We have introduced these observations as preparatory to our notice of the establishment of the Bank of England.  This undoubtedly was the effect of our increased commercial habits, but it was as undoubtedly the cause of those habits becoming stronger and more general:  it supposed the pre-existence of a certain degree of commercial confidence and credit, but it increased these in a much greater ratio than they existed before:  and if England owes its very superior wealth to any other causes besides its free government, its superior industry, and improvements in machinery, those causes must be sought for in the very extensive diffusion of commercial confidence and credit.  The funding system, which took place about the same, time that the Bank of England was established, may be regarded as another powerful cause of the increase of our commerce:  we do not mean to contend that the national debt is a national blessing, but it is certain that the necessity of paying the interest of that debt produced exertions of industry, and improvements in manufactures, which would not otherwise, have been called forth; while, on the other hand, the funds absorbed all the superfluous capital, which, otherwise, as in Holland, must have had a bad effect on commerce, either by reducing its profits very low, or by being transferred to other countries; and the interest, which so many individuals felt in the stability of the funds, induced them most steadily and strongly to support government.

The commerce of Scotland and Ireland during the sixteenth and seventeenth centuries, supplies us with very few materials.  In the year 1544, Scotland must have had no inconsiderable foreign trade, as in the war which took place at this time between that country and England, twenty-eight of the principal ships of Scotland, laden with all kinds of rich merchandize, were captured by the English, on their voyage from France, Flanders, Denmark, &c.; and in the same year, when the English took Leith, they found more riches in it than they had reason to expect.  While Scotland and England were at peace, however, the former was principally supplied through the latter with the commodities which Antwerp, during the sixteenth century, dispersed over all Europe.  The exports of Scotland to Antwerp, &c. were indeed direct, and consisted principally, as we have already remarked from Guicciardini, of peltry, leather, wool, indifferent cloth, and pearls.

The earliest account which occurs of the Scotch carrying on commerce to any port out of Europe, is in the year 1589, when three or four Scotch ships were found at the Azores by the earl of Cumberland.  In the year 1598, it appears, from a letter of king James to Queen Elizabeth, that some Scotch merchants traded to the Canaries.  There is evidence that the Scotch had some commerce in the Mediterranean in the beginning of the seventeenth century; for in the “Cabala,” under the year 1624, the confiscation of three Scotch