IV. BOOK trade, which, without force or conftraint, is naturally and regularly carried on between any two places, is always advantageous, though not always equally fo, to both. By advantage or gain, I understand, not the increase of the quantity of gold and filver, but that of the exchangeable value of the annual produce of the land and labour of the country, or the increase of the annual revenue of its inhabitants. If the balance be even, and if the trade between the two places confift altogether in the exchange of their native commodities, they will, upon most occafions, not only both gain, but they will gain equally, or very near equally: each will in this cafe afford a market for a part of the furplus produce of the other; each will replace a capital which had been employed in raifing and preparing for the market this part of the furplus produce of the other, and which had been distributed among, and given revenue and maintenance to a certain number of its inhabit, ants. Some part of the inhabitants of each, therefore, will indirectly derive their revenue and maintenance from the other. As the commodi, ties exchanged too are fuppofed to be of equal value, fo the two capitals employed in the trade will, upon moft occafions, be equal, or very nearly equal; and both being employed in raif ing the native commodities of the two countries, the revenue and maintenance which their diftri bution will afford to the inhabitants of each will be equal, or very nearly equal. This revenue and # and maintenance, thus mutually afforded, will CHAP. be greater or finaller in proportion to the extent of their dealings. If these should annually amount to an hundred thoufand pounds, for example, or to a million on each fide, each of them would afford an annual revenue in the one cafe of an hundred thousand pounds, in the other, of a million, to the inhabitants of the other. If their trade should be of fuch a nature that one of them exported to the other nothing but native commodities, while the returns of that other confifted altogether in foreign goods; the balance in this cafe, would ftill be fuppofed even, commodities being paid for with commodities. They would, in this cafe too, both gain, but they would not gain equally; and the inhabitants of the country which exported nothing but native commodities would derive the greatest revenue from the trade. If England, for example, fhould import from France nothing but the native commodities of that country, and, not having fuch commodities of its own as were in demand there, fhould annually repay them by fending thither a large quantity of foreign goods, tobacco, we shall fuppofe, and Eaft India goods; this trade, though it would give fome revenue to the inhabitants of both countries, would give more to thofe of France than to thofe of England. The whole French capital annually employed in it would annually be distributed among the people of France. But that part of the Englifh capital only which was employed in producing the English commodities with which those foreign IV. BOOK foreign goods were purchased, would be annually diftributed among the people of England. The greater part of it would replace the capitals which had been employed in Virginia, Indostan, and China, and which had given revenue and maintenance to the inhabitants of those diftant countries. If the capitals were equal, or nearly equal, therefore, this employment of the French capital would augment much more the revenue of the people of France, than that of the English capital would the revenue of the people of England. France would in this cafe carry on a direct foreign trade of confumption with England; whereas England would carry on a round-about trade of the fame kind with France. The dif ferent effects of a capital employed in the direct, and of one employed in the round-about foreign trade of confumption, have already been fully explained. There is not, probably, between any two countries, a trade which confifts altogether in the exchange either of native commodities on both fides, or of native commodities on one fide and of foreign goods on the other. Almoft all countries exchange with one another partly native and partly foreign goods. That country, however, in whofe cargoes there is the greatest proportion of native, and the leaft of foreign goods, will always be the principal gainer. If it was not with tobacco and Eaft India goods, but with gold and filver, that England paid for the commodities annually imported from France, the balance, in this cafe, would be fup pofed III. pofed-uneven, commodities not being paid for C HA P. with commodities, but with gold and filver. The trade, however, would, in this cafe, as in the foregoing, give fome revenue to the inhabitants of both countries, but more to thofe of France than to thofe of England. It would give fome revenue to thofe of England. The capital which had been employed in producing the English goods that purchased this gold and filver, the capital which had been distributed among, and given revenue to, certain inhabitants of England, would thereby be replaced, and enabled to continue that employment. The whole capital of England would no more be diminished by this exportation of gold and filver, than by the exportation of an equal value of any other goods. On the contrary, it would, in most cafes, be augmented. No goods are fent abroad but those for which the demand is fuppofed to be greater abroad than at home, and of which the returns confequently, it is expected, will be of more value at home than the commodities exported. If the tobacco which, in England, is worth only a hundred thousand pounds, when fent to France will purchase wine which is, in England, worth a hundred and ten thousand pounds, the exchange will augment the capital of England by ten thousand pounds. If a hundred thousand pounds of English gold, in the fame manner, purchase French wine, which, in England, is worth a hundred and ten thoufand, this exchange will equally augment the capital of England by ten thousand pounds. As a merchant who has a hundred I IV. BOOK a hundred and ten thousand pounds worth of wine in his cellar, is a richer man than he who has only a hundred thousand pounds worth of tobacco in his warehouse, fo is he likewife a richer man than he who has only a hundred thoufand pounds worth of gold in his coffers. He can put into motion a greater quantity of industry, and give revenue, maintenance, and employment, to a greater number of people than either of the other two. But the capital of the country is equal to the capitals of all its differ ent inhabitants, and the quantity of industry which can be annually maintained in it, is equal to what all those different capitals can maintain. Both the capital of the country, therefore, and the quantity of industry which can be annually maintained in it, muft generally be augmented by this exchange. It would, indeed, be more advantageous for England that it could purchase the wines of France with its own hard-ware and broad-cloth, than with either the tobacco of Virginia, or the gold and filver of Brazil and Peru. A direct foreign trade of confumption is always more advantageous than a round-about one. But a round-about foreign trade of confumption, which is carried on with gold and filver, does not seem to be less advantageous than any other equally round-about one. Neither is a country which has no mines, more likely to be exhaufted of gold and filver by this annual exportation of thofe metals, than one which does not grow tobacco by the like annual exportation of that plant. As a country which has where |