Part 11

It seems, therefore, probable enough, that the money annually imported by England, during the period aforesaid, does not exceed the 888,698l. 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 700,000l. 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 30,000l. 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 825,212l. annually. This, in fact, is more than enough to swallow up the 6 or 700,000l. 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 825,212l. 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 521,201l. 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.

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 825,212l. 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 825,212l. 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 521,201l.—Nor is money worth above its price in Germany, though the latter owes likewise to England a balance of 924,709l. 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 770,916l.—Nor is it above its value in France, who owes to England an annual balance of 108,073l.—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 1,372,258l. 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 2,000,000l. 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.