HKB
rigidly applied by the French minister, Colbert, but the policy of France was faithfully copied by England and other commercial nations and ranked as an orthodox theory of international trade.
The Balance of Trade doctrine estimated the worth of a nation's intercourse with another by the excess of the export over the import trade, which brought a quantity of bullion into the exporting country. This theory was also widely spread, though obviously its general application would have been destructive of all international commerce. The more liberal interpretation of the doctrine was satisfied with a favourable balance of the aggregate export over the aggregate import trade of the country, but the stricter interpretation, generally dominant in practice, required that in the case of each particular nation the balance should be favourable. In regarding England's commerce with a foreign nation, any excess in import values over export was spoken of as "a loss to England." England deliberately cut off all trade with France during the period 1702 to 1763 by a system of prohibitive tariffs urged by a double dread lest the balance should be against us, and lest French textile goods might successfully compete with English goods in the home markets. On the other hand, we cultivated trade with Portugal because "we gain a greater balance from Portugal than from any other country whatever." The practical policy prevalent in 1713 is thus summarised by one of its enthusiastic upholders--"We suffer the goods and merchandises of Holland, Germany, Portugal, and Italy to be imported and consumed among us; and it is well we do, for we expect a much greater value of our own to those countries than we take from them. So that the consumption of those nations pays much greater sums to the rents of our lands and the labour of our people than ours does to theirs. But we keep out as much as possible the goods and merchandises of France, because our consumption of theirs would very much hinder the consumption of our own, and abate a great part of forty-two millions which it now pays to the rents of our lands and the labour of our people."[9] Thus our policy was to confine our import trade to foreign luxuries and raw materials of manufacture which could not be here produced, drawn exclusively from countries where such trade would not turn the balance against us, and, on the other hand, to force our export trade on any country that would receive it. Since every European nation was largely influenced by similar ideas and motives, and enforced upon their colonies and dependencies a like line of conduct, many mutually profitable exchanges were prevented, and commerce was confined to certain narrow and artificial grooves, while the national industrial energy was wasted in the production of many things at home which could have been more cheaply obtained from foreign countries through exchange.
The following example may suffice to illustrate the intricacy of the legislation passed in pursuance of this policy. It describes a change of detailed policy in support and regulation of textile trade:--
"A tax was laid on foreign linens in order to provide a fund for raising hemp and flax at home; while bounties were given on these necessary articles from our colonies, the bounty on the exportation of hemp was withdrawn. The imposts on foreign linen yarn were withdrawn. Bounties were given on British linen cloth exported; while the making of cambricks was promoted, partly by prohibiting the foreign and partly by giving fresh incentives, though without success, to the manufacture of cambricks within our island. Indigo, cochineal, and logwood, the necessaries of dyes, were allowed to be freely imported."[10]