When they were indebted for their wealth to the profitable contracts which they entered into with government, and to their grinding the people; there might have been some colour of justice in considering a national bankruptcy as a sort of reprisals, as a kind of retaliation which they had deserved. Their misfortune was applauded by the same motives which induce the stupid Mussulmen to bless the grand-signor, when he confiscates the treasures of the pasha by whom they have been stripped and ruined. Had the results of such unjust proceedings been attended to, it would undoubtedly have been seen that the consequences of the bankruptcy which ruined French capitalists, and of the confiscation which ruined the Turkish paslas, fall upon all classes of the people, and are tantamount to the most burthensome taxes. But passion does not reflect ; it only seeks to satisfy itself, without considering the good or ill that is to result from it. Passion does not perceive that national bankruptcies impede private savings ; that they arrest or suspend their circulation, and deprive labour of the capitals through which it prospers ; that they obstruct the circulation of produce, or burthen it with the enormous cost of the use of coin, and augment by as much the price of consumptions; which augmentation is equivalent to a tax; and finally, that they reduce governments to the necessity of raising contributions beyond the faculties of the contributors, which is the utmost degree of public misery.

It is under the impression of these obvious and manifest consequences that I am warranted in observing, that bankruptcies are, in the present state of social mechanism, a calamity more disastrcus than wars and bad seasons. These last misfortunes at least may be repaired, and quickly disappear where credit has not been impaired, and when nations enjoy all their faculties, their means, and their power.

But the loss of credit is irreparable, and destroys even the consolations of hope. May the picture of these dreadful results protect credit against fresh attacks, consolidate it by new measures, keep it unshaken among the nations that have known how to preserve it, restore it to those that had lost it, and establish it among those by whom it never was enjoyed! May credit, by its vast combinations, accelerate their private prosperity, and cause them all to share in the benefits of general wealth!


IVhich Trade is the most beneficial to National


Whether the home or the foreign trade is most beneficial to national wealth, is one of the most important, most difficult, and most controverted questions of political economy.

At first sight, the problem appears to offer no difficulties. The most advantageous trade to nations, as to individuals, must be that which causes the produce of a country to be sold at the highest, and foreign produce to be purchased at the lowest possible price. It seems that it is to this twofold end, that every trade

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must tend ; and that a country has attained its object when that end is accomplished. It is even difficult to conceive that the smallest doubt can be raised on this point, and the question viewed in any other light.

Indeed, it was long considered in that light only by the most esteemed writers on political economy.

Prudence,” says D'Avenant, is generally wrong when it pretends to guide nature. The various products of different soils and countries is an indication that Providence intended they should be helpful to each other and mutually supply the necessities of one another." *

The benefit of trade does not consist in the profit of the home-merchant, but in the clear gain the nation acquires through the exchange of its raw and manufactured produce for the produce of other countries.

Elsewhere he remarks, “ that the foreign trade is the basis of the home-trade, that it causes consumption, and increases population in all countries where it flourishes and is encouraged." opt A great part of our domestic trade depends upon our foreign commerce ; and we must sink in one, as the other decreases.

Finally, he says, in another place, " it is an undeniable truth, that a rise in the value of a commodity of a penny per pound, proceeding from foreign expence, does more enrich the body of the nation than a rise of three-pence per pound occasioned only by our own consumption.”*

Sir James Stuart observes, that " when foreign

† Ibidem, page 385.

* Vol. i. page 104. I Vol. ii. page 150.

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trade ceases, the internal mass of wealth cannot be augmented.” *

“ A nation,” says Forbonnais, “ gains the amount of its sales to foreigners, and loses the amount of the purchases it makes abroad.”

Lastly, Montesquieu adds to these opinions a reflection which is entitled to notice.

- The nations of the same climate,” says he,

having nearly the same productions, do not stand so much in need of trading with each other as those of a different climate. Hence the trade of Europe was formerly less extensive than it is at present.”

“ As foreign trade is carried on with benefit,» observes Beccaria, “ that is, as it receives a greater quantity of values, it serves as a more powerful incentive, and is more efficacious to increase the sum of productions. Besides, it burthens the subjects of other countries with a considerable part of the taxes paid to the state.” *

Were I to collect the opinions of all the writers who have sanctioned, supported, or adopted the sys

* Inquiry into the Principles of Political Economy, book ii. chap. 26. But I have not been able to trace this passage in the quoted chapter. In the 24th chapter of the same book, of the edition of 1805, it is said : “ When foreign trade is at an end, the number of inhabitants must be reduced to the proportion of home subsistence."-T.

+ Elémens du Commerce, chap. i.--I do not quote this opinion as correct, but as a proof of the system of the best writers on


I Element. di Econom. Publ.-Genovesi, Carli, Verri, Pal. mieri, and Corniani, speak nearly in the same terms respecting foreign trade,

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tem favourable to foreign trade, I should never have done.

Dr. Quesnay is the first who attempted to combat that system.

- In a free concurrence of foreign trade,” says he, “there is but anexchange of equal value for equal value, without either loss or gain on either side, and a nation cannot have a more advantageous commerce than its home-trade.”*

Elsewhere he adds, “it would be necessary first to enrich the foreign purchasers, to extend the sale of your manufactured produce abroad, and to enrich yourselves in your turn by this trade at the expence of foreigners, &c. Foreign trade is but a last resource to nations, for which their home-trade is not sufficient profitably to dispose of the productions of their country.”

Adam Smith has, like Dr. Quesnay, combated the system favourable to foreign trade, and extolled the home-trade as the most beneficial to national wealth ; but his opinion has been influenced by motives not only different but even opposed to those of Dr. Quesnay.

That trade," observes Adam Smith, “which, without force or constraint, is naturally and regularly carried on between any two places, is always advantageous, though not always equally so to both.

By advantage or gain," he adds, “I understand, not the increase of the quantity of gold and silver, but that of the exchangeable value of the annual produce of the land and

* Physiocratic, Observation 5.

+ Physiocratie, page 345.


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