第1章

Edinburgh。

PrintedbytheHeirsandSuccessorsofAndrewAnderson，PrintertotheQueensmostExcellentMajesty，AnnoDOM。1705。

ThereareseveralProposalsoffer’dtoRemedytheDifficultiestheNationisunderfromthegreatScarcityofMoney。

ThatarightJudgmentmaybemade，whichwillbemostSafe，AdvantageousandPracticable；ItseemsNecessary，1。ThattheNatureofMoneybeinquiredinto，andwhySilverwasus’dasMoneypreferabletootherGoods。2。ThatTradebeconsidered，andhowfarMoneyaffectsTrade。2。ThattheMeasureshavebeenus’dforpreservingandIncreasingMoney，andthesenowpropos’dbeexamin’d。

Chapter1

HowGoodsarevalued。OfBarter，ofsilver；ItsValueasaMettal，itsQualitiesfittingitforMoney，andtheAdditionalValueitreceivedfrombeingus’dasMoney。

GoodshaveaValuefromtheUsestheyareapply’dto；AndtheirValueisGreaterorLesser，notsomuchfromtheirmoreorlessvaluable，ornecessaryUses：AsfromthegreaterorlesserQuantityoftheminproportiontotheDemandforthem。Example。Waterisofgreatuse，yetoflittleValue；BecausetheQuantityofWaterismuchgreaterthantheDemandforit。Diamondsareoflittleuse，yetofgreatValue，becausetheDemandforDiamondsismuchgreater，thantheQuantityofthem。

GoodsofthesamekinddifferinValue，fromanydifferenceintheirQuality。（Ex。）OneHorseisbetterthananotherHorse。BarleyofoneCountryisbetterthanBarleyofanotherCountry。

GoodschangetheirValue，fromanyChangeintheirquantity，orintheDemandforthem。（Ex。）IfOatsbeingreaterQuantitythanlastyear，andtheDemandthesame，orlesser，Oatswillbelessvaluable。

MrLocksayes，TheValueofGoodsisaccordingtotheirQuantityinProportiontotheirVent。TheVentofGoodscannotbegreaterthantheQuantity，buttheDemandmaybegreater：（Ex。）IftheQuantityofWinebroughtfromFrancebea100Tunn，andtheDemandbefor500

Tunn，theDemandisgreaterthantheVent；andthe100TunnwillsellatahigherPrice，thaniftheDemandwereonlyequaltotheVent。SothePricesofGoodsarenotaccordingtotheQuantityinProportiontotheVent，butinProportiontotheDemand。

BeforetheuseofMoneywasknown，Goodswereexchang’dbyBarter，orContract；andContractsweremadepayableinGoods。

ThisStateofBarterwasinconvenient，anddisadvantageous。1。Hewhodesir’dtoBarterwouldnotalwaysfindPeoplewhowantedtheGoodshehad，andhadsuchGoodsashedesir’dinExchange。

2。ContractstakenpayableinGoodswereuncertain，forGoodsofthesamekinddiffer’dinvalue。

3。TherewasnomeasurebywhichheProportionofValueGoodshadtooneanothercouldbeknown。

InthisStateofBartertherewaslittleTrade，andfewArts—men。

ThePeopledependedontheLanded—men。TheLanded—menlabour’donlysomuchoftheLandasserv’dtheoccasionsoftheirFamilies，tobarterforsuchnecessariesastheirLanddidnotproduce；andtolayupforSeedandbadYears。Whatremain’dwasunlabour’d；orgiftedonconditionofVassalage，andotherServices。

TheLossesandDifficultiesthatattendedBarter，wouldforcetheLanded—mentoagreaterconsumptionoftheGoodsoftheirownProduct，andalesserConsumptionofotherGoods；ortosupplythemselves，theywouldturntheLandtotheproductoftheseveralGoodstheyhadoccasionfor；thoonlypropertoproduceofonekind。So，muchoftheLanduasunlabour’d，whatwaslabour’dwasnotemploy’dtothatbywhichitwouldhaveturn’dtomostAdvantage，northePeopletotheLabourtheyweremostfitfor。

SilverasaMetalhadavalueinBarter，asotherGoods；fromtheUsesitwasthenapply’dto。

AsGoodsofthesamekinddiffer’dinvalue，soSilverdiffer’dfromSilver，asitwasmoreorlessfine。

SilverwaslyabletoachangeinitsValue，asotherGoods，fromanychangeinitsQuantity，orintheDemandforit。

SilverhadQualitieswhichfitteditfortheuseofMoney。

1。ItcouldbebroughttoaStandardinFineness，sowascertainastoitsQuality。

2。ItwaseasieofDelivery。

3。ItwasofthesamevalueinonePlacethatitwasinanother；

ordiffer’dlittle，beingeasieofcarriage。

4。ItcouldbekeptwithoutLossorExpense；takinguplittleRoom，andbeingdurable。

5。ItcouldbedividedwithoutLoss，anOunceinfourPieces，beingequalinValuetoanOunceinonePiece。

SilverhavingtheseQualities，’itsreasonabletothinkitwasusedasMoney，beforeitwascoin’d。Whatismean’tbybeingusedasMoney，is，thatSilverinBullionwastheMeasurebywhichGoodswerevalued：TheValuebywhichGoodswereexchanged：AndinwhichContractsweremadepayable。

HewhohadmoreGoodsthanhehadusefor，wouldchoosetobarterthemforSilver，thohehadnouseforit；Because，SilverwascertaininitsQuality：Itwaseasieofdelivery：ItcouldbekeptwithoutLossorExpense：AndwithithecouldpurchaseotherGoodsashehadoccasion，inWholeorinPart，atHomeorAbroad，silverbeingdivisiblewithoutLoss，andofthesameValueindifferentPlaces。

（Ex。）IfA。B。hada100Sheep，anddesiredtoexchangethemforHorses；C。D。had10Horses，whichwereequalto，orworththe100

sheep，andwaswillingtoexchange：ButasA。B。hadnotpresentoccasionfortheHorses，ratherthanbeattheExpenseofKeepingthem，hewouldbarterhisSheepwithE。F。whohadtheValuetogiveinSilver，withwhichhecouldpurchasetheHorsesatthetimehehadoccasion。

OrifE。FhadnotSilver，butwassatisfiedtogivehisBondforheSilver，ortheHorses，payableatthetimeA。B。wantedthem；A。B。

wouldchoosetotaketheBondpayableinSilver，ratherthaninHorses：BecauseSilverwascertaininQuality，andHorsesdiffer’dmuch。SoSilverwasusedasthevalueinwhichContractsweremadepayable。

SilverwaslikewiseusedastheMeasurebywhichGoodswerevalued，becausecertaininQuality。（Ex。）IfA。B。hada100weightofLead，anddesiredtoexchangeitforBarley，thewaytoknowwhatquantityofBarleywasequalinvaluetotheLead，wasbytheSilver。

Ifthe100WeightofLeadwasequaltofiveOuncesoffineSilver，and5OuncesoffineSilverequalto20BollsofBarley，then20BollswastheQuantitytobegiveninexchangefortheLead。

SilverbeingeasieofCarriage，soequalinonePlacetowhatitwasinanother；wasusedastheMeasurebywhichGoodstobedeliver’dindifferentplaceswerevalued。（Ex。）IfaPieceofWinewastobedeliver’datGlasgowbyA。B。Merchantthere，totheOrderofC。D。

MerchantinAberdeen：AndtheValuetobedeliver’dinOatsatAberdeenbyC。D。totheOrderofA。B。TheWinecouldnotbevaluedbytheQuantityofOatsitwasworthatGlasgow，northeOatsbytheQuantityofWinetheywereworthatAberdeen。WineorOatsmightdifferinQuantity，orbemoreorlessvaluableattheonePlacethanattheother。ThewaytohaveknownwhatQuantityofOatswasequaltotheWine，wasbytheQuantityofSilvereachwasworthattheplacestheyweretobedelivered。IfthePieceofWinewasworthatGlasgow20OuncesoffineSilver，and20OuncesoffineSilverworth50BollsofOatsatAberdeen；then50BollswastheQuantityofOatstobegiventhereinreturnfortheWine。

SilverbeingcapableofaStamp，Princes，forthegreaterConvenienceofthePeople，setupMintstobringittoaStandard，andStampit；WherebyitsWeightandFinenesswasknown，withouttheTroubleofWeighingorFyning；buttheStampaddednothingtotheValue。

FortheseReasonsSilverwasusedasMoney；ItsbeingCoin’dwasonlyaConsequenceofitsbeingapplyedtothatuseinBullion，tho’

notwiththesameConvenience。

*MrLockandotherswhohaveWrotonthisSubject，say，ThegeneralConsentofMenplac’danimaginaryValueuponsilver，becauseofitsQualitiesfittingitforMoney。[*Lock，pag。31。uponInterest，andpag。1，uponMoney。]

IcannotconceivehowdifferentNationscouldagreetoputanImaginaryValueuponanything，expeciallyuponSilver，bywhichallotherGoodsarevalued；OrthatanyoneCountrywouldreceivethatasaValue，whichwasnotvaluableequaltowhatitwasgivenfor；OrhowthatImaginaryValuecouldhavebeenkeptup。But，supposeFrancereceivingSilveratanImagainaryValue，otherNationsreceiv’ditatthatValue，becausereceiv’dsoinFrance：ThenforthesameReasonaCrownpassinginFrancefor76Sols，shouldpassinScotlandfor76

Pence，andinHollandfor76Stivers。Butonthecontrair，eveninFrancewheretheCrownisrais’d，’tisworthnomorethanbeforewhenat60Sols。

ItisreasonabletothinkSilverwasBarter’dasitwasvaluedforitsUsesasaMettal，andwasgivenasMoneyaccordingtoitsValueinBarter。TheadditionalUseofMoneySilverwasapply’dtowouldaddtoitsValue，becauseasMoneyitremediedtheDisadvantagesandInconveniencesofBarter，andconsequentlythedemandforSilverencreasing，itreceivedanadditionalValueequaltothegreaterdemanditsUseasMoneyoccasioned。

AndthisadditionalValueisnomoreImaginary，thantheValueSilverhadinBarterasaMettal，forsuchValuewasbecauseitserv’dsuchUses，andwasgreaterorlesseraccordingtothedemandforSilverasaMettal，proportionedtoitsQuantity。TheadditionalValueSilverreceiv’dfrombeingusedasMoney，wasbecauseofitsQualitieswhichfitteditforthatUse；AndthatValuewasaccordingtotheadditionaldemanditsUseasMoneyoccasioned。

IfeitheroftheseValuesareImaginary，thenallValueisso，fornoGoodshaveanyValue，butfromtheusestheyareapply’dto，andaccordingtotheDemandforthem，inproportiontotheirQuantity。

ThusSilverhavingaValue，andQualitiesfittingitforMoney，whichotherGoodshadnot，wasmadeMoney，andforthegreaterconvenienceofthePeoplewasCoin’d。

TheNamesofthedifferentPiecesmighthavebeenNumber1。

Number2。andsoon；Number60wouldhavethesameasaCrown；FortheNameandStampwasonlytocertify，thatthePiecehadsuchaQuantityofSilverinit，ofsuchafineness。

GoodsofanyotherkindthathavethesameQualitiesmightthen，andmaynowbemadeMoneyequaltotheirValue。GoldandCoppermaybemadeMoney，butneitherwithsomuchConvenienceasSilver。PaymentsinCopperbeingInconvientbyreasonofitsBulk；andGoldnotbeinginsogreatQuantityastoservetheUseofMoney。InCountrieswhereGoldisingreatQuantity，itisusedasMoney；Andwheregoldandsilverarescarce，Copperisused。

Goldiscoin’dforthemoreeasieExchangeofthatMettalandCoppertoserveinsmallPayments；butSilveristhemeasurebywhichGoodsareValued，theValuebywhichGoodsareExchang’d，andinwhichContractsaremadepayable。

AsMoneyencreas’d，theDisadvantagesandInconveniencesofBarterwereremov’d；thePoorandIdlewereemploy’d，moreoftheLandwasLabour’d，theProductencreas’d，ManufacturesandTradeimprov’d，theLanded—menLivedbetter，andthePeoplewithlessDependanceonthem。

Chapter2

OfTrade，andhowfaritdependsonMoney。ThattheEncreaseofthePeopledependsonTrade。OfExchange。

TradeisDomestick，orForreign。

DomestickTradeistheImploymentofthePeople，andtheExchangeofGoodswithintheCountry。

ForreignTradehasseveralBranches。

1。TheProductandManufacturebeingmorethantheConsumption，apartisExported，andinReturnForreignGoodsarebroughtHome。

2。SellingtheGoodsExportedatonePort，andLoadingtheretosellatanother；WherebyagreaterReturnismade，thaniftheGoodsExportedhadbeencarryeddirectlythere。

3。BringingHometheProductandManufactureofotherCountries，fromwhence，andwhentheyareCheap；TosupplyCountrieswhere，andwhentheyaredear。

4。BringingHometheProductofotherCountries，andExportingitinManufacture。

5。Freighting，orhireingoutShips。

DomestickandForreignTrademaybecarriedonbyBarter；ButnotforsogreataValueasbyMoney，norwithsomuchconvenience。

DomestickTradedependsontheMoney。AgreaterQuantityemployesmorePeoplethanalesserQuantity。AlimitedSumcanonlysetanumberofPeopletoWorkproportion’dtoit，and’tiswithlittlesuccessLawsaremade，forEmployingthePoororIdleinCountrieswhereMoneyisscarce；goodLawsmanybringtheMoneytothefullCirculation’tiscapableof，andforceittothoseEmploymentsthataremostprofitabletotheCountry：ButnoLawscanmakeitgofurder，norcanmorePeoplebesettoWork，withoutmoreMoneytocirculateso，astopaytheWagesofagreaternumber。TheymaybebroughttoWorkonCredit，andthatisnotpracticable，unlesstheCredithaveaCirculation，soastosupplytheWorkmanwithnecessaries；Ifthat’ssuppos’d，thenthatCreditisMoney，andwillhavethesameeffects，onHome，andForreignTrade。

AnadditiontotheMoneyaddstotheValueoftheCountry。SolongasMoneygivesInterest，itisimployed；andMoneyimployedbringsProfite，tho’theImployerloses。（Ex。）If50MenaresettoWork，towhom25shillingsispayedperday，andtheImprovementmadebytheirLabourbeonlyequalto，orWorth15sh。YetbysomuchtheValueoftheCountryisincreased。ButasitisreasonabletosupposetheirLabourequalto40sh。SomuchisaddedtothevalueoftheCountry，ofwhichtheImployergains15sh。15maybesupposedtoequaltheConsumptionoftheLabourers，whobeforelivedoncharity，and10sh。remainstothemovertheirConsumption。

IfaStoneofWoollisworth10sh。andmadeintoClothworth2

Pound；TheProductisimprov’dtofourtimestheValueithadinWooll：theWorkmenmaybesupposedtoconsumemorethanwhentheywerenotimployed；Allowone4th，theNationisGainerdoublethevalueoftheProduct。SoanAdditiontotheMoney，whethertheImployergainsornot，addstotheNationalWealth，easestheCountryofanumberofPoororidle，proportionedtotheMoneyadded，enablesthemtolivebetter，andtobearashareinthePublickwiththeotherPeople。

ThefirstBranchofForreignTrade，whichistheExportandImportofGoods，dependsontheMoney。IfonehalfofthePeopleareemploy’d，andthewholeProductandmanufactureconsum’d；MoreMoney，byemployingmorePeople，willmakeanOverplustoExport：IfthentheGoodsimportedballancetheGoodsexported，agreaterAdditiontotheMoneywillimployyetmorePeople，orthesamePeoplebeforeemployedtomoreAdvantage；whichbymakingagreater，ormorevaluableExport，willmakeaBallancedue。SoiftheMoneylessens，apartofthePeoplethenimployedaresetidle，orimployedtolessadvantage；theProductandManufactureisless，orlessvaluable，theExportofConsequenceless，andaBallanceduetoForreigners。

The2dand3dBranchesofForreignTrade，call’dtheTradesofCarriage；aremonopoliz’doutofEurope，bytheseCountrieswhohaveColonies；andinEuropebythesewhosellcheapest。

ScotlandhasAdvantagesforTradebywhichtheMerchantsmightunderselMerchantsinHolland，ascheapnessofLiving，payinglesstothePublick，havingWorkmen，Seamen，andProvisionsforvicutalingcheaper：butiftheDutchMerchantsStockis10000lib。andhisyearlyExpense500；hecantradeat10percentProfit，andaddyearly500

lib。tohisStock。WherasaScotsMerchant，whoseStockis500lib。

andhisyearlyExpense50；cannottradesocheap。

If’tisask’thowaDutchMerchanttradeswohasonly500lib。

Stock？HerestrictshisExpensesoashecanaffordtotradeat10percentProfit：OrMoneybeingingreaterQuantityinHolland，wherebyitiseasierborrowed，andatlessuse；HegetsCreditformorea3or4

percent，bywhichhegains6or7。AndunlessMoneybeingreaterQuantityinScotland，orExpenseretrench’d，wecannottradesocheapastheDutch；Tho’wehaveAdvantagesforTradethattheyhavenot，andtho’theybeunderDisadvantageswearenotlyableto。ByagreaterquantityofMoneyandOeconomy，theDutchmonopolizetheTradesofCarriageevenfromtheEnglish。

The4thBranchofForreignTrade，BringinghometheProductofotherCountries，andExportingitinManufacture，dependsontheQuantityofMoney。WearesofarfromCompetingwiththeDutchinthisTrade，thatourWoollwassenttoHolland，andimportedfromthenceinmanufacture；underthedifficultyofaProhibitionontheExportoftheWooll，andontheImportoftheManufacture。YetbesidestheAdvantagesalreadynamed，whichwehaveforTradeovertheDutch，theMaterialistheProductofourCountry，andgreaterPriviledgesaregrantedtoManufacturershere，thaninHolland。

’Tisalledged，iftheProhibitionhadcontinued，ManufacturesmighthavecometoPerfection。

TheAdvantagesomeMenmadebyManufacture，mayhaveoccasion’dthesettingupofmore，whiletheMoneyhasbeendiminishing；ButthatMoneysoemploy’d，hasbeentakenfromsomeotheruseitwasbeforeimploy’din：ForMoneycannotserveintwoPlacesatonetime。

’Tisalledg’d，ThattheallowingtheWoolltobeexported，occasionedtheExportationoftheMoney。Thatatonetime5000lib。

wassenttoEnglandtobuyWooll。’TisasktwhatbecameofthatWooll？

TheyAnswer，itwassenttoFranceforWine。Then，as5000lib。ofEnglishWoollmaybeworth8or10ThousandPoundinFrance；Sothe5000lib。senttoEngland，savedthesendingoutof8or10000lib。toFrance。

Tothesewhodon’tthroughlyExaminetheStateofthisCountry，itmayseemoddthatWoollshouldbeallowedbyLawtobeExported：

ButiftheProductofScotlandcannotbeManufactur’dwithlessthan50000People，andtheMoneythatcanbespar’dtoManufacture，beonlycapabletoemploy25000，onehalfoftheProductwillbelostifitisnotallowedtobeExported。

The5thBranch，theFreightingofHireingoutofShips，dependsontheMoney，andtheotherBranchesofTrade。WhereShipsareinusetobeFreightedbyStrangers，andsupportedbyagreatDemandfortheirownTrade；ThereareallsortsofShipsaretobehiredCheaperthaninotherplaces；AndMerchantsaresureofsuchShipsasareproperfortheGoodstheyLoadwith，andtheCountriestheyTradeto。

ThisTradeofFreightingbringstheGoodsofotherCountriestoHolland，thodesign’dforSaleelsewhere。IfWoollenManufacturefromEnglandtoPortugalyields25percentProfit，andtoHolland15；TheEnglishMerchantwillchoosetosendsuchGoodstoHollandfor15percent，ratherthantoPortugalfor25：AndtheDutchMerchantwhoisabletoTradecheaper，fromtheCheapnessofFreight，etc。issatisfiedfortheother10tocarrytoPortugal。

MostAuthorswhohaveWroteonTradedivideitintoNationalandPrivat。Theysay，AMerchantmaygainwheretheNationloses。Ifa1000Lib。isExportedtotheIndiesinMoneyorBullion，anda1000

Lib。inGoodsorProvisions；Thereturnworth8000Lib。theMerchantgains6000；ButastheseGoodsareallconsum’dintheCountry，theNationlosesthe1000Lib。MoneyorBullionExported。

Theydon’tconsiderwhetherthe8000Lib。ofGoodsimported（allsuppos’dtobeconsum’dintheCountry）doesnotlessentheConsumptionoftheProductorManufactureoftheCountry，soastooccasionanadditiontotheExport，atleastequaltothe1000lib。

MoneyorBullionExported。ButallowingtheydonotlessentheConsumptionoftheGoodsoftheCountry，andtheUseofthembenotatallnecessary；YettheseGoodsbeingworth8000lib。atHomeorAbroad，theNationgains6000。IfthePeopleconsumethem，andinextravagantUses，that’snotthefaultoftheTrade，norforthatReasonshouldthatTradebecall’dDisadvantageous；ItisthefaultoftheGovernment，whooughttohinderthetoogreatConsumptionofForreignGoods；Especially，suchasmightbewantedwithoutcausingagreaterConsumptionoftheGoodsoftheCountry。Thatcarebeingtaken，bymakingtheventlessprofitableatHome，thanAbroad；

MerchantswouldExportthem，orforthefuturelessentheImport。

IfEast—IndiaGoodsthatSellfora1000lib。inEngland，areonlyworthAbroad800Lib，theDutypayedattheirentrybeingreturn’d，andmoregivenasadraw—backtoEncouragetheExport，theirVentAbroadwillbemoreProfitablethaninEngland。

APeoplemayconsumemoreoftheirownorForreignGoods，thantheValueoftheProduct，Manufacture，andProfitsbyTrade；buttheirTradeisnotdisvantageous，itistheirtoogreatconsumption：AndthetoogreatconsumptionoftheProductandManufactureoftheCountry，maybealshurtfulasthatofForreignGoods；For，ifsomuchisconsumed，thattheremainderExportedwon’tpaytheConsumptionofForreignGoods，aBallancewillbedue，andthatBallancewillbesentoutinMoneyorBullion。

ANationmaygainwheretheMerchantloses，butwhereverthemerchantgains，theNationgainsequal，andsomuchmore，astheMaintenanceandWagesofthePeopleemploy’dandtheDutyontheGoodsamountsto。Ifashipinsur’dislost，theNationloses，andtheMerchantlosesnothing；ButinthatcasetheinsureristheMerchant，andlosesequaltotheNation。

AsTradedependsonMoney，sotheencreaseordecreaseofthePeopledependsonTrade。IftheyhaveEmploymentatHome，theyarekeptatHome：AndiftheTradeisgreaterthanservestoEmploythePeople，itbringsmorefromplaceswheretheyarenotEmploy’d。SirWilliamPettyValuesaManat20yearsPurchase，bythatComputationaSeamanwhoseWagesis40shil。aMonth，isValued430lib。

ScotlandhasaveryinconsiderableTrade，becauseshehasbutaverysmallpartoftheMoney。ThereisalittleHomeTrade，buttheCountryisnotImprov’d，northeProductManufactur’d。ThereisalittleofthefirstBranchofForreignTrade，andthatiscarriedonwithgreatDisadvantagetothePeople，whopaydearerformostForreignGoods，andareworseserv’d，thanotherNations：IftheyhaveanyCheaper，’tisfromthelowerDutyontheImport。InScotlandlowPricesaregivenforGoodsBoughtuptobeExported，theMerchantsProfitbeinggreat：Ifa100StoneofWoolisworthinHolland10

PieceofLinenCloth，thesetenPiecesareSoldinScotlandfortheValueofa180or200StoneofsuchWool。SuchGoodsasdonotyeildthatgreatProfit；arenotExported；Andthesethatdo，arenotExportedinanyQuantity，theMerchantsStockbeingsmall。ScotlandhasnopartoftheotherBranchesofForreignTrade，notbeingabletoTradesoCheapasotherNations。

SomethinkifInterestwerelower’dbyLaw，Tradewouldincrease，MerchantsbeingabletoEmploymoreMoneyandTradeCheaper。SuchaLawwouldhavemanyInconveniencies，anditismuchtobedoubted，whetheritwouldhaveanygoodEffect；Indeed，iflownessofInterestwretheConsequenceofagreaterQuantityofMoney，theStockapplyedtoTradewouldbegreater，andMerchantswouldTradeCheaper，fromtheeasinessofborrowingandthelowerInterestofMoney，withoutanyInconvenienciesattendingit。

Tho’Interestwereat3percentinHolland，andcontinuedat6

inScotland；ifMoneyweretobehadequaltotheDemandsat6，theAdvantageswehaveforTrade，whichtheDutchhavenot，wouldenableustoextendTradetoitsotherBranches，notwithstandingthedifferenceofInterest。

IfMoneyinScotlandwereequaltotheDemandsat6percent，theDutchcouldnottradesocheapinHerring；TheHinderancesofthatTradebeingtheConsequencesoftheScarcityofMoney。TheMaterialsforcarryingontheFishingarecheaperinHolland，butthecheapnessofVictuallingalonewouldballancethat。AndtheDearthoftheseMaterials，asofotherForreignGoods，comingfromthescarcityofMoney；thatbeingremeded，theseMaterials，andotherForreignGoodsthatarenottheProductofHollandwouldbesoldascheapinScotland。

Exchange，iswhenaMerchantexportstoagreaterValuethanheImports，andhasMoneydueAbroad；Anotherimportingtoagreatervaluethanheexported，hasoccasionforMoneyabroad：ThislastbypayinginMoneytotheother，oftheWeightandFinenesswiththatisduehim，ortothatValue，savestheTrouble，Hazard，andExpense，tohimselfofoffendingMoneyout，totheotherofbringingMoneyhome，andtoboththeExpenseofRe—coyining。

SolongasForreignTrade，andExpensekeptequal，ExchangewasatthePar：ButwhenaPeopleimportedforagreaterValue，orhadotherOccasionsAbroad，morethantheirExport，andtheExpenseofForreignersamongthemwouldballance；therewasanecessityofsendingouttheBallanceinMoneyorBullion，andtheMerchantorGentlemanwhoowed，orhadoccasionforMoneyabroad，tosavetheTrouble，ExpenseandHazardofsendingitout，gavesomuchpercenttoanother，astheTrouble，ExpenseandHazardwasvaluedat。ThusExchangeroseabovethePar，andbecameaTrade。

MrMunonTradePage100，says，TheExchangebeingagainstaNation，isofadvantagetothatNation。andsupposes，ifa100lib。atLondonisworthnomorethan90lib。ofthesameMoneyatAmsterdam，theDutchtosend500000lib。ofGoodstoEngland，andtheEnglish400000lib。ofGoodstoHolland；Itfollows，thattheMoneyduetheEnglishatAmsterdam，willballance440000lib。duetotheDutchatLondon：So60000lib。paystheBallance。MrMundoesnotconsider，thattheDutchGoodsworth500000lib。whenExchangewasatthePar，areworthatLondon555555l。when90lib。atAmsterdamiswortha100

lib。atLondon。Andthe400000lib。ofEnglishGoodsinHolland，areonlyworth360000lib。thatSumbeingequalbyExchangeto400000lib。

inEngland。SoinplaceofEnglandshavinganAdvantageof40000lib。

ashealledgesbytheExchangebeingagainsther：Shepays95555lib。

more，thanifExchangehadbeenatthePar。

WhenExchangeisabovethePar，itisnotonlypayedfortheSumsdueofballance，butaffectsthewholeExchangetothePlacewheretheBallanceisdue。IftheBallanceis20000lib。andtheSumsExchangedbyMerchantswhohaveMoneyabroad，withotherswhoareowing，orhaveocasionforMoneythere，be60000lib。theBillsforthe60000lib。

aresoldatornearthesamePrice，withthe20000lib。ofBallance。

ItlikewiseaffectstheExchangetoCountrieswherenoBallanceisdue（Ex。）IftheExchangebetwixtScotlandandHollandis3percentabovetheParagainstScotland，betwixtEnglandandHollandatthePar，tho’noballanceisduebyScotlandtoEngland，yettheExchangewithEnglandwillrise；For，a100lib。inEnglandremittedtoScotlandbyHolland，willyield103lib。SobetwixtScotlandandEnglanditmaybesupposedtobehadat2percent，beinglessTroublethantoremitbyHolland。

GoodsaresoldtoForreigners，accordingtothefirstCost。（Ex。）

IfGoodswortha100lib。inScotland，areworth130lib。inEngland，theseGoodswillbeexported，30percentbeingsuppos’denoughfortheChargesandProfit。IfthePriceoftheseGoodslowerinScotlandfroma100lib。to80，thePriceinEnglandwillnotcontinueata130；Itwilllowerproportionably，foreitherScotsMerchantswillunderseloneanother，orEnglishMerchantswillexporttheseGoodsthemselves。SoiftheyriseinScotlandfrom100lib。to120；theywillriseproportionalbyinEngland，unlesstheEnglishcanbeserv’dwiththeseGoodscheaperfromotherplaces，orcansupplytheuseofthemwithGoodsofanotherkind。Thisbeingsupposed，itfollowsthat，BysomuchasExchangeisabovethePar，somuchallGoodsexportedaresoldcheaper，andallGoodsimportedaresolddearerthanbefore。（Ex。）IfaMerchantsendGoodsyearlytoEnglandfirstCost，ChargesandProfit6000lib。MoneyinEnglandofthesameStandardwithMoneyinScotland，andnoBallancedue；ButaBallanceduetoHolland，raisingtheExchange3percentabovethepartoHolland，andaffectingtheExchangetoEngland2percent5882lib。7sh。inEnglandpaystheGoods，thatSumbyExchangebeingequalto6000lib。

inScotland。sothataBallanceduetoHolland，byraisingtheExchangetootherCountries，occasionsaLosstoScotlandof17lib。

13sh。onthevlaueof6000lib。ofGoodssenttoEngland。

EnglishGoodsaresoldsomuchdearer。（Ex。）IfanEnglishMerchantsendGoodsyearlytoScotland，firstCost，ChargesandProfit6000lib。6120lib。mustbepayedfortheseGoodsinScotland，beingonlyequalto6000lib。inEngland。IftheExchangehadbeenatthePar，theScotsGoodssenttoEnglandwouldhavesold117lib。13sh。

more，andtheEnglishGoodssenttoScotland120lib。less。

ThustoallPlaceswithwhomExchangeisabovethePar，Goodssentoutaresoldsomuchless，andGoodsbroughtfromthencearesoldsomuchdearer，astheExchangeisabovethePar；whethersentout，orbroughtin，byScotsorForreignMerchants。

TheMerchantwhodealsinEnglishGoodsgainsnomorethanwhenExchangewasatthePar，thohesellsdearer；NortheMerchantwhodealsinScotsGoodsless，thohesellscheaper；theyhaveboththesameProfitaswhenExchangewasatthePar。Scotlandpays2percentmoreforEnglishGoods，andEngland2percentlessforScotsGoods：

All，oragreatpartofthelossfallsatlastontheLandedManinScotland，anditistheLandedManinEnglandhasall，oragreatpartoftheBenefit。

NationsfindingtheExportofMoneyorBulliontopaytheballanceduebyTrade，alossofsomuchRiches，andveryhurtfultoTrade，mighhavedischarg’dtheImportofsuchGoodsasthePeoplecouldbestwant；OrlaidaDutyonthem，suchasmighthavelessen’dtheirConsumption：TheymighthavegivenencouragementtoIndustry，wherebytheProductwouldhavebeenencreas’dandimprov’d，ordiscourag’dextravagantConsumption，wherebytheOverplustoExportwouldhavebeengreater；AnyoneoftheseMethodswouldhavebroughtTradeandExchangeequal，andhavemadeaBallanceduethem：Butinplaceofthesemeasures，theyProhibitBullionandMoneytobeExported，whichcouldnotwellhaveanyothereffect，thantoraisetheExchangeequaltotheHazard，suchLawsaddedtotheExportofMoneyorBullion，whichmaybesuppos’d3percentmore：AndastheseLawsbysucheffectwerehurtful，makingallGoodsExportedsellyet3

percentcheaper，andallGoodsImported3percentdearer；thestrictertheywereexecut，thehighertheExchangerose，andthemoretheydidhurt。TheballancewasstillsentoutinMoneyorBullion，bytheMerchantwhoowedit，bytheBankerwhogavetheBills，orbytheForreigntowhomitwasdue。

SupposetheMoneyofScotland，England，andHollandofthesameweightandfineness。ScotlandtoTradewithnootherplaces。TheExchangeatthePar。TheyearlyExportfromScotland，firstcost300000lib。ChargesandProfit30percent。GoodsImported280000lib。

ChargesandProfit30percent。OnehalfoftheTradetobecarriedonbyScotsMerchants，theotherhalfbyEnglishandDutch。

DuetoScotlandforonehalfoftheExportcarriedoutbytheirownMerchants195000

DuefortheotherhalfcarriedoutbyEnglishandDutch。

150000

345000

DuebyScotlandtoEnglandandHollandforGoodsImportedbyEnglishandDutch182000

DueforGoodsImportedbyScotsMerchants140000

322000

TheExpenseofScots—menAbroad，morethanofForreignersinScotland，40000lib。Ifthisissuppos’dtheyearlystateoftheTradeandExpenseofScotland，therewillbeaballancedueof17000lib。

AndunlesstheScotsretrenchtheConsumptionofForreignGoods，soastoImportless；OrretrenchtheConsumptionoftheirownGoods，soastoExportmore；Orencrease，orimprovetheirProduct，soastheExportbegreaterormorevaluable；OrretrenchintheirExpenseAbroad。SincethatballancemustbepaiditwillgooutinMoneyorBullion；AndoccasionstheExchangetorise3percent，theProhibitionontheExportofMoney3more，ifScotsMenExportit，theNationsavesthe1020l。Exchangeonthe17000ofballancedue，whichislostifEnglishMerchantsExportit：ButthelosssuchaRiseinExchangeoccasionsontheGoods，ismoreconsiderable。The195000lib。

dueAbroadforGoodssentoutofScotlandbyScotsMerchants，willbepay’dwith183962lib。EnglishorDutchMoney，thatSumbeingequalbyExchangeat6percentto195000lib。inScotland。The150000lib。dueforfirstCostofGoodscarriedoutbyEnglishorDutchMerchants，willbepay’dwith141510lib。EnglishorDutchMoney，thatSumbeingequalto150000lib。inScotland。The182000lib。duebyScotlandforGoodsImportedbyEnglishandDutchMerchantswillcometo192920lib。

inScotland。Andthe140000lib。firstcostofGoodsbroughtHomebyScotsMerchants，willcometo148400lib。inScotland。SotheAccomptwillrunthus。

DuetoScotlandforGoodsExported183962

BroughtfromAbroadfirstCost140000

BallanceofExpenseAbroad40000

DuetoScotlandAbroad3962

DuebyScotlandforGoodsImportedbyEnglishandDutch192920

EnglishandDutchtakebackingoods150000

DuetoEnglishandDutchinScotland42920

3962Lib。dueabroadtoScotlandinScotsMoney4199

RemainsduebyScotland38721

SotheRiseintheExchangeof3percentbytheballancedueof17000lib。and3morebytheProhibitionontheExportofMoney，occasionsalosstoScotlandof21721l。andmakesthenextyearsballance38721lib。thotheTradebethesameasbefore。Ofwhich21721lib。lostbyExchange，onehalfwouldbesav’difMoneywereallowedtobeExported。

SincetheExchangebeing6percentabovethePar，occasionsthelossof21721lib。thenraisingtheMoney8anda1/3percent，havingrais’dtheExchangewithEnglandto14percent，andwithHollandto30，makesthelossproportionablygreater：ScotsGoodsbeingsuppos’dtocontinueatthesamePricestheywereSoldfor，beforetheMoneywasrais’d，ornottoriseinthesameproportionwiththeMoney。ForwhnExchangewasatthePar，a100lib。ofScotsGoodswereSoldAbroadfora130lib。EnglishMoney；But114lib。EnglishMoney，beingnowequalbyExchangetoa130lib。inScotland，theScotsMerchantcanaffortoSellthesameQuantityofGoodsfora114lib。thatheSoldbeforeata130，andhavethesameProfit。SoForreignGoodsworthAbroada100lib。andSoldinScotlandfora130lib。whenExchangewasatthePar；cannotbeSoldnowforlessthana150lib。

inScotland，thatSumbeingonlyequaltoa130lib。EnglishMoney；

AndtheMerchantsprofitisnogreater，thanwhenheSoldthesameQuanityofGoodsfora130lib。

ItmaynotbeimpropertoconsiderwhatConsequenceswouldattendtheloweringtheMoneytotheEnglishStandard，andallowingittobeExported。

TheformerstateofTradeIhavesuppos’dtobecarriedon，onehalfbyScotsMerchants，theotherhalfbyEnglishandDutch；ButasmostoftheTradeiscarriedonbyScotsMerchants，IshallsupposethisstateofTradeaccordingly。TheoneortheotherwillclearthematterinQuestion。

ThestateofTradenow，andExchangesuppos’dat15percenttoEngland，and30toHolland。ThewholeExportofScotlandtobe300000

lib。ofwhich250000lib。carriedoutbyScotsMerchants，Soldat30

percentprofitandcharges325000lib。

InEnglishMoney282608

ExportedbyForreignersfor50000lib。

inEnglishMoney43478

ThewholeExport326086

GoodsImported。306086

SpentAbroad40000

DueofBallancebyScotland20000

Moneybeinglower’dtotheEnglishStandard，andallow’dbyLawtobeExported；WillbringtheExchangewithEnglandto2or3percent，andwithHollandto17or18，notwithstandingoftheBallancedue。For，asa100lib。inEdinburgh，wouldthenbeequalto100lib。

atLondon，andbeingallowedtobeexported；nonewouldgiveabove102，or3herefora100lib。atLondon：BecausetheTroubleandChargeofsendingittoLondon，wouldbevaluednohigher。TheExport，Import，andExpenseabroadsuppos’dtocontinuethesame；aBallancewouldthenbeduetoScotland。

TheStateofTrade，Exchangeat3percenttoEngland，andproportionablytootherplaces。

DueinEnglishMoney，for325000lbi。firstCost，ChargesandProfitofGoodssentoutbyScotsMerchants315534

DueinEnglishMoney，for50000lib。ofGoodsexportedbyForreigners。

48544

TheWholeExport364078

OfthisdeducetheValueofGoodsImported。

306086

AndtheExpenseAbroad40000

TherewillbeaBallanceduetoScotland，of17992

AsthisBallanceduetoScotland，wouldbringExchangetothePar，and3percentontheScotsSyde；3more，becauseMoneyinEnglandisprohibittobeexported；100lib。inScotland，wouldbeworth106lib。inEngland，andproportionablyinotherplaces。SotheStateofTradewouldthenbethus，DueinEnglishMoneyfor325000lib。firstCost，ChargesandProfitofScotsGoodssentoutbyScotsMerchants，and50000lib。exportedbyForreigners。

397500

Ofthisspentabroad40000

Importedfromabroad306086

BallancethenduetoScotland51414

IftheyearlyExportbeasgreatasIsupposeit，andtheBallanceonly20000Pounds；thenLoweringtheMoneytotheEnglishStandard，willmakeaBallancedueof51414Pounds，thotheMoneyisnotallowedtobeexported。

Itmaybeobjected，thatsuchanAlterationintheExchange，loweringtheValueofForreignMoney；mighthindertheSaleofourGoodsabroad。For，LinenClothboughtinScotlandfora100lib，andsoldatLondonfora115lib。yieldsbyExchange31percentprofit。

ButifExchangewere6percentontheScotsSide，theProfitisonly9percent。

Itisanswered。IfanEnglishMerchanttakesBillsonScotlandfora1000lib。tolayoutonLinen—cloth，theExchangethenatthePar：TheLinen—clothissoldinEnglandaccordingtothefirstCost，ChargesandusualProfit。NextyeartheExchangeisontheEnglishside，theLinenissoldinEnglandcheaperthanbefore。ThethirdyearExchangereturnstothePar，theLinenisthensoldinEnglandasthefirstyear。IfthefirstCostofLinenisdearer，theConsumerpaysthemoreforit，theMerchantsProfitisthesame。

AllNationsendeavourtogettheExchangeasmuchastheycanontheirside。TheExchangefromHollandtoEnglandis12or15percent，toScotland30percent，toFrance40or50，sometimesmore；YetDutchGoodssellintheseCountries，theMerchanthashisProfitthesameaswhenExchangewaslower，theConsumerpaysmoreforthem。EnglishClothissoldatParisfrom18to20LivrestheFrenchEll，whentheLued’oreisat12Livres，from20to23，whentheLued’oreisat14

Livres：BecausetheExchangetoEnglandisdearer，inProportionastheFrenchMoneyisrais’d。

MostGoodssentfromScotlandaresuchasForreignerswon’twant，thotheypayed10or20percentmoreforthem。WehaveanExampleofthisintheWooll。DuringtheProhibition，WoollsoldinHollandandFrancefordoublethefirstCost，nowithasfallento30or40percentProfit。PricesaregivenforGoods，accordingtotheirfirstCost，Charges，andusualProfit；WhereProhibitionsare，theHazardofexportingcontrairtoLawisvalued。WoollisoflessvaluenowinHollandthanintimeofPeace，becausetheventoftheirWoollenManufactureisless；ButthoWoollwerealsvaluableinHollandasbefore，andthoaDutchManufacturerwouldgive200lib。forWoollthatcostonlya100lib。inScotland，ratherthanwantit：YetasheknowstheProhibitionistakenoff，andthattheScotsMerchantscanaffordtosellcheaper；hewon’tbuyunlesshecanhaveitatareasonableProfit。SoeithertheScotsMerchantsbringdownthePrice，byundersellingoneanother；ortheDutchMerchantCommissionsithimself。IfaDutywereputonsuchGoodswhoseValueabroadwouldbearit，theMerchantwouldgainthesame，’tistheForreignerpaystheDuty。