The foreign goods for home consumption may sometimes be purchased, not with the produce of domestic industry, but with some other foreign goods.These last, however, must have been purchased either immediately with the produce of domestic industry, or with something else that had been purchased with it;for, the case of war and conquest excepted, foreign goods can ever be acquired but in exchange for something that had been produced at home, either immediately, or after two or more different exchanges.The effects, therefore, of a capital employed in such a roundabout foreign trade of consumption, are, in every respect, the same as those of one employed in the most direct trade of the same kind, except that the final returns are likely to be still more distant, as they must depend upon the returns of two or three distinct foreign trades.If the flax and hemp of Riga are purchased with the tobacco of Virginia, which had been purchased with British manufactures, the merchant must wait for the returns of two distinct foreign trades before he can employ the same capital in re-purchasing a like quantity of British manufactures.If the tobacco of Virginia had been purchased, not with British manufactures, but with the sugar and rum of Jamaica which had been purchased with those manufactures, he must wait for the returns of three.If those two or three distinct foreign trades should happen to be carried on by two or three distinct merchants, of whom the second buys the goods imported by the first, and the third buys those imported by the second, in order to export them again, each merchant indeed will in this case receive the returns of his own capital more quickly;but the final returns of the whole capital employed in the trade will be just as slow as ever.Whether the whole capital employed in such a round-about trade belong to one merchant or to three can make no difference with regard to the country, though it may with regard to the particular merchants.Three times a greater capital must in both cases be employed in order to exchange a certain value of British manufactures for a certain quantity of flax and hemp than would have been necessary had the manufactures and the flax and hemp been directly exchanged for one another.
The whole capital employed, therefore, in such a round-about foreign trade of consumption will generally give less encouragement and support to the productive labour of the country than an equal capital employed in a more direct trade of the same kind.
Whatever be the foreign commodity with which the foreign goods for home consumption are purchased, it can occasion no essential difference either in the nature of the trade, or in the encouragement and support which it can give to the productive labour of the country from which it is carried on.If they are purchased with the gold of Brazil, for example, or with the silver of Peru, this gold and silver, like the tobacco of Virginia, must have been purchased with something that either was the produce of the industry of the country, or that had been purchased with something else that was so.So far, therefore, as the productive labour of the country is concerned, the foreign trade of consumption which is carried on by means of gold and silver has all the advantages and all the inconveniences of any other equally round-about foreign trade of consumption, and will replace just as fast or just as slow the capital which is immediately employed in supporting that productive labour.It seems even to have one advantage over any other equally roundabout foreign trade.The transportation of those metals from one place to another, on account of their small bulk and great value, is less expensive than that of almost any other foreign goods of equal value.Their freight is much less, and their insurance not greater; and no goods, besides, are less liable to suffer by the carriage.An equal quantity of foreign goods, therefore, may frequently be purchased with a smaller quantity of the produce of domestic industry, by the intervention of gold and silver, than by that of any other foreign goods.The demand of the country may frequently, in this manner, be supplied more completely and at a smaller expense than in any other.Whether, by the continual exportation of those metals, a trade of this kind is likely to impoverish the country from which it is carried on, in any other way, I shall have occasion to examine at great length hereafter.
