Adam Smith's Simplified Wealth of Nations, Book 4, Chapter 6a: Commercial Treaties

Chapter 6a: Commercial Treaties

1 The commerce of foreign merchants and manufacturers becomes so favoured when a nation: Those foreign merchants and manufacturers derive great advantage from the treaty. 2 However, such treaties are disadvantageous to the merchants and manufacturers of the favouring country. 3 Some commercial treaties were supposed advantageous on different principles. 4 Article 1. His royal majesty of Portugal promises to forever admit British woollen cloths and woollen manufactures as before they were banned. 5 Article 2. Her royal majesty of Great Britain shall admit Portuguese wines into Britain. 6 Article 3. The lords promise: 7 By this treaty, Portugal becomes bound to admit English woollens as before the ban. 8 It was celebrated as a masterpiece of English commercial policy. 9 Some years ago, our merchants were out of humour with the crown of Portugal. 10 Let us suppose that the total trade between Great Britain and Portugal: This trade would not be more advantageous than other trades which gave us an equal value of goods in return. 11 Only a very small part of this precious metals importation is added to Great Britain's plate or coin. 12 Even if Britain were entirely excluded from the Portugal trade, it would have very little difficulty in procuring the gold it needs. 13 Almost all our gold comes from Portugal. 14 England could not subsist without the Portugal trade based on this silly notion. 15 The great annual importation of gold and silver is for foreign trade and not for plate nor coin. 16 Any addition to kingdom's plate or coin only requires a very small annual importation of gold and silver.
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Next: Chapter 6b: Coinage