Part 7
It will be asked, perhaps, if I pretend to infer at last, that the exportation has not been so considerable as it ought to be supposed from the statements of Sir _Charles Whitworth_? I shall answer to this, as to many other queries; it may now be seen that a few millions more or less, are a matter of perfect indifference, in regard to my main object. The exportation from _England_ is clearly prodigious; its immensity is proved by that of the tonnage of the shipping employed for her trade, 775,624 tons in the years 1771, 1772, and 1773, (see _Chalmers_’s _Estimate_); this point is established beyond all equivocation. What I refuse therefore to the imagination of the trader, is solely what appears to me chimerical and useless in that favourable balance of money; and this _I refuse_, because I cannot possibly but acknowledge, that every trader has too much good sense to act against the general interest of trade, when such operation must, at the same time, prove contrary to his own interest. Nay, is much more than plain instinct wanted, not to import money which yields a very trifling benefit when there is no demand for it, whilst one may take up foreign goods, on which there is a certain gain of 10 or 12 _per cent._ because they are eagerly sought after? and when, besides, the nation, on a certainty, will not finally pay for them but with national goods, since she has no mines of her own? I must observe, indeed, that this very trader, guilty of such an act of _impatriotism_, of this national crime of importing merchandize instead of gold and silver, cries up, as loud as any other, _the necessity of striking a favourable balance_; but private wisdom gets the better of public folly; every one imports such goods as he is in hopes to sell to advantage, and leaves to his neighbour the care of importing that _favour_ on which no profit can be got.
What is then the quantity of bullion really imported every year into _England_?
It is incontestably, in the first place, so much of it as is necessary to answer the progressive increase of the prices and products, both of the land and industry; the bank-notes cannot suffice to that augmentation, but in their ordinary proportion to the real specie in circulation; all supplement of bank-notes, which in the needful hour exceeds that proportion, must soon be replaced by real specie; on this exactness stand the credit of the Bank, and the vast advantage accruing therefrom to the public, and to the State; but from thence also results a greater inutility of accumulating money before it is wanted.
It is, in the second place, all the bullion necessary for the labouring gold and silver-smiths, from the first gold-smith in _London_ to the last plated-button maker at _Birmingham_.
It is, thirdly, all that importation which is required to make good the _deficit_ occasioned by petty stock-jobbing, and the melting down of guineas, which no workman will ever scruple, when there will be a few more pence to be got that way, than by the purchase of bullion, or as often as, having no bullion at hand, he shall find himself in the immediate necessity of working.
It is, fourthly, all that which is wanted to replace the few guineas carried away annually from _England_ by travellers, smugglers, or by means of some inferior transactions in trade, and which cannot always be exactly balanced by the contraband trade carried on elsewhere by the nation.
Ever since the _English_ have acquired the immense landed revenue which they possess in the _East-Indies_, it is probable they do not carry there so much money; yet some must be sent there. The above five articles are the only ones I know of, which may render necessary an annual importation of money. The first of those articles is absolutely independent of the caprice of any one; it is always subservient to the quantity of effects to be put into circulation, as well as to their price; and can at no time deprive the other parts of _Europe_ of their share in the mines of _America_. The third and fourth are in a manner included in the first; nor can they, when viewed separately, be very considerable: The second alone is truly prodigious, but is likewise subservient to the demands of that very silver when wrought, that is to say, converted into some articles of luxury: But it is necessary to observe, in regard to this, that great care is taken to find out purchasers for that metal thus improved by the hands of the workman, not only in _England_, but wherever people can possibly be found willing to take from her, that part of the precious balance, which she had taken upon herself, only in hopes of getting rid of it.
This I think is sufficient to demonstrate the impossibility of that pretended _favourable balance_, amounting, in the space of 75 years, to 162,774,769_l._ the existence of which many people imagine to be real, from the statements of Sir _Charles Whitworth_: for, if they would confine themselves to say, that, in the course of 75 years, _England_ has profited in trade to the amount of 162,774,769_l_. I have proved much more, since I proved (p. 17 to 22) that all the benefits which have accrued, and might now be spent, form together a solid mass of clear and palpable savings; and that this mass would now be, without doubt, 332 millions, instead of 162, had the 180 millions, lent by the subjects to government, and swallowed up by the war, been laid out in the improvement of lands and industry.
As to the inference that might be drawn from the apparent exportation of 105 millions of money, during the same period, according to the above statement, it is also necessary to make an observation on this matter.
In any grand mercantile operation, where prompt and certain remittances are required, be the motive of such operations what it may; if there goes out of _England_, we shall suppose, 400,000_l._ in bullion, this very same bullion, after the bargain is struck and fulfilled, either in goods or in bills of exchange, comes back to _London_, to resume if necessary, the same course three weeks afterwards: For the space of 40 years, therefore, the same sum may an hundred times be placed in the catalogue of exports, and perfectly answer to a capital of 40 millions, the place of which it has really supplied: This is a well-known resource; nothing then can be concluded in regard to the 105 millions of bullion exported, according to Sir _Charles_, but, that there ever has been, and probably ever will be, in _England_ all the bullion necessary to answer the exigencies of the most unforeseen and extraordinary negociations of all kinds, and industry enough to recall in time, that bullion which had only been given as a pledge. It is like a jewel worth 100,000 crowns, which, for the space of 20 years, is said to have passed ten times backwards and forwards from _Paris_ to _Amsterdam_, but finally remained at _Amsterdam_, by a reason contrary to that which keeps up the commercial shuttle between _England_ and _Holland_.
In order to come as close to the point as it is necessary, on a matter, besides, of which it is equally useless and impossible to obtain an exact knowledge, here follow some facts, the essential results of which by no means depend on more or less exaggeration in the exposition either of the sale, or of the credit.
The period from 1764 to 1773, must be allowed to have been the most flourishing era of _Great Britain_. During those ten years the exportation of _English_ merchandises into _Spain_, has exceeded the importations from _Spain_ into _England_, by 5,095,998_l._ In the same space of time, the balance of trade between _England_ and _Portugal_ has been 3,274,133_l._ in favour of the former. The two _favours_ united, amount all together to 8,370,131_l._; add thereto the _favourable balances_ of _Madeira_, and the _Canary_ Islands, paid probably in _Spain_ and _Portugal_, amounting, in the same space of time, to 516,863_l._—the total presents us with the aggregate sum of 8,886,994_l._ which, divided by 10 years, proves an annual balance, _in favour_ of _England_, of 888,699_l._ real money.
The light of probability now begins to dawn upon me: at least I here find myself at the source of money; and, as I know, first, that _England_ must absolutely be provided with a certain quantity of it, whatever that quantity may be, for the five articles before mentioned:
Secondly, That she exports, of her own goods, fifteen times as much as she need to do for that purpose:
Thirdly, That gold and silver are to _Spain_ and _Portugal_, what wines are to _France_, silks to _Piedmont_, hemp and timber to _Russia_; and that, in order to procure those different articles at the easiest rates, they must be fetched from _France_, _Piedmont_, and _Russia_:
Fourthly and lastly, that _Spain_ and _Portugal_ stand exactly in the same need of making away with the surplus of their gold and silver, as _England_ does of acquiring it, by getting rid of a surplus of her manufactures: I cannot therefore entertain the least doubt, but that it is at _Cadiz_ and _Lisbon_ that _England_ procures all that gold and silver which is indispensably wanted for the five operations spoken of; and I must positively conclude, that there she has taken the whole quantity which she had occasion for; but I as positively conclude, that she took up only so much of it as was wanted, when I see that it depended entirely upon her to take more, and that she has not done it: A decisive point, which I cannot by any means call in question, when I have convinced myself, by Sir _Charles Whitworth_’s statements, that this sum of 888,699_l._ which _England_, if so disposed, might have procured annually during the ten years above mentioned, is no more than the balance of 1,785,826_l._ in goods exported there, one year with another, during the same space of time:—For, after all, why should not _England_ have taken _in money_ the amount of 897,157_l._ of _Spanish_ and _Portuguese_ goods, taken by her ships in return, were it not that the value of money, as that of all other kinds of merchandise, is always tyrannically fixed by the demand?
It seems, therefore, probable enough, that the money annually imported by _England_, during the period aforesaid, does not exceed the 888,698_l._ of the balance which appears against _Spain_, _Portugal_, _Madeira_, and the _Canary_ Islands: But here follows a strong conjecture, that it is not so considerable as it appears by those accounts.—It is an uncontroverted fact, that the article of exportation is always exaggerated more or less; the man who first bethought himself of this harmless cunning, fancied that his own importance would appear more conspicuous to the nation, by reason of the quantity of goods which he might seem to export: this is now the secret of the play-house, every body knows it; but this practice is in a manner become necessary: one must unblushingly raise himself above his level, in order to be thought in his real place; the only way of deceiving in this respect, would be to speak the truth; and, in this case, the deceit would fall on the deceiver himself, and that just regard which the exporter has a right to claim, would be lost to him: Add to this necessary artifice, which is no longer a cheat, the usual mode adopted in regard to importation, the value of which is always a little under-rated, but only a little, because there might be some inconvenience in cheating Government to excess. With these trifling modifications, I think _England_ will be found not much above the _par_ of her _quota_, in the gold and silver imported from _America_.
Now, out of these 6 or 700,000_l._ in money, which I believe are really and annually imported into _England_, what quantity is sent to foreign markets,—not, indeed, before its value is considerably advanced by the workmanship?—But, if this metal be so precious, why part with it when once acquired? Why not employ the workman upon objects, the price of which would have received a ten-fold increase by his labour? Why should these continual prophanations of the sacred metal be permitted? Why give encouragement to that kind of prostitution of gildings of all sorts, which daily consume such quantities of gold? It is said, that in _Birmingham_ alone, they consume 30,000_l._ worth _per annum_:—And shall it be on a metal thus lavished away, shall it be on that pretended balance, that _England_ will build her resources, and the security of her creditors?—In what consists, then, the wealth of the nation, that wealth which is truly independent of all circumstances, and which will ever be superior to the national wants?
It consists in any sum whatever, money and paper currency, which is required to keep in the utmost activity, 3,000,000 of cultivators, 3,000,000 of tradesmen, and 3,000,000 of other consumers, as indispensable to realise the value of the objects by them consumed, as the tradesman and cultivator are necessary to produce them:—And if any question should arise on the number of inhabitants,
It consists in the number of men necessary to furnish annually exports to the value of fifteen or sixteen millions:—And if it should be urged that this exportation is over-rated,
It consists in the number of men capable of making up that quantity of exports, which is annually required for a trading navy of 775,024 tons, on the statement of which there cannot arise a single doubt.
It consists in a population necessary (which doth really exist, and could not be dispensed with) to find, without any other inconvenience but a momentary sensation, the 100,000 seamen of the royal navy, the 70,000 national soldiers, and the 3 or 400,000 artificers, and other persons employed in every way, who, by the last war, were for some years taken away, from their daily and useful occupations, some monuments of which would probably have been transmitted to posterity, in order to their being employed in all the accidental operations that were requisite to carry on those destructive plans, which have left nothing but a sad remembrance behind: _A remembrance, nevertheless, of which the most allowable pride should allay the bitterness._
It consists also, perhaps, in that revolution, which must have been effected in the mind of every intelligent _Briton_, by the demonstration grounded on experience, of the impossibility of doing beyond a few minutes, with a given number of men, more than that same number is capable of effecting habitually, and without fatigue.
It consists in the impossibility of not doing, even to the end of ages, with a given number of industrious men, all that which the same number have executed during 80 years, not only without exhausting themselves, but rather, on the contrary, still increasing their strength and wealth.
It consists, in fine, in the demonstration which will become daily more palpable, that labour alone is the source of that wealth; that the more the sum of this labour shall augment, the greater will be the increase of riches; but that this same labour will not reach its last degree of activity in _England_, till it is nearly in the same state in _Siberia_; and that there is no great harm in an _English_ mechanic creating a cultivator in _Siberia_, or even in _France_, provided a _Siberian_ or _French_ mechanic, create a cultivator or mechanic in _England_.
_Reflexions on some private Balances of ~England~, both of the favourable and disadvantageous Kind._
In the small number of disadvantageous balances, the necessity of which is so grievous to _England_, I distinguish that with _Russia_, which, in the course of the ten years above mentioned, amounts upon an average to 825,212_l._ annually. This, in fact, is more than enough to swallow up the 6 or 700,000_l._ of the favourable balance, during the same period, against _Spain_ and _Portugal_, the only sources almost of the precious metals; luckily the expence of _Russia_ in gold and silver is ascertained, as it is every where else, first, by the quantity of coin in circulation, a quantity always proportioned to the price, as well as to the number of objects to be circulated; and, secondly, by the degree of ease, riches, and pomp, which the generality of private faculties can admit of, in the articles of furniture, plate, and dress: The introducing of gold and silver, above the quantity necessary to answer those various purposes, would, as the case is every where else, prove entirely useless; for it can hardly be imagined, that so wise a Princess as the Sovereign who now holds the sceptre of _Russia_, should think of hoarding up, before her 20,000,000 of subjects be as rich, that is, _do produce and consume as much as a similar population might produce and consume in France or in England_: Now, to hoard up would be the infallible means to prevent it. Let us now suppose, that the annual importation of bullion necessary for the circulation in _Russia_, amounts to one half, or even to an equality of what is wanted by _England_ for the same object:—It is probable that _England_ contributes thereto no more than her proportion, as the other maritime States, who, like her, are obliged to provide themselves in _Russia_; and, consequently, the disadvantageous balance of _England_ with _Russia_, can no more demonstrate that the former exports there annually 825,212_l._ than the balance in her favour against _Flanders_, clearly proved by the accounts of Sir _Charles Whitworth_, can demonstrate that the above province is by her stripped of 521,201_l._ annually.
A publication truly interesting, would be a work containing a particular account of the trade of each country, were it only such as that which Sir _Charles Whitworth_ has given on _the trade of England_; but though such a treasure is wanting, yet it appears to me, that to have a clear idea of such a work, would be sufficient to foresee what would be the result of it. All men are alike: one may therefore, without fear of deceit, suppose in the merchants of every country, the same attention to swell up the list of articles which pay no duty, and which give a trader the petty consequence of a more considerable exportation; every where might be found the same exactness, _in a contrary sense_, in regard to goods liable to an importation duty; consequently the balance struck at last would be in favour of the nation whose accounts should be then inspected: but deduct from all those favourable balances, that which might have been farther declared on the articles which are duty-free; add to the total of the exports, what has been declared short of the true amount on the objects which must pay; it would then be found that (the five articles excepted) all is paid literally without having laid out any cash, and that each nation is wisely reduced to the only real advantage of trade, the _exchange of want against fancy, the exchange of one fancy for another, or the exchange of one want against another want_.[4]
In fact, how can it be supposed, that a nation who should not sell to one, or to six others, exactly as much as she has purchased from a seventh, should not be, a little sooner or a little later, compelled, either to give up a trade which she must support with real specie, or to sell that at home for _five_ in cash, which fetched ten before? Is it not evident, that a nation which should not purchase from one or six others, as much as she sells to a seventh, must, sooner or later, find herself in the necessity, either to hide her money under ground, or to lower its value, so far as to sell at home successively for 6, 8, 10, and 20, that which was sold before at 5? This would exactly have been the case with _Russia_, had the annual balance of 825,212_l._ been effectually paid to her in coin, either by _England_, or by those who stand on the debtor side with _England_, and had the former put it into circulation, instead of laying out the surplus of that balance in the purchase of goods from six other countries, to whom the _English_ sold articles to a similar amount: Now the _Russian_ trader does not in _Russia_ charge 20, for that which, 50 years ago, was sold there for 5: the value of money is not debased there, though _Russia_ has annually a claim upon _England_ for a balance of 825,212_l._ and, probably, demands not less considerable upon the other maritime powers; _Russia_, therefore, has cautiously avoided receiving those different balances in coin.
Besides, money fetches but its price in _Flanders_, although, according to Sir _Charles_, that province is indebted to _England_ in a yearly balance of 521,201_l._—Nor is money worth above its price in _Germany_, though the latter owes likewise to _England_ a balance of 924,709_l._ annually.—In _Ireland_ it goes for no more than its worth, though there is another balance due by that kingdom to _England_, to the yearly amount of 770,916_l._—Nor is it above its value in _France_, who owes to _England_ an annual balance of 108,073_l._—Now, if money is every where nearly of the same value, we must conclude, that there does not exist a nation which has not found in her annual importations of gold and silver, either considered as money, or as materials for some articles of luxury, all that she stood in need of to keep up circulation, and provide for that degree of luxury, which the _actual_ degree of her industry _requires, as much as it allows_; in this case the final balance, deemed unexact, that is, in _favour of England_, has, in fact, been kept perfectly even. Each has sold here or there, as much as he has purchased, and _vice versâ_; and the prejudice _England_ entertains on the necessity of a _favourable balance_, has not, in practice, dazzled the eyes of the merchant who carried on her trade: He has rejected the gold tendered to him, when his profit upon it would have been but trifling, with as much judgement as he has, with care, sought after such goods as could then yield him a greater benefit.
_State of the Balance between ~England~ and ~Holland~._
Sir _Charles Whitworth_, in his _State of the English Trade_, rates the annual balance due by _Holland_ to _Great Britain_, at 1,372,258_l._ upon an average of 10 years: This is the most considerable. There can be no illusion, in regard to the effect this balance has upon the money in _England_; it is well known that it does not increase it; nay, it is thought that the debt due to _Holland_, lessens it annually, not only by the whole amount of the _favourable balance_ which would revert to _England_ were she not indebted to the _Dutch_, but of one million more, which must be found to pay them off.