The Online Library of Liberty

A project of Liberty Fund, Inc.

• Preface
• Studies In the Theory of International Trade
• Chapter I: English Theories of Foreign Trade, Before Adam Smith: I
• I. Introduction
• II. “ Mercantilism” and “bullionism”
• III. the Balance-of-trade Doctrine
• IV. Reasons For Wanting More Bullion
• V. Employment and the Balance of Trade
• Chapter II: English Theories of Foreign Trade, Before Adam Smith: Ii
• I. Legislative Proposals of Mercantilists
• II. the Collapse of Mercantilist Doctrine
• III. Some Modern Interpretations of English Mercantilism
• Chapter III: The Bullionist Controversies: I. The Inflation Phase
• I. the Participants In the Controversy
• II. the Factual Background
• III. Premium On Bullion As Evidence of Excess Issue: the Bullionist Position
• IV. Qualifications Conceded By the Bullionists
• V. Possible Objections to the Bullionist Position
• VI. the Anti-bullionist Position
• VII. the Balance of Payments Argument
• VIII. the Possibility of Excess Issue By Banks
• IX. Responsibility For the Excess Issue: Bank of England Vs. Country Banks
• X. Responsibility For Excess Issue: the Credit Policy of the Bank of England
• Chapter IV: The Bullionist Controversies: II. The Deflation Phase
• I. the Resumption of Cash Payments
• II. Responsibility of Resumption For the Fall In Prices
• III. the Economic Effect of Changing Price Levels
• IV. Ricardo's Position On the Gold Standard
• V. Reform Without Departure From the Metallic Standard
• VI. Paper Standard Currencies
• Chapter V: English Currency Controversies, 1825–1865
• I. Introduction
• II. the “currency School” -“banking School” Controversy
• III. the “palmer Rule ”
• IV. the Bank Act of 1844
• V. the Possibility of Overissue of Convertible Bank Notes
• VI. the Role of Deposits, Bills of Exchange, and “credit” In the Currency System
• VII. the Technique of Credit Control
• VIII. the Relation Between Bank of England Operations and Specie Movements
• IX. Currency Reform Proposals
• Chapter VI: The International Mechanism Under a Simple Specie Currency
• I. Introductory
• II. the Mechanism According to Hume
• III. an Omitted Factor? Relative Changes In Demand As an Equilibrating Force
• IV. Prices In the Mechanism: the Concept of “price Levels ”
• V. the “terms-of-trade” Concept
• VI. the Prices of “domestic” Commodities
• VII. the Mechanism of Transfer of Unilateral Payments In Some Recent Literature
• VIII. a Graphical Examination of Pigou's Analysis 1
• IX. Some Elaborations On the Basis of Pigou's Analysis
• X. an Alternative Solution
• XI. Types of Disturbance In International Equilibrium
• XII. Specie Movements and Velocity of Money
• XIII. Commodity Flows and Relative Price Levels
• XIV. Exchange Rates
• XV. A Criticism of the Purchasing-power Parity Theory 1
• Chapter VII: The International Mechanism In Relation to Modern Banking Processes
• I. Automatic Vs. Managed Currencies
• II. Primary and Secondary Expansion of Means of Payments
• III. Short-term Loans In the International Mechanism
• IV. Primary and Secondary Expansion In Canada , 1900–13
• V. the International Mechanism and Business Cycles
• Chapter VIII: Gains From Trade: the Doctrine of Comparative Costs
• I. the Nature and Origin of the Doctrine
• II. the Division of the Gain From Trade
• III. Trade In More Than Two Commodities
• IV. Trade Between More Than Two Countries
• V. Transportation Costs
• VI. Increasing and Decreasing Costs
• VII. Prices, Money Costs, and Real Costs
• VIII. Dependence of Comparative Cost Doctrine On a Real-cost Theory of Value
• IX. Differences In Wage Rates In Different Occupations
• X. Variable Proportions of the Factors and International Specialization
• XI. Variable Proportions of the Factor and Comparative Real Costs
• XII. “ Opportunity Cost” Analysis As a Substitute For Real Cost Analysis
• Chapter IX: Gains From Trade: the Maximization of Real Income
• I. “ Mass of Commodities” and “sum of Enjoyments”: Ricardo and Malthus
• II. Reciprocal Demand and the Terms of Trade
• III. Terms of Trade and the Amount of Gain From Trade
• IV. “ Net Benefit” In International Trade: Marshall
• V. Total Net Utility Derived From International Trade: Edgeworth
• VI. the Gain From Trade Measured In Money
• Appendix: a Note On the Scope and Method of the Theory of International Trade

III. The Balance-of-Trade Doctrine

The Concept and Its Application.1 —The most pervasive feature of the English mercantilist literature was the doctrine that it was vitally important for England that it should have an excess of exports over imports, usually because that was for a country with no gold or silver mines the only way to increase its stock of the precious metals. The doctrine is of early origin, and some of the mercantilists, in the earlier period when it was still customary to scatter miscellaneous tags of classical wisdom through one's discourse, succeeded in finding Latin quotations which seemed to expound it. It was clearly enough stated as far back as 1381 by Richard Leicester, a mint official, in answer to an official inquiry as to the cause of, and remedy for, the supposed drain of gold out of England:

First, as to this that no gold or silver comes into England, but that which is in England is carried beyond the sea, I maintain that it is because the land spends too much in merchandise, as in grocery, mercery and peltry, or wines, red, white and sweet, and also in exchanges made to the Court of Rome in divers ways. Wherefore the remedy seems to me to be that each merchant bringing merchandise into England take out of the commodities of the land as much as his merchandise aforesaid shall amount to; and that none carry gold or silver beyond the sea, as it is ordained by statute.... And so me-seems that the money that is in England will remain, and great quantity of money and bullion will come from the parts beyond the sea.2

The following citations from sixteenth-century sources show that the doctrine was current throughout that century:

The whole wealth of the realm is for all our rich commodities to get out of all other realms therefor ready money; and after the money is brought in to the whole realm, so shall all people in the realm be made rich therewith.3

But it is an infallible argument that if we send yearly into beyond the seas one hundred thousand pounds worth of wares more than we receive yearly again, then must there needs be brought into this realm for the said hundred thousand pounds worth of wares so much in value either of gold or silver.... The only means to cause much bullion to be brought out of other realms unto the king's mints is to provide that a great quantity of our wares may be carried yearly into beyond the seas and less quantity of their wares be brought hither again.4

... for if England would spend less of foreign commodities, than the same [i.e., English] commodities will pay for, then the remain must of necessity be returned of silver or gold; but if otherwise, then it will fare in England in short time, as it doth with a man of great yearly living that spendeth more yearly than his own revenue and spendeth of the stock besides.5

If we keep within us much of our commodities, [because of heavy duty on wool exports] we must spare many other things that we have now from beyond the seas; for we must always take heed that we buy no more of strangers than we sell them; for so we should impoverish ourselves and enrich them.6

And another [object of policy] is that the things which we carry out do surmount in price the things which we bring in; else shall we soon make a poor land and a poor people.7

Although the concept of a national balance of trade was already common in the sixteenth century, the exact term itself seems to have first been coined in 1615, when it almost immediately passed into common usage.8 In that year two customs officials, Wolstenholme and Cranfield, were instructed to compute the exports and imports for the two preceding years, in order to ascertain the effect on foreign trade of “Alderman Cockayne's Project” restricting the export of undyed or undressed woolens. The results of their computations are still extant in manuscript, indorsed as follows: “A computation of all merchandises exported and imported into England one year by Mr. Wolstenholme 21 May 1615” and “Sir Lionell Cranfield his balance of trade 21 May 1615.” 9 In the next year, Sir Francis Bacon, who was acquainted in his official capacity with these computations, in his “Advice to Sir George Villiers” wrote as follows:

This realm is much enriched, of late years, by the trade of merchandise which the English drive in foreign parts; and, if it be wisely managed, it must of necessity very much increase the wealth thereof; care being taken, that the exportation exceed in value the importation; for then the balance of trade must of necessity be returned in coin or bullion.10

The first appearance in print of the phrase appears to have been in the title and text of a pamphlet by Misselden published in 1623, The Circle of Commerce, or the Balance of Trade. It is to be found ad nauseam in the subsequent literature. The term was, of course, borrowed from the current terminology of bookkeeping, into which the word “balance” had apparently been incorporated from the Italian about 1600. Prior to 1615, such terms as “overplus,” 11 “remayne,” 12 “overvallue” 13 were used to signify the excess of exports over imports, or vice versa, and Malynes,14 in 1601, and Cotton in 1609,15 used the term “overballancing” for the same purpose. A memorandum of 1564 spoke of exports sufficient “to answer the foreign commodities” to mean exports adequate to balance the imports,16 and John Stow in 1598 used “overplus” and “countervail” for the two meanings of “balance.” 17 Nothing was invented or discovered in 1615 except the precise term “balance of trade.” There is no evidence that when in that year attempts were made to compute the actual balance any person regarded it as the application of a novel idea. Misselden, in 1623, did write of “this balance of trade, an excellent and politic invention, to shew us the difference of weight in the commerce of one kingdom with another,” 18 but what he regarded as novel was not the notion of a balance but its actual measurement in the absence of periodic trade statistics such as those with which we are now familiar. Malynes did criticize Misselden's balance-of-trade argument, but not because the notion of a balance between exports and imports was unfamiliar or objectionable to him, for he had himself stressed the concept years before. What Malynes was criticizing was the overemphasis which Misselden was giving to the mere computation of the actual balance, since “the conceited balance of trade proposed by Misselden, can be but a trial and discovery of the overbalancing of trade, without that it can produce any other benefit to the commonwealth,” 19 and in any case was likely to be highly inaccurate.20

The term “favorable balance of trade” now so common, and so commonly attributed to the mercantilists, seems first to have been used in 1767 by Sir James Steuart,21 although the phrase “balance in our favor” had been used by Cary22 in 1695, Pollexfen in 1697,23 and Mackworth24 in about 1720, and corresponding terms were used by many other writers.25

General and Partial Balances.—There is no historical basis for the distinction which some writers have tried to make between a balance-of-individual-bargains stage and a chronologically later general balance-of-trade stage in the evolution of mercantilist doctrine. Richard Jones coined the phrase “balance-of-bargain” in order to distinguish between means and not ends: “To effect their purposes, they [i.e., the early politicians] adopted a very complicated system, which we may call the balance-of-bargain system; and which, though its object was precisely the same with that of the balance-of-trade system long subsequently established, yet sought to attain that object by very different means.” 26 An influx of bullion resulting from an excess of exports over imports was the common objective both of the earlier and of the later period. To the extent that the methods advocated or actually applied to attain this end differed, it is more accurate to say that the early bullionist regulations dealt directly with the transactions in coin and bullion and foreign exchange, whereas the later customs regulations sought the same results indirectly by regulating the commodity imports and exports. No trace is to be found in the early literature of anything even approaching a theory of the importance of the individual balances except as items in a clearly conceived national balance and it is only as inference from the character of the bullionist regulations that the prevalence of the notion that such a theory was once expounded can be explained.

In some of the modern literature on mercantilism there is to be found an exposition of the evolution of the balance-of-trade doctrine in terms of three chronological stages: first, the individual bargain; then an intermediate stage in which the notion of the balance of trade with particular countries, but not the total balance of trade, had been grasped; and, finally, the emergence of the concept of the national or aggregate balance. This is all the product of vivid imagination. In the seventeenth and eighteenth centuries there was much controversy about the state of the balances with particular countries, but always with reference to their bearing on the aggregate balance. In the seventeenth century the state of the balance in the East India trade was the principal object of controversy in this connection; in the eighteenth century it was the balance with France which gave rise to most misgiving. The East Indian balance was indisputably “unfavorable,” and the East India Company was attacked on this ground. Its spokesmen tried to meet the attack by the contention that, although the balance was immediately unfavorable, the East India trade had indirect effects, such as the reexport at a profit of commodities imported from India and the substitution of imports from India for imports to greater value from other countries, which made its net result, direct and indirect, a favorable instead of an unfavorable contribution to the total national balance.27 It would be difficult to demonstrate such a theory to determined critics, even if it were in accord with the facts, and when this method of argument failed to be effective, the defenders of the company, while still conceding in the abstract that any trade was harmful if it did not contribute, directly or indirectly, to a favorable balance for the country, resorted to questioning the possibility of applying the test with sufficient accuracy to warrant the condemnation of any trade.28 When this argument also failed to subdue criticism, the defenders of the company were finally driven to questioning and even to explicitly rejecting the validity of the balance-of-trade test, however qualified, as a measure of the value of trade.29 But none of the writers on either side of the controversy claimed that the particular balance of trade was to be judged except in terms of its contribution to the total balance, and there was certainly none who argued about particular balances without first having conceived of the notion of a total balance. On this question there was no conflict of doctrine, but only disagreement as to the facts and as to the possibility of ascertaining them.

Constituent Items in the Balance.—The mercantilists have sometimes been charged with failure to see that the international balance does not consist only of commodity exports and imports,30 and many suppose that the “invisible items” are a recent discovery. But most of the important writers of the seventeenth and eighteenth centuries took care to point out that allowance must be made for non-commodity items in explaining the net balance payable in bullion. Reference to an “invisible” item is to be found as far back as 1381, when both Aylesbury and Lincoln explained the drain of gold as due partly to remittances to Rome.31 An early writer argued that if foreign merchants were required to come to England to buy English cloth instead of being permitted to buy it abroad, their living expenses in England would be an item in England's favor.32 Misselden, in 1623, mentioned the profits from the fisheries, reexport trade, and freight earnings as items to be added to the commodity statistics in computing the balance.33 Malynes,34 in the same year, pointed out that interest payments on foreign loans should be included in the balance. Robinson,35 in 1641, included diplomatic expenditures abroad, travelers' expenses, and freight charges. Mun, writing in about the year 1630, listed almost all the items which would be included today: freight earnings, military expenditures abroad, marine insurance payments, gains from fisheries, losses at sea of outward and inward shipments of goods, Catholic remittances to Rome, travelers' expenses, gifts, and the excess over their living expenses in the country for which the balance is being computed of payments to foreigners for exchange commissions, interest, and life and commodity insurance.36 Child,37 in 1690, added absentee incomes and losses from bad debts. Hugh Chamberlain, in 1606, listed, in addition to commodity trade, the earnings of migratory labor abroad, tourist expenditures (“what foreign travellers spend here to see the country”), diplomatic and military expenditures abroad, and other items.38

The mercantilists were most interested in the “balance of payments” in its strict sense of a net balance of immediate obligations payable in specie, and the specie flows inward or outward resulting from the balance of payments were their primary concern. Payments on account of shipping freights or interest payments on foreign indebtedness were therefore recognized as having, value for value, the same significance as payments for commodity imports. But it was long before separate terms were coined to distinguish between the commodity balance of trade and the total balance of payments, and the writers of the period ordinarily used the term “balance of trade” to mean at one time one of these balances, at another time the other. John Pollexfen,39 however, referred to the “balance of accompts” as meaning the total balance inclusive of both commodity and non-commodity items, and Justice40 and Harris41 later used the same term in the same sense. Steuart spoke of “the whole mass of reciprocal payments” and their “balance,” 42 and at one point used the actual phrase, “balance of payments,” in its modern sense: “We must always carefully avoid confounding the grand balance of payments with the balance between importation and exportation, which I consider as the balance of trade.” 43 Arthur Young in 1772 used the phrase “temporal balance of remittance” to signify the immediate balance of payments.44 The term “balance of indebtedness” seems not to have been used until the nineteenth century. Adam Smith, however, approached it at one point, where he referred to the “state of debt and credit.” 45

[1]Cf. also Jacob Viner, article, “Balance of trade,” Encyclopaedia of the social sciences, II (1930), 399–406; F. W. Fetter, “The term ‘favorable balance of trade,’” Quarterly journal of economics, XLIX (1935), 621–30.

[2]Bland, Brown, and Tawney, English economic history, select documents, 1914, pp. 219–20. The concept here clearly implied of a national balance (“the land spends too much in merchandise”) and the emphasis on increase, and not merely on prevention of reduction, of England's stock of money, support the contention made above that there has been exaggeration of the differences in doctrine between the so-called “bullionist” and “mercantilist” periods. Other officials, Aylesbury and Cranten, at the same time offered the same explanation of the loss of bullion. For Aylesbury, see ibid., p. 222. For Cranten, see the original source, Rotuli parliamentorum [1381], III (1767), 127: “Quant a primr article: Ne soit pluis despendu deinz le Roialme des Marchandies estranges en value q les Marchandies de la cresceance du Roialme issant hors de mesme le Roialme ne sont en value.”

[3][Clement Armstrong?] “A treatise concerning the staple and the commodities of this realme” [ms. ca. 1530], first printed in Reinhold Pauli, Drei volkswirthschaftliche Denkschriften ans der Zeit Heinricks VIII von England, 1878, p. 32. Cf. also “Clement Armestrong's sermons and declaracions agaynst popish ceremonies” [ms. ca. 1530], ibid., pp. 46–47; “How to reforme the realme in settyng them to worke and to restore tillage” [ms. ca. 1535], ibid., pp. 60 ff., 76.

[4]“Polices to reduce this realme of Englande unto a prosperous wealthe and estate” [ms., 1549], Tawney and Power, Tudor economic documents, III (1924), 318, 321. This collection will henceforth be cited as T.E.D.

[5]“Considerations for the restraynte of transportinge gould out of the realme” [reign of Elizabeth], printed in Georg Schanz, Englische Handelspolitik gegen Ende des Mittelalters, 1881, II, 649.

[6][John Hales] A discourse of the common weal of this realm of England [written, ca. 1550, first printed, 1581], Elizabeth Lamond ed., 1893, pp. 62–63.

[7]“A discourse of corporations” [ca. 1587], T.E.D., III, 267. For additional statements of the balance-of-trade doctrine during the sixteenth century, see: William Cholmeley, “The request and suite of a true-hearted Englishman” [ms., 1553], The Camden miscellany, II (1853), 11–12; “Memorandum prepared for the royal commission on the exchanges” [1564], ibid., III, 353; “Memorandum by Cecil on the export trade in cloth and wool” [1564?], ibid., II, 451; “D'Ewes' journal” (for 1593) [1693], ibid., II, 242; “An apologie of the cittie of London,” in John Stow, A survey of London, C. L. Kingsford ed., 1908, II, 210.

[8]I owe some of the following references to the excellent account by W.H. Price, “The origin of the phrase ‘balance of trade,’” Quarterly journal of economics, XX (1905), 157 ff.

[9]Astrid Friis, Alderman Cockayne's project and the cloth trade, 1927, p. 207, and W. H. Price, loc. cit. There were no value statistics of imports and exports at that time, but the customs rates on all goods were 5 per cent of the official values of the goods. The balance was computed, therefore, by multiplying the customs revenues by twenty.

[10]Works, 1852, II, 385. (The essay was written in 1616, but first published in 1661.)

[11]“Polices to reduce this realme” [1549], T.E.D., III, 324.

[12]“Considerations for the restraynte of transportinge goulde” [time of Elizabeth], Schanz, op. cit., II, 649.

[13]“Memorandum prepared for the royal commission on the exchanges” [1564], T.E.D., III, 353.

[14]Gerard Malynes, A treatise of the canker of England's commonwealth [1601], T.E.D., III, 386.

[15]Sir Robert Cotton, “The manner and meanes” [1609], in Cottoni Posthuma, 1672, p. 196.

[16]“Memorandum by Cecil on the export trade in cloth and wool,” T.E.D., II, 45.

[17]“Apologie of the cittie of London” [1598], in Stow, A survey of London, Kingsford ed., 1908, II, 210.

[18]The circle of commerce, 1623, p. 117. Misselden cites from an alleged manuscript an attempt made during the reign of Edward III to estimate the English balance of trade.—Ibid., p. 118.

[19]The center of the circle of commerce, 1623, pp. 68–69.

[20]Ibid., pp. 58–59.

[21]An inquiry into the principles of political economy, 1767, II, 422: “when one nation is growing richer, others must be growing poorer; this is an example of a favorable balance of trade.” Cf. also ibid., II. 425–26. Steuart also used the terms “passive” and “active” for import and export surpluses, respectively. (Ibid., II, 207.)

[22]John Cary, An essay on the state of England in relation to its trade, 1695, pp. 131–32; ibid., An essay on the coyn and credit of England, 1696, p. 20.

[23][John Pollexfen] A discourse of trade, coyn, and paper credit, 1697, p. 40.

[24]Sir Humphrey Mackworth, A proposal for payment of the publick debts, 2d ed., ca. 1720, p. 9.

[25]F. W. Fetter nevertheless considers it an anachronism to attribute the use of the terms “favorable” or “unfavorable” to the mercantilists. “The term ‘favorable balance of trade,’” Quarterly journal of economics, XLIX (1935), 629.

[26]“Primitive political economy of England” [1847], in Literary remains, Whewell ed., 1859, p. 295.

[27]The argument was made by many who were not personally interested in the fortunes of the East India Company, and was accepted, in theory, by the critics of the company. The following citations are only to spokesmen for the company: Thomas Mun, A discourse of trade, from England unto the East Indies [1621], Facsimile Text Society reprint, 1930, pp. 9 ff.; ibid., England's treasure by forraign trade [first published 1664, written about 1630], Ashley ed., 1895, pp. 19 ff.; [Sir Thomas Papillon] A treatise concerning the East-India trade being a most profitable trade to the kingdom [1677], 1696 reprint, pp. 12 ff.; [Sir Josiah Child] A treatise wherein is demonstrated that the East-India trade is the most national of all foreign trades, 1681, pp. 6 ff.; [Child] A discourse about trade, 1690, p. 142; Charles Davenant, An essay on the East-India trade [1696], in Works, Charles Whitworth ed., I, 97; Some considerations on the nature and importance of the East-India trade, 1728, pp. 30 ff. As representative instances of the acceptance of the argument by critics of the company who denied, however, that the company could meet the test even if indirect effects were taken into consideration, there may be cited: [William Petyt?] Britannia languens [1680], McCulloch ed., Early English tracts on commerce, 1856, pp. 342 ff.; [John Pollexfen] England and East-India inconsistent in their manufactures, 1697, p. 52.

[28]Cf. Charles Davenant, Discourses on publick revenues [1698], in Works, I, 388: “It is hard to trace all the circuits of trade, to find its hidden recesses, to discover its original springs and motions, and to shew what mutual dependence all traffics have one upon the other. And yet, whoever will categorically pronounce that we get or lose by any business, must know all this, and besides, have a very deep insight into many other things.” Cf. Sir Leslie Stephen, History of English thought in the eighteenth century, 3d ed., 1902, II, 294, with reference to Davenant's position: “Merchants easily assumed their own balances to be a sufficient test of the national prosperity, but when the theories thus framed were applied to limit their own dealings and to prevent them from importing the most advantageous articles of commerce, they naturally found more or less ingenious modes of meeting the awkward inference. It was better, they admitted, to import gold than silk; but by some dexterous manipulation it must be shown that the importation of silk would enable them to get more gold.”

[29]Cf. Nicholas Barbon, A discourse concerning coining the new money lighter, 1696, p. 36: “And yet there is nothing so difficult, as to find out the balance of trade in any nation; or to know whether there ever was, or can be such a thing as the making up the balance of trade betwixt one nation and another; or to prove, if it could be found out, that there is anything got or lost by the balance.” Ibid., p. 40: “But if there could be an account taken of the balance of trade, I can't see where the advantage of it could be. For the reason that's given for it, that the overplus is paid in bullion, and the nation grows so much the richer, because the balance is made up in bullion, is altogether a mistake: for gold and silver are but commodities; and one sort of commodity is as good as another, so it be of the same value.”

[30]Cf., for example, C. F. Bastable, The theory of international trade, 4th ed., 1903, p. 73; Paul Leroy-Beaulieu, Traité théorique et pratique déconomie politique, 2d ed., 1896, IV, 175.

[31]Bland, Brown, and Tawney, English economic history, pp. 221, 222.

[32][Clement Armstrong] “How to reform the realme” [ca. 1535], Pauli ed., op. cit., p. 67.

[33]The circle of commerce, 1623, p. 124.

[34]The center of the circle of commerce, 1623, p. 59.

[35]Henry Robinson, England's safety; in trades encrease, 1641, pp. 50 ff.

[36]Englands treasure by forraign trade [1664], Ashley ed., 1895, p. II, and chap. xx.

[37]A discourse about trade, 1690, pp. 138, 140.

[38]Dr. Hugh Chamberlain, A collection of some papers writ upon several occasions, 1696, pp. 2–3.

[39]A discourse of trade, coyn, and paper credits, 1697, p. 40. Pollexfen also spoke of “debts and credits” in connection with international transactions of all sorts.—Ibid., pp. 4, 10.

[40]A. J. [Alexander Justice] A general treatise of monies and exchanges, 1707, p. 74.

[41][Joseph Harris] An essay upon money and coins, part I (1757), 119.

[42]An inquiry into the principles of political æconomy, 1767, II, 316.

[43]Ibid., II, 453, note.

[44][Arthur Young] Political essays concerning the present state of the British Empire, 1772, p. 534.

[45]Wealth of nations [1776], Cannan ed., I, 440.