Pagina-afbeeldingen
PDF
ePub

CONVERSATION XIX.

ON FOREIGN TRADE.

Advantages of foreign trade.-It employs the surplus of capital, and disposes of a surplus of commodities.Of bounties.-Effects of restrictions on foreign trade. -Extract from Say's Political Economy.— Extract from Franklin's Works.

CAROLINE.

AT our last interview, Mrs B., you were regretting that any restraint should be imposed on our trade with foreign countries; but since you have explained to me the superior advantages arising from the home trade, I should have supposed that every measure tending to discourage foreign commerce, and promote our own industry, would be extremely useful.

Mrs B. You would find it difficult to accomplish both those objects; for in order to encourage our own industry we must facilitate the means of selling the produce of our manufactures, and extend their market as much as possible. On the other hand, if we prohibit exportation we limit the production of our manufactures to the supply which can be consumed at home. No measure tending to the discouragement of foreign trade, can, therefore, be said to promote the industry of the country.

Caroline. But foreign trade cannot be both advantageous and disadvantageous to a country?

Mrs B. It is never disadvantageous, but only less beneficial than the home trade. It is only after the demand at home is supplied, that our surplus produce is sent to foreign markets. When we have more capital

1052. In order to encourage our own industry what means must we facilitate?1053. Can foreign trade ever be disadvantageous to a country?

to dispose of than is required in the home trade, instead of leaving it useless, and the laborers it would employ idle, we set them to work for foreign markets. If, for instance, the woollen manufacturers of Leeds, after having supplied the whole demand of England for broadcloths, have any capital left, they will use it in the preparation of woollen goods for exportation.

Caroline. Why not rather employ it in the fabrication of other commodities which may be consumed at home?

Mrs B. If there were a deficiency of capital in any other branch of industry at home, the redundancy would naturally be drawn to that branch; but if all the trade, that is, all the exchanges that could be made at home, have been made, we send the residue of our commodities to foreign markets for sale.

Caroline. Yet it appears a great hardship on the poor to send goods abroad, which so many of them are in want of at home.

Mrs B. The poor are at first supplied with whatever they can afford to purchase; and without the means of purchase you must recollect, that there can be no effectual demand. It is not to be expected that farmers and manufacturers should labor for them merely from charitable motives, and were they so disposed, they would not long possess the means of continuing their benevolence. It would be very wrong, therefore, to consider this surplus produce as taken from the poor; for it would not have been produced had there been no demand for it in foreign countries.

Caroline. That is very true. In all employment of capital men labor with a view to profit; they work,

1054. What instance is here mentioned?- -1055. Why not employ it in the fabrication of other commodities which may be consumed at home?-1056. Without the means of purchase can there be any effectual demand ?- -1057. In all employment of capital with what view do men labor?

therefore, only for those who will pay them the value of their produce. And it is easy to conceive that those who have no further want of English commodities may yet wish to procure foreign goods. The English merchant will therefore say, "Since there is no more demand for the goods I deal in, I will export the remainder, which will be purchased abroad, and I shall get foreign commodities in exchange ;-though my countrymen do not require any more cotton goods, I know that they will purchase wines, coffee, sugar, &c."

Mrs B. Very well. Let us examine now what / would be the effect of confining the employment of commercial capital to the home trade. If the inhabitants of the West Indian islands, Jamaica, for instance, were to prohibit the exportation of coffee and sugar, and the planters were obliged to trade only within the island, the consequence would be that the demand for coffee and sugar would be very insignificant, and that an inconsiderable part only of the capital of the colony would find employment. The same effect would take place in Russia, if foreign merchants were not allowed to purchase the hemp and flax so abundantly produced in that country. If in Peru and Chili the exportation of indigo, bark, and other drugs, was prohibited, the Europeans who purchase them, would not be the only sufferers; the Americans would be impoverished for want of employment for their capital.

Caroline. All this is very clear, I admit. But what security have we that merchants will not employ their capital in foreign commerce, before the demand for it in the home trade is fully supplied?

-1059. What is now

1058. What illustration is given of this? to be the subject of our examination?--1060. What instance is given of the inhabitants of the West Indian islands?- -1061. What regarding Russia ?-1062. What in Peru and Chili?

Mrs B. That security is derived from the natural distribution of capital according to the rate of profit. If foreign commerce employed more capital than the country could spare, the demand for it at home would raise the profits of the home trade, and the temptation of these increased profits would soon restore that portion of capital which had been unnecessarily withdrawn from it.

Caroline. What an excellent criterion the rate of profit affords of the employment of capital most advantageous to the community! When foreign commerce then offers greater profits than the home trade, it proves that there is a greater demand for capital in that branch of industry?

Mrs B. Yes, it proves that the country possesses a surplus quantity of produce either agricultural or manufactured, which cannot be disposed of in the home market; and if the owners of this surplus were prevented from exchanging it for foreign commodities, it would not in future be produced, and those who produced it would be thrown out of employment.

The first commodities a country usually exports is agricultural produce, which she exchanges for manufactured goods; this is still the case with America, on account of its being a newly settled nation; it is also the case with Poland and Russia, those countries having made slower progress in wealth and population than the other communities of Europe. When nations are considerably advanced in wealth and population, all the food

1063. What security have we that merchants will not employ their capital in foreign commerce before the demand for it in the home trade is fully supplied?--1064. If foreign commerce employed more capital than the country could spare, what effect would the demand for it have upon the home trade?-1065. How would that portion of capital which had been withdrawn from it be restored?1066. When foreign commerce offers greater profits than the home trade what does it prove?—1067. What are the first commodities which a country usually exports?-1068. With what nations is this still the case?

they can raise is required at home, and manufactures are established in order to employ the increased numbers of people; in the course of time they find it expedient to export manufactured goods in return for corn, the home supply, which was at first so redundant, being no longer sufficient to maintain the increased population. And it is at this point that England is now arrived.

Caroline. I am surprised that foreign commerce with distant countries should ever offer sufficient profits to afford a compensation to the merchant for the disadvantages arising from the slow return of capital.

it.

Mrs B. If it did not, no merchant would engage in

The greater the distance of the market to which he sends his goods the greater must be the profits on their sale, to make up not only for the tardy return of his capital, but also for the charges of conveyance of the goods. Freight and insurance from sea risks are both to be deducted from the profits of the merchant in foreign trade.

Caroline. Then since we are obliged to sell our goods at such high prices in distant markets, I wonder that we should find purchasers for them: would it not answer better for those countries to produce them at home?

Mrs B. You may be assured that no nation will purchase from abroad what may be procured of the same quality and for less expense at home. But all countries are not equally capable of producing the same kind of commodities, either rude or manufactured. gifts of nature are still more diversified in the different climates of the earth, than the habits and dispositions of It would be impossible for us at any expense to

men.

The

1069. When nations are advanced in wealth and population, for what are manufactures established?-1070. What are to be deducted from the profits of the merchant in foreign trade?- -1071. Are all countries capable of producing the same kind of commodities?

« VorigeDoorgaan »