CHAPTER XIX.

The Balance of Trade.

As an infallible test of the increase, or decline of the industry and prosperity of a nation, the balance of trade forms an important study to the political economist. It is the barometer of labour, in our competition with foreign countries, and furnishes indications. the most useful, how to direct the industry, and regulate the commerce of the nation; so that we may escape becoming the mere province, or dependency of the more industrious, or skillful, or prudent, of the countries of Europe.

The same laws and principles that enter into trade between individuals, are likewise common to nations. It is the balance of profit and loss which determines the fortunes, or produces the ruin of the merchant. It is the same with nations. A country which imports more for consumption, than it exports for sale—estimating the sale by the amount of the returns-must be a loser by the trade, however individuals may profit or gain. Such a commerce must necessarily produce an unfavourable balance of trade against the country; and gold and silver must be exported to pay for the superflux of importations. This gold and silver is not a serious loss in itself, but it is a test to show, that we are living too much upon the labour of others, instead of producing enough ourselves, for home consumption.

The exchange of values, when those values are in commodities, is always profitable to a country; because we part with superfluities that are of no use, for commodities that are useful; but when to effect this exchange, we are compelled to export gold and silver as equivalents, it becomes a losing trade, and shows the balance of industry to be against us. A parallel between a trading manufacturer and his customers will illustrate this losing operation. Suppose a cotton weaver has 1,000 dollars in coin, but that he engages to pay his landlord, his grocer, his baker, his cotton merchant, &c. in cotton cloth of his own fabrication; but when his landlord calls for payment of his rent, having previously parted with a large stock of his cloth to his cotton merchant, he finds himself unable to meet the demand. But his landlord insists, and finally he parts with a portion of his 1,000 dollars. By a repetition of this falling on his capital, he at last discovers that his 1,000 dollars have disappeared; and again falling under the same embarrassment, he becomes a ruined man. Is it not evident that his first payment of his capital ought to have been avoided? and that instead of paying his money, he ought to have either increased his manufacture of cloth, or reduced his consumption of the produce of the baker, grocer, &c.? Nations are like individuals, individuals like nations, and the balance of trade being unfavourable to either, ruin ultimately covers them; or, what must be considered the same thing, poverty, dependence, and lassitude.

The example of Spain and Portugal, are melancholy proofs in point. Reposing in indolence upon. the produce of their American mines, they neglected their manufactures, arts, and industry; content

to import the labour of England, and pay away their gold and silver. The consequences are manifest in their poverty, degradation, and provincial dependence; and the natural result of opulence, vigour, and power, on the part of England, whose industry absorbed so essentially the golden dew of her indolent neighbours.

If any proof, therefore, were wanting of the pernicious influence of an unfavourable balance of trade upon a country, Spain and Portugal would produce a demonstration that would preclude all doubt.

It is from a perception of the truth of this principle, that labour is essential to national independence, comfort, and vigour, that all countries, who have not been wrapt in the delusion of gold and silver mines, have ever been careful to cherish, foster, stimulate, and protect their own manufactures, their own agriculture, and every mode of their own industry, as a counterpoise to the industry of other nations, and a sure resource for themselves, when need and peril beset them.

Every circumstance favourable to the preservation of a balance of trade, ought to be studiously cultivated by a wise and provident government. In addition to a large stock of industry, cheapness of labour and commodities, is an important consideration; to enable us to compete with, and undersell other countries. Here, however, the immense paper currency of our republic proves a fatal obstacle, by enhancing the price of labour and commodities, to so great a degree, as to give the superiority to our rivals. Notwithstanding her immense national debt, and credit system, this one circumstance of cheapness of labour in Great Britain, has caused the world to become her debtors-tributary to

her industry, and pouring their coin at her feet, in payment of a ruinous balance of trade.

All improvements in machinery, which is compound labour, adds to the cheapness of labour. To the application of steam, and other inventions, is England indebted for that vast superiority of advantages, that has made her the banker of the world.

CHAPTER XX.

Of Taxes.

It is of the first importance to a people, as well as to governments, to know what are the most equitable and productive modes of taxation; and where the people constitute the government by free suffrage and representation, it concerns them essentially to be familiarly conversant with the principles of sound economy, in relation to the proper objects of revenue.

The most equitable, uniform, and productive taxes, are those which are levied upon articles of general consumption. This makes it a matter of choice, whether the citizen pay such a tax, or not-it becomes in some sense voluntary; and imposts of this description are at all times preferable to those that are compulsory. They are more just, more popular, and more productive.

Taxes, however, upon the necessaries of life, should be carefully avoided; for they oppress labour, check industry, dispirit the labouring people, causing discontent, indolence, intemperance, and emigration, as well as serve as a check to marriages and population.

Articles of luxury ought always to be selected for taxation, in preference to all others; because they fall upon the rich, and leave the poor the option to pay them, or not, by abstaining from their use, or consumption.

Visible and tangible objects, should be selected for taxation; as lands, houses, &c. whose value may be as