The former state of Trade I have suppos'd to be carried on, one half by Scots Merchants, the other half by English and Dutch; But as most of the Trade is carried on by Scots Merchants, I shall suppose this state of Trade accordingly. The one or the other will clear the matter in Question.
The state of Trade now, and Exchange suppos'd at 15 per cent to England, and 30 to Holland. The whole Export of Scotland to be 300000lib. of which 250000 lib. carried out by Scots Merchants, Sold at 30per cent profit and charges 325000 lib.
In English Money282608Exported by Forreigners for 50000 lib.
in English Money 43478The whole Export326086Goods Imported. 306086Spent Abroad 40000Due of Ballance by Scotland20000Money being lower'd to the English Standard, and allow'd by Law to be Exported; Will bring the Exchange with England to 2 or 3 per cent, and with Holland to 17 or 18, notwithstanding of the Ballance due. For, as a 100 lib. in Edinburgh, would then be equal to 100 lib.
at London, and being allowed to be exported; none would give above 102, or 3 here for a 100 lib. at London: Because the Trouble and Charge of sending it to London, would be valued no higher. The Export, Import, and Expense abroad suppos'd to continue the same; a Ballance would then be due to Scotland.
The State of Trade, Exchange at 3 per cent to England, and proportionably to other places.
Due in English Money, for 325000 lbi. first Cost, Charges and Profit of Goods sent out by Scots Merchants 315534Due in English Money, for 50000 lib. of Goods exported by Forreigners.
48544
The Whole Export364078Of this deduce the Value of Goods Imported.
306086
And the Expense Abroad 40000There will be a Ballance due to Scotland, of 17992As this Ballance due to Scotland, would bring Exchange to the Par, and 3 per cent on the Scots Syde; 3 more, because Money in England is prohibit to be exported; 100 lib. in Scotland, would be worth 106 lib. in England, and proportionably in other places. So the State of Trade would then be thus, Due in English Money for 325000 lib. first Cost, Charges and Profit of Scots Goods sent out by Scots Merchants, and 50000 lib. exported by Forreigners.
397500
Of this spent abroad 40000Imported from abroad306086Ballance then due to Scotland51414If the yearly Export be as great as I suppose it, and the Ballance only 20000 Pounds; then Lowering the Money to the English Standard, will make a Ballance due of 51414 Pounds, tho the Money is not allowed to be exported.
It may be objected, that such an Alteration in the Exchange, lowering the Value of Forreign Money; might hinder the Sale of our Goods abroad. For, Linen Cloth bought in Scotland for a 100 lib, and sold at London for a 115 lib. yields by Exchange 31 per cent profit.
But if Exchange were 6 per cent on the Scots Side, the Profit is only 9 per cent.
It is answered. If an English Merchant takes Bills on Scotland for a 1000 lib. to lay out on Linen-cloth, the Exchange then at the Par: The Linen-cloth is sold in England according to the first Cost, Charges and usual Profit. Next year the Exchange is on the English side, the Linen is sold in England cheaper than before. The third year Exchange returns to the Par, the Linen is then sold in England as the first year. If the first Cost of Linen is dearer, the Consumer pays the more for it, the Merchants Profit is the same.
