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TREASURE AND TRADE BALANCES: FURTHER EVIDENCE

1951; Wiley; Volume: 4; Issue: 2 Linguagem: Inglês

10.1111/j.1468-0289.1951.tb00612.x

1468-0289

Charles Wilson,

Global Financial Crisis and Policies

I N his article in the Economic History Review (1950), 2nd Ser., m, 2i9, Prof. Heckscher has subjected my earlier suggestions1 to some lively criticism. I shall therefore produce further evidence which seems to me to support my views. First, however, since Prof. Heckscher has credited me with several contentions which stand in need of modification, it may avoid further misunderstandings if I repeat my own statement of my primary object which appeared in my first article viz. ... . to suggest that... there were indispensable practical uses to which precious metals were put in international trade in the mercantilist period, that these uses were sufficiently well known to practical men of trade and government, that they were more or less taken for granted, and that they do in fact form an assumption, largely unspoken and far from clearly stated, in much contemporary discussion'. These suggestions were prompted by the feeling that, first, the significance of the functions of precious metals in the processes of international payment during the mercantilist period has not always been fully appreciated; and, secondly, that it is in fact unlikely that their special usefulness was entirely unrelated to the emphasis placed upon the pursuit of treasure in mercantilist writings, more especially since so many of the writers were themselves closely associated with overseas commerce. Unfortunately, this primary aim is in some danger of being obscured behind the discussion which has arisen regarding a secondary issue, viz. whether trade was bilateral or multilateral in this period. I should therefore like to make it clear that it was not my intention to suggest that ' . . the idea of multilateral international payments...' was 'unthinkable' to mercantilists. On the contrary, I agree readily that such payments took place quite commonly. Yet there remained certain practical difficulties about such payments especially in certain areas, mainly because of the limited scope or sometimes even the absence of the bill of exchange in those areas.2 Now the kind of universal multilateral system which centred on London in more modern times, and which Dr Hilgerdt has analysed,3 seemed to me to depend on a world structure of credit and currency far more comprehensive and highly developed than that known to the mercantilist age. If Prof. Heckscher re-reads the paragraph which he quoted from my article, he will observe that it is the completed structure, not the idea, that I deem to have been unthinkable to mercantilists. One element of 'multilateralism' there certainly was; and it was one of the purposes of my article to suggest that a flow of precious metals was 'the principal and often the only link between a series of channels of trade each of which was essentially bilateral'. I hoped that the sentence which followed (but which