Caroline. When goods are equally good and cheap I certainly prefer buying them of shops in the neighborhood rather than at distance, because it is more convenient; but why merchants should feel the same preference I do not clearly see: provided the goods they receive in their warehouses are of the same quality and price, I should think it would be immaterial to them from whence they came?

Mrs B. They, like you, find advantages in dealing with their neighbors; it enables them to ascertain better the character of the persons of whom they make their purchases; it affords them the means of protecting themselves against imposition, and of applying a legal remedy in case of necessity. As long as profits are equal, therefore, (independently of risk) a merchant will always prefer employing his capital in the home trade; and it is only superior profits that can tempt him to enter on a trade in which he is exposed to greater risks. You may recollect we formerly observed that the chances of gain must always be proportioned to the chances of loss.

Caroline. I confess that before this explanation I never could comprehend how foreign trade could be a mutual advantage to the countries engaged in it, for I imagined that what was gained by the one was lost by the other.

Mrs B. All free trade, of whatever description, muşt be a mutual benefit to the parties engaged in it; the only difference that can exist with regard to profit is, that it may not always be equally divided between them. An opposition of interests takes place not between merchants or countries exchanging their commodities, but

1092. How long will a merchant prefer employing his capital in the home trade? -1093. To what must the chances of gain be proportioned?-1094. What is the only difference that can exist with regard to profit? -1095. Between whom does an opposition of interest take place?

between rival dealers in the same commodity; and it is from that circumstance probably that you have been led to form such an erroneous idea of commerce. Do you not recollect our observing, some time since, that competition amongst dealers to dispose of their commodities renders them cheap, whilst competition amongst purchasers renders them dear. When you make any purchase, are you not sensible that the greater the number of shops in the same neighborhood dealing in the same commodity, the more likely you are to purchase it at a low price?

Caroline. Yes; because the shopkeepers endeavor to undersell each other.

Mrs B. It is therefore, the interest of the dealer to narrow competition, whilst it is that of the consumer to enlarge it. Now which do you suppose to be the interest of the country at large?

Caroline. That of the consumer; for every man is a consumer, even the dealers themselves, who, though they are desirous of preventing competition in their own individual trade, must wish for it in all other species of

commerce.

Mrs B. No doubt; it is by free and open competition alone that extravagant prices and exorbitant profits are prevented, and that the public are supplied with commodities as cheap as the dealer can afford to sell them.

Caroline. But in regard to luxuries, Mrs B., may we not be allowed to encourage those of our own pro

1094. What is the only difference that can exist with regard to profit? -1095. Between whom does an opposition of interests take place? -1096. Why is it that when you make a purchase you are more likely to obtain it at a low price, when there are in the same neighborhood a great number of shops dealing in the same commodi-1097. Which is the interest of the country at large?

ty?

-1098.

-1099.

By what is it that extravagant prices are prevented? May we not be allowed to encourage the luxuries of our own production in preference to those other countries?

duction in preference to those brought from foreign countries?

Mrs B. The commercial state of France during Bonaparte's system of prohibition will furnish a very satisfactory answer to your question. The West Indian produce, which the French were prohibited from purchasing, consists chiefly of certain luxuries of which they could not endure to be deprived; so that, for instance, they were employed, at an immense expense of capital, in extracting a saccharine juice from various fruits and roots to answer in an inferior degree the purpose of sugar; they cultivated bitter endives, the root of which supplied them with a wretched substitute for coffee; their tea was composed of indigenous herbs of a very inferior flavor to that of China. In a word, labor was multiplied to produce commodities of inferior value; or they would have been altogether deprived of a variety of comforts to which they had been accustomed, and. which, besides the pleasure derived from the enjoyment of them, we have observed to be one of the strongest incitements to industry.

But the privation of the consumers of luxuries is but a trifling evil compared with the consequences of such restrictions upon the laboring classes; for its effect is to inrcease the difficulty of raising produce, and, consequently, to diminish the quantity of capital, the fund upon which the poor subsist.

M. Say, who witnessed all the pernicious effects of this system, thus expresses himself: "C'est un bien mauvais calcul que de vouloir obliger la zone temperee a fournir des produits a la zone torride. Nos terres produisent peniblement en petite quantite, et en qualite mediocre, des matieres sucrees et colorantes, qu'un

1100. What is the privation to consumers of luxuries compared with the consequences of such restrictions upon the laboring classes? -1101. What opinion is given by M. Say upon this subject?

autre climat donne avec profusion; mais elles produisent, au contraire avec facilite, des fruits, des cereales que leur poids et leur volume ne permettent pas de tirer de bien loin. Lorsque nous condamnons nos terres a nous donner ce qu'elles produisent avec desavantage aux depends de ce qu'elles produisent plus volontiers; lorsque nous achetons fort cher, ce que nous payerions a fort bon marche, si nous le tirions des lieux ou il est produit avec avantage, nous devenons nous memes victimes de notre propre folie. Le comble de l'habilite est de tirer le parti le plus avantageux des forces de la nature; et le comble de la demence est de lutter contre elles; car c'est employer nos peines a detruire une partie des forces qu'elle voudroit nous preter."

Caroline. The prohibition of foreign commodities has then an effect precisely the reverse of that of machinery; for it increases instead of diminishing the quantity of labor; and produces inferior instead of more perfect commodities.

Mrs B. And consequently the wealth, prosperity, and enjoyments of a country so situated, instead of augmenting would decline. Let us hear what Dr Franklin says on the subject of restrictions and prohibitions.

"Perhaps in general, it would be better if government meddled no further with trade than to protect it, and let it-take its course. Most of the statutes or acts, edicts, arrets, and placards, of parliaments, princes, and states, for regulating, directing, or restraining of trade, have, we think, been either political blunders, or jobs obtained by artful men, for private advantage, under pretence of public good. When Colbert assembled some wise old merchants of France, and desired their advice and opinion how he could serve and promote commerce; their answer, after consultation, was in three words only, Lais

1102. What effect has the prohibition of foreign commodities?-1103. What opinion is expressed by Dr Franklin on the subject of restrictions and prohibitions?

sez nous faire.' It is said by a very solid writer of the same nation, that he is well advanced in the science of politics who knows the full force of that maxim, pas trop gouverner, which perhaps would be of more use when applied to trade, than in any other public concern. It were therefore to be wished, that commerce were as free between all the nations in the world, as between the several counties of England. So would all, by mutual communication, obtain more enjoyment. Those counties do not ruin each other by trade, neither would the nations. No nation was ever ruined by trade, even seemingly the most disadvantageous. Whenever desirable superfluities are imported, industry is thereby excited and superfluity produced."

Caroline. Well, I abandon the exclusive use of English luxuries; but the very argument you have used against them makes me think that it must be advisable to rely on home produce for the necessaries of life. Were we dependent on foreign countries for a supply of corn, what would become of us if those countries, in time of war, prohibited its exportation?

Mrs B. Your question will lead us into a discussion on the corn-trade, which it is too late for us to enter upon today; we will, therefore, reserve it for our next meeting.

CONVERSATION XX.

CONTINUATION OF FOREIGN TRADE.

On the corn trade.-Consequences of depending upon a home supply of corn in countries of great capital and population. It produces high prices in ordinary

-1105.

1104. What farther is mentioned by a French writer? What therefore is to be wished regarding commerce among all nations? -1106. Was any nation ever ruined by trade ?1107. What is the subject of the twentieth conversation?