that the English goods which were sold to
Holland would be sold so much cheaper, and
the Dutch goods which were sold to England
so much dearer, by the difference of the exchange:
that the one would draw so much less
Dutch money to England, and the other so
much more English money to Holland, as
this difference amounted to: and that the balance
of trade, therefore, would necessarily be
so much more against England, and would
require a greater balance of gold and silver
be exported to Holland.
Those arguments were partly solid and some
partly sophistical. They were solid, so far as
they asserted that the exportation of gold and
silver in trade might frequently be advantageous
to the country. They were solid, too, in
asserting that no prohibition could prevent
their exportation, when private people found
any advantage in exporting them. But they
were sophistical, in supposing, that either to
preserve or to augment the quantity of those
metals required more the attention of government,
than to preserve or to augment the quantity
of any other useful commodities, which
the freedom of trade, without any such attention,
never fails to supply in the proper quantity.
They were sophistical, too, perhaps, in
asserting that the high price of exchange necessarily
increased what they called the unfavourable
balance of trade, or occasioned the
exportation of a greater quantity of gold and
silver. That high price, indeed, was extremely
disadvantageous to the merchants who had
any money to pay in foreign countries. They
paid so much dearer for the bills which their
bankers granted them upon those countries.
But though the risk arising from the prohibition
might occasion some extraordinary expense
to the bankers, it would not necessarily
carry any more money out of the country.
This expense would generally be all laid out
in the country, in smuggling the money out of
it, and could seldom occasion the exportation
of a single sixpence beyond the precise sum
drawn for. The high price of exchange, too,
would naturally dispose the merchants to endeavour
to make their exports nearly balance
their imports, in order that they might have
this high exchange to pay upon as small a
sum as possible. The high price of exchange,
besides, must necessarily have operated as a
tax, in raising the price of foreign goods, and
thereby diminishing their consumption. It
would tend, therefore, not to increase, but to
diminish, what they called the unfavourable
balance of trade, and consequently the exportation
of gold and silver.
Such as they were, however, those arguments
convinced the people to whom they
were addressed. They were addressed by merchants
to parliaments and to the councils of
princes, to nobles, and to country gentlemen;
by those who were supposed to understand
trade, to those who were conscious to themselves
that they knew nothing about the matter.
That foreign trade enriched the country,
experience demonstrated to the nobles and
country gentlemen, as well as to the merchants;
but how, or in what manner, none of
them well knew. The merchants knew perfectly
in what manner it enriched themselves,
it was their business to know it. But to know
in what manner it enriched the country, was
no part of their business. The subject never
came into their consideration, but when they
had occasion to apply to their country for
some change in the laws relating to foreign
trade. It then became necessary to say something
about the beneficial effects of foreign
trade, and the manner in which those effects
were obstructed by the laws as they then stood.
To the judges who were to decide the business,
it appeared a most satisfactory account
of the matter, when they were told that foreign
trade brought money into the country,
but that the laws in question hindered it from
bringing so much as it otherwise would do.
Those arguments, therefore, produced the
wished-for effect. The prohibition of exporting
gold and silver was, in France and England,
confined to the coin of those respective
countries. The exportation of foreign coin
and of bullion was made free. In Holland,
and in some other places, this liberty was extended
even to the coin of the country. The
attention of government was turned away
from guarding against the exportation of gold
and silver, to watch over the balance of trade,
as the only cause which could occasion any
augmentation or diminution of these metals.
From one fruitless care, it was turned away
to another care much more intricate, much
more embarrassing, and just equally fruitless.
The title of Mun's book, England's
Treasure in Foreign Trade, became a fundamental
maxim in the political economy, not
of England only, but of all other commercial
countries. The inland or home trade, the
most important of all, the trade in which an
equal capital affords the greatest revenue, and
creates the greatest employment to the people
of the country, was considered as subsidiary
only to foreign trade. It neither brought
money into the country, it was said, nor carried
any out of it. The country, therefore,
could never become either richer or poorer by
means of it, except so far as its prosperity or
decay might indirectly influence the state of
foreign trade.
A country that has no mines of its own,
must undoubtedly draw its gold and silver from
foreign countries, in the same manner as one
that has no vineyards of its own must draw
its wines. It does not seem necessary, however,
that the attention of government should
be more turned towards the one than towards
the other object. A country that has wherewithal
to buy wine, will always get the wine
which it has occasion for; and a country that