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all manufactures, and the inhabited world became, in the eyes of the philosophical observer, an extensive work-shop, a grand manufacture, where the industry of men prepares all objects of consumption, and an immense market where mankind supply their wants. Such is the origin and such the end of the commercial system conceived by Adam Smith. This system would be perfect and would form one of the most beautiful parts of political economy, had not Adam Smith derived it from causes unconnected with and absolutely independent of it. Adam Smith thought that commerce, by receiving its impulse and motion from the interchange of that produce which the producers will not or cannot consume, depends on these labours, on their increase, on their progress, and on their success. Hence he assigned to commerce a rank inferior to that of all other productive labours, and unconsciously made it descend from the eminent rank to which he had elevated it. His error is so much the more to be deplored, as, by stripping commerce of the consideration which is its due, it impedes its success and its prosperity. Commerce undoubtedly owes its existence to the interchange of the produce which the producers will not or cannot consume : but this interchange is only effected by commerce, by the capital, the talents, and the genius of merchants. Commerce is not only the instrument of the interchange of commodities; it is its promoter, its instigator, and frequently its sole cause. It is by constantly exhibiting to all producers fresh enjoyments, by exciting their desires, flattering their taste, or gratifying their appetite, that commerce stimulates them to labour, developes their industry, keeps them in continual activity, and forces them as it were to augment the mass of their productions, and to give them infinite variety and the highest degree of perfection. Far from being the mere instrument of productive labours, and entitled to rank only after them, commerce is the agent of general production, diffuses its benefits by the equivalents which it affords to every producer in exchange for his produce, and deserves to be considered as the most bountiful source of public and private wealth.

It matters little whether the interchange be more favourable to one of the parties than to the other; they both recover, in the equivalent which they receive, whatever the equivalent they give cost them. Were it not for this condition, the interchange would not take place at all, or would soon cease. The interchange between fellow-subjects, as well as between natives and foreigners, can never be detrimental to any one; and the least favourable exchange still yields an agreeable commodity for one that is not so : it is therefore the interest of all nations to protect, to encourage, to favour commerce. It keeps the mass of wealth up even when it does not augment it; and it prevents the decline of national wealth, even when it cannot effect its increase. The obstructions, restraints, and prohibitions, to which commerce has almost always been exposed, with the view to save it from the losses that were apprehended, or to obtain greater benefits from it, are false measures, fatal alike to public and private wealth.

Commerce, however, cannot pervade the whole range of exchanges but by means of an equivalent which suits every one, and which every one prefers to the produce he wishes to exchange. A gold and silver currency is eminently possessed of this prerogative, and it owes it neither to the conventional agreement of mankind nor to the authority of governments, but simply to the valuable qualities of the metals of which it is composed : no other value can supply the place of a metallic currency, because no other commodity possesses the properties which money requires.

When the monetary equivalent is of gold and silver, when its numeric or nominal value approximates as near as possible its commercial value, and when its divisions are in an exact proportion, all the operations of commercial interchange are easy and safe, and commerce may securely indulge in its combinations, speculations, and enterprises.

It is not even necessary that the metallic money should be the actual instrument of the commercial interchange; it is faithfully represented, and its place is frequently successfully supplied by credit. This is the reason why banks, which, after all, do nothing but liquidate and extinguish by compensation the demands of commercial credit, employ so little money in proportion to the vast extent of their operations.

The case is not the same with public and private credit. Both terminate almost all their operations, and cannot extinguish their engagements but with the help of money. Great care ought to be taken not to apply to these two kinds of credit measures which are so beneficial and so well appropriated to commercial credit.

The success of every kind of credit depends also on the freedom of stipulations, and on the facility and certainty of their performance. Both the private and public interest are little consulted, when through a misplaced pity the debtor is favoured to the prejudice of the creditor, and when a failure in public or private engagements is considered as a mere transitory evil without any influence on general prosperity. Whatever injures either commercial or public and private credit, stops the circulation of capital, causes money to be hoarded, paralyses the interchange of the produce of labour, restrains production, and leaves labourers without work. Credit ought not to be placed under the protection of justice or loyalty; it is the interest of public and private wealth which ought to be its safeguard. Assisted by a gold and silver currency, by credit and banks, commerce encounters no obstruction but the difficulty of taking the direction most beneficial and most favourable to the progress of wealth. Is the preference to be given to the home-trade before the foreign trade of consumption ? This is one of the most controverted, and, no doubt, one of the most important questions of political economy. Reason seems to counsel that interchange of produce which affords most enjoyment to all parties and insures them the most profitable equivalents. The foreign trade of consumption combines these two advantages in a greater degree than the home trade. The home trade affords to the natives none but ordinary, common, and almost identical productions, little calculated of course to excite desire, to flatter taste, and to gratify fancy. It does not go beyond

those wants, the extent of which is extremely limited, and consequently never can produce wealth, which consists in what is superfluous. The foreign trade deals less with what is wanted, than with what is superfluous. In exchange for the home-produce, it affords the productions of all countries, which, from their variety, their novelty, and their quantity, prove more attractive, lay stronger hold of the imagination, and promise greater enjoyments; and it is by the continual offer of these enticing commodities that foreign trade keeps all labours in constant activity, favours their progress, obtains a larger produce, increases its surplus, and sontinually augments the mass of wealth. The home-trade imparts to the national produce a value but nearly equal to what its production has cost; and as, in all countries, the faculties of labour are almost uniform, because they are limited by the climate, the state of industry, the wisdom of the laws, and the knowledge of government, they give few advantages to certain labours over others. Thus it is not easy for individuals to grow rich, and almost impossible for the state to rise to opulence. The case is not the same with regard to foreign trade. The national produce is always sold at the highest price, and the foreign produce purchased at the lowest, for this simple reason; the produce of the labour of one country is exported to another, only because it fetches a higher price in the country into which it is imported, than in the country from which it is exported. The foreign trade therefore constantly imparts the greatest possible value to the home-pro

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