The internal commerce of a nation mainly arises in consequenceof and in proportion to the activity of its internal manufactures,of the improved means of transport called forth by them, and of theincrease of population, and attains an importance which is ten totwenty fold greater than the internal trade of a merelyagricultural nation, and five to ten fold that of the mostflourishing foreign trade.If anyone will compare the internalcommerce of England with that of Poland or Spain, he will find thisobservation confirmed.
The foreign commerce of agricultural nations of the temperatezone, so long as it is limited to provisions and raw materials,cannot attain to importance.
Firstly, because the exports of the agricultural nation aredirected to a few manufacturing nations, which themselves carry onagriculture, and which indeed, because of their manufactures andtheir extended commerce, carry it on on a much more perfect systemthan the mere agricultural nation; that export trade is thereforeneither certain nor uniform.The trade in mere products is alwaysa matter of extraordinary speculation, whose benefits fall mostlyto the speculating merchants, but not to the agriculturists or tothe productive power of the agricultural nation.
Secondly, because the exchange of agricultural products forforeign manufactured goods is liable to be greatly interrupted bythe commercial restrictions of foreign states and by wars.
Thirdly, because the export of mere products chiefly benefitscountries which are situated near sea coasts and the banks ofnavigable rivers, and does not benefit the inland territory, whichconstitutes the greater part of the territory of the agriculturalnation.
Fourthly and finally, because the foreign manufacturing nationmay find it to its interest to procure its means of subsistence andraw materials from other countries and newly formed colonies.
Thus the export of German wool to England is diminished byimportations into England from Australia; the exports of French andGerman wines to England by importations from Spain, Portugal,Sicily, the Spanish and Portuguese islands, and from the Cape; theexports of Prussian timber by importations from Canada.
In fact, preparations have already been made to supply Englandwith cotton chiefly from the East Indies.If the English succeed inrestoring the old commercial route, if the new State of Texasbecomes strong, if civilisation in Syria and Egypt, in Mexico andthe South American states progresses, the cotton planters of theUnited States will also begin to perceive that their own internalmarket will afford them the safest, most uniform, and constantdemand.
In temperate climates, by far the largest part of a nation'sforeign commerce originates in its internal manufactures, and canonly be maintained and augmented by means of its own manufacturingpower.
Those nations only which produce all kinds of manufacturedgoods at the cheapest prices, can have commercial connections withthe people of all climates and of every degree of civilisation; cansupply all requirements, or if they cease, create new ones; cantake in exchange every kind of raw materials and means ofsubsistence.Such nations only can freight ships with a variety ofobjects, such as are required by a distant market which has nointernal manufactured goods of its own.Only when the exportfreights themselves suffice to indemnify the voyage, can ships beloaded with less valuable return freights.
The most important articles of importation of the nations ofthe temperate zone consist in the products of tropical climates, insugar, coffee, cotton, tobacco, tea, dye stuffs, cacao, spices, andgenerally in those articles which are known under the name ofcolonial produce.By far the greatest part of these products ispaid for with manufactured goods.In this interchange chieflyconsists the cause of the progress of industry in manufacturingCountries of the temperate zone, and of the progress ofcivilisation and production in the countries of the torrid zone.
This constitutes the division of labour, and combination of thepowers of production to their greatest extent, as these neverexisted in ancient times, and as they first originated from theDutch and English.
Before the discovery of the route round the Cape, the Eaststill far surpassed Europe in manufactures.Besides the preciousmetals and small quantities of cloth, linen, arms, iron goods, andsome fabrics of luxury, European articles were but little usedthere.The transport by land rendered both inward and outwardconveyance expensive.The export of ordinary agricultural productsand common manufactured goods, even if they had been produced inexcess, in exchange for the silks and cotton stuffs, sugar, andspices, of the East, could not be hoped for.Whatever we may,therefore, read of the importance of Oriental commerce in thosetimes, must always be understood relatively; it was important onlyfor that time, but unimportant compared with what it is now.
The trade in the products of the torrid zone became moreimportant to Europe through the acquisition of larger quantities ofthe precious metals in the interior and from America, and throughthe direct intercourse with the East by the route round the Cape.
It could not, however, attain to universal importance as long asthe East produced more manufactured goods than she required.