ities, therefore, the purchase of Foreign
commodities encourages British industry as much as the purchase of
British commodities" (Principles of Political Economy, p. 152). The
important exception to this theorem arising from the _nature_ of the
commodities exported and imported has been already dealt with. Let us
examine the vital principle of the theorem. "The capital," says Adam
Smith, "which is employed in purchasing in one part of the country in
order to sell in another, the produce of the industry of that country,
generally replaces by every such operation two distinct capitals, that
had both been employed in the agriculture or manufactures of that
country, and thereby enables them to continue that employment. When it
sends out from the residence of the merchant a certain value of
commodities it generally brings back in return at least an equal value
of other commodities. When both are the produce of domestic industry it
necessarily replaces by every such operation two distinct capitals which
had both been employed in supporting productive labour, and thereby
enables them to continue that support. The capital which sends Scotch
manufactures to London, and brings back English corn and manufactures to
Edinburgh, necessarily replaces, by every such operation, two British
capitals, which had both been employed in the agriculture or
manufactures of Great Britain.

"The capital employed in purchasing foreign goods for home consumption,
when this purchase is made with the produce of domestic industry,
replaces too, by every such operation, two distinct capitals; but one of
them only is employed in supporting domestic industry. The capital which
sends British goods to Portugal, and brings back Portuguese goods to
Great Britain, replaces, by every such operation, only one British
capital. The other is a Portuguese one. Though the returns, therefore,
of the foreign trade of consumption should be as quick as those of the
home trade, the capital employed in it will give but one half of the
encouragement to the industry or productive labour of the country.

"But the returns of the foreign trade of consumption are very seldom so
quick as those of the home trade. The returns of the home trade
generally come in before the end of the year, and sometimes three or
four times in the year. The returns of the foreign trade of consumption
seldom come in before the end of the year, and sometimes not till after
two or three years. A capi