The Work of Mr. Necker on the French finances, is in my judgement, for that nation, the most precious work that this age has produced; it is a sword hanging over the head of whoever shall fill up that department during the reign of the present King, and of all those of his successors whom God shall bless with a soul like his. That work would still be precious, though it should serve only to expose the knavery or the incapacity of those who pretended that France, preparing for a war which required the creation of a navy, without which she could not carry it on, forced to have recourse to new loans proportionate to such an undertaking, and weighed down, as it was said, by the load of the old taxes imposed for discharging the interest of her former debts, was again on the eve of laying new imposts, in spite of herself, and perhaps of having recourse to those degrading reductions, so lightly, yet so often practised before. The first public operation of Mr. Necker (his Compte rendu) inspired every one with the enthusiastic spirit of an unbounded confidence, wherever nothing was foreseen but the discouragement arising from discredit. He did not create anything, it is true; but he dispelled the clouds which had hitherto concealed what really existed; he restored order where confusion reigned before, and treated the mechanical part of the finances, like a merchant willing at all times to have it in his power to compare his undertakings with his means, his plans with his resources. No other step could be taken at first. I have no kind of connexion with Mr. Necker, neither direct nor indirect; nor am I bound to him by the ties of friendship, interest, or gratitude; and, besides, it is not my intention either to praise, or to censure; yet I cannot forbear to observe, that Mr. Necker, entirely circumscribed by the circumstances of the time, charged with the triple load of clearing up what was passed, supplying present wants, and guarding against future events, could only loosely survey, regret, and prepare, what a situation so critical did not permit him to undertake. His being displaced, left him no other advantage than that of informing the public of what he intended to do; and the manner in which the nation has received the work wherein he recorded his projects, is at the same time a tribute of the national esteem for the man who planned them, and a pledge of the national gratitude, even for any one of his successors, who should confine himself to carry them into execution.

Whatever I have hitherto said, whatever may drop from my pen in the sequel, in contradiction to some of Mr. Necker’s opinions, was written long before the publication of his work, and in no degree detracts from the solidity of his views. What he devised was perhaps the best that could possibly be imagined in the actual state of things, and according to the received system:—But is that system the best?—I subscribe to his principle concerning the precautions to be taken, and the slowness of the march necessary even through all the paths that may lead to the best; but that best, what is it? France cannot boast of having found it—read the work of Mr. Necker; England cannot boast of having found it—read the debates of both Houses of Parliament:—And do I dare to offer my thoughts!—Yes:—two children, it is said, found what it was necessary to find, in order to the discovery of immense bodies of light, at a distance where nothing was suspected but the limits of creation.—Were my thoughts only plausible, they ought to be thoroughly investigated; they concern the State, they concern mankind at large:—if they prove just, to say that they are impracticable on account of the shackles with which our forefathers have loaded us, is to say nothing but with regard to the fleeting moment in which I speak, already so far off from us; but to feel then that we should not add new shackles to those we endure already, would be a great point gained; to scrutinise afterwards the ancient opinions, without exception; to analyse the principles on which pretended impossibilities are founded; to expect nothing from seduction or from authority; to desire nothing but from general conviction; to spare no pains to make the people sensible of, and familiar with the truths that might be discovered, would perhaps be a second step towards that very mark to which we should probably direct our course, were it not for the pretended impossibility, the mere supposition of which casts a ridicule upon the very thought of looking up to it.

It is upon this plan, and under this point of view, that I purpose to examine the supposed balance of France, in regard to trade:—and I begin by asking, whether there exists a nation in Europe, which, upon perusing what Mr. Necker says to the present purpose, and the use made almost generally in England of the work of Sir Charles Whitworth, much more explicit with regard to the balance of Great Britain, would hesitate an instant to break off all commercial connexions with England and France, if only one half should prove real in the prejudices of the two nations, on the object, which at present seems to determine all the others?

I would, in the next place, propose, for examination, whether those two nations are not indebted to these prejudices, for the greatest part of their mistakes, and of the obstacles which they have found, which they still find, and which they will ever find, in the measures that other nations think themselves obliged to adopt, in order to guard against the effects of those prejudices, till their fallacy is universally acknowledged, as well as their insufficiency to produce their boasted effect, even in favour of those who would obstinately refuse to give them up.

Every year, say the prejudices of both nations, more than seven millions sterling are required for their two terrible balances;—but not above six millions are brought over from America:—if Spain and Portugal be allowed to come in for one sixth (indeed it would be but just), the other parts of Europe must settle it amongst themselves to find the two millions sterling, which without that assessment would be deficient in the balances necessary to France and England.—Whence does Europe take those two millions? Whence have they been taken hitherto? I know not: but it is a stubborn fact: you may consult the work of Mr. Necker for the balance of France, and for that of England the statements of Sir Charles Whitworth; the former amounts annually to 70 millions of livres, about 3 millions sterling; and the latter to 83,678,818l. in the space of 20 years, from 1754 to 1773; it is, one year with another, more than 4,180,000l. per annum. But above all, let it not escape your observation, what is said in France, that the decline of that Empire will begin, when this balance of 70 millions of livres shall begin to decline, and that it is the opinion in England, that, were the favourable balance to be below 2 or 3 millions sterling, a national bankruptcy must indispensably follow. What is most miraculous (and indeed consolatory for those who are obliged to think of their elevation, before they dream of a bankruptcy, or even of their decline) is, that whilst France and England have received annually, the one 4, the other 3 millions sterling, that is to say, one sixth more than America has to share amongst all the European nations, the other countries in Europe have nevertheless increased their mass of money, by all that was necessary to keep up their luxury, and the circulation of a revenue which has almost doubled in the course of a century. These are prodigies which will cease to be so, even if we admit the facts on which they are founded, if we take the trouble of adding thereto a few other facts rather less questionable; and if it be acknowledged at last, that there are yet others, concerning which the most expert calculator cannot flatter himself that he shall even come near the truth, and which give to those who will be at the trouble of reflecting, all the latitude they may want, to conclude that the two supposed balances are as inadmissible when subjected to the discussion of reason alone, as they are afterwards demonstrated to be false, by facts which cannot be controverted.

The quantity of money required for circulation, depends neither on the speculations of a Minister of finances, nor on the blind cupidity of trade, which, luckily, is always counteracted by the clear-sighted cupidity of every trader: it depends on the quantity of articles to be circulated, on their price, and on the method adopted for circulation:—it is evident that less cash is required in England than in France to circulate the same mass of revenue, trade, and transactions of all kinds; the reasons are obvious: but the sum wanted for the circulation being once found, every addition thereto is soon, notwithstanding all ministerial machinations, transferred to some hundred leagues distance, if that surplus should be wanted there: now, when this necessary sum for circulation is once ascertained, we shall see how useless it is to despoil, how absurd it is to suppose that they do despoil the rest of Europe of her money, in order to keep up that circulation.

What is the real amount of the cash circulating in England? Some say 25, others 30 millions sterling. It is probable that 25 millions are sufficient, with the help of credit and paper-currency, even in the supposition that France should stand in want of 2 milliards of livres in hard cash to give circulation to a revenue, double to that of England, because there is in France no paper-money, and much less credit than would be obtained, were it not, too often yet, so easy to avoid, by another kind of credit, the payment of the most lawful debts: but we must argue from an incontrovertible fact, and assent, in their fullest scope, to the consequences that may be deduced therefrom. The following is the fact:

Of all the coin circulating in England, 18 months ago there was only a sixth, and there is now much less than a sixth part, in pieces struck before the present reign. Now, in 1780, it appears that the money coined at the Mint, in the present reign, amounted only to 30,457,805l.

It is impossible to suppose, that in the space of 18 years there should have been carried out of the kingdom, either to Ireland, or in support of the smuggling trade, or for other purposes, less than the amount of the coin struck since that period. Let us add to the 30 millions coined from the beginning of this reign down to the year 1780, the 5 millions for the sixth part in old specie remaining of the former reigns (that sixth supposed, rather than acknowledged, to be actually in circulation), the total will be 35 millions; to which must be added, the value of silver plate, toys, &c. Admit, that all these articles together, circulation and silver wrought, amount to 50 millions sterling;—to those who may think that the sum of 15 millions, at which I rate the wrought silver of all kinds, is too trifling, I would recommend to observe, first, that these 15 millions constitute nearly the tenth part of the general revenue, both of the land and industry; secondly, that the third part of that revenue belongs to the peasants and mechanics, who have no such costly furniture; and thirdly, that as to the rest of the nation, if there exist a man who possesses the equivalent of one half of his revenue in plate, there are scores who are not possessed of so much as one tenth part.—Shall it be insisted upon, however, that, by adding the amount of plate and the mass in circulation to that which must correspond with the demands that may be made upon the Bank, the whole amounts to 60 millions sterling?—Be it so;—but England was certainly in possession of 20 millions at least, in cash and wrought silver, before the time at which Sir Charles Whitworth began his Statements; for there existed then much less credit, and no paper to answer the purposes of cash:—forty millions, then, constitute the whole of what England chose (I call it strictly a choice) to reserve, out of so many millions imported from America, which really went through her hands, in the space of 90 years.—I am fully persuaded that I could meet with some thousands of persons, even in England, who, from the sketch I have given, would think that I make a present to England of 10 millions. It matters not, I shall be equally generous in regard to France, whose accounts I am about to lay open; and yet I shall have gold and silver enough left to extend my liberality all over Europe.

Mr. Necker has but two reasons to suppose that there exists in the French circulation a sum of 2,200,000,000 livres tournois. The first is the indubitable fact, that since, and including the general re-coining of the French specie in 1726 to 1783, there have been struck, in the different mints of that kingdom, 2,500,000,000 of the same specie (the only one that is current in that country:) and, in the next place, the very questionable fact, that France has preserved the whole, except 3 or 400 millions tournois, which may have passed into foreign hands, from the quantity of French specie which must have been carried abroad, to answer her commercial and political purposes.

Say only 2000 millions of livres in the French circulation, that I may not be troubled with 100 millions, which can neither weaken nor strengthen my reasonings.

When that general re-coinage of the year 1726 took place in France, there must have existed, at that time, 1000 millions tournois, to impart a proper circulation to a revenue, which, we may suppose, was less by one half than what it is at this time. France, therefore, had occasion to increase her specie, only by the additional thousand of millions, of which she is now in possession, even upon a supposition that she has now 2000 millions; and this want has been supplied in the space of 57 years, at the rate of 18 millions only, one year with another.

Let it be granted, now, that the annual wants, the personal wants of France, in articles of luxury, plate, gold and silver lace, trinkets, &c. amounted to 7 millions tournois, upon an average, in the course of the above 57 years.—By adding thereto the 18 millions I have spoken of, I can find but 25 millions overplus, one year with another, saved by France upon all the treasures of America, which certainly must have passed through her hands from 1726 to 1783.

The reader must be sensible, that there is no occasion to speak of the sums annually exported to India, it matters not by whom; they no longer exist for Europe; and I have proved nothing hitherto, if it be still doubted that Europe has lost nothing in that respect but the trifling advance in her prices, which 100 or 150 thousand pounds sterling, added annually to her general specie, would have given to all the productions, both of agriculture and industry. The return of those 150,000l. in India goods has produced yearly to Europe all the labour necessary to repay them; for it must be observed, that labour pays every thing, and that nothing is paid but by labour. The 150,000l. exported to India, are not lost therefore, as to their essential effect, as would be the case of sums laid up in the coffers of a Sovereign, who might be unacquainted, even at this day, with what was known to Queen Elizabeth above 200 years ago, that the Prince’s treasures are well placed no where, but in the hands of his subjects, that is, of such amongst his subjects who do not lock them up in their own chests.

I join together the two balances of France and England, which probably fall much below, and which cannot be above, what I have stated them to be; and I see that those two formidable bugbears, after having annually devoured, according to their own account, 7 millions sterling, have, in the end, and very fortunately too, only digested something less than 2 millions, viz. the bugbear of France, 12 or 1300 thousand pounds sterling; and the bugbear of England, about 5, 6, or 700 thousand.

Thank Heaven then, there remains, after England and France have been fully saturated, (including the general exportation to India) about 4 millions sterling, which the other States of Europe have received, one year with another, partly in plate, partly in gold and silver-lace, partly in ingots, partly in guineas, and partly in louis-d’ors, of which those who gave them still think themselves in possession, and which those who received them do not think they possess.

But, it will be said, the louis d’ors, which are spent in Germany during a war, revert to France soon after a peace; the plenty in which they flow back, is known to every one who has the least concern in trade.—No doubt of it; when the German circulation is overloaded, it must re-flow where it is beneath its level: the coin carried by the French into Germany, in the time of war, was then indispensable there to supply the wants of those who carried the money into that country, and to increase the means of the ordinary circulation, an increase occasioned by a circumstance that tertiated the price of every thing. The circumstance subsiding, every thing takes its usual course; prices are reduced; the greatest part of the money which had been carried there, becomes useless on account of that reduction:—it is sent back; and why is it taken then by France? Because it is become necessary there;—for you must observe, that the money in question was useless in France, as soon as it was wanted in Germany.—During the war the commerce of France was at a stand; her granaries overstocked with corn, her cellars with wine, her warehouses with goods, waited only for peace, to set a value on that corn, that wine, those goods, and of course, on that idol Money, which, during the war, could not, in regard to the French, be of any value, but on the very spot where the French had themselves carried it.

Observe, above all, that England, who pretends to have the largest balance in money, is the very nation who, with respect to the extensiveness of her commerce and the mass of her industry, keeps the least part of that balance at home, and constantly preserves as little of it, as if she had been no less convinced than I am myself, of the futility of any other balance in bullion, but that which is necessary for the five articles above mentioned. What results now from the reduction of those two frightful colossi to their proper dimensions?

It results, First, that every system of balance, founded on the supposition which served as a basis to the two balances I have spoken of, is as chimerical, as it would be pernicious to the nation who should regulate herself by it, and to such other nations as might be unfortunate enough to correspond with her:

Secondly, That the private interest of every merchant always militates, in this respect, against the pernicious dreams of trade in general:

Thirdly, That the case between nation and nation trading together, is similar to that which subsists between citizen and citizen; as there is but one way for a man to prevent the last penny of his wealth from being useful to some other member of his community; and that way is, to bury under ground (as soon as he has received it) that last penny, the utility of which he grudges to share with other men: in like manner, a nation can no otherwise prevent the surplus of her money being carried into another country when this latter is in want of it, than by burying her balance as soon as she has received it:

Fourthly, That the superiority of industry, activity, and capitals, in a nation, gives her no other advantage, than that of supplying those countries with which she trades, with further means of increasing their own industry and activity: Now,

Fifthly, The more you increase industry and activity amongst other nations, the more you increase their want of those signs which are to represent the products; the more you increase their want of those signs which you long to possess exclusively, if it were possible: Therefore,

Sixthly, If it be true, that money ought to be the only aim of commerce and exportation, all the favourite ideas on the pretended balance, being entirely destroyed by facts, even at the time when the world was more fully persuaded of the truth of those ideas, and of the wisdom of the measures which were to have perpetuated that balance, it would be necessary henceforth to resolve to hide money under ground, as fast as it comes in.—Would it not be better to question the principle itself, and seek for fresh information on the utility as well as the object of exportation?