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emptier, as if he took out of the heavier what he adds to the lighter, for then half so much will do it. Riches do not consist in having more gold and silver, but in having more in proportion than the rest of the world, or than our neighbours, whereby we are enabled to procure to ourselves a greater plenty of the conveniencies of life, than comes within the reach of neighbouring kingdoms and states, who, sharing the gold and silver of the world in a less proportion, want the means of plenty and power, and so are poorer. and so are poorer. Nor would they be one jot the richer, if, by the discovery of new mines, the quantity of gold and silver in the world becoming twice as much as it is, their shares of them should be doubled. By gold and silver in the world, I must be understood to mean, not what lies hid in the earth, but what is already out of the mine, in the hands and possessions of men. This, if well considered, would be no small encouragement to trade, which is a surer and shorter way to riches than any other, where it is managed with skill and industry.
In a country not furnished with mines, there are but two ways of growing rich, either conquest or comBy the first the Romans made themselves masters of the riches of the world; but I think that, in our present circumstances, nobody is vain enough to entertain a thought of our reaping the profits of the world with our swords, and making the spoil and tribute of vanquished nations the fund for the supply of the charges of the government, with an overplus for the wants, and equally craving luxury, and fashionable vanity of the people.
Commerce, therefore, is the only way left to us, either for riches, or subsistence: for this the advantages of our situation as well as the industry and inclination of our people, bold and skilful at sea, do naturally fit us: by this the nation of England has been hitherto supported, and trade left almost to itself, and assisted only by the natural advantages above-mentioned, brought us in plenty of riches, and always set this kingdom in a rank equal, if not superior to any of its neighbours; and would no doubt, without any difficulty, have continued
it so, if the more enlarged and better understood interest of trade, since the improvement of navigation, had not raised us many rivals; and the amazing politics of some late reigns let in other competitors with us for the sea, who will be sure to seize to themselves whatever parts of trade our mismanagement, or want of money, shall let slip out of our hands: and when it is once lost, it will be too late to hope, by a mistimed care, easily to retrieve it again. For the currents of trade, like those of waters, make themselves channels, out of which they are afterwards as hard to be diverted, as rivers that have worn themselves deep within their banks.
Trade, then, is necessary to the producing of riches, and money necessary to the carrying on of trade. This is principally to be looked after, and taken care of. For if this be neglected, we shall in vain by contrivances amongst ourselves, and shuffling the little money we have, from one another's hands, endeavour to prevent our wants: decay of trade will quickly waste all the remainder; and then the landed-man, who thinks, perhaps, by the fall of interest to raise the value of his land, will find himself cruelly mistaken; when the money being gone, (as it will be, if our trade be not kept up) he can get neither farmer to rent, nor purchaser to buy his land. Whatsoever, therefore, hinders the lending of money, injures trade: and so the reducing of money to four per cent. which will discourage men from lending, will be a loss to the kingdom, in stopping so much of the current money, which turns the wheels of trade. But all this upon a supposition, that the lender and borrower are both Englishmen.
If the lender be a foreigner, by lessening interest from six to four, you get to the kingdom one-third part of the interest we pay yearly to foreigners, which let any one, if he please, think considerable; but then, upon lessening interest to four per cent. it is likely one of these things will happen: that either you fall the price of your native commodities, or lessen your trade, or else prevent not the high use, as you intended; for at the time of lessening your interest, you want money for your trade, or you do not. If you do not, there is no
need to prevent borrowing at a high rate of your neighbours. For no country borrows of its neighbours, but where there is need of money for trade: nobody will borrow money of a foreigner to let it lie still. And, if you do want money, necessity will still make you borrow where you can, and at the rates your necessity, not your laws, shall set: or else, if there be a scarcity of money, it must hinder the merchant's buying and exportation, and the artisan's manufacture. Now the kingdom gets or loses by this (for no question the merchant, by low interest, gets all the while) only proportionably (allowing the consumption of foreign commodities to be still the same) as the paying of use to foreigners carries away more, or less, of our money, than want of money, and stopping our trade keeps us from bringing in, by hindering our gains, which can be only estimated by those who know how much money we borrow of foreigners, and at what rate; and too, what profit in trade we make of that money.
Borrowing of foreigners upon interest, it is true, carries away some of our gain: but yet, upon examination it will be found, that our growing rich or poor depends not at all upon our borrowing upon interest, or not; but only, which is greater or less, our importation or exportation of consumable commodities. For, supposing two millions of money will drive the trade of England, and that we have money enough of our own to do it; if we consume of our own product and manufacture, and what we purchase by it of foreign commodities, one million, but of the other million consume nothing, but make a return of ten per cent. per annum, we must then every year be one hundred thousand pounds richer, and our stock be so much increased: but, if we import more consumable commodities than we export, our money must go out to pay for them, and we grow poorer. Suppose, therefore, ill husbandry hath brought us to one million stock, and we borrow the other million (as we must, or lose half our trade) at six per cent. If we consume one moiety, and make still ten per cent. per ann. return of the other million, the kingdom gets
forty thousand pounds per ann. though it pay sixty thousand pounds per ann. use. So that, if the merchant's return be more than his use, (which it is certain it is, or else he will not trade), and all that is so traded for, on borrowed money, be but the over-balance of our exportation to our importation; the kingdom gets, by this borrowing, so much as the merchant's gain is above his use. But, if we borrow only for our own expenses, we grow doubly poor, by paying money for the commodity we consume, and use for that money; though the merchant gets all this while, by making returns greater than his use. And therefore, borrowing of foreigners, in itself, makes not the kingdom rich or poor; for it may do either: but spending more than our fruits, or manufactures, will pay for, brings in poverty, and poverty borrowing.
For money, as necessary to trade, may be doubly considered. First, as in his hands that pays the labourer and landholder, (for here its motion terminates, and through whose hands soever it passes between these, he is but a broker) and if this man want money, (as for example, the clothier) the manufacture is not made; and so the trade stops, and is lost. Or, secondly, money may be considered as in the hands of the consumer, under which name I here reckon the merchant who buys the commodity, when made, to export: and, if he want money, the value of the commodity, when made, is lessened, and so the kingdom loses in the price. If, therefore, use be lessened, and you cannot tie foreigners to your terms, then the ill effects fall only upon your landholders and artisans: if foreigners can be forced, by your law, to lend you money, only at your own rate, or not lend at all, is it not more likely they will rather take it home, and think it safer in their own country at four per cent. than abroad, in a decaying country? Nor can their overplus of money bring them to lend to you, on your terms: for, when your merchants, want of money shall have sunk the price of your market, a Dutchman will find it more gain to buy your commodity himself, than lend his money at four per cent. to an
English merchant to trade with. Nor will the act of navigation hinder their coming, by making them come empty, since even already there are those who think that many who go for English merchants are but Dutch factors, and trade for others in their own names. The kingdom, therefore, will lose by this lowering of interest, if it makes foreigners withdraw any of their money, as well as if it hinders any of your people from lending theirs, where trade has need of it.
In a treatise, writ on purpose for the bringing down of interest, I find this argument of foreigners calling away their money to the prejudice of our trade, thus answered: "That the money of foreigners is not brought into the land by ready coin, or bullion, but by goods, or bills of exchange, and, when it is paid, must be returned by goods, or bills of exchange; and there will not be the less money in the land." I could not but wonder to see a man, who undertook to write of money and interest, talk so directly besides the matter, in the business of trade. "Foreigners' money," he says, "is not brought into the land by ready coin, or bullion, but by goods, or bills of exchange." How then do we come by bullion or money? For gold grows not, that I know, in our country, and silver so little, that one hundred thousandth part of the silver we have now in England was not drawn out of any mines in this island. If he means that the monied man in Holland, who puts out his money at interest here, did not send it over in bullion, or specie hither: that may be true or false; but either way helps not that author's purpose. For, if he paid his money to a merchant, his neighbour, and took his bills for it here in England, he did the same thing as if he had sent over that money; since he does but make that merchant leave in England the money, which he has due to him there, and otherwise would carry away. "No," says our author," he cannot carry it away; for," says he, "when it is paid, it must be returned by goods, or bills of exchange." It must not be paid and exported in ready money; so says our law indeed, but that is a law to hedge in the cuckoo, and serves to no purpose; for, if we export