Eighthly, That the real difference between 1848 grains of silver, and 3440, which is perceivable between the prices of the years 1300 and 1785, would not even be sufficient, were it considered by itself, to invalidate, or confirm this futile proposition, that the mass or stock of money is nearly doubled in England; for we have already found, that, supposing the case of an epidemic distemper, which would have carried off three fourths of the people, and consequently reduced the revenue in the same proportion, the price of every thing must have increased fourfold, if the three fourths of the coin had not been buried under ground; we have seen, on the contrary, that it has been possible to withdraw from circulation half of the current cash, and make good this substraction in a very advantageous manner, by introducing scraps of paper in its stead, without making any alteration in the general prices, or in the least affecting the circumstances of any one, poor or rich, unless some collateral incident should intervene to bring about a change; and the least reflexion will convince us, that the mass of specie might be quadruplicated in a nation, without any material variation in the prices, if the sum of labour, and of its products, as well as of the consumption, should augment proportionably.
But, in stating that the only—the infallible reason for the variations of common prices in the foregoing hypotheses, is the change of proportion between the mass of specie, or of the paper-currency which represents it, and the articles of which the one, or the other, is to transfer the property, there is no inconsistency in persisting to pretend that taxes add to the former prices, both the amount of the impost, and the profit due to the trader who advances it. But, in both cases the progress is different: in the former, it is the quantity of the specie actually in being which necessitates and fixes the prices; in the latter, it is the necessary advance in the prices, that necessitates and fixes the quantity of specie, or paper-money which is substituted to it.—Luckily, as we have already observed, it has been enough for England to find, once for all, money to the amount of 5 millions sterling, (cash and paper) for discharging to the end of time, the interest of a debt computed at 238 millions, the same currency.—But upon a supposition that the debt incurred by France, from the year 1774, should amount to 15 or 1600 millions tournois, and the yearly produce of French industry in all its branches, (at the common rate of 1775) be of 2,400,000,000l.—the interest of 80 millions and upwards, to be paid for such a debt, requires an adequate increase of taxes:—now, 80 millions tournois constitute about the 30th part of the annual revenue produced by French industry, the nominal value of which must be increased by those taxes;—but as paper-money does not supply in France the place of cash, it has been, of course, necessary to augment by one 30th, the mass of specie, which proved sufficient before the rise in the prices, occasioned by the impost;—this mass, it is said, was rated at 2,400,000,000 of livres, the 30th part of which is 66,666,666 13s. and 4d. tournois, a very considerable sum indeed; but nevertheless nothing more has been necessary, to prevent any inquietude on the subject, than to procure that sum, once for all; and, once for all likewise, to add thereto the effect of some re-actions, of which I shall speak presently; nothing more, I say, was wanted to secure, in an indefensible manner, the interest of a loan of 1500 millions, and to secure it so as to raise in the minds of the holders of stock to so immense an amount, no other apprehension than that of their being reimbursed.
Some will say, perhaps, “this reasoning is frivolous, and founded on the absurd supposition of a general combination, a kind of universal conspiracy, in order to raise the price of every thing proportionably to the taxes.” I know that such a combination, such a conspiracy is impossible; I know that there is not in France a single edict, nor any particular act of parliament in England, to enforce, or even to permit it; but I am sensible that such an act, and such an edict, would be perfectly useless, when I see, that in either of those countries there is not a rational being, capable of reflexion, who will not say, Taxes occasion a dreadful advance in the prices of every thing: it is true that the order is sometimes inverted, and then the cry is—How cruel it is that the price of every article is increased, whilst the taxes diminish our means of purchase!—But if every article rises in a due proportion, we must conclude that there is no alteration in the state of the balance; for if every individual in a nation buys up, every one sells also, one his labour, another his wares, a third his corn; and if every thing grows dearer, except the article you have to sell, you must own yourself completely in the wrong: luckily the landed proprietors are as little in the wrong as they possibly can be; for as often as they renew a lease, they increase their rental, just as if they had got possession of my little secret, or as if there were corporations also in agriculture.—The agents of industry are still less liable to be in the wrong, for all their operations are founded on the following rule:—For purchase so much,—for freight so much,—so much for taxes,—to these add my commission or profit—The balance is so much, which I must be paid, as I shall settle with the members of my corporation. Besides, the commercial part of the nation is too well persuaded how necessary it is to secure a favourable general balance, to be mistaken in the means of equipoising their private ones.
It is my opinion, therefore, that one may, without being a conjurer, foretell that the last dreadful and convulsive shock, almost generally felt all over the world, will finally, and in a very little time, end in the loose remembrance of some thousands of hands having been, foolishly enough, taken from their peaceable occupations, very favourable to population, to employ them in forwarding destructive plans, to which many thousands of men have fallen a sacrifice; one might also add, thousands of depredations, some of which, the most pardonable in their nature, have been punished at the gallows: perhaps even they will say modestly in France, We have reduced the English, but we were four to one—and then England will proudly answer, We have been reduced, but we were only one to four; nor would it be at all unreasonable to lament, that the value of 4 or 5 millions sterling in gold and silver, fatuously ornamented with the escutcheons of England and France, to consolidate for ever the interest of 140 or 150 millions, which constitute the last debts contracted by the two rival nations, be not humbly stamped with the puncheon made use of to mark the plate in London and Paris ... but, to suppose that there will be in London or Paris a single carriage less! that France will lessen her importation of English goods, or that the demand for French wines will be less from England—is an idea which cannot, in my mind, coincide with that of a population and industry which, hitherto had sufficed in both nations to answer all those different purposes; of a population, I say, and of an industry, which will, in all likelihood, go on still increasing every day, wherever they shall not be checked by the laws.
One of the most fatal effects that spring from that increase in the prices, occasioned by the impost, is, as they say, the impossibility to which a country is reduced, of supporting abroad the rivalship, the competition of a nation less burdened with taxes, who of course can, they say, undersell every thing.
Such is, in fine, the question which I thought the fastidious details I have entered into, ought to preface, and might render of more easy solution. But I request the reader to examine previously,
1st, Whether an accession of wealth, an addition of gold and money to the circulation, would not increase the prices of every thing, as necessarily as taxes must do it;—2dly, If that increase in prices, procured by wealth, would not be accompanied with the same inconveniences in regard to the supporting of a competition abroad;—and, 3dly, If the stranger to whom we should declare ourselves compelled to sell him our goods dearer, because we are grown richer than the rival nation, would not have the same answer to give us, as if he were told, that the cause of the advance in the price is, our being loaded more heavily with taxes.
If these three questions cannot be answered but in the affirmative, we should then be obliged to suspect that there is something inexplicable, ill judged, and not better grounded in the clamours which resound in every part of England on this subject; and this surmise might perhaps incline the reader to peruse, without prejudice, what I am going to set down, with no other view, than to find out some useful truths.
On the Influence of the National Prices on the Sales in Foreign Markets.
The impossibility of a competition in trade with those who can afford cheaper, in money, the articles which are to be the object of such a trade, is so affirmatively maintained, and this principle is so self-evident, when applied to two manufacturers in the same town, circumscribed in their selling as well as their buying, within the precincts of the same country, where the one should always procure for 3, what the other would have the stupidity to buy constantly at 4, that it becomes pardonable (if one carries the examination no farther) to admit of this idea, taken in a most comprehensive manner, as one of those trivial truths, which are not worth being searched into. But I must own, that my reflexions on the pretended necessity of keeping the commercial balance constantly in favour, have made me rather circumspect in giving credit to opinions the most generally received.