foreign trade, and that to increase the former was to add to the latter; partly in the idea that the profit on the export of home manufactures, fostered by protective duties and stimulated by bounties, was greater than that gained by the export of the agricultural products—the corn and wine and wool—which Colbert's predecessor, Sully, had recognised as the sources of the wealth and prosperity of France. These premises once conceded, the soundness of the system followed as a matter of course. It was the policy of a nation of landowners which had been seized with a desire to become at all hazards a nation of manufacturers and merchants.
Of an exactly opposite character was the example of Holland, whose prosperity it was the desire of France to destroy. That country, as observed by Adam Smith in the following century, had approached the nearest to the character of a free port of all European countries.[1] Holland still held the greater part of the carrying trade of the world. Colbert hoped to crush it by hostile duties; Louvois and his royal master by open war. The Dutch tariff imposed no protective duties at all, and the State gathered the necessary revenue from the home consumer by a wide-reaching system of indirect taxation on commodities. It was the policy of a nation of merchants and bankers who understood the interests of their class.
'Holland,' to use the words of a recent author, 'was intrinsically a poor country. But, notwithstanding, in nearly all commodities Holland gave the price, and it did so because her towns had a good market, to which all the world resorted. The Dutch were manufacturers; in some articles the successful manufacturing rivals of England; but their principal source of wealth, of that wealth, abundance of good products, on which alone the capacity for any other industry can be based, was to be traced to trade and the policy of free trade.'[2]
Such were the two rival systems of the Continent, between
