ENGLISH seventeenth-century economic theory about
foreign trade was permeated by the belief that it was
essential to have an excess of exports over imports. It is
true that some writers were inclined to emphasize bullionism
and others what has come to be called mercantilism. The former
tended to magnify the importance of exchange transactions and
of restrictions on the export of coin and bullion, and of regula-
tion through supervision of individual transactions. James I and
Charles I were both bullionists. For example a proclamation
was issued ( 25 May 1627) that the exchange of money was a
royal prerogative, and goldsmiths were forbidden to inter-
meddle with foreign money or bullion, or to melt current coin.
More influential, however, was the theory that in the case of a
country like England, with no gold or silver mines to speak of,
the only way to increase its stock of precious metal was to
export more of commodities than was imported. When this
happy state of things was brought about, England enjoyed
what much later was called a favourable balance of trade. The
best-known of all the mercantilist treatises is Mun England's
Treasure by Forraign Trade. Mun laid down as a maxim that 'the
ordinary means therefore to encrease our wealth and treasure
is by forraign trade, wherein wee must ever observe this rule; to
sell more to strangers yearly than wee consume of theirs in
value'. ¹ One reason why the mercantilists so strongly urged the
accumulation of bullion was that they tended to confuse wealth
and money. Although it would be unjust to state that they
looked upon precious metals as the sole wealth of the country,
their over-emphasis upon the accumulation of gold and silver
often made them act as if they did.

It has been well said, however, that, so far as the abler mer-
cantilists were concerned, more important 'than the absolute
identification of wealth with gold and silver was the attribution
to the precious metals of functions of such extreme importance
to the nation's welfare as to make it proper to attach to them a

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