By so much as exchange is above the par, so much all goods exported are sold cheaper, and all goods imported are sold dearer than before. if a merchant send goods yearly to England first cost, charges and profit 6000 lib. money in England of the same standard with money in Scotland, and no ballance due; but a ballance due to Holland, raising the exchange 3 per cent above the par to Holland, and affecting the exchange to England 2 per cent, 5882 lib. 7 sh. in England pays the goods, that sum by exchange being equal to 6000 lib. in Scotland. so that a ballance due to Holland, by raising the exchange to other countries, occasions a loss to Scotland of 117 lib. 13 sh. on the value of 6000 lib. of goods sent to England.
English goods are sold so much dearer. if an English merchant sends goods yearly to Scotland, first cost, charges and profit 6000 lib. 6120 lib. must be payed for these goods in Scotland, being only equal to 6000 lib. in England. if the exchange had been at the par, the Scots goods sent to England would have sold 117 lib. 14 sh. more, and the English goods sent to Scotland 120 lib. less.
Thus to all places with whom exchange is above the par, goods sent out are sold so much less, and goods brought from thence are sold so much dearer, as the exchange is above the par; whether sent out, or brought in, by Scots or foreign merchants.
The merchant who deals in English goods gains no more than when exchange was at the par, tho’ he sells dearer; nor the merchant who deals in Scots goods less, tho’ he sells cheaper; they have both the same profit as when exchange was at the par. Scotland pays 2 per cent more for English goods, and England 2 per cent less for Scots goods: all, or a great part of the loss falls at last on the landed man in Scotland, and it is the landed man in England has all, or a great part of the benefit.
Nations finding the export of money or bullion to pay the ballance due by trade, a loss of so much riches, and very hurtful to trade, might have discharged the import of such goods as the people could best want; or laid a duty on them, such as might have lessen’d their consumption: they might have given encouragement to industry, whereby the product would have been encreas’d and improv’d, or discouraged extravagant consumption, whereby the overplus to export would have been greater; any one of these methods would have brought trade and exchange equal, and have made a ballance due them: but in place of these measures, they prohibit bullion and money to be exported, which could not well have any other effect, than to raise the exchange equal to the hazard, such laws added to the export of money or bullion, which may be supposed 3 per cent more: and as these laws by such effect were hurtful, making all goods exported sell yet 3 per cent cheaper, and all goods imported 3 per cent dearer; the stricter they were execute, the higher the exchange rose, and the more they did hurt. the ballance was still sent out in money or bullion, by the merchant who owed it, by the banker who gave the bills, or by the foreigner to whom it was due.
Suppose the money of Scotland, England, and Holland of the same weight and fineness. Scotland to trade with no other places. the exchange at the par. the yearly export from Scotland, first cost 300000 lib. charges and profit 30 per cent. goods imported 280000 lib. charges and profit 30 per cent. one half of the trade to be carried on by Scots merchants, the other half by English and Dutch.
| Due to Scotland for one half of the export carried out by their own merchants —— | 195000 | |
| Due for the other half carried out by English and Dutch. | 150000 | 345000 |
| Due by Scotland to England and Holland for goods imported by English and Dutch.— | 182000 | |
| Due for goods imported by Scots merchants —— —— | 140000 | 322000 |
The expense of Scots-men abroad, more than of foreigners in Scotland, 40000 lib. if this is supposed the yearly state of the trade and expense of Scotland, there will be a ballance due of 17000 lib. and unless the Scots retrench the consumption of foreign goods, so as to import less; or retrench the consumption of their own goods, so as to export more; or increase, or improve their product, so as the export be greater or more valuable; or retrench in their expence abroad. since that ballance must be paid it will go out in money or bullion: and occasions the exchange to rise 3 per cent, the prohibition on the export of money 3 more, if Scots-men export it, the Nation saves the 1020 l. exchange on the 170000 of ballance due, which is lost if English merchants export it; but the loss such a rise in exchange occasions on the goods, is more considerable. the 195000 lib. due abroad for goods sent out of Scotland by Scots merchants, will be payed with 183962 lib. English or Dutch money, that sum being equal by exchange at 6 per cent to 195000 lib. in Scotland. the 150000 lib. due for first cost of goods carried out by English or Dutch merchants, will be payed with 141510 lib. English or Dutch money, that sum being equal to 150000 lib. in Scotland. the 182000 lib. due by Scotland for goods imported by English and Dutch merchants, will come to 192920 lib. in Scotland. and the 140000 lib. first cost of goods brought home by Scots merchants, will come to 148400 lib. in Scotland. so the accompt will run thus.
| Due to Scotland for goods exported | 183962 |
| Brought from abroad first cost | 140000 |
| Ballance of expence abroad | 40000 |
| Due to Scotland abroad | 3962 |
| Due by Scotland for goods imported by English and Dutch | 192920 |
| English and Dutch take back in goods | 150000 |
| Due to English and Dutch in Scotland | 42920 |
| 3962 lib. due abroad to Scotland in Scots money | 4199 |
| Remains due by Scotland. | 38721 |
So the rise in the exchange of 3 per cent by the ballance due of 17000 lib. and 3 more by the prohibition on the export of money, occasions a loss to Scotland of 21721 l. and makes the next year’s ballance 38721 lib. tho’ the trade be the same as before. of which 21721 lib. lost by exchange, one half would be saved if money were allowed to be exported.