State of the Balance betweenEnglandandHolland.
SirCharles Whitworth, in hisState of the English Trade, rates the annual balance due byHollandtoGreat Britain, at 1,372,258l.uponan average of 10 years: This is the most considerable. There can be no illusion, in regard to the effect this balance has upon the money inEngland; it is well known that it does not increase it; nay, it is thought that the debt due toHolland, lessens it annually, not only by the whole amount of thefavourable balancewhich would revert toEnglandwere she not indebted to theDutch, but of one million more, which must be found to pay them off.
I have already said, and repeated, that in every circumstance where it is necessary to borrow or to displace a capital, it is better to borrow, even at 5per cent.than to remove a capital which returns double that sum; and that, on the other hand, it is more advantageous to lend any sum abroad upon good security at 5, or even at 3per cent.than to lend the same sum at home, where it would yield only 2per cent.or to bury it in the abyss of a Bank, whence nothing returns. Now what proves thatGreat BritainandHollandare in this case with regard to each other, is, thatEnglandseldom or never opens a loan, but what theDutchtake a share in. What do they give for the purchase? Nothing more than the surplus of the ordinary profits arising from a trade, which they cannotextend sufficiently to employ the whole amount of their savings. And why has this part of theEnglishloan been given up to theDutchby the national capitalists? Because the latter could find in their own trade, susceptible of a farther extension, a way of employing their capitals to greater advantage, that is to say, of reaping a benefit superior to the interest offered by the loan: How can this be doubted, when we see that the loan falls into the hands of a small number of merchants, who soon afterwards make over their debt? Would they transfer it to any one, were not the interest it brings in, interest secured by the nation, inferior to the ordinary profits of their commerce?
Therefore, if the balance due to theDutchis thoughtburdensome, only in the supposition that it serves to payburdensomeinterests, it cannot be looked upon in the same light, when the matter rests upon a debt, by which the borrower clears a benefit superior to the interest that he has to pay.—I shall present this question under another point of view.
In the war which was terminated by the treaty ofParis, the most considerable part of the debt contracted for its support, was acquired by theDutch: Why so? Because theEnglish, carrying on, without any opposition, an exclusive trade with every part of the world open to them alone, found therein the opportunity of employing their capitals to a far greater advantage, than that held out by government in the interest of the loan. During the last war, on the contrary, theEnglish, being more narrowly circumscribed in regard to their commercial operations, by a navy, the possibility of which they did not even suspect, much less its real existence, and being kept more circumspect by a new system which opened a free navigation to all the powers not involved in war, thought themselves happy to find, in the national loan, an employment for that portion of their capitals, which, from circumstances, was become useless. The interests of the last debt are then due and paid within, and byGreat Britain; but will it be said, thatEnglandwould not be so rich, were the 3 millions additional interest, with which she is burdened, due toHolland, and had theEnglish, instead of employing their capitals, as they have done, in support of the last war, made use of them in the same profitable manner as in the year 1755? had that money, for instance, been laid out in the improvement of their waste lands inEurope,whilst Dutch cash should havefought against French money, to determine how many European nations ought to be permitted to carry to North America, the goods of the other parts of the globe!
As to the full acquittal in money,realandeffective, of the 2,000,000l.interest, due toHollandfor her previous loan, it is improbable, impossible, and useless.
It is improbable, becauseHolland, being already overstocked with money, and carefully intent on getting rid of her surplusage in this particular, at the first opportunity of placing it with security, would still lower the price of it at home, were she to increase its mass; and that, on the contrary, whilstHollandtakes in goods instead of money, she keeps up the interest of the one, by securing to herself a benefit upon the other.
It is impossible, becauseEnglandimporting bullion fromSpainandPortugal, to the amount only of one third, and being very cautious, as observed before, not to import more thanone thirdof what she owes to theDutch, and this, not to pay them, but because this third answers sufficiently to the five articles of which I havespoken before;—England, then, cannot give to theDutchwhat she has not received from another, and which she has not of her own.
It is useless, in fine, because all accounts whatever are balanced with more ease, in the age we live in, by bills of exchange, than with cash, and because the claims ofHollandare more naturally paid off, by another debt due toGreat Britain, for the produce of her exports to some other parts ofEurope, from whence theDutchcarefully avoid, as much as possible, to import any thing but merchandise.
Butwould it not be better to owe nothing to foreign nations? For to this one point we ought to confine all the lamentations aboutDutchcreditors.
The above question, so apparently simple, so readily to be resolved in the affirmative, would grow perhaps more intricate, were it ushered in by some previous queries, which might permit us to foresee the effect of the national wish, when accomplished, if it could be obtained by the easiest answer that could be given; for the case, no doubt, is not to examine, whether it would not be better to have borrowed, without beingobliged to return, than to pay an interest after the money has been borrowed. In the state of things, the question alluded to, to be fair and within the pale of common sense, must mean nothing more than this:Would it not be better, that the proprietors of the two millions interest, paid to a foreign nation, should make their residence in England?And in this case it leads us, by degrees, to the following query:Would it not be better, if all and every man in the world, who has money to spare, should come to spend it in London?Then indeedLondonwould be a dear place to live in! And this is, methinks, the most dreaded effect arising from taxes.O ye, whose covetousness knows no limits but the bounds of the earth! do ye pretend to be the sole inhabitants thereof?Can ye draw off the capitalists of a country, without completing its ruin? Can ye effect its ruin, without losing both that portion which the produce of your soil secures to you in the produce of that nation’s industry, and the share which the produce of your industry has secured for you in those of her soil?
What then appears to me to be the result of thisfatalinterest of two millions due annually toHolland?—That the latter is essentially interested, not in an increase of the power ofEngland,who might make a bad use of it; not in an increase of specie inEngland, which, by lowering its value, must compel her to return that of theDutch, already so much disparaged in their country; but to a further extension of theEnglishtrade, or rather of the general commerce, which can alone, by advancing constantly, and every where, the quantity and price of the objects that are to circulate, increase in the same proportion the necessity of theinstrumentsindispensable to every kind of circulation and undertaking, and keep up in every part,for the interest of Spain and Portugal, as well as for that of Holland, the value of the sign intended for a general representation, whichHollandin her proportion will ever have in greater plenty than all other nations, thanks to the narrow limits of her territories, and to the manners of her inhabitants, which, in all probability, are the consequence of that limitation.