England's treasure by forraign trade

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ENGLAND'S TREASURE BY FORRAIGN TRADE BY THOMAS MUN 1664 New York MACMILLAN AND CO. AND LONDON 1895 All rights reserved

Thomas Mun, son of John Mun, mercer, of London, and grandson of John Mun, provost of moneyers in the Royal Mint, was born in 1571. He acquired wealth and reputation as a merchant engaged in the Levant trade, and in 1615 he was elected a member of the committee, i.e. a director, of the recently established East India Company. It was the controversies to which the action of the East India Company gave rise that led to the publication of his opinions upon trade. To defend the Company against the outcry caused by its exportation of precious metal, he published in 1621 A Discourse of Trade from England into the East Indies. Of this a second edition appeared in the same year, and it was reprinted in Purchas's Pilgrims in 1625. In the present century it has been reprinted in the volume of Early English Tracts on Commerce issued by the Political Economy Club, in 1856. The views there set forth attracted considerable attention, and they were the occasion of protracted controversy (1622-1623) between Gerard Malynes and Edward Misselden. In 1628 Mun drew up for presentation to the House of Commons The Petition and Remonstrance of the Governor and Company of Merchants of London trading to the East Indies (dealing with the relations between the English and Dutch), which was reprinted in 1641, and of which much of the argument and language reappeared later in his best known book. Mun continued to enjoy great prosperity in his business undertakings, and was able to buy several estates in Kent, and thus lay the foundations of a county family. He died in 1641.

His treatise, England's Treasure by Forraign Trade, probably written about 1630, was printed for the first time by his son in 1664. A 2nd edition appeared in 1669 ; a 3rd in 1698; a 4th, in one volume with Roberts' Merchants' Map of Commerce, in 1700; a 5th in 1713, during the discussion upon Bolingbroke's proposed commercial treaty with France ; and a 6th was published by Foulis at Glasgow in 1755. A copy of this last mentioned edition is known ta have been in the possession of Adam Smith. England's Treasure was also included in the (1856) volume of Tracts on Commerce before mentioned.

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ECONOMIC CLASSICS

Volumes now ready:

ADAM SMITH: Select Chapters and Passages

Preface

Thomas Mun, son of John Mun, mercer, of London, and grandson of John Mun, provost of moneyers in the Royal Mint, was born in 1571. He acquired wealth and reputation as a merchant engaged in the Levant trade, and in 1615 he was elected a member of the committee, i.e. a director, of the recently established East India Company. It was the controversies to which the action of the East India Company gave rise that led to the publication of his opinions upon trade. To defend the Company against the outcry caused by its exportation of precious metal, he published in 1621 A Discourse of Trade from England into the East Indies. Of this a second edition appeared in the same year, and it was reprinted in Purchas's Pilgrims in 1625. In the present century it has been reprinted in the volume of Early English Tracts on Commerce issued by the Political Economy Club, in 1856. The views there set forth attracted considerable attention, and they were the occasion of protracted controversy (1622-1623) between Gerard Malynes and Edward Misselden. In 1628 Mun drew up for presentation to the House of Commons The Petition and Remonstrance of the Governor and Company of Merchants of London trading to the East Indies (dealing with the relations between the English and Dutch), which was reprinted in 1641, and of which much of the argument and language reappeared later in his best known book. Mun continued to enjoy great prosperity in his business undertakings, and was able to buy several estates in Kent, and thus lay the foundations of a county family. He died in 1641.

His treatise, England's Treasure by Forraign Trade, probably written about 1630, was printed for the first time by his son in 1664. A 2nd edition appeared in 1669 ; a 3rd in 1698; a 4th, in one volume with Roberts' Merchants' Map of Commerce, in 1700; a 5th in 1713, during the discussion upon Bolingbroke's proposed commercial treaty with France ; and a 6th was published by Foulis at Glasgow in 1755. A copy of this last mentioned edition is known ta have been in the possession of Adam Smith. England's Treasure was also included in the (1856) volume of Tracts on Commerce before mentioned.

All accessible biographical and bibliographical details have been gathered by Mr. A. L. Hardy in his article in the Dictionary of National Biography, xxxix (1894), which has been freely drawn upon in the foregoing statement.

To readers of to-day the treatise here reprinted is known chiefly by the account of its argument given by Adam Smith ( Wealth of Nations, bk. iv, ch. i), and by his happy remark that "the title of Mun's book, England's Treasure in (sic) Foreign Trade, became a fundamental maxim in the political economy, not of England only, but of all other commercial countries." To Adam Anderson, in 1764 (Origin of Commerce, s. aa. 1663 and 1664), it was a "judicious" and "valuable treatise," in which it was "clearly shewn 'that nothing but an overbalance in foreign trade…can either increase our bullion or even keep what we have already'" ; and these phrases reappear unaltered in David Macpherson's Annals of Commerce in 1805. The importance in the history of economic thought assigned to it — whether correctly or no — by more recent writers, may be sufficiently illustrated by three examples. McCulloch (Literature of Political Economy, 1845) says that "Mun may be consid as the earliest expositor of what has been called the mercantile system of Commercial policy" ; Hallam (Literature of Europe, 3rd ed., 1847) remarks that "Mun is generally reckoned the founder of…the mercantile system" ; and Richard Jones (Primitive Political Economy of England in Quarterly Review, 1847, and in Literary Remains, 1859) declares that his "book was received as the gospel of finance and commercial policy."

The copy of the first edition, from which the present has been exactly reprinted, was presented to Harvard University in 1765, after the destruction of the old Library by fire, by the Rev. John Barnard of Marblehead. It is interesting to see from his Autobiography (printed in the Collections of the Massachusetts Historical Society, 3rd series, vol. v, 1836), how completely the donor agreed with the fundamental idea of Mun's work. Recalling with pride the impetus he had himself given to business enterprise in Marblehead, he observes, "When I came," in 1714, "they had their houses built by country workmen, and their clothes made out of town, and supplied themselves with beef and pork from Boston, which drained the town of its money."

Some missing leaves have been supplied from the copy in the library of Professor Seligman of Columbia College. Upon one of the blank pages at the end is the following curious memorandum :

July 10th 1664.

Borrowed of Sr Winston Churchill ye | l - s -d

day and yeare above written ye sum

of six pounds to be repaid upon | 6. 0. 0

demand

John Churchill

The borrower was probably that John Churchill, the "famous Chancery practiser," who afterwards became Master of the Rolls. He was a cousin of Sir Winston Churchill, the father of the great Duke of Marlborough.

In the present volume, the original title-page and license have been reproduced in facsimile ; and an attempt has been made to retain, as far as is possible without specially manufactured type and paper, something of the appearance of the dedicatory letter, and the address to his son. The original spelling and punctuation have been followed throughout the treatise.

Introduction

To the Right Honourable, THOMAS EARL OF SOUTH-HAMPTON,

Lord High Treaſurer of England, Lord Warden of the New Forreſt, Knight of the moſt Noble Order of the Garter, and one of His Majeſty's moſt Honourable Privy Council.

MY LORD,

I Preſent this enſuing Treatiſe to your Lordſhip as its proper Patron, to whom, by vertue of your great Truſt (the greateſt, doubtleſs, in this Kingdome) the management of his Majeſty's Treaſure, and improvement of his Revenue, are moſt peculiarly committed.

The title of it (Englands Treaſure by Forraign Trade) alone beſpeaks your notice, the Argument, (being of ſo publick a nature) may invite your peruſall but the Tract it ſelf will, I hope, deferve your Lordſhips Protection. It was left me in the nature of a Legacy by my Father, for whoſe fake I cannot but value it as one of my beſt Moveables, and as ſuch I dedicate it to your Lordſhip.

He was in his time famous amongſt Merchants, and well known to moſt men of buſineſs, for his general Experience in Affairs, and notable Inſight into Trade ; neither was he leſs obſerved for his Integrity to his Prince, and Zeal to the Common-wealth : the ſerious Discourſes of ſuch men are commonly not unprofitable.

To your Lordſhips judgement I ſubmit this Treatiſe, and my preſumption herein to your Pardon.

My Lord,

Your moſt faithful and obedient Servant,

John Mun.

Chapter 1

Chap. I

The Qualities which are required in a perfect Merchant of Forraign Trade.

The love and service of our Country consisteth not so much in the knowledge of those duties which are to be performed by others, as in the skilful practice of that which is done our selves; and therefore (my Son) it is now fit that I say something of the Merchant, which I hope in due time shall be thy Vocation: Yet herein are my thougths free from all Ambition, although I rank thee in a place of so high esteem; for the Merchant is worthily called The Steward of the Kingdoms Stock, by way of Commerce with other Nations; a work of no less Reputation than Trust, which ought to be performed with great skill and conscience, that so the private gain may ever accompany the publique good. And because the nobleness of this profession may the better stir up thy desires and endeavours to obtain those abilities which may effect it worthily, I well briefly set down the excellent qualities which are required in a perfect Merchant.

1. He ought to be a good Penman, a good Arithmetician, and a good Accomptant, by that noble order of Debtor and Creditor, which is used onely amongst Merchants; also to be expert in the order and form of Charter-parties. Bills of Lading, Invoyces, Contracts, Bills of Exchange, and policies of Ensurance.

2. He ought to know the Measures, Weights. and Monies of all forraign Countries, especially where we have Trade, & the Monies not onely by their several denominations, but also by their intrinsique values in weight & fineness, compared with the Standard of this Kingdome, without which he cannot well direct his affaires.

3. He ought to know the Customs, Tolls, Taxes, Impositions, Conducts and other charges upon all matters of Merchandize exported or imported to and from the said Forraign Countries.

4. He ought to know in what several commodities each Country abounds, and what be the wares which they want, and how and from whence they are furnished with the same.

5. He ought to understand, and to be a diligent observer of the rates of Exchanges by Bills, from one State to another, whereby he may the better direct his affairs,and remit over and receive home his Monies to the most advantage possible.

6. He ought to know what goods are prohibited to be exported or imported in the said forraign Countreys, lest otherwise he should incur great danger and loss in the ordering of his affairs.

7. He ought to know upon what rates and conditions to fraight his Ships, and ensure his adventures from one Countrey to another, and to be well acquainted with the laws, orders and customes of the Ensurance office both here and beyond the Seas, in the many accidents which may happen upon the damage or loss of Ships or goods, or both these.

8. He ought to have knowledge in the goodness and in the prices of all the several materials which are required for the building and repairing of Ships, and the divers workmanships of the same, as also for the Masts, Tackling, Cordage, Ordnance, Victuals, Munition and Provisions of many kinds; together with the ordinary wages of Commanders, Officers and Mariners, all which concern the Merchant as he is an Owner of Ships.

9. He ought (by the divers occasions which happen sometime in the buying and selling of one commodity and sometimes in another) to have indifferent if not perfect knowledge in all manner of Merchandize or wares, which is to be as it were a man of all occupations and trades.

10. He ought by his voyaging on the Seas to become skilful in the Art of Navigation.

11. He ought as he is a Traveller, and sometimes abiding in forraign Countreys to attain to the speaking of divers Languages, and to be a diligent observer of the ordinary Revenues and expences of forraign Princes, together with their strength both by Sea and Land, their laws, customes, policies, manners, religions, arts, and the like; to be able to give account thereof in all occasions for the good of his Countrey.

12. Lastly, although there be no necessity that such a Merchant should be a great Scholar; yet is it (at least) required, that in his youth he learn the Latine tongue, which will the better enable him in all the rest of his endeavours.

Thus have I briefly shewed thee a pattern for thy diligence, the Merchant in his qualities; which in truth are such and so many, that I find no other profession which leadeth into more worldly knowledge. And it cannot be denied but that their sufficiency doth appear likewise in the excellent government of State at Venice, Luca, Genoua, Florence, the low Countreys, and divers other places of Christendom. And in those States also where they are least esteemed, yet is their skill and knowledge often used by those who sit in the highest places of Authority: It is therefore an act beyond rashness in some, who do dis-enable their Counsel and judgment (even in books printed) making them uncapable of those ways and means which do either enrich or empoverish a Common-wealth, when in truth this is only effected by the mystery of their trade, as I shall plainly shew in that which followeth. It is true indeed that many Merchants here in England finding less encouragement given to their profession than in other Countreys, and seeing themselves not so well esteeemed as their Noble Vocation requireth, and according to the great consequence of the same, doe not therefore labour to attain unto the excellencie of their profession, neither is it practised by the Nobility of this Kingdom as it is in other States from the Father to the Son throughout their generations, to the great encrease of their wealth, and maintenance of their names and families: Whereas the memory of our richest Merchants is suddenly extinguished; the Son being left rich, scorneth the profession of his Father, conceiving more honor to be a Gentleman (although but in name) to consume his estate in dark ignorance and excess, than to follow the steps of his Father as an Industrious Merchant to maintain and advance his Fortunes. But now leaving the Merchants praise we will come to his practice, or at least to so much thereof as concerns the bringing of Treasure into the Kingdom.

Chapter 2

Chap. II

The Means to enrich this Kingdom, and to encrease our Treasure.

Although a Kingdom 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 encrease our wealth and treasure is by Forraign Trade, wherein wee must ever observe this rule; to sell more to strangers yearly than wee consume of theirs in value. For suppose that when this Kingdom is pletifully served with the Cloth, Lead, Tinn, Iron, Fish and other native commodities, we doe yearly export the overplus to forraign Countries to the value of twenty two hundred thousand pounds; by which means we are enabled beyond the Seas to buy and bring in forraign wares for our use and Consumption, to the value of twenty hundred thousand pounds; By this order duly kept in our trading, we may rest assured that this order duly kept in our trading, we may rest assured that the Kingdom shall be enriched yearly two hundred thousand pounds, which must be brought to us in so much Treasure; because that part of our stock which is not returned to us in wares must necessarily be brought home in treasure.

For in this case it cometh to pass in the stock of a Kingdom, as in the estate of a private man; who is supposed to have one thousand pounds yearly revenue and two thousand pounds of ready money in his Chest: If such a man through excess shall spend one thousand five hundred pounds per annum, all his ready mony will be gone in four years; and in the like time his said money will be doubled if he take a Frugal course to spend but five hundred pounds per annum; which rule never faileth likewise in the Common-wealth, but in some cases (of no great moment) which I will hereafter declare, when I shall shew by whom and in what manner this ballance of the Kingdoms account ought to be drawn up yearly, or so often as it shall please the State to discover how much we gain or lose by trade with forraign Nations. But first I will say something concerning those ways and means which will encrease our exportations and diminish our importations of wares; which being done, I will then set down some other arguments both affirmative and negative to strengthen that which is here declared, and thereby to shew that all the other means which are commonly supposed to enrich the Kingdom with Treasure are altogether insufficient and meer fallacies.

Chapter 3

Chap. III.

The particular ways and means to encrease the exportation of our commodities, and to decrease our Consumption of forraign wares.

The revenue or stock of a Kingdom by which it is provided of forraign wares is either Natural or Artificial. The Natural wealth is so much only as can be spared from our own use and necessities to be exported unto strangers. The Artificial consists in our manufactures and industrious trading with forraign commodities, concerning which I will set down such particulars as may serve for the cause we have in hand.

1. First, although this Realm be already exceeding rich by nature, yet might it be much encreased by laying the waste grounds (which are infinite) into such employments as should no way hinder the present revenues of other manufactured lands, but hereby to supply our selves and prevent the importations of Hemp, Flax, Cordage, Tobacco, and divers other things which now we fetch from strangers to our great impoverishing.

2. We may likewise diminish our importations, if we would soberly refrain from excessive consumption of forraign wares in our diet and ray , with such often change of fashions as is used, so much the more to encrease the waste and charge; which vices at this present are more notorious amongst us than in former ages. Yet might they easily be amended by enforcing the observation of such good laws as are strictly practised in other Countries against the said excesses; where likewise by commanding their own manufactures to be used, they prevent the coming in of others, without prohibition, or offence to strangers in their mutual commerce.

3. In our exportations we must not only regard our own superfluities, but also we must consider our neighbours necessities, that so upon the wares which they cannot want, nor yet be furnished thereof elsewhere, we may (besides the vent of the Materials) gain so much of the manufacture as we can, and also endeavour to sell them dear, so far forth as the high price cause not a less vent in the quantity. But the superfluity of our commodities which strangers use, and may also have the same from other Nations, or may abate their vent by the use of some such like wares from other places, and with little inconvenience; we must in this case strive to sell as cheap as possible we can, rather than to lose the utterance of such wares. For we have found of late years by good experience, that being able to sell our Cloth cheap in Turkey, we have greatly encreased the vent thereof, and the Venetians have lost as much in the utterance of theirs in those Countreys, because it is dearer. And on the other side a few years past, when by excessive price of Wools our Cloth was exceeding dear, we lost at the least half our clothing for forraign parts, which since is no otherwise (well neer) recovered again than by the great fall of price for Wools and Cloth. We find that twenty five in the hundred less in the price of these and some other Wares, to the loss of private mens revenues, may raise above fifty upon the hundred in the quantity vented to the benefit of the publique. For when Cloth is dear, other Nations doe presently practise clothing, and we know they want neither art nor materials to this performance. But when by cheapness we drive them from this employment, and so in time obtain our dear price again, then do they also use their former remedy. So that by these alterations we learn, that it is in vain to expect a greater revenue of our wares than their condition will afford, but rather it concerns us to apply our endeavours to the times with care and diligence to help our selves the best we may, by making our cloth and other manufactures without deceit, which will encrease their estimation and use.

4. The value of our exportations likewise may be much advanced when we perform it our selves in our own Ships, for then we get only not the price of our wares as they are worth here, but also the Merchants gains, the changes of ensurance, and fraight to carry them beyond the seas. As for example, if the Italian Merchants should come hither in their own shipping to fetch our Corn, our red Herrings or the like, in the case the Kingdom should have ordinarily but 25. s. for a quarter of Wheat, and 20. s. for a barrel of red herrings, whereas if we carry these wares our selves into Italy upon the said rates, it is likely that wee shall obtain fifty shillings for the first, and forty shillings for the last, which is a great difference in the utterance or vent of the Kingdoms stock. And although it is true that the commerce ought to be free to strangers to bring in and carry out at their pleasure, yet nevertheless in many places the exportation of victuals and munition are either prohibited, or at least limited to be done onely by the people and Shipping of those places where they abound.

5. The frugal expending likewise of our own natural wealth might advance much yearly to be exported unto strangers; and if in our rayment we will be prodigal, yet let this be done with our own materials and manufactures, as Cloth, Lace, Imbroderies, Cutworks and the like, where the excess of the rich may be the employment of the poor, whose labours notwithstanding of this kind, would be more profitable for the Commonwealth, if they were done to the use of strangers.

6. The Fishing in his Majesties seas of England, Scotland and Ireland is our natural wealth, and would cost nothing but labour, which the Dutch bestow willingly, and thereby draw yearly a very great profit to themselves by serving many places of Christendom with our Fish, for which they return and supply their wants both of forraign Wares and Mony, besides the multitude of Mariners and Shipping, which hereby are main , whereof a long discourse might be made to shew the particular manage of this important business. Our Fishing plantation likewise in New-England, Virginia, Groenland, the Summer Islands and the New-found-land, are of the like nature, affording much wealth and employments to maintain a great number of poor, and to encrease our decaying trade.

7. A Staple or Magazin for forraign Corn, Indico, Spices, Raw-silks, Cotton wool or any other commodity whatsoever, to be imported will encrease Shipping, Trade, Treasure, and the Kings customes, by exporting them again where need shall require, which course of Trading, hath been the chief means to raise Venice, Genoa, the low-Countreys, with some others; and for such a purpose England stands most commodiously, wanting nothing to this performance but our own diligence and endeavour.

8. Also wee ought to esteem and cherish those trades which we have in remote or far Countreys, for besides the encrease of Shipping and Mariners thereby, the wares also sent thither and receiv'd from thence are far more profitable unto the kingdom than by our trades neer at hand; As for example; suppose Pepper to be worth here two Shillings the pound constantly, if then it be brought from the Dutch at Amsterdam, the Merchant may give there twenty pence the pound, and gain well by the bargain, but if he fetch this Pepper from the East-indies, he must not give above three pence the pound at the most, which is a mighty advantage, not only in that part which serveth for our own use, but also for that great quantity which (from hence) we transport yearly unto divers other Nations to be sold at a higher price: whereby it is plain, that we make a far greater stock by gain upon these Indian Commodities, than those Nations doe where they grow, and to whom they properly appertain, being the natural wealth of their Countries. But for the better understanding of this particular, we must ever distinguish between the gain of the Kingdom, and the profit of the Merchant; for although the Kingdom payeth no more for this Pepper than is before supposed, nor for any other commodity bought in forraign parts more than the stranger receiveth from us for the same,yet the Merchant payeth not only that price, but also the fraight, ensurance, customes and other charges which are exceeding great in these long voyages; but yet all these in the Kingdoms accompt are but commutations among our selves, and no Privation of the Kingdoms stock, which being duly considered, together with the support also of our other trades in our best Shipping to Italy, France, Turkey, and East Countreys and other places, by transporting and venting the wares which we bring yearly from the East Indies; It may well stir up our utmost endeavours to maintain and enlarge this great and noble business, so much importing the Publique wealth, Strength, and Happiness. Neither is there less honour and judgment by growing rich (in this manner) upon the stock of other Nations, than by an industrious encrease of our own means, especially when this later is advanced by the benefit of the former, as we have found in the East Indies by sale of much of our Tin, Cloth, Lead and other Commodities, the vent whereof doth daily encrease in those Countreys which formerly had no use of our wares.

9. It would be very beneficial to export money as well as wares, being done in trade only, it would encrease our Treasure; but of this I write more largely in the next Chapter to prove it plainly.

10. It were policie and profit for the State to suffer manufactures made of forraign Materials to be exported custome-free, as Velvets and all other wrought Silks, Fustians, thrown Silks and the like, it would employ very many poor people, and much encrease the value of our stock yearly issued into other Countreys, and it would (for this purpose) cause themore foraign Materials to be brought in, to the improvement of His Majesties Customes. I will here remember a notable increase in our manufacture of winding and twisting only of forraign raw Silk, which within 35. years to my knowledge did not employ more than 300. people in the City and suburbs of London, where at this present time it doth set on work above fourteen thousand souls, as upon diligent enquiry hath been credibly reported unto His Majesties Commissioners for Trade. and it is certain, that if the raid forraign Commodities might be exported from hence, free of custome, this manu would yet encrease very much, and decrease as fast in Italy and in the Netherlands. But if any man allege the Dutch proverb, Live and let others live; I answer, that the Dutchmen notwithstanding their own Proverb, doe not onely in these Kingdoms, encroach upon our livings, but also in other forraign parts of our trade (where they have power) they do hinder and destroy us in our lawful course of living, hereby taking the bread out of our mouth, which we shall never prevent by plucking the pot from their nose, as of late years too many of us do practise to the great hurt and dishonour of this famous Nation; We ought rather to imitate former times in taking sober and worthy courses more pleasing to God and suitable to our ancient reputation.

11. It is needful also not to charge the native commodities with too great customes, lest by indearing them to the strangers use, it hinder their vent. And especially forraign wares brought in to be transported again should be favoured, for otherwise that manner of trading (so much importing the good of the Commonwealth) cannot prosper nor subsist. But the Consumption of such forraign wares in the Realm may be the more charged, which will turn to the profit of the kingdom in the Ballance of the Trade, and thereby also enable the King to lay up the more Treasure out of his yearly incomes, as of this particular I intend to write more fully in his proper place, where I shall shew how much money a Prince may conveniently lay up without the hurt of his subjects.