as obvious as it was universal, of attempting to increase the amount of national wealth by forbidding the exportation of gold and silver, and encouraging their importation.

It appears from a passage in Cicero, that the exportation of the precious metals from Rome had been frequently prohibited during the period of the Republic; and this prohibition was repeatedly renewed, though to very little purpose, by the Emperors. Neither, perhaps, has there been a state in modern Europe whose early laws have not expressly forbidden the exportation of gold and silver. It is said to have been interdicted by the law of England previously to the Conquest; and reiterated statutes were subsequently passed to the same effect; one of which, (3d Henry VIII. cap. 1.) enacted so late as 1512, declared, that all persons carrying over sea any coins, plate, jewels, &c. should, on detection, forfeit double the value of these articles.

The extraordinary extension of commerce during the fifteenth and sixteenth centuries occasioned the substitution of a more refined and complex system for increasing the supply of the precious metals, in

* 66 Exportari aurum non oportere, cum sæpe antea senatus, tum me consule, gravissime judicavit. Orat. pro L. Flacco, sect. 28.

+ Pliny, when enumerating the silks, spices, and other Eastern products imported into Italy, says, " Minimaque computatione millies centena millia sestertium annis omnibus, India et Seres, peninsulaque illa (Arabia) imperia nostro demunt." (Hist. Nat. Lib. xii. cap. 18.)

place of the coarse and vulgar one that had previously obtained. The establishment of a direct intercourse with India by the Cape of Good Hope, seems to have had the greatest influence in effecting this change. The precious metals have always been among the most advantageous articles of export to the East: And notwithstanding the old and deeply rooted prejudices against their exportation, the East India Company obtained, when first instituted, in 1600, leave annually to export foreign coins, or bullion, of the value of L. 30,000; on condition, however, that they should import, within six months after the termination of every voyage, except the first, as much gold and silver as should together be equal to the value of the silver exported by them. But the enemies of the Company contended, that this condition was not complied with; and that it was besides contrary to all principle, and highly injurious to the public interests, to permit gold and silver to be sent out of the kingdom. The merchants, and others interested in the support of the Company, could not controvert the reasonings of their opponents, without openly impugning the ancient policy of absolutely preventing the exportation of the precious metals. They did not, however, venture to contend, nor is there indeed any good reason for thinking that it really occurred to them, that the exportation of bullion to the East was advantageous, on the ground that the commodities purchased by it were of greater value in England. But they contended, that the exportation of bullion to India was advantageous,

because the commodities imported from thence were chiefly re-exported to other countries, from which a much greater quantity of bullion was obtained than had been required to pay them in India. Mr Thomas Mun, the ablest of the Company's advocates, ingeniously compares the operations of the merchant in conducting a trade carried on by the exportation of gold and silver, to the seed-time and harvest of agriculture. "If we only behold," says he, "the actions of the husbandman in the seed-time, when he casteth away much good corn into the ground, we shall account him rather a madman than a husbandman. But when we consider his labours in the harvest, which is the end of his endeavours, we shall find the worth and plentiful increase of his actions." *

Such was the origin of what has been called the MERCANTILE SYSTEM: And, when compared with the previous prejudice for it hardly deserves the name of system-which wholly interdicted the exportation of gold and silver, it must be allowed that its adoption was a considerable step in the progress to sounder opinions. The supporters of the mercantile system, like their predecessors, held that

Treasure by Foreign Trade, orig. ed. p. 50.-This work was published in 1664, a considerable period after Mr Mun's death. Most probably it had been written about 1635, or 1640. Mun had previously advanced the same doctrines, and nearly in the same words, in his Defence of the East India Trade, originally published in 1609, and reprinted in 1621, and in a petition drawn up by him, and presented by the East India Company to Parliament in 1628.

gold and silver alone constituted wealth; but they thought that sound policy dictated the propriety of allowing their exportation to foreigners, provided the commodities imported in their stead, or a portion of them, were afterwards sold to other foreigners for a greater amount of bullion than had been originally laid out on their purchase; or, provided the importation of the foreign commodities caused the exportation of so much more native produce than would otherwise have been exported, as would more than equal their cost. These opinions necessarily led to the celebrated doctrine of the Balance of Trade. It was obvious that the precious metals could not be imported into countries destitute of mines, except in return for exported commodities; and the grand object of the supporters of the mercantile system was to monopolize the largest possible supply of the precious metals, by the adoption of various complex schemes for encouraging exportation, and restraining the importation of almost all products, except gold and silver, that were not intended for future exportation. In consequence, the excess of the value of the Exports over that of the Imports came to be considered as being at once the sole cause and measure of the progress of a country in the career of wealth. This excess, it was taken for granted, could not be balanced otherwise than by the importation of an equal value of gold or silver, or of the only real wealth it was then supposed a country could possess.

The principles and conclusions of the mercantile system, though absolutely false and erroneous, afford

a tolerable explanation of a few very obvious phenomena; and what did more to recommend them, they were in perfect unison with the popular prejudices on the subject. The merchants, and practical men, who were the founders of this system, did not consider it necessary to subject the principles they assumed to any very refined analysis or examination. But, reckoning them as sufficiently established by the common consent and agreement of mankind, they applied themselves almost exclusively to the discussion of the practical measures calculated to give them the greatest efficacy.

66

Although a kingdom," says Mr Mun," may be enriched by gifts received, or by purchase taken, from some other nations, yet these are things uncertain, and of small consideration, when they happen. The ordinary means, therefore, to increase our wealth and treasure, is by foreign trade, wherein we must ever observe this rule-to sell more to strangers yearly than we consume of theirs in value. For, suppose, that when this kingdom is plentifully served with cloth, lead, tin, iron, fish, and other native commodities, we do yearly export the overplus to foreign countries to the value of L. 2,200,000, by which means we are enabled, beyond the seas, to buy and bring in foreign wares for our use and consumption to the value of L. 2,000,000: By this order duly kept in our trading, we may rest assured that the kingdom shall be enriched yearly L. 200,000, which must be brought to us as so much treasure; because that part of our stock which is not return