V.

replaces too, by every fuch operation, two dif- CHAP. tinct capitals: but one of them only is employed in fupporting domeftic industry. The capital

which fends British goods to Portugal, and brings back Portuguese goods to Great Britain, replaces by every fuch operation only one British capital. The other is a Portuguese one. Though the returns, therefore, of the foreign trade of confumption should be as quick as those of the home-trade, the capital employed in it will give but one-half the encouragement to the industry or productive labour of the country.

A

But the returns of the foreign trade of confumption are very feldom fo quick as thofe of the home-trade. The returns of the home-trade generally come in before the end of the year, and fometimes three or four times in the year. The returns of the foreign trade of confumption feldom come in before the end of the year, and fometimes not till after two or three years. capital, therefore, employed in the home-trade will fometimes make twelve operations, or be fent out and returned twelve times, before a capital employed in the foreign trade of confumption has made one. If the capitals are equal, therefore, the one will give four and twenty times more encouragement and support to the industry of the country than the other.

The foreign goods for home-confumption may fometimes be purchased, not with the produce of domeftic industry, but with some other foreign goods. Thefe laft, however, must have been purchased either immediately with the produce

of

II.

BOOK of domeftic industry, or with fomething else that had been purchased with it; for, the cafe of war and conqueft excepted, foreign goods can never be acquired, but in exchange for fomething that had been, produced at home either immediately, or after two or more different exchanges. The effects, therefore, of a capital employed in fuch a round-about foreign trade of confumption, are, in every respect, the fame as thofe of one employed in the moft direct trade of the fame kind, except that the final returns are likely to be still more diftant, as they must depend upon the returns of two or three diftinct foreign trades. If the flax and hemp of Riga are purchased with the tobacco of Virginia, which had been purchased with British manufactures, the merchant muft wait for the returns of two diftinct foreign trades before he can employ the fame capital in repurchafing a like quantity of British manufactures. If the tobacco of Virgi nia had been purchased, not with British manufactures, but with the fugar and rum of Jamaica which had been purchased with those manufactures, he must wait for the returns of three. If those two or three diftinct foreign trades fhould happen to be carried on by two or three diftin&t merchants, of whom the fecond buys the goods imported by the firft, and the third buys those imported by the fecond, in order to export them again, each merchant indeed will in this cafe receive the returns of his own capital more quickly; but the final returns of the whole capital employed in the trade will be juft as flow as

ever.

Whether the whole capital employed in c fuch a round-about trade belong to one merchant or to three, can make no difference with regard to the country, though it may with regard to the particular merchants. Three times a greater capital must in both cafes be employed, in order to exchange a certain value of British manufactures for a certain quantity of flax and hemp, than would have been neceffary, had the manufactures and the flax and hemp been directly exchanged for one another. The whole capital employed, therefore, in fuch a round-about foreign trade of confumption, will generally give lefs encouragement and support to the productive labour of the country, than an equal capital employed in a more direct trade of the fame kind.

Whatever be the foreign commodity with which the foreign goods for home-confumption are purchased, it can occafion no effential difference either in the nature of the trade, or in the encouragement and fupport which it can give to the productive labour of the country from which it is carried on. If they are purchased with the gold of Brazil, for example, or with the filver of Peru, this gold and filver, like the tobacco of Virginia, must have been purchased with fomething that either was the produce of the industry of the country, or that had been purchased with fomething else that was fo. So far, therefore, as the productive labour of the country is concerned, the foreign trade of confumption which is carried on by means of gold and filver, has all

the

H A P.

V.

II.

BO O K the advantages and all the inconveniencies of any other equally round-about foreign trade of confumption, and will replace just as fast or just as flow the capital which is immediately employed in fupporting that productive labour. It seems even to have one advantage over any other equally round-about foreign trade. The tranf portation of thofe metals from one place to another, on account of their small bulk and great value, is lefs expenfive than that of almost any other foreign goods of equal value. Their freight is much lefs, and their infurance not greater; and no goods, befides, are lefs liable to fuffer by the carriage. An equal quantity of foreign goods, therefore, may frequently be purchafed with a smaller quantity of the produce of domestic industry, by the intervention of gold and filver, than by that of any other foreign goods. The demand of the country may frequently, in this manner, be supplied more completely and at a fmaller expence than in any other. Whether, by the continual exportation of thofe metals, a trade of this kind is likely to impoverish the country from which it is carried on, in any other way, I fhall have occafion to. examine at great length hereafter.

That part of the capital of any country which is employed in the carrying trade, is altogether withdrawn from fupporting the productive labour of that particular country, to support that of fome foreign countries. Though it may replace by every operation two diftinct capitals, yet neither of them belongs to that particular country.

4

country. The capital of the Dutch merchant, CHAP. which carries the corn of Poland to Portugal, V. and brings back the fruits and wines of Portugal to Poland, replaces by every fuch operation two capitals, neither of which had been employed in fupporting the productive labour of Holland; but one of them in fupporting that of Poland, and the other that of Portugal. The profits only return regularly to Holland, and conftitute the whole addition which this trade neceffarily makes to the annual produce of the land and labour of that country. When, indeed, the carrying trade of any particular country is carried on with the ships and failors of that country, that part of the capital employed in it which pays the freight, is distributed among, and puts into motion, a certain number of productive labourers of that country. Almost all nations that have had ány confiderable share of the carrying trade have, in fact, carried it on in this manner. The trade itself has probably derived its name from it, the people of fuch countries being the carriers to other countries. It does not, however, feem effential to the nature of the trade that it should be fo. A Dutch merchant may, for example, employ his capital in transacting the commerce of Poland and Portugal, by carrying part of the furplus produce of the one to the other, not in Dutch, but in British bottoms. It may be prefumed, that he actually does fo upon fome particular occafions. It is upon this account, however, that the carrying trade has been supposed peculiarly advantageous to fuch a country as Great Britain,

VOL. III.

F