value would receive detriment or be driven backwards, and then the second hundred millions would receive detriment likewise, because the power of buying or exchanging is either very much diminished or taken away. The commodity or commodities, whatever they may be, which are brought into demand for effecting the exchanges against the manufactured goods newly imported from England or any other country, will consist of articles that are wanted by the people of England, or such as would find ready sale in the markets. there, and so remunerate the merchant; but they will not. consist of that large variety of commodities which the manufacturing people of America have encouraged the production of for their special consumption.

Sufficient examination has now been bestowed on that great substantive proposition of Adam Smith's and M. Say's, by which these two leading authorities of the school of Economists have attempted to place the character and value of home trade on a solid foundation. When I come to treat of the science, and of this particular branch of it, affirmatively, I shall have to revert to this remarkable proposition. In the meantime it has to be particularly noticed, that this proposition, together with the treatment awarded to it, is a recorded fact of failure in the treatment of the science, by the whole school of modern economical writers.

The manner in which the proposition under examination has been both mystified and evaded, entails discredit on all the writers and statesmen of the modern school whose duty it has been, by means of a thorough examination, either to have substantiated and conceded, or else to have refuted and rejected it. Up to the present moment the whole evidence and reasoning that have been connected with the subject and the science serve only to throw over them, in the larger degree, obscurity instead of light. It has to be particularly

noticed, that notwithstanding Adam Smith and M. Say constructed the proposition which has been under examination, and also incorporated it within their economical system, yet neither of these writers appears to have been aware of, or to have understood, in any degree approaching sufficiency, the character of the great conclusion for which they had contended. This is proved by the fact that both these celebrated economists departed afterwards from all that course of reasoning by which their conclusion is sustained.

On examining the reasoning and arguments of a character diametrically opposite, which these two writers have employed, it would appear as though their minds were entirely unconscious of, and had become wholly disconnected from, the evidence and the conclusions which they had before advanced and laid down with so much precision.

On endeavouring to account for the confused, contradictory, and erroneous state in which the science of Political Economy has hitherto been placed before the world, the reader will find that all this great body of error has arisen because of the absence of the one true or right general principle of social action. Every writer of the school has involved himself in, and become perplexed by, an immense quantity of facts, not having been able, in the first place, to discover that principle by which all social facts are to be arranged so as to insure that good and sound conclusions shall be established. Hence, as I shall have to show throughout my investigation of the state of the science, the literary labourers in it have seldom risen above the low character of statisticians. They have been inventors, collectors, and compilers of facts, but they have neglected so to prepare and qualify their minds as to be able to impart to these facts that due or necessary arrangement which constitutes the truth. of their subject. Hence we have much and even over much

compilation; but only a very small leaven of philosophical truth. And, moreover, whenever a small glimmering of pure light is seen to have been shed by any one of them over the subject-matter of which he has had to treat, it is discerned that this light is soon extinguished by its own author. By bearing in mind the fact now noticed, the reader will more readily, and with greater ease and satisfaction to himself, accompany me through those intricate and obscure courses of investigation that are necessary to be pursued for the purpose of divesting the great subject of the immense load of error by which it is oppressed.

CHAP. IV.

The knowledge of the schoolmen tried by their treatment of the question of absentee expenditure. In accordance with the system of Free Trade advocated by them, they are shown to be under the necessity of arguing that absentee expenditure is beneficial to a nation. The confusion and contradiction into which the writers are thrown by this question. — Remarkable difference of conclusion between Mr. Senior and Mr. M'Culloch, — Another defect of a most important character discovered and explained, or Dr. Bowring's view of the subject of the destruction of the cotton manufacturing trade of India.

THE question by means of which I propose to try, in the next place, the truth of the views, reasonings, and conclusions of the school of Economical writers, is the question of the effects that are entailed on the circumstances of a nation by that which is denominated absentee expenditure, or the habit of certain of the wealthy inhabitants of a nation, who, deriving their incomes from property within the nation, expend this income amongst the people of another nation.

Every reader exercising even the smallest degree of intelligence and observation will discern, that the question now propounded involves the great general principle of commercial dealing, or the law of production and consumption, from which the maintenance of the people of every nation is derived. The author of "The Wealth of Nations," although he embraced within his range of treatment so large a volume of national circumstances, yet did not direct his attention, specially, to this question. The question, however, is one which the school of Economical writers have not been able to pass over without some notice, though it would appear that most of them would

have preferred to do so, for all of them have had to find that it possesses a character that is exceedingly perplexing to them. When once they have admitted this question to have place within the field of science, they soon have to discover that by it an element is lodged at the very foundation of that structure of evidence of reasoning and of argument which they have attempted to raise, and that by the force of this element their whole structure is shattered and destroyed.

Mr. McCulloch rightly discerned that if that particular principle, involving the full or unconditional freedom of trade, for which the modern school of Economical writers have mainly contended, is conceded, the question of absentee expenditure being included in it thus becomes a settled question. He saw that under the principle of the full and unconditional freedom of trade, the full and unconditional freedom of living in any place must be conceded also, for that one and the same course is thereby involved. That in so far as soundness, goodness, and general national advantage, inhere in the principle of free trade, the same must inhere in absentee expenditure; and that this course of living and expending income, instead of being an injurious course to a nation, an impoverishing, a weakening, and a destroying course, is just the contrary, and that by it more general justice, more encouragement of industry and trade, more enrichment, more prosperity, more strength, and more vitality, are imparted to a nation and to the aggregate of nations.

Mr. McCulloch, therefore, although approaching the question, as he did other questions of difficulty, somewhat reluctantly, and getting rid of it as speedily as possible, made an attempt to solve it by applying to it the course of reasoning which he had been employing on the question of the comparative characters of home and foreign trade. Having put upon the face of his reasoning and argument the most