour in all nations:
Fourthly, that it is impossible a nation should be willing to barter a
greater quantity of its own labour, against a less quantity of the labour
of another; _and yet it is to such a degree of absurdity, that we must
reduce the supposed ~advantage~_ of the _dreaded_ competition:
Fifthly, that the liberty of exporting corn, even under its present
restrictions, makes, as it were, of all _Europe_, at this day, _only_
one family; that, on the whole, there is constantly as much of that
indispensable commodity as is necessary for all the family; but that
a man whose folly would be to trace out, describe, and acknowledge,
throughout every thing that concerns society in any essential point, the
stamp of an universal benevolence, determined to unite all men together
by their wants and interests if it is impossible to do it by more
disinterested motives, would not prove too inconsistent in a fit of that
folly which might induce him to suspect some marks of that stamp, even
in the bad seasons, in the storms which successively visit all the parts
of the world, make them all sensible of the necessity of such union,
and soon bring nearly upon a level, all the different prices of that
indispensable commodity, the cultivation of which requires, almost every
where, the same labour, or which, by its quantity, always answers, upon
an average, to the labour bestowed upon it:
Sixthly and in fine, that hence results the impossibility that there
should long subsist, in the prices of any thing, a difference capable of
making any competition whatever, formidable _to any man who will not be
so unjust as to wish and ask beads of gold for beads of glass, or, in
other words, to try in bartering, to obtain the labour of 150 in exchange
for that of 100 only_.
Let us suppose, nevertheless, that there should exist at this day, a
nation pretending to be formidable in her competition, and who should
only be, in fact, remarkable for her folly, that is to say, a nation so
very blind, as to endeavour to keep the price of her wheat under that of
all other countries; I agree that the labour of her artisans would be
rated in consequence, and that the produce of her industry might thus
be purchased at a lower rate than that of any other nation:—but what
advantage could she derive from thence in a competition abroad?⸺Though
she should denominate at home the sum of her exports, only _one million_
for instance, because she would call 100, the quantity of wheat, which
elsewhere would be called 150, how could she require less for her
returns than the other countries, who, by the price of their wheat,
would be compelled to call 1,500,000 that which she herself would call
1,000,000?—Would not this million represent, as really, the labour of
75,000 of her workmen (their families included), as if it were by her
denominated 1,500,000_l._?—Besides, the place where she has carried her
goods is not the end of her voyage; and it is so much more necessary
for her to obtain in return the produce of 75,000 labourers (families
included), adequate to what she herself has given, as being obliged to
carry those returns home, where every thing sells, in the _hypothesis_,
50 _per cent._ below the price they would fetch any where else, she
would lose in lowering the rates of her exports, all the fruit she might
expect to reap from her voyage.—This is what escapes observation. They
see nothing but money in commercial operations, instead of observing
that all the nations in _Europe_, neither do nor can require, and that
_England_ herself does not preserve more of it than _the sum necessary
to answer those five articles_ of which I have spoken in examining her
balance: I shall in the sequel bring some proofs, in addition to those I
have already given; but I think I have said enough here, to justify me
in _insisting_, that the competition can be dreaded by the unjust man
alone, by that man who wishes to sell the labour of 100 workmen as if
it were the labour of 150, and by that man, not less unreasonable, who,
compelled to sell his own goods 10 _per cent._ dearer, should refuse to
pay also 10 _per cent._ dearer for the foreign goods which he would ask
in exchange.—If that principle—a principle of the strictest justice, is
still unknown in _Europe_; as an _American_, I glory that it is not so in
_America_.
_Reflexions on a Letter from ~Philadelphia~, inserted in the ~English~
News-papers._
A Merchant of _Philadelphia_ offers to his former _Jamaica_
correspondents, (see _Morning Chronicle_ and _London Advertiser_ of June
24, 1785) to serve them, with all such articles as they may require, at
the current price of _Philadelphia_, only with the addition of freight
and the usual commission. In order to render his proposal unequivocal,
he mentions staves, and makes a calculation, by which it appears that
he could not land them in _Jamaica_ for less than 12_l._ 19_s._ 1½_d._
currency per thousand; he then adds:
“By this calculation it appears, that staves would come considerably
higher than they used to be in _Jamaica_ before the war: it is true they
are so, but it is owing to their being risen at _Philadelphia_ nearly 100
_per cent._ Of _course_, _Jamaica_ prices must be in proportion; _for it
would be unreasonable_ to expect goods of _Jamaica_ at the old prices,
when those of _America_ have advanced so considerably.”