Thoughts on the mechanism of societies

by marquis de Charles Casaux

I am indebted to the details contained in Sir Charles Whitworth’s work, for the advantage of applying to real facts, many reflexions which I had digested before I had read that work; but I was, till then, reasoning on hypotheses; I now reason on what so nearly approaches reality, that it is necessary to controvert my arguments, instead of consigning their foundation to the system of chimeras.

By means of that valuable work, I see, from the year 1700 to 1775, and that in the greatest detail, strengthened by all the proofs that the nature of the subject can admit of, a constant superiority of exports, which, in the space of 75 years, amounts to the enormous sum of 267,774,769l. (I have overlooked the fractions of each article.) This is, in the total amount, much more than one half of the gold and silver imported into Europe from America, during the same lapse of time; but, of this period of 75 years, 30 must be attended to, wherein the superiority of English exports comes up very nearly to five-sixths of the general importation of those two precious metals, which were to make good so many other balances. We should also observe, amongst those years, a most flourishing one, wherein that English favour absorbs, as it were, all the silver imported into Europe; and five other years still more wonderful, where it surpasses that general importation by 10, 12, and even 1,300,000l.; for, in 1750 the general exportation of English goods exceeded the importation of foreign produce, by 7,359,964l. and yet all that product of the mines, belonging to Spain and Portugal, is estimated only at 6,000,000l. sterling per annum.

I shall suppose, for a moment, that, during the space of time I have just mentioned, the balance of trade did, in reality, produce to England an importation of money, to the amount of 267,774,769l. (for the reports of the Custom-House, as stated by Sir Charles Whitworth, brought in as a proof of that pretended, uninterrupted balance, in favour of the nation, mean what I have said, or mean nothing at all, in regard to this matter; they do not prove one penny if they do not prove the whole sum). It is true that, according to the same reports, we must deduct for the money exported from England, during the course of those 75 years, about 105 millions, by which the nation at least got rid of a surplus which would have strangely disparaged the price of that which was preserved in the country: but is it very certain that the 162,774,969l. the precious nett of the pretended balance, was actually preserved? This appears to me impossible, for the following reasons, which may perhaps furnish us with the means of knowing, precisely enough, in what the true balance consists.

Since the beginning of this century, the real and nominal value of the revenue in the other parts of Europe, has doubled, as well as in England. Now this augmentation, in the products and prices, has required, every where, a proportionable increase of the means of circulation; and Spain and Portugal are nearly the only two sources from whence that increase of means could be procured.

In the supposition that the revenue of England constitutes one tenth of that of Europe (it is a great deal), the other nations composing that part of the world were of course obliged to endeavour to secure the nine tenths of the money necessary for their own circulation; and their success in this is the less questionable, as, in case any one of them should be short of money for the circulation of its property, the English themselves would eagerly supply that part of the precious balance, which it might want, because, in this case, the importation of money into such country would prove more profitable than an importation of fresh goods, whilst the old ones, carried there already, waited for money to circulate them. Hence it may be concluded, that the English never had, or at least have not preserved, more than their tenth, twelfth, or rather, more than their natural portion in that absolute mass of gold and silver necessary to the circulation.

I shall now say, that it is not even probable that they have preserved that quota, necessary every where else for the circulation of a revenue similar to theirs, because England is, of all known nations, the one where the circulation of property of all kinds, requires a less quantity of real cash: the merciless severity of the laws against debtors, the general credit which it encourages, the use and indubitable value of paper currency, which are derived equally from both, are three objects which, in this respect, set England far above par, in comparison with all the other nations who have neglected to secure to themselves the same advantages.

Might we not further say, that England evidently has not thought proper to get that quota, which she might have claimed, since one third, and perhaps half of her circulation, is effected by paper-money with more dispatch, with more facility, and with as much solidity as if it were effected by cash?

It will be asked, perhaps, if I pretend to infer at last, that the exportation has not been so considerable as it ought to be supposed from the statements of Sir Charles Whitworth? I shall answer to this, as to many other queries; it may now be seen that a few millions more or less, are a matter of perfect indifference, in regard to my main object. The exportation from England is clearly prodigious; its immensity is proved by that of the tonnage of the shipping employed for her trade, 775,624 tons in the years 1771, 1772, and 1773, (see Chalmers’s Estimate); this point is established beyond all equivocation. What I refuse therefore to the imagination of the trader, is solely what appears to me chimerical and useless in that favourable balance of money; and this I refuse, because I cannot possibly but acknowledge, that every trader has too much good sense to act against the general interest of trade, when such operation must, at the same time, prove contrary to his own interest. Nay, is much more than plain instinct wanted, not to import money which yields a very trifling benefit when there is no demand for it, whilst one may take up foreign goods, on which there is a certain gain of 10 or 12 per cent. because they are eagerly sought after? and when, besides, the nation, on a certainty, will not finally pay for them but with national goods, since she has no mines of her own? I must observe, indeed, that this very trader, guilty of such an act of impatriotism, of this national crime of importing merchandize instead of gold and silver, cries up, as loud as any other, the necessity of striking a favourable balance; but private wisdom gets the better of public folly; every one imports such goods as he is in hopes to sell to advantage, and leaves to his neighbour the care of importing that favour on which no profit can be got.

What is then the quantity of bullion really imported every year into England?

It is incontestably, in the first place, so much of it as is necessary to answer the progressive increase of the prices and products, both of the land and industry; the bank-notes cannot suffice to that augmentation, but in their ordinary proportion to the real specie in circulation; all supplement of bank-notes, which in the needful hour exceeds that proportion, must soon be replaced by real specie; on this exactness stand the credit of the Bank, and the vast advantage accruing therefrom to the public, and to the State; but from thence also results a greater inutility of accumulating money before it is wanted.