Money and trade considered

by John Law

It is objected that we are under a necessity of having goods from countries who will take none of ours. France does not allow money to be exported, nor any ship to import goods, unless French goods are exported from the same port, to the value of the goods which were imported. by our law we are forbid to export money. but as I don’t think the example of nations a good answer, I shall endeavour to give a better. suppose our money is not valued abroad, and we have occasion for goods from Denmark, who takes none of ours. these goods being necessary here, will be valued higher than other goods that are not so necessary; and the value of Scots goods sold in other countries, will be carried to Denmark, in such goods as will sell there, or in foreign money, and these necessary goods be brought home: because the trader makes a greater profit by them, than by such goods as could have been imported from that country, where the goods exported were sold.

But as this addition to the money will employ the people who are now idle, and these now employ’d to more advantage: so the product will be encreas’d, and manufacture advanc’d. if the consumption of the nation continues as now, the export will be greater, and a ballance due to us: and as the exchange depends on the ballance, so paper money here, will be equal to a greater quantity of silver money abroad.

Suppose the yearly value of Scotland a million and a half, the yearly value of England 40 millions; the value of Scotland, is only about one 28th part of the value of England. yet the quantity and quality of the lands, and the numbers of people consider’d; Scotland will be at least as 1 to 6. and if there was money to employ the people, we would be as one to 6; for we have advantages peculiar to us, that do more than equal the Plantation and East-India trades.

England is not improv’d so far as it might be, by a greater quantity of money. we may have money equal to the demand, by applying our land to that use. so our country may be improv’d above the proportion of one to 6. but if the propos’d addition to our money, improved the country only so as to bear a proportion with England of one to 13, our yearly value would be 3 millions: and our consumption not being half what the same number of people consume in England; if the consumption continued as now, the ballance due to Scotland would be greater, than the ballance due to England.

This addition to our yearly value may be thought by some people, a supposition that’s extravagant, but I desire these people will consider what consequences the plenty of money has had in other places. as the money of England has increas’d, the yearly value has increas’d; and as the money has decreas’d, the yearly value has decreas’d.

I don’t doubt but the paper-money propos’d being given out equal to the demand, would bring the yearly value of Scotland to 3 millions, tho’ the fishing and other branches of foreign trade (which might be improv’d to great advantage) were neglected. but suppose the yearly value increas’d only half a million, of which a 4th spent in a greater consumption of the product and manufacture of the country, a 4th in the greater consumption of foreign goods and expence abroad, a 4th laid up in magazines of foreign goods, a 4th would still be due of ballance and brought home in silver.

If the consumption and expence increas’d equal to, or beyond the improvement; as the paper-money could not be exported, so the people would not be set idle, nor the manufacture decay: that money being like an estate intail’d. we might continue to consume equal to the yearly value, but could not lessen the yearly value, nor be poorer if we would.

If a greater value of goods was imported than was exported, and credit given for the ballance; foreigners to pay themselves, would send a lesser value of goods the year after. but such restrictions may be put on the consumption of our own and foreign goods, as may make a ballance due.

The revenue of the commission will be a great help toward the advancing our trade in its infancy: what encourages the export of goods, encourages the manufacture of them; and that money given as a draw-back, will not only encourage the export and manufacture; but likewise regain the reputation our goods have lost, and give them a better reputation than the goods of other nations.

The draw-back ought not to be given to all goods, but to such as do not yield a reasonable profit abroad, and upon condition they are found sufficient.