Then Again




Thomas Mun

England's Treasure by Foreign Trade



Thomas Mun (1571-1641) was one of the directors of the British East India Company, one of the largest companies engaged in colonial trade. His England's Treasure by Foreign Trade, written in the 1630s, but not published until 1664, was a classic statement of the economic doctrine know as mercantilism

The Qualities Which Are Required In A Perfect Merchant Of Foreign 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 by 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 thoughts free from all Ambition, although I rank thee in a place of so high estimation; 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 endeavors to obtain those abilities which may effect it worthily, I will 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, Invoices, Contracts, Bills of Exchange, and Policies of Insurance.

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

3. He ought to know the Customs, Tolls, Taxes, Impositions, Conducts and other charges upon all manner of Merchandize exported or imported to and from the said Foreign 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 foreign Countries, 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 Country to another, and to be well acquainted with the laws, orders and customs of the Insurance 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 Manners, all which concern the Merchant as he is an Owner of Ships.

9. He ought (by the diverse occasions which happen sometimes in the buying and selling of one commodity arid 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 Traveler, and sometimes abiding ill foreign Countries, to attain to the speaking of diverse Languages, and to be a diligent observer of the ordinary Revenues and expenses of foreign Princes, together with their strength both by Sea and Land, their laws, customs, policies, manners, religions, arts, and the like; to be able to give account thereof in all occasions for the good of his Country.

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 Latin tongue, which will the better enable him in all the rest of his endeavors.

The Means To Enrich This Kingdom, And To Increase 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 increase our wealth and treasure is by Foreign 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 plentifully served with the Cloth, Lead, Tin, Iron, Fish and other native commodities, we doe yearly export the overplus to foreign Countries to the value of twenty two hundred thousand pounds; by which means we are enabled beyond the Seas to buy and bring in foreign wares for our use and Consumptions, to the value of twenty hundred thousand pounds: By 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.

The Exportation Of Our Moneys In Trade Of Merchandize Is A Means To Increase Our Treasure

This Position is so contrary to the common opinion, that it will require many and strong arguments to prove it before it can be accepted of the Multitude, who bitterly exclaim when they see any monies carried out of the Realm; affirming thereupon that wee have absolutely lost so much Treasure, and that this is an act directly against the long continued laws made and confirmed by the wisdom of this Kingdom in the High Court of Parliament, and that many places, nay Spain itself which is the Fountain of Money, forbids the exportation thereof, some cases only excepted.

First, I will take that for granted which no man of judgment will deny, that we have no other means to get Treasure but by foreign trade, for Mines we have none which do afford it, and how this money is gotten in the managing of our said Trade I have already showed, that it is done by making our commodities which are exported yearly to over balance in value the foreign wares which we consume; so that it resteth only to show how our moneys may be added to our commodities, and being jointly exported may so much the more increase our Treasure.

We have already supposed our yearly consumptions of foreign wares to be for the value of twenty hundred thousand pounds, and our exportations to exceed that two hundred thousand pounds, which sum wee have thereupon affirmed is brought to us in treasure to balance the account. But now if we add three hundred thousand pounds more in ready money unto our former exportations in wares, what profit can we have (will some men say) although by this means we should bring in so much ready money more than wee did before, seeing that wee have carried out the like value.

To this the answer is, that when we have prepared our exportations of wares, and sent out as much of everything as wee can spare or vent abroad; It is not therefore said that then we should add our money thereunto to fetch in the more money immediately, but rather first to enlarge our trade by enabling us to bring in more foreign wares, which being sent out again will in due time much increase our Treasure.

For although ill this manner we do yearly multiply our importations to the maintenance of more Shipping and Mariners, improvement of His Majesties Customs and other benefits; yet our consumption of those foreign wares is no more than it was before; so that all the said increase of commodities brought by the means of our ready money sent out as is afore written, doth in the end become an exportation unto this of a far greater value than our said moneys were.

The answer is (keeping our first ground) that if our consumption of foreign wares be no more yearly than is already supposed, and that our exportations be so mightily increased by this manner of Trading with ready money, as is before declared: It is not then possible but that all the over balance or difference should return either in money or in such wares as we must export again, which, as is already plainly showed will be still a greater means to increase our Treasure.

For it is in the stock of the Kingdom as in the estates of private men, who having store of wares, do not therefore say that they will not venture out or trade with their money (for this were ridiculous) but do also turn that into wares, whereby they multiply their Money, and so by a continual and orderly change of one into the other grow rich, and when they please turn all their estates into Treasure; for they that have Wares cannot want money.

Neither is it said that Money is the Life of Trade, as if it could not subsist without the same; for we know that there was great trading by way of commutation or barter when there was little money stirring in the world. The Italians and some other Nations have such remedies against this want, that it can neither decay nor hinder their trade, for they transfer bills of debt, and have Banks both publick and private, wherein they do assign their credits from one to another daily for very great sums with ease and satisfaction by writings only, whilst in the mean time the Mass of Treasure which gave foundation to these credits is employed in Foreign Trade as a Merchandize, and by the said means they have little other use of money in those countries more than for their ordinary expenses. It is not therefore the keeping of our money in the Kingdom, but the necessity and use of our wares in foreign Countries, and our want of their commodities that causeth the vent and consumption of all sides, which makes a quick and ample Trade. If we were once poor, and now having gained some store of money by trade with resolution to keep it still in the Realm, shall this cause other Nations to spend more of our commodities than formerly they have done, whereby we might say that our trade is Quickened and Enlarged? No verily, it will produce no such good effect, but rather, according to the alteration of times by their true causes, we may expect the contrary; for all men do consent that plenty of money in a Kingdom doth make the native commodities dearer, which as it is to the profit of some private men in their revenues, so is it directly against the benefit of the Public in the quantity of the trade; for as plenty of money makes wares dearer, so dear wares decline their use and consumption.

There is yet an objection or two as weak as all the rest: that is, if we trade with our Money we shall issue out the less wares; as if a man should say, those Countries which heretofore had occasion to consume our Cloth, Lead, Tin, Iron, Fish, and the like, shall now make use of our monies in the place of those necessaries, which were most absurd to affirm, or that the Merchant had not rather carry out wares by which there is ever some gains expected, than to export money which is still but the same without any increase.

But on the contrary there are many Countries which may yield us very profitable trade for our money, which otherwise afford us no trade at all, because they have no use of our wares, as namely the East Indies for one in the first beginning thereof, although since by industry in our commerce with those Nations we have brought them into the use of much of our Lead, Cloth, Tin, and other things, which is a good addition to the former vent of our commodities.

Again, some men have alleged that those Countries which permit money to be carried out, do it because they have few or no wares to trade withal, but we have great store of commodities, and therefore their action ought not to be our example.

To this the answer is briefly, that if we have such a quantity of wares as doth fully provide us of all things needful from beyond the seas, why should we then doubt that our monies sent out in trade, must not necessarily come back again in treasure, together with the great gains which it may procure in such manner as is before set down? And on the other side, if those Nations which send out their monies do it because they have but few wares of their own, how come they then to have so much Treasure as we ever see in those places which suffer it freely to be exported at all times and by whomsoever? I answer, Even by trading with their Moneys; for by what other means can they get it, having no Mines of Gold or Silver?

Thus may we plainly see, that when this weighty business is duly considered in his end, as all our humane actions ought well to be weighed, it is found much contrary to that which most men esteem thereof, because they search no further than the beginning of the work, which misinforms their judgments, and leads them into error. For if we only behold the actions of the husbandman in the seed-time when he casteth away much good corn into the ground, we will rather accept him a mad man than a husbandman, but when we consider his labors in the harvest which is the end of his endeavors, we find the worth and plentiful increase of his actions.

From: Thomas Mun, England's Treasure by Foreign Trade (New York, 1895), pp. 7-27. Reprinted in Eugen Weber, ed., The Western Tradition, Vol. II, 4th ed. (Lexington, MA; D. C. Heath, 1990) pp. 399-407.

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