Chapter III: Part 3

The state-creditor stands in a far more disagreeable predicament; he cannot even suppose, on his part, an intention hostile to the general good. Whoever lends to the State, knows that the latter cannot pay the interest it submits to, but by taxes, which, in the long-run, affect every thing alike; and that one must cease to be a consumer, if he would forbear coming in for his share. Now, whilst the exigency of the State requires fresh loans, and course additional taxes, whoever advances of the stock, the interest of which is paid by means of those very taxes, cannot entertain any hopes of avoiding their effect, unless it be for a short period, which depends entirely on the adopted scheme of finance. Some of these schemes extend, others shorten the round such taxes must go through, before the burden falls equally on every shoulder, _and becomes null by its universality_. I say _null_, all injustice set aside, which is inseparable from some sorts of taxes, of which I shall speak hereafter; but, I add, _strictly null_, even in regard to the lender, although the price of every article be raised, whilst his revenue alone continues on the same standard. And I ground my opinion on the following reason, which appears to me unanswerable: The difference between the interest of money, and that of landed property, is always a sufficient indemnity to the monied man for the rise, occasioned by the taxes, on the prices of the produce of land and industry; but _nothing can compensate the landed proprietor for that pretended increase of wealth called Money, or that supposed poverty known by the name of Taxes, but a proportionable increase in the price of his goods_[3]. A word more on the lender. One may take the part of that important individual, who accumulates those savings by which the State is to profit. It is allowed, I say, to support such a man even against the State, when the State attempts to reduce him by an useless reimbursement, by an _unnatural_ operation; but he should be assigned his real rank in the State, that he may not complain of the _natural_ reductions. In this case, I think, we should be more just, more humane, and more equitable, than Mr. _Hume_, when, in the continuation of the scheme of national loans, he offers to the posterity of the present owners of landed estates, no other prospect than that of serving, as coachmen, the descendents of their footmen, and no other means of averting the prophecy—but _a bankruptcy_. (_Vide_ _Hume’s Public Credit_, Essay IX.)

_Reflections on the two foregoing Articles._

If it were very true, though upon the first blush rather strange, that after an operation so simple as that of increasing the price of the whole mass of commodities, or rather suffering it _naturally to increase_, in proportion as the taxes and the effects produced by them enhance the price of all the products of industry, which are to bear those taxes—were it true, I say, that after so plain, so simple an operation, it would suffice, in order to secure for ever, in the most efficacious manner, the payment of the interest on any given national debt whatever, to find, _once for all_, in cash and paper, a sum which would exactly be, to the mass of the specie and paper already in circulation, as the interest of the debt, and the reactions of which I shall speak in the sequel, are to the mass of the two revenues—were it equally true, that those who are to be paid that interest, should, _after these two previous data_, have nothing in the world to dread but the reimbursement of a principal, the interest of which should appear so oddly secured, it would then be impossible not to confess, that _England_ has hitherto been a prey to great uneasiness, with very little foundation.

It would then be necessary to conclude, that all other nations were greatly in the wrong to think that _England_ had any reason to be alarmed.

It must, in this case also, be acknowledged, that _France_, in 1720, very unreasonably cut asunder the _Gordian_ knot of her difficulties, by declaring in substance that she owed no longer 15 millions _Tournois_ of the debts which she had contracted; since, without so barbarously cutting the knot, and thereby effecting the ruin of thousands of wretched beings, she would have secured their fortune by imposing without mercy, or rather with judgement, a tax of 75 millions on all the produce of industry, which this tax would not have raised by one twentieth part; whilst an _Arrêt_ from the council, permitting _then_ the exportation of grain, which was not allowed till 50 years after, would have proved more than sufficient to enhance, as it must have done, the price of commodities, in order to make amends to the landed proprietors for the increase which they would have found in the products of industry.

Above all, it would be necessary to admit, that no minister, in any country, could, for the future, without a horrid perverseness, without a want of judgement bordering upon insanity, propose, neither all together nor separately, expedients as shameful as they would prove useless; and that no individual could hereafter dread such measures, without being guilty of folly. What a security, then, for the Subject! what an advantage to the State! what a _facility_ for Administration!

Under this point of view, the idea I start deserves to be examined; but I once more entreat the reader not to pronounce finally upon it, until it has undergone the full exposition which I propose to give it. Nor shall I think I have written in vain, if I succeed only in making it appear so feasible, as to induce some abler hand more deeply to investigate it. Where is the man who would not wish to find it true? where is the man who could have an interest in finding it otherwise? I confess, perhaps to my shame, that it has engrossed my attention for a long series of years; I apply it to every thing, I square it with every thing; and the more I consider it under all the suppositions which my fancy suggests, the more I compare these suppositions with all the facts which it is possible to ascertain, and which seem to bear any relation to the subject, the more am I convinced, not only that the matter stands thus, but even that it is impossible it should be otherwise.

In fact, if I return to _Great-Britain_⸺

It would be absurd to suppose, that the taxes necessary to discharge the debt incurred during the late war, exceed the twentieth part of the value of the products both of foreign and national industry, consumed within the country. In this case, is it not impossible that the additional tax of a twentieth, in whatever manner it may be assessed on the mass of those products, should not enhance, by a twentieth, the value of this very mass? Let us call it a fifteenth; all kind of reaction included.

Is it not impossible that this additional fifteenth on the price of the products of industry, be not followed, sooner or later, by an equal augmentation on the productions of the earth, unless the proprietors of land should submit to diminish, by one fifteenth, their own consumption,—the home consumption (_the only one that secures the prosperity of the State_) and diminish it, in order to increase, by so much, the exportation, according to the ideas commonly adopted which would be as contrary to the facts that I shall adduce hereafter, as it would prove hostile to the interest of the State, to the interest of the proprietors, and would operate in direct opposition to the spirit of the tax, _which is certainly to produce its own amount, without taking the trouble, every year, of going in search of it to ~Lisbon~_.

Is it not impossible that the augmentation of one fifteenth, upon the price of every produce in circulation, should require any thing above an additional fifteenth, in the sums which had been hitherto sufficient for _brokerage_, and the transports of all kinds of property?

Is it not impossible that this fifteenth, both in new specie and paper currency, once obtained, the interest of the latter part of the debt should not be very firmly established, _funded_, without any one being the worse for it, _if the price of labour increases like that of its produce_?

Such, I repeat it, such will be, in the last analysis, the result of the underworkings of nature; of nature, ever more slow, but ever more skilful in repairing evil than men are in creating it; of nature, who, as good at all times as the bread which she breaks to her children, fills up without intermission, incessantly levels, behind them, and unknown to them, whilst they are amusing themselves or playing tricks upon each other, all those little furrows which they imagine will be left to the care of their posterity.

Some one, no doubt, will exclaim against this additional fifteenth upon the prices of every commodity; an augmentation which I have represented as the only remaining trace of a war, which, for five years, attracted in both hemispheres, the eyes of all whose brains were not heated by it. I shall grant therefore that it was necessary to add thereto,

First, the trifling difference which must result from the impossibility of a thorough good understanding between the interested parties, together with the intention, not very liberal, but natural enough to each of them, of gaining more than they can lose.

Secondly, the difference, perhaps more sensible, which must follow the method so much boasted, of taxing in preference, those objects which are consumed by the rich; as if it were possible to apply to any object, an extraordinary portion of a given revenue, without taking off that very portion from some other article, the consumption of _which is equally necessary to the subsistence of artizans of another kind_.

Thirdly, and in fine, the far more considerable difference which must be produced, _especially in England_, by another kind of taxation, of which I shall speak hereafter.

Nothing contributes so much to render a question undeterminable, as to perplex it with a multitude of accessaries, each of which would require a separate dissertation; consequently, nothing can render the solution easier than to reduce it to the smallest compass. Some other person will, no doubt, do much better, what I can do only according to the extent of my abilities; nor did ever an author peruse his own work with more pleasure than I shall read the production of any one who shall throw the light of evidence where I can only form surmises. But if it be true, that after a short space of time, without any other assistance than the natural clashing of one interest with another, taxes, _judiciously laid_, are hurtful neither to individuals nor to the State,—would it not be better to labour with care to _lay them judiciously_, than to think of a reimbursement, the only effect of which will be to diminish, for a short time, amongst some individuals, the power of paying those very taxes?

I beg permission to add a word more on this fatal reimbursement.

_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~._