ABSTRACT
The mercantile system was a natural product of the time in which it originated, and is best understood by reference to the circumstances then existing. The nations of Europe had acquired their separate national characters, and in the case of some of the most important, their distinct govern ments. The New World had supplied a very large addition to the stock of the precious metals, and had thus aided in breaking up the older economic system; money was more used in ordinary transactions, and was more eagerly desired by statesmen. The extensive fields of colonization offered to the maritime nations of Europe became the object of competition, partly as a means of gaining the gold and silver deemed essential for national prosperity, but partly also as furnishing at once a supply of raw materials and a market for manufacturers. The promotion of foreign commerce was seen to be powerfully assisted by the posses sion of a national marine that carried forth the products of the country and earned a profit for its owners. These circumstances would not of themselves fully account for the mercantile system. We must further take into account the hostilities in which the states of Europe had been engaged, which made it almost inevitable to extend the
THE MERCANTILE SYSTEM
3i sentiments of rivalry generated by war to commercial relations. The object of the statesman was to protect the home market against the inroads of alien goods, and at the same time to develop foreign markets for home produc tions. In this way the store of money would be increased, and the prosperity of the nation augmented. For, even in its highest form, the mercantile school carried on that exaggerated belief in the benefits of money that has been already noticed as existing in earlier times. It did not indeed hold that money alone was wealth, but it regarded the precious metals as being a peculiarly durable and perma nent form of wealth; and besides, it accepted the view, often maintained at present, that increased supplies ot money acted as a stimulus to trade. The chief advance in the later mercantile system was in respect to the methods adopted for securing the influx of this precious agent. Instead of the old regulations forbidding the export of the precious metals and providing for supervision of foreigners who might remove the national currency, it directed attention to the relation of imports and exports. When a country exported more than it imported there must be, it was argued, a debt due to it for the balance, and a debt that could be discharged only by the payment of money; if imports were unfortunately greater than exports, the case was reserved, and the country would have to send its money abroad. To preserve the nation from loss the best way was, apparently, to take care that there should be a permanent excess of exports over imports. This object was the real point towards which all the mercantilist regulations were directed, and they can be fully understood only by reference to it. A theory of commerce was built up from a particular and inaccurate interpretation of facts, and derived its force and influence from the surrounding historical conditions and modes of thought.
