Part 14

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 40s. 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 27s. 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 40s. 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 27s. that which fetches 40s. 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 40s. the article he proposes to buy is commonly sold at 80s. 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 54s. in Rome, where wheat is at 27s. 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 27s. at Rome, we have supposed, and 40s. 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 27s. 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 40s. at Rome, instead of 27s. 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 40s. 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 1,500,000l.?—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 12l. 19s. 1½d. 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.”