He admits, too, that while a
part of the goods received in exchange for the coin exported, may be
materials, tools, and provisions for the employment of an additional
industry, a part also may be taken back in foreign wines, silks, &c.
to be consumed by idle people who produce nothing; and so far the
substitution promotes prodigality, increases expense and consumption,
without increasing production. So far also, then, it lessens the capital
of the nation. What may be the amount which the conversion of the part
exchanged for productive goods, may add to the former productive mass,
it is not easy to ascertain, because, as he says, (page 441,) 'It is
impossible to determine what is the proportion which the circulating
money of any country bears to the whole value of the annual produce. It
has been computed by different authors, from a fifth* to a thirtieth of
that value.'
* The real cash or money necessary to carry on the
circulation and barter of a State, is nearly one third part
of all the annual rents of the proprietors of the said
State; that is, one ninth of the whole produce of the land.
Sir William Petty supposes one tenth part of the value of
the whole produce sufficient. Postlethwayt, _voce_, Cash.
In the United States it must be less than in any other part of the
commercial world; because the great mass of their inhabitants being
in responsible circumstances, the great mass of their exchanges in the
country is effected on credit, in their merchant's ledger, who supplies
all their wants through the year, and at the end of it receives the
produce of their farms, or other articles of their industry.
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