during a tour in Wales; we were admiring a neat fountain which supplied a village with water, and were informed by the landlord of the inn that he had constructed it, and had had the water conveyed from a distant spring, whence the people of the village had formerly been under the necessity of fetching it. A trifling sum was annually paid by each family for liberty to use this water, and the landlord thought it ncessary to make many apologies for not allowing it them free of expense, and talked much of the money he had laid out in the enterprise. My father assured him that he was convinced the speculation was still more beneficial to the village than it was to himself; that as the inhabitants had the option of fetching water for themselves, the payment proved that it was because they could turn the time and labour they bestowed on the conveyance of water to better account; and upon inquiry we found the village had been in an improving state ever since the erection of this fountain. It had not only become more opulent, but had acquired habits of cleanliness, which had proved very beneficial to the health of the people. MRS. B. There are three species of commerce in which merchants engage their capitals. The home trade, foreign trade, and the carrying trade. The home trade comprehends all the internal and coasting trade of a country. The foreign trade is that in which we exchange our commodities for those of foreign countries; and the carrying trade consists in conveying the commodities of one foreign country to another. Let us at present confine our observations to the home trade. CAROLINE. The home trade, I conclude, must be the most ad- . vantageous to the country, because it encourages the industry of our own people. MRS. B. What difference can it make whether our labourers are employed to work for us, or for foreigners? For if we export English goods, we receive an equal amount of foreign goods in exchange; so that foreign labourers work equally for us in return. The only advantage of the home trade is that it usually affords a quicker return of capital, which is a further means of promoting industry. The nearer is the market at which the merchant disposes of his goods the sooner will his capital be returned to him, and the sooner will he be able to take other goods from the hands of the farmer or manufacturer. If a London merchant trades with Sheffield or Manchester, his capital may be returned to him in the course of a few weeks; if with America or the East Indies, it may be a year or two, or more, before he gets it back. The greater the vicinity of the market, therefore, the greater the number of sales and purchases he will be able to make in a given time. A capital of 1,000%., for instance, might in the home trade be returned once a month, and enable the merchant, during the course of the year, to purchase 12,000l. worth of goods; whilst, if he sent his merchandise to India, two years would probably elapse before he got his capital returned. In the first case, therefore, the 1,000l. capital would afford twenty-four times more encouragement to industry than it would in the latter. CAROLINE. You do not thence mean to infer, that in the first case the profits would be twenty-four times greater? MRS. B. Certainly not. Competition is, you know, perpetually tending to equalise the profits of capital, in whatever way it is employed. Profits will consequently be proportioned to the slow return of capital; and must, therefore, be reckoned annually, and not calculated upon every time the capital is returned. CAROLINE. The period of the return of capital applies, then, not so much to the home or foreign trade, as to the distance of the market; for capital might be returned quicker in trading with Calais or Dunkirk than with Edinburgh and Cork? MRS. B. Very true; and how much is it to be regretted - that jealousies and dissensions should so frequently impede and restrict the trade between neighbouring nations, which would otherwise be carried on with such great and reciprocal advantage! But we shall reserve till our next interview the observations we have to make on foreign trade. 334 CONVERSATION XIX. ON FOREIGN TRADE. ADVANTAGES OF FOREIGN TRADE. — IT EMPLOYS THE SURPLUS OF CAPITAL, AND DISPOSES OF A SURPLUS OF COMMODITIES.-OF BOUNTIES.-EFFECTS OF RESTRICTIONS ON FOREIGN TRADE. EXTRACT FROM SAY'S POLITICAL ECONOMY.- EXTRACT FROM FRANKLIN'S WORKS. CAROLINE. Ar our last interview, Mrs. B., you were regretting that any restraint should be imposed on our trade with foreign countries; yet I cannot help thinking that every measure tending to discourage foreign commerce, and promote our own industry, would be extremely useful. MRS. B. You would find it difficult to accomplish both those objects; for in order to encourage our own industry we must facilitate the means of selling the produce of our manufactures, and extend their market as much as possible. On the other hand, if we prohibit exportation, we limit the production of our manufactures to the supply which can be consumed at home. If the woollen manufacturers of Leeds, after having supplied the whole demand of England for broad cloths, have any capital left, they will use it in the preparation of woollen goods for exportation. CAROLINE. Why not rather employ it in the fabrication of other commodities which may be consumed at home? MRS. B. If there were a deficiency of capital in any other branch of industry at home, the redundancy would naturally be drawn to that branch; but if all the trade, that is all the exchanges, that could be made at home have been made, we send the residue of our commodities to foreign markets for sale. CAROLINE. Yet it appears a great hardship on the poor to send goods abroad, which so many of them are in want of at home. MRS. B. The poor are supplied with whatever they can afford to purchase; and without the means of purchase you must recollect that there can be no effectual demand. It is not to be expected that farmers and manufacturers should labour for them merely from charitable motives, and were they so disposed, they would not long possess the means of continuing their benevolence. It would be very wrong, therefore, to consider this surplus produce as taken from the poor; for it would not have been produced had there been no demand for it in foreign countries. CAROLINE. That is very true. In all employment of capital men labour with a view to profit; they work, therefore, only for those who will pay them the value of their produce; and it is easy to conceive that those |