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Ir is no small proof of the growing liberality of the times, that government has been emboldened to investigate the principles of that commercial policy which had been matured by the ingenuity of a long succession of statesmen, and had been considered, as the common law of England has been designated to be, the perfection of reason; and, on finding some of those principles to be utterly erroneous, to recommend such necessary changes as were called for by the increased intelligence, as well as by the altered circumstances of the nation. The public mind, however, was not yet wholly prepared for such changes. The ancient policy of the kingdom had been a theme of praise in every British statesman's mouth, until it became an axiom of universal belief,-confirmed by the circumstance, that under that system our commerce had attained to extraordinary prosperity. There is not a more vulgar error than, when two things, having some visible affinity, co-exist, to conclude that they are respectively allied to each other as cause and effect; and it is, therefore, far from surprising that the commercial policy pursued by

Britain should, both by natives and foreigners, have been held to be the cause of her commercial greatness. That, in some measure, the one was a cause of the other, we are prepared to concede ; for we are not so transcendental as to believe that, in some respects, it did not operate to her advantage. But it remains to be shown by its advocates, that the ancient policy of England was, on the whole, more advantageous than injurious to her; second, that any virtue it possessed was inherent to it, and not derived from extraneous and transitory circumstances; and, third, granting, for argument's sake, that it worked well for a length of time, that, in the present state of trade, as it has been regulated by foreign governments, it could still be profitably, or even safely, persevered in.

The balance of trade was a notion which, for a long time, misled the whole of our statesmen. When a nation in its dealings with another exported more in value (market value of course) than she imported, the balance to be paid to her in money, was called the balance of trade; and by so much was she considered a gainer. Accord

ing to this view, gold was everything, and commodities as nothing, excepting in so far as they might procure a supply of the former; whereas, in point of fact, gold is as next to nothing, were it not that, as the representative of value, it may purchase commodities. We will suppose a country in which all things that can conduce to the wants, real and artificial, of its inhabitants, so greatly abound, that each has so large a portion of them, that he has no occasion to purchase from any of his neighbours. Such a people might justly be considered rich, though there should be no money among them. But suppose, what will ever be the case, that there is an inequality of wealth among a people that some are deficient in commodities which others are largely possessed of, a commercial intercourse would necessarily spring up among them; and the use of money would be speedily discovered. An individual, call him A, purchasing from another, who may be called B, would most naturally pay him rather in money than in kind; but it may happen, that A has a commodity to dispose of such as B desires to purchase; in which case B would be no loser were he, instead of receiving a money payment for what he has sold, to receive in exchange A's commodity at a fairly estimated value. Were he to prefer the money, the balance of trade, as it has been defined, would be in his favour; but then he would either have to dispense with the commodity which he stands in need of, or to disburse that money in purchasing it from some other. We shall suppose still farther, that A can afford to sell the commodity much cheaper than any other, and that the transfer of it from him to B may be most easily effected. In that case would it not be the extreme of folly in B, from his terror of the balance of trade not being in his favour, to decline accepting A's commodity in payment, and insisting

for money in preference; and then to go to a distance, and purchase the same article from some other at an extravagant price? His friends would naturally say to him, "If this article be necessary in the trade which you are conducting, why not obtain it at the cheapest rate? If you take money in preference to it, you must part with that money to obtain the article elsewhere at a greater cost. Consider, too, that the article is with you really more than equivalent to the money you mean to receive; for you have only to retail it at an advanced price, or enhance its value by working it up into some new form."

But we are supposing not one half of the insanity which B. may commit, by indulging his predilection for the balance of trade principle. He may thus reason with himself: "If the balance of trade be a good thing, the whole of a trade must be still better. I will sell for money what I produce ; but I will purchase nothing. I shall have no out-goings of money; and, of course, will wax exceedingly rich. I will be my own tailor, shoemaker, hatter, baker, brewer, and butcher: nay more, I will raise my own mutton and beef, my own grain, and the articles necessary to clothe me." To any person acquainted with-we shall not say the principles of Political Economy, or the arcana of trade, but the commonest maxims of human life, it will be quite unnecessary to observe, that such a resolution would prove utterly ruinous to any individual adopting it.

Should, however, the whole individuals composing a nation adopt such a resolution, (and if it be a wise resolution for one, it must be so for all), the inevitable result would be, a total cessation of trade; the industry of an individual would be of no farther avail than that the fruits of it would support himself; there would be no accumulation of capital; but, on the contrary

what capital there was would infallibly be wasted.

As with the individuals composing a community, so it nearly is with the community of nations. Had each within the limits of its own territory all that could minister to its wants and desires, (and China stands much in that predicament,) there would be no necessity of foreign commerce among them; and money, excepting for the purposes of internal trade, would be quite superfluous. But each has its own peculiar wants, which the others can supply; and hence arises foreign commerce, or the interchange of commodities among na⚫tions. It is next to chimerical to suppose, that the mutual dealings of any two nations can be so exactly equal, but that there will be a balance due by the one to the other, which must, of course, be paid in that universal representative of value-money. But it far from follows, that the nation having that money to pay is a loser by the commerce. The other may not have purchased from it so largely as might have been wished; but still for its money paid away, it has received an equivalent in goods; which goods it would otherwise, perhaps, have had to purchase from some more remote quarter, and at an increased cost. Supposing such goods to be not destined for luxurious consumption, but to serve as the material of industry, they may more properly be considered an increment to the national wealth than even money itself. We shall take, as an example, the trade maintained between Great Britain and the United States of America, the balance of which is always decidedly against the former country. Has Britain, in consequence, been a loser by that trade? No. Her immense importations of cotton chiefly caused the balance of trade against her; but this cotton being worked up by her manufacturing industry into certain fabrics, it was sold in its mo

dified forms to foreigners, (including the Americans themselves,) at a greatly enhanced price, which far more than compensated for such balance; and did, in fact, constitute a most abundant source of the national wealth. This example shows as decidedly as a hundred examples could do, that an industrious nation cannot import foreign commodities too liberally.

If a nation (acting upon the absurd principle we have supposed of the individual B) resolve to purchase from no other that which, by any possibility, she can produce herself, so as to enlarge in her own favour the balance of trade; and especially, if she refuse to deal in the staple produce of another, because doing so might turn the balance of trade against her, the consequences are obvious. As real value, (we speak of it as opposed to money) is at the bottom of all commercial transactions and as, in such transactions, there must always be quid pro quo, it is morally certain and demonstrable that the nation we are supposing, by limiting her imports from the other, must submit to a consequent limitation of her exports; and that articles which she might purchase cheaply, and import easily, she will have to procure circuitously, and at a dearer rate. If Britain refuse, for example, to purchase from France her wines, France, as a necessary consequence, cannot well purchase from Britain her soft goods and hardwares. But this is not all. Nations too powerful and proud to submit to trade with another upon terms which being unequal are degrading to them, will be sure to defeat such selfish policy as that we are considering, by having recourse to direct retaliation; then non-intercourse succeeds to unequal intercourse; and the grasping avarice of the one is not only disappointed, but signally punished by the resentment of the other.

It may happen that the unequal system

we are condemning, having been adopt ed by one nation as most sagacious policy, may come to be viewed in the same light by all the rest, and adopted by them. The issue would be, that international commerce all over the. world would be next to annihilated, to the manifest loss of all, but chiefly to the loss of that nation which most depended upon commerce.

All that we have supposed may be done by a nation infatuated by the notion of balance of trade, has been done by Great Britain. She discouraged as much as was possible all trade with foreign countries, the balance of which was not decidedly in her favour, making exceptions (we speak not of her colonies at present) only of the United States of America, whose tobacco and cotton she could not dispense with; and China, where tea alone is to be procured. She virtually prohibited, upon this principle, the importation of French wines and silks, the staple commodities of France, by which the French market was lost to her manufacturers; and limited her purchases of wine to the beggarly kingdom of Portugal. Not content with the unrivalled advantages she possessed in her mines of iron, copper, tin, lead, &c., and inexhaustible coal-fields; in her capital, the skill of her artisans, and perfectness of their machinery, she excluded, by means of intolerably heavy duties, almost every raw article which, by sacrifice of capital or otherwise, could be produced within her own territory, and nearly every manufactured article whatever. It will scarcely be credited in after times, that in the custom-house book of rates there is scarcely an article of foreign manufacture which was not specially set down; and at the end of it there was a sweeping clause which provided that ALL goods, wares, and merchandize, either in part or wholly manufactured, which were not enumerated in the book, should pay an importation duty of L.50 per cent on

their estimated value; and by a farther clause, a duty of L.20 was imposed. upon all non-enumerated articles, which were not manufactured either in whole or in part. But this was not all. Britain, by means of bounties, endeavoured to establish within her own territory, manufactures which were uncongenial to the soil, the most absurd policy, abstractedly considered, which can be possibly imagined; since the giving a bounty upon a manufacture implies, in the first place, that it cannot be pursued profitably to the manufacturer, nor, of course, to the nation; in the second, it is taxing the nation in order to repair the loss of the manufacturer; and, thirdly, it acts, in most cases, as a bonus upon the manufacturer's want of ingenuity and enterprise.

But Britain, besides acting upon the balance of trade principle, discouraging commerce whenever her exported did not exceed her imported value, sought also to obtain undue advantages over other nations in the carriage of articles which are the subject of commerce; and this by means of her famous navigation laws. These laws, first enacted in Cromwell's time, were directed against the Dutch marine; and they regulated, 1st, The fisheries, which they limited to British ships, no importation in foreign ships being allowed; 2d, The coasting trade, which was put under the same limitation; 3d, The European importing trade, which, with re gard to twenty-eight bulky articles, named the "enumerated articles," was confined to British ships and ships of the producing country; but, with regard to the Dutch, they were wholly excluded from the trade, unless the articles imported were the produce of their own country; 4th, The trade with Asia, Africa, and America; importation of the produce of which quarters of the globe was limited to British ships; and 5th, The trade with the colonies, which, both as respects imports and exports, was confined to ships of the mother country.

The blindness of avarice was never better exemplified than in the whole commercial system thus established and I matured; and never was good luck more conspicuous, upon a great scale, than in the partial success of it. It was obviously opposed to the suggestions of common sense; and its virtue or efficacy, as to any good it could produce, strictly depended upon the acquiescence in it by other nations; because had other nations chosen to retaliate, not only would it have been completely counteracted, but commerce generally would have been effectually crippled, by which England, as the most commercial country, would most have suffered. But many other nations did acquiesce in the system, which we consider one of the most wonderful anomalies in international history. Fear, no doubt, actuated some, and favour others. Great Britain having been the bulwark of European independence against the ambitious encroachments of France, many of the continental powers, especially the smaller ones, were in no disposition to quarrel with, still less to thwart her policy, however sinister or selfish that might seem to be. The system having been at least partially acquiesced in, it may be asked, how far was it successful? In so far as it restricted our trade with wealthy nations, such as the French and Dutch, it must, in the nature of things, have been injurious; but we are inclined to think, that, in a few respects, it worked beneficially. First, It naturalised in the country several exotic manufactures, which have taken root and now abundantly fructify. It is true, that the capital employed in those manufactures might have been turned into more profitable channels; but it has to be considered that most of our manufactures now suffer under repletion; that the capital invested in them is capable of a rate of production far exceeding any possible demand; that there is no new channel that can be thought of into which any part

of that capital can be diverted; and that in proportion to the number of discovered channels, and in which that capital actually flows, must be the rate of its profits. Second, That branch of the system called the Navigation Laws, did, in point of fact, destroy the Dutch carrying trade, especially with the West Indies; and threw it chiefly into the hands of England, by which her commercial navy, and, by conse quence, her maritime power, were greatly augmented; and these were attended with many important collateral advantages.

But, after all, as we have premised, the success of the system did not arise from the wisdom of, or anything inherent to it, but from the extraneous circumstance of the acquiescence by other nations. So long as this acquiescence was yielded, it might have been unwise to disturb the system. But how stands the fact? First, we shall consider the fact with reference to the balance of trade principle. Upon the establishment of general peace in Europe, most of the continental nations felt themselves to be independent of Great Britain; and so feeling, they were de .luded by her example. They believed that her manufacturing prosperity arose out of the restrictive and exclusive policy which she had adopted; and hence, they were led to imitate that policy by imposing enormous duties, amounting in effect to prohibitory ones, upon the importation into their territories of all foreign commodities. By the operation of their regulations, British goods would have been more effectually excluded from the continent than they were during the war, by the famous continental system of Buonaparte, had our government not relaxed its ancient policy, and set the example of a more liberal one, which most foreign powers have been persuaded to follow. Second, With regard to the navigation laws, these are always spoken of as having been held sacred and