partly upon the distance of the ports between 
which they are to be carried; chiefly upon 
the former of those two circumstances. The 
coal trade from Newcastle to London, for example, 
employs more shipping than all the carrying 
trade of England, though the ports are 
at no great distance. To force, therefore, by 
extraordinary encouragements, a larger share 
of the capital of any country into the carrying 
trade, than what would naturally go to it, 
will not always necessarily increase the shipping 
of that country
The capital, therefore, employed in the 
home trade of any country, will generally 
give encouragement and support to a greater 
quantity of productive labour in that country, 
and increase the value of its annual produce
more than an equal capital employed in the 
foreign trade of consumption; and the capital 
employed in this latter trade has, in both these 
respects, a still greater advantage over an 
equal capital employed in the carrying trade
The riches, and so far as power depends upon 
riches, the power of every country must always 
be in proportion to the value of its annual 
produce, the fund from which all taxes 
must ultimately be paid. But the great object 
of the political economy of every country
is to increase the riches and power of that 
country. It ought, therefore, to give no preference 
nor superior encouragement to the foreign 
trade of consumption above the home 
trade, nor to the carrying trade above either of 
the other two. It ought neither to force nor 
to allure into either of those two channels
greater share of the capital of the country
than what would naturally flow into them of 
its own accord
Each of those different branches of trade
however, is not only advantageous, but necessary 
and unavoidable, when the course of 
things, without any constraint or violence, naturally 
introduces it. 
When the produce of any particular branch 
of industry exceeds what the demand of the 
country requires, the surplus must be sent 
abroad, and exchanged for something for 
which there is a demand at home. Without 
such exportation, a part of the productive 
labour of the country must cease, and 
the value of its annual produce diminish
The land and labour of Great Britain produce 
generally more corn, woollens, and hardware
than the demand of the home market requires
The surplus part of them, therefore, must be 
sent abroad, and exchanged for something for 
which there is a demand at home. It is only 
by means of such exportation, that this surplus 
can acquire a value sufficient to compensate 
the labour and expense of producing it. The 
neighbourhood of the sea-coast, and the banks 
of all navigable rivers, are advantageous situations 
for industry, only because they facilitate 
the exportation and exchange of such surplus 
produce for something else which is more in 
demand there. 
When the foreign goods which are thus purchased 
with the surplus produce of domestic 
industry exceed the demand of the home market
the surplus part of them must be sent 
abroad again, and exchanged for something 
more in demand at home. About 96,000 
hogsheads of tobacco are annually purchased 
in Virginia and Maryland with a part of the 
surplus produce of British industry. But the 
demand of Great Britain does not require
perhaps, more than 14,000. If the remaining 
82,000, therefore, could not be sent abroad
and exchanged for something more in 
demand at home, the importation of them must 
cease immediately, and with it the productive 
labour of all those inhabitants of Great Britain 
who are at present employed in preparing the 
goods with which these 82,000 hogsheads are 
annually purchased. Those goods, which are 
part of the produce of the land and labour of 
Great Britain, having no market at home, and 
being deprived of that which they had abroad
must cease to be produced. The most round-about 
foreign trade of consumption, therefore, 
may, upon some occasions, be as necessary for 
supporting the productive labour of the country
and the value of its annual produce, as 
the most direct
When the capital stock of any country is 
increased to such a degree that it cannot be all 
employed in supplying the consumption, and 
supporting the productive labour of that particular 
country, the surplus part of it naturally 
disgorges itself into the carrying trade, and 
is employed in performing the same offices 
to other countries. The carrying trade is the 
natural effect and symptom of great national 
wealth; but it does not seem to be the natural 
cause of it. Those statesmen who have been 
disposed to favour it with particular encouragement
seem to have mistaken the effect and 
symptom for the cause. Holland, in proportion 
to the extent of the land and the number 
of its inhabitants, by far the richest country in 
Europe, has accordingly the greatest share of 
the carrying trade of Europe. England, perhaps 
the second richest country of Europe, is 
likewise supposed to have a considerable share 
in it; though what commonly passes for the 
carrying trade of England will frequently
perhaps, be found to be no more than a round-about 
foreign trade of consumption. Such 
are, in a great measure, the trades which carry 
the goods of the East and West Indies and of 
America to the different European markets
Those goods are generally purchased, either 
immediately with the produce of British industry
or with something else which had been 
purchased with that produce, and the final returns 
of those trades are generally used or consumed 
in Great Britain. The trade which is 
carried on in British bottoms between the different