of our silver coin to the East Indies, so<152> loudly exclaimed against by shallow politicians, is to us, on the contrary, a most substantial blessing: it keeps up the value of silver, and consequently lessens the value of labour and of goods, which enable us to maintain our place in foreign markets. Were there no drain for our silver, its quantity in our continent would sink its value so much as to render the American mines unprofitable. Notwithstanding the great flow of money to the East Indies, many mines in the West Indies are given up, because they afford not the expence of working; and were the value of silver in Europe brought much lower, the whole silver mines in the West Indies would be abandoned. Thus our East-India commerce, which is thought ruinous by many, because it is a drain to much of our silver, is for that very reason profitable to all. The Spaniards profit by importing it into Europe; and other nations profit, by receiving it for their manufactures.
How ignorantly do people struggle against the necessary chain of causes and effects! If money do not overflow, a commerce in which the imports exceed<153> in value the exports, will soon drain a nation of money, and put an end to its industry. Commercial nations for that reason struggle hard for the balance of trade; and they fondly imagine, that it cannot be too advantageous. If greatly advantageous to them, it must in the same proportion be disadvantageous to those they deal with; which proves equally ruinous to both. They foresee indeed, but without concern, immediate ruin to those they deal with; but they have no inclination to foresee, that ultimately it must prove equally ruinous to themselves. It appears the intention of Providence that all nations should benefit by commerce as by sun-shine; and it is so ordered, that an unequal balance is prejudicial to the gainers as well as to the losers: the latter are immediate sufferers; but no less so, ultimately, are the former. This is one remarkable instance, among many, of providential wisdom in conducting human affairs, independent of the will of man, and frequently against his will. An ambitious nation, placed advantageously for trade, would willingly engross all to themselves, and reduce their neighbours to be hewers of<154> wood and drawers of water. But an invincible bar is opposed to such ambition, making an overgrown commerce the means of its own destruction. The commercial balance held by the hand of Providence, is never permitted to preponderate much to one side; and every nation partakes, or may partake, of all the comforts of life. Engrossing is bad policy: men are prompted, both by interest and duty, to second the plan of Providence; and to preserve, as near as possible, equality in the balance of trade.
Upon these principles, a wise people, having acquired a stock of money sufficient for an extensive commerce, will tremble at a balance too advantageous: they will rest satisfied with an equal balance, which is the golden mean. A hurtful balance may be guarded against by industry and frugality: but by what means is a balance too favourable to be guarded against? With respect to that question, it is not the quantity of gold and silver in a country that raises the price of labour and manufactures, but the quantity in circulation; and may not that quantity be regulated by the state, permitting coinage as far only<155> as is beneficial to its manufactures? Let the registers of foreign mints be carefully watched, in order that our current coin may not exceed that of our industrious neighbours. There will always be a demand for the surplus of our bullion, either to be exported as a commodity, or to be purchased at home for plate; which cannot be too much encouraged, being ready at every crisis to be coined for public service. The senate of Genoa has wisely burdened porcelane with a heavy tax, being a foreign luxury; but it has no less wisely left gold and silver plate free; which we most unwisely have loaded with a duty.*
The accumulating money in the public treasury, anciently the practice of every prudent monarch, prevents superfluity. Lies there any good objection against that practice, in a trading nation where gold and silver flow in with impetuosity? A great sum locked up by a frugal King, Henry VII. of England for example, lessens the quantity of money in circulation: profusion in a successor, which was the<156> case with Henry VIII. is a spur to industry, similar to the influx of gold and silver from the new world. The canton of Bern, by locking up money in its treasury, possesses the miraculous art of reconciling immense weath with frugality and cheap labour. A climate not kindly, and a soil not naturally fertile, enured the inhabitants to temperance and to virtue. Patriotism is their ruling passion; they consider themselves as children of the republic; are fond of serving their mother; and hold themselves sufficiently recompensed by the privilege of serving her. The public revenue greatly exceeds the expence of government: they carefully lock up the surplus for purchasing land when a proper opportunity offers; which is a shining proof of their disinterestedness as well as of their wisdom. By that politic measure, much more than by war, the canton of Bern, from a very slender origin, is now far superior to any of the other cantons in extent of territory. But in what other part of the globe are there to be found ministers of state, moderate and disinterested like the citizens of Bern! In the hands of a British ministry, the<157> greatest treasure would vanish in the twinkling of an eye; and do more mischief by augmenting money in circulation above what is salutary, than formerly it did good by confining it within moderate bounds. But against such a measure there lies an objection still more weighty than its being an ineffectual remedy: in the hands of an ambitious prince it would prove dangerous to liberty.
If the foregoing measures be not relished, I can discover no other means for preserving our station in foreign markets, but a bounty on exportation. The sum would be great: but the preserving our industry and manufactures, and the preventing an influx of foreign manufactures, cannot be purchased too dear. At the same time, a bounty on exportation would not be an unsupportable load: on the contrary, superfluity of wealth, procured by a balance constantly favourable, would make the load abundantly easy. A proper bounty would balance the growing price of labour and materials at home, and keep open the foreign market. By neglecting that salutary measure, the Dutch have lost all their manufactures, a neglect that has<158> greatly benefited both England and France. The Dutch indeed act prudently in with-holding that benefit as much as possible from their powerful neighbours: to prevent purchasing from them, they consume the manufactures of India.
The manufactures of Spain, once extensive, have been extirpated by their gold and silver mines. Authors ascribe to the same cause the decline of their agriculture; but erroneously: on the contrary, superfluity of gold and silver is favourable to agriculture, by raising the price of its productions. It raises also, it is true, the price of labour; but that additional expence is far from balancing the profit made by high prices of whatever the ground produces. Too much wealth indeed is apt to make the tenant press into a higher rank: but that is easily prevented by a proper heightening of the rent, so as always to confine the tenant within his own sphere.
As gold and silver are essential to commerce, foreign and domestic, several commercial nations have endeavoured most absurdly to bar the exportation by penal laws; forgetting that gold and silver will<159> never be exported while the balance of trade is on their side, and that they must necessarily be exported when the balance is against them. Neither do they consider, that if a people continue industrious, they cannot be long afflicted with an unfavourable balance; for the value of money, rising in proportion to its scarcity, will lower the price of their manufactures, and promote exportation: the balance will turn in their favour; and money will flow in, till by plenty its value be reduced to a par with that of neighbouring nations.
It is an important question, Whether a bank, upon the whole, be friendly to commerce. It is undoubtedly a spur to industry, like a new influx of money: but then, like such influx, it raises the price of labour and of manufactures. Weighing these two facts in a just balance, the result seems to be, that in a country where money is scarce, a bank properly constituted is a great blessing, as it in effect increases the quantity of money, and promotes industry and manufactures; but that in a country which possesses money sufficient for extensive commerce, the only bank that will not injure foreign commerce, is what<160> is erected for supplying the merchant with ready money by discounting bills. At the same time, much caution and circumspection is necessary with respect to banks of both kinds. A bank erected for discounting bills, ought to be confined to bills really granted in the course of commerce; rejecting fictitious bills drawn merely for procuring a loan of money. And with respect to a bank purposely erected for lending money, there is great danger of extending credit too far; not only with respect
