89
 

HI,
 

advancement of the price,(i?) and made the excliange unfa- chapter
vourable; but it will be hereafter seen that the price of
bullion in different countries depends upon the relative
value of their respective currencies, and not upon its
demand for remittance.

Nor can it be said that (ft) Dr. Adam Smith was more
luminous on this point than his predecessors, as he like¬
wise admitted " that the ordinary course of exchange was
a sufficient indication of the ordinary state of debt and
credit." He took, indeed, as I have before observed, such
little pains to inform himself either of its regulati::g prin¬
ciple or practical effect, that he even ventured to doubt
whether the arguments which merchants adduced to prove
that an unfavourable exchange enforced the departure of
specie, were not sophistical; and then, with a refinement
of ingenuity, attempted to shew, that by operating as a
tax upon foreign consumption it even had a contrary
efifect, and rather tended to diminish than increase the
efflux.

The erroneous opinions, which these celebrated authors
maintained on this important department of their science,
necessarily precluded the deduction of a regular system
of correct reasoning, to explain its subordinate branches.
 

(a) See Sir James Sleuart, Vol. II. from page 5 to page 25,
(3) See Dr. Adam Smith, Vol. 11, page 214.
 

N