A I q iyi t t e n n ur n o h Na u ea dC u e o t e t r n a s s fh W e l o Na in at f t s h o b A a S t y d m mi h

The Project Gutenberg EBook of An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith This eBook is for the use of anyone anywhere at no cost and with almost no restrictions whatsoever. You may copy it, give it away or re-use it under the terms of the Project Gutenberg License included with this eBook or online at www.gutenberg.org Title: An Inquiry into the Nature and Causes of the Wealth of Nations Author: Adam Smith Release Date: February 28, 2009 [EBook #3300] Language: English *** START OF THIS PROJECT GUTENBERG EBOOK NATURE AND CAUSES OF THE WEALTH OF NATIONS ***

Produced by Colin Muir, and David Widger

AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS.

By Adam Smith

Contents
INTRODUCTION AND PLAN OF THE WORK.
BOOK I. OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE. CHAPTER I. OF THE DIVISION OF LABOUR. CHAPTER II. OF THE PRINCIPLE WHICH GIVES OCCASION TO THE DIVISION OF LABOUR. CHAPTER III. THAT THE DIVISION OF LABOUR IS LIMITED BY THE EXTENT OF THE MARKET. CHAPTER IV. OF THE ORIGIN AND USE OF MONEY. CHAPTER V. OF THE REAL AND NOMINAL PRICE OF COMMODITIES, OR OF THEIR PRICE IN LABOUR, AND THEIR PRICE IN MONEY. CHAPTER VI. OF THE COMPONENT PART OF THE PRICE OF COMMODITIES. CHAPTER VII. OF THE NATURAL AND MARKET PRICE OF COMMODITIES. CHAPTER VIII. OF THE WAGES OF LABOUR. CHAPTER IX. OF THE PROFITS OF STOCK. CHAPTER X. OF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS OF LABOUR AND STOCK. CHAPTER XI. OF THE RENT OF LAND.

BOOK II. OF THE NATURE, ACCUMULATION, AND EMPLOYMENT OF STOCK. CHAPTER I. OF THE DIVISION OF STOCK. CHAPTER II. OF MONEY, CONSIDERED AS A PARTICULAR BRANCH OF THE GENERAL STOCK OF THE SOCIETY, OR OF THE EXPENSE OF MAINTAINING THE NATIONAL CAPITAL. CHAPTER III. OF THE ACCUMULATION OF CAPITAL, OR OF PRODUCTIVE AND UNPRODUCTIVE LABOUR. CHAPTER IV. OF STOCK LENT AT INTEREST. CHAPTER V. OF THE DIFFERENT EMPLOYMENTS OF CAPITALS.

BOOK III. OF THE DIFFERENT PROGRESS OF OPULENCE IN DIFFERENT NATIONS CHAPTER I. OF THE NATURAL PROGRESS OF OPULENCE. CHAPTER II. OF THE DISCOURAGEMENT OF AGRICULTURE IN THE ANCIENT STATE OF EUROPE, AFTER THE FALL OF THE ROMAN EMPIRE. CHAPTER III. OF THE RISE AND PROGRESS OF CITIES AND TOWNS, AFTER THE FALL OF THE ROMAN EMPIRE. CHAPTER IV. HOW THE COMMERCE OF TOWNS CONTRIBUTED TO THE IMPROVEMENT OF THE COUNTRY.

BOOK IV. OF SYSTEMS OF POLITICAL ECONOMY. CHAPTER I. OF THE PRINCIPLE OF THE COMMERCIAL OR MERCANTILE SYSTEM. CHAPTER II. OF RESTRAINTS UPON IMPORTATION FROM FOREIGN COUNTRIES OF SUCH GOODS AS CAN BE PRODUCED AT HOME. CHAPTER III. OF THE EXTRAORDINARY RESTRAINTS UPON THE IMPORTATION OF GOODS OF ALMOST ALL KINDS, FROM THOSE COUNTRIES WITH WHICH THE BALANCE IS SUPPOSED TO BE DISADVANTAGEOUS. CHAPTER IV. OF DRAWBACKS.

CHAPTER V. OF BOUNTIES. CHAPTER VI. OF TREATIES OF COMMERCE. CHAPTER VII. OF COLONIES. CHAPTER VIII. CONCLUSION OF THE MERCANTILE SYSTEM. CHAPTER IX. OF THE AGRICULTURAL SYSTEMS, OR OF THOSE SYSTEMS OF POLITICAL ECONOMY WHICH REPRESENT THE PRODUCE OF LAND, AS EITHER THE SOLE OR THE PRINCIPAL SOURCE OF THE REVENUE AND WEALTH OF EVERY COUNTRY.

BOOK V. CHAPTER I. OF THE EXPENSES OF THE SOVEREIGN OR COMMONWEALTH. CHAPTER II. OF THE SOURCES OF THE GENERAL OR PUBLIC REVENUE OF THE SOCIETY. CHAPTER III. OF PUBLIC DEBTS.

INTRODUCTION AND PLAN OF THE WORK.
The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations. According, therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion. But this proportion must in every nation be regulated by two different circumstances: first, by the skill, dexterity, and judgment with which its labour is generally applied; and, secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed. Whatever be the soil, climate, or extent of territory of any particular nation, the abundance or scantiness of its annual supply must, in that particular situation, depend upon those two circumstances. The abundance or scantiness of this supply, too, seems to depend more upon the former of those two circumstances than upon the latter. Among the savage nations of hunters and fishers, every individual who is able to work is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, and such of his family or tribe as are either too old, or too young, or too infirm, to go a-hunting and fishing. Such nations, however, are so miserably poor, that, from mere want, they are frequently reduced, or at least think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger, or to be devoured by wild beasts. Among civilized and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently of a hundred times, more labour than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied; and a workman, even of the lowest and poorest order, if he is frugal and industrious, may enjoy a greater share of the necessaries and conveniencies of life than it is possible for any savage to acquire. The causes of this improvement in the productive powers of labour, and the order according to which its produce is naturally distributed among the different ranks and conditions of men in the society, make the subject of the first book of this Inquiry. Whatever be the actual state of the skill, dexterity, and judgment, with which labour is applied in any nation, the abundance or scantiness of its annual supply must depend, during the continuance of that state, upon the proportion between the number of those who are annually employed in useful labour, and that of those who are not so employed. The number of useful and productive labourers, it will hereafter appear, is everywhere in proportion to the quantity of capital stock which is employed in setting them to work, and to the particular way in which it is so employed. The second book, therefore, treats of the nature of capital stock, of the manner in which it is gradually accumulated, and of the different quantities of labour which it puts into motion, according to the different ways in which it is employed. Nations tolerably well advanced as to skill, dexterity, and judgment, in the application of labour, have followed very different plans in the general conduct or direction of it; and those plans have not all been equally favourable to the greatness of its produce. The policy of some nations has given extraordinary encouragement to the industry of the country; that of others to the industry of towns. Scarce any nation has dealt equally and impartially with every sort of industry. Since the down-fall of the Roman empire, the policy of Europe has been more favourable to arts, manufactures, and commerce, the industry of towns, than to agriculture, the Industry of the country. The circumstances which seem to have introduced and established this policy are explained in the third book. Though those different plans were, perhaps, first introduced by the private interests and prejudices of particular orders of men, without any regard to, or foresight of, their consequences upon the

general welfare of the society; yet they have given occasion to very different theories of political economy; of which some magnify the importance of that industry which is carried on in towns, others of that which is carried on in the country. Those theories have had a considerable influence, not only upon the opinions of men of learning, but upon the public conduct of princes and sovereign states. I have endeavoured, in the fourth book, to explain as fully and distinctly as I can those different theories, and the principal effects which they have produced in different ages and nations. To explain in what has consisted the revenue of the great body of the people, or what has been the nature of those funds, which, in different ages and nations, have supplied their annual consumption, is the object of these four first books. The fifth and last book treats of the revenue of the sovereign, or commonwealth. In this book I have endeavoured to shew, first, what are the necessary expenses of the sovereign, or commonwealth; which of those expenses ought to be defrayed by the general contribution of the whole society, and which of them, by that of some particular part only, or of some particular members of it: secondly, what are the different methods in which the whole society may be made to contribute towards defraying the expenses incumbent on the whole society, and what are the principal advantages and inconveniencies of each of those methods; and, thirdly and lastly, what are the reasons and causes which have induced almost all modern governments to mortgage some part of this revenue, or to contract debts; and what have been the effects of those debts upon the real wealth, the annual produce of the land and labour of the society.

BOOK I. OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE.

CHAPTER I. OF THE DIVISION OF LABOUR.
The greatest improvements in the productive powers of labour, and the greater part of the skill, dexterity, and judgment, with which it is anywhere directed, or applied, seem to have been the effects of the division of labour. The effects of the division of labour, in the general business of society, will be more easily understood, by considering in what manner it operates in some particular manufactures. It is commonly supposed to be carried furthest in some very trifling ones; not perhaps that it really is carried further in them than in others of more importance: but in those trifling manufactures which are destined to supply the small wants of but a small number of people, the whole number of workmen must necessarily be small; and those employed in every different branch of the work can often be collected into the same workhouse, and placed at once under the view of the spectator. In those great manufactures, on the contrary, which are destined to supply the great wants of the great body of the people, every different branch of the work employs so great a number of workmen, that it is impossible to collect them all into the same workhouse. We can seldom see more, at one time, than those employed in one single branch. Though in such manufactures, therefore, the work may really be divided into a much greater number of parts, than in those of a more trifling nature, the division is not near so obvious, and has accordingly been much less observed. To take an example, therefore, from a very trifling manufacture, but one in which the division of labour has been very often taken notice of, the trade of a pin-maker: a workman not educated to this business (which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery employed in it (to the invention of which the same division of labour has probably given occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades. One man draws out the wire; another straights it; a third cuts it; a fourth points it; a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on is a peculiar business; to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them. I have seen a small manufactory of this kind, where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day. There are in a pound upwards of four thousand pins of a middling size. Those ten persons, therefore, could make among them upwards of forty-eight thousand pins in a day. Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day; that is, certainly, not the two hundred and fortieth, perhaps not the four thousand eight hundredth, part of what they are at present capable of performing, in consequence of a proper division and combination of their different operations. In every other art and manufacture, the effects of the division of labour are similar to what they are in this very trifling one, though, in many of them, the labour can neither be so much subdivided, nor reduced to so great a simplicity of operation. The division of labour, however, so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour. The separation of different trades and employments from one another, seems to have taken place in consequence of this advantage. This separation, too, is generally carried furthest in those countries which enjoy the highest degree of industry and improvement; what is the work of one man, in a rude state of society, being generally that of several in an improved one. In every

improved society, the farmer is generally nothing but a farmer; the manufacturer, nothing but a manufacturer. The labour, too, which is necessary to produce any one complete manufacture, is almost always divided among a great number of hands. How many different trades are employed in each branch of the linen and woollen manufactures, from the growers of the flax and the wool, to the bleachers and smoothers of the linen, or to the dyers and dressers of the cloth! The nature of agriculture, indeed, does not admit of so many subdivisions of labour, nor of so complete a separation of one business from another, as manufactures. It is impossible to separate so entirely the business of the grazier from that of the corn-farmer, as the trade of the carpenter is commonly separated from that of the smith. The spinner is almost always a distinct person from the weaver; but the ploughman, the harrower, the sower of the seed, and the reaper of the corn, are often the same. The occasions for those different sorts of labour returning with the different seasons of the year, it is impossible that one man should be constantly employed in any one of them. This impossibility of making so complete and entire a separation of all the different branches of labour employed in agriculture, is perhaps the reason why the improvement of the productive powers of labour, in this art, does not always keep pace with their improvement in manufactures. The most opulent nations, indeed, generally excel all their neighbours in agriculture as well as in manufactures; but they are commonly more distinguished by their superiority in the latter than in the former. Their lands are in general better cultivated, and having more labour and expense bestowed upon them, produce more in proportion to the extent and natural fertility of the ground. But this superiority of produce is seldom much more than in proportion to the superiority of labour and expense. In agriculture, the labour of the rich country is not always much more productive than that of the poor; or, at least, it is never so much more productive, as it commonly is in manufactures. The corn of the rich country, therefore, will not always, in the same degree of goodness, come cheaper to market than that of the poor. The corn of Poland, in the same degree of goodness, is as cheap as that of France, notwithstanding the superior opulence and improvement of the latter country. The corn of France is, in the corn-provinces, fully as good, and in most years nearly about the same price with the corn of England, though, in opulence and improvement, France is perhaps inferior to England. The corn-lands of England, however, are better cultivated than those of France, and the corn-lands of France are said to be much better cultivated than those of Poland. But though the poor country, notwithstanding the inferiority of its cultivation, can, in some measure, rival the rich in the cheapness and goodness of its corn, it can pretend to no such competition in its manufactures, at least if those manufactures suit the soil, climate, and situation, of the rich country. The silks of France are better and cheaper than those of England, because the silk manufacture, at least under the present high duties upon the importation of raw silk, does not so well suit the climate of England as that of France. But the hardware and the coarse woollens of England are beyond all comparison superior to those of France, and much cheaper, too, in the same degree of goodness. In Poland there are said to be scarce any manufactures of any kind, a few of those coarser household manufactures excepted, without which no country can well subsist. This great increase in the quantity of work, which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances; first, to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and, lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many. First, the improvement of the dexterity of the workmen, necessarily increases the quantity of the work he can perform; and the division of labour, by reducing every man's business to some one simple operation, and by making this operation the sole employment of his life, necessarily increases very much the dexterity of the workman. A common smith, who, though accustomed to handle the hammer, has never been used to make nails, if, upon some particular occasion, he is obliged to attempt it, will scarce, I am assured, be able to make above two or three hundred nails in a day, and those, too, very bad ones. A smith who has been accustomed to make nails, but whose sole or principal business has not been that of a nailer, can seldom, with his utmost diligence, make more than eight hundred or a thousand nails in a day. I have seen several boys, under twenty years of age, who had never exercised any other trade but that of making nails, and who, when they exerted themselves, could make, each of them, upwards of two thousand three

or men of speculation. stirs or mends the fire as there is occasion. and the dexterity of the person. exceeds what the human hand could. Men are much more likely to discover easier and readier methods of attaining any object. A great part of the machines made use of in those manufactures in which labour is most subdivided. When the two trades can be carried on in the same workhouse. upon that account. It is impossible to pass very quickly from one kind of work to another. Many improvements have been made by the ingenuity of the makers of the machines.hundred nails in a day. but to observe every thing. and of indolent careless application. everybody must be sensible how much labour is facilitated and abridged by the application of proper machinery. a boy was constantly employed to open and shut alternately the communication between the boiler and the cylinder. whose trade it is not to do any thing. and to apply his hand in twenty different ways almost every day of his life. however. and who. and some by that of those who are called philosophers. acquired by every country workman who is obliged to change his work and his tools every half hour. the whole of every man's attention comes naturally to be directed towards some one very simple object. is much greater than we should at first view be apt to imagine it. and from the field to his loom. have by no means been the inventions of those who had occasion to use the machines. who cultivates a small farm. who. must loose a good deal of time in passing from his loom to the field. much less. being each of them employed in some very simple operation. It is. which were the inventions of such workmen. he supposed capable of acquiring. All the improvements in machinery. that some one or other of those who are employed in each particular branch of labour should soon find out easier and readier methods of performing their own particular work. however. according as the piston either ascended or descended. Independent. even on the most pressing occasions. are often capable of combining together the powers of the most distant and dissimilar objects in the progress of society. Whoever has been much accustomed to visit such manufactures. he is seldom very keen and hearty. of whose life it has been the sole business to perform them. The making of a nail. When he first begins the new work. the valve would open and shut without his assistance. observed that. renders him almost always slothful and lazy. is by no means one of the simplest operations. Secondly. therefore. heats the iron. must frequently have been shewn very pretty machines. therefore. . It is unnecessary to give any example. and lastly. no doubt. than when it is dissipated among a great variety of things. this cause alone must always reduce considerably the quantity of work which he is capable of performing. The different operations into which the making of a pin. since it was first invented. in consequence of the division of labour. A man commonly saunters a little in turning his hand from one sort of employment to another. very considerable. The habit of sauntering. however. was in this manner the discovery of a boy who wanted to save his own labour. by tying a string from the handle of the valve which opened this communication to another part of the machine. the loss of time is. The same person blows the bellows. by those who had never seen them. his mind. is subdivided. too. therefore. even in this case. I shall only observe. that is carried on in a different place. when the whole attention of their minds is directed towards that single object. Thirdly. in order to facilitate and quicken their own particular part of the work. seems to have been originally owing to the division of labour. when to make them became the business of a peculiar trade. The rapidity with which some of the operations of those manufactures are performed. and with quite different tools. which is naturally. and incapable of any vigorous application. A country weaver. But. and for some time he rather trifles than applies to good purpose. whenever the nature of it admits of such improvement. In the first fire engines {this was the current designation for steam engines}. naturally turned their thoughts towards finding out easier and readier methods of performing it. and forges every part of the nail: in forging the head. One of those boys. One of the greatest improvements that has been made upon this machine. as they say. and leave him at liberty to divert himself with his play-fellows. or of a metal button. were originally the invention of common workmen. is usually much greater. The advantage which is gained by saving the time commonly lost in passing from one sort of work to another. that the invention of all those machines by which labour is so much facilitated and abridged. does not go to it. he is obliged to change his tools. or rather necessarily. of his deficiency in point of dexterity. who loved to play with his companions. It is naturally to be expected. are all of them much more simple.

the principal or sole trade and occupation of a particular class of citizens. and the quantity of science is considerably increased by it. which occasions. How many merchants and carriers. the coals which he makes use of for that purpose. the workmen who attend the furnace. sailmakers. The miner. He supplies them abundantly with what they have occasion for. all these things. the glass window which lets in the heat and the light. it is subdivided into a great number of different branches. . the builder of the furnace for smelting the ore the feller of the timber. each of which affords occupation to a peculiar tribe or class of philosophers. has been employed in procuring him this accommodation. the absolute masters of the lives and liberties of ten thousand naked savages. even according to. the millwright. too. must all join their different arts in order to complete even this homely production. improve dexterity. Every workman has a great quantity of his own work to dispose of beyond what he himself has occasion for. the brickmaker. the shears with which the shepherd clips the wool. Each individual becomes more expert in his own peculiar branch. though but a small part. rope-makers. the coarse linen shirt which he wears next his skin. as the accommodation of the latter exceeds that of many an African king. must have been employed in order to bring together the different drugs made use of by the dyer. how many ship-builders. and every other workman being exactly in the same situation. perhaps. Compared. is necessary in order to produce the tools of the meanest of those workmen! To say nothing of such complicated machines as the ship of the sailor. The shepherd. perhaps. the wool-comber or carder. which often come from the remotest corners of the world? What a variety of labour. dug from the bowels of the earth. together with the tools of all the different workmen employed in producing those different conveniencies. without the assistance and cooperation of many thousands. and saves time. as well as in every other business. the very meanest person in a civilized country could not be provided. the smith. or even the loom of the weaver. in consequence of the division of labour. of whose industry a part. Like every other employment. the bricklayer. indeed. the kitchen-grate at which he prepares his victuals. the dresser.philosophy or speculation becomes. by a long sea and a long land-carriage. and they accommodate him as amply with what he has occasion for. more work is done upon the whole. and yet it may be true. what comes to the same thing. the mill of the fuller. the dyer. the scribbler. the knives and forks. the spinner. the different hands employed in preparing his bread and his beer. all the furniture of his table. with all the knowledge and art requisite for preparing that beautiful and happy invention. and keeps out the wind and the rain. we shall be sensible that. besides. the weaver. exceeds all computation. what we very falsely imagine. Observe the accommodation of the most common artificer or daylabourer in a civilized and thriving country. that universal opulence which extends itself to the lowest ranks of the people. the fuller. that the accommodation of an European prince does not always so much exceed that of an industrious and frugal peasant. all the different parts of his dress and household furniture. the bed which he lies on. Were we to examine. as coarse and rough as it may appear. must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country? How much commerce and navigation in particular. all the other utensils of his kitchen. must all of them join their different arts in order to produce them. is the produce of the joint labour of a great multitude of workmen. for example. the earthen or pewter plates upon which he serves up and divides his victuals. sailors. he is enabled to exchange a great quantity of his own goods for a great quantity or. I say. for the price of a great quantity of theirs. without which these northern parts of the world could scarce have afforded a very comfortable habitation. the shoes which cover his feet. like every other employment. and this subdivision of employment in philosophy. the forger. the burner of the charcoal to be made use of in the smelting-house. let us consider only what a variety of labour is requisite in order to form that very simple machine. and brought to him. the easy and simple manner in which he is commonly accommodated. the sorter of the wool. if we examine. It is the great multiplication of the productions of all the different arts. with the more extravagant luxury of the great. and consider what a variety of labour is employed about each of them. and you will perceive that the number of people. in the same manner. and all the different parts which compose it. and a general plenty diffuses itself through all the different ranks of the society. The woollen coat. which covers the day-labourer. in a well-governed society. too. with many others. his accommodation must no doubt appear extremely simple and easy.

.

Whether this propensity be one of those original principles in human nature. when it is grown up to maturity. or of another animal. A puppy fawns upon its dam. of which no further account can be given. Two greyhounds. in this manner. We address ourselves. In a tribe of hunters or shepherds. and in its natural state has occasion for the assistance of no other living creature. or for lodging. and never talk to them of our own necessities. He will be more likely to prevail if he can interest their self-love in his favour. and when he has no other means of engaging them to act according to his inclinations. When an animal wants to obtain something either of a man. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens. or lodging. is not the effect of any contract. from which so many advantages are derived. however. But man has almost constant occasion for the help of his brethren. so it is this same trucking disposition which originally gives occasion to the division of labour. to do this upon every occasion. by barter. than if he himself went to the field to catch . consequence of a certain propensity in human nature. and by purchase. It is common to all men. which seem to know neither this nor any other species of contracts. each individual. OF THE PRINCIPLE WHICH GIVES OCCASION TO THE DIVISION OF LABOUR. barter. that we obtain from one another the greater part of those mutual good offices which we stand in need of. and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. with his companions. as seems more probable. is not originally the effect of any human wisdom. He has not time. but of their advantages. It is not from the benevolence of the butcher the brewer. it belongs not to our present subject to inquire. that yours. This division of labour. and you shall have this which you want. The old clothes which another bestows upon him he exchanges for other clothes which suit him better. This. is entirely independent. and he finds at last that he can. proposes to do this. it has no other means of persuasion. or endeavours to intercept her when his companion turns her towards himself. With the money which one man gives him he purchases food. or for food. Give me that which I want. endeavours by every servile and fawning attention to obtain their good will. or the baker that we expect our dinner. It is the necessary. supplies him with the whole fund of his subsistence. and a spaniel endeavours. this is mine. and by purchase. by barter. Each turns her towards his companion. but to gain the favour of those whose service it requires. the propensity to truck. as he has occasion. In civilized society he stands at all times in need of the co-operation and assistance of great multitudes. Whoever offers to another a bargain of any kind. In almost every other race of animals. get more cattle and venison. clothes. it neither does nor can provide him with them as he has occasion for them. As it is by treaty. I am willing to give this for that. or for money. The greater part of his occasional wants are supplied in the same manner as those of other people. Man sometimes uses the same arts with his brethren. which foresees and intends that general opulence to which it gives occasion. He frequently exchanges them for cattle or for venison. Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. with more readiness and dexterity than any other. Even a beggar does not depend upon it entirely. have sometimes the appearance of acting in some sort of concert. but to their self-love. while his whole life is scarce sufficient to gain the friendship of a few persons. by a thousand attractions. and it is in vain for him to expect it from their benevolence only. it be the necessary consequence of the faculties of reason and speech. though very slow and gradual. by its gestures and natural cries signify to another.CHAPTER II. and to be found in no other race of animals. But though this principle ultimately provides him with all the necessaries of life which he has occasion for. Nobody ever saw one animal. and exchange one thing for another. with which he can buy either food. not to their humanity. is the meaning of every such offer. for example. however. by treaty. when it wants to be fed by him. a particular person makes bows and arrows. to engage the attention of its master who is at dinner. indeed. The charity of well-disposed people. and shew them that it is for their own advantage to do for him what he requires of them. in running down the same hare. but from their regard to their own interest. or whether. which has in view no such extensive utility. but of the accidental concurrence of their passions in the same object at that particular time.

Those different tribes of animals. or by the sagacity of the spaniel. the principal part of the clothing of savages. and exchange. which is over and above his own consumption. The difference of talents comes then to be taken notice of. Many tribes of animals. the different produces of their respective talents. and to cultivate and bring to perfection whatever talent of genius he may possess for that particular species of business. antecedent to custom and education. Among men. a fourth. so it is this same disposition which renders that difference useful. and do not in the least contribute to the better accommodation and conveniency of the species. But without the disposition to truck. The strength of the mastiff is not in the least supported either by the swiftness of the greyhound. when grown up to maturity. seems to arise not so much from nature. for example. and widens by degrees. By nature a philosopher is not in genius and disposition half so different from a street porter. as the effect of the division of labour. than if he himself went to the field to catch them. they come to be employed in very different occupations. or this last from a shepherd's dog. barter. From a regard to his own interest. than what. perhaps. much less than we are aware of. by the general disposition to truck. where every man may purchase whatever part of the produce of other men's talents he has occasion for. every man must have procured to himself every necessary and conveniency of life which he wanted. The difference of natural talents in different men. separately and independently. a tanner or dresser of hides or skins. in this manner. into a common stock. as from habit. barter. between a philosopher and a common street porter. The effects of those different geniuses and talents. All must have had the same duties to perform. derive from nature a much more remarkable distinction of genius. As it is this disposition which forms that difference of talents. therefore. cannot be brought into a common stock. Each animal is still obliged to support and defend itself. being brought. When they came in to the world. and neither their parents nor play-fellows could perceive any remarkable difference. or soon after. though all of the same species are of scarce any use to one another. or by the docility of the shepherd's dog. and education.that he can. very much alike. and the very different genius which appears to distinguish men of different professions. and exchange. get more cattle and venison. the most dissimilar geniuses are of use to one another. He is accustomed to be of use in this way to his neighbours. for want of the power or disposition to barter and exchange. . and there could have been no such difference of employment as could alone give occasion to any great difference of talents. acknowledged to be all of the same species. encourages every man to apply himself to a particular occupation. and for the first six or eight years of their existence. In the same manner a third becomes a smith or a brazier. as a mastiff is from a grey-hound. they were. so remarkable among men of different professions. is not upon many occasions so much the cause. who reward him in the same manner with cattle and with venison. or a grey-hound from a spaniel. appears to take place among men. on the contrary. in reality. Another excels in making the frames and covers of their little huts or moveable houses. and derives no sort of advantage from that variety of talents with which nature has distinguished its fellows. custom. And thus the certainty of being able to exchange all that surplus part of the produce of his own labour. and to become a sort of housecarpenter. till at last the vanity of the philosopher is willing to acknowledge scarce any resemblance. The difference between the most dissimilar characters. however. and he becomes a sort of armourer. and the same work to do. for such parts of the produce of other men's labour as he may have occasion for. the making of bows and arrows grows to be his chief business. is. as it were. till at last he finds it his interest to dedicate himself entirely to this employment. About that age.

can find employment and subsistence in no other place. a cabinet-maker. for which. There are some sorts of industry. Six or eight men. but by land-carriage.CHAPTER III. and brewer. even of the lowest kind. and sailing between the ports of London and Leith. and drawn by eight horses. THAT THE DIVISION OF LABOUR IS LIMITED BY THE EXTENT OF THE MARKET. in the same time. Upon two hundred tons of goods. carried by the cheapest land-carriage from London to Edinburgh. must learn to perform themselves a great number of little pieces of work. there must be charged the maintenance of a hundred men for three weeks. Country workmen are almost everywhere obliged to apply themselves to all the different branches of industry that have so much affinity to one another as to be employed about the same sort of materials. they would call in the assistance of those workmen. a plough-wright. A broad-wheeled waggon. There could be little or no commerce of any kind between the distant parts of the world. they could carry on but a small part of that commerce which at present subsists between them. and drawn by four hundred horses. in other words. in more populous countries. that is. will make three hundred thousand nails in the year. In such situations we can scarce expect to find even a smith. upon the same quantity of goods carried by water. attended by two men. or. with what safety could they be transported . even an ordinary market-town is scarce large enough to afford him constant occupation. no person can have any encouragement to dedicate himself entirely to one employment. and along the banks of navigable rivers. It is impossible there should be such a trade as even that of a nailer in the remote and inland parts of the highlands of Scotland. for example. A village is by much too narrow a sphere for him. A country carpenter deals in every sort of work that is made of wood. for such parts of the produce of other men's labour as he has occasion for. In about the same time a ship navigated by six or eight men. But in such a situation it would be impossible to dispose of one thousand. but a joiner. Such a workman at the rate of a thousand nails a-day. The former is not only a carpenter. As by means of water-carriage. and it is frequently not till a long time after that those improvements extend themselves to the inland parts of the country. therefore. and the wear and tear of a ship of two hundred tons burthen. baker. which can be carried on nowhere but in a great town. and consequently could give but a small part of that encouragement which they at present mutually afford to each other's industry. together with the value of the superior risk. and both the maintenance and what is nearly equal to maintenance the wear and tear of four hundred horses. a country smith in every sort of work that is made of iron. there is to be charged only the maintenance of six or eight men. The scattered families that live at eight or ten miles distance from the nearest of them. carries and brings back between London and Edinburgh near four ton weight of goods. and even a carver in wood. therefore. that industry of every kind naturally begins to subdivide and improve itself. The employments of the latter are still more various. as well as of fifty great waggons. In the lone houses and very small villages which are scattered about in so desert a country as the highlands of Scotland. can carry and bring back. attended by a hundred men. as well as a wheelwright. or the difference of the insurance between land and water-carriage. by the extent of the market. of one day's work in the year. which is over and above his own consumption. every farmer must be butcher. Were there no other communication between those two places. a carpenter. as no goods could be transported from the one to the other. the same quantity of goods between London and Edinburgh as fifty broad-wheeled waggons. a cart and waggon-maker. What goods could bear the expense of land-carriage between London and Calcutta? Or if there were any so precious as to be able to support this expense. a more extensive market is opened to every sort of industry than what land-carriage alone can afford it. by the help of water-carriage. within less than twenty miles of another of the same trade. Whereas. A porter. so the extent of this division must always be limited by the extent of that power. therefore. frequently carries and brings back two hundred ton weight of goods. As it is the power of exchanging that gives occasion to the division of labour. in about six weeks time. When the market is very small. and three hundred working days in the year. except such whose price was very considerable in proportion to their weight. so it is upon the sea-coast. or a mason. for want of the power to exchange all that surplus part of the produce of his own labour. for his own family.

The sea of Tartary is the frozen ocean. they are at too great a distance from one another to carry commerce and communication through the greater part of it. the modern Tartary and Siberia. that neither the ancient Egyptians. was. the ancient Scythia. nor consequently any waves. for a long time. and Siam. according to the best authenticated history. extremely favourable to the infant navigation of the world. several great rivers form. In our North American colonies. Egypt seems to have been the first in which either agriculture or manufactures were cultivated and improved to any considerable degree. and the proximity of its neighbouring shores. and in Lower Egypt. though the great extent of this antiquity is not authenticated by any histories of whose authority we. India. and though some of the greatest rivers in the world run through that country. by far the greatest inlet that is known in the world. encouraged foreign commerce. appear to have been first civilized. by communicating with one another. to sail out of the straits of Gibraltar. a multitude of canals. The extent of the market. are the advantages of water-carriage. or. Of all the countries on the coast of the Mediterranean sea. Upper Egypt extends itself nowhere above a few miles from the Nile. that great river breaks itself into many different canals. The extent and easiness of this inland navigation was probably one of the principal causes of the early improvement of Egypt. too. was. however. Bengal. to abandon themselves to the boisterous waves of the ocean. with the assistance of a little art. as well as by the multitude of its islands. seem. which. in . and in some of the eastern provinces of China. seem to have afforded a communication by water-carriage. and several other great rivers. and they were. afford an inland navigation much more extensive than that either of the Nile or the Ganges. when. nearly in the same manner as the Rhine and the Maese do in Holland at present. having no tides. than both of them put together. the Ganges. The nations that. except such as are caused by the wind only. to have been in the same barbarous and uncivilized state in which we find them at present. attempted it. and even to many farm-houses in the country. form a great number of navigable canals. must for a long time be in proportion to the riches and populousness of that country. therefore. It is remarkable. In the eastern provinces of China. from their ignorance of the compass. It was late before even the Phoenicians and Carthaginians. In Bengal. The inland parts of the country can for a long time have no other market for the greater part of their goods. it is natural that the first improvements of art and industry should be made where this conveniency opens the whole world for a market to the produce of every sort of labour. in the East Indies. in this part of the world. and the great navigable rivers. by the smoothness of its surface. such as the Baltic and Adriatic seas in Europe. perhaps. Persia. the Mediterranean and Euxine seas in both Europe and Asia. nor the Indians. men were afraid to quit the view of the coast. therefore. but the country which lies round about them. and all that part of Asia which lies any considerable way north of the Euxine and Caspian seas. give a good deal of encouragement to each other's industry. and have scarce anywhere extended themselves to any considerable distance from both. by their different branches. not only between all the great towns. nor the Chinese. long considered as a most wonderful and dangerous exploit of navigation. The improvements in agriculture and manufactures seem likewise to have been of very great antiquity in the provinces of Bengal. and from the imperfection of the art of ship-building. the only nations that did attempt it. All the inland parts of Africa. There are in Africa none of those great inlets. Since such. To pass beyond the pillars of Hercules. and that they should always be much later in extending themselves into the inland parts of the country. in the same manner as the Nile does in Egypt. and by mutually affording a market. That sea. and consequently their improvement must always be posterior to the improvement of that country. are well assured. and. in the ancient world. but seem all to have derived their great opulence from this inland navigation. which admits of no navigation. but between all the considerable villages.through the territories of so many barbarous nations? Those two cities. the most skilful navigators and ship-builders of those old times. and the gulfs of Arabia. the plantations have constantly followed either the seacoast or the banks of the navigable rivers. in all ages of the world. were those that dwelt round the coast of the Mediterranean sea. that is. and separates them from the sea-coast. at present carry on a very considerable commerce with each other.

besides. till it falls into the Black sea. if any of them possessed the whole of its course. and which runs into another territory before it reaches the sea. The navigation of the Danube is of very little use to the different states of Bavaria.Asia. to carry maritime commerce into the interior parts of that great continent. can never be very considerable. . which any nation can carry on by means of a river which does not break itself into any great number of branches or canals. and Hungary. The commerce. because it is always in the power of the nations who possess that other territory to obstruct the communication between the upper country and the sea. Austria. in comparison of what it would be. and the great rivers of Africa are at too great a distance from one another to give occasion to any considerable inland navigation.

and the latter to purchase. for example. in some measure. and which. But if this latter should chance to have nothing that the former stands in need of. Iron was the common instrument of commerce among the ancient Spartans. and the butcher is already provided with all the bread and beer which he has immediate occasion for. a merchant. has more of a certain commodity than he himself has occasion for. we shall suppose. cost only nine oxen. no exchange can be made between them. it is probable. cattle are said to have been the common instrument of commerce. however. must have been obliged to buy salt to the value of a whole ox. But when the division of labour first began to take place. without any . for such parts of the produce of other men's labour as he has occasion for. every prudent man in every period of society. and the brewer and the baker would each of them be willing to purchase a part of it. it is but a very small part of a man's wants which the produce of his own labour can supply. as to have at all times by him. men seem at last to have been determined by irresistible reasons to give the preference. he could easily proportion the quantity of the metal to the precise quantity of the commodity which he had immediate occasion for. sugar in some of our West India colonies. One man. No exchange can. He cannot be their merchant. renders them fit to be the instruments of commerce and circulation. as by fusion those parts can easily be re-united again. more than any other quality. or a whole sheep. must naturally have endeavoured to manage his affairs in such a manner. or of two or three sheep. If. Many different commodities. while another has less. nor they his customers. But they have nothing to offer in exchange. though they must have been a most inconvenient one. would be glad to dispose of. The armour of Diomede. at a time. or becomes. Those metals seem originally to have been made use of for this purpose in rude bars. be divided into any number of parts. Salt is said to be the common instrument of commerce and exchanges in Abyssinia. besides the peculiar produce of his own industry. which is over and above his own consumption. The butcher has more meat in his shop than he himself can consume. In the rude ages of society. yet. were successively both thought of and employed for this purpose. this power of exchanging must frequently have been very much clogged and embarrassed in its operations. and the society itself grows to be what is properly a commercial society. and. He could seldom buy less than this. copper among the ancient Romans. but that of Glaucus cost a hundred oxen. In order to avoid the inconveniency of such situations. to wit. I am told. and they are all of them thus mutually less serviceable to one another. and gold and silver among all rich and commercial nations. Metals can not only be kept with as little loss as any other commodity. in this case. where it is not uncommon. for a workman to carry nails instead of money to the baker's shop or the ale-house. such as he imagined few people would be likely to refuse in exchange for the produce of their industry. he must. and there is at this day a village In Scotland. a certain quantity of some one commodity or other. for the same reasons. dried cod at Newfoundland. Different metals have been made use of by different nations for this purpose. When the division of labour has been once thoroughly established. Every man thus lives by exchanging. on the contrary. The former. and if he had a mind to buy more. tobacco in Virginia. because what he was to give for it could seldom be divided without loss. the value. hides or dressed leather in some other countries. a quality which no other equally durable commodities possess. scarce any thing being less perishable than they are. In all countries. says Homer. for this employment. after the first establishment of the division of labour. in old times. OF THE ORIGIN AND USE OF MONEY. he had metals to give in exchange for it. and had nothing but cattle to give in exchange for it. consequently. have been obliged to buy double or triple the quantity. without any loss. we find things were frequently valued according to the number of cattle which had been given in exchange for them. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour. of two or three oxen. be made between them. a part of this superfluity. a species of shells in some parts of the coast of India. The man who wanted to buy salt. except the different productions of their respective trades. but they can likewise.CHAPTER IV. to metals above every other commodity. instead of sheep or oxen.

The inconveniency and difficulty of weighing those metals with exactness. in all countries that have made any considerable advances towards improvement. not in money. into twelve ounces. a pound. seem in many cases to have been intended to ascertain. in the time of Edward I. each of which contained a real ounce of good copper. he was obliged to weigh the farthing. The use of metals in this rude state was attended with two very considerable inconveniences. or the Spanish mark which is sometimes affixed to ingots of gold. was for a long time. but not the weight of the metal. upon the authority of Timaeus. with that of assaying them. what it was both most difficult and most important to ascertain. an adulterated composition of the coarsest and cheapest materials. were received by tale. still more tedious. Such coins. Hence the origin of coined money. with proper exactness. and of those public offices called mints. requires at least very accurate weights and scales. and secondly. be necessary. and the weights and measures of so famous a market were generally known and esteemed. The first public stamps of this kind that were affixed to the current metals. Troyes weight. where a small difference in the quantity makes a great difference in the value. to affix a public stamp upon certain quantities of such particular metals. The French livre contained. To prevent such abuses. from the time of Alexander the First to that of Robert Bruce. lib. of silver of a known fineness. might receive. contained a pound. and instead of a pound weight of pure silver. in the time of Charlemagne. that. of silver of a known fineness. The revenues of the ancient Saxon kings of England are said to have been paid. however. the quantity and uniform goodness of those different commodities when brought to market. 3). Before the institution of coined money. in their outward appearance. till the time of Servius Tullius. unless they went through this tedious and difficult operation. They are said. an ancient historian. and not by tale. in the same manner as ingots of gold and bars of silver are at present. performed at this time the function of money. institutions exactly of the same nature with those of the aulnagers and stampmasters of woollen and linen cloth. The Scots money pound contained. in the same manner as our Troyes pound. therefore. This money. any conclusion that can be drawn from it is extremely uncertain. by means of a public stamp. The operation of assaying is still more difficult. ascertains the fineness. The fair of Troyes in Champaign was at that time frequented by all the nations of Europe.stamp or coinage. but made use of unstamped bars of copper. In the precious metals. which had. 33. and thereby to encourage all sorts of industry and commerce. Hist Nat. The Tower pound seems to have been something more than the Roman pound. and something less than the Troyes pound. The weighing of gold. gave occasion to the institution of coins. the Romans had no coined money. being struck only upon one side of the piece. to facilitate exchanges. as at present. Yet we should find it excessively troublesome if every time a poor man had occasion either to buy or sell a farthing's worth of goods. of which the stamp. and not covering the whole surface. William the Conqueror introduced the custom of paying them in money. and which. in victuals and provisions of all sorts. and sometimes the edges too. who first coined money at Rome. and yet are received by weight. All of them are equally meant to ascertain. and. In the time of Servius Tullius. it has been found necessary. without the trouble of weighing. a pound of silver of the same weight and fineness with the English pound . where a small error would be of little consequence. with proper dissolvents. by weight. to purchase whatever they had occasion for. The denominations of those coins seem originally to have expressed the weight or quantity of metal contained in them. to be the current money of the merchant. or pure copper. Thus we are told by Pliny (Plin. unless a part of the metal is fairly melted in the crucible. however. been made to resemble those metals. received at the exchequer. in particular. is an operation of some nicety In the coarser metals. no doubt. and not by tale. the goodness or fineness of the metal. as were in those countries commonly made use of to purchase goods. even the business of weighing. however. first. was supposed to ascertain not only the fineness. but in kind. Abraham weighs to Ephron the four hundred shekels of silver which he had agreed to pay for the field of Machpelah. covering entirely both sides of the piece. but the weight of the metal. less accuracy would. however. that is. and to have resembled the sterling mark which is at present affixed to plate and bars of silver. The English pound sterling. the Roman as or pondo contained a Roman pound of good copper. It was divided. people must always have been liable to the grossest frauds and impositions. in exchange for their goods. cap. therefore. indeed. with the trouble of weighing. These rude bars. This last was not introduced into the mint of England till the 18th of Henry the VIII. Tower weight.

All other debtors in the state were allowed the same privilege. It is in this manner that money has become. and have sometimes produced a greater and more universal revolution in the fortunes of private persons. The one may be called 'value in use. have by degrees diminished the real quantity of metal. and the French pound and penny about a sixty-sixth part of their original value. their natural or ordinary rate. I shall now proceed to examine. Nothing is more useful than water. the shilling. but a very great quantity of other goods may frequently be had in exchange for it. These rules determine what may be called the relative or exchangeable value of goods. and the two hundred-and-fortieth part of a pound. . Secondly. contained all of them originally a real pennyweight of silver. First. scarce any thing can be had in exchange for it. During the first race of the kings of France. The English pound and penny contain at present about a third only. or. the actual price of commodities. to pay their debts and fulfil their engagements with a smaller quantity of silver than would otherwise have been requisite. what are the causes which sometimes hinder the market price. for in every country of the world. "then wastel bread of a farthing shall weigh eleven shillings and fourpence". I shall endeavour to shew. And. was reduced to the twenty-fourth part of its original value. The shilling.' the other. what are the different circumstances which sometimes raise some or all of these different parts of price above. twelve. A diamond. and sometimes expresses the utility of some particular object. and it is not improbable that it may have been as variable among them as among their neighbours. on the contrary. that is. or the pound on the other. for their creditors were really defrauded of a part of what was due to them. Such operations. but it will purchase scarce any thing. 'value in exchange. In order to investigate the principles which regulate the exchangeable value of commodities." says an ancient statute of Henry III. which had been originally contained in their coins. in exchanging them either for money. however. the ancient Franks. or wherein consists the real price of all commodities. and. and either the penny on the one hand. in appearance. the proportion between the pound. From the time of Charlemagne among the French. from coinciding exactly with what may be called their natural price. and ruinous to the creditor. what are the different parts of which this real price is composed or made up. the twentieth part of an ounce. therefore. French. and the penny. it is to be observed. has two different meanings. "When wheat is at twelve shillings the quarter. and forty pennies. It was indeed in appearance only. those which have the greatest value in exchange have frequently little or no value in use. in all civilized nations. on the contrary. and might pay with the same nominal sum of the new and debased coin whatever they had borrowed in the old. a shilling appears at one time to have contained only five pennies. I believe. has scarce any value in use. have always proved favourable to the debtor. the princes and sovereign states which performed them were enabled. came to weigh only half an ounce. though the value of each has been very different. The Roman as. and. too. than could have been occasioned by a very great public calamity. by the intervention of which goods of all kinds are bought and sold. English. and sometimes the power of purchasing other goods which the possession of that object conveys. what is the real measure of this exchangeable value. Among the ancient Saxons. seems originally to have been the denomination of a weight. By means of those operations. the Scots pound and penny about a thirty-sixth. in the latter ages of the republic. and from that of William the Conqueror among the English. The word VALUE. What are the rules which men naturally observe. seems not to have been so constant and uniform as that between the penny and the pound. or for one another. the French sou or shilling appears upon different occasions to have contained five. and Scots pennies. abusing the confidence of their subjects. seems to have been uniformly the same as at present. The proportion. the avarice and injustice of princes and sovereign states. lastly. and sometimes sink them below. or exchanged for one another. too.sterling. instead of weighing a pound. the universal instrument of commerce. twenty. between the shilling.' The things which have the greatest value in use have frequently little or no value in exchange.

as fully and distinctly as I can. in some places.I shall endeavour to explain. appear unnecessarily tedious. after the fullest explication which I am capable of giving it. appear still in some degree obscure. for which I must very earnestly entreat both the patience and attention of the reader: his patience. I am always willing to run some hazard of being tedious. after taking the utmost pains that I can to be perspicuous. those three subjects in the three following chapters. in order to understand what may perhaps. in order to be sure that I am perspicuous. in its own nature extremely abstracted. and his attention. some obscurity may still appear to remain upon a subject. perhaps. and. in order to examine a detail which may. .

the original purchase money that was paid for all things. or succeeds to a great fortune. and thereby compared with. but the mere possession of that fortune does not necessarily convey to him either. therefore. Labour therefore. or with goods. His fortune may. and he must be rich or poor according to the quantity of that labour which he can command. but to exchange it for other commodities. of the produce of other men's labour. or exchange it for something else. as much as what we acquire by the toil of our own body. but by the higgling and bargaining of the market. must likewise be taken into account. The one is a plain palpable object. what every thing really costs to the man who wants to acquire it. therefore. the other an abstract notion. Is more frequently exchanged for. that all the wealth of the world was originally purchased. afford him the means of acquiring both. other commodities. understand better what is meant by a quantity of a particular commodity. perhaps. It is often difficult to ascertain the proportion between two different quantities of labour. not by any accurate measure. OF THE REAL AND NOMINAL PRICE OF COMMODITIES. it is but a very small part of these with which a man's own labour can supply him. and its value. Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries. what is the same thing. AND THEIR PRICE IN MONEY. is the real measure of the exchangeable value of all commodities. or in an hour's application to a trade which it cost ten years labour to learn. but by labour. Wealth. does not necessarily acquire or succeed to any political power. either civil or military. at an ordinary and obvious employment. or. precisely in proportion to the extent of this power. is equal to the quantity of labour which it enables him to purchase or command. which we exchange for what is supposed at the time to contain the value of an equal quantity. to those who possess it. it is not that by which their value is commonly estimated. indeed. In exchanging. They contain the value of a certain quantity of labour. What every thing is really worth to the man who has acquired it and who wants to dispose of it. or to the quantity either of other men's labour. Every commodity.CHAPTER V. But though labour be the real measure of the exchangeable value of all commodities. and of ingenuity exercised. or which he can afford to purchase. The value of any commodity. than in a month's industry. and who means not to use or consume it himself. The power which that possession immediately and directly conveys to him. than by a quantity of labour. is the toil and trouble which it can save to himself. or those goods. But after the division of labour has once thoroughly taken place. It is adjusted. or over all the produce of labour which is then in the market. is sufficient for carrying on the business of common life. too. It is more natural. The exchangeable value of every thing must always be precisely equal to the extent of this power which it conveys to its owner. That money. and which it can impose upon other people. some allowance is commonly made for both. than by that of the labour which it can produce. the different productions of different sorts of labour for one another. than in two hours easy business. indeed. Labour was the first price. is the power of purchasing a certain command over all the labour. however. But it is not easy to find any accurate measure either of hardship or ingenuity. save us this toil. There may be more labour in an hour's hard work. is purchased by labour. is the toil and trouble of acquiring it. according to that sort of rough equality which. The real price of every thing. The different degrees of hardship endured. which . is precisely equal to the quantity of' labour which it can enable them to purchase or command. OR OF THEIR PRICE IN LABOUR. But the person who either acquires. than with labour. and amusements of human life. conveniencies. which it enables him to purchase or command. as Mr Hobbes says. to estimate its exchangeable value by the quantity of some other commodity. is power. The time spent in two different sorts of work will not always alone determine this proportion. The far greater part of them he must derive from the labour of other people. It was not by gold or by silver. to the person who possesses it. and who want to exchange it for some new productions. What is bought with money. besides. His fortune is greater or less. though not exact. The greater part of people.

therefore. but may sometimes be of considerable use in practice. The quantity of labour which any particular quantity of them can purchase or command. or with very little labour. may be said to have a real and a nominal price. in order to exchange them for bread or for beer. Equal quantities of labour. in the ordinary degree of his skill and dexterity. than by the quantity either of labour or of any other commodity which can be had in exchange for it. is sold with a reservation of a perpetual rent. yet to the person who employs him they appear sometimes to be of greater. though perhaps the greatest. The quantity of money which he gets for them regulates. too. The labourer is rich or poor. and rather to say that his butcher's meat is worth three-pence or fourpence a-pound. or the quantity of other goods which it will exchange for. is by no means the only one of which history gives some account. the quantity of bread and beer which he can afterwards purchase. or which it costs much labour to acquire. In his ordinary state of health. is not altogether so natural and obvious. to estimate their value by the quantity of money. is well or ill rewarded. But as a measure of quantity. the same nominal price is sometimes of very different values. In this popular sense. he must always lay down the same portion of his ease. at all times and places. labour. and sometimes with a smaller quantity of goods. The price which he pays must always be the same. it may sometimes purchase a greater and sometimes a smaller quantity. It is more natural and obvious to him. the commodities for which he can exchange them only by the intervention of another commodity. As it cost less labour to bring those metals from the mine to the market. but he carries them to the market. money is their nominal price only. reduced. every particular commodity is more frequently exchanged for money than for any other commodity. therefore. and dear in the other. or handful. may be said to be of equal value to the labourer. The butcher seldom carries his beef or his mutton to the baker or the brewer. or three or four quarts of small beer. the commodity for which he immediately exchanges them. therefore. The distinction between the real and the nominal price of commodities and labour is not a matter of mere speculation. if it is intended that this rent should always be of the same value. Its real price may be said to consist in the quantity of the necessaries and conveniencies of life which are given for it. like commodities. sometimes of easier and sometimes of more difficult purchase. and sometimes of smaller value. are sometimes cheaper and sometimes dearer. in the sixteenth century. and to him the price of labour seems to vary like that of all other things. Labour alone. is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. not that of the labour which purchases them. Gold and silver. and cheap in the other. fathom. The discovery of the abundant mines of America. it is of importance to the family in whose favour it is reserved. Of these. Hence it comes to pass. whatever may be the quantity of goods which he receives in return for it. and money has become the common instrument of commerce. so. therefore. In reality. where he exchanges them for money. strength. and this revolution in their value. It appears to him dear in the one case. the value of gold and silver in Europe to about a third of what it had been before. It is their real price. than that it is worth three or four pounds of bread. indeed. however. vary in their value. however. its nominal price. But though equal quantities of labour are always of equal value to the labourer. such as the natural foot. not to the nominal price of his labour. so a commodity which is itself continually varying in its own value. that the exchangeable value of every commodity is more frequently estimated by the quantity of money. his liberty. they could purchase or command less labour. can never be an accurate measure of the quantity of other things. that is dear which it is difficult to come at. like every other commodity. But when barter ceases. than by that of bread and beer. in proportion to the real. when they were brought thither. and afterwards exchanges that money for bread and for beer. and his happiness. depends always upon the fertility or barrenness of the mines which happen to be known about the time when such exchanges are made. but on account of the variations in the value of gold and silver. which is continually varying in its own quantity. that it should not consist in a . and spirits. and that cheap which is to be had easily. At all times and places. He purchases them sometimes with a greater. in the quantity of money.though it can be made sufficiently intelligible. The same real price is always of the same value. never varying in its own value. but it is their value which varies. it is the goods which are cheap in the one case. can never be an accurate measure of the value of other commodities. When a landed estate.

it is commonly supposed. according to Dr. perhaps. will. The rents which have been reserved in corn. The money arising from this corn rent. more liberal in a society advancing to opulence. A rent. Equal quantities of corn. than with equal quantities of gold and silver. tend almost always to diminish the value of a money rent. has arisen altogether from the degradation in the price of silver. where it has undergone still greater than it ever did in Scotland. This diminution. for example). . at distant times. They will do this. not only to the variations in the quantity of labour which any particular quantity of corn can purchase. more nearly than equal quantities of almost any other commodity. or. Every other commodity. some ancient rents. will. and pence. have sunk almost to a fourth part of their ancient value. is still going on gradually. Its value would in this case be liable to variations of two different kinds: first. at distant times. The quantity of metal contained in the coins. Equal quantities of labour will. be more nearly of the same real value. Such variations. to be paid either in kind. even though it should be stipulated to be paid. or are worth little more than a fourth part of the corn which they were formerly worth. the loss is frequently still greater. or enable the possessor to purchase or command more nearly the same quantity of the labour of other people. shillings. I believe of all nations. and in one that is standing still. I say. and the same number of pounds. is. and. it varies much more from year to year. Upon this supposition. even where the denomination of the coin has not been altered. but they seldom have fancied that they had any to augment it. to those which arise from the different values of equal quantities of gold and silver at different times. have contained very nearly the same quantity of pure silver. The subsistence of the labourer. the subsistence of the labourer. But since the reign of Philip and Mary. in the present times. purchase a greater or smaller quantity of labour. either of pure silver. been reduced almost to nothing. it is to be observed. have. is liable only to the variations in the quantity of labour which a certain quantity of corn can purchase. according to this account. therefore. however. When the degradation in the value of silver is combined with the diminution of the quantity of it contained in the coin of the same denomination. that a third of the rent of all college leases should be reserved in corn. as I shall endeavour to shew hereafter. the denomination of the English coin has undergone little or no alteration. and is likely to continue to do so for a long time. than in one that is standing still. But a rent reserved in any other commodity is liable. than in one that is going backwards. The old money rents of colleges must. The discovery of the mines of America diminished the value of gold and silver in Europe. reserved in corn. or according to the current prices at the nearest public market. not in such a quantity of coined money of such a denomination (in so many pounds sterling. originally of considerable value. In Scotland. though originally but a third of the whole. varies much less from century to century than that of a money rent. therefore. The money price of labour. or of silver of a certain standard. but in so many ounces. in the value of the money rents of colleges. therefore. is very different upon different occasions. though I apprehend without any certain proof. however. in this manner. By the 18th of Elizabeth. Princes and sovereign states have frequently fancied that they had a temporary interest to diminish the quantity of pure metal contained in their coins. it was enacted. and in France. Though the real value of a corn rent. for even equal quantities of corn will not do it exactly. has accordingly been almost continually diminishing. be purchased more nearly with equal quantities of corn. or the real price of labour. of any other commodity. but to the variations in the quantity of corn which can be purchased by any particular quantity of that commodity. Blackstone.particular sum of money. This degradation. therefore. have preserved their value much better than those which have been reserved in money. at any particular time. such variations are more likely to diminish than to augment the value of a money rent. secondly. and hardly ever augmenting. to those which arise from the different quantities of gold and silver which are contained at different times in coin of the same denomination. commonly near double of what arises from the other two-thirds. therefore. where the denomination of the coin has undergone much greater alterations than it ever did in England. in proportion to the quantity of subsistence which it can purchase at that time.

may. which sells for half an ounce of silver at Canton. with the greatest accuracy. than an ounce at London. in other respects. the more common and ordinary transactions of human life. or very nearly the same. because. therefore. the society continues. however. A commodity. can buy at Canton. It is so. at least. or will command double the quantity either of labour. From year to year. as well as the only accurate. But though. yet the merchant who carries goods from the one to the other. Labour. From century to century. and along with it that of most other things. because equal quantities of it will more nearly command the same quantity of labour. or very nearly the same. not only the nominal. the money price of labour. by the richness or barrenness of the mines which supply the market with that metal. and from year to year. It is of no importance to him that half an ounce of silver at Canton would have given him the command of more labour. it appears evidently. but to the average or ordinary price of that necessary of life. a commodity which he can afterwards sell at London for an ounce. than a commodity which sells for an ounce at London is to the man who possesses it at London. during so long a period. At the same time and place. and that for which he is likely to sell them. The ordinary or average money price of corn. both from century to century. At the same time and place. continuing the same during all these fluctuations. though it sometimes varies greatly from century to century. or the only standard by which we can compare the values of different commodities. but seems to be everywhere accommodated. continue the same. As it is the nominal or money price of goods. If a London merchant. however. just as much as if an ounce of silver was at London exactly of the same value as at Canton. therefore. at all times. in establishing perpetual rents. from century to century. Though at distant places there is no regular proportion between the real and the money price of commodities. money is the exact measure of the real exchangeable value of all commodities. too. In the mean time. will be double of what it is when at the former. therefore. the real and the nominal price of all commodities are exactly in proportion to one another. not to the temporary or occasional. But the value of silver. in order to bring any particular quantity of silver from the mine to the market. therefore. the real value of different commodities from century to century by the quantities of silver which were given for them. the more or less labour it will at that time and place enable you to purchase or command. or nearly in the same. and along with it the money price of labour. for example. therefore. condition. for example. Half an ounce of silver at Canton in China may command a greater quantity both of labour and of the necessaries and conveniencies of life. from five-and-twenty to fifty shillings the quarter. corn is a better measure than silver. does not fluctuate from year to year with the money price of corn.as I shall endeavour to shew hereafter. at the same time and place only. estimate it. and thereby regulates almost the whole business of . is the only universal. The more or less money you get for any commodity. for half a century or a century together. or fluctuate. it is of none in buying and selling. he gains a hundred per cent. measure of value. on the contrary. it may be of use to distinguish between real and nominal price. provided. in the same. again is regulated. for half an ounce of silver. which finally determines the prudence or imprudence of all purchases and sales. By the quantities of labour. by the value of silver. and at all places. seldom varies much from year to year. We cannot estimate. which half an ounce could have done there. as I shall likewise endeavour to shew hereafter. silver is a better measure than corn. the temporary and occasional price of corn may frequently be double one year of what it had been the year before. and consequently of corn which must be consumed. it is allowed. in the London market. by the bargain. of more real importance to the man who possesses it there. has nothing to consider but the money price. and of a greater quantity of the necessaries and conveniencies of life than an ounce can do at London. but frequently continues the same. or the difference between the quantity of silver for which he buys them. or even in letting very long leases. or by the quantity of labour which must be employed. may there be really dearer. we can. The average or ordinary price of corn. An ounce at London will always give him the command of double the quantity of all these. and this is precisely what he wants. But when corn is at the latter price. equal quantities of corn will command the same quantity of labour more nearly than equal quantities of silver. but the real value of a corn rent. We cannot estimate it from year to year by the quantities of corn. or of the greater part of other commodities.

Originally. I believe. have given to those who possessed it. therefore. or accept of it at such a valuation of the gold as he and his debtor could agree upon. If a debtor offered payment in gold. a legal tender of payment could be made only in the coin of that metal which was peculiarly considered as the standard or measure of value. we cannot wonder that it should have been so much more attended to than the real price. appears to have continued always the measure of value in that republic. which they must have done when they had no other money. it may sometimes be of use to compare the different real values of a particular commodity at different times and places. cap. and this preference seems generally to have been given to the metal which they happen first to make use of as the instrument of commerce. can scarce ever be known with any degree of exactness. and the value of all goods and of all estates is generally computed. and consequently better acquainted with the proportion between their respective values. one who owed a great deal of money was said to have a great deal of other people's copper. therefore. But the current prices of labour. at distant times and places. either in asses or in sestertii. or some other coarse metal. We must generally. but there was little gold coined till the time of Edward III nor any copper till that of James I. the distinction between the metal which was the standard. therefore. and copper. though they have in few places been regularly recorded. gold for larger payments. when they first began to coin silver. the creditor might either reject such payment altogether. I believe. considered one of those metals as more peculiarly the measure of value than any of the other two. commercial nations have found it convenient to coin several different metals into money. content ourselves with them. In England. been found convenient to ascertain this proportion. I shall hereafter have occasion to make several comparisons of this kind. In England. but was left to be settled by the market. Those of corn. At Rome all accounts appear to have been kept. in silver: and when we mean to express the amount of a person's fortune. There were silver coins in England in the time of the Saxons. lib. was something more than a nominal distinction. The proportion between the values of gold and silver money was not fixed by any public law or proclamation. we seldom mention the number of guineas. Copper. but the number of pounds sterling which we suppose would be given for it. and not to have known either gold or copper coins for several ages thereafter. all accounts are kept. Though the sestertius. xxxiii. silver for purchases of moderate value. and have been more frequently taken notice of by historians and other writers. Having once begun to use it as their standard. it has. for those of still smaller consideration. The as was always the denomination of a copper coin. In such a work as this. are in general better known. therefore. they have generally continued to do so even when the necessity was not the same. its value was estimated in copper. and for the same reason. The northern nations who established themselves upon the ruins of the Roman empire. in all countries. At Rome. not so much the different quantities of silver for which it was commonly sold. In process of time. In the progress of industry. gold was not considered as a legal tender for a long time after it was coined into money. was originally a silver coin. but as being the nearest approximation which can commonly be had to that proportion. 3).common life in which price is concerned. The Romans are said to have had nothing but copper money till within five years before the first Punic war (Pliny. seem to have had silver money from the first beginning of their settlements. upon different occasions. not as being always exactly in the same proportion as the current prices of labour. in most countries. however. as the different quantities or labour which those different quantities of silver could have purchased. We must in this case compare. and as people became gradually more familiar with the use of the different metals in coin. I believe. They have always. of Great Britain. and that which was not the standard. Copper is not at present a legal tender. The word sestertius signifies two asses and a half. In this state of things. except in the change of the smaller silver coins. and . and the value of all estates to have been computed. however. or the different degrees of power over the labour of other people which it may. in all other modern nations of Europe.

however. in silver money. and very frequently £4 an ounce. But as. and a smaller in the other. in the same manner as before. was worn and defaced too. which. for example. however. and a shilling can at any time be had for them. and of expressing the amount of all great and small sums rather in silver than in gold money. would be considered as the metal which was peculiarly the standard or measure of value. the greater part of payments could in either case be made with the same quantity of silver money as before. this distinction becomes. Gold would appear to measure the value of silver. and the value of silver would not seem to depend upon the quantity of gold which it would exchange for. The late regulations have brought the gold coin as near. a pound weight of gold is coined into forty-four guineas and a half. by the regulation. which. for many years. would be altogether owing to the custom of keeping accounts. in this manner should ever become general. If the regulated value of a guinea. therefore. If the custom of keeping accounts. without any deduction. the price of standard gold bullion in the market had. gets back a pound weight or an ounce weight of gold in coin. however. one-and-twenty shillings of this degraded silver coin are still considered as worth a guinea of this excellent gold coin. is seldom worth seven-pence in silver. This difference. and that which is not the standard. In reality. but would require very different quantities of gold money. after such an alteration. which is the standard. and almost all obligations for debt being expressed. is worth £ 3:17:10½ in silver. were considered as equivalent to a guinea. Twelve copper pence contain half a pound avoirdupois of copper. that . or be a legal tender for a debt of that amount. Silver would appear to measure the value of gold. becomes little more than a nominal distinction. twelve such pence are ordered to exchange for a shilling. An ounce of such gold coin. during the continuance of any one regulated proportion between the respective values of the different metals in coin. and he who carries a pound weight or an ounce weight of standard gold bullion to the mint. therefore. before it is coined. and not silver. In the payment of such a note. for example. however. as long as that order is enforced. In the market. The silver coin still continues in the same worn and degraded state as before the reformation of the cold coin. and silver would not appear to measure the value of gold. been upwards of £3:18s. It would. is equal to forty-six pounds fourteen shillings and sixpence. The value of gold would seem to depend upon the quantity of silver which it would exchange for. of such a weight and fineness. In this state of things. or the quantity of gold coin which the mint gives in return for standard gold bullion. gold. that part of it at least which circulated in London and its neighbourhood. and of expressing promissory-notes and other obligations for money. that a guinea. was in general less degraded below its standard weight than the greater part of the silver. The reformation of the gold coin has evidently raised the value of the silver coin which can be exchanged for it. and during the continuance of any one regulated proportion of this kind.to declare by a public law. after an alteration of this kind. perhaps. all accounts being kept. to its standard weight as it is possible to bring the current coin of any nation. was either reduced to twenty. no duty or seignorage is paid upon the coinage. of not the best quality. Before the reformation of the gold coin. In the English mint. In consequence of any change. the gold. the value of the most precious metal regulates the value of the whole coin. indeed. which at one-and-twenty shillings the guinea. and gold would not appear to measure the value of silver. gold would appear to be more invariable in its value than silver. the distinction between the metal. In England. but with very different quantities of silver. or raised to two-and-twenty shillings. in this regulated proportion. should exchange for one-and-twenty shillings. be payable with the same quantity of gold as before. something more than nominal again. perhaps. Three pounds seventeen shillings and tenpence halfpenny an ounce. and the order to receive no gold at the public offices but by weight. One of Mr Drummond's notes for five-and-twenty or fifty guineas would. but seldom so much so. be still payable with five-and-twenty or fifty guineas. or at least seems to become. One-and-twenty worn and defaced shillings. they are in the market considered as worth a shilling. Silver would appear to be more invariable in its value than gold. is likely to preserve it so. sometimes £ 3:19s. a greater in the one case. Even before the late reformation of the gold coin of Great Britain. is said to be the mint price of gold in England.

and five shillings and fivepence an ounce. was not supposed to require any reformation) regulated then. according to the common estimation of Europe. so silver is rated somewhat below it. five shillings and sixpence. for more silver than it is worth. exchange for more silver in coin than it would purchase in bullion. a pound weight of standard silver. is surely much greater than that of those who want silver bullion either for the use of exportation or for any other use. the real value of the whole coin. Five shillings and sevenpence. Before the reformation of the gold coin. he said. therefore. In the market of Europe. The inconveniency. upon different occasions. but likewise that of the silver coin in proportion to gold bullion. In the proportion between the different metals in the English coin. But the number of people who want silver coin for the common uses of buying and selling at home. would be less. or the quantity of silver coin which the mint gives in return for standard silver bullion. the market price of standard silver bullion has fallen occasionally to five shillings and threepence. it is probable. in order. In the English coin. even in England. for the same reason that copper in bars preserves its proper proportion to silver. in the worn and degraded gold coin. Since the reformation of the gold coin. be a profit in melting it down. Silver in bullion still preserves its proper proportion to gold. the market price of standard gold bullion seldom exceeds £ 3:17:7 an ounce. underrated in proportion to gold. But as the price of copper in bars is not. and a like prohibition of exporting gold coin. and to the prohibition of exporting silver coin. to be melted down in the same manner. five shillings and fourpence. rendered the demand for silver bullion greater than the demand for silver coin. as copper is rated very much above its real value. as well as now. five shillings and fourpence. five shillings and sevenpence. it is probable. Since the reformation of the gold coin. But in the English coin. according to the present proportion. though the price of the greater part of other commodities being influenced by so many other causes. and the gold coin (which at that time. it has not fallen so low as the mint price. Some alteration in the present proportion seems to be the only method of preventing this inconveniency. in the reign of William III. the market price was always more or less above the mint price. But that market price is the same whether it is paid in gold or in silver coin.. and afterwards to exchange this gold coin for silver coin. which last price it has scarce ever exceeded. and yet the price of gold bullion has fallen below the mint price. first to sell the bullion for gold coin. provided it was at the same time enacted. Mr Locke imputed this high price to the permission of exporting silver bullion. the rise in the value of either gold or silver coin in proportion to them may not be so distinct and sensible. Since that reformation. is said to be the mint price of silver in England. As the reformation of the silver coin did not then reduce the price of silver bullion to the mint price. and probably. it exchanges for about fifteen ounces. five shillings and fivepence. The silver coin containing its full standard weight. containing. has raised not only the value of the gold coin. an ounce of fine gold exchanges for about fourteen ounces of fine silver.sum. perhaps. the market price has been constantly below the mint price. Upon the reformation of the silver coin. In the English mint. There subsists at present a like permission of exporting gold bullion. a guinea. that is. the price of silver bullion still continued to be somewhat above the mint price. silver was then. in proportion to all other commodities. Though the market price of silver bullion has fallen considerably since the reformation of the gold coin. seems to have been the most common price. a pound weight of standard silver bullion is coined into sixty-two shillings. in the same manner as . there would in this case. if silver was rated in the coin as much above its proper proportion to gold as it is at present rated below it. too. too. in the same manner as now. therefore. the market price of standard silver bullion was. The late reformation of the gold coin. seldom containing more than an ounce of standard gold. Five shillings and twopence an ounce. Before the reformation of the gold coin. Were the silver coin brought back as near to its standard weight as the gold. would. in the French coin and in the Dutch coin. it is not very probable that a like reformation will do so now. so the price of silver in bullion is not sunk by the low rate of silver in English coin. and very often five shillings and eightpence an ounce. This permission of exporting. that silver should not be a legal tender for more than the change of a guinea. however. raised by the high price of copper in English coin. in the same manner.

and sometimes underdo it. at that time. or eleven ounces of fine gold. The constancy and steadiness of the effect supposes a proportionable constancy and steadiness in the cause. more or less an accurate measure or value. therefore. When. in England. of its own accord. silver was rated according to its proper proportion to gold. and one ounce of alloy. to suit their occasional importations to what they judge is likely to be the immediate demand. increase the value of the metal coined in proportion to the extent of this small duty. The money of any particular country is. as no creditor can at present be cheated in consequence of the high valuation of copper. in this case. even in our present excellent gold coin. and it may be thought. require.copper is not a legal tender for more than the change of a shilling. Three pounds seventeen shillings and tenpence halfpenny (the mint price of gold) certainly does not contain. With all their attention. a seignorage of about eight per cent. But gold in coin is more convenient than gold in bullion. the continual waste of them in gilding and plating. The occasional fluctuations in the market price of gold and silver bullion arise from the same causes as the like fluctuations in that of all other commodities. the price of silver bullion would probably fall below the mint price. the gold coin of England . and the French coin. either superiority or inferiority of price. But when. Abroad. it could sell only for its weight in bullion. can seldom be returned in coin to the owner till after a delay of several weeks. or more or less below the mint price. If in England. be cheated in consequence of the high valuation of silver in coin. at the same time. endeavour. the market price either of gold or silver bullion continues for several years together steadily and constantly. it would. in consequence. renders a certain quantity of coin either of more value or of less value than the precise quantity of bullion which it ought to contain. The bankers only would suffer by this regulation. When a run comes upon them. they sometimes overdo the business. of its own accord. they get something more than this price. and though this might. should not purchase more standard bullion. as well as they can. more than an ounce of standard gold. therefore. No creditor could. on the other hand. forty-four guineas and a half contained exactly a pound weight of standard gold. and though. in bringing it home again. This delay is equivalent to a small duty. we may believe. we may be assured that this steady and constant. The merchant importers. in the English coin. either more or less above. in the wear and tear of coin. be a considerable security to their creditors. at any particular time and place. In the present hurry of the mint. and would discourage its exportation. rather than incur the risk and trouble of exporting it again. it could not be returned till after a delay of several months. like all other merchants. when exported. a continual importation. At home. which. the value even of the present worn and defaced silver coin being regulated by the value of the excellent gold coin for which it can be changed. If. they sometimes endeavour to gain time. in lace and embroidery. in this case. under all those occasional fluctuations. even without any reformation of the silver coin. In France. according as the current coin is more or less exactly agreeable to its standard. is said to return home again. and renders gold in coin somewhat more valuable than an equal quantity of gold in bullion. upon any public exigency. by paying in sixpences. however. or contains more or less exactly the precise quantity of pure gold or pure silver which it ought to contain. in all countries which possess no mines of their own. is imposed upon the coinage. and they would be precluded by this regulation from this discreditable method of evading immediate payment. yet the gold which is carried in bullion to the mint. There would be a profit. the greater part of it would soon return again. When they import more bullion than is wanted. they are sometimes willing to sell a part of it for something less than the ordinary or average price. They would be obliged. If. would probably increase still more the superiority of those metals in coin above an equal quantity of either of them in bullion. they import less than is wanted. and in that of plate. it should become necessary to export the coin. The superiority of coin above bullion would prevent the melting down of the coin. for the same reason that the fashion increases the value of plate in proportion to the price of that fashion. the coinage is free. The coinage would. it would buy more than that weight. for example. is the effect of something in the state of the coin. The frequent loss of those metals from various accidents by sea and by land. in order to repair this loss and this waste. no doubt. to keep at all times in their coffers a greater quantity of cash than at present. A small seignorage or duty upon the coinage of both gold and silver. be a considerable inconveniency to them.

because it contained. upon an average. he finds. By the money price of goods. by experience. I understand always the quantity of pure gold or silver for which they are sold.. it is to be observed. In consequence of a like disorder in the coin. not to what those weights and measures ought to be. . it is found. upon an average. to be adjusted. the same quantity of pure silver. however. the measure of value comes to be liable to the same sort of uncertainty to which all other weights and measures are commonly exposed. for example.would be as accurate a measure of the actual value of goods at any particular time and place as the nature of the thing would admit. as nearly as we can judge. it actually does contain. not to the quantity of pure gold or silver which the coin ought to contain. but to what. by experience. by rubbing and wearing. the price of goods comes. I consider as the same money price with a pound sterling in the present times. the diminution. in the same manner. being greater in some pieces than in others. As it rarely happens that these are exactly agreeable to their standard. forty-four guineas and a half generally contain less than a pound weight of standard gold. the merchant adjusts the price of his goods as well as he can. but to that which. in the time of Edward I. But if. they actually are. without any regard to the denomination of the coin. Six shillings and eight pence.

In exchanging the complete manufacture either for money. while that of the other will expect about seven hundred . unless his profits were to bear some proportion to the extent of his stock. Or if the one species of labour requires an uncommon degree of dexterity and ingenuity. there are two different manufactures. the other the profits of their employer upon the whole stock of materials and wages which he advanced. are commonly made in the wages of labour. If the one species of labour should be more severe than the other. too. and the quantity of labour commonly employed in acquiring or producing any commodity. It is natural that what is usually the produce of two days or two hours labour. allowances of this kind. some of them will naturally employ it in setting to work industrious people. or for other goods. over and above what may be sufficient to pay the price of the materials. and bear no proportion to the quantity. In the advanced state of society. and the produce of one hour's labour in the one way may frequently exchange for that of two hour's labour in the other. is the only circumstance which can regulate the quantity of labour which it ought commonly to purchase. As soon as stock has accumulated in the hands of particular persons. or by what their labour adds to the value of the materials. in order to make a profit by the sale of their work. the whole produce of labour belongs to the labourer. are regulated by quite different principles. superior to what would be due to the time employed about it. while the finer materials in the other cost seven thousand. therefore. will naturally give a value to their produce. therefore. are only a different name for the wages of a particular sort of labour. Such talents can seldom be acquired but in consequence of long application. If among a nation of hunters.CHAPTER VI. The profits of stock. who hazards his stock in this adventure. for example. In this state of things. should be worth double of what is usually the produce of one day's or one hour's labour. They are. and are greater or smaller in proportion to the extent of this stock. the esteem which men have for such talents. whom they will supply with materials and subsistence. that in some particular place. and the wages of the workmen. it may perhaps be thought. at the rate of fifteen pounds a year each. whereas that employed in the other will amount to seven thousand three hundred pounds. and he could have no interest to employ a great stock rather than a small one. amount only to one thousand pounds. it usually costs twice the labour to kill a beaver which it does to kill a deer. At the rate of ten per cent. and something of the same kind must probably have taken place in its earliest and rudest period. one beaver should naturally exchange for or be worth two deer. or at the expense of three hundred a-year in each manufactory. the labour of inspection and direction. The capital annually employed in the one will. OF THE COMPONENT PART OF THE PRICE OF COMMODITIES. of which the one pays their wages. Let us suppose. however. something must be given for the profits of the undertaker of the work. command. for superior hardship and superior skill. in each of which twenty workmen are employed. for labour. where the common annual profits of manufacturing stock are ten per cent. Let us suppose. seems to be the only circumstance which can afford any rule for exchanging them for one another. the proportion between the quantities of labour necessary for acquiring different objects. and the superior value of their produce may frequently be no more than a reasonable compensation for the time and labour which must be spent in acquiring them. some allowance will naturally be made for this superior hardship. He could have no interest to employ them. altogether different. The value which the workmen add to the materials. In that early and rude state of society which precedes both the accumulation of stock and the appropriation of land. in this case. or the ingenuity of this supposed labour of inspection and direction. that the coarse materials annually wrought up in the one cost only seven hundred pounds. the undertaker of the one will expect a yearly profit of about one hundred pounds only. for example. unless he expected from the sale of their work something more than what was sufficient to replace his stock to him. or exchange for. They are regulated altogether by the value of the stock employed. the hardship. resolves itself in this case into two parts.

in the price of bread. who advances both the rent of this land. yet they never bear any regular proportion to the capital of which he oversees the management. The wood of the forest. In the price of commodities. the only circumstance which can regulate the quantity which it ought commonly to purchase. into the same three parts of rent. In every society. almost the whole labour of this kind is committed to some principal clerk. the whole produce of labour does not always belong to the labourer. the labour of tending and rearing him. and the third pays the profit of the farmer. Though in settling them some regard is had commonly. the whole price still resolves itself. must be due for the profits of the stock which advanced the wages and furnished the materials of that labour. more or less. and in the price of both. but of that which resolves itself into rent. Labour measures the value. it may perhaps be thought is necessary for replacing the stock of the farmer. when land was in common. the labour of transporting the corn from the house of the farmer to that of the miller. These three parts seem either immediately or ultimately to make up the whole price of corn. the grass of the field. for example. their labour of inspection and direction may be either altogether or very nearly the same. the price of every commodity finally resolves itself into some one or other. the profits of the baker. In the price of corn. each of them. still expects that his profit should bear a regular proportion to his capital. An additional quantity. and profit. another pays the wages or maintenance of the labourers and labouring cattle employed in producing it. to have an additional price fixed upon them. or for compensating the wear and tear of his labouring cattle. and from that of the miller to that of the baker. we must add to the price of the corn. such as a labouring horse. In the price of linen we must add to this price the wages of the flax-dresser. which. The real value of all the different component parts of price. This portion. therefore. and of that which resolves itself into profit. come. cost the labourer only the trouble of gathering them. makes a third component part. and in the price of the greater part of commodities. the profits of the miller. that part of the price which resolves . the landlords. In this state of things. together with the profits of their respective employers. and the wages of this labour. He must then pay for the licence to gather them. either immediately or ultimately. and the wages of his servants. labour. Neither is the quantity of labour commonly employed in acquiring or producing any commodity. the rent of the land upon which he is reared. but to the trust which is reposed in him. of the spinner. A fourth part. He must in most cases share it with the owner of the stock which employs him. or. In many great works. not only to his labour and skill. what comes to the same thing. like all other men. and must give up to the landlord a portion of what his labour either collects or produces. all the three enter. love to reap where they never sowed. the price of this portion. and regulated by quite different principles. as component parts. and all the natural fruits of the earth. command or exchange for. The price of flax resolves itself into the same three parts as that of corn. together with the profits of those who advance the wages of that labour.profit of about one hundred pounds only. and demand a rent even for its natural produce. of the weaver. it must be observed. the profits of stock constitute a component part altogether different from the wages of labour. Though the price of the corn. or all of those three parts. and the profits of the farmer. and in every improved society. etc. constitutes the rent of land. and other instruments of husbandry. it is evident. into the price of the far greater part of commodities. that the price of any instrument of husbandry. But it must be considered. In the price of flour or meal. one part pays the rent of the landlord. But though their profits are so very different. is measured by the quantity of labour which they can. As any particular commodity comes to be more manufactured. while that of the other will expect about seven hundred and thirty pounds. His wages properly express the value of this labour of inspection and direction. purchase or command. and the owner of this capital. may pay the price as well as the maintenance of the horse. As soon as the land of any country has all become private property. is itself made up of the same time parts. of the bleacher. and the wages of his servants. therefore. not only of that part of price which resolves itself into labour. even to him. though he is thus discharged of almost all labour.

Wages. they are readily distinguished. along the sea-shore. and rent. the wages of the weavers: and the profits must always bear some proportion to the capital. the profits of their stock. and be parcelled out among different inhabitants of the country. and bringing it to market. but every subsequent profit is greater than the foregoing. but lends it to another. for the profit which he has an opportunity of making by the use of the money. at least in common language. and are paid either immediately or mediately from the wages of labour. who affords him the opportunity of making this profit. is called rent. In the progress of the manufacture. and a still smaller number. however. A gentleman who farms a part of his own estate. are the three original sources of all revenue. In the most improved societies. though it does sometimes. all salaries. profit. must resolve itself into the same three parts. as well as wares and profit. is in this manner originally distributed among some of its different members. as well as of all exchangeable value. To him. unless perhaps the borrower is a spendthrift. as whatever part of it remains after paying the rent of the land. however. for example. those little variegated stones commonly known by the name of Scotch pebbles. but pays. so that of all the commodities which compose the whole annual produce of the labour of every country. When those three different sorts of revenue belong to different persons. his . they are sometimes confounded with one another. taken complexly. who runs the risk and takes the trouble of employing it. He is apt to denominate. All taxes. It is otherwise. and rent. Part of that profit naturally belongs to the borrower. and to make the profits of this stock. though it cannot well be called the rent of land. if it is not paid from the profit which is made by the use of the money. is called profit. or the rent of land. In the price of sea-fish. As the price or exchangeable value of every particular commodity. must be paid from some other source of revenue. It is the compensation which the borrower pays to the lender. because the capital from which it is derived must always be greater. from his stock. and the price of the whole labour employed in raising. neither rent nor profit makes an part of it. not only the number of profits increase. or all of those three parts. and the other the profits of the capital employed in the fishery. should gain both the rent of the landlord and the profit of the farmer. comes to be greater in proportion to that which resolves itself into rent. and part to the lender. taken separately. Whoever derives his revenue from a fund which is his own. which. and belongs to the landlord. or from his land. in river fisheries.itself into wages and profit. either as the wages of their labour. The price which is paid to them by the stone-cutter. The revenue derived from labour is called wages. Rent very seldom makes any part of it. must be greater than that which employs the spinners. besides. and partly from his stock. what comes to the same thing. A salmon fishery pays a rent. are ultimately derived from some one or other of those three original sources of revenue. The interest of money is always a derivative revenue. and the profits of stock. But the whole price of any commodity must still finally resolve itself into some one or other or all of those three parts. and all the revenue which is founded upon them. in which it consists altogether in the wages of labour. by the person who manages or employs it. The revenue of the farmer is derived partly from his labour. land is only the instrument which enables him to earn the wages of this labour. after paying the expense of cultivation. for example. must draw it either from his labour. or the rent of their land. and annuities of every kind. who contracts a second debt in order to pay the interest of the first. resolves itself into some one or other. makes a part of the price of a salmon. the whole price of it. because it not only replaces that capital with its profits. must necessarily be profit to somebody. a few poor people make a trade of gathering. is called the interest or the use of money. the profits of stock. All other revenue is ultimately derived from some one or other of these. is altogether the wages of their labour. manufacturing. The whole of what is annually either collected or produced by the labour of every society. as I shall shew hereafter. In some parts of Scotland. at least through the greater part of Europe. but when they belong to the same. or. there are always a few commodities of which the price resolves itself into two parts only the wages of labour. one part pays the labour of the fisherman. that derived from stock. The capital which employs the weavers. pensions. The revenue which proceeds altogether from land. that derived from it by the person who does not employ it himself.

but frequently of its profit. They farm. but pay them the wages which are due to them. the greater part of them. must necessarily gain them. are commonly called profit. His whole gains.whole gain. according to the different proportions in which it is annually divided between those two different orders of people. after paying the rent. Whatever remains. are in this case confounded with profit. If the society were annually to employ all the labour which it can annually purchase. at least in common language. however. profit. so the produce of every succeeding year would be of vastly greater value than that of the foregoing. should pay him the rent of the first. after paying the rent and keeping up the stock. confounded with wages. The idle everywhere consume a great part of it. too. and. is commonly considered as the earnings of his labour. Common farmers seldom employ any overseer to direct the general operations of the farm. is called profit. and wages are. too. who has stock enough both to purchase materials. or continue the same from one year to another. however. The greater part of our North American and West Indian planters are in this situation. unites in his own person the three different characters. As in a civilized country there are but few commodities of which the exchangeable value arises from labour only. farmer. their own estates: and accordingly we seldom hear of the rent of a plantation. in this case. therefore. etc. What remains of the crop. But there is no country in which the whole annual produce is employed in maintaining the industrious. work a good deal with their own hands. and the wages of the third. They generally. . confounded with profit. A gardener who cultivates his own garden with his own hands. rent and profit contributing largely to that of the far greater part of them. Wages. and bringing that produce to market. The farmer. should not only replace to them their stock employed in cultivation. harrowers. His produce. should gain both the wages of a journeyman who works under a master. preparing. and to maintain himself till he can carry his work to market. as ploughmen. But wages evidently make a part of it. however. and thus confounds rent with profit. its ordinary or average value must either annually increase or diminish. by saving these wages. An independent manufacturer. Both rent and profit are. as the quantity of labour would increase greatly every year. so the annual produce of its labour will always be sufficient to purchase or command a much greater quantity of labour than what was employed in raising. therefore. both as labourers and overseers. of landlord. in this case. therefore. together with its ordinary profits. The whole. and labourer. the profit of the second. and the profit which that master makes by the sale of that journeyman's work.

The actual price at which any commodity is commonly sold. Such people may be called the effectual demanders. in the same manner. by employing his stock in some other way. and partly by the particular nature of each employment. he is evidently a loser by the trade. at the time and place in which they commonly prevail. which is generally suitable to the profit which he may reasonably expect from the sale of his goods. the proper fund of his subsistence. OF THE NATURAL AND MARKET PRICE OF COMMODITIES. or their subsistence.CHAPTER VII. as I shall shew hereafter. and profit. according as either the greatness of the deficiency. or declining condition. As. Though the price. therefore. and partly by the natural or improved fertility of the land. When the quantity of any commodity which is brought to market falls short of the effectual demand. These ordinary or average rates may be called the natural rates of wages. in common language. The commodity is then sold precisely for what it is worth. labour. since. since it maybe sufficient to effectuate the bringing of the commodity to market. both of wages and profit. he might have made that profit. in some sense. wages. so he advances to himself. partly by the general circumstances of the society. to have a demand for a coach and six. besides. or the wealth and wanton luxury of the competitors. A competition will immediately begin among them. and profit. their advancing. When the price of any commodity is neither more nor less than what is sufficient to pay the rent of the land. the commodity is then sold for what may be called its natural price. There is in every society or neighbourhood an ordinary or average rate. at least where there is perfect liberty. they do not repay him what they may very properly be said to have really cost him. some of them will be willing to give more. or for what it really costs the person who brings it to market. or below. is not always the lowest at which a dealer may sometimes sell his goods. is called its market price. yet. or exactly the same with its natural price. A very poor man may be said. is his revenue. what is called the prime cost of any commodity does not comprehend the profit of the person who is to sell it again. which leaves him this profit. and the profits of the stock employed in raising. happen to animate . as I shall shew hereafter. their riches or poverty. which is regulated. he advances to his workmen their wages. stationary. Unless they yield him this profit. and bringing it to market. and the demand of those who are willing to pay the natural price of the commodity. which must be paid in order to bring it thither. but his demand is not an effectual demand. too. all those who are willing to pay the whole value of the rent. as the commodity can never be brought to market in order to satisfy it. he might like to have it. The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market. profit and rent. There is likewise in every society or neighbourhood an ordinary or average rate of rent. if he sells it at a price which does not allow him the ordinary rate of profit in his neighbourhood. his own subsistence. It is different from the absolute demand. or the whole value of the rent. it is the lowest at which he is likely to sell them for any considerable time. the wages of the labour. which must be paid in order to bring it thither. therefore. preparing. Rather than want it altogether. or where he may change his trade as often as he pleases. in every different employment of labour and stock. cannot be supplied with the quantity which they want. His profit. for though. partly by the general circumstances of the society or neighbourhood in which the land is situated. and the market price will rise more or less above the natural price. according to their natural rates. This rate is naturally regulated. while he is preparing and bringing the goods to market. It may either be above. and their demand the effectual demand.

and as its actual produce is frequently much greater. while. according as the acquisition of the commodity happens to be of more or less importance to them. will prompt them to withdraw a part of their labour or stock. and frequently much less. The same excess in the importation of perishable. the interest of all other landlords will naturally prompt them to prepare more land for the raising of this commodity. to the effectual demand. produce very different quantities of corn. Hence the exorbitant price of the necessaries of life during the blockade of a town. on the contrary. But the same number of spinners or weavers will every year produce the same. etc. oil. some of the component parts of its price must be paid below their natural rate. or the wealth and wanton luxury of the competitors. or very nearly the same. If at any time it exceeds the effectual demand. quantity of linen and woollen cloth. the interest of the landlords will immediately prompt them to withdraw a part of their land. All the different parts of its price will rise to their natural rate. in any respect. in others. or stock. and sometimes force them down even somewhat below it. that the quantity never should exceed the effectual demand. according as the greatness of the excess increases more or less the competition of the sellers. to which the prices of all commodities are continually gravitating. the interest of all other labourers and dealers will soon prompt them to employ more labour and stock in preparing and bringing it to market. the same with the natural price. The quantity of every commodity brought to market naturally suits itself to the effectual demand. in some employments. The whole quantity upon hand can be disposed of for this price. happen to animate more or less the eagerness of the competition. the market price naturally comes to be either exactly. the interest of the labourers in the one case. is. produce very different quantities of commodities. But whatever may be the obstacles which hinder them from settling in this centre of repose and continuance. If.greatness of the deficiency. If it is rent. The competition of the different dealers obliges them all to accept of this price. wages. which must be paid in order to bring it thither. labour. from this employment. will occasion a much greater competition than in that of durable commodities. It is the interest of all those who employ their land. in different years. The natural price. and no more. that demand. naturally suits itself in this manner to the effectual demand. The whole quantity of industry annually employed in order to bring any commodity to market. as it were. in the importation of oranges. the same deficiency will generally occasion a more or less eager competition. Different accidents may sometimes keep them suspended a good deal above it. Some part must be sold to those who are willing to pay less. therefore. and the low price which they give for it must reduce the price of the whole. . Among competitors of equal wealth and luxury. some of the component parts of its price must rise above their natural rate. if it is wages or profit. or in a famine. It naturally aims at bringing always that precise quantity thither which may be sufficient to supply. and the whole price to its natural price. hops. The quantity brought thither will soon be sufficient to supply the effectual demand. and if it is wages or profit. they are constantly tending towards it. or as nearly as can be judged of. When the quantity brought to market exceeds the effectual demand. The quantity brought to market will soon be no more than sufficient to supply the effectual demand. If it is rent. the central price. When the quantity brought to market is just sufficient to supply the effectual demand. But. All the different parts of its price will soon sink to their natural rate. the quantity brought to market should at any time fall short of the effectual demand. but does not oblige them to accept of less. and the whole price to its natural price. The market price will sink more or less below the natural price. and of their employers in the other. for example. wine. and can not be disposed of for more. and it is the interest of all other people that it never should fall short of that demand. The same number of labourers in husbandry will. in bringing any commodity to market. in different years. it cannot be all sold to those who are willing to pay the whole value of the rent. or very nearly the same. it will produce always the same. It is only the average produce of the one species of industry which can be suited. or according as it happens to be more or less important to them to get immediately rid of the commodity. and profit. the same quantity of industry will. and no more than supply. than in that of old iron.

and even leave it as a legacy to his posterity. While that demand continues the same. according to their best judgment. and to be either altogether. The market is here understocked with labour. towards the natural price. The occasional and temporary fluctuations in the market price of any commodity fall chiefly upon those parts of its price which resolve themselves into wages and profit. His extraordinary gains arise from the high price which is paid for his private labour. or as nearly as can be judged of. either of wages or of profit. That part which resolves itself into rent is less affected by them. Secrets in manufactures are capable of being longer kept than secrets in trade. that. it must be acknowledged. Even though that demand. When. can seldom be long kept. If it was commonly known. variations in the quantity of what is brought to market. their natural price. a good deal above the natural price. not with work to be done. but with the much greater. the produce of equal quantities of labour being always the same. A public mourning raises the price of black cloth ( with which the market is almost always understocked upon such occasions). should continue always the same. for a long time together. the same with the natural price. nor to such great variations. A rent which consists either in a certain proportion. their great profit would tempt so many new rivals to employ their stocks in the same way. In settling the terms of the lease. Such fluctuations affect both the value and the rate. but it is seldom affected by them in its yearly rate. Secrets of this kind. the effectual demand being fully supplied. and sometimes particular regulations of policy. It sinks the price of coloured silks and cloths. with good management. than can be had. the wages of the workmen employed in preparing such commodities. that of the other varies not only with the variations in the demand. every man's experience will inform him. The price of the one species of commodities varies only with the variations in the demand. the market price would soon be reduced to the natural price. enjoy the advantage of his discovery as long as he lives. That the price of linen and woollen cloth is liable neither to such frequent. in many commodities. or very nearly the same. the landlord and farmer endeavour. with work done. The market is here overstocked both with commodities and with labour. therefore. It sinks. A rent certain in money is not in the least affected by them. in order to supply that demand. those who employ their stocks in supplying that market. according as the market happens to be either overstocked or understocked with commodities or with labour. In the other species of industry. but to the average and ordinary price of the produce. and. and sometimes rise a good deal above. not with labour. the quantity of the commodities brought to market will sometimes exceed a good deal. The market is understocked with commodities. therefore. is no doubt affected in its yearly value by all the occasional and temporary fluctuations in the market price of that rude produce. they may sometimes be able to keep the secret for several years together. But though the market price of every particular commodity is in this manner continually gravitating. by an increase in the effectual demand. for more work to be done. it can be more exactly suited to the effectual demand. not to the temporary and occasional. may. for which all demand is stopped for six months. and augments the profits of the merchants who possess any considerable quantity of it. either in its rate or in its value. the market price of some particular commodity happens to rise a good deal above the natural price. A dyer who has found the means of producing a particular colour with materials which cost only half the price of those commonly made use of. or with work to be done. with work done. for some time even below it. yet sometimes particular accidents. and thereby reduces the profits of the merchants who have any considerable quantity of them upon hand. perhaps. as the price of corn. They properly consist in the high wages of . may. their market price will be liable to great fluctuations. and the extraordinary profit can last very little longer than they are kept. will sometimes fall a good deal below. keep up the market price. If the market is at a great distance from the residence of those who supply it. It raises the wages of journeymen tailors. and may so long enjoy their extraordinary profits without any new rivals. perhaps for a twelvemonth. and more frequent. too. and sometimes fall short a good deal. are generally careful to conceal this change. however. It has no effect upon the wages of the weavers. sometimes natural causes. of the rude produce. if one may say so. of the effectual demand. the market price of the commodities is likely to do so too. to adjust that rate.than its average produce. or in a certain quantity. There is an effectual demand for more labour.

on the contrary. and that part of it which resolves itself into the rent of land. and may frequently. The same statutes of apprenticeship and other corporation laws. and in whole classes of employments. that all the land in a great country. The one is upon every occasion the highest which can be squeezed out of the buyers. indeed. from being employed about it. greatly above their natural rate. would soon rise to the natural price. and as their whole amount bears. are seldom out of their natural proportion to those of the other employments of labour and stock in their neighbourhood. however. The monopolists. The rent of the land which affords such singular and esteemed productions. can seldom continue long below. and at the same time continue their business. its natural price. not upon every occasion indeed. this at least would be the case where there was perfect liberty. a regular proportion to it. therefore. statutes of apprenticeship. or so much stock. which is fit for producing them. whether they consist in wages or profit. like the rent of some vineyards in France of a peculiarly happy soil and situation. of which. and would immediately withdraw either so much land or no much labour. Such enhancements of the market price may last as long as the regulations of policy which give occasion to them. for ages together. The whole quantity brought to market. Such enhancements of the market price are evidently the effect of natural causes. have the same tendency.that labour. A monopoly granted either to an individual or to a trading company. The natural price. Whatever part of it was paid below the natural rate. the operation may sometimes last for many years together. upon that account. bears no regular proportion to the rent of other equally fertile and equally well cultivated land in its neighbourhood. therefore. to operate for ever. and which may continue. which may hinder the effectual demand from ever being fully supplied. the other is the lowest which the sellers can commonly afford to take. therefore. and raise their emoluments. and all those laws which restrain in particular employments. has the same effect as a secret in trade or manufactures. by keeping the market constantly understocked by never fully supplying the effectual demand. But as they are repeated upon every part of his stock. together with the wages of the labour and the profits of the stock which were employed in preparing and bringing them to market. is the lowest which can be taken. The market price of any particular commodity. is in this case the part which is generally paid above its natural rate. The wages of the labour. or the price of free competition. that the quantity brought to market would soon be no more than sufficient to supply the effectual demand. and the profits of the stock employed in bringing such commodities to market. Such enhancements of the market price are evidently the effects of particular accidents. sell their commodities much above the natural price. which. enable the workman to raise his wages a good deal above their . when a manufacture is in prosperity. on the contrary. The exclusive privileges of corporations. They are a sort of enlarged monopolies. keep up the market price of particular commodities above the natural price. Its market price. the persons whose interest it affected would immediately feel the loss. though it may continue long above. they are commonly considered as extraordinary profits of stock. according to their natural rates. may not be sufficient to supply the effectual demand. and maintain both the wages of the labour and the profits of the stock employed about them somewhat above their natural rate. though in a less degree. Such commodities may continue for whole centuries together to be sold at this high price. may be disposed of to those who are willing to give more than what is sufficient to pay the rent of the land which produced them. but for any considerable time together. the competition to a smaller number than might otherwise go into them. or which it is supposed they will consent to give. The price of monopoly is upon every occasion the highest which can be got. Some natural productions require such a singularity of soil and situation.

is not near so durable in sinking the workman's wages below. The natural price itself varies with the natural rate of each of its component parts. when it decays. and in every society this rate varies according to their circumstances. When they are gone. The effect of such regulations. by the advancing. profit. and in what manner those circumstances are affected by the riches or poverty. Secondly.natural rate. I shall endeavour to shew what are the circumstances which regulate the rent of land. too. This is all that I think necessary to be observed at present concerning the deviations. sink either the wages of labour or the profits of stock below their natural rate. sometimes oblige him. I shall endeavour to shew what are the circumstances which naturally determine the rate of profit. stationary. The policy must be as violent as that of Indostan or ancient Egypt (where every man was bound by a principle of religion to follow the occupation of his father. endeavour to explain. as in raising them above their natural rate. of wages. their advancing. in the third place. to let them down a good deal below it. but to remain the same. Their operation in the one way may endure for many centuries. so in the other they exclude him from many employments. and in what manner. according to their riches or poverty. stationary. and rent. In the fourth and last place. endeavour to explain all the different circumstances which regulate this proportion. First. or declining state of the society. and the pecuniary profits in all the different employments of stock. those circumstances are affected by the like variations in the state of the society. and which either raise or lower the real price of all the different substances which it produces. I shall endeavour to explain what are the circumstances which naturally determine the rate of wages. of the market price of commodities from the natural price. . or declining condition. But though in many respects dependent upon the laws and policy. stationary. I shall. as fully and distinctly as I can. and was supposed to commit the most horrid sacrilege if he changed it for another). or declining condition. I shall. this proportion seems to be little affected by the riches or poverty of that society. and partly upon the different laws and policy of the society in which they are carried on. however. depends partly upon the nature of the different employments. by its advancing. the number of those who are afterwards educated to the trade will naturally suit itself to the effectual demand. This proportion. As in the one case they exclude many people from his employment. yet a certain proportion seems commonly to take place between both the pecuniary wages in all the different employments of labour. which can in any particular employment. in the four following chapters. whether occasional or permanent. but in the other it can last no longer than the lives of some of the workmen who were bred to the business in the time of its prosperity. and for several generations together. in all those different states. the causes of those different variations. Though pecuniary wages and profit are very different in the different employments of labour and stock. it will appear hereafter. or very nearly the same.

.

His maintenance is generally advanced to him from the stock of a master. the greater part of the workmen stand in need of a master. it would require only half the quantity of labour either to purchase or to produce it. or that a day's labour could produce only twice the quantity of work which it had done before. Had this state continued. or unless his stock was to be replaced to him with a profit. and to maintain himself till it be completed. or that a day's labour could produce ten times the quantity of work which it had done originally. Any particular quantity in it. till it be completed. and their wages and maintenance. He is both master and workman. the landlord demands a share of almost all the produce which the labourer can either raise or collect from it. however. for example. or the whole value which it adds to the materials upon which it is bestowed. therefore. long before the most considerable improvements were made in the productive powers of labour. The produce of labour constitutes the natural recompence or wages of labour. Though it required five times the quantity of other goods to purchase it. to advance them the materials of their work. But this original state of things. in appearance many things might have become dearer. in which the labourer enjoyed the whole produce of his own labour. This profit makes a second deduction from the produce of the labour which is employed upon land. than before. The acquisition. they would have been purchased likewise with the produce of a smaller quantity. would appear to be five times dearer than before. it would be twice as cheap. It includes what are usually two distinct revenues. that a single independent workman has stock sufficient both to purchase the materials of his work. therefore. Let us suppose. and enjoys the whole produce of his own labour. The produce of almost all other labour is liable to the like deduction of profit. therefore. or in the value which it adds to the materials upon which it is bestowed. for example. or have been exchanged for a greater quantity of other goods. to which the division of labour gives occasion. that in the greater part of employments the productive powers of labour had been improved to tenfold. In all arts and manufactures. ten times the original quantity of work in them would purchase only twice the original quantity in it. a pound weight. It was at an end. They would have been produced by a smaller quantity of labour. All things would gradually have become cheaper. the whole produce of labour belongs to the labourer. OF THE WAGES OF LABOUR. He has neither landlord nor master to share with him. In that original state of things which precedes both the appropriation of land and the accumulation of stock. In exchanging the produce of a day's labour in the greater part of employments for that of a day's labour in this particular one. His rent makes the first deduction from the produce of the labour which is employed upon land. and in this share consists his profit. but that in a particular employment they had been improved only to double. indeed. would be twice as easy as before. As soon as land becomes private property. and it would be to no purpose to trace further what might have been its effects upon the recompence or wages of labour. and as the commodities produced by equal quantities of labour would naturally in this state of things be exchanged for one another. He shares in the produce of their labour. unless he was to share in the produce of his labour. It seldom happens that the person who tills the ground has wherewithal to maintain himself till he reaps the harvest. In reality. It sometimes happens.CHAPTER VIII. and who would have no interest to employ him. . the farmer who employs him. But though all things would have become cheaper in reality. could not last beyond the first introduction of the appropriation of land and the accumulation of stock. the wages of labour would have augmented with all those improvements in its productive powers.

they are always abundantly heard of. being fewer in number. Masters are always and everywhere in a sort of tacit. sometimes the great profit which their masters make by their work. can combine much more easily: and the law. though they did not employ a single workman. In the long run. the profits of stock. however. It is not. though severely felt by them. who must either starve. besides. however. combination. upon all ordinary occasions.belonging to two distinct persons. The masters. though frequently of those of workmen. masters must generally have the advantage. have the advantage in the dispute. it has been said. because it is the usual. depends everywhere upon the contract usually made between those two parties. A landlord. but the necessity is not so immediate. and sometimes to the most shocking violence and outrage. could generally live a year or two upon the stocks. partly from the superior steadiness of the masters. We have no acts of parliament against combining to lower the price of work. and. Such combinations. in disputes with their workmen. But whether their combinations be offensive or defensive. a certain rate. is as ignorant of the world as of the subject. The workmen desire to get as much. partly from the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence. of their own accord. as possible. We seldom. the latter in order to lower. or merchant. What are the common wages of labour. sometimes the high price of provisions. These are always conducted with the utmost silence and secrecy till the moment of execution. otherwise it would be impossible for . and act with the folly and extravagance of desperate men. they have always recourse to the loudest clamour. whose interests are by no means the same. the workman may be as necessary to his master as his master is to him. without any provocation of this kind. of the combinations of masters. however. and scarce any a year. while it prohibits those of the workmen. They must even upon most occasions be somewhat more. A man must always live by his work. which nobody ever hears of. difficult to foresee which of the two parties must. and never cease to call aloud for the assistance of the civil magistrate. below which it seems impossible to reduce. that masters rarely combine. the masters can hold out much longer. In all such disputes. when the labourer is one person. and force the other into a compliance with their terms. sometimes enter into particular combinations to sink the wages of labour even below this rate. and the owner of the stock which employs him another. which. for any considerable time. accordingly. The workmen. and when the workmen yield. and in every part of Europe twenty workmen serve under a master for one that is independent. combine. and his wages must at least be sufficient to maintain him. to raise the price of their labour. however. they are never heard of by other people. Masters. a master manufacturer. and the wages of labour. are just as clamorous upon the other side. Their usual pretences are. upon these occasions. the wages of labour. or at least does not prohibit. but constant and uniform. labourers. a farmer. The masters. The former are disposed to combine in order to raise. But though. not to raise the wages of labour above their actual rate. the natural state of things. the ordinary wages even of the lowest species of labour. or frighten their masters into an immediate compliance with their demands. few could subsist a month. and journeymen. Many workmen could not subsist a week. very seldom derive any advantage from the violence of those tumultuous combinations. generally end in nothing but the punishment or ruin of the ringleaders. But whoever imagines. which they have already acquired. partly from the interposition of the civil magistrate. upon this account. as they sometimes do without resistance. and the wages of labour are everywhere understood to be. what they usually are. but many against combining to raise it. too. To violate this combination is everywhere a most unpopular action. We rarely hear. without employment. one may say. Such cases. In order to bring the point to a speedy decision. authorises. their combinations. there is. They are desperate. who sometimes. indeed. are not very frequent. and a sort of reproach to a master among his neighbours and equals. are frequently resisted by a contrary defensive combination of the workmen. too. the masters to give as little. and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants. hear of this combination.

common labourers earned in 1773. the revenue which is over and above what is necessary for the maintenance. These funds are of two kinds. according to this account. such as a weaver or shoemaker. that the wages of labour are highest. however. annuitant. the labour of the husband and wife together must. it is supposed. Thus far at least seems certain. The wages of labour. servants of every kind. and thus voluntarily break through the natural combination of masters not to raise wages. in order to make a profit by their work. The labour of an able-bodied slave. is computed to be worth double his maintenance. but in the most thriving. he naturally employs one or more journeymen with the surplus. three shillings and sixpence currency. These prices are all above the London price. being supposed no more than sufficient to provide for herself: But one half the children born. accordingly. There are certain circumstances. It is not. who bid against one another in order to get workmen. The increase of revenue and stock is the increase of national wealth. it is computed. ten shillings and sixpence currency. therefore. must. die before the age of manhood. journeymen tailors. and to maintain himself till he can dispose of it. attempt to rear at least four children. upon this account. has got more stock than what is sufficient to purchase the materials of his own work. ship-carpenters. When an independent workman. with a pint of rum. It is not the actual greatness of national wealth. journeymen. it is evident. a-day. whether in that abovementioned. naturally increases with the increase of national wealth. necessarily increases with the increase of the revenue and stock of every country. I shall not take upon me to determine. is continually increasing. equal to about two shillings and tenpence sterling. When in any country the demand for those who live by wages. labourers. England is certainly. and he will naturally increase the number of his journeymen. cannot be worth less than that of an able-bodied slave. but in what proportion. be able to earn something more than what is precisely necessary for their own maintenance. he employs either the whole or a part of the surplus in maintaining one or more menial servants. are much higher in North America than in any part of England. equal in all to six shillings and sixpence sterling. equal to four shillings and sixpence sterling. the stock which is over and above what is necessary for the employment of their masters. or many other. in the present times. or monied man. the labour of the wife. But the necessary maintenance of four children.him to bring up a family. Increase this surplus. equal to two shillings sterling. before the commencement of the late disturbances. secondly. evidently the lowest which is consistent with common humanity. Mr Cantillon seems. they may be enabled to bring up two children. he thinks. or in those which are growing rich the fastest. therefore. and enable them to raise their wages considerably above this rate. on account of her necessary attendance on the children. cannot increase but in proportion to the increase of the funds which are destined to the payment of wages. and cannot possibly increase without it. in order to bring up a family. one with another. and the race of such workmen could not last beyond the first generation. in order that two may have an equal chance of living to that age. to suppose that the lowest species of common labourers must everywhere earn at least double their own maintenance. the same author adds. may be nearly equal to that of one man. first. and. which sometimes give the labourers an advantage. The demand for those who live by wages. The demand for those who live by wages. The scarcity of hands occasions a competition among masters. in the richest countries. and wages are said . has a greater revenue than what he judges sufficient to maintain his own family. but its continual increase. The demand for those who live by wages. one with another. and he will naturally increase the number of those servants. therefore. house-carpenters and bricklayers. and cannot possibly increase without it. In the province of New York. and that of the meanest labourer. that. the workmen have no occasion to combine in order to raise their wages. when every year furnishes employment for a greater number than had been employed the year before. Increase this surplus. eight shillings currency. When the landlord. a much richer country than any part of North America. even in the lowest species of common labour. The poorest labourers. however. in order that. which occasions a rise in the wages of labour. worth sixpence sterling. five shillings currency.

be higher than it is anywhere in the mother-country. and. its real price. In the neighbourhood of Canton. many hundred. There would be a constant scarcity of employment. nor could the masters be obliged to bid against one another in order to get them. China has been long one of the richest. is as welcome to them as the most wholesome food to the people of other countries. The subsistence which they find there is so scanty. perhaps. is there frequently courted as a sort of fortune. but if they have continued for several centuries of the same. as in Europe. if possible. Any carrion. offering their services. there is a continual complaint of the scarcity of hands in North America. but live constantly in little fishing-boats upon the rivers and canals. Notwithstanding the great increase occasioned by such early marriages. A young widow with four or five young children. it is commonly said. wonder that the people in North America should generally marry very young. The hands. we must not expect to find the wages of labour very high in it. The price of provisions is everywhere in North America much lower than in England. If by digging the ground a whole day he can get what will purchase a small quantity of rice in the evening. almost in the same terms in which they are described by travellers in the present times. the funds destined for maintaining them increase. and most other European countries. however. in this case. naturally multiply beyond their employment. Marriage is encouraged in China. industry. still worse. In the British colonies in North America. It seems. If in such a country the wages off labour had ever been more than sufficient to maintain the labourer. But though North America is not yet so rich as England. one of the most fertile. In the worst seasons they have always had a sufficiency for themselves. The value of children is the greatest of all encouragements to marriage. instead of being a burden. the number of labourers employed every year could easily supply. acquired that full complement of riches which the nature of its laws and institutions permits it to acquire. would have so little chance for a second husband. and to enable him to bring up a family. he is contented. among the middling or inferior ranks of people in Europe. and sometimes many more. Those who live to old age. the number wanted the following year. may be of the greatest extent. that they are eager to fish up the nastiest garbage thrown overboard from any European ship. agree in the low wages of labour. they are not supposed to double in less than five hundred years. that is. The accounts of all travellers. would. There could seldom be any scarcity of hands. The poverty of the lower ranks of people in China far surpasses that of the most beggarly nations in Europe. that a numerous family of children. as it were. In Great Britain. Labour is there so well rewarded. and most populous. to have been long stationary. We cannot. the competition of the labourers and the interest of the masters would soon reduce them to the lowest rate which is consistent with common humanity. is a source of opulence and prosperity to the parents. though less for exportation. Nor in the present times is this increase principally owing to the continual importation of new inhabitants. for example. inconsistent in many other respects. describes its cultivation. countries in the world. Marco Polo. it is much more thriving. it has been found that they double in twenty or five-and-twenty years. frequently see there from fifty to a hundred. and even more than supply. and populousness. many thousand families have no habitation on the land. The demand for labourers. before it can leave their house. must be higher in a still greater proportion. the carcase of a dead dog or cat. not by the profitableness of children. The condition of artificers is. begging employment. yet if it has been long stationary. Though the wealth of a country should be very great. who. who visited it more than five hundred years ago. and the labourers would be obliged to bid against one another in order to get it. but to the great multiplication of the species. and advancing with much greater rapidity to the further acquisition of riches. the real command of the necessaries and conveniencies of life which it conveys to the labourer. the revenue and stock of its inhabitants. The labour of each child. therefore. and in the difficulty which a labourer finds in bringing up a family in China. Instead of waiting indolently in their work-houses for the calls of their customers. even long before his time. on the contrary. A dearth has never been known there. still faster than they can find labourers to employ. In . If the money price of labour. best cultivated. is computed to be worth a hundred pounds clear gain to them. it seems. The most decisive mark of the prosperity of any country is the increase of the number of its inhabitants.to be as high in the other colonies as in New York. they are continually running about the streets with the tools of their respective trades. The funds destined for the payment of wages. it is said. most industrious. but by the liberty of destroying them. though half putrid and stinking. or very nearly of the same extent. It had. therefore. descendants from their own body.

the wages of labour do not. therefore. be better illustrated than by the different state of those countries. the competition for employment would be so great in it. to be evidently more than what is precisely necessary to enable the labourer to bring up a family. so it is the natural symptom of increasing national wealth. notwithstanding their scanty subsistence. should not be very difficult. or one absolutely dependent on us for immediate subsistence. notwithstanding. or by the perpetration perhaps. on the other hand. cannot. three or four hundred thousand people die of hunger in one year. Every year the demand for servants and labourers would. or be driven to seek a subsistence. and that of the mercantile company which oppresses and domineers in the East Indies. Its towns are nowhere deserted by their inhabitants. they do not exceed what is necessary to maintain his family through the whole year. being highest when this expense is lowest. perhaps. which is consistent with common humanity. ought to save part of his summer wages. annual labour. The lands which had once been cultivated. consequently. the wages of labour seem. it will not be necessary to enter into any tedious or doubtful calculation of what may be the lowest sum upon winch it is possible to do this. either by begging. and the funds destined for maintaining it must not. on account of the extraordinary expense of fuel. Wages. Summer wages are always highest. The scanty maintenance of the labouring poor. In a fertile country. famine. would not be treated in this manner. consequently. but would either starve. must some way or another make shift to continue their race so far as to keep up their usual numbers. or very nearly the same. China. In Great Britain. would immediately prevail in that class. The lowest class of labourers. not being able to find employment in their own business. First. In order to satisfy ourselves upon this point. that they are going fast backwards. we maybe assured that the funds destined for the maintenance of the labouring poor are fast decaying. indeed. that the wages of labour are nowhere in this country regulated by this lowest rate. and that. in almost every part of Great Britain there is a distinction. therefore. This. Want. perhaps. where subsistence. There are many plain symptoms. The performance of this horrid office is even said to be the avowed business by which some people earn their subsistence. in the present times. several are every night exposed in the street. as to reduce the wages of labour to the most miserable and scanty subsistence of the labourer. are nowhere neglected. or drowned like puppies in the water. does not seem to go backwards. till the number of inhabitants in the country was reduced to what could easily be maintained by the revenue and stock which remained in it. it may be said. but by the quantity and supposed value of the work. however. as it is the necessary effect. therefore. and which had escaped either the tyranny or calamity which had destroyed the rest. The same. however. stand still. and where. Many would not be able to find employment even upon these hard terms. But. and mortality. even in the lowest species of labour. but with the overflowings of all the other classes. therefore. would be glad to seek it in the lowest. fluctuate with the price of provisions. through the whole year. must. between summer and winter wages. and of some other of the English settlements in the East Indies. His daily subsistence would be proportioned to his daily necessities. The lowest class being not only overstocked with its own workmen. These . But it would be otherwise in a country where the funds destined for the maintenance of labour were sensibly decaying. be less than it had been the year before. of the greatest enormities. Secondly. the maintenance of a family is most expensive in winter. The liberal reward of labour. in order to defray his winter expense. A labourer. A slave. it seems evident that they are not regulated by what is necessary for this expense. though it may.all great towns. continue to be performed. which had before been much depopulated. in all the different classes of employments. Many who had been bred in the superior classes. The difference between the genius of the British constitution. and their starving condition. is the natural symptom that things are at a stand. which protects and governs North America. and from thence extend themselves to all the superior classes. be sensibly diminished. in Great Britain. is nearly the present state of Bengal. perhaps.

in many parts of the kingdom. on the contrary. This difference. the country to which it is brought. and. as the price of provisions varies more from year to year than the wages of labour.vary everywhere from year to year. Grain. Thirdly. frequently from month to month. It is in Scotland supported by the evidence of the public fiars. Eighteen pence a day may be reckoned the common price of labour in London and its neighbourhood. they must be at their ease in times of moderate plenty. in general. The quality of grain depends chiefly upon the quantity of flour or meal which it yields at the mill. If such direct proof could require any collateral evidence to confirm it. and because the other is poor. are frequently a fourth or a fifth part. he walks a-foot. and the proof of it is. therefore. At a few miles distance. that this has likewise been the case in France. the usual price of common labour through the greater part of the low country of Scotland. Such a difference of prices. is dearer in Scotland than in England. therefore. Tenpence may be reckoned its price in Edinburgh and its neighbourhood. supplies the common people in Scotland with the greatest and the best part of their food. it falls to eightpence. it seems. With regard to France. where it varies a good deal less than in England. still more decisive with regard to Scotland than with regard to England. and in proportion to its quality it cannot be sold dearer in Scotland than the Scotch corn that comes to the same market in competition with it. can maintain their families in the one part of the united kingdom. of all sorts of luggage. grain was dearer in both parts of the united kingdom than during that of the present. in great towns than in the remoter parts of the country. If. while his neighbour walks afoot. If the labouring poor. I would observe. than in England. higher than at a few miles distance. though. much inferior to that of their neighbours of the same rank in England. has not. indeed. he keeps a coach. that though often dearer in appearance. if possible. or cheaper. At a few miles distance. through the greater part of the united kingdom. is not the cause. and the other poor. the way in which the labouring poor buy all things. there is the clearest proof. I have frequently heard it represented as the cause. in this respect. than to that of the price of provisions. the food of the common people. It has. either in place or time. The high price of provisions during these ten years past. and probably in most other parts of Europe. on the other hand. sometimes for half a century together. These. that man is. more to the increase of the demand for labour. taking one year with another. it falls to fourteen and fifteen pence. therefore. been accompanied with any sensible rise in the money price of labour. But English corn must be sold dearer in Scotland. they must be in affluence in the other. so. the most difficult to be transported. for reasons which I shall have occasion to explain hereafter. But . of all the different sorts of grain in every different county of Scotland. they must be in affluence where it is highest. but because the one is rich. would necessarily occasion so great a transportation of the most bulky commodities. twenty or five-and—twenty per cent. The price of labour. of the difference in their wages. in some. or in proportion to the measure of its bulk. owing. whence Scotland receives almost every year very large supplies. it appears evidently from experience. But in many places. or very nearly the same. annual valuations made upon oath. During the course of the last century. The prices of bread and butchers' meat are generally the same. it is generally cheaper in reality. can maintain their families in those parts of the kingdom where the price of labour is lowest. however. that the one is rich. according to the actual state of the markets. probably. in the mode of their subsistence. are generally fully as cheap. the wages of labour vary more from place to place than the price of provisions. It is not because one man keeps a coach. in these places. which is. but they are frequently quite opposite. Fourthly. which. This is a matter of fact which cannot now admit of any reasonable doubt. not only from one parish to another. or even to the measure of its weight. the variations in the price of labour not only do not correspond. But the wages of labour in a great town and its neighbourhood. and most other things which are sold by retail. but the effect. is not always sufficient to transport a man from one parish to another. Oatmeal. or in proportion to its quality. English grain is so much superior to the Scotch. If the labouring poor. is dearer in England than in Scotland. the country from which it comes. the labouring poor can maintain their families in dear years. by a strange misapprehension. and in affluence in those of extraordinary cheapness. the money price of labour remains uniformly the same. as would soon reduce them more nearly to a level. After all that has been said of the levity and inconstancy of human nature. almost from one end of the world to the other. with those in the price of provisions. indeed. but from one end of the kingdom.

The real recompence of labour. The greater part of the apples. with cheaper and better instruments of trade. In the last century. Ayrshire. If the labouring poor. Not only grain has become somewhat cheaper. in Burn's History of the Poor Laws. the most usual wages of common labour are now eight pence a-day. whose skill in political arithmetic is so much extolled by Dr Davenant. has. and experience seems to shew that law can never regulate them properly. The quantity of these. consisting of six persons. sometimes a shilling. and that the . that the increase in their price does not compensate the diminution in that of so many other things. Mr Gregory King. and in some less. imported from Flanders. The same thing may be said of turnips. very nearly still continues to be paid in some parts of the Highlands and Western islands. computed the ordinary income of labourers and out-servants to be fifteen pounds a-year to a family. it is equally certain that labour was much cheaper. not only according to the different abilities of the workman. things which were formerly never raised but by the spade. Both suppose the weekly expense of such families to be about twenty-pence a-head. All sort of garden stuff. though different in appearance. cost half the price which they used to do thirty or forty years ago. the most usual day-wages of common labour through the greater part of Scotland were sixpence in summer. though perhaps scarce anywhere so much as some exaggerated accounts of the present wages of labour have lately represented them to the public. The great improvements in the coarser manufactories of both linen and woollen cloth furnish the labourers with cheaper and better clothing. In England. but according to the easiness or hardness of the masters. accordingly. Soap. Through the greater part of the Low country. in the counties which border upon England. but many other things. Carron. though. and in a few other places where there has lately been a considerable rise in the demand for labour. cannot be ascertained very accurately anywhere. through the greater part of the kingdom. become a good deal dearer. and two not able. When it was first established. and even of the onions. the real quantity of the necessaries and conveniencies of life which it can procure to the labourer. they must make it up. and fivepence in winter. which the labouring poor an under any necessity of consuming. therefore. during the course of the present century. considerably since that time. too. the same price. If they cannot earn this by their labour. which he supposed to consist. of three and a half persons. etc. what are the most usual. computes the necessary expense of a labourer's family. and fermented liquors. In 1688. The price of labour. cabbages. the improvements of agriculture. for example. either by begging or stealing. have. He appears to have enquired very carefully into this subject {See his scheme for the maintenance of the poor.}. the wages of labour were higher in England than in Scotland. that luxury extends itself even to the lowest ranks of the people. probably on account of that neighbourhood.though it is certain. Three shillings a-week. and consequently its price. however. could bring up their families then. Where wages are not regulated by law. they must be much more at their ease now. on account of the greater variety of wages paid there in different places. therefore. corresponds very nearly at bottom with that of Judge Hales. different prices being often paid at the same place and for the same sort of labour. His calculation. about Edinburgh. from which the industrious poor derive an agreeable and wholesome variety of food. in some places more. Potatoes. one with another. it would naturally be regulated by the usual wages of common labourers. chiefly from the taxes which have been laid upon them. he supposes. it is more difficult to ascertain how much. as well as in the present. the father and mother. is so very small. or twenty-six pounds a-year. In the last century. must necessarily have increased with those improvements. manufactures. The demand for labour. In 1614. candles. tenpence. and those in the manufactories of the coarser metals. indeed. but which are now commonly raised by the plough. the pay of a foot soldier was the same as in the present times. in the last century. it must be observed. consumed in Great Britain. leather. salt. The common complaint. eightpence a-day. as well as with many agreeable and convenient pieces of household furniture. Lordchief-justice Hales. They have risen. though it has often pretended to do so. have become a great deal cheaper. has become cheaper. and commerce. Both the pecuniary income and expense of such families have increased considerably since that time through the greater part of the kingdom. who wrote in the time of Charles II. that in both parts of the united kingdom grain was somewhat dearer in the last century than in the present. at ten shillings a-week. the rank of people from which foot soldiers are commonly drawn. began much earlier than in Scotland. too. all that we can pretend to determine is. do not at present. carrots. were. about Glasgow. increased perhaps in a still greater proportion than its money price. two children able to do something.

that they who feed. It is in this manner that the demand for men. should have such a share of the produce of their own labour as to be themselves tolerably well fed. in North America. The liberal reward of labour. A half-starved Highland woman frequently bears more than twenty children. as may enable them to supply that continually increasing demand by a continually increasing population. the powers of generation. A greater number of fine children. or as an inconveniency. however will everywhere be found chiefly among the children of the common people. In some places. and frequently to destroy altogether.labouring poor will not now be contented with the same food. clothing. and lodging. and in China. as would soon force back its price to that proper rate which the circumstances of the society required. in the Highlands of Scotland. their excessive multiplication would soon lower it to this necessary rate. It is but equity. which has augmented. slow and gradual in the second. It seems even to be favourable to generation. who cannot afford to tend them with the same care as those of better station. in the fair sex. In foundling hospitals. marriage. does not always prevent. can never be regarded as any inconveniency to the whole. the deficiency of hands would soon raise it. seems always to weaken. so frequent among women of fashion. which satisfied them in former times. soon withers and dies. but its real recompence. may convince us that it is not the money price of labour only. No society can surely be flourishing and happy. in Europe. and is generally exhausted by two or three. and so severe a climate. and consequently to bring up a greater number. the passion for enjoyment. This great mortality. It is not uncommon. Luxury. while it inflames. The market would be so much understocked with labour in the one case. that it necessarily does this as nearly as possible in the proportion which the demand for labour requires. and in almost all places before they are nine or ten. Several officers of great experience have assured me. labourers. too. of which the far greater part of the members are poor and miserable. But poverty. make up the far greater part of every great political society. It is this demand which regulates and determines the state of propagation in all the different countries of the world. that. while a pampered fine lady is often incapable of bearing any. Servants. If the reward should at any time be less than what was requisite for this purpose. and lodged. is seldom seen anywhere than about a barrack of soldiers. but in so cold a soil. I have been frequently told. The tender plant is produced. arrive at the age of thirteen or fourteen. and altogether stationary in the last. Barrenness. perhaps. a smaller proportion of their children arrive at maturity. and so much overstocked in the other. from all the soldiers' children that were born in it. by enabling them to provide better for their children. is very rare among those of inferior station. in many places before they are seven. it seems. and no species can ever multiply be yond it. the mortality is still greater than among those of the common people. so far from recruiting their regiment. . Poverty. and workmen of different kinds. and it can do so in no other way than by destroying a great part of the children which their fruitful marriages produce. Though their marriages are generally more fruitful than those of people of fashion. one half the children die before they are four years of age. Very few of them. But in civilized society. clothe. though it does not prevent the generation. and stops it when it advances too fast. Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage. and if it should at any time be more. the reward of labour must necessarily encourage in such a manner the marriage and multiplication of labourers. It deserves to be remarked. and among the children brought up by parish charities. they have never been able to supply it with drums and fifes. however. and lodge the whole body of the people. it is only among the inferior ranks of people that the scantiness of subsistence can set limits to the further multiplication of the human species. though it no doubt discourages. quickens it when it goes on too slowly. clothed. If this demand is continually increasing. Every species of animals naturally multiplies in proportion to the means of their subsistence. like that for any other commodity. which renders it rapidly progressive in the first. besides. is extremely unfavourable to the rearing of children. necessarily regulates the production of men. naturally tends to widen and extend those limits. But what improves the circumstances of the greater part. to the society? The answer seems at first abundantly plain. for a mother who has born twenty children not to have two alive.

which. in ease and plenty. This. for example. in most men. in England. like every other human quality. is to lament over the necessary cause and effect of the greatest public prosperity. is. Ramuzzini. and in some other places. diminishing. in reality. and the comfortable hope of bettering his condition. is almost irresistible. But though the wear and tear of a free servant be equally at the expense of his master. from the experience of all ages and nations. improves in proportion to the encouragement it receives. A plentiful subsistence increases the bodily strength of the labourer. than in Scotland. continued for several days together is. according as the increasing. that it is in the progressive state. accordingly. Workmen. we shall always find the workmen more active. and liberally paid by the piece. . is by no means the case with the greater part. is at the expense of his master. perhaps. and Philadelphia. If it is not complied with. The wages of labour are the encouragement of industry. the stationary is dull. naturally introduce themselves into the management of the former. but that of a free servant is at his own expense. diligent. the consequences are often dangerous and sometimes fatal. The fund destined for replacing or repairing. indeed. and the desire of greater gain. it generally costs him much less than that of a slave. if I may say so. Almost every class of artificers is subject to some peculiar infirmity occasioned by excessive application to their peculiar species of work. The wear and tear of the latter. yet when soldiers have been employed in some particular sorts of work. so it increases the industry of the common people. or stationary demand of the society. that the work done by freemen comes cheaper in the end than that performed by slaves. That destined for performing the same office with regard to the freeman is managed by the freeman himself. is commonly managed by a negligent master or careless overseer. the same purpose must require very different degrees of expense to execute it. rather than when it has acquired its full complement of riches. The progressive state is. Great labour. than in remote country places. It appears. and to ruin their health and constitution in a few years. and miserable in the declining state. We do not reckon our soldiers the most industrious set of people among us. as much at the expense of his master as that of the former. perhaps.The wear and tear of a slave. one with another to continue the race of journeymen and servants. mutual emulation. when they can earn in four days what will maintain them through the week. that the condition of the labouring poor. it has been said. in the neighbourhood of great towns. wherever wages are higher than ordinary. the declining melancholy. as they generally are in manufactures. however. if not restrained by force. and expeditious. their officers have frequently been obliged to stipulate with the undertaker. The wages paid to journeymen and servants of every kind must be such as may enable them. than where they are low. accordingly. either of mind or body. the strict frugality and parsimonious attention of the poor as naturally establish themselves in that of the latter. Some workmen. and to hurt their health by excessive labour. The liberal reward of labour. Excessive application. Till this stipulation was made. or by some strong necessity. as it is the effect of increasing wealth. are very apt to overwork themselves. and even in country labour. naturally followed by a great desire of relaxation. frequently prompted them to overwork themselves. the wear and tear of the slave. as it encourages the propagation. when they are liberally paid by the piece. may happen to require. seems to be the happiest and the most comfortable. The disorders which generally prevail in the economy of the rich. in which the workmen are paid by the piece. is frequently the real cause of the idleness of the other three. so much and so loudly complained of. To complain of it. but sometimes too of dissipation and diversion. animates him to exert that strength to the utmost. has written a particular book concerning such diseases. so it is the cause of increasing population. New-York. however. is not supposed to last in his utmost vigour above eight years. I believe. while the society is advancing to the further acquisition. which requires to be relieved by some indulgence. The liberal reward of labour. It is found to do so even at Boston. that they should not be allowed to earn above a certain sum every day. Under such different management. Something of the same kind happens in many other trades. an eminent Italian physician. according to the rate at which they were paid. of the great body of the people. It is the call of nature. during four days of the week. It is hard in the stationary. the cheerful and the hearty state to all the different orders of the society. in reality. therefore. will be idle the other three. and of ending his days. A carpenter in London. which. where the wages of common labour are so very high. on the contrary. Where wages are high. sometimes of ease only. It deserves to be remarked.

The price of labour. or that men in general should work better when they are ill fed. and are obliged to become journeymen for subsistence. they have frequently occasion rather to moderate. Nothing can be more absurd. two of the largest classes of masters. it has been concluded. In cheap years it is pretended. than to imagine that men in general should work less when they work for themselves. relaxes. than to animate the application of many of their workmen. sooner or later. is less liable to the temptations of bad company. encourages masters. one of linen. Cheap years tend to increase the proportion of independent workmen to journeymen and servants of all kinds. many are willing to take it upon lower terms than ordinary. in the course of the year. A poor independent workman will generally be more industrious than even a journeyman who works by the piece. but that it should have this effect upon the greater part. If masters would always listen to the dictates of reason and humanity. Masters of all sorts. In years of plenty. the difficulty and uncertainty of subsistence make all such people eager to return to service. therefore. but. bring on the peculiar infirmity of the trade. in his separate independent state. It appears from his account. seems not very probable. by increasing the fund which is destined for the maintenance of servants. than by selling it at a low price in the market. Mr Messance. frequently make better bargains with their servants in dear than in cheap years. that the man who works so moderately. than when they are well fed. it is to be observed. A plentiful subsistence. I believe. cannot be well doubted. commend the former as more favourable to industry. receiver of the taillies in the election of St Etienne. too. while the number of those who offer to supply that demand diminishes. are generally among the common people years of sickness and mortality. It will be found. when they are disheartened than when they are in good spirits. The demand for servants increases. one of coarse woollens. and another of silk. That a little more plenty than ordinary may render some workmen idle. and that it has always been. upon such occasions. and a scanty one quickens their industry. and least in the dearest years. as to be able to work constantly. and in dear times more industrious than ordinary. is likely to be still greater. The superiority of the independent workman over those servants who are hired by the month or by the year. A French author of great knowledge and ingenuity. poor independent workmen frequently consume the little stock with which they had used to supply themselves with the materials of their work. disposes masters rather to diminish than to increase the number of those they have. More people want employment than easily get it. endeavours to shew that the poor do more work in cheap than in dear years. in every sort of trade. which cannot fail to diminish the produce of their industry. greatest in the cheapest. by diminishing the funds destined for the maintenance of servants. and whose wages and maintenance are the same. however. servants frequently leave their masters. and trust their subsistence to what they can make by their own industry. In dear years. workmen are generally more idle. But the same cheapness of provisions. therefore. in large manufactories. The one. depend very much upon the price of provisions. therefore. besides. have another reason for being pleased with dear years. which is copied from the registers of the public offices. and dear years to diminish it. farmers especially. frequently rises in cheap years. They naturally. expect more profit from their corn by maintaining a few more labouring servants. and the profits of the other. not only preserves his health the longest. whether they do much or do little. executes the greatest quantity of work. both which extend through the whole generality of Rouen. and find them more humble and dependent in the former than in the latter. The one enjoys the whole produce of his own industry. In years of scarcity. to employ a greater number. The rents of the one. therefore. the other shares it with his master. that the quantity and value of the goods made in all those three manufactories has generally been greater in cheap than in dear years. which. and the wages of both servants and journeymen frequently sink in dear years.and such as almost always. Farmers. when they are frequently sick than when they are generally in good health. But the high price of provisions. than when they work for other people. All the . Landlords and farmers. Years of dearth. so frequently ruin the morals of the other. carried on at Elbeuf. by comparing the quantity and value of the goods made upon those different occasions in three different manufactures.

therefore. who want more workmen. Those masters. therefore. and the money price of labour is determined by what is requisite for purchasing this quantity. In 1740. in order to make clothes for themselves and their families. however. till 1766. upon the prosperity or declension of other rival manufactures and upon the good or bad humour of their principal customers. and this extraordinary number cannot always be had. but are employed by some of their neighbours in manufactures for family use. Though the money price of labour. The plenty of a cheap year. upon this account. many people were willing to work for bare subsistence. therefore. increasing both in quantity and value. or to require an increasing. of which the records are sometimes published with so much parade. frequently makes no figure in those public registers. become independent labourers. a year of great scarcity. the demand for labour. appear to have declined very considerably. and that of coarse woollens in the West Riding of Yorkshire. on the contrary. which is probably done in cheap years. is sometimes high where the price of provisions is low. we must not. sufficient to maintain and employ a greater number of industrious people than had been employed the year before. determines the quantities of the necessaries and conveniencies of life which must be given to the labourer. and commonly spin. as the high price of provisions tends to raise it. bid against one another. though their produce may vary somewhat from year to year. besides. by diminishing the demand for labour. upon peace or war. as the . tends to raise the price of labour. stationary. In 1740. and from which our merchants and manufacturers would often vainly pretend to announce the prosperity or declension of the greatest empires. who leave their masters. It is because the demand for labour increases in years of sudden and extraordinary plenty. in order to get them. The produce of all great manufactures for distant sale must necessarily depend. by increasing the demand. The demand for labour. though with some variations. which sometimes lowers both the real and the money price of labour. Through the variations in the price of labour not only do not always correspond with those in the price of provisions. which sometimes raises both the real and the money price of their labour. it greatly exceeded what it had ever been before. or which. it would be still higher. The menservants. are growing manufactures. Upon examining. In the succeeding years of plenty. declined. or declining. and its produce did not rise to what it had been in 1755. both manufactures. the accounts which have been published of their annual produce. The manufacture of linen in Scotland. The contrary of this happens in a year of sudden and extraordinary scarcity. work for public sale. But in 1756. The produce of their labour. as upon the circumstances which affect the demand in the countries where they are consumed. the Scotch manufactures made more than ordinary advances. never enters the public registers of manufactures. if the price of provisions was high. tends to lower its price. The funds destined for employing industry are less than they had been the year before. and sinks in the other. but are frequently quite opposite. and diminishes in those of sudden and extraordinary scarcity. In a year of sudden and extraordinary plenty. imagine that the price of provisions has no influence upon that of labour. of which the produce is generally. The money price of labour is necessarily regulated by two circumstances. upon the whole. The Yorkshire manufacture. I have not been able to observe that its variations have had any sensible connection with the dearness or cheapness of the seasons. and the price of the necessaries and conveniencies of life. Even the independent workmen do not always. a year of extraordinary scarcity.three seem to be stationary manufactures. there are funds in the hands of many of the employers of industry. neither going backwards nor forwards. who bid one against another. the demand continuing the same. according as it happens to be increasing. it was more difficult to get labourers and servants. A considerable number of people are thrown out of employment. The scarcity of a dear year. are. A great part of the extraordinary work. stationary. another year or great scarcity. The women return to their parents. In that and the following year. indeed. indeed. not so much upon the dearness or cheapness of the seasons in the countries where they are carried on. or declining population. and it has continued to advance ever since. in order to get it. that the money price of labour sometimes rises in the one. after the repeal of the American stamp act.

which. those two opposite causes seem to counterbalance one another. There me many commodities. both at home and abroad. for his own advantage. and so far tends to diminish their consumption. which is probably.cheapness of provisions tends to lower it. In the ordinary variations of the prices of provisions. among those of a great society. The increase in the wages of labour necessarily increases the price of many commodities. in part. the more they naturally divide themselves into different classes and subdivisions of employments. For the same reason. he endeavours to supply them with the best machinery which either he or they can think of. by increasing that part of it which resolves itself into wages. and to make a smaller quantity of labour produce a greater quantity of work. takes place. More heads are occupied in inventing the most proper machinery for executing the work of each. and it is. What takes place among the labourers in a particular workhouse. the increase of stock. The greater their number. The same cause. come to be produced by so much less labour than before. that the increase of its price is more than compensated by the diminution of its quantity. therefore. The owner of the stock which employs a great number of labourers necessarily endeavours. however. . to make such a proper division and distribution of employment. that they may be enabled to produce the greatest quantity of work possible. more likely to be invented. which raises the wages of labour. in consequence of these improvements. therefore. the reason why the wages of labour are everywhere so much more steady and permanent than the price of provisions. tends to increase its productive powers. for the same reason.

which raises wages. like all others of the same kind. and almost from hour to hour. and by the 12th of Queen Anne. it has already been observed. religious zeal prohibited all interest. OF THE PROFITS OF STOCK. may lead us to form some notion of the progress of profit. was declared unlawful. cannot always tell you himself what is the average of his annual profit. The increase of stock. More. cap. seldom determine more than what are the most usual wages. their pace seems rather to have been gradually accelerated than retarded. either in the present or in ancient times. to five per cent. the increasing or declining state of the wealth of the society. therefore. The progress of interest. By the 37th of Henry VIII. Profit is so very fluctuating. but from day to day. or even when stored in a warehouse. It varies. All these different statutory regulations seem to have been made with great propriety. It may be laid down as a maxim. This prohibition. and rise as it rises. We can. and in many other parts of the kingdom. must sink as it sinks. the wealth and revenue of the country have been continually advancing. seems to have been rather above than below the market rate. as the usual market rate of interest varies in any country. to which goods. even in this case. In the reign of Edward VI. The statute of Henry VIII. not only by every variation of price in the commodities which he deals in. or the rate at which people of good credit usually borrowed. the government borrowed at three per cent. with any degree of precision. soon after the Restoration. the same competition must produce the same effect in them all.. therefore.CHAPTER IX. Since the time of Henry VIII. at three and a-half. and ten per cent. and that. to ascertain what are the average wages of labour. or in remote periods of time. It was reduced to six per cent. Accordingly. . the market rate of interest. It is affected. and four and a-half per cent. But though it may be impossible to determine. wherever little can be made by it. To ascertain what is the average profit of all the different trades carried on in a great kingdom. all interest above ten per cent. but those causes affect the one and the other very differently. and when there is a like increase of stock in all the different trades carried on in the same society. But even this can seldom be done with regard to the profits of stock. we may be assured that the ordinary profits of stock must vary with it. with any degree of precision. when carried either by sea or by land. but to have been going on faster and faster. Before the late war. When the stocks of many rich merchants are turned into the same trade. 8. but by the good or bad fortune both of his rivals and of his customers. less will commonly he given for it. four. it seems. Since the time of Queen Anne. continued to be the legal rate of interest till the 21st of James I. however. therefore. in the greater part of the different branches of trade and manufactures. that the person who carries on a particular trade. must be altogether impossible. are liable. their mutual competition naturally tends to lower its profit. and not to have gone before. and in the course of their progress. was revived by the 13th of Elizabeth. and people of good credit in the capital. and by a thousand other accidents. It is not easy. when it was restricted to eight per cent. and probably rather increased than diminished the evil of usury. The wages of labour have been continually increasing during the same period. and to judge of what it may have been formerly. five per cent. some notion may be formed of them from the interest of money. The rise and fall in the profits of stock depend upon the same causes with the rise and fall in the wages of labour. and. and at a particular time. not only from year to year. They seem not only to have been going on. must be much more difficult. what are or were the average profits of stock. even in a particular place. had sometimes been taken before that. They seem to have followed. the profits of stock have been diminishing. tends to lower profit. that wherever a great deal can be made by the use of money. a great deal will commonly be given for the use of it. is said to have produced no effect.

for it is evidently advancing. either in whole or in part may be demanded at pleasure. a purpose which has sometimes been executed. People of the best credit there seldom borrow under five per cent. is ill-founded. and lowers the profits of stock. it is said in the latter (in which. in countries where the rate of interest is higher than in their own. During the late war. The Abbé Terray raised it afterwards to the old rate of five per cent. even with regard to France. Even private bankers in Edinburgh give four per cent. merchants are very apt to complain that trade decays. which lowers the wages of labour. France.It generally requires a greater stock to carry on any sort of trade in a great town than in a country village. in proportion to the extent of its territory and the number of its people. and it is no doubt upon this account. In 1725. The great property which they possess both in French and English funds. it was reduced to the twenty-fifth penny. though no doubt a richer country than Scotland. and therefore bid against one another. the great sums which they lend to private people. the market rate has generally been higher. The government there borrow at two per cent. it has already been observed. and private people of good credit at three. it was raised to the thirtieth penny. are higher in France than in England. on the other hand. than in one where it is highly respected. I have been assured by British merchants who had traded in both countries. it has been pretended by some people. The province of Holland. but the steps by which it advances to a better condition. iii. When you go from Scotland to England. The common rate of profit. it is well known. generally reduce the rate of profit in the former below what it is in the latter. The profits of trade. they have several very safe and easy methods of evading the law. the Dutch gained the whole carrying trade of France. therefore. but these symptoms seem to indicate sufficiently that there is no general decay. The trade of Holland. frequently cannot get the number of workmen they want. Private bankers in London give no interest for the money which is deposited with them. though the diminution of profit is the natural effect of its prosperity. seem to be much slower and more tardy.13}. When profit diminishes. or to four per cent. during the administration of Mr Laverdy. must be somewhat greater. The country. Article Taux des Interests. In 1724. In 1766. p. or to five per cent. for there. interest was reduced from the twentieth to the fiftieth penny. and raises the profits of stock. In a thriving town. tom. upon their promissory-notes. and who saw it twenty or thirty years ago. But the wages of labour are generally higher in a great town than in a country village. of which they still retain a very large share. though the legal rate of interest is the same as in England. who sees the country now. and it may perhaps be true that some particular branches of it are so. the market rate is rather higher. or from five to two per cent. sufficiently indicates the difference in their condition. not so rich a country as England. I suspect. that many British subjects chuse rather to employ their capitals in a country where trade is in disgrace. or of a greater stock being employed in it than before. The great stocks employed in every branch of trade. and though the legal rate of interest has in France frequently been lower than in England. or to three and a third per cent. There are few trades which cannot be carried on with a smaller stock in Scotland than in England. The wages of labour are said to be higher in Holland than in England. It is a common and even a popular opinion in the country. an opinion which I apprehend. as in other countries. The legal rate of interest in France has not during the course of the present century. is decaying. trade upon lower profits than any people in Europe. there is a considerable exaggeration ). there is frequently not stock sufficient to employ all the people. it was again raised to the twentieth penny. and the number of rich competitors. in the present times. The contrast is still greater when you return from France. too. are circumstances which no doubt demonstrate the redundancy of their stock. In Scotland. In 1720. seems not to be going forward so fast. of which payment. In the remote parts of the country. but which nobody can possibly entertain with regard to Scotland. The wages of labour are lower in France than in England. who therefore bid against one another. however. is a richer country than England. or that it has increased beyond what they can employ with tolerable profit in the proper business of their own country. is not only much poorer. been always regulated by the market rate {See Denisart. The wages of labour. and the Dutch. which raises the wages of labour. the people who have great stocks to employ. about forty millions. France is. in order to get as many as they can. The supposed purpose of many of those violent reductions of interest was to prepare the way for reducing that of the public debts. in order to get employment. are lower in Scotland than in England. but . perhaps. the difference which you may remark between the dress and countenance of the common people in the one country and in the other. that it is going backwards.

whatever be its profits. Those whom he can find. perhaps. however. the land near the sea-shore. may sometimes raise the profits of stock. even in a country which is fast advancing in the acquisition of riches. and along the banks of navigable rivers. the profits must have been greater. In the greater part of our colonies. therefore. the competition comes to be Jess than before. The great difficulty is to get that little. which scarce ever go together. When you have got a little. therefore. both the legal and the market rate of interest have been considerably reduced during the course of the present century. The great accession both of territory and trade by our acquisitions in North America and the West Indies. or of new branches of trade. therefore. Stock employed in the purchase and improvement of such lands. commonly borrowed at five per cent. than the greater part of other countries. and yields a greater profit to those who deal in them. however. A new colony must always. is frequently purchased at a price below the value even of its natural produce. and consequently the interest of money. are very liberally rewarded. so it raises the profits of stock. is necessarily withdrawn from them. Such land. Money. afford to borrow at a higher interest. The wages of labour do not sink with the profits of stock. In all those old trades. As the capital of a private man. Part of what had before been employed in other trades. in which the competition being less. so may likewise the capital of a great nation. not only private people of the best credit. afford to pay a very large interest. generally increases faster than a small stock with great profits. in treating of the accumulation of stock. as with industrious individuals. Their price necessarily rises more or less. but the interest of money. is applied to those particular branches only which afford the greatest profit. The demand for labour increases with the increase of stock. stock may not only continue to increase. may increase beyond what he can employ in it. has partly been explained already. not being sufficient for the whole accession of business which such acquisitions present to the different people among whom it is divided. and after these are diminished. improvement. or of the funds destined for the maintenance of industry. interest has declined. When the most fertile and best situated lands have been all occupied. The acquisition of new territory. it is often easy to get more. and with them the interest of money. What they have. for some time. and four and a half per cent. A great stock. before that. says the proverb. are things. In the different colonies. who are advancing in the acquisition of riches. is applied to the cultivation only of what is most fertile and most favourably situated. They have more land than they have stock to cultivate. be more understocked in proportion to the extent of its territory. or of the demand for useful labour. The diminution of the capital stock of the society. The connection between the increase of stock and that of industry. and population. The market comes to be less fully supplied with many different sorts of goods. By the wages of labour being lowered. makes money. who. I shall hereafter have occasion to mention the reasons which dispose me to believe that the capital stock of Great Britain was not diminished. and. accordingly. as it lowers the wages of labour. the owners of what stock remains in the society can bring their goods at less expense to market than before. had not been used to pay more than four. but to increase much faster than before. except in the peculiar circumstances of new colonies. are higher than in England. less profit can be made by the cultivation of what is inferior both in soil and situation. though acquired by a particular trade. and yet that trade continue to increase too. will sufficiently account for this. who can.they do not demonstrate that that business has decreased. must necessarily have diminished the quantity employed in a great number of particular branches. the profits of stock gradually diminish. For some time after the conclusion of the late war. So great an accession of new business to be carried on by the old stock. The stock of the country. and less . It is with industrious nations. and turned into some of the new and more profitable ones. and consequently the profits of stock. though with small profits. In our North American and West Indian colonies. not only the wages of labour. too. therefore. Its rapid accumulation in so profitable an employment enables the planter to increase the number of his hands faster than he can find them in a new settlement. but some of the greatest companies in London. and less interest can be afforded for the stock which is so employed. As the colony increases. even by the enormous expense of the late war. without supposing any diminution in the capital stock of the society. must yield a very large profit. but will be explained more fully hereafter. and more underpeopled in proportion to the extent of its stock. consequently. High wages of labour and high profits of stock. have increased. both the legal and the market rate of interest run from six to eight percent. As riches.

so such enormous usury must in its turn eat up the greater part of those profits. cannot transact the same quantity of business which it might do with different laws and institutions. and had. the oppression of the poor must establish the monopoly of the rich.stock being employed in supplying the market than before. not only to what can be made by the use of it. a usury of the same kind seems to have been common in the provinces. When the law does not enforce the performance of contracts. enjoy scarce any. fifty. Their goods cost them less. the nature of its soil. But. both the wages of labour and the profits of stock would probably be very low. and which was not going backwards. may. the poor. the quantity of stock employed in all the different branches of business transacted within it. The interest of money is proportionably so. therefore. that number could never be augmented. Montesquieu. Many people must borrow. money is frequently lent to the farmers at forty. Before the fall of the Roman republic. who. therefore. or the owners of large capitals. The high rate of interest which took place in those ancient times. which could. under the ruinous administration of their proconsuls. or people of doubtful credit. enjoy a good deal of security. by engrossing the whole trade to themselves. might admit of. Twelve per cent. though the rich. under the pretence of justice. and the ordinary profits of stock must be sufficient to afford this large interest. not from their poverty. The lowest ordinary rate of profit must always be something more than what is sufficient to . A defect in the law may sometimes raise the rate of interest considerably above what the condition of the country. But this complement may be much inferior to what. they can sell them dearer. as we learn from the letters of Cicero. climate. The high rate of interest among all Mahometan nations is accounted for by M. it puts all borrowers nearly upon the same footing with bankrupts. would everywhere be as great. would require. When the law prohibits interest altogether. and nobody will lend without such a consideration for the use of their money as is suitable. so the profits of stock are very high in those ruined countries. it does not prevent it. and its situation with respect to other countries. can never be equal to what the nature and extent of that business might admit. consequently. perhaps. no country has ever yet arrived at this degree of opulence. the performance of contracts was left for many ages to the faith of the contracting parties. or the owners of small capitals. China seems to have been long stationary. In a country. and partly from the difficulty of recovering the money. is said to be the common interest of money in China. In Bengal. In a country fully peopled in proportion to what either its territory could maintain. to be pillaged and plundered at any time by the inferior mandarins. therefore. the competition for employment would necessarily be so great as to reduce the wages of labour to what was barely sufficient to keep up the number of labourers. allowed it to acquire. and which admits the vessel of foreign nations into one or two of its ports only. too. may satisfy us. accordingly. The competition. and the country being already fully peopled. with other laws and institutions. A country which neglects or despises foreign commerce. long ago acquired that full complement of riches which is consistent with the nature of its laws and institutions. and the succeeding crop is mortgaged for the payment. as to wealth or poverty. The courts of justice of their kings seldom intermeddled in it. probably. In every different branch. As the profits which can afford such an interest must eat up almost the whole rent of the landlord. that as the wages of labour are very low. be partly accounted for from this cause. in better regulated countries. but partly from this. as great a quantity of stock would be employed in every particular branch as the nature and extent of the trade would admit. and they get more for them. The uncertainty of recovering his money makes the lender exact the same usurious interest which is usually required from bankrupts. where. and. will be able to make very large profits. The virtuous Brutus lent money in Cyprus at eight-and-forty per cent. and sixty per cent. being augmented at both ends. Their profits. advance no further. Among the barbarous nations who overran the western provinces of the Roman empire. but are liable. In a country which had acquired that full complement of riches which the nature of its soil and climate. perhaps. and situation. but to the difficulty and danger of evading the law. can well afford a large interest. The great fortunes so suddenly and so easily acquired in Bengal and the other British settlements in the East Indies. the ordinary profit as low as possible. In a country fully stocked in proportion to all the business it had to transact. or its stock employ.

high profits tend much more to raise the price of work than high wages. The workman must always have been fed in some way or other while he was about the work. as it were. The profits of the trade which the servants of the East India Company carry on in Bengal may not. be very far from this rate. in every particular branch of business. and enable those countries to sell as cheap as their less thriving neighbours. As it is ridiculous not to dress. and custom everywhere regulates fashion. perhaps. be something more than sufficient to compensate the occasional losses to which lending. it would be necessary to heighten the price of a piece of linen only by a number of twopences equal to the number of people that had been employed about it. multiplied by the number of days during which they had been so employed. insures it to the lender. in the same manner. Were it not. In a country where the ordinary rate of clear profit is eight or ten per cent. in the price of the greater part of commodities. require an additional five per cent. rise in geometrical proportion to this rise of profit. compensate the high wages of labour. it may be reasonable that one half of it should go to interest. the low rate of profit may. the flax-dressers. All people of small or middling fortunes would be obliged to superintend themselves the employment of their own stocks. for example. and more might be afforded if it were a good deal higher. The province of Holland seems to be approaching near to this state. that part of the price of the commodity which resolved itself into profit would. so is it. As a man of a civil profession seems awkward in a camp or a garrison. and leaves only what is sufficient to pay the labour of preparing and bringing them to market. may. What is called gross profit. there was the greatest quantity of stock that could be employed in it. is exposed. mere charity or friendship could be the only motives for lending. reasonable profit. one half of it. The interest which the borrower can afford to pay is in proportion to the clear profit only. who. If it were a good deal lower. or a good deal higher. or engage in some sort of trade. and a sufficient recompence for the trouble of employing the stock. the spinners. If. so the usual market rate of interest which could be afforded out of it would be so low as to render it impossible for any but the very wealthiest people to live upon the interest of their money. The lowest ordinary rate of interest must. the weavers. The highest ordinary rate of profit may be such as. necessarily varies as profit rises or falls. I apprehend. be both a sufficient profit upon the risk of this insurance. But if the profits of all the different employers of those working people should be raised five per cent. The employer of the flax dressers would. wherever business is carried on with borrowed money. as the ordinary rate of clear profit would be very small. comprehends frequently not only this surplus. through all the different stages of the manufacture. could not be afforded for interest. would. The . the bare subsistence of the labourer. in the linen manufacture. eats up the whole of what should go to the rent of the land. in the price of many commodities. The stock is at the risk of the borrower. where. in some measure. rise only in arithmetical proportion to this rise of wages. In countries which are fast advancing to riches. In a country which had acquired its full complement of riches. Necessity makes it usual for almost every man to be so.compensate the occasional losses to which every employment of stock is exposed. It would be necessary that almost every man should be a man of business. the wages of the different working people. and is even in some danger of being despised there. so does an idle man among men of business. That part of the price of the commodity which resolved itself into the wages. It is this surplus only which is neat or clear profit. but the landlord may not always have been paid. etc. In reality. It is there unfashionable not to be a man of business. among whom the wages of labour may be lower. mean no more than a common and usual profit. But the proportion between interest and clear profit might not be the same in countries where the ordinary rate of profit was either a good deal lower. in the greater part of trades. The proportion which the usual market rate of interest ought to bear to the ordinary rate of clear profit. through all the different stages of the manufacture. but what is retained for compensating such extraordinary losses. not to be employed like other people. Double interest is in Great Britain reckoned what the merchants call a good. according to the lowest rate at which labour can anywhere be paid. moderate. upon the whole value of the materials and wages which he advanced to his workmen. even with tolerable prudence. should all of them be advanced twopence a-day. terms which. and four or five per cent. perhaps. in selling his flax.

and upon the wages of the spinners. And the employer of the weavers would require alike five per cent. they are silent with regard to the pernicious effects of their own gains. both at home and abroad. they complain only of those of other people.employer of the spinners would require an additional five per cent. The rise of profit operates like compound interest. the rise of wages operates in the same manner as simple interest does in the accumulation of debt. . both upon the advanced price of the flax. and upon the wages of the weavers. They say nothing concerning the bad effects of high profits. and thereby lessening the sale of their goods. Our merchants and master manufacturers complain much of the bad effects of high wages in raising the price. In raising the price of commodities. both upon the advanced price of the linen-yarn.

and to shun the disadvantageous employment. in the same neighbourhood. partly from certain circumstances in the employments themselves. in the same neighbourhood. are everywhere in Europe extremely different. make up for a small pecuniary gain in some. . there was any employment evidently either more or less advantageous than the rest. either really. and partly from the policy of Europe. and counterbalance a great one in others. at least. The particular consideration of those circumstances. OF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS OF LABOUR AND STOCK. and of that policy. or at least in the imagination of men. and where every man was perfectly free both to choose what occupation he thought proper. and so many would desert it in the other. The whole of the advantages and disadvantages of the different employments of labour and stock. or continually tending to equality.CHAPTER X. If. and to change it as often as he thought proper. Every man's interest would prompt him to seek the advantageous. This. will divide this Chapter into two parts. indeed. so many people would crowd into it in the one case. But this difference arises. would be the case in a society where things were left to follow their natural course. that its advantages would soon return to the level of other employments. where there was perfect liberty. be either perfectly equal. which. which nowhere leaves things at perfect liberty. according to the different employments of labour and stock. Pecuniary wages and profit. must.

A journeyman blacksmith. will replace the capital laid out upon it. the licensed hunter is not in a much better condition. The most detestable of all employments. the wages of labour vary with the ease or hardship. thirdly. become. The work which he learns to perform. The keeper of an inn or tavern. is less dangerous. {See Idyllium xxi. A poacher is everywhere a very poor man in Great Britain.}. and. they are all very poor people who follow as a trade. regard being had to the very uncertain duration of human life. who is only a labourer. In countries where the rigour of the law suffers no poachers. Fishermen have been so since the time of Theocritus. it must be expected. of the employment. Honour makes a great part of the reward of all honourable professions. is. than can live comfortably by them. though an artificer. over and above the usual wages of common labour. it must be expected. and above ground. so far as I have been able to observe. the cleanliness or dirtiness. The five following are the principal circumstances which. Thus in most places. The trade of a butcher is a brutal and an odious business. but it is in most places more profitable than the greater part of common trades. will replace to him the whole expense of his education. The natural taste for those employments makes more people follow them. is founded upon this principle. or the difficulty and expense. the wages of labour vary with the easiness and cheapness. to afford any thing but the most scanty subsistence to the labourers. as a collier. First. what other people pursue as a pastime. secondly. fourthly. take the year round. better paid than any common trade whatever. The difference between the wages of skilled labour and those of common labour. or the difficulty and expense of learning them. the agreeableness or disagreeableness of the employments themselves. they are generally under-recompensed. who is never master of his own house. Disagreeableness and disgrace affect the profits of stock in the same manner as the wages of labour. and is carried on in day-light. Disgrace has the contrary effect. His work is much easier. their most agreeable amusements. In the advanced state of society. therefore.PART I. Secondly. as I shall endeavour to shew by and by. A man educated at the expense of much labour and time to any of those employments which require extraordinary dexterity and skill. Hunting and fishing. exercises neither a very agreeable nor a very creditable business. It must do this too in a reasonable time. His work is not quite so dirty. the small or great trust which must be reposed in those who exercise them. but it is much cleanlier. and they pursue for pleasure what they once followed from necessity. Inequalities arising from the nature of the employments themselves. the probability or improbability of success in them. the honourableness or dishonourableness. the constancy or inconstancy of employment in them. A journeyman weaver earns less than a journeyman smith. First. His work is not always easier. fifthly. in proportion to the quantity of work done. the easiness and cheapness. the extraordinary work to be performed by it before it is worn out. does in eight. that of public executioner. But there is scarce any common trade in which a small stock yields so great a profit. with at least the ordinary profits. . and who is exposed to the brutality of every drunkard. may be compared to one of those expensive machines. In point of pecuniary gain. in its advanced state. comes always too cheap to market. with at least the ordinary profits of an equally valuable capital. seldom earns so much in twelve hours. and counterbalance a great one in others. of learning the business. and the produce of their labour. the most important employments of mankind in the rude state of society. in proportion to its quantity. a journeyman tailor earns less than a journeyman weaver. When any expensive machine is erected. all things considered. make up for a small pecuniary gain in some employments. in the same manner as to the more certain duration of the machine.

are nearly upon a level with the day-wages of common labourers. in most places. What he earns. is still more tedious and expensive. During the continuance of the apprenticeship. accordingly. artificers. give time. and where the former earn nine and ten. for it is not universally so. Their employment. in consequence. therefore. therefore. They are so accordingly. as skilled labour. therefore. It seems to suppose that of the former to be of a more nice and delicate nature than that of the latter. in reality. In most places. the wages of labour in different occupations vary with the constancy or inconstancy of employment. of lawyers and physicians. those of masons and bricklayers are generally from one-half more to double those wages. indeed. and the superiority of their earnings. too. but in the greater part it is quite otherwise. His employment. be maintained by his parents or relations. He is liable. Thirdly. as the compensation for the inconstancy of their employment. be considered as a superior rank of people. the latter often earn nine and ten. and their superior gains make them. A house-carpenter seems to exercise rather a nicer and a more ingenious trade than a mason. of painters and sculptors. Education in the ingenious arts. Some money. either of foreign or domestic trade. must be clothed by them. Where common labourers earn four or five shillings a-week. as I shall endeavour to shew by and by.The policy of Europe considers the labour of all mechanics. a consideration which. and that of all country labourers us common labour. They leave the other free and open to every body. and his own labour maintains him through all the different stages of his employment. the whole labour of the apprentice belongs to his master. very little more than the day-wages of common labourers. the labourer. masons and bricklayers frequently earn seven and eight. and. however. The high wages of those workmen. All the different ways in which stock is commonly employed in great towns seem. though it is not always advantageous to the master. In the greater part of manufactures. can work neither in hard frost nor in foul weather. computed at an average. and manufacturers. learns the more difficult parts of his business. Where the computed earnings of the greater part of manufacturers. . and it is so accordingly. that in Europe the wages of mechanics. and it is not liable to be interrupted by the weather. on the contrary. while he is employed about the easier. The laws and customs of Europe. on the contrary. It is reasonable. are. It is so perhaps in some cases. It seems evidently. to be frequently without any. in order to qualify any person for exercising the one species of labour. but make him some compensation for those anxious and desponding moments which the thought of so precarious a situation must sometimes occasion. and his employment at all other times depends upon the occasional calls of his customers. however. though it depends much. and manufacturers. One branch. in almost all cases. In the meantime he must. however. They who cannot give money. and in the liberal professions. during the summer season. while he is employed. in many cases. or become bound for more than the usual number of years. does not depend so entirely upon the occasional calls of his customers. may be somewhat greater. in most places. is generally very small: the daily or weekly earnings of journeymen in the more common sorts of manufactures. on account of the usual idleness of apprentices. must not only maintain him while he is idle. therefore. The pecuniary recompence. Chairmen in London. taking the whole year together. his day-wages are somewhat lower. This superiority. are said sometimes to be employed as bricklayers. are not so much the recompence of their skill. is always disadvantageous to the apprentice. though with different degrees of rigour in different places. is more steady and uniform. therefore. The profits of stock seem to be very little affected by the easiness or difficulty of learning the trade in which it is employed. a journeyman maybe pretty sure of employment almost every day in the year that he is able to work. to be almost equally easy and equally difficult to learn. artificers. cannot well be a much more intricate business than another. is commonly given to the master for teaching him his trade. ought to be much more liberal. A mason or bricklayer. impose the necessity of an apprenticeship. the latter commonly earn fifteen and eighteen. however. In country labour. to be no greater than what is sufficient to compensate the superior expense of their education. as in London. where the former earn six. seems more easy to learn than that of masons and bricklayers. No species of skilled labour. such as those of plain linen and woollen cloth. Employment is much more constant in some trades than in others. should be somewhat higher than those of common labourers.

How extravagant soever those earnings may appear. The probability that any particular person shall ever be qualified for the employments to which he is educated. as. but in London they are often many weeks without employment. at the rate at which they were then paid. therefore. and dirtiness of his work. but upon their opinion of his fortune. the wages of the workmen always rise a good deal above their ordinary proportion to those of common labour. the wages of common labour. disagreeableness. be as constant as he pleases. The different rates of profit. commonly earn double and triple the wages of common labour. particularly during the summer. the employment of the greater part of them is necessarily very inconstant. upon most occasions. almost all journeymen artificers are liable to be called upon and dismissed by their masters from day to day. The wages of goldsmiths and jewellers are everywhere superior to those of many other workmen. when combined with this circumstance. depends. When the inconstancy of employment is combined with the hardship. therefore. The coal-heavers in London exercise a trade which. Put your son apprentice to a shoemaker. in a trade which has no exclusive privilege. In the greatest part of mechanic trades success is almost certain. and. from the unavoidable irregularity in the arrivals of coal-ships. almost equals that of colliers. When a person employs only his own stock in trade. Their reward must be such. but very uncertain in the liberal professions. in the same manner as daylabourers in other places. not only of equal. Whether the stock is or is not constantly employed. Fifthly. there is little doubt of his learning to make a pair of shoes. and. The constancy or inconstancy of employment cannot affect the ordinary profits of stock in any particular trade. not upon the trade. disagreeableness. and sometimes our life and reputation. and. to the lawyer and attorney. and dirtiness of the work. it was found that. accordingly. about three times. in many parts of Scotland. in the different branches of trade. the wages of labour in different employments vary according to the probability or improbability of success in them. our fortune. in every particular trade. dirtiness.When the trades which generally afford constant employment. to earn commonly about double. but send him to study the law. The lowest order of artificers. A collier working by the piece is supposed. it ought not to seem unreasonable that coal-heavers should sometimes earn four and five times those wages. depends. We trust our health to the physician. would quickly reduce them to a lower rate. probity and prudence. His employment may. In small towns and country villages. Such confidence could not safely be reposed in people of a very mean or low condition. it sometimes raises the wages of the most common labour above those of the most skilful artificers. not upon the nature of the trade. the lowest common earnings may always be considered as those of the far greater number. on account of the precious materials with which they are entrusted. the wages of labour vary according to the small or great trust which must be reposed in the workmen. they could earn from six to ten shillings a-day. earn their half-a-crown a-day. and from week to week. and disagreeableness. journeymen tailors. but the trader. Six shillings are about four times the wages of common labour in London. necessarily enhance still further the price of their labour. but of much superior ingenuity. Fourthly. His high wages arise altogether from the hardship. at Newcastle. and the credit which he may get from other people. if they were more than sufficient to compensate all the disagreeable circumstances of the business. in hardship. If colliers. there is no trust. In London. is very different in different occupations. it as at least twenty to one if he ever makes such proficiency as will enable him to live by the . as may give them that rank in the society which so important a trust requires. though eighteen pence may be reckoned the wages of common labour. happen in a particular place not to do so. In the inquiry made into their condition a few years ago. the wages of journeymen tailors frequently scarce equal those of common labour. cannot arise from the different degrees of trust reposed in the traders. The long time and the great expense which must be laid out in their education. therefore. there would soon be so great a number of competitors.

when in tolerable health and spirits. or one in which the whole gain compensated the whole loss. the natural confidence which every man has. But make the same computation with regard to all the counsellors and students of law. must be sufficient. and by scarce any man. is considered. First. in any particular place. It seems absurd at first sight. and sometimes forty per cent. To excel in any profession. Such talents. In a profession. at near forty years of age. not only of his own so tedious and expensive education. and. in proportion as it is higher or lower in degree. and the discredit of employing them in this manner. is an ancient evil remarked by the philosophers and moralists of all ages. for the sake of gain. opera-dancers. How extravagant soever the fees of counsellors at law may sometimes appear. The soberest people scarce look upon it as a folly to pay a small sum for the chance of gaining ten or twenty . who. and what is likely to be annually spent. The chance of gain is by every man more or less over-valued. all the most generous and liberal spirits are eager to crowd into them. labour. has not some share of it. if any thing could be made honourably by them. It is. not only to pay for the time. and the chance of loss is by most men undervalued. who. Two different causes contribute to recommend them. in that of law. though far from being common. advance. or superior talents. however. however. That the chance of gain is naturally overvalued. where twenty fail for one that succeeds. who is in tolerable health and spirits. valued more than it is worth. It makes a considerable part of that reward in the profession of physic. if possible. Compute. but in his own good fortune. and you will find that the former sum will generally exceed the latter. and the competition would quickly reduce the price of their labour. the rarity and beauty of the talents. a still greater. therefore.business. of those who exercise them in this manner. and many more are capable of acquiring them. whether from reason or prejudice. The public admiration which attends upon such distinguished abilities makes always a part of their reward. Those professions keep their level. and the latter as low. and you will find that their annual gains bear but a very small proportion to their annual expense. There is no man living. with other occupations. The lottery of the law. who are never likely to make any thing by it. we must of necessity do the other. The counsellor at law. nor ever will see. but for the discredit which attends the employment of them as the means of subsistence. of which the possession commands a certain sort of admiration. however. not only in his own abilities. in all the different Inns of Court. thirty. While we do the one. evidently under-recompensed. that one ought to gain all that should have been gained by the unsuccessful twenty. in poetry and philosophy it makes almost the whole. more or less. In the state lotteries. There are some very agreeable and beautiful talents. even though you rate the former as high. the desire of the reputation which attends upon superior excellence in any of them. The vain hopes of gaining some of the great prizes is the sole cause of this demand. we may learn from the universal success of lotteries. and that as well as many other liberal and honourable professions. and expense of acquiring the talents. Many people possess them in great perfection. it is the most decisive mark of what is called genius. The exorbitant rewards of players. is. those who draw the prizes ought to gain all that is lost by those who draw the blanks. what is likely to be annually gained. in point of pecuniary gain. a perfectly fair lottery. ought to receive the retribution. are by no means so rare as imagined. The over-weening conceit which the greater part of men have of their own abilities. their pecuniary recompence would quickly diminish. as can well be done. by all the different workmen in any common trade. that we should despise their persons. are founded upon those two principles. therefore. opera-singers. perhaps. and yet reward their talents with the most profuse liberality. The pecuniary recompence. Their absurd presumption in their own good fortune has been less taken notice of. as a sort of public prostitution. In a perfectly fair lottery. secondly. and yet commonly sell in the market for twenty. The world neither ever saw. but of which the exercise. begins to make something by his profession. because the undertaker could make nothing by it. notwithstanding these discouragements. and. but of that of more than twenty others. in which but few arrive at mediocrity. is very far from being a perfectly fair lottery. a greater or smaller. still more universal. More people would apply to them. their real retribution is never equal to this. who disdain to make this use of them. such as that of shoemakers or weavers. perhaps. Should the public opinion or prejudice ever alter with regard to such occupations. etc. the tickets are really not worth the price which is paid by the original subscribers.

in their youthful fancies. and. in actual service. and to afford such a profit as might have been drawn from an equal capital employed in any common trade. more than the chance is worth. and the highest success in the sea service promises a less brilliant fortune and reputation than equal success in the land. and though they have scarce any chance of preferment. The lottery of the sea is not altogether so disadvantageous as that of the army. Though their skill and dexterity are much superior to that of almost any artificers. and the greater the number of your tickets. The son of a creditable labourer or artificer may frequently go to sea with his father's consent. though in other respects it approached much nearer to a perfectly fair one than the common state lotteries. or rather. very few have made a great fortune. however. Their pay is less than that of common labourers. evidently pays no more than the real value of the risk. from this consideration alone. in most cases. more frequently get some fortune and preferment than common soldiers. but if he enlists as a soldier. are in no period of life more active than at the age at which young people choose their professions. the smaller ones must be more numerous. is. nobody but himself sees any of his making any thing by the other. they figure to themselves. the effect of no such nice calculation. a trade at all. young volunteers never enlist so readily as at the beginning of a new war. By the rules of precedency. Other people see some chance of his making something by the one trade. a captain in the navy ranks with a colonel in the army. nineteen houses in twenty. there would not be the same demand for tickets. What a common soldier may lose is obvious enough. The same difference runs through all the inferior degrees of preferment in both. The great admiral is less the object of public admiration than the great general. as the premium of insurance commonly is. In order to make insurance. the nearer you approach to this certainty. be done without any imprudence. Without regarding the danger. But though many people have made a little money by insurance. however. The person who pays no more than this. but he does not rank with him in the common estimation. their fatigues are much greater. and the proportion of ships insured to those not insured is much greater. and even in time of war. and the presumptuous hope of success. has twenty or thirty ships at sea. either from fire or sea-risk. it seems evident enough that the ordinary balance of profit and loss is not more advantageous in this than in other common trades. ninety-nine in a hundred. by which so many people make fortunes. The contempt of risk. Taking the whole kingdom at an average. we may learn from the very moderate profit of insurers. Moderate. small shares in a still greater number. however. but of mere thoughtless rashness. The neglect of insurance upon shipping. and presumptuous contempt of the risk. therefore. however. That the chance of loss is frequently undervalued. they may. a thousand occasions of acquiring honour and distinction which never occur.thousand pounds. In a lottery in which no prize exceeded twenty pounds. insure one another. or to go to sea. than that the more tickets you adventure upon. Common sailors. How little the fear of misfortune is then capable of balancing the hope of good luck. it is always without it. though they know that even that small sum is perhaps twenty or thirty per cent. and others. for all those hardships . perhaps. These romantic hopes make the whole price of their blood. When a great company. without any insurance. Sea-risk is more alarming to the greater part of people. As the great prizes in the lottery are less. The premium saved up on them all may more than compensate such losses as they are likely to meet with in the common course of chances. as it were. appears still more evidently in the readiness of the common people to enlist as soldiers. many people despise the risk too much to care to pay it. the common premium must be sufficient to compensate the common losses. are not insured from fire. a more certain proposition in mathematics. There is not. to pay the expense of management. however. This may sometimes. the more likely you are to be a loser. and you lose for certain. at all seasons. and. Many sail. and though their whole life is one continual scene of hardship and danger. or even a great merchant. or the lowest price at which he can reasonably expect to insure it. In order to have a better chance for some of the great prizes. and scarce ever valued more than it is worth. Adventure upon all the tickets in the lottery. yet for all this dexterity and skill. and the hope of those prizes is what principally recommends the trade. some people purchase several tickets. perhaps. than in the eagerness of those of better fashion to enter into what are called the liberal professions. in the same manner as upon houses.

the excess will not be clear gain to the sailor. .and dangers. It should follow from all this. for example. in the profits of different trades. and the conversation and adventures of the sailors. Their wages are not greater than those of common labourers at the port which regulates the rate of seamen's wages. In time of peace. but a great deal in those of labour. though. But the sailors who sail from the port of London. however. At London. seldom earn above three or four shillings a month more than those who sail from the port of Leith. is evidently much greater than that between the ordinary profits in any two different branches of trade. of the same nature with the profit of insurers. and its effects upon the wages of labour are to be ranked under that general head. from what ought to be considered as profit. and the risk or security with which it is attended. Bankruptcies are most frequent in the most hazardous trades. These are. in the same society or neighbourhood. instead of disheartening young people. It is otherwise with those in which courage and address can be of no avail. seem to rise in proportion to it. The sailor. two only affect the profits of stock. while they remain in the condition of common sailors. over and above the ordinary profits of stock. does not always seem to rise in proportion to it. that of a smuggler. A common labourer in London. is the infallible road to bankruptcy. Their value. and the ordinary profit of stock. at the rate of nine or ten shillings a week. that is. the wages of the greater part of the different classes of workmen are about double those of the same classes at Edinburgh. the agreeableness or disagreeableness of the business. Of the five circumstances. and in some branches of foreign trade than in others. The apparent difference. To compensate it completely. among the inferior ranks of people. there is little or no difference in the far greater part of the different employments of stock. though it rises with the risk. however. not only to make up for all occasional losses. and though it sometimes should. and the difference is frequently not so great. is supplied with provisions. or so as to compensate it completely. is more nearly upon a level than that of any other workmen in those different places. They are so accordingly. the wages of labour are always remarkably high. the common returns ought. in general. and in the merchant-service. which vary the wages of labour. and the rate of the port to and from which the greatest number sail. In all the different employments of stock. besides. lest the sight of the ships. A tender mother. that. is generally a deception arising from our not always distinguishing what ought to be considered as wages. the ordinary rate of profit varies more or less with the certainty or uncertainty of the returns. is often afraid to send her son to school at a sea-port town. The ordinary rate of profit always rises more or less with the risk. when the adventure succeeds. indeed. whom he must maintain out of his wages at home. in the trade to North America. In point of agreeableness or disagreeableness. that their competition reduces the profit below what is sufficient to compensate the risk. from which we can hope to extricate ourselves by courage and address. Unwholesomeness is a species of disagreeableness. they receive scarce any other recompence but the pleasure of exercising the one and of surmounting the other. is not disagreeable to us. It does not. But if the common returns were sufficient for all this. The dangers and hair-breadth escapes of a life of adventures. the monthly pay of those who sail from all the different ports of Great Britain. The most hazardous of all trades. therefore. The distant prospect of hazards. but to afford a surplus profit to the adventurers. may earn in the calendar month from forty to five-and-forty shillings. less uncertain in the inland than in the foreign trade. seem frequently to recommend a trade to them. and does not raise the wages of labour in any employment. over and above his pay. may not perhaps always exceed the difference between his pay and that of the common labourer. The presumptuous hope of success seems to act here as upon all other occasions. because he cannot share it with his wife and family. than in that to Jamaica. In trades which are known to be very unwholesome. bankruptcies would not be more frequent in these than in other trades. the port of London. and to entice so many adventurers into those hazardous trades. As they are continually going from port to port. the average and ordinary rates of profit in the different employments of stock should be more nearly upon a level than the pecuniary wages of the different sorts of labour. the London price is from a guinea to about seven-and-twenty shillings the calendar month. it is likewise the most profitable. should entice him to go to sea. The difference between the earnings of a common labourer and those of a well employed lawyer or physician. regulates that of all the rest.

In a small sea-port town. denoting something uncommonly extravagant. by giving employment to greater stocks. is frequently no more than the reasonable wages of labour. The greater part of the apparent profit is. trade cannot always be extended as stock extends. therefore. for example. Besides possessing a little capital. The skill of an apothecary is a much nicer and more delicate matter than that of any artificer whatever. His trade is extended in proportion to the amount of both. qualities. in the capital than in small towns and country villages. a little grocer will make forty or fifty per cent. The prime cost of bread and butchers' meat is greater in the great town than in the country village. are generally much cheaper. and the credit of a frugal and thriving man increases much faster than his stock. the sum or amount of them can never be very great. they are cheapest where the least profit is charged upon them. upon a stock of ten thousand. and the trust which is reposed in him is of much greater importance. is much less in the capital than in small towns and country villages. but live by it suitably to the qualifications which it requires. on the contrary. trade can be extended as stock increases. nor consequently that of his annual accumulation. in the only way in which he can charge them. upon the price of his drugs. nearly to counterbalance one another. Deduct this from the seemingly great profits of his capital. In small towns and country villages. may not perhaps cost him above thirty or forty pounds. real wages. and little more will remain. on account of the narrowness of the market. being the same in both places. It costs no more to bring grocery goods to the great town than to the country village. therefore. and the sum or amount of his profits is in proportion to the extent of his trade. those of bread and butchers' meat are generally very nearly the same through the greater part of it. In such articles as bread and butchers' meat. and though the profit is less. therefore they are not always cheaper there. profit. The difference between the apparent profit of the retail and that of the wholesale trade. Where ten thousand pounds can be employed in the grocery trade. The apparent profits of the wealthy retailer. too. upon a stock of a single hundred pounds. charged. He is the physician of the poor in all cases. therefore. while a considerable wholesale merchant in the same place will scarce make eight or ten per cent. which nothing hinders him from becoming but the want of a sufficient capital. therefore. are generally less in the capital than in small towns and country villages. the same cause which diminishes apparent profit. than the ordinary profits of stock. But the whole drugs which the best employed apothecary in a large market-town. and of the rich when the distress or danger is not very great. though the rate of a particular person's profits may be very high. and scarce ever in the latter. however. seem. and the markets where they are to be had cheapest. Though the profits of stock. increases prime cost. The trade of the grocer may be necessary for the conveniency of the inhabitants. will sell in a year. in most cases. The prime cost of grocery goods. In great towns. but often equally cheap. The man. yet great fortunes are frequently acquired from small beginnings in the former. for three or four hundred. and it arises generally from the price at which he sells his drugs. In such places. he must be able to read. the wages of the grocer's labour must be a very trifling addition to the real profits of so great a stock. are there more nearly upon a level with those of the wholesale merchant. write.Apothecaries' profit is become a bye-word. His reward. but it costs a great deal more to bring corn and cattle. or at a thousand per cent. and the narrowness of the market may not admit the employment of a larger capital in the business. in this case too. this may frequently be no more than the reasonable wages of his labour. ought to be suitable to his skill and his trust. The greater part of the apparent profit is real wages disguised in the garb of profit. and . it increases prime cost. diminishes apparent profit. He must have all the knowledge. their prices. must not only live by his trade. Thirty or forty pounds a year cannot be considered as too great a recompence for the labour of a person so accomplished. The extent of the market. which is probably the reason that. as the greater part of them must be brought from a much greater distance. Grocery goods. but by requiring supplies from a greater distance. of perhaps fifty or sixty different sorts of goods. that is necessary for a great merchant. It is upon this account that goods sold by retail are generally as cheap. therefore. and frequently much cheaper. bread and butchers' meat frequently as cheap. in short. however. This diminution of the one and increase of the other. This great apparent profit. and account and must be a tolerable judge. Though he should sell them. both in the wholesale and retail trade. perhaps. though the prices of corn and cattle are commonly very different in different parts of the kingdom.

therefore. Sudden fortunes. It is only in places of the most extensive commerce and correspondence that the intelligence requisite for it can be had. but is just as likely to lose one by two or three unsuccessful ones. wages are generally higher in new than in old trades. The speculative merchant exercises no one regular. by higher wages than they can either earn in their own trades. occasion none in the whole of the advantages and disadvantages. by any one regular. for which the demand arises chiefly from use or necessity. Those. A bold adventurer may sometimes acquire a considerable fortune by two or three successful speculations. however. but. and attention. therefore. The demand for country labour is greater at hay-time and harvest than during the greater part of the year. of the different employments of either. or what may be called the natural state of those employments. the competition reduces them to the level of other trades. and counterbalance a great one in others. in general. The establishment of any new manufacture. The five circumstances above mentioned. can bear no regular proportion to those of any one established and well-known branch of business. Secondly. It seldom happens. and seldom last long enough to be considered as old established manufactures. frugality. three things are requisite. that they make up for a small pecuniary gain in some. are continually changing. when forty or . when he foresees that it is likely to lie more than commonly profitable. can take place only in the ordinary. even in great towns. In order. real or imaginary. are less liable to change. than in those of the latter kind. Sheffield in those of the latter. First the employments must be well known and long established in the neighbourhood. Manufactures for which the demand arises altogether from fashion and fancy. by what is called the trade of speculation. or than the nature of his work would otherwise require. indeed. This equality can take place only in those employments which are well known. the advantages of the employment rise above. The demand for almost every different species of labour is sometimes greater. they are quite otherwise. These profits sometimes are very great. is always a speculation from which the projector promises himself extraordinary profits.his annual accumulation in proportion to the amount of his profits. or tea merchant the year after. In the one case. and wages rise with the demand. perhaps. are sometimes made in such places. The wages of labour. that great fortunes are made. When a projector attempts to establish a new manufacture. though they occasion considerable inequalities in the wages of labour and profits of stock. this equality in the whole of the advantages and disadvantages of the different employments of labour and stock. He is a corn merchant this year. or well-known branch of business. he must at first entice his workmen from other employments. First. more frequently. This trade can be carried on nowhere but in great towns. they are commonly at first very high. The nature of those circumstances is such. that this equality may take place in the whole of their advantages or disadvantages. and a sugar. on the contrary. and have been long established in the neighbourhood. and well-known branch of business. He enters into every trade. and a wine merchant the next. and the same form or fabric may continue in demand for whole centuries together. and sometimes less than usual. thirdly. His profits and losses. When the trade or practice becomes thoroughly established and well known. of any new branch of commerce. and sometimes. they bear no regular proportion to those of other old trades in the neighbourhood. Birmingham deals chiefly in manufactures of the former kind. established. established. are likely to be higher in manufactures of the former. however. or of any new practice in agriculture. tobacco. or what may be called their natural state. Where all other circumstances are equal. but in consequence of a long life of industry. and the wages of labour in those two different places are said to be suitable to this difference in the nature of their manufactures. and. they must be in their ordinary. they must be the sole or principal employments of those who occupy them. In time of war. If the project succeeds. secondly. in the other they fall below the common level. and he quits it when he foresees that its profits are likely to return to the level of other trades. even where there is the most perfect freedom. and a considerable time must pass away before he can venture to reduce them to the common level.

In countries ill cultivated.fifty thousand sailors are forced from the merchant service into that of the king. The usual reward which they receive from their master is a house. But as the demand for most sorts of plain linen and woollen cloth is pretty uniform. worth about sixteen pence sterling. and their wages. wine. A public mourning raises the price of black cloth. rather than quit their own trade. and. however. many workmen. so is likewise the price. The price of such commodities. in many parts of Scotland. the same quantity of industry will always produce the same. which does not occupy the greater part of his time. The operations of the speculative merchant are principally employed about such commodities. The variations in the market price of such commodities. hops. The same quantity of industry. Thirdly. or very nearly the same quantity of commodities. the profits of at least some part of the stock that is employed in bringing it to market. he gives them. two pecks of oatmeal a-week. will. produce very different quantities of corn. they seem to have been common all over Europe. and to have wrought for less wages than other labourers. but some are much more so than others. The produce of such labour comes frequently cheaper to market than would otherwise be suitable . and as it falls they sink below it. and worse inhabited. can arise only from some accidental variation in the demand. This daily or weekly recompence. for example. As the price of any commodity rises above the ordinary or average rate. The daily or weekly recompence which such labourers occasionally received from their masters. though they were more frequent some years ago than they are now. are contented with smaller wages than would otherwise be suitable to the nature of their employment. the same number of hands will annually work up very nearly the same quantity of linen and woollen cloth. on the contrary. In a decaying manufacture. he has little or no occasion for their labour. All commodities are more or less liable to variations of price. There still subsists. They are a sort of out-servants of the landlords and farmers. In ancient times. But there are other employments in which the same quantity of industry will not always produce the same quantity of commodities. this equality in the whole of the advantages and disadvantages of the different employments of labour and stock. the greater part of landlords and farmers could not otherwise provide themselves with the extraordinary number of hands which country labour requires at certain seasons. Their small tenement made a considerable part of it. as much grass as will feed a cow. but with the much greater and more frequent variations of quantity. in such a manner that the average annual produce may. When such occupiers were more numerous than they are at present. by many writers who have collected the prices of labour and provisions in ancient times. an acre or two of bad arable land. a set of people called cottars or cottagers. in different years. be equal to the average annual consumption. they are said to have been willing to give their spare time for a very small recompence to any body. perhaps. besides. was evidently not the whole price of their labour. and to sell them when it is likely to fall. but the profit of some of the dealers must necessarily fluctuate with the price of the commodities. in the intervals of his leisure he is often willing to work at another for less wages than would otherwise suit the nature of the employment. In the linen or woollen manufactures. etc. the demand for sailors to merchant ships necessarily rises with their scarcity. a small garden for pot-herbs. varies not only with the variations of demand. and is consequently extremely fluctuating. He endeavours to buy them up when he foresees that their price is likely to rise. During a great part of the year. In some employments. When a person derives his subsistence from one employment. therefore. seems to have been considered as the whole of it. When their master has occasion for their labour. sugar tobacco. upon such occasions. and the cultivation of their own little possession is not sufficient to occupy the time which is left at their own disposal. and who have taken pleasure in representing both as wonderfully low. as nearly as possible. The profits of stock vary with the price of the commodities in which it is employed. therefore. In all commodities which are produced by human industry. for example. commonly rise from a guinea and seven-and-twenty shillings to forty shilling's and three pounds a-month. rise above their proper level. can take place only in such as are the sole or principal employments of those who occupy them. it has already been observed. the quantity of industry annually employed is necessarily regulated by the annual demand.

every landlord acting the part of a monopolist. but the whole expense of the family. At Lerwick. the dearness of house-rent is the cause of the cheapness of lodging. are knit much cheaper than they can anywhere be wrought upon the loom. of which the price is from fivepence to seven-pence a pair. it is much cheaper than in Edinburgh. In most parts of Scotland. however. I believe. The spinning of linen yarn is carried on in Scotland nearly in the same way as the knitting of stockings. than can be had for a hundred of the best in the country. which oblige every master of a family to hire a whole house from top to bottom. in which house-rent is dearer than in London. the dearness of labour. and he endeavours to pay a part of his house-rent by letting the two middle storeys to lodgers. Whereas at Paris and Edinburgh. they knit worsted stockings to the value of a guinea a pair and upwards. of the same degree of goodness. in many parts of Scotland. The following instance. it frequently means no more than a single storey. which must generally be brought from a great distance. people who let lodgings have commonly no other means of subsistence. More than a thousand pair of Shetland stockings are annually imported into Leith. and. and. . Lodging is not only much cheaper in London than in Paris. the market is generally so extensive. and many other parts of Europe. They earn but a very scanty subsistence. Instances of people living by one employment. They are the work of servants and labourers who derive the principal part of their subsistence from some other employment. by servants. that any one trade is sufficient to employ the whole labour and stock of those who occupy it. and. who endeavour to get their livelihood by either of those trades. at the same time. and the price of the lodging must pay. The dearness of house-rent in London arises. and not by his lodgers. the dearness of all the materials of building. tenpence a-day. not only from those causes which render it dear in all great capitals. Scotland. He expects to maintain his family by his trade. the small capital of the Shetland islands. A tradesman in London is obliged to hire a whole house in that part of the town where his customers live.to its nature. A dwelling-house in England means every thing that is contained under the same roof. not only the rent of the house. but it arises in part from the peculiar manners and customs of the people. In opulent countries. who are chiefly hired for other purposes. There is no city in Europe. is a common price of common labour. above all. I have been assured. Stockings. In France. she is a good spinner who can earn twentypence a-week. occur chiefly in pour countries. the dearness of ground-rent. His shop is upon the ground floor. In the same islands. and yet I know no capital in which a furnished apartment can be hired so cheap. and frequently exacting a higher rent for a single acre of bad land in a town. is to be found in the capital of a very rich one. deriving some little advantage from another. what may seem extraordinary. and he and his family sleep in the garret. of something of the same kind.

occasions other inequalities of much greater importance. The limitation of the number of apprentices restrains it directly. First. By the 5th of Elizabeth. though they have been confirmed by a public law of the kingdom. It does this chiefly in the three following ways. by obstructing the free circulation of labour and stock. are evidently dictated by the same corporation-spirit which enacted the bye-law of Sheffield. for the future. secondly. which the defect of any of the three requisites above mentioned must occasion. by restraining the competition in some employments to a smaller number than might otherwise be disposed to enter into them. by a bye-law of the corporation. and from place to place. The university of smiths. Seven years seem anciently to have been. the university of tailors. No master hatter can have more than two apprentices anywhere in England. etc. appears evidently to have been copied from the term of apprenticeship in common trades. when they enacted a bye-law. so to have studied seven years under a master properly qualified. by restraining the competition in some employments to a smaller number than would otherwise be disposed to enter into them. teacher. which are now peculiarly called universities. no master weaver can have more than two apprentices. and. under pain of forfeiting five pounds a-month to the king. The silk-weavers in London had scarce been incorporated a year. or in the English plantations. even where there is the most perfect liberty. restraining any master from having more than two apprentices at a time. The policy of Europe occasions a very important inequality in the whole of the advantages and disadvantages of the different employments of labour and stock. When those particular incorporations. all over Europe. but as effectually. the usual term established for the duration of apprenticeships in the greater part of incorporated trades. commonly called the Statute of Apprenticeship. to those who are free of the trade. was necessary. is the proper Latin name for any incorporation whatever. In Norfolk and Norwich. or mystery. It required a particular act of parliament to rescind this bye-law. five pounds a-month. First. thirdly. which. the term of years which it was necessary to study. by increasing the expense of education. half to the king. is commonly the necessary requisite for obtaining this freedom. craft. The intention of both regulations is to restrain the competition to a much smaller number than might otherwise be disposed to enter into the trade.PART II. and to have himself apprentices in a common trade. exercise any trade. no master cutler can have more than one apprentice at a time. and almost always the number of years which each apprentice is obliged to serve. and what . indeed. In Sheffield. and to have scholars or apprentices (words likewise originally synonymous) to study under him. of which the incorporations were much more ancient. are expressions which we commonly meet with in the old charters of ancient towns. and half to him who shall sue in any court of record. The exclusive privileges of corporations are the principal means it makes use of for this purpose. by increasing it in others beyond what it naturally would be. unless he had previously served to it an apprenticeship of seven years at least. at that time exercised in England. that no person should. in the liberal arts. by not leaving things at perfect liberty. To have served an apprenticeship in the town. But the policy of Europe. As to have wrought seven years under a master properly qualified. Both these regulations. was necessary to entitle him to become a master. it was enacted. A long term of apprenticeship restrains it more indirectly.—Inequalities occasioned by the Policy of Europe. in the town where it is established. The bye-laws of the corporation regulate sometimes the number of apprentices which any master is allowed to have. or doctor (words anciently synonymous). under a master properly qualified. Such are the inequalities in the whole of the advantages and disadvantages of the different employments of labour and stock. in order to entitle my person to become a master. in order to obtain the degree of master of arts. All such incorporations were anciently called universities. under pain of forfeiting. were first established. The exclusive privilege of an incorporated trade necessarily restrains the competition. both from employment to employment.

he is called the companion of his master. When this is done. reel-makers. and of those who might be disposed to employ him. A journeyman who works by the piece is likely to be industrious. it is generally the effect of fraud. as it is the original foundation of all other property. Three years is. in many of them. this latter trade having been exercised in England before the 5th of Elizabeth. and has never been extended to such as have been introduced since that time. too. Birmingham. whose interest it so much concerns. and not of inability. by interpretation its operation has been limited to market towns. and the longest apprenticeship can give no security against fraud. An apprentice is likely to be idle. To judge whether he is fit to be employed. give the purchaser much greater security than any statute of apprenticeship. Quite different regulations are necessary to prevent this abuse. In most towns. but must buy them of a master wheel-wright. they being necessary for the conveniency of the inhabitants. in which corporation laws are so little oppressive. The manufactures of Manchester. may either himself make or employ journeymen to make coaches. The institution of long apprenticeships can give no security that insufficient workmanship shall not frequently be exposed to public sale. because . In all towns-corporate. even in some very nice trades. and the number of people frequently not being sufficient to supply each with a particular set of hands. The term is different in different corporations. so it hinders the others from employing whom they think proper. not having been exercised in England before the 5th of Elizabeth. etc. serve five years more as a journeyman. because not exercised in England at the time when it was made. all persons are free to sell butchers' meat upon any lawful day of the week. too. and Wolverhampton. Where it is long. in general. For though the words of the statute are very general. a person may exercise several different trades. I know of no country in Europe. lest they should employ an improper person. the principal manufactures of the country. wheel-makers. as well as all other artificers subservient to them. a part of it may generally be redeemed by paying a small fine. it having been held that. He generally looks at these. so it is the most sacred and inviolable. The sterling mark upon plate. is evidently as impertinent as it is oppressive. without injury to his neighbour. a very small fine is sufficient to purchase the freedom of any corporation. may surely be trusted to the discretion of the employers. In France. is a plain violation of this most sacred property. though he has never served an apprenticeship to a coachmaker. because he derives a benefit from every exertion of his industry. and seem plainly to include the whole kingdom. not within the statute. and. which. a common term of apprenticeship. there is no general law which regulates universally the duration of apprenticeships.before had been the bye-law of many particular corporations. During this latter term. but never thinks it worth while to enquire whether the workman had served a seven years apprenticeship. and the term itself is called his companionship. and almost always is so. The property which every man has in his own labour. he must. upon this account. in country villages. both of the workman. considered as rules of police. The patrimony of a poor man lies in the strength and dexterity of his hands. may exercise their trades in any town-corporate without paying any fine. the duration of apprenticeships is different in different towns and in different trades. It has been adjudged. It is a manifest encroachment upon the just liberty. for example. the operation of this statute has been limited to those trades which were established in England before the 5th of Elizabeth. As it hinders the one from working at what he thinks proper. are many of them. but. By a strict interpretation of the words. five years is the term required in a great number. The affected anxiety of the lawgiver. though he has not served a seven years apprenticeship to each. and to hinder him from employing this strength and dexterity in what manner he thinks proper. The weavers of linen and hempen cloth. In Paris. before any person can be qualified to exercise the trade as a master. the trade of a coachmaker not being within the statute. and the stamps upon linen and woollen cloth. The institution of long apprenticeships has no tendency to form young people to industry. This limitation has given occasion to several distinctions. became in England the general and public law of all trades carried on in market towns. that a coach-maker can neither himself make nor employ journeymen to make his coach-wheels. But a wheel-wright. in Scotland. In Scotland. appear as foolish as can well be imagined.

but obliged to fine annually to the king. The dexterity of hand. Each class was eager to establish regulations proper for this purpose. They who are soonest in a condition to enjoy the sweets of it. But a young man would practice with much more diligence and attention. which are much superior to common trades. Apprenticeships were altogether unknown to the ancients. The trades. but that of the town-corporate in which it was established. such as those of making clocks and watches. 26 etc. and consequently of wages and profit. indeed. the mysteries. contain no such mystery as to require a long course of instruction. those of a few days might certainly be sufficient. The immediate inspection of all corporations. as they commonly express it. was willing to consent that every other class . and. in many parts of Europe. His education would generally in this way be more effectual. and his wages. would all be losers. the charter seems generally to have been readily granted. as they were called. and the greater part of corporation laws have been established. for permission to exercise their usurped privileges {See Madox Firma Burgi p. indeed.he has no immediate interest to be otherwise. A young man naturally conceives an aversion to labour. a servant bound to work at a particular trade for the benefit of a master. and they generally turn out very idle and worthless. such adulterine guilds. The boys who are put out apprentices from public charities are generally bound for more than the usual number of years. must no doubt have been the work of deep thought and long time. if from the beginning he wrought as a journeyman. for seven years together. and to acquire the early habit of industry. with their own particular species of industry. and even that of some of the instruments employed in making them. provided it was allowed to do so. and may justly be considered as among the happiest efforts of human ingenuity. which is in reality to keep it always understocked. In England. to prevent the market from being overstocked. and whatever discipline was exercised over them. and it was the manifest interest of every particular class of them. by restraining that free competition which would most certainly occasion it. I know no Greek or Latin word (I might venture. and when any particular class of artificers or traders thought proper to act as a corporation. and always less tedious and expensive. not from the king. He would lose all the wages of the apprentice. But the public would be a gainer. The same increase of competition would reduce the profits of the masters. that all corporations. The arts. and are well understood. a charter from the king was likewise necessary. when he came to be a complete workman. the work of all artificers coming in this way much cheaper to market. The first invention of such beautiful machines. to explain to any young man. are likely soonest to conceive a relish for it. and paying in his turn for the materials which he might sometimes spoil through awkwardness and inexperience. and of the bye-laws which they might think proper to enact for their own government. were not always disfranchised upon that account. no other authority in ancient times was requisite. perhaps those of a few days might be sufficient. than for the defence of the common liberty against such oppressive monopolies. during a term of years. but from that greater incorporation of which those subordinate ones were only parts or members. proceeded commonly. how to apply the instruments. The Roman law is perfectly silent with regard to them. which he now saves. In a trade so easily learnt he would have more competitors. The master. the apprentice himself would be a loser. being paid in proportion to the little work which he could execute. In the common mechanic trades. as well as the wages of workmen. the sweets of labour consist altogether in the recompence of labour. upon condition that the master shall teach him that trade. cannot be acquired without much practice and experience. indeed. belonged to the town-corporate in which they were established. would be a loser. cannot well require more than the lessons of a few weeks. It is to prevent his reduction of price. I believe. even in common trades. perhaps. Long apprenticeships are altogether unnecessary. when for a long time he receives no benefit from it. But this prerogative of the crown seems to have been reserved rather for extorting money from the subject. But when both have been fairly invented. the crafts. to assert that there is none) which expresses the idea we now annex to the word apprentice. The government of towns-corporate was altogether in the hands of traders and artificers. Upon paying a fine to the king. In the end. The reciprocal duties of master and apprentice make a considerable article in every modern code. would be much less than at present.}. without a charter. In order to erect a corporation. In the inferior employments. and how to construct the machines. in the completest manner. indeed.

The trades which employ but a small number of hands. therefore. and that of the country less advantageous. or of distant parts of the same country. somewhat dearer than they otherwise might have done. a greater share of it is given to the inhabitants of the town than would otherwise fall to them. tend to enable the town to purchase. from small beginnings. They naturally. The inhabitants of a town being collected into one place. and even where they have never been incorporated. and in these latter dealings consist the whole trade which supports and enriches every town. therefore. and the profits of their different employers. accordingly. The inhabitants of the country. and labourers. Every town draws its whole subsistence. the aversion to take apprentices. the advantage of its inland and foreign trade. The wages of the workmen. their price is augmented by the wages of the workmen. tend to increase those wages and profits beyond what they otherwise: would be. By means of those regulations. the industry which properly belongs to towns. They have not only never been incorporated. But stock and labour naturally seek the most advantageous employment. more advantageous than that which is carried on in the country. they can not only engross the employment. without entering into any very nice computations. The whole annual produce of the labour of the society is annually divided between those two different sets of people. make up the whole of what is gained upon both. and by the profits of the merchants who employ them. perhaps. in the country. But. by sending to it a part both of the rude and manufactured produce. yet the corporation-spirit. must be better rewarded. resort as much as they can to the town. and a less to those of' the country. and desert the country. by voluntary associations and agreements. consists the advantage which the town makes by its manufactures. run most easily into such combinations. in some place or other. In consequence of such regulations. and the profits of their masters or immediate employers. Industry. The industry of the town becomes more. the jealousy of strangers. It pays for these chiefly in two ways. each class was obliged to buy the goods they had occasion for from every other within the town. we find at least a hundred people who have acquired great fortunes. dispersed in distant places. therefore. by trade and manufactures. in which case. imported into the town. been incorporated. so far it was as broad as long. indeed. too. and in the dealings of the different classes within the town with one another. as they say. They give the traders and artificers in the town an advantage over the landlords. is the quantity of manufactures and other goods annually exported from it. they were enabled to sell their own just as much dearer. are necessary to keep a thousand spinners and weavers at work. and often teach them. the wages of labour and the profits of stock must evidently be greater. by sending back to the country a part of those materials wrought up and manufactured. with a smaller quantity of its labour. Half-a-dozen wool-combers. Whatever regulations. the original price of those goods is augmented by the wages of the carriers or sailors. the cheaper the former are bought. cannot easily combine together. The most insignificant trades carried on in towns have. In what is gained upon the first of those branches of commerce. or to communicate the secret of their trade. the raising of rude produce by the improvement and cultivation of land.should do the same. and break down that natural equality which would otherwise take place in the commerce which is carried on between them. the produce of a greater quantity of the labour of the country. in recompence. By combining not to take apprentices. either of other countries. The price which the town really pays for the provisions and materials annually imported into it. in the one situation than in the other. for one who has done so by that which properly belongs to the country. and all the materials of its industry. First. can easily combine together. from the: country. in what is gained upon the second. The dearer the latter are sold. but reduce the whole manufacture into a sort of slavery to themselves. and raise the price of their labour much above what is due to the nature of their work. none of them were losers by these regulations. we may satisfy ourselves by one very simple and obvious observation. But in their dealings with the country they were all great gainers. but the incorporation spirit never has prevailed among . secondly. farmers. everywhere in Europe. to prevent that free competition which they cannot prohibit by bye-laws. generally prevail in them. in which case. so that. That the industry which is carried on in towns is. In every country of Europe.

and more difficult to be understood by those who are not used to them. In Great Britain. Those other regulations secure them equally against that of foreigners. The man who works upon brass and iron. and upon materials of which the temper is always the same. Not only the art of the farmer. but many inferior branches of country labour require much more skill and experience than the greater part of mechanic trades.them. of the country. how contemptuously soever the very contemptible authors of some of them may sometimes affect to speak of him. it has never been regarded as a matter very easily understood. though very late consequence of the extraordinary encouragement given to the industry of the towns. works with instruments. who have seldom opposed the establishment of such monopolies. and of a subordinate part. or very nearly the same. the great trade of the country. and the increase of stock. indeed. is generally much superior to that of the other. The condition of the materials which he works upon. and the clamour and sophistry of merchants and manufacturers easily persuade them. whose whole attention. of the society. After what are called the fine arts. necessarily reduces the profit. and the profits of stock employed in agriculture to those of trading and manufacturing stock. both the rank and the wages of country labourers are said to be superior to those of the greater part of artificers and manufacturers. is not altogether owing to corporations and corporation laws. The common ploughman. The lowering of . if corporation laws and the corporation spirit did not prevent it. No apprenticeship has ever been thought necessary to qualify for husbandry. by increasing the competition. there is perhaps no trade which requires so great a variety of knowledge and experience. is commonly occupied in performing one or two very simple operations. the superiority of the industry of the towns over that of the country seems to have been greater formerly than in the present times. The enhancement of price occasioned by both is everywhere finally paid by the landlords. farmers. In the history of the arts. strength. may satisfy us. as it is possible for words illustrated by figures to explain them. In China and Indostan. however. which must be varied with every change of the weather. requires much more judgment and discretion. are very different upon different occasions. to social intercourse. without fearing to be undersold by the free competition of their own countrymen. The high duties upon foreign manufactures. This change may be regarded as the necessary. is seldom defective in this judgment and discretion. than they are said to have none in the last century. accordingly. is the general interest of the whole. from morning till night. or very nearly the same. How much the lower ranks of people in the country are really superior to those of the town. The direction of operations. of which all the operations may not be as completely and distinctly explained in a pamphlet of a very few pages. though generally regarded as the pattern of stupidity and ignorance. is as variable as that of the instruments which he works with. They would probably be so everywhere. several of them are actually explained in this manner. and temper. and the liberal professions. His understanding. But the man who ploughs the ground with a team of horses or oxen. and labourers. He is less accustomed. and both require to be managed with much judgment and discretion. that the private interest of a part. or in the beginning of the present. That industry has its limits like every other. It is supported by many other regulations. They have commonly neither inclination nor fitness to enter into combinations. and upon all goods imported by alien merchants. being accustomed to consider a greater variety of objects. And from all those volumes we shall in vain attempt to collect that knowledge of its various and complicated operations which is commonly possessed even by the common farmer. His voice and language are more uncouth. is well known to every man whom either business or curiosity has led to converse much with both. Corporation laws enable the inhabitants of towns to raise their prices. works with instruments of which the health. on the contrary. besides. all tend to the same purpose. however. The stocks accumulated in them come in time to be so great. than the mechanic who lives in a town. than that of those which are always the same. now publishing by the French Academy of Sciences. as well as with many other accidents. that it can no longer be employed with the ancient profit in that species of industry which is peculiar to them. that among the wisest and most learned nations. too. the general direction of the operations of husbandry. There is scarce any common mechanic trade. The superiority which the industry of the towns has everywhere in Europe over that of the country. The wages of country labour approach nearer to those of manufacturing labour. The innumerable volumes which have been written upon it in all languages.

to prevent such meetings. in a great measure. and gives every man of the trade a direction where to find every other man of it. prejudices. which have given occasion to it. but makes the act of the majority binding upon the whole. if I my say so. by any law which either could be executed. Very few of them are educated altogether at their own expense. attained to a considerable degree of opulence. it ought to do nothing to facilitate such assemblies. have established many pensions. It is upon this account that. contrary to the order of nature and of reason The interests. by being employed in agriculture. laws. which draw many more people into those trades than could otherwise pretend to follow them. and sometimes the piety of private founders. much less to render them necessary. is not that of his corporation. It is the fear of losing their employment which restrains his frauds and corrects his negligence. by increasing the competition in some employments beyond what it naturally would be. by restraining the competition in some employments to a smaller number than would otherwise be disposed to enter into them. where. An incorporation not only renders them necessary. it necessarily raises its wages. their widows and orphans. the education of the greater part of churchmen is paid for in this manner. Secondly. A particular set of workmen must then be employed. in many large incorporated towns. That everywhere in Europe the greatest improvements of the country have been owing to such over flowings of the stock originally accumulated in the towns. that though some countries have. The policy of Europe. for this purpose. of an opposite kind. and. The pretence that corporations are necessary for the better government of the trade. and you must then smuggle it into the town as well as you can. and it cannot last longer than every single trader continues of the same mind. liable to be disturbed and interrupted by innumerable accidents. The real and effectual discipline which is exercised over a workman. An exclusive corporation necessarily weakens the force of this discipline. A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register. it must be done in the suburbs. But though the law cannot hinder people of the same trade from sometimes assembling together. is in part restored to the country. indeed. uncertain. It is in this manner that the policy of Europe. or would be consistent with liberty and justice. which will limit the competition more effectually and more durably than any voluntary combination whatever. no tolerable workmen are to be found. occasions another inequality. exhibitions. It then spreads itself. and. an effectual combination cannot be established but by the unanimous consent of every single trader. or in some contrivance to raise prices. where the workmen. I shall endeavour to explain as fully and distinctly as I can in the third and fourth books of this Inquiry. renders such assemblies necessary. having no exclusive privilege. I believe. scholarships. It connects individuals who might never otherwise be known to one another. that sometimes the public. with proper penalties. have nothing but their character to depend upon. occasions a very important inequality in the whole of the advantages and disadvantages of the different employments of labour and stock. facilitates such assemblies. at the expense of which. let them behave well or ill. It is impossible. If you would have your work tolerably executed. The long.profit in the town forces out stock to the country. In all Christian countries. People of the same trade seldom meet together. It has been considered as of so much importance that a proper number of young people should be educated for certain professions. it had originally been accumulated in the town. A regulation which enables those of the same trade to tax themselves. The majority of a corporation can enact a bye-law. in every respect. but that of his customers. In a free trade. tedious. etc. but the conversation ends in a conspiracy against the public. . even in some of the most necessary trades. by giving them a common interest to manage. by this course. in order to provide for their poor. even for merriment and diversion. their sick. bursaries. is without any foundation. I shall endeavour to shew hereafter. over the face of the land. in the whole of the advantages and disadvantages of the different employments of labour and stock. and customs. by creating a new demand for country labour. it is in itself necessarily slow. and at the same time to demonstrate.

was in England the usual pay of a curate or a stipendiary parish priest. not exceeding fifty. in several places. to compare either a curate or a chaplain with a journeyman in any common trade. commonly called men of letters. it has always been rather to lower them than to raise them. indeed. and has never either been able to raise the wages of curates. were much superior to those of the curate. in order to get employment. They would be entirely abandoned to such as had been educated by those public charities. In every part of Europe. the cures have. the competition would soon be so great as to sink very much their pecuniary reward. to the entire degradation of the now respectable professions of law and physic. containing about as much silver as ten pounds of our present money. upon the foregoing supposition. and. was declared to be the pay of a master mason. are willing to accept of a much smaller recompence than what such an education would otherwise have entitled them to. who. supposing him to have been without employment one-third of the year. At the same period. and respectable men into holy orders. as we find it regulated by the decrees of several different national councils. therefore. notwithstanding the mean circumstances of some of its inferior members. In professions in which there are no benefices. notwithstanding this act of parliament. would have fully equalled them. there are many curacies under twenty pounds a-year. or to sink those of labourers to the degree that was intended. on account of the indigence of their situation and the multitude of their competitors. does not exceed what frequently earned by common labourers in many country parishes. a sufficient certain stipend or allowance. supposing them to have been constantly employed. and not less than twenty pounds a-year". In England. upon many occasions. the lottery of the church is in reality much more advantageous than is necessary. the hopes of much more moderate benefices will draw a sufficient number of learned. that of a journeyman mason. in which education is so easily procured. 12. of Geneva. the law seems to have been equally ineffectual. That unprosperous race of men. in both cases. makes some compensation even to them for the meanness of their pecuniary recompence.} The wages of both these labourer's. This last sum. The wages of the master mason. by writing under his hand and seal. attempted to raise the wages of curates. It might then not be worth any man's while to educate his son to either of those professions at his own expense. for the dignity of the church. and there is scarce an industrious workman of any kind in that metropolis who does not earn more than twenty. decent. But the law has. of those who are. therefore. and in all Roman catholic countries. The pay of a curate or chaplain. on account of the contrary competition of those who expected to derive either profit or pleasure from employing them. but have been hindered by . too. will not always procure them a suitable reward. The great benefices and other ecclesiastical dignities support the honour of the church. "That whereas. and threepence a-day. five merks. the bishop is. and in this manner the competition of the poor takes away the reward of the rich. and. been meanly supplied. are pretty much in the situation which lawyers and physicians probably would be in. no doubt. for want of sufficient maintenance and encouragement to curates. It would be indecent. or the other from receiving more. Till after the middle of the fourteenth century. empowered to appoint. because it has never been able to hinder either the one from being willing to accept of less than the legal allowance. Forty pounds a-year is reckoned at present very good pay for a curate. therefore. however. fourpence aday. to oblige the rectors of parishes to give them more than the wretched maintenance which they themselves might be willing to accept of. c. equal to ninepence of our present money. may satisfy us. The respect paid to the profession. if an equal proportion of people were educated at the public expense. may very properly be considered as of the same nature with the wages of a journeyman. containing the same quantity of silver as a shilling of our present money. Ed. Whenever the law has attempted to regulate the wages of workmen. whose numbers and necessities would oblige them in general to content themselves with a very miserable recompence. There are journeymen shoemakers in London who earn forty pounds a-year. The example of the churches of Scotland. 25. the church being crowded with people. {See the Statute of Labourers. it is declared. the greater part of them have been educated for the church. that in so creditable a profession. such as law and physic. III.and expensive education. and of several other protestant churches. By the 12th of Queen Anne. And. They are all three paid for their work according to the contract which they may happen to make with their respective superiors.

rhetoric. a number which will not appear extraordinary from so great a city to so famous a teacher. and. I understand this to be the number whom he taught at one time. was not taken out of the market. who taught. therefore. A thousand minae. would undoubtedly be less than it is. a more useful." "They who teach wisdom. five minae to sixteen pounds thirteen shillings and fourpence. and application requisite to qualify an eminent teacher of the sciences. the only employment by which a man of letters could make any thing by his talents. is said by Plutarch. Teachers of the sciences were probably in those times less common than they came to be in an age or two afterwards. small as it may appear. but if any man were to sell such a bargain for such a price. in what is called his discourse against the sophists. We must not. a thousand minae. as commonly to reduce the price of their labour to a very paltry recompence. Carneades. or by communicating to other people the curious and useful knowledge which he had acquired himself. it was still an independent and considerable republic. The most eminent of them. he is said to have had a hundred scholars. before any charities of this kind had been established for the education of indigent people to the learned professions. even a more profitable employment than that other of writing for a bookseller. the rewards of eminent teachers appear to have been much more considerable. "They make the most magnificent promises to their scholars. to have been his didactron. The Athenians sent Carneades the academic. and. The different governors of the universities. reproaches the teachers of his own times with inconsistency. even to ostentation. too. as well as that of Hippias and Protagoras. or who attended what we would call one course of lectures. and most munificently rewarded. what was at that time the most fashionable of all sciences. to which the art of printing has given occasion. Georgias made a present to the temple of Delphi of his own statue in solid gold. the genius. and this is still surely a more honourable. must at that time have been usually paid to the most eminent teachers at Athens. "and undertake to teach them to be wise. a scholar and a beggar seem to have been terms very nearly synonymous. or £ 3335:6:8. and though their city had then declined from its former grandeur. is represented by Plato as splendid. appear always to have enjoyed a degree of consideration much superior to any of the like profession in the present times. When he taught at Athens. The usual recompence. suppose that it was as large as the life. to return to Athens. But the usual reward of the eminent teacher bears no proportion to that of the lawyer or physician. was a Babylonian by birth. if the competition of those yet more indigent men of letters. in return for so important a service. upon a solemn embassy to Rome. or £ 33:6:8 from each scholar. Plato himself is said to have lived with a good deal of magnificence. They have generally. in order to resume the teaching of his school. because the trade of the one is crowded with indigent people. Isocrates himself demanded ten minae. or usual price of teaching. thought it worth while. was that of a public or private teacher. Many other eminent teachers in those times appear to have acquired great fortunes. I presume. Four minae were equal to thirteen pounds six shillings and eightpence. in another place. Something not less than the largest of those two sums." He certainly does not mean here to exaggerate the reward. whereas those of the other two are encumbered with very few who have not been educated at their own. He must have made. too. he would be convicted of the most evident folly. they stipulate the paltry reward of four or five minae. Before the invention of the art of printing." continues he. two other eminent teachers of those times. In ancient times. and we may be assured that it was not less than he represents it. their consideration for him must have . who write for bread. therefore. however. accordingly. been educated at the public expense. to be happy. and as there never was a people more jealous of admitting foreigners to public offices than the Athenians. notwithstanding. The time and study. however. therefore. by each course of lectures. after having been tutor to Alexander. in general. Isocrates. when the competition had probably somewhat reduced both the price of their labour and the admiration for their persons. knowledge. of public and private teachers. as it is universally agreed. and their numbers are everywhere so great. appear to have often granted licences to their scholars to beg. who have been brought up to it at the public expense. before that time.different reasons from entering into holy orders. His way of living." says he. "ought certainly to be wise themselves. and to be just. both by him and his father. Before the invention of the art of printing. Aristotle. Philip. are at least equal to what is necessary for the greatest practitioners in law and physic. and Diogenes the stoic.

It is the labour of artificers and manufacturers only of which the free circulation is obstructed by corporation laws. perhaps. the greatest. for which. Whatever obstructs the free circulation of labour from one employment to another. peculiar to England. that either a linen or a silk weaver might become a tolerable workman in a very few days. both from employment to employment. It is everywhere much easier for a wealthy merchant to obtain the privilege of trading in a towncorporate. and present state of this disorder. It may somewhat degrade the profession of a public teacher. and has therefore a continual demand for new hands. it can afford no general resource to the work men of other decaying manufactures. If any of those three capital manufactures. than to that of labour. It frequently happens. by the destruction of monasteries. who. c. without being able to lend the least assistance to one another. but the cheapness of literary education is surely an advantage which greatly overbalances this trifling inconveniency. wherever the statute of apprenticeship takes place. upon the whole. if those absurd laws did not hinder them. and sometimes in the same neighbourhood. That which is given to it by the poor laws is. This inequality is. chuse to come upon the parish. They generally. were decaying. nor sink too low in the decaying manufacture. however. was more reasonable than it is at present through the greater part of Europe. therefore. That of weaving plain woollen is somewhat different. The arts of weaving plain linen and plain silk. if the constitution of those schools and colleges. after some other ineffectual attempts for their relief. but the difference is so insignificant. that every parish should be bound to provide for its own poor. to every part of Europe. it was enacted. the operations are so much alike. and the superabundance of hands is continually increasing. too. they are much worse qualified than for any sort of manufacture that bears any resemblance to their own. of any in the police of England. open to every body. occasions. the workmen might find a resource in one of the other two which was in a more prosperous condition. for example. by a particular statute. Those two manufactures may sometimes be in the same town. than for a poor artificer to obtain that of working in it. that the workmen could easily change trades with one another. 2. give less obstruction to the free circulation of stock from one place to another. and their wages would neither rise too high in the thriving. in which education is carried on. even in the same employment. the quantity of stock which can be employed in any branch of business depending very much upon that of the labour which can be employed in it. is in England. by the 43d of Elizabeth. perhaps rather advantageous than hurtful to the public. The public. and from place to place. or to work as common labourers. The statute of apprenticeship obstructs the free circulation of labour from one employment to another. The obstruction which corporation laws give to the free circulation of labour is common. even in the same place. indeed. The difficulty of obtaining settlements obstructs even that of common labour. therefore. It may be worth while to give some account of the rise. those in another are obliged to content themselves with bare subsistence. in some cases. the policy of Europe. It consists in the difficulty which a poor man finds in obtaining a settlement. The linen manufacture. are almost entirely the same. a very inconvenient inequality in the whole of the advantages and disadvantages of their different employments. the poor had been deprived of the charity of those religious houses. however. Corporation laws. I believe. but as it is not much cultivated through the greater part of the country. The one is in an advancing state. In many different manufactures. The exclusive privileges of corporations obstruct it from one place to another. have no other choice. and both that and an exclusive corporation in the other. or even in being allowed to exercise his industry in any parish but that to which he belongs. by obstructing the free circulation of labour and stock.been very great. When. the other is in a declining state. The statute of apprenticeship may oppose it in the one case. Thirdly. by their habits. and that overseers of . progress. so far as I know. obstructs that of stock likewise. that while high wages are given to the workmen in one manufacture. but dither to come upon the parish. might derive still greater benefit from it.

immediately after divine service. the third. by serving an apprenticeship in the parish. a question of some importance. But parish officers. But masters are not always willing to give their servants a settlement by hiring them in this manner. who. "After all. of the place of his abode and the number of his family. that even at this day. . as for the avoiding of them by persons coming into a parish clandestinely. But if a person's situation is such. it appointed four other ways by which a settlement might be gained without any notice delivered or published. receiving the notice. the necessity of providing for their own poor was indispensably imposed upon every parish. to remove any new inhabitant to the parish where he was last legally settled. for the giving of notice is only putting a force upon the parish to remove. It was enacted. it is said. by giving of notice. by the 1st of James II. should be accounted only from the time of his delivering notice. by suffering him to continue forty days. it was further enacted by the 3rd of William III. Who were to be considered as the poor of each parish became. unless he either rented a tenement of ten pounds a-year. is very seldom obtained. rendered it almost impracticable for a poor man to gain a new settlement in the old way. when it was enacted. Some frauds. and taking no proper steps in consequence of it. that forty days undisturbed residence should gain any person a settlement in any parish. parish officers sometime's bribing their own poor to go clandestinely to another parish. he shall. and continuing in the same service during the whole of it. to gain a settlement there. by keeping themselves concealed for forty days. was at last determined by the 13th and 14th of Charles II. or by electing him into a parish office. the habitation of their parents and relations. that the forty days residence should be accounted only from the publication of such notice in writing on Sunday in the church. to the discharge of that to which they properly belonged. compel the parish either to allow him a settlement uncontested. were not always more honest with regard to their own than they had been with regard to other parishes. therefore. by a parish rate. the second. and. as those justices should judge sufficient. upon complaint made by the church-wardens or overseers of the poor. No married man can well gain any settlement in either of the two last ways. or could give such security for the discharge of the parish where he was then living. and servants are not always willing to be so hired. were committed in consequence of this statute. who has nothing but his labour to support him. and sometimes connived at such intrusions. if no particular term is agreed upon. but by the public deed of the whole parish. therefore. therefore. after some variation. and the design of the acts is not so much for gaining of settlements." This statute. by continuing forty days after publication of notice in writing. and serving in it a year. in writing. to one of the church-wardens or overseers of the parish where he came to dwell. by being elected into an annual parish office. with the church-wardens. But that it might not appear to preclude altogether the common people of one' parish from ever establishing themselves with security in another. by being taxed to parish rates and paying them. should raise. that the forty days undisturbed residence of any person necessary to gain a settlement. the fourth. therefore. they might thereby lose their original settlement in the places of their nativity. competent sums for this purpose. An apprentice is scarce ever married. has been to put out in a great measure the old fashion of hiring for a year. and it is expressly enacted. or by removing him to try the right. Nobody can gain a settlement by either of the two first ways. who are too well aware of the consequences to adopt any new-comer. This question. it seems. by being hired into service there for a year. but that within that time it should be lawful for two justices of the peace. because. that it is doubtful whether he is actually removable or not. as every last settlement discharges all the foregoing." says Doctor Burn. either by taxing him to parish rates. As every person in a parish. which before had been so customary in England.the poor should be annually appointed. that no married servant shall gain any settlement by being hired for a year. By this statute. The first was. was supposed to have an interest to prevent as much as possible their being burdened by such intruders. the law intends that every servant is hired for a year. by forty days inhabitancy. The principal effect of introducing settlement by service. "this kind of settlement.

By the 12th of Queen Anne. 1. that he should gain no settlement there by any means whatever. a thing impossible for one who has nothing but his labour to live by. but a . c. says Doctor Burn. except either by renting a tenement of ten pounds a-year. and allowed by two justices of the peace. and in a worse condition. By the 8th and 9th of William III. it was further enacted. and consequently neither by notice nor by service." Though a certificate carries along with it no testimonial of good behaviour. in places at no great distance from one another." says the same very intelligent author. none of all which can be without a certificate. to compel the church-wardens and overseers to sign a certificate. it having been enacted. either by apprenticeship or by service. "that there are divers good reasons for requiring certificates with persons coming to settle in any place. it was enacted that if any person should bring a certificate from the parish where he was last legally settled. it is certainly known whither to remove them. whether labourer or artificer. which the preceding statutes had almost entirely taken away. stat. that they can settle neither apprentices nor servants. and for their maintenance in the mean time. that the purchase even of a freehold estate of less than thirty pounds value. And in order to give the most perfect security to the parish where such certificated man should come to reside. it was further enacted by the same statute. and cannot be removed. "It is obvious. subscribed by the church-wardens and overseers of the poor. may sometimes reside by sufferance without one. or whatever advantage he may propose himself by living elsewhere. is left altogether to their discretion. A mandamus was once moved for. nor by giving notice. but the Court of King's Bench rejected the motion as a very strange attempt. however inconvenient it may be for him to continue at that place where he has had the misfortune to acquire what is called a settlement. too. The very unequal price of labour which we frequently find in England. carried his industry to a new parish. that persons residing under them can gain no settlement. that if they become chargeable. how healthy and industrious soever. and much greater security is frequently demanded. What security they shall require." The moral of this observation seems to be. that every other parish should be obliged to receive him. and that they ought very seldom to be granted by that which he purposes to leave. the invention of certificates was fallen upon. Which reasons will hold proportionably for parishes not granting certificates in ordinary cases. is likely to gain any new settlement. neither by apprenticeship. But this is a security which scarce any man who lives by labour can give. indeed who is healthy and industrious. at the caprice of any churchwarden or overseer. that he should not be removable merely upon account of his being likely to become chargeable. nor by paying parish rates. and certifies nothing but that the person belongs to the parish to which he really does belong. and that. that certificates ought always to be required by the parish where any poor man comes to reside. and the parish shall be paid for the removal. he was liable to be removed. nor by paying parish rates. but that they will have the certificated persons again. nor by apprenticeship. or could give such security for the discharge of the parish as two justices of the peace should judge sufficient.No independent workman. "by putting it in the power of a parish officer to imprison a man as it were for life. and that then the parish which granted the certificate should be obliged to pay the expense both of his maintenance and of his removal. it is altogether discretionary in the parish officers either to grant or to refuse it. namely. but only upon his becoming actually chargeable. or by serving upon his own account in an annual parish office for one whole year. it is evident. nor by service. if they fall sick. we may learn from the following very judicious observation of Doctor Burn. in some measure. the parish which gave the certificate must maintain them. A single man. as not being sufficient for the discharge of the parish. in his History of the Poor Laws. that free circulation of labour which those different statutes had almost entirely taken away. that neither the servants nor apprentices of such certificated man should gain any settlement in the parish where he resided under such certificate. but they cannot well require less than thirty pounds. When such a person. shall not gain any person a settlement.18. In order to restore. therefore. unless he either rented a tenement of ten pounds a-year. indeed. is probably owing to the obstruction which the law of settlements gives to a poor man who would carry his industry from one parish to another without a certificate. "There is somewhat of hardship in this matter of certificates. How far this invention has restored that free circulation of labour." says he. for it is far more than an equal chance.

and in particular places. therefore. perhaps. from the parish where he chooses to reside. and I believe. the law would punish them very severely. if the single man should afterwards marry. When the regulation. "it seems time to lay aside all endeavours to bring under strict regulations.man with a wife and family who should attempt to do so. is quite just and equitable." says Doctor Burn. and five miles round it. therefore. in all other countries where there is no difficulty of settlement. yet we never meet with those sudden and unaccountable differences in the wages of neighbouring places which we sometimes find in England. have some times complained of the law of settlements as a public grievance. which they pretended to pay. than an arm of the sea. and. and sink gradually as the distance from such places increases. The common people of England. by regulating the price of provisions and ether goods. In such countries. cannot always be relieved by their superabundance in another." Particular acts of parliament. an abusive practice undoubtedly. as it is constantly in Scotland. felt himself most cruelly oppressed by this ill-contrived law of settlements. but it is sometimes otherwise when in favour of the masters. however. In ancient times. could not be put in practice in Scotland. he would generally be removed likewise. have now. for if all persons in the same kind of work were to receive equal wages. the competition will regulate it much better than any assize. But the 8th of George III. but. but such a one as was not likely to occasion any general oppression. till they fall back to the common rate of the country. yet it has never been the object of any general popular clamour. it may. and no room left for industry or ingenuity. would. but the 8th of George III. it would treat the masters in the same manner. Thus the law which obliges the masters in several different trades to pay their workmen in money. established by the 31st of George II. Where there is an exclusive corporation. enforces by law that very regulation which masters sometimes attempt to establish by such combinations. under a certain penalty. and their workmen from accepting. too. it is always just and equitable. both these practices have now gone entirely into disuse. in goods. they commonly enter into a private bond or agreement. still attempt sometimes to regulate wages in particular trades. Were the workmen to enter into a contrary combination of the same kind. in most parishes. where it is often more difficult for a poor man to pass the artificial boundary of a parish. for more than a century together. first by general laws extending over the whole kingdom. is an evident violation of natural liberty and justice. but did not always really pay. that though anciently it was usual to rate wages. except in the case of a general mourning. if it dealt impartially. The scarcity of hands in one parish. and not in goods. Whenever the legislature attempts to regulate the differences between masters and their workmen. or a ridge of high mountains. more than two shillings and sevenpence halfpenny a-day. I shall conclude this long chapter with observing. The assize of bread is. but like the common people of most other countries. be proper to regulate the price of the first necessary of life. Thus the 8th of George III. or wherever else there is an extraordinary demand for labour. in some part of his life. This law is in favour of the workmen. It imposes no real hardship upon the masters. "By the experience of above four hundred years. . not to accept of a certain wage. in order to reduce the wages of their workmen. When masters combine together. and afterwards by particular orders of the justices of peace in every particular county. I will venture to say. is in favour of the masters. there would be no emulation. be sure of being removed. the only remnant of this ancient usage. The complaint of the workmen. seems perfectly well founded. To remove a man who has committed no misdemeanour. never rightly understanding wherein it consists. too. and. what in its own nature seems incapable of minute limitation. so far as I know. Though men of reflection. on account of a defect in the law. though wages may sometimes rise a little in the neighbourhood of a great town. under a certain penalty. that it puts the ablest and most industrious upon the same footing with an ordinary workman. from giving. so jealous of their liberty. is in favour of the workmen. The method of fixing the assize of bread. its counsellors are always the masters. under heavy penalties. it was usual to attempt to regulate the profits of merchants and other dealers. where there is none. There is scarce a poor man in England. however. prohibits. all master tailors in London. not to give more than a certain wage. suffered themselves to be exposed to this oppression without a remedy. It only obliges them to pay that value in money. such as that against general warrants. natural boundaries which sometimes separate very distinctly different rates of wages in other countries. who has not. of forty years of age.

The proportion between them. who claim exclusive privileges. The proportion between the different rates. which does not exist there. This defect was not remedied till the third of George III. must. in the end. though they are not very strictly guarded. or declining state of the society. at least for any considerable time. there is an incorporation of bakers. as has already been observed. and cannot well be altered. in the different employments of labour and stock. In the greater part of the towns in Scotland. however. therefore. by any such revolutions. seems not to be much affected. The want of an assize occasioned no sensible inconveniency. by the riches or poverty. must remain the same. the advancing. . stationary. Such revolutions in the public welfare. though they affect the general rates both of wages and profit. both of wages and profit.its execution depending upon the office of clerk of the market. and the establishment of one in the few places where it has yet taken place has produced no sensible advantage. affect them equally in all different employments.

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In adjusting the terms of the lease. he naturally endeavours to reserve to himself as the rent of his land. it can afford no rent to the landlord. without being a loser. considered as the price paid for the use of land. or to content himself with somewhat less. and sometimes. Kelp is a species of sea-weed. The latter sometimes may and sometimes may not. which is evidently the highest the tenant can afford to pay in the actual circumstances of the land. too. If it is not more. or to what he can afford to take. though the commodity may be brought to market. may be partly the case upon some occasions. The rent of land. is to be found in that country. the landlord commonly demands the same augmentation of rent as if they had been all made by his own. besides. The landlord. but to what he can make both by the land and the water. indeed. The sea in the neighbourhood of the islands of Shetland is more than commonly abundant in fish. though more rarely. OF THE RENT OF LAND. and one of the very few instances in which rent makes a part of the price of that commodity. or is not more. There are some parts of the produce of land. Rent. may still be considered as the natural rent of land. but to what the farmer can afford to give. But. not to what the farmer can make by the land. whatever part of its price. in order to profit by the produce of the water. however. is naturally the highest which the tenant can afford to pay in the actual circumstances of the land. and purchases and maintains the cattle and other instruments of husbandry. be let. more frequently the ignorance. yields an alkaline salt. It grows in several parts of Great Britain. considered as the price paid for the use of the land. the liberality. or. of which the ordinary price is sufficient to replace the stock which must be employed in bringing them thither. when burnt. therefore. and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent. Whatever part of the produce. Such parts only of the produce of land can commonly be brought to market. When the lease comes to be renewed. of the landlord. upon such rocks only as lie within the high-water mark. however. This portion. soap. which. the landlord endeavours to leave him no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed. what is the same thing. for it can scarce ever be more than partly the case. and of which the produce. pays the labour. depends upon the demand. are not always made by the stock of the landlord. The rent of the landlord is in proportion. If the ordinary price is more than this. it may be thought. is over and above this share. He sometimes demands rent for what is altogether incapable of human improvements. but sometimes by that of the tenant. which makes a great part of the subsistence of their inhabitants. than the ordinary profits of farming stock in the neighbourhood.CHAPTER XI. particularly in Scotland. The former must always afford a rent to the landlord. demands a rent for it as much as for his corn-fields. or the rent at which it is naturally meant that land should. This is evidently the smallest share with which the tenant can content himself. for which the demand must always be such as to afford a greater price than what is sufficient to bring them to market. and the landlord seldom means to leave him any more. they must have a habitation upon the neighbouring land. no doubt. The landlord demands a rent even for unimproved land. together with its ordinary profits. The rent of land. and there are others for which it either may or may not be such as to afford this greater price. for the most part. however. This. whose estate is bounded by a kelp shore of this kind. together with the ordinary profits of farming stock in the neighbourhood. Sometimes. is frequently no more than a reasonable profit or interest for the stock laid out by the landlord upon its improvement. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land. Whether the price is. makes him accept of somewhat less than this portion. was never augmented by human industry. useful for making glass. It is partly paid in sea-fish. the surplus part of it will naturally go to the rent of the land. according to different . is naturally a monopoly price. therefore. which are twice every day covered with the sea. Those improvements. and for several other purposes. the ignorance of the tenant makes him undertake to pay somewhat more.

Rent. High or low wages and profit are the causes of high or low price. in order to bring a particular commodity to market. that it affords a high rent. and. than what is sufficient to pay those wages and profit. first. naturally take place in the relative value of those two different sorts of rude produce. or no rent at all. therefore. when compared both with one another and with manufactured commodities. it is to be observed. The particular consideration.circumstances. of those which sometimes may and sometimes may not afford rent. of the variations which. will divide this chapter into three parts. or no more. of those parts of the produce of land which always afford some rent. thirdly. a great deal more. secondly. that its price is high or low. or very little more. in the different periods of improvement. or a low rent. But it is because its price is high or low. . It is because high or low wages and profit must be paid. enters into the composition of the price of commodities in a different way from wages and profit. high or low rent is the effect of it.

whatever be its fertility. . put the remote parts of the country more nearly upon a level with those in the neighbourhood of the town. and somebody can always be found who is willing to do something in order to obtain it. is always more than sufficient to replace the stock which employed that labour. indeed. must belong to the landlord. canals. They encourage the cultivation of the remote. they pretended. Though it may cost no more labour to cultivate the one than the other. is not always equal to what it could maintain. which must always be the most extensive circle of the country. is a great enemy to good management. it must always cost more to bring the produce of the distant land to market. must be diminished. and by the diminution of the labour which must be maintained out of it. is generally higher than in the neighbourhood of a large town. The quantity of labour. Monopoly. the rate of profit. The most desert moors in Norway and Scotland produce some sort of pasture for cattle. and navigable rivers. is likewise much greater. But land. than the best pasture of equal extent. as has already been shewn. by the increase of the produce. which it can purchase. If a pound of butcher's meat. Those remoter counties. like all other animals. but to afford some small rent to the landlord. according to the rate at which that sort of labour is commonly maintained in the neighbourhood. Their rents. It can always purchase or command a greater or smaller quantity of labour. and their cultivation has been improved since that time. too.PART I. would be able to sell their grass and corn cheaper in the London market than themselves. The same extent of ground not only maintains a greater number of cattle. always remains for a rent to the landlord. and would thereby reduce their rents. must be maintained out of it. but as they we brought within a smaller compass. But in remote parts of the country. produces a greater quantity of food than what is sufficient to maintain all the labour necessary for bringing it to market. by diminishing the expense of carriage. The rent increases in proportion to the goodness of the pasture. yet the surplus which remains after replacing the seed and maintaining all that labour. The surplus. The rent of land not only varies with its fertility. They are advantageous to the town by breaking down the monopoly of the country in its neighbourhood. therefore. naturally multiply in proportion to the means of their subsistence. They are advantageous even to that part of the country. Good roads. in almost any situation. Something. but with its situation. food is always more or less in demand. whatever be its produce.—Of the Produce of Land which always affords Rent. from which are drawn both the profit of the farmer and the rent of the landlord. The landlord gains both ways. if managed in the most economical manner. and the surplus. on account of the high wages which are sometimes given to labour. and to collect their produce. which can never be universally established. was never supposed to be worth more than a pound of bread. of which the milk and the increase are always more than sufficient. A corn field of moderate fertility produces a much greater quantity of food for man. A greater quantity of labour. It is not more than fifty years ago. Land in the neighbourhood of a town gives a greater rent than land equally fertile in a distant part of the country. therefore. therefore. Though they introduce some rival commodities into the old market. but it can always purchase such a quantity of labour as it can maintain. from the cheapness of labour. therefore. together with its profits. They are upon that account the greatest of all improvements. and ruin their cultivation. Though its cultivation requires much more labour. less labour becomes requisite to tend them. however. they open many new markets to its produce. As men. not only to maintain all the labour necessary for tending them. but in consequence of that free and universal competition which forces every body to have recourse to it for the sake of self defence. that some of the counties in the neighbourhood of London petitioned the parliament against the extension of the turnpike roads into the remoter counties. in the most liberal way in which that labour is ever maintained. besides. have risen. A smaller proportion of this diminished surplus. and to pay the ordinary profit to the farmer or the owner of the herd or flock.

pound of butcher's meat, therefore, was never supposed to be worth more than a pound of bread, this greater surplus would everywhere be of greater value and constitute a greater fund, both for the profit of the farmer and the rent of the landlord. It seems to have done so universally in the rude beginnings of agriculture. But the relative values of those two different species of food, bread and butcher's meat, are very different in the different periods of agriculture. In its rude beginnings, the unimproved wilds, which then occupy the far greater part of the country, are all abandoned to cattle. There is more butcher's meat than bread; and bread, therefore, is the food for which there is the greatest competition, and which consequently brings the greatest price. At Buenos Ayres, we are told by Ulloa, four reals, one-and-twenty pence halfpenny sterling, was, forty or fifty years ago, the ordinary price of an ox, chosen from a herd of two or three hundred. He says nothing of the price of bread, probably because he found nothing remarkable about it. An ox there, he says, costs little more than the labour of catching him. But corn can nowhere be raised without a great deal of labour; and in a country which lies upon the river Plate, at that time the direct road from Europe to the silver mines of Potosi, the money-price of labour could be very cheap. It is otherwise when cultivation is extended over the greater part of the country. There is then more bread than butcher's meat. The competition changes its direction, and the price of butcher's meat becomes greater than the price of bread. By the extension, besides, of cultivation, the unimproved wilds become insufficient to supply the demand for butcher's meat. A great part of the cultivated lands must be employed in rearing and fattening cattle; of which the price, therefore, must be sufficient to pay, not only the labour necessary for tending them, but the rent which the landlord, and the profit which the farmer, could have drawn from such land employed in tillage. The cattle bred upon the most uncultivated moors, when brought to the same market, are, in proportion to their weight or goodness, sold at the same price as those which are reared upon the most improved land. The proprietors of those moors profit by it, and raise the rent of their land in proportion to the price of their cattle. It is not more than a century ago, that in many parts of the Highlands of Scotland, butcher's meat was as cheap or cheaper than even bread made of oatmeal The Union opened the market of England to the Highland cattle. Their ordinary price, at present, is about three times greater than at the beginning of the century, and the rents of many Highland estates have been tripled and quadrupled in the same time. In almost every part of Great Britain, a pound of the best butcher's meat is, in the present times, generally worth more than two pounds of the best white bread; and in plentiful years it is sometimes worth three or four pounds. It is thus that, in the progress of improvement, the rent and profit of unimproved pasture come to be regulated in some measure by the rent and profit of what is improved, and these again by the rent and profit of corn. Corn is an annual crop; butcher's meat, a crop which requires four or five years to grow. As an acre of land, therefore, will produce a much smaller quantity of the one species of food than of the other, the inferiority of the quantity must be compensated by the superiority of the price. If it was more than compensated, more corn-land would be turned into pasture; and if it was not compensated, part of what was in pasture would be brought back into corn. This equality, however, between the rent and profit of grass and those of corn; of the land of which the immediate produce is food for cattle, and of that of which the immediate produce is food for men, must be understood to take place only through the greater part of the improved lands of a great country. In some particular local situations it is quite otherwise, and the rent and profit of grass are much superior to what can be made by corn. Thus, in the neighbourhood of a great town, the demand for milk, and for forage to horses, frequently contribute, together with the high price of butcher's meat, to raise the value of grass above what may be called its natural proportion to that of corn. This local advantage, it is evident, cannot be communicated to the lands at a distance. Particular circumstances have sometimes rendered some countries so populous, that the whole territory, like the lands in the neighbourhood of a great town, has not been sufficient to produce both the grass and the corn necessary for the subsistence of their inhabitants. Their lands, therefore, have been principally employed in the production of grass, the more bulky commodity,

and which cannot be so easily brought from a great distance; and corn, the food of the great body of the people, has been chiefly imported from foreign countries. Holland is at present in this situation; and a considerable part of ancient Italy seems to have been so during the prosperity of the Romans. To feed well, old Cato said, as we are told by Cicero, was the first and most profitable thing in the management of a private estate; to feed tolerably well, the second; and to feed ill, the third. To plough, he ranked only in the fourth place of profit and advantage. Tillage, indeed, in that part of ancient Italy which lay in the neighbour hood of Rome, must have been very much discouraged by the distributions of corn which were frequently made to the people, either gratuitously, or at a very low price. This corn was brought from the conquered provinces, of which several, instead of taxes, were obliged to furnish a tenth part of their produce at a stated price, about sixpence a-peck, to the republic. The low price at which this corn was distributed to the people, must necessarily have sunk the price of what could be brought to the Roman market from Latium, or the ancient territory of Rome, and must have discouraged its cultivation in that country. In an open country, too, of which the principal produce is corn, a well-inclosed piece of grass will frequently rent higher than any corn field in its neighbourhood. It is convenient for the maintenance of the cattle employed in the cultivation of the corn; and its high rent is, in this case, not so properly paid from the value of its own produce, as from that of the corn lands which are cultivated by means of it. It is likely to fall, if ever the neighbouring lands are completely inclosed. The present high rent of inclosed land in Scotland seems owing to the scarcity of inclosure, and will probably last no longer than that scarcity. The advantage of inclosure is greater for pasture than for corn. It saves the labour of guarding the cattle, which feed better, too, when they are not liable to be disturbed by their keeper or his dog. But where there is no local advantage of this kind, the rent and profit of corn, or whatever else is the common vegetable food of the people, must naturally regulate upon the land which is fit for producing it, the rent and profit of pasture. The use of the artificial grasses, of turnips, carrots, cabbages, and the other expedients which have been fallen upon to make an equal quantity of land feed a greater number of cattle than when in natural grass, should somewhat reduce, it might be expected, the superiority which, in an improved country, the price of butcher's meat naturally has over that of bread. It seems accordingly to have done so; and there is some reason for believing that, at least in the London market, the price of butcher's meat, in proportion to the price of bread, is a good deal lower in the present times than it was in the beginning of the last century. In the Appendix to the life of Prince Henry, Doctor Birch has given us an account of the prices of butcher's meat as commonly paid by that prince. It is there said, that the four quarters of an ox, weighing six hundred pounds, usually cost him nine pounds ten shillings, or thereabouts; that is thirty-one shillings and eight-pence per hundred pounds weight. Prince Henry died on the 6th of November 1612, in the nineteenth year of his age. In March 1764, there was a parliamentary inquiry into the causes of the high price of provisions at that time. It was then, among other proof to the same purpose, given in evidence by a Virginia merchant, that in March 1763, he had victualled his ships for twentyfour or twenty-five shillings the hundred weight of beef, which he considered as the ordinary price; whereas, in that dear year, he had paid twenty-seven shillings for the same weight and sort. This high price in 1764 is, however, four shillings and eight-pence cheaper than the ordinary price paid by Prince Henry; and it is the best beef only, it must be observed, which is fit to be salted for those distant voyages. The price paid by Prince Henry amounts to 3d. 4/5ths per pound weight of the whole carcase, coarse and choice pieces taken together; and at that rate the choice pieces could not have been sold by retail for less than 4½d. or 5d. the pound. In the parliamentary inquiry in 1764, the witnesses stated the price of the choice pieces of the best beef to be to the consumer 4d. and 4½d. the pound; and the coarse pieces in general to be from seven farthings to 2½d. and 2¾d.; and this, they said, was in general one halfpenny dearer than the same sort of pieces had usually been sold in the month of March. But even this high price is still a good deal cheaper than what we can well suppose the ordinary retail price to have been in the

time of Prince Henry. During the first twelve years of the last century, the average price of the best wheat at the Windsor market was £ 1:18:3½d. the quarter of nine Winchester bushels. But in the twelve years preceding 1764 including that year, the average price of the same measure of the best wheat at the same market was £ 2:1:9½d. In the first twelve years of the last century, therefore, wheat appears to have been a good deal cheaper, and butcher's meat a good deal dearer, than in the twelve years preceding 1764, including that year. In all great countries, the greater part of the cultivated lands are employed in producing either food for men or food for cattle. The rent and profit of these regulate the rent and profit of all other cultivated land. If any particular produce afforded less, the land would soon be turned into corn or pasture; and if any afforded more, some part of the lands in corn or pasture would soon be turned to that produce. Those productions, indeed, which require either a greater original expense of improvement, or a greater annual expense of cultivation in order to fit the land for them, appear commonly to afford, the one a greater rent, the other a greater profit, than corn or pasture. This superiority, however, will seldom be found to amount to more than a reasonable interest or compensation for this superior expense. In a hop garden, a fruit garden, a kitchen garden, both the rent of the landlord, and the profit of the farmer, are generally greater than in acorn or grass field. But to bring the ground into this condition requires more expense. Hence a greater rent becomes due to the landlord. It requires, too, a more attentive and skilful management. Hence a greater profit becomes due to the farmer. The crop, too, at least in the hop and fruit garden, is more precarious. Its price, therefore, besides compensating all occasional losses, must afford something like the profit of insurance. The circumstances of gardeners, generally mean, and always moderate, may satisfy us that their great ingenuity is not commonly over-recompensed. Their delightful art is practised by so many rich people for amusement, that little advantage is to be made by those who practise it for profit; because the persons who should naturally be their best customers, supply themselves with all their most precious productions. The advantage which the landlord derives from such improvements, seems at no time to have been greater than what was sufficient to compensate the original expense of making them. In the ancient husbandry, after the vineyard, a well-watered kitchen garden seems to have been the part of the farm which was supposed to yield the most valuable produce. But Democritus, who wrote upon husbandry about two thousand years ago, and who was regarded by the ancients as one of the fathers of the art, thought they did not act wisely who inclosed a kitchen garden. The profit, he said, would not compensate the expense of a stone-wall: and bricks (he meant, I suppose, bricks baked in the sun) mouldered with the rain and the winter-storm, and required continual repairs. Columella, who reports this judgment of Democritus, does not controvert it, but proposes a very frugal method of inclosing with a hedge of brambles and briars, which he says he had found by experience to be both a lasting and an impenetrable fence; but which, it seems, was not commonly known in the time of Democritus. Palladius adopts the opinion of Columella, which had before been recommended by Varro. In the judgment of those ancient improvers, the produce of a kitchen garden had, it seems, been little more than sufficient to pay the extraordinary culture and the expense of watering; for in countries so near the sun, it was thought proper, in those times as in the present, to have the command of a stream of water, which could be conducted to every bed in the garden. Through the greater part of Europe, a kitchen garden is not at present supposed to deserve a better inclosure than mat recommended by Columella. In Great Britain, and some other northern countries, the finer fruits cannot Be brought to perfection but by the assistance of a wall. Their price, therefore, in such countries, must be sufficient to pay the expense of building and maintaining what they cannot be had without. The fruit-wall frequently surrounds the kitchen garden, which thus enjoys the benefit of an inclosure which its own produce could seldom pay for.

That the vineyard, when properly planted and brought to perfection, was the most valuable part of the farm, seems to have been an undoubted maxim in the ancient agriculture, as it is in the modern, through all the wine countries. But whether it was advantageous to plant a new vineyard, was a matter of dispute among the ancient Italian husbandmen, as we learn from Columella. He decides, like a true lover of all curious cultivation, in favour of the vineyard; and endeavours to shew, by a comparison of the profit and expense, that it was a most advantageous improvement. Such comparisons, however, between the profit and expense of new projects are commonly very fallacious; and in nothing more so than in agriculture. Had the gain actually made by such plantations been commonly as great as he imagined it might have been, there could have been no dispute about it. The same point is frequently at this day a matter of controversy in the wine countries. Their writers on agriculture, indeed, the lovers and promoters of high cultivation, seem generally disposed to decide with Columella in favour of the vineyard. In France, the anxiety of the proprietors of the old vineyards to prevent the planting of any new ones, seems to favour their opinion, and to indicate a consciousness in those who must have the experience, that this species of cultivation is at present in that country more profitable than any other. It seems, at the same time, however, to indicate another opinion, that this superior profit can last no longer than the laws which at present restrain the free cultivation of the vine. In 1731, they obtained an order of council, prohibiting both the planting of new vineyards, and the renewal of these old ones, of which the cultivation had been interrupted for two years, without a particular permission from the king, to be granted only in consequence of an information from the intendant of the province, certifying that he had examined the land, and that it was incapable of any other culture. The pretence of this order was the scarcity of corn and pasture, and the superabundance of wine. But had this superabundance been real, it would, without any order of council, have effectually prevented the plantation of new vineyards, by reducing the profits of this species of cultivation below their natural proportion to those of corn and pasture. With regard to the supposed scarcity of corn occasioned by the multiplication of vineyards, corn is nowhere in France more carefully cultivated than in the wine provinces, where the land is fit for producing it: as in Burgundy, Guienne, and the Upper Languedoc. The numerous hands employed in the one species of cultivation necessarily encourage the other, by affording a ready market for its produce. To diminish the number of those who are capable of paying it, is surely a most unpromising expedient for encouraging the cultivation of corn. It is like the policy which would promote agriculture, by discouraging manufactures. The rent and profit of those productions, therefore, which require either a greater original expense of improvement in order to fit the land for them, or a greater annual expense of cultivation, though often much superior to those of corn and pasture, yet when they do no more than compensate such extraordinary expense, are in reality regulated by the rent and profit of those common crops. It sometimes happens, indeed, that the quantity of land which can be fitted for some particular produce, is too small to supply the effectual demand. The whole produce can be disposed of to those who are willing to give somewhat more than what is sufficient to pay the whole rent, wages, and profit, necessary for raising and bringing it to market, according to their natural rates, or according to the rates at which they are paid in the greater part of other cultivated land. The surplus part of the price which remains after defraying the whole expense of improvement and cultivation, may commonly, in this case, and in this case only, bear no regular proportion to the like surplus in corn or pasture, but may exceed it in almost any degree; and the greater part of this excess naturally goes to the rent of the landlord. The usual and natural proportion, for example, between the rent and profit of wine, and those of corn and pasture, must be understood to take place only with regard to those vineyards which produce nothing but good common wine, such as can be raised almost anywhere, upon any light, gravelly, or sandy soil, and which has nothing to recommend it but its strength and wholesomeness. It is with such vineyards only, that the common land of the country can be brought into competition; for with those of a peculiar quality it is evident that it cannot. The vine is more affected by the difference of soils than any other fruit-tree. From some it derives a flavour which no culture or management can equal, it is supposed, upon any other. This flavour, real or imaginary, is sometimes peculiar to the produce of a few vineyards; sometimes it extends

through the greater part of a small district, and sometimes through a considerable part of a large province. The whole quantity of such wines that is brought to market falls short of the effectual demand, or the demand of those who would be willing to pay the whole rent, profit, and wages, necessary for preparing and bringing them thither, according to the ordinary rate, or according to the rate at which they are paid in common vineyards. The whole quantity, therefore, can be disposed of to those who are willing to pay more, which necessarily raises their price above that of common wine. The difference is greater or less, according as the fashionableness and scarcity of the wine render the competition of the buyers more or less eager. Whatever it be, the greater part of it goes to the rent of the landlord. For though such vineyards are in general more carefully cultivated than most others, the high price of the wine seems to be, not so much the effect, as the cause of this careful cultivation. In so valuable a produce, the loss occasioned by negligence is so great, as to force even the most careless to attention. A small part of this high price, therefore, is sufficient to pay the wages of the extraordinary labour bestowed upon their cultivation, and the profits of the extraordinary stock which puts that labour into motion. The sugar colonies possessed by the European nations in the West Indies may be compared to those precious vineyards. Their whole produce falls short of the effectual demand of Europe, and can be disposed of to those who are willing to give more than what is sufficient to pay the whole rent, profit, and wages, necessary for preparing and bringing it to market, according to the rate at which they are commonly paid by any other produce. In Cochin China, the finest white sugar generally sells for three piastres the quintal, about thirteen shillings and sixpence of our money, as we are told by Mr Poivre {Voyages d'un Philosophe.}, a very careful observer of the agriculture of that country. What is there called the quintal, weighs from a hundred and fifty to two hundred Paris pounds, or a hundred and seventy-five Paris pounds at a medium, which reduces the price of the hundred weight English to about eight shillings sterling; not a fourth part of what is commonly paid for the brown or muscovada sugars imported from our colonies, and not a sixth part of what is paid for the finest white sugar. The greater part of the cultivated lands in Cochin China are employed in producing corn and rice, the food of the great body of the people. The respective prices of corn, rice, and sugar, are there probably in the natural proportion, or in that which naturally takes place in the different crops of the greater part of cultivated land, and which recompenses the landlord and farmer, as nearly as can be computed, according to what is usually the original expense of improvement, and the annual expense of cultivation. But in our sugar colonies, the price of sugar bears no such proportion to that of the produce of a rice or corn field either in Europe or America. It is commonly said that a sugar planter expects that the rum and the molasses should defray the whole expense of his cultivation, and that his sugar should be all clear profit. If this be true, for I pretend not to affirm it, it is as if a corn farmer expected to defray the expense of his cultivation with the chaff and the straw, and that the grain should be all clear profit. We see frequently societies of merchants in London, and other trading towns, purchase waste lands in our sugar colonies, which they expect to improve and cultivate with profit, by means of factors and agents, notwithstanding the great distance and the uncertain returns, from the defective administration of justice in those countries. Nobody will attempt to improve and cultivate in the same manner the most fertile lands of Scotland, Ireland, or the corn provinces of North America, though, from the more exact administration of justice in these countries, more regular returns might be expected. In Virginia and Maryland, the cultivation of tobacco is preferred, as most profitable, to that of corn. Tobacco might be cultivated with advantage through the greater part of Europe; but, in almost every part of Europe, it has become a principal subject of taxation; and to collect a tax from every different farm in the country where this plant might happen to be cultivated, would be more difficult, it has been supposed, than to levy one upon its importation at the custom-house. The cultivation of tobacco has, upon this account, been most absurdly prohibited through the greater part of Europe, which necessarily gives a sort of monopoly to the countries where it is allowed; and as Virginia and Maryland produce the greatest quantity of it, they share largely, though with some competitors, in the advantage of this monopoly. The cultivation of tobacco, however, seems not to be so advantageous as that of sugar. I have never even heard of any tobacco plantation that was improved and cultivated by the capital of merchants who resided in Great Britain; and our tobacco colonies send us home no such wealthy planters as we see frequently arrive from our sugar islands. Though, from the preference given in those colonies to the cultivation of tobacco above

that of corn, it would appear that the effectual demand of Europe for tobacco is not completely supplied, it probably is more nearly so than that for sugar; and though the present price of tobacco is probably more than sufficient to pay the whole rent, wages, and profit, necessary for preparing and bringing it to market, according to the rate at which they are commonly paid in corn land, it must not be so much more as the present price of sugar. Our tobacco planters, accordingly, have shewn the same fear of the superabundance of tobacco, which the proprietors of the old vineyards in France have of the superabundance of wine. By act of assembly, they have restrained its cultivation to six thousand plants, supposed to yield a thousand weight of tobacco, for every negro between sixteen and sixty years of age. Such a negro, over and above this quantity of tobacco, can manage, they reckon, four acres of Indian corn. To prevent the market from being overstocked, too, they have sometimes, in plentiful years, we are told by Dr Douglas {Douglas's Summary, vol. ii. p. 379, 373.} (I suspect he has been ill informed), burnt a certain quantity of tobacco for every negro, in the same manner as the Dutch are said to do of spices. If such violent methods are necessary to keep up the present price of tobacco, the superior advantage of its culture over that of corn, if it still has any, will not probably be of long continuance. It is in this manner that the rent of the cultivated land, of which the produce is human food, regulates the rent of the greater part of other cultivated land. No particular produce can long afford less, because the land would immediately be turned to another use; and if any particular produce commonly affords more, it is because the quantity of land which can be fitted for it is too small to supply the effectual demand. In Europe, corn is the principal produce of land, which serves immediately for human food. Except in particular situations, therefore, the rent of corn land regulates in Europe that of all other cultivated land. Britain need envy neither the vineyards of France, nor the olive plantations of Italy. Except in particular situations, the value of these is regulated by that of corn, in which the fertility of Britain is not much inferior to that of either of those two countries. If, in any country, the common and favourite vegetable food of the people should be drawn from a plant of which the most common land, with the same, or nearly the same culture, produced a much greater quantity than the most fertile does of corn; the rent of the landlord, or the surplus quantity of food which would remain to him, after paying the labour, and replacing the stock of the farmer, together with its ordinary profits, would necessarily be much greater. Whatever was the rate at which labour was commonly maintained in that country, this greater surplus could always maintain a greater quantity of it, and, consequently, enable the landlord to purchase or command a greater quantity of it. The real value of his rent, his real power and authority, his command of the necessaries and conveniencies of life with which the labour of other people could supply him, would necessarily be much greater. A rice field produces a much greater quantity of food than the most fertile corn field. Two crops in the year, from thirty to sixty bushels each, are said to be the ordinary produce of an acre. Though its cultivation, therefore, requires more labour, a much greater surplus remains after maintaining all that labour. In those rice countries, therefore, where rice is the common and favourite vegetable food of the people, and where the cultivators are chiefly maintained with it, a greater share of this greater surplus should belong to the landlord than in corn countries. In Carolina, where the planters, as in other British colonies, are generally both farmers and landlords, and where rent, consequently, is confounded with profit, the cultivation of rice is found to be more profitable than that of corn, though their fields produce only one crop in the year, and though, from the prevalence of the customs of Europe, rice is not there the common and favourite vegetable food of the people. A good rice field is a bog at all seasons, and at one season a bog covered with water. It is unfit either for corn, or pasture, or vineyard, or, indeed, for any other vegetable produce that is very useful to men; and the lands which are fit for those purposes are not fit for rice. Even in the rice countries, therefore, the rent of rice lands cannot regulate the rent of the other cuitivated land which can never be turned to that produce. The food produced by a field of potatoes is not inferior in quantity to that produced by a field of rice, and much superior to what is produced by a field of wheat. Twelve thousand weight of

potatoes from an acre of land is not a greater produce than two thousand weight of wheat. The food or solid nourishment, indeed, which can be drawn from each of those two plants, is not altogether in proportion to their weight, on account of the watery nature of potatoes. Allowing, however, half the weight of this root to go to water, a very large allowance, such an acre of potatoes will still produce six thousand weight of solid nourishment, three times the quantity produced by the acre of wheat. An acre of potatoes is cultivated with less expense than an acre of wheat; the fallow, which generally precedes the sowing of wheat, more than compensating the hoeing and other extraordinary culture which is always given to potatoes. Should this root ever become in any part of Europe, like rice in some rice countries, the common and favourite vegetable food of the people, so as to occupy the same proportion of the lands in tillage, which wheat and other sorts of grain for human food do at present, the same quantity of cultivated land would maintain a much greater number of people; and the labourers being generally fed with potatoes, a greater surplus would remain after replacing all the stock, and maintaining all the labour employed in cultivation. A greater share of this surplus, too, would belong to the landlord. Population would increase, and rents would rise much beyond what they are at present. The land which is fit for potatoes, is fit for almost every other useful vegetable. If they occupied the same proportion of cultivated land which corn does at present, they would regulate, in the same manner, the rent of the greater part of other cultivated land. In some parts of Lancashire, it is pretended, I have been told, that bread of oatmeal is a heartier food for labouring people than wheaten bread, and I have frequently heard the same doctrine held in Scotland. I am, however, somewhat doubtful of the truth of it. The common people in Scotland, who are fed with oatmeal, are in general neither so strong nor so handsome as the same rank of people in England, who are fed with wheaten bread. They neither work so well, nor look so well; and as there is not the same difference between the people of fashion in the two countries, experience would seem to shew, that the food of the common people in Scotland is not so suitable to the human constitution as that of their neighbours of the same rank in England. But it seems to be otherwise with potatoes. The chairmen, porters, and coal-heavers in London, and those unfortunate women who live by prostitution, the strongest men and the most beautiful women perhaps in the British dominions, are said to be, the greater part of them, from the lowest rank of people in Ireland, who are generally fed with this root. No food can afford a more decisive proof of its nourishing quality, or of its being peculiarly suitable to the health of the human constitution. It is difficult to preserve potatoes through the year, and impossible to store them like corn, for two or three years together. The fear of not being able to sell them before they rot, discourages their cultivation, and is, perhaps, the chief obstacle to their ever becoming in any great country, like bread, the principal vegetable food of all the different ranks of the people.

PART II.—Of the Produce of Land, which sometimes does, and sometimes does not, afford Rent.
Human food seems to be the only produce of land, which always and necessarily affords some rent to the landlord. Other sorts of produce sometimes may, and sometimes may not, according to different circumstances.
After food, clothing and lodging are the two great wants of mankind. Land, in its original rude state, can afford the materials of clothing and lodging to a much greater number of people than it can feed. In its improved state, it can sometimes feed a greater number of people than it can supply with those materials; at least in the way in which they require them, and are willing to pay for them. In the one state, therefore, there is always a superabundance of these materials, which are frequently, upon that account, of little or no value. In the other, there is often a scarcity, which necessarily augments their value. In the one state, a great part of them is thrown away as useless and the price of what is used is considered as equal only to the labour and expense of fitting it for use, and can, therefore, afford no rent to the landlord. In the other, they are all made use of, and there is frequently a demand for more than can be had. Somebody is always willing to give more for every part of them, than what is sufficient to pay the expense of bringing them to market. Their price, therefore, can always afford some rent to the landlord. The skins of the larger animals were the original materials of clothing. Among nations of hunters and shepherds, therefore, whose food consists chiefly in the flesh of those animals, everyman, by providing himself with food, provides himself with the materials of more clothing than he can wear. If there was no foreign commerce, the greater part of them would be thrown away as things of no value. This was probably the case among the hunting nations of North America, before their country was discovered by the Europeans, with whom they now exchange their surplus peltry, for blankets, fire-arms, and brandy, which gives it some value. In the present commercial state of the known world, the most barbarous nations, I believe, among whom land property is established, have some foreign commerce of this kind, and find among their wealthier neighbours such a demand for all the materials of clothing, which their land produces, and which can neither be wrought up nor consumed at home, as raises their price above what it costs to send them to those wealthier neighbours. It affords, therefore, some rent to the landlord. When the greater part of the Highland cattle were consumed on their own hills, the exportation of their hides made the most considerable article of the commerce of that country, and what they were exchanged for afforded some addition to the rent of the Highland estates. The wool of England, which in old times, could neither be consumed nor wrought up at home, found a market in the then wealthier and more industrious country of Flanders, and its price afforded something to the rent of the land which produced it. In countries not better cultivated than England was then, or than the Highlands of Scotland are now, and which had no foreign commerce, the materials of clothing would evidently be so superabundant, that a great part of them would be thrown away as useless, and no part could afford any rent to the landlord. The materials of lodging cannot always be transported to so great a distance as those of clothing, and do not so readily become an object of foreign commerce. When they are superabundant in the country which produces them, it frequently happens, even in the present commercial state of the world, that they are of no value to the landlord. A good stone quarry in the neighbourhood of London would afford a considerable rent. In many parts of Scotland and Wales it affords none. Barren timber for building is of great value in a populous and well-cultivated country, and the land which produces it affords a considerable rent. But in many parts of North America, the landlord would be much obliged to any body who would carry away the greater part of his large trees. In some parts of the Highlands of Scotland, the bark is the only part of the wood which, for want of roads and water-carriage, can be sent to market; the timber is left to rot upon the ground. When the

materials of lodging are so superabundant, the part made use of is worth only the labour and expense of fitting it for that use. It affords no rent to the landlord, who generally grants the use of it to whoever takes the trouble of asking it. The demand of wealthier nations, however, sometimes enables him to get a rent for it. The paving of the streets of London has enabled the owners of some barren rocks on the coast of Scotland to draw a rent from what never afforded any before. The woods of Norway, and of the coasts of the Baltic, find a market in many parts of Great Britain, which they could not find at home, and thereby afford some rent to their proprietors. Countries are populous, not in proportion to the number of people whom their produce can clothe and lodge, but in proportion to that of those whom it can feed. When food is provided, it is easy to find the necessary clothing and lodging. But though these are at hand, it may often be difficult to find food. In some parts of the British dominions, what is called a house may be built by one day's labour of one man. The simplest species of clothing, the skins of animals, require somewhat more labour to dress and prepare them for use. They do not, however, require a great deal. Among savage or barbarous nations, a hundredth, or little more than a hundredth part of the labour of the whole year, will be sufficient to provide them with such clothing and lodging as satisfy the greater part of the people. All the other ninety-nine parts are frequently no more than enough to provide them with food. But when, by the improvement and cultivation of land, the labour of one family can provide food for two, the labour of half the society becomes sufficient to provide food for the whole. The other half, therefore, or at least the greater part of them, can be employed in providing other things, or in satisfying the other wants and fancies of mankind. Clothing and lodging, household furniture, and what is called equipage, are the principal objects of the greater part of those wants and fancies. The rich man consumes no more food than his poor neighbour. In quality it may be very different, and to select and prepare it may require more labour and art; but in quantity it is very nearly the same. But compare the spacious palace and great wardrobe of the one, with the hovel and the few rags of the other, and you will be sensible that the difference between their clothing, lodging, and household furniture, is almost as great in quantity as it is in quality. The desire of food is limited in every man by the narrow capacity of the human stomach; but the desire of the conveniencies and ornaments of building, dress, equipage, and household furniture, seems to have no limit or certain boundary. Those, therefore, who have the command of more food than they themselves can consume, are always willing to exchange the surplus, or, what is the same thing, the price of it, for gratifications of this other kind. What is over and above satisfying the limited desire, is given for the amusement of those desires which cannot be satisfied, but seem to be altogether endless. The poor, in order to obtain food, exert themselves to gratify those fancies of the rich; and to obtain it more certainly, they vie with one another in the cheapness and perfection of their work. The number of workmen increases with the increasing quantity of food, or with the growing improvement and cultivation of the lands; and as the nature of their business admits of the utmost subdivisions of labour, the quantity of materials which they can work up, increases in a much greater proportion than their numbers. Hence arises a demand for every sort of material which human invention can employ, either usefully or ornamentally, in building, dress, equipage, or household furniture; for the fossils and minerals contained in the bowels of the earth, the precious metals, and the precious stones. Food is, in this manner, not only the original source of rent, but every other part of the produce of land which afterwards affords rent, derives that part of its value from the improvement of the powers of labour in producing food, by means of the improvement and cultivation of land. Those other parts of the produce of land, however, which afterwards afford rent, do not afford it always. Even in improved and cultivated countries, the demand for them is not always such as to afford a greater price than what is sufficient to pay the labour, and replace, together with its ordinary profits, the stock which must be employed in bringing them to market. Whether it is or is not such, depends upon different circumstances. Whether a coal mine, for example, can afford any rent, depends partly upon its fertility, and partly upon its situation.

A mine of any kind may be said to be either fertile or barren, according as the quantity of mineral which can be brought from it by a certain quantity of labour, is greater or less than what can be brought by an equal quantity from the greater part of other mines of the same kind. Some coal mines, advantageously situated, cannot be wrought on account of their barrenness. The produce does not pay the expense. They can afford neither profit nor rent. There are some, of which the produce is barely sufficient to pay the labour, and replace, together with its ordinary profits, the stock employed in working them. They afford some profit to the undertaker of the work, but no rent to the landlord. They can be wrought advantageously by nobody but the landlord, who, being himself the undertaker of the work, gets the ordinary profit of the capital which he employs in it. Many coal mines in Scotland are wrought in this manner, and can be wrought in no other. The landlord will allow nobody else to work them without paying some rent, and nobody can afford to pay any. Other coal mines in the same country, sufficiently fertile, cannot be wrought on account of their situation. A quantity of mineral, sufficient to defray the expense of working, could be brought from the mine by the ordinary, or even less than the ordinary quantity of labour: but in an inland country, thinly inhabited, and without either good roads or water-carriage, this quantity could not be sold. Coals are a less agreeable fuel than wood: they are said too to be less wholesome. The expense of coals, therefore, at the place where they are consumed, must generally be somewhat less than that of wood. The price of wood, again, varies with the state of agriculture, nearly in the same manner, and exactly for the same reason, as the price of cattle. In its rude beginnings, the greater part of every country is covered with wood, which is then a mere incumbrance, of no value to the landlord, who would gladly give it to any body for the cutting. As agriculture advances, the woods are partly cleared by the progress of tillage, and partly go to decay in consequence of the increased number of cattle. These, though they do not increase in the same proportion as corn, which is altogether the acquisition of human industry, yet multiply under the care and protection of men, who store up in the season of plenty what may maintain them in that of scarcity; who, through the whole year, furnish them with a greater quantity of food than uncultivated nature provides for them; and who, by destroying and extirpating their enemies, secure them in the free enjoyment of all that she provides. Numerous herds of cattle, when allowed to wander through the woods, though they do not destroy the old trees, hinder any young ones from coming up; so that, in the course of a century or two, the whole forest goes to ruin. The scarcity of wood then raises its price. It affords a good rent; and the landlord sometimes finds that he can scarce employ his best lands more advantageously than in growing barren timber, of which the greatness of the profit often compensates the lateness of the returns. This seems, in the present times, to be nearly the state of things in several parts of Great Britain, where the profit of planting is found to be equal to that of either corn or pasture. The advantage which the landlord derives from planting can nowhere exceed, at least for any considerable time, the rent which these could afford him; and in an inland country, which is highly cuitivated, it will frequently not fall much short of this rent. Upon the seacoast of a well-improved country, indeed, if coals can conveniently be had for fuel, it may sometimes be cheaper to bring barren timber for building from less cultivated foreign countries than to raise it at home. In the new town of Edinburgh, built within these few years, there is not, perhaps, a single stick of Scotch timber. Whatever may be the price of wood, if that of coals is such that the expense of a coal fire is nearly equal to that of a wood one we may be assured, that at that place, and in these circumstances, the price of coals is as high as it can be. It seems to be so in some of the inland parts of England, particularly in Oxfordshire, where it is usual, even in the fires of the common people, to mix coals and wood together, and where the difference in the expense of those two sorts of fuel cannot, therefore, be very great. Coals, in the coal countries, are everywhere much below this highest price. If they were not, they could not bear the expense of a distant carriage, either by land or by water. A small quantity only could be sold; and the coal masters and the coal proprietors find it more for their interest to sell a great quantity at a price somewhat above the lowest, than a small

A sixth part of the gross produce is the rent. must necessarily more or less affect their price at every other in it. Some works are abandoned altogether. the one that he can get a greater rent. others can afford no rent. at every mine. abandoned. and some do not afford so much. after the discovery of those of Potosi. and less upon its situation. or replace. too. and it is seldom a rent certain. it can. The price of coals in Westmoreland or Shropshire can have little effect on their price at Newcastle. but at those of China. at the greater part of mines. being regulated in some measure by its price at the most fertile mine in the world that is actually wrought. and can seldom afford a very high rent to the landlord. he says. and other necessaries which were consumed in that operation. with the mines of Cuba and St. but from Europe to China. The most fertile coal mine. too. like that of all other commodities. the most fertile that are known in the world. therefore. afford more. and their price in the Lionnois can have none at all. Rent accordingly. Their neighbours are soon obliged to sell at the same price. The price. or the quantity either of labour or of other goods which it will purchase there. Rent. at the most fertile mines in the world. and of the most distant sea carriage. not only at the silver mines of Europe. frequently depends as much upon its situation as upon its fertility. but. the stock which must be employed in bringing them to market. regulates the price of coals at all the other mines in its neighbourhood. the price of coals must generally be nearly about this price. The price of silver in Peru. Some. Their market is not confined to the countries in the neighbourhood of the mine. the other that he can get a greater profit. The value of silver was so much reduced. the iron of Spain in that of Chili and Peru. that their produce could no longer pay the expense of working them. is. with a profit. and it is generally a rent certain and independent of the occasional variations in the crop. ten years purchase is regarded as a good price for that of a coal mine. too. The silver of Peru finds its way. and in fact commonly are. The coarse. we are told by Frezier and Ulloa. the price which is barely sufficient to replace. Mr. a fifth of the gross produce is a very great rent. A sixth part of the gross produce may be reckoned the average rent of the tin mines of Cornwall. Borlace. a tenth the common rent. But the productions of the most distant metallic mines frequently may. seems at the greater part of mines to have but a small share in the price of the coarse. The lowest price at which coals can be sold for any considerable time. of several very fertile lead mines in Scotland. This was the case. Labour and profit make up the greater part of both. The productions of such distant coal mines can never be brought into competition with one another. clothes. These are so great. and still more that of the precious metals. not only to Europe. together with its ordinary profits. when separated from the ore. the food. The value of a coal mine to the proprietor. At a coal mine for which the landlord can get no rent. The price of every metal. The rent of an estate above ground. the greater part of them. both their rent and their profit. After the discovery of the mines of Peru. and sometimes takes away altogether. must have some influence on its price. the proprietor frequently exacts no . In coal mines. That of a metallic mine depends more upon its fertility. Both the proprietor and the undertaker of the work find. The copper of Japan makes an article of commerce in Europe. and still more the precious metals. and a still smaller in that of the precious metals. as we are told by the Rev. vice-warden of the stannaries. The price of copper in Japan must have some influence upon its price at the copper mines in Europe. even where coals afford one. but extends to the whole world. and though it always diminishes. which he must either work himself or let it alone altogether. of the coarse.quantity at the highest. do very little more than pay the expense of working. that they can generally bear the expense of a very long land. and even with the ancient mines of Peru. but depends upon the occasional variations in the produce. by somewhat underselling all their neighbours. therefore. the silver mines of Europe were. and can be wrought only by the proprietor. though they cannot so well afford it. commonly amounts to what is supposed to be a third of the gross produce. has generally a smaller share in their price than in that of most other parts of the rude produce of land. that in a country where thirty years purchase is considered as a moderate price for the property of a landed estate. are so valuable. lodging. In the silver mines of Peru. Domingo.

The interest of the duke of Cornwall has given occasion to a regulation nearly of the same kind in that ancient dutchy. Gold. paying him the ordinary multure or price of grinding. which cannot well be carried on but in work-houses erected for the purpose. however. and afterwards a tenth. gives more temptation to smuggling than the tax of one twentieth upon tin. than in the precious metal. in which the prizes do not compensate the blanks. He becomes proprietor of this portion of the mine. as a lottery. But the silver mines of Peru are not now able to pay even this low rent. derives a considerable part of his revenue from the produce of silver mines. but by a very laborious and tedious operation. from which it is impossible to separate it in such quantities as will pay for the expense. Even this tax upon silver. was to the whole average rent of the silver mines of Peru. but that he will grind the ore at his mill. that when any person undertakes to work a new mine in Peru. The same most respectable and well-informed authors acquaint us. therefore. is generally mineralized with some other body. The tax of the duke of Cornwall upon tin is supposed to amount to more than five per cent. is almost always found virgin. not only on account of the superior value of the metal in proportion to its bulk. is entitled to measure off two hundred and forty-six feet in length. as thirteen to twelve. as in silver. therefore. like most other metals. Gold. or give it in lease to another. is said to be very ill paid. earth. The tax of the king of Spain. and the tax upon silver was. even when mixed. too. however. As the sovereign. If there had been no tax. the tax of the king of Spain amounted to one fifth of the standard silver. It was once a fifth. but. is much more liable to be smuggled than even silver. indeed. it seems. It is sometimes found in pieces of some bulk. in small and almost insensible particles. it can be separated from them by a very short and simple operation. it seems. This twentieth part seems to be the whole rent which is paid by the greater part of the gold mines of Chili and Peru. the sacred rights of private property are sacrificed to the supposed interests of public revenue. together with its ordinary profits. Frezier and Ulloa. you will find that the whole average rent of the tin mines of Cornwall. Mining. belong to the proprietor of the mine. Silver is very seldom found virgin. because they could not afford this tax. a very small acknowledgment must be paid upon working it. this fifth would naturally have belonged to the landlord. it is probable. the law in Peru gives every possible encouragement to the discovery and working of new ones. makes a greater part of the price of tin at the most fertile tin mines than it does of silver at the most fertile silver mines in the world. to whom. and smuggling must be much easier in the precious than in the bulky commodity. if tin was duty free. which till then might be considered as the real rent of the greater part of the silver mines of Peru. and many mines might have been wrought which could not then be wrought. and in gold the king's tax amounts only to a twentieth part of the standard rental. Rent. and can work it without paving any acknowledgment to the landlord. and may either work it himself. and whatever may be his proportion. to find a person who has made his fortune by a silver. though the greatness of some tempts many adventurers to throw away their fortunes in such unprosperous projects. with sand. any person who discovers a tin mine may mark out its limits to a certain extent. according to what he supposes to be the direction of the vein. and. say the same authors. in 1736. accordingly. without the consent of the owner of the land. in the coarse. The bounder becomes the real proprietor of the mine. But if you add one twentieth to one sixth. Till 1736. In both regulations. The same encouragement is given in Peru to the discovery and working of new gold mines. and half as much in breadth. is considered there in the same light as here. reduced from one fifth to one tenth. Neither are the profits of the undertakers of silver mines commonly very great in Peru. which can be carried on in any private house by any body who is . it would naturally. too. but it was found that the work could not bear even the lowest of these two taxes. or one twentieth part of the value. the richest which have been known in the world. on the contrary. If it is rare. and. Whoever discovers a new mine. which is called bounding a mine. and is upon that account shunned and avoided by every body. it is still much rarer to find one who has done so by a gold mine. the residue which remains to the proprietor is greater. but on account of the peculiar way in which nature produces it. In waste and uninclosed lands. he is universally looked upon as a man destined to bankruptcy and ruin. and that of the duke of Cornwall very well. however. After replacing the stock employed in working those different mines. exposed to the inspection of the king's officers.other acknowledgment from the undertaker of the mine. and other extraneous bodies. too.

with the ordinary profits. both of the precious metals and of the precious stones. any other metal. Rent comes in but for a very small share. It must at least be sufficient to replace that stock. and the same quality would render a gold boiler still better than a silver one. The stock which must commonly be employed. they can more easily be kept clean. In their eyes. and was the quality which fitted them for that employment. determine it. and the merit of their beauty is greatly enhanced by their scarcity. With the greater part of rich people. Such objects they are willing to purchase at a higher price than things much more beautiful and useful. As they are less liable to rust and impurity. may have afterwards contributed to keep up or increase their value. is but ill paid upon silver. This value was antecedent to. As the prices. It is not determined by that of any other commodity. in their eye. a jeweller. or by the great labour which it requires to collect any considerable quantity of it. and by diminishing the quantity which could be employed in any other way. No paint or dye can give so splendid a colour as gilding. the food. are often. A silver boiler is more cleanly than a lead. They are of no use but as ornaments. as they were superior to those of Europe. and the utensils. beyond which no scarcity can ever raise it. it might have exchanged for an equal quantity of other goods. by occasioning a new demand. which is in any degree either useful or beautiful. a labour which nobody can afford to pay but themselves. The demand for those metals arises partly from their utility. Their highest price. Though the quantity of silver was much less. the rent which a mine of either can afford to its proprietor is in proportion. he was informed that the sovereign of the country. and lodging. frequently for no share. are the original foundation of the high price of those metals. seems not to be necessarily determined by any thing but the actual scarcity or plenty of these metals themselves. The lowest price at which the precious metals can be sold. visited the diamond mines of Golconda and Visiapour. and the proprietor's share might have enabled him to purchase or command an equal quantity either of labour or of commodities. These qualities of utility. it is likely to be much worse paid upon gold. perhaps. . but to what may be called its relative fertility. which must commonly be consumed in bringing them from the mine to the market. copper. and rent must make a much smaller part of the price of gold than that of silver. and the most fertile mines only afford any considerable rent. and scarcity. or by the difficulty and expense of getting them from the mine. were to the proprietor not worth the working. but more common. and exchange for a greater quantity of other goods. Wages and profit accordingly make up. however. the chief enjoyment of riches consists in the parade of riches. The other. The demand for the precious stones arises altogether from their beauty. is regulated by the same principles which fix the lowest ordinary price of all other goods. beauty. more agreeable when made of them. arises from their beauty. When Tavernier. which renders them peculiarly fit for the ornaments of dress and furniture.possessed of a small quantity of mercury. it seems. or tin one. which. If you except iron. during any considerable time. the merit of an object. upon most occasions. and partly from their beauty. and independent of their being employed as coin. upon that account. however. and the smallest bit of it may become more precious than a diamond. is never so complete as when they appear to possess those decisive marks of opulence which nobody can possess but themselves. Increase the scarcity of gold to a certain degree. clothes. had ordered all of them to be shut up except those which yielded the largest and finest stones. or the smallest quantity of other goods for which they can be exchanged. That employment. the value of silver might be so much degraded as to render even the mines of Potosi not worth the working. or to its superiority over other mines of the same kind. The merit of their beauty is greatly enhanced by their scarcity. they are more useful than. however. Their principal merit. therefore. is greatly enhanced by its scarcity. almost the whole of the high price. is regulated all over the world by their price at the most fertile mine in it. as much superior to those of Potosi. not to its absolute. or of the great quantity of other goods for which they can everywhere be exchanged. Before the discovery of the Spanish West Indies. If the king's tax. for whose benefit they were wrought. in the same manner as the price of coals is by that of wood. the most fertile mines in Europe may have afforded as great a rent to their proprietors as the richest mines in Peru do at present. If new mines were discovered. either of the table or the kitchen.

could be purchased for a smaller quantity of commodities. the passion of the Spaniards would not have surprised them. clothes. both for the precious metals and the precious stones. might have been the same. and the other frivolous ornaments of dress and furniture. They seemed to value them as we would do any little pebbles of somewhat more than ordinary beauty. That abundance of food. both to the public and to the proprietor. and of the commodities with which that labour can supply him. Whatever increases the fertility of land in producing food. for a very small quantity of those glittering baubles. They gave them to their new guests at the first request. A produce. The poor inhabitants of Cuba and St. A service of plate. The most abundant mines. a certain number of people. and whatever may be the proportion of the landlord. and to consider them as just worth the picking up. Domingo. clothe. It is otherwise in estates above ground. The value.The value. they would willingly give as much as might maintain a whole family for many years. is the great cause of the demand. could add little to the wealth of the world. lodging. as well as for every other conveniency and ornament of dress. in consequence of the improvement of land. without seeming to think that they had made them any very valuable present. that. is in proportion to their absolute. can always feed. The land which produces a certain quantity of food. of which the value is principally derived from its scarcity. but it is the abundance of food which gives the principal part of their value to many other sorts of riches. and equipage. and lodge. They were astonished to observe the rage of the Spaniards to obtain them. so scanty always among themselves. used to wear little bits of gold as ornaments in their hair and other parts of their dress. but not worth the refusing to any body who asked them. either of the precious metals. Could they have been made to understand this. or of the precious stones. . it will always give him a proportionable command of the labour of those people. but contributes likewise to increase that of many other lands. household furniture. it is generally increased by it. both of their produce and of their rent. Food not only constitutes the principal part of the riches of the world. many people have the disposal beyond what they themselves can consume. the real revenue which they afforded. and in this would consist the sole advantage which the world could derive from that abundance. of which. when they were first discovered by the Spaniards. increases not only the value of the lands upon which the improvement is bestowed. which they could never have found among those whom their own produce could maintain. On the contrary. The value of the most barren land is not diminished by the neighbourhood of the most fertile. and had no notion that there could anywhere be a country in which many people had the disposal of so great a superfluity of food. and not to their relative fertility. and lodging. both of the produce and of the rent. is necessarily degraded by its abundance. by creating a new demand for their produce. The great number of people maintained by the fertile lands afford a market to many parts of the produce of the barren.

even though there should not be another within a thousand miles of it. and of that which sometimes does. the principal part of the subsistence of the labourer. should gradually come to be more and more in demand. the materials of clothing and lodging. should increase. in spite of all improvements. in a greater proportion than the demand. Unless the world in general. might gradually purchase or command a smaller and a smaller quantity of labour. therefore. will necessarily increase with the increasing improvement and population of the country round about it. the value of silver would gradually rise in proportion to that of corn. In the whole progress of improvement. that the real price of that metal might gradually fall. in other words. the supply of that metal should increase nearly in the same proportion as the demand. continue very nearly the same. it might. This. should gradually become dearer and dearer. the demand for silver might not be at all increased by the improvement even of a large country in the neighbourhood of the mine. Even though the world in general were improving. be advancing in improvement and population. The increasing abundance of food. yet if. or. must necessarily increase the demand for every part of the produce of land which is not food. be expected there should be only one variation in the comparative values of those two different sorts of produce. Any given quantity of silver would exchange for a greater and a greater quantity of corn. should gradually exchange for a greater and a greater quantity of food. that is. in the course of its improvements. though the demand for silver would necessarily increase. the useful fossils and materials of the earth. The market for the produce of a free-stone quarry can seldom extend more than a few miles round about it. the supply. accordingly. especially if it should be the only one in the neighbourhood. If. in other words. But if. any given quantity. The great market for silver is the commercial and civilized part of the world. the demand of this market should increase.—Of the variations in the Proportion between the respective Values of that sort of Produce which always affords Rent. increased the supply of some of them in a still greater proportion than the demand. and would have been the case with all of them upon all occasions. and the average money price of corn would. the supply did not increase in the same proportion. on the other hand. As art and industry advance. at the same time. by the general progress of improvement. new mines should be discovered. in spite of all improvements. the precious metals and the precious stones. has been the case with most of these things upon most occasions. on the contrary. for example. will not necessarily increase with the improvement of the country in which it is situated. for example. a pound weight of it.PART III. or exchange for a smaller and a smaller quantity of corn. If. if particular accidents had not. upon some occasions. The value of that sort which sometimes does. the average money price of corn would gradually become cheaper and cheaper. in consequence of the increasing improvement and cultivation. gradually become dearer and dearer. it would continue to purchase or exchange for nearly the same quantity of corn. but the market for the produce of a silver mine may extend over the whole known world. should constantly rise in proportion to that which always affords some rent. or. and sometimes does not. the average money price of corn would. and the demand must generally be in proportion to the improvement and population of that small district. for many years together. These three seem to exhaust all the possible combinations of events which can happen in the . afford Rent. by some accident. But the value of a silver mine. yet the supply might increase in so much a greater proportion. The value of a free-stone quarry. therefore. while. that metal would gradually become cheaper and cheaper. much more fertile than any which had been known before. and sometimes does not afford rent. and which can be applied either to use or to ornament. or. in other words.

in the beginning of the fourteenth century. and twopence a-quarter. and during the course of the four centuries preceding the present. which cost seventeen pounds ten shillings. the term to which the statute refers. and at which it seems to have continued to be estimated till about 1570. be contented with the same wages and liveries (liveries in those times signified not only clothes. the common price of wheat was not less than four ounces of silver the quarter. equal to about twenty shillings of our present money. In the preamble. but the prices of many particulars. which cost four pounds. twenty quarters of oats. it complains much of the insolence of servants. and that of other grain in proportion. as old at least as the time of his grandfather.progress of improvement. which cost nineteen pounds. in which I have here set them down. Four ounces of silver. 1st. in those times. 2dly. and that it should always be in the option of the master to deliver them either the wheat or the money. fifty-eight quarters of malt. equal to six shillings and eightpence of the money of those times. the average price of the quarter of wheat in England seems not to have been estimated lower than four ounces of silver. Tower weight. gave a feast upon his installation-day. besides. and from which. since it required a particular statute to oblige servants to accept of it in exchange for their usual livery of provisions. as the prices actually paid for large quantities of grain consumed at a feast. being the 25th of Edward III. than the prices of some particular years. and to near twenty shillings of that of the present. 3dly. must have been reckoned a moderate price for the quarter of eight bushels. First Period. which. who endeavoured to raise their wages upon their masters. each of those three different combinations seems to have taken place in the European market. upon this account. prior of St Augustine's. the king says in the preamble. or in the 16th year of the king. In 1262. being the 51st of Henry III. This statute is surely a better evidence of what was reckoned. It regulates the price of bread according as the prices of wheat may happen to be. their livery-wheat should nowhere be estimated higher than tenpence a-bushel. called the assize of bread and ale. Tower weight. on account of their extraordinary dearness or cheapness. therefore. been reckoned a very moderate price of wheat. and for some time before. therefore. therefore. and for some time before. equal to about twelve shillings of our present money. The prices of malt and oats seem here to lie higher than their ordinary proportion to the price of wheat. the price at which we find it estimated in the beginning of the sixteenth century. and the four preceding years. but are mentioned accidentally.—In 1350. equal to about one-and-twenty shillings and sixpence of our present money. too. In that feast were consumed. In 1309. if we may judge by what has happened both in France and Great Britain. of which William Thorn has preserved. not only the bill of fare. or four shillings a-quarter. had been made in the times of his progenitors. for the future. but provisions) which they had been accustomed to receive in the 20th year of the king. and may have been as old as the Conquest. equal to about ten shillings of our present money. it is difficult to form any judgment concerning what may have been the ordinary price. was revived an ancient statute. or seven shillings. some time kings of England. Digression concerning the Variations in the value of Silver during the Course of the Four last Centuries. Canterbury. that all servants and labourers should. that. and nearly in the same order. a moderate price of grain. which was famous for its magnificence. on account of their extraordinary dearness or cheapness. in the 25th of Edward III. had. But in the 16th year of Edward III. It is probably. therefore. Ralph de Born. which have generally been recorded by historians and other writers. and it had been reckoned a reasonable price ten years before that. equal to about eighteen shillings of our present money. or six shillings a-quarter. There are. From this price it seems to have fallen gradually to two ounces of silver. In 1350. other reasons for believing that. fifty-three quarters of wheat. Tower weight. It therefore ordains. and was nearly equal to half-a-crown of our present money. was enacted what is called the Statute of Labourers. These prices are not recorded. tenpence contained about half an ounce of silver. Henry II. Tenpence: a-bushel. from one shilling to twenty shillings the quarter of the money of .

by the 5th of Elizabeth. but that when it rose higher. during the course of this period. it became prudent to allow of importation. to prohibit it altogether. in reality. the exportation of wheat was in the same manner prohibited. in 1436. whenever the price of the quarter should exceed six shillings and eightpence.those times. that is. had probably sunk in the same manner through the . the fifth earl of Northumberland. it was enacted. That in France the average price of grain was. during the same period. that no wheat should be imported if the price was not above six shillings and eightpence the quarter: The legislature had imagined. equal to about ten shillings of our present money. In 1512. containing nearly the same quantity of silver as the like nominal sum does at present. that to restrain the exportation of wheat till the price was so very low. so as at last to have fallen to about two ounces of silver. and for a considerable time before. The quantity of silver. the ordinary or average price of wheat. have been reckoned the middle price of the quarter of wheat when this statute was first enacted. was. in those times. In one of them it is computed at six shilling and eightpence the quarter. Tower weight. had. that wheat might be exported without a licence when the price was so low as six shillings and eightpence: and in 1463. From about the middle of the fourteenth to the beginning of the sixteenth century. therefore. however. by the 1st of Elizabeth. and must have continued to be so in the 51st of Henry III. than in the two centuries preceding. containing about the same quantity of silver as thirteen shillings and fourpence of our present money (one-third part less than the same nominal sum contained in the time of Edward III). therefore. or than six shillings and eightpence of the money of those times. It agrees nearly with the estimation of the Northumberland book in 1512. that is. to the beginning of the reign of Elizabeth. been considered as what is called the moderate and reasonable price of wheat. In the household book of Henry. In 1562. containing six ounces of silver. But it had soon been found. Thus. as well as for those above it. Its price. six shillings and eightpence contained only two ounces of silver. whenever the price of the quarter should not exceed ten shillings. But statutes of this kind are generally presumed to provide with equal care for all deviations from the middle price. and were equal to about ten shillings of our present money. In 1554. must. we seem to have some reason to conclude that. Tower weight. six shillings and eightpence. during the space of more than two hundred years. be very wrong in supposing that the middle price was not less than one-third of the highest price at which this statute regulates the price of bread. But the increase of the value of silver had. for those below it. We cannot. had continued to be considered as what is called the moderate and reasonable. it seems. there could be no inconveniency in exportation. and equal to about thirty shillings of our present money. Tower weight. therefore. it was enacted. Tower weight. therefore. and in 1558. therefore. that the legislature did not think it worth while to attend to this circumstance. seems to have sunk gradually to about one half of this price. It continued to be estimated at this price till about 1570. the average or ordinary price of the quarter of wheat was not supposed to be less than four ounces of silver. in the same manner. what was reckoned the reasonable and moderate. about the middle of the fourteenth century. the ordinary or average price of wheat. which did not then contain two penny worth more silver than the same nominal sum does at present. so far compensated the diminution of the quantity of it contained in the same nominal sum. contained in that nominal sum was. in the other at five shillings and eightpence only. has been observed both by Mr Dupré de St Maur. This price had at this time. containing four ounces of silver. upon this supposition. Tower weight. and by the elegant author of the Essay on the Policy of Grain. From the 25th of Edward III. Six shillings and eightpence. the exportation of wheat was allowed from certain ports. drawn up in 1512 there are two different estimations of wheat. Ten shillings. much lower in the end of the fifteenth and beginning of the sixteenth century. therefore. From these different facts. been considered as what is called the moderate and reasonable price of wheat. it appears from several different statutes. that when the price was so low. continually diminishing in consequence of some alterations which were made in the coin. by the 1st and 2nd of Philip and Mary.

Through the greater part of Scotland this custom still continues with regard to poultry. the corn rent. in the mean time. the expense of working them much increased. too. as they call it. it is not much above one half of this price. continuing the same as before. till the discovery of the mines of America. It sometimes happened. or it may have been owing partly to the one. it contained no more than the same nominal sum does at present. of the average price of all the different sorts of grain. the supply. A greater annual produce would require a greater quantity of coin to circulate it. and a greater number of rich people would require a greater quantity of plate and other ornaments of silver. they have been misled by the slovenly manner in which some ancient statutes of assize had been sometimes transcribed by lazy copiers. however. These are annual valuations. But in 1562. This rise in the value of silver. In many places. The price is eight shillings the quarter of wheat. many of them. consequently. This opinion they seem to have been led into. either the annual payment in kind or a certain sum of money instead of it. and in some places with regard to cattle. it is necessary. and the demand for the precious metals. rather at what should happen to be the price of the fiars of each year. that the greater part of the mines which then supplied the European market with silver might be a good deal exhausted. in a certain quantity of corn. may either have been owing altogether to the increase of the demand for that metal. and partly to the other of those two circumstances. . It might probably have continued to take place. the greater part of Europe was approaching towards a more settled from of government than it had enjoyed for several ages before. Fleetwood acknowledges. and. for the safety of the tenant. and much more convenient for the landlord. from the time of the Romans. according to the actual market price in every different county. First. the value of silver was continually diminishing. however. poultry. The increase of security would naturally increase industry and improvement. and have become more expensive in the working. however. in consequence of increasing improvement and cultivation. with regard to corn. of the greater part of those who have written upon the prices of commodities in ancient times. that. that the conversion price should rather be below than above the average market price. in ancient times. It is natural to suppose. perhaps. As he wrote his book. that he had made this mistake. according to the judgment of an assize. the demand continuing the same as before. Secondly. upon one occasion. as well as for every other luxury and ornament. that the landlord would stipulate. etc. In the end of the fifteenth and beginning of the sixteenth centuries. actually composed by the legislature. and partly by the popular notion. would naturally increase with the increase of riches. or. had not the institution of the public fiars put an end to it. too. the year at which he ends with it. accordingly. perhaps from the invasion of Julius Caesar. They had been wrought. cattle. three different circumstances seem frequently to have misled them. is in Scotland called the conversion price. it may have been owing altogether to the gradual diminution of the supply: the greater part of the mines which were then known in the world being much exhausted. to convert. than at any certain fixed price. It has been the opinion. that as the quantity of silver naturally increases in every country with the increase of wealth. The price at which the payment in kind was in this manner exchanged for a certain sum of money. partly by the observations which they had occasion to make upon the prices both of corn and of some other parts of the rude produce of land. and sometimes. almost all rents were paid in kind. contained the same quantity of silver as sixteen shillings of our present money.greater part of Europe. for a particular purpose. In their observations upon the prices of corn. the year at which he begins with it. This institution rendered it sufficiently safe for the tenant. in proportion to that of corn. But the writers who have collected the prices of corn in ancient times seem frequently to have mistaken what is called in Scotland the conversion price for the actual market price. he does not think proper to make this acknowledgment till after transcribing this conversion price fifteen times. from the Conquest. As the option is always in the landlord to take either the substance or the price. that he should be at liberty to demand of the tenant. This sum in 1423. so its value diminishes as it quantity increases. and of all the different qualities of each.

" Thirdly. that all these prices are only set down as examples of the proportion which ought to be observed between the respective prices of wheat and bread. either by some accident of the seasons. equal to nineteen pounds four shillings of our present money. might be suffering all the horrors of a famine. and that tenpence. and to have imagined. Upon consulting the manuscript. who governed it from about the middle of the twelfth till towards the end of the fifteenth century. and yet if the lands of some hostile lord were interposed between them. was the ordinary or average price of wheat at that time. whether higher or lower. or at most two shillings. at no great distance. according as the prices of those two sorts of grain should gradually rise above this lowest price. But in the manuscripts from which all the different editions of the statutes. by the very low price at which wheat was sometimes sold in very ancient times. though at all times liable to variation varies most in those turbulent and disorderly societies. while another. equal to fourteen pounds eight shillings of that of the present. therefore. there is a statute of assize. the copiers had never transcribed this regulation beyond the price of twelve shillings. which approaches to the extravagance of these. being misled by this faulty transcription. the other is six pounds eight shillings. from two shillings. an old Scotch law book. Three shillings Scotch. it appears evidently. at the time when this assize is supposed to have been enacted.The ancient statutes of assize seem to have begun always with determining what ought to be the price of bread and ale when the price of wheat and barley were at the lowest. The price of corn. as its lowest price was below any thing that had ever been known in later times. saving in this manner their own labour. to four shillings the quarter. enacted nearly about the same time. the price of bread was regulated according to the different prices of wheat. the one might not be able to give the least assistance . No price can be found in the end of the fifteenth. were the ordinary prices. according to what is above written. of the 51st of Henry III. The one is four pounds sixteen shillings of the money of those times. however. we may infer from the last words of the statute: "Et sic deinceps crescetur vel diminuetur per sex denarios." The expression is very slovenly. in the assize of bread and ale. They might have found. in 1270. however. were equal to about nine shillings sterling of our present money Mr Ruddiman seems {See his Preface to Anderson's Diplomata Scotiae. Several writers. in which the interruption of all commerce and communication hinders the plenty of one part of the country from relieving the scarcity of another. Thus. and judging. from tenpence to three shillings the Scotch boll. very naturally conclude that the middle price."—"You shall judge of the remaining cases. or by the incursion of some neighbouring baron. In the disorderly state of England under the Plantagenets. equal to about eighteen shillings of our present money. or six shillings the quarter. were printed. a shilling. equal to about half an English quarter. and to have proceeded gradually to determine what it ought to be. or beginning of the sixteenth century. That four shillings. from one shilling to twenty shillings the quarter of the money of those times. but the meaning is plain enough.} to conclude from this. by having its crop destroyed. they seem to have been misled too. preceding that of Mr Ruffhead. "that the price of ale is in this manner to be increased or diminished according to every sixpence rise or fall in the price of barley. that as its lowest price was then much lower than in later times its ordinary price must likewise have been much lower." In the composition of this statute. one district might be in plenty. In an ancient manuscript of the Regiam Majestatem. In the statute of Tumbrel and Pillory. however. But the transcribers of those statutes seem frequently to have thought it sufficient to copy the regulation as far as the three or four first and lowest prices. The last words of the statute are "reliqua judicabis secundum praescripta. and that these prices were only given as an example of the proportion which ought to be observed in all other prices. that this was enough to show what proportion ought to be observed in all higher prices. Fleetwood gives us two prices of the quarter of wheat. that three shillings was the highest price to which wheat ever rose in those times. I suppose. the legislature itself seems to have been as negligent as the copiers were in the transcription of the other. the price of ale is regulated according to every sixpence rise in the price of barley. habendo respectum ad pretium bladi. that in those ancient times its highest price was fully as much above. having respect to the price of corn. was not considered as the highest price to which barley might frequently rise in those times. Thus. in which the price of bread is regulated according to all the different prices of wheat.

with most other writers. so she frequently produces them in much greater quantities than the consumption of the inhabitants requires. But this cheapness was not the effect of the high value of silver. certainly do not agree with this opinion. as from that of some other parts of the rude produce of land. however. It is the only addition which I have made. was. was the price of a good horse in the capital of Chili. It is some what curious that. It is not. 1600. and digested. from the accounts of Eton college. the supply commonly exceeds the demand. no baron was powerful enough to dare to disturb the public security. poultry. therefore. indeed. I suppose. seem to have been those chiefly which were remarkable for extraordinary dearness or cheapness. the prices of 1598. was. In different states of society. Sixteen shillings sterling. Labour. so far as they relate to the price of corn at least. in the country where it is produced. was continually diminishing. therefore. which he himself has collected. should coincide so very exactly. In such a state of things. In a country naturally fertile. and I do not pretend that any very certain conclusion can be drawn from them. They agree perfectly with that of Mr Dupré de St Maur. it must always be remembered. etc. I have added. who governed England during the latter part of the fifteenth. poultry. we are told by Mr Byron. The prices of corn. as they prove any thing at all. 1599. he will find the average price of the twelve years of which it consists. poultry. not many years ago. with the greatest diligence and fidelity. At the end of each division. is the real measure of the value both of silver and of all other commodities. the price of an ox chosen from a herd of three or four hundred. In that long period of time. So far. than the greater part of unmanufactured commodities. cattle. however. In every state of society. Bishop Fleetwood and Mr Dupré de St Maur are the two authors who seem to have collected. their facts. during all this period. according to the order of time. The reader will see. The prices. etc. Fleetwood himself. both inclusive. such commodities will represent. at Buenos Ayres. being a sort of manufacture. such as cattle. cattle. Silver must certainly be cheaper in Spanish America than in Europe. and 1601. that the most judicious writers have inferred the great value of silver in those very ancient times. more or less exactly. that from the beginning of the thirteenth till after the middle of the sixteenth century. though their opinions are so very different. or be equivalent. in different states of improvement. much dearer in proportion than the greater part of other commodities. but of which the far greater part is altogether uncultivated. which Fleetwood has been able to collect. as they can be acquired with a very small quantity of labour.to the other. The low money price for which they may be sold. seems. and not any particular commodity. but of the low value of those commodities. and that towards the end of the sixteenth century it begins to rise again. One-and-twenty pence halfpenny sterling. from 1202 to 1597. in every stage of improvement. to have believed. That in those times of poverty and barbarism these were proportionably much cheaper than corn. Corn. they confirm the account which I have been endeavouring to give. Under the vigorous administration of the Tudors. Fleetwood has been able to collect the prices of no more than eighty years. too. It was not because silver would in such times purchase or represent a greater quantity of labour. etc. so much from the low price of corn. game of all kinds. and with that which I have been endeavouring to explain. game of all kinds. to very different quantities of labour. in consequence of its increasing abundance. but that the real value of those commodities is very low. But the average produce of every sort of industry is always suited. game of all kinds. the prices of things in ancient times. than in the country to which it is brought. it has been said. and an insurance. reduced to the money of the present times. the average price of each twelve years grows gradually lower and lower. but because such commodities would purchase or represent a much smaller quantity than in times of more opulence and improvement. The reader will find at the end of this chapter all the prices of wheat which have been collected by Fleetwood. that. at the expense of a long carriage both by land and by sea. of a freight. or but thinly inhabited. we are told by Ulloa. to the . the value of silver. however. is no proof that the real value of silver is there very high. so they will purchase or command but a very small quantity. or set of commodities. is undoubtedly true. as they are the spontaneous productions of Nature. so that four years are wanting to make out the last twelve years. into seven divisions of twelve years each. however. and through the whole of the sixteenth century. corn is the production of human industry. in those rude ages. But in countries almost waste. it is meant.

will naturally purchase a greater and a greater quantity of plate. When. it is necessarily connected with some diminution of their value. besides. . the labouring poor seldom eat butcher's meat. Such slight observations. being more or less counterbalanced by the continual increasing price of cattle. where labour is somewhat better rewarded than in France. So far. so gold and silver are not likely to be worse paid for. depends much more upon the quantity of corn which they can purchase or command. and the quantity of the necessaries and conveniencies of life for which they must be exchanged being the same as before.average consumption. Butcher's meat. In all those different stages. in an improved state of cultivation. secondly. the principal instruments of agriculture. when the annual produce of its labour becomes gradually greater and greater. however. so its value diminishes as its quantity increases. This notion. by comparing it with corn. from the increased wealth of the people. upon the prices either of corn or of other commodities. The first of these causes is no doubt necessarily connected with the diminution of the value of the precious metals. is. require nearly equal quantities of labour. When more abundant mines are discovered. therefore. or any other part of the rude produce of land. seems to be altogether groundless. a greater quantity of the precious metals is brought to market. than by comparing it with any other commodity or set of commodities. the average supply to the average demand. therefore. on the contrary. more nearly represent. first. But as statuaries and painters are not likely to be worse rewarded in times of wealth and prosperity. and even in Scotland. The money price of labour. besides. in every civilized country. than equal quantities of any other part of the rude produce of land. at an average. than upon that of butcher's meat. The real value of gold and silver. or where labour is most highly rewarded. In consequence of the extension of agriculture. except in the most thriving countries. equal quantities of the metals must be exchanged for smaller quantities of commodities. the quantity of their plate from vanity and ostentation. or. and game no part of it. and the labourer everywhere lives chiefly upon the wholesome food that is cheapest and most abundant. depends much more upon the average money price of corn. equal quantities of labour. than upon that of butcher's meat. that equal quantities of corn will. constitutes. from the increased produce of their annual labour. or be equivalent to. would not probably have misled so many intelligent authors. or. a greater quantity of coin becomes necessary in order to circulate a greater quantity of commodities: and the people. but the second is not. the land of every country produces a much greater quantity of vegetable than of animal food. as they have more commodities to give for it. The quantity of their coin will increase from necessity. the raising of equal quantities of corn in the same soil and climate. the continual increase of the productive powers of labour. In France. from the increased abundance of the mines which supply it. is likely to increase among them. The quantity of the precious metals may increase in any country from two different causes. what comes to the same thing. as the increase of the quantity of the precious metals in any country arises from the increased abundance of the mines. Upon all these accounts. will. we may rest assured. Corn. however. therefore. and other extraordinary occasions. except upon holidays. in every stage of improvement. in all the different stages of wealth and improvement. or of any other part of the rude produce of land. accordingly. it has already been observed. in every state of society. poultry makes a still smaller part of it. therefore. than in times of poverty and depression. Corn. either. that as the quantity of silver naturally increases in every country with the increase of wealth. had they not been influenced at the same time by the popular notion. the price of nearly equal quantities. and of every other luxury and curiosity. or whatever else is the common and favourite vegetable food of the people. the subsistence of the labourer. the real quantity of labour which they can purchase or command. or from the same reason that the quantity of fine statues. In every different stage of improvement. we can judge better of the real value of silver. the wealth of any country increases. as they can afford it. therefore. a more accurate measure of value than any other commodity or set of commodities. makes but an insignificant part of his subsistence. pictures. the principal part of the subsistence of the labourer.

the difference will be smaller. as it must be brought to them from distant countries. The real cost of silver must be nearly the same in both places. but by their advancing. They are rich in the industry and skill of their artificers and manufacturers. but the difference between the money price of corn in those two countries is much smaller. corn is always dearer than in remote parts of the country. But gold and silver will naturally exchange for a greater quantity of subsistence in a rich than in a poor country. In some very rich and commercial countries. and the best price is commonly given for every thing in the country which can best afford it. If the countries are near. Labour. while China seems to be standing still. in shipping. This. because. and may sometimes be scarce perceptible. as it naturally rises with the wealth of every country. must. though the metals naturally fly from the worse to the better market. or declining condition. and the price of corn. so they are naturally of the least value among the poorest nations. Diminish the real opulence either of Holland or of the territory of Genoa. in every sort of machinery which can facilitate and abridge labour. and the difference between the price of subsistence in China and in Europe is very great. or to the quantity and goodness of the flour or meal which can be made from it. like all other commodities. is naturally regulated. which must necessarily accompany this declension. but that of corn must be very different. English corn. Rice in China is much cheaper than wheat is any where in Europe. when the accidental discovery of more abundant mines does not keep it down. because the real recompence of labour is much lower: Scotland. naturally seek the market where the best price is given for them. and is but just perceptible. and every commodity must commonly be somewhat dearer in the country to which it is brought than in that from which it comes. It does not cost less labour to bring silver to Amsterdam than to Dantzic. because in this case the transportation will be easy. the poorest of all nations. by an addition to its price. is the ultimate price which is paid for every thing. in proportion to its quality. They do not produce enough to maintain their inhabitants. than in one which is but indifferently supplied with it. In proportion to the quantity or measure. pay for the carriage from those countries. but it costs a great deal more to bring corn. must be dearer in Scotland than in England. not by their actual wealth or poverty. but. though advancing to greater wealth. the difference may be very great. Gold and silver. not of the real cheapness of silver. the money price of labour will be in proportion to that of the subsistence of the labourer. whatever be the state of the mines. and the rarity of it from England. because the real recompence of labour is higher in Europe than in China. diminish their power of supplying themselves from distant countries. it must be remembered. It does not cost less labour to bring silver to the great town than to the remote parts of the country. therefore. and yet in proportion to its quality. England is a much richer country than Scotland. The proportion between the real recompence of labour in different countries. which. The frequency of emigration from Scotland. Gold and silver. the greater part of Europe being in an improving state. In great towns. The money price of labour is lower in Scotland than in England. The difference between the money price of labour in China and in Europe. China is a much richer country than any part of Europe. either .The price of gold and silver. it cannot commonly be sold higher there than the Scotch corn which comes to market in competition with it. sufficiently prove that the demand for labour is very different in the two countries. and in all the other instruments and means of carriage and commerce: but they are poor in corn. while the number of their inhabitants remains the same. so. advances much more slowly than England. Scotland receives almost every year very large supplies from England. they are scarce of any value. Scotch corn generally appears to be a good deal cheaper than English. but it costs a great deal more to bring corn. corn is dear for the same reason that it is dear in great towns. If the two countries are at a great distance. as they are naturally of the greatest value among the richest. Among savages. is still greater than that between the money price of subsistence. and in countries where labour is equally well rewarded. it is certainly somewhat dearer. however. it is at all times naturally higher in a rich than in a poor country. it must be remembered. yet it may be difficult to transport them in such quantities as to bring their price nearly to a level in both. is the effect. instead of sinking with that diminution in the quantity of their silver. stationary. such as Holland and the territory of Genoa. but of the real dearness of corn. in a country which abounds with subsistence.

both inclusive. The discovery of the abundant mines of America seems to have been the sole cause of this diminution in the value of silver. The greater part of Europe was. at Windsor market. the quantity of labour which they can purchase or command. at the same market. either about the fact. The discovery of the mines of America. it seems.—But how various soever may have been the opinions of the learned concerning the progress of the value of silver during the first period. which.. from the accounts of Eton college. so it sinks in times of poverty and distress. appears to have been completed.. they are unanimous concerning it during the second. or 4s. or would exchange for a smaller quantity of labour than before. during the period between the middle of the fourteenth and that of the sixteenth century. for the difference between the price of the best wheat and that of the middle wheat. From about 1570 to about 1640. Whatever. advancing in industry and improvement. had. From 1595 to 1620. and it had probably begun to do so. neglecting the fraction. of which the value. or about ten shillings of our present money. Corn is a necessary. will rise to the price of a famine. during this period. it could have no tendency to diminish their value. as it rises in times of opulence and prosperity. and sinks in times of opulence and prosperity. When we are in want of necessaries. and the value of that metal seems never to have sunk lower in proportion to that of corn than it was about that time. during a period of about seventy years. making the like deductions as in the foregoing case. they had still less reason to infer it from any supposed increase of wealth and improvement. in proportion to that of corn. Second Period. the average price of the same measure of the best wheat. and.. to have been £ 2:10s. Silver sunk in its real value. from which. so far exceeded that of the demand. 7 1/3d. From 1637 to 1700. accordingly. or about seven ounces and two-thirds of an ounce of silver. the price of the quarter of eight bushels comes out to have been £ 1:16:10 2/3. in reducing the value of silver. It is accounted for. or about six ounces and one-third of an ounce of silver. Their real price. or about 1636. during this period. appears. both inclusive. and the demand for silver must consequently have been increasing. or about thirty and forty shillings of our present money. and there never has been any dispute. for they could not otherwise be times of opulence and prosperity. the average price of the quarter of nine bushels of the best wheat. but the increase of the supply had. From 1621 to 1636. the effect of the discovery of the mines of America. And from this sum. it is to be observed. and deducting a ninth. If those who have collected the prices of things in ancient times. came to be sold for six and eight ounces of silver the quarter. being the sixty-four last years of the last century the average . the average price of the quarter of eight bushels of middle wheat comes out to have been £ 1:19:6. that the value of that metal sunk considerably. neglecting likewise the fraction. silver is only a superfluity. the price of the middle wheat comes out to have been about £ 1:12:8 8/9. Third Period. arose from the increase of wealth and improvement. It is otherwise with necessaries. From which sum. instead of being commonly sold for about two ounces of silver the quarter. to have been £ 2:1:6 9/13.—Between 1630 and 1640. no reason to infer the diminution of the value of silver from any observations which they had made upon the prices either of corn. or 4s. or about the cause of it. either in Great Britain. may have been the increase in the quantity of the precious metals. even some time before the end of the last. and corn rose in its nominal price. or of other commodities. It seems to have risen somewhat in the course of the present century. the variation in the proportion between the value of silver and that of corn held a quite opposite course. 1 1/9d. does not seem to have had any very sensible effect upon the prices of things in England till after 1570. therefore. appears. both inclusive. from the same accounts. in the same manner by every body.as its cause or as its effect. though even the mines of Potosi had been discovered more than twenty years before. therefore. which are always times of great abundance. and deducting a ninth. rises in times of poverty and distress. or in my other part of Europe. we must part with all superfluities.

But in 1695. the further exportation of corn was prohibited for nine months. to have been £ 4. by encouraging the exportation of the surplus produce of every year. that is. as we may learn from Mr Lowndes. But in the beginning of the present century. In 1695. must necessarily have occasioned some augmentation in the nominal sum. granted in 1688. may. on the contrary. than when near to its standard value. it is found by experience. there happened two events. accordingly. and. In the course of the present century. the silver coin has not at any time been more below its standard weight than it is at present. without supposing any further reduction in the value of silver. which. (the average price of the sixteen years preceding 1637 is £ 3:5s. the gold coin was a good deal defaced too. at Windsor market. must have been somewhat enhanced by the bounty. perhaps. and which. the value of the silver coin was not kept up by the gold coin. This nominal sum. which is but fivepence above the mint price. the price of silver bullion was seldom higher than five shillings and sevenpence an ounce. the greater part of the current silver coin must have been still nearer to its standard . it had not time to produce any such effect. and thereby hindering the abundance of one year from compensating the scarcity of another. in a long course of years. dearer than it had been during the sixteen years before. on the contrary. from 1693 to 1699. 0 1/3d. before the late recoinage. a guinea then commonly exchanging for thirty shillings of the worn and clipt silver. in 1649. {Lowndes's Essay on the Silver Coin. ought to be contained in it. though the highest. however. and. at all the different markets in the kingdom. at an average. its value has been kept up by that of the gold coin. which must have produced a much greater scarcity of corn than what the course of the season is would otherwise have occasioned.. than what would otherwise have taken place there. The first of these events was the civil war. But the nominal sum which constitutes the market price of every commodity is necessarily regulated.) These. the price of the best wheat. below that value. more or less. But though very much defaced. which require to be supplied from the greatest distance. There was a third event which occurred in the course of the same period. by clipping and wearing. will much more than account for this very small enhancement of price. is necessarily higher when the coin is much debased by clipping and wearing. was not supposed to be more than eight per cent. appears. are by no means the only high prices which seem to have been occasioned by the civil wars. at which time. by discouraging tillage and interrupting commerce. must have raised the price of corn much above what the course of the seasons would otherwise have occasioned. in the course of these sixty-four years. the coin. any augmentation in the real quantity of silver which was usually paid for it. extending through a considerable part of Europe. actually is contained in it. appears.} which is fifteen pence above the mint price. a greater cheapness of corn in the home market. In 1695. it had been supposed to be near five-and-twenty per cent. below its standard value. This event was the great debasement of the silver coin. The scarcity which prevailed in England. to raise the price in the home market. which. from the same accounts. for which it is exchanged. In 1699.. below its standard value. not so much by the quantity of silver. immediately after the great recoinage in King William's time. nor. consequently. will alone very nearly account for that small enhancement of price which seems to have taken place in them. to have been £ 4:5s. at Windsor market. gold and silver together. it has been thought by many people. to have been £ 2:11:0 1/3. from the same accounts. near five-and-twenty per cent. though no doubt principally owing to the badness of the seasons. 68. therefore. and had gone on continually increasing till 1695. though it could not occasion any scarcity of corn. therefore. have occasioned a greater abundance. divided among the sixty four last years of the last century. both inclusive. that between 1688 and 1700. Even before the late recoinage of the gold. It must have had this effect. as by that which.price of the quarter of nine bushels of the best wheat. How far the bounty could produce this effect at any time I shall examine hereafter: I shall only observe at present. when compared with silver bullion. but particularly at those in the neighbourhood of London. and. But. and which. The excess of those two years above £ 2:10s. the quarter of nine bushels. it was less so than the silver. During this short period. therefore. by encouraging tillage. which is only 1s. the common price of silver bullion was six shillings and fivepence an ounce. The second event was the bounty upon the exportation of corn. In 1648. This evil had begun in the reign of Charles II. which. The bounty. accordingly. For though. therefore. the current silver coin was. its only effect must have been. Before the late recoinage of the gold. according to the standard.

In 1688 was granted the parliamentary bounty upon the exportation of corn. 6d. or more than five-and-twenty percent. without some such expedient as the bounty. In the course of the present century. such as a civil war. Before the scarcity occasioned by the late extraordinary course of bad seasons. there has been no great public calamity. soliciting the first establishment of the annual land-tax. upon the principles of a system which I shall explain and examine hereafter. appears. and thereby to increase the quantity of corn in the home market. which is about ten shillings and sixpence. accordingly. as in the course of this century. a man famous for his knowledge in matters of this kind. or the price at which a farmer contracts for a certain number of years to deliver a certain quantity of corn to a dealer. the lowest price at which it had ever been from 1595. the price of the quarter of nine bushels of the best wheat. by the accounts of Eton college. in proportion to that of corn. to be to the grower 3s. In plentiful years. As a contract of this kind saves the farmer the expense and trouble of marketing. It is by many people supposed to have done more. the bounty. though the necessary operation of the bounty must have hindered that rise from being so sensible as it otherwise would have been in the actual state of tillage. seems to have risen somewhat in proportion to that of corn during the course of the present century. and about one shilling cheaper than it had been in the twenty-six years preceding 1620. from whom it was. the average price of the quarter of nine bushels of the best wheat. In 1687. or interrupt the interior commerce of the country. by keeping up . cheaper than it had been during the sixty-four last years of the last century. eight-and-forty shillings the quarter was a price which. be supposed to have done something to lower the price of that commodity the one way. If his calculations deserve any part of the reputation which they have obtained very universally. in that very year. during these sixty-four first years of the present century. In the sixty-four years of the present century. To encourage tillage. the bounty has had full time to produce all the good effects commonly imputed to it to encourage tillage. It was to take place. before that discovery can well be supposed to have produced its full effect. The country gentlemen. at that very time. or eight-and-twenty shillings the quarter. Mr Gregory King. to have been £ 2:0:6 10/32. The value of silver. necessarily raises the price of corn above what it otherwise would be in those years. as well as to raise it the other. that is. was £ 1:5:2. I have been assured. the average price of middle wheat. except in years of extraordinary scarcity. who then composed a still greater proportion of the legislature than they do at present. In 1688. therefore. And though the bounty which has taken place through the greater part of this century. must always raise the price of corn somewhat higher than it otherwise would be in the actual state of tillage. comes out to have been about thirty-two shillings the quarter of eight bushels. the bushel. in years of moderate plenty. had probably risen somewhat before the end of the last century. The grower's price I understand to be the same with what is sometimes called the contract price. The value of silver. at Windsor market. Mr King had judged eight-and-twenty shillings the quarter to be at that time the ordinary contract price in years of moderate plenty. twenty shillings. therefore. when the discovery of the abundant mines of America may be supposed to have produced its full effect. the ordinary contract price in all common years. at Windsor market. and it seems to have continued to do so during the course of the greater part of the present. by occasioning an extraordinary exportation. The bounty was an expedient to raise it artificially to the high price at which it had frequently been sold in the times of Charles I. therefore. till wheat was so high as fortyeight shillings the quarter. estimated the average price of wheat. But the government of King William was not then fully settled. According to this account. estimated the grower's price to be in times of moderate plenty. and II. had felt that the money price of corn was falling.weight than it is at present. it was. or 5-7ths dearer than Mr King had. It was in no condition to refuse anything to the country gentlemen. yet. which could either discourage tillage. the contract price is generally lower than what is supposed to be the average market price. it may. could not at that time be expected. and about nine shillings and sixpence cheaper than it had been during the sixteen years preceding 1636. too. and it had probably begun to do so even some time before the end of the last.

Between 1741 and 1750. will be at no loss to recollect several other examples of the same kind. But. has occasioned a suspicion that the real value of silver still continues to fall in the European market. By the extraordinary exportation which it occasions in years of plenty. have been unfavourable through the greater part of Europe. to consider this variation in the average money price of corn as the effect rather of some gradual rise in the real value of silver in the European market. It must. If. the average price has been lower than during the sixty-four last years of the last century. had it not been for this operation of the bounty. notwithstanding this prohibition. Ten years of extraordinary scarcity. therefore. one bushel. after the discovery of the abundant mines of America. therefore. in proportion to that of corn. in another. It would be more proper. be owing to the extraordinary encouragement given to exportation. that this rise in the value of silver. was only £ 1:13:9 4/5. in dear years. to be regarded. besides. was the avowed end of the institution. in the same state of tillage. however. perhaps. The high price of corn during these ten or twelve years past.3d. If during the sixty-four first years of the present century. to have been. I shall endeavour to explain hereafter. which. without the bounty. The seasons. it appears from the custom-house books.514. have been much more so. and whoever has inquired much into the history of the prices of corn in former times. it appears from the accounts of Eton college. in the same manner. therefore. however. any other commodity. have had some effect upon the prices of many of those years. though not a very common event. the bounty must have hindered the price of corn from falling so low in the home market as it naturally would have done. From 1741 to 1750. at distant periods of time. however. It has been observed to have taken place in France during the same period. the average money price of corn has fallen somewhat below what it had been during the greater part of the last century. we should. even in the most plentiful years. During these ten years. too. during these ten years. this change was universally ascribed. but to a fall in the real value of silver. not to any fall in the real value of corn. The low price of corn. I shall only observe at present. than of any fall in the real average value of corn. impute this change. But in France. indeed. Corn. during the sixty-four first years of the present century. the bounty has generally been suspended. it must. only £ 1:6:8. seems evidently to have been the effect of the extraordinary unfavourableness of the seasons. and the disorders of Poland have very much increased the scarcity in all those countries. but to some rise in the real value of silver in the European market. So long a course of bad seasons. When. but as a transitory and occasional event. Both in years of plenty and in years of scarcity. What may have been the effects of this institution upon the agriculture of the country. not as a permanent. is by no means a singular one. has not been peculiar to England. when I come to treat particularly of bounties. the average price of the quarter of nine bushels of the best wheat. not to any rise in the real value of corn. the bounty raises the price of corn above what it naturally would be in the actual state of tillage. The bounty paid for this amounted to £ 1. In years of great scarcity. and nearly in the same proportion. diligent. The average price of the quarter of eight bushels of middle wheat comes out. a more accurate measure of value than either silver or. Mr Messance. it has already been observed. In . This high price of corn. till 1764. which is nearly 6s. according to this account. that nearly the same diminution of price which took place in one country. indeed. it must frequently hinder the plenty of one year from compensating the scarcity of another. at Windsor market. amounted to no less than 8. and it is somewhat difficult to suppose.the price of corn.029. therefore. the quantity of all sorts of grain exported. below the average price of the sixty-four first years of the present century. from 1741 to 1750. should. and the author of the Essay on the Police of Grain. is. perhaps. and laborious collectors of the prices of corn. it may be said the state of tillage would not have been the same. by three very faithful.962:17:4 1/2. are not more wonderful than ten years of extraordinary plenty. both inclusive. Mr Dupré de St Maur. corn rose to three and four times its former money price. used to be supplied from that market. may very well be set in opposition to its high price during these last eight or ten years. for these ten or twelve years past.156 quarters. and ought. the exportation of grain was by law prohibited.

As the former were a good deal below the general average of the century. as of an increase in the demand for labour in Great Britain. {See Tracts on the Corn Trade. In that single year. while it continued to pay this tax to the king of Spain. and at last to a tenth. which is always slow and gradual. which must be paid in order to bring it from the mine to the market. it seems. these mines. in the particular market of Great Britain. indeed. The suddenness of the effect can be accounted for only by a cause which can operate suddenly. the general average of the sixty-four first years of the century. or to what was just sufficient to pay. together with its ordinary profits. If the former have not been as much below the general average as the latter have been above it. the date of the discovery of the mines of Potosi. and much above their natural rate. observed to the house of commons. This. are now as low as they can well be. at that time prime minister. In Great Britain. the tax of the king of Spain. These twenty years preceding 1750 may very well be set in opposition to the twenty preceding 1770. of which the average is likewise below. eats up. though not so much below. or before 1636. since the middle of the last century. a measure which contains a little more than four Winchester bushels. so the latter have been a good deal above it. the wages of the labour. At the end of the accounts annexed to this chapter the reader will find the particular account of those ten years separated from the rest. the accidental variations of the seasons. In the greater part of the silver mines of Peru. the particular account of the preceding ten years. would soon find that the whole annual importation could not be disposed of at this high price.176:10:6. The money price of labour in Great Britain has. the money price of labour has. it has already been shewn. then to a fifth. for the three years preceding. however. silver would continue to sell at its former. amounting to a tenth of the gross produce. but of a rise in the real price of labour. He had good reason to make this observation. been observed to sink gradually with the average money price of corn. accordingly. The change has evidently been too sudden to be ascribed to any change in the value of silver.1749. at which late it still continues. the whole rent of the land. which were once very high. a very extraordinary sum had been paid as bounty for the exportation of corn. seems to be the effect. Mr Pelham. and in the following year he might have had still better.} It is unnecessary to observe how much this forced exportation must have raised the price of corn above what it otherwise would have been in the home market. the bounty paid amounted to no less than £ 324. The year 1740. The profits of mining would for some time be very great. Both in the last century and in the present. Ninety years is time sufficient to . In the course of ninety years. not of any diminution of the value of silver in the general market of Europe. He will find there. not so much of any diminution in the value of silver in the European market. or not much below its former price.}. or to reduce the value of silver in the European market as low as it could well fall. In France. a country not altogether so prosperous. of 1759. notwithstanding the intervention of one or two cheap ones. Tract 3. vol. this. the most fertile in all America. till it fell to its natural price. it has already been observed. too. the profits of the stock. Its price would sink gradually lower and lower. we ought probably to impute it to the bounty. The rise in its money price seems to have been the effect. the real quantities of the necessaries and conveniencies of life which are given to the labourer. however. the real recompence of labour. owing to the peculiarly happy circumstances of the country. consistently with carrying on the works. This tax was originally a half. that. The tax of the king of Spain was reduced to a fifth of the registered silver in 1504 {Solorzano. one-and-forty years before 1545. Silver would gradually exchange for a smaller and a smaller quantity of goods. it soon afterwards fell to a third. Those who imported that metal into Europe. For some time after the first discovery of America. for example. however. In the greater part of the silver mines of Peru. and it seems to be universally acknowledged that these profits. arising from the great. had time sufficient to produce their full effect. risen during the course of the present century. ii. and almost universal prosperity of the country. and the rent of the land. the day wages of common labour are there said to have been pretty uniformly about the twentieth part of the average price of the septier of wheat. after replacing the stock of the undertaker of the work. notwithstanding the intervention of one or two dear years. according to their natural rates. is all that remains. was a year of extraordinary scarcity. has increased considerably during the course of the present century.

reduce any commodity. though they cannot be considered as altogether new markets. The increasing produce of the agriculture and manufactures of Europe must necessarily have required a gradual increase in the quantity of silver coin to circulate it. or the gradual enlargement of the market for the produce of the silver mines of America. Even Mexico and Peru. and commerce. and partly for plate. the history of their first discovery and conquest. Even the Peruvians. is but a very small part of Europe. with any degree of sober judgment. perhaps. The Spanish colonies are under a government in many respects less favourable to agriculture. and there was accordingly scarce any division of labour among them. as in 1736. partly for coin. After all the wonderful tales which have been published concerning the splendid state of those countries in ancient times. had no coined money of any kind. the greater part of Europe has been much improved. and the priests. Paraguay. The few artificers among them are said to have been all maintained by the sovereign. and frequently did not amount to half that number. Those who cultivated the ground. though they scarce ever exceeded five hundred men. of which there is no monopoly. are certainly much more extensive ones than they ever were before. are much more rapid than those of the most thriving countries in Europe. in countries. shoes. the nobles. The greater part. In the beginning of the sixteenth century. agriculture. The Spanish armies. before discovered by the Europeans. The English colonies are altogether a new market. sufficiently demonstrate that the story of this populousness and high cultivation is in a great measure fabulous. even Sweden. but to one twentieth. Since that time it seems rather to have recovered a little. its demand must increase much more rapidly. to its natural price. America is itself a new market. will evidently discern that. while it pays a particular tax. and population. All the ancient arts of Mexico and Peru have never furnished one single manufacture to Europe. were obliged to build their own houses. They . First. and instruments of agriculture. indeed. requires a continual augmenting supply of silver through a great continent where there never was any demand before. which. in arts. and population. and were probably their servants or slaves. than that of the English colonies. it can continue to be sold for any considerable time together. which at the same time are represented as very populous and well cultivated. both in agriculture and in manufactures. to make their own household furniture. who had neither arts nor agriculture. their own clothes. but has perhaps even raised it somewhat higher than it was about the middle of the last century. in the same manner as that upon gold. Denmark. whoever reads. and as its advances in agriculture. though they made use of gold and silver as ornaments. too. so great as is commonly imagined. which has been so much improved since that time. Italy seems not to have gone backwards. even in comparison with France. or to the lowest price at which. are altogether new markets. the market for the produce of its silver mines has been growing gradually more and more extensive. of the Spanish and Portuguese colonies. Portugal. The famines which they are said to have occasioned almost wherever they went. were. the market of Europe has become gradually more and more extensive. the more civilized nation of the two. however. Since the first discovery of America. It was the well known remark of the emperor Charles V. their inhabitants were much more ignorant than the Tartars of the Ukraine are at present. have all advanced considerably. that every thing abounded in France. Secondly. Spain was a very poor country. have fallen still lower. and the Brazils. The fall of Italy preceded the conquest of Peru. Since the discovery of America. Spain and Portugal. industry. improvement. inhabited by savage nations. perhaps. Holland. too. England. found almost everywhere great difficulty in procuring subsistence. but that every thing was wanting in Spain. is probably the cause which has prevented this from happening. the Yucatan. and it might have become necessary either to reduce the tax upon it. New Granada. not only to one-tenth. The gradual increase of the demand for silver. The price of silver in the European market might. France. for the produce of its own silver mines. and Russia. and Germany. Their whole commerce was carried on by barter. and the declension of Spain is not. and which has not only kept up the value of silver in the European market. or to give up working the greater part of the American mines which are now wrought. A considerable degree of both has now been introduced into all of them. are supposed to have gone backwards. who had travelled so frequently through both countries. and the increasing number of wealthy individuals must have required the like increase in the quantity of their plate and other ornaments of silver.

Ulloa. too. at any one time during the last century. much greater than that of the English East India company before the late reduction of their shipping. But in the East Indies. and in a few years expelled them from their principal settlements in India. was much higher than in Europe. In rice countries. by all accounts. however. the Dutch began to encroach upon this monopoly. it seems. such commodities would naturally exchange for a greater quantity of food in India than in Europe. was a drug very little used in Europe. such as the precious metals and the precious stones. the value of the precious metals. sometimes three crops in the year. The increasing consumptions of East India goods in Europe is. which is carried on by means of the Acapulco ships. The same superabundance of food. when the Europeans first began to trade to those countries. much more numerous and splendid than that of the richest subjects in Europe. each of them more plentiful than any common crop of corn. from the time of the first discovery of those mines. the Portuguese were the only European nation who carried on any regular trade to the East Indies. During the greater part of the last century. to be advancing in all those much more rapidly than any country in Europe. the East Indies is another market for the produce of the silver mines of America. represents it as containing more than fifty thousand. Thirdly. having a greater superabundance of food to dispose of beyond what they themselves can consume. so great an advantage. America. so great. In the last years of that century. those two nations divided the most considerable part of the East India trade between them. who visited Peru in 1713. which supplied the Indian market. the rich. Even the Muscovites now trade regularly with China. but it has been greatly augmented in the course of the present. have the means of purchasing a much greater quantity of the labour of other people. has been continually taking off a greater and a greater quantity of silver. The consumption of the porcelain of China. accordingly. which generally yield two. for the use of their own countrymen. and those which supplied it with . The East India trade of all these nations. and as there seems to be no reason to doubt of the good information of either. of the piece goods of Bengal. before the middle of the last century. Since that time. and a market which. therefore. Though the mines. if we except that of the French. as to compensate many defects in civil government. and from the coast of France. who resided in the same country between 1740 and 1746. is a new market for the produce of its own silver mines. as long as the French East India company was in prosperity. a great deal more being constantly smuggled into the country from the ports of Holland. the great objects of the competition of the rich. for example. The East India trade of the Swedes and Danes began in the course of the present century. a circumstance common to all new colonies. Such countries are accordingly much more populous. amounts to more than a million and a half a year. At present. particularly in China and Indostan. In a fertile soil and happy climate. But the mines which supplied the Indian market with the precious metals seem to have been a good deal less abundant. and even this is not enough. too. and it still continues to be so. which the last war had well nigh annihilated. and the indirect intercourse by the way of Europe has been augmenting in a still greater proportion. The English and French carried on some trade with India in the last century. is. In them. enables them to give a greater quantity of it for all those singular and rare productions which nature furnishes but in very small quantities. The difference in their accounts of the populousness of several other principal towns of Chili and Peru is nearly the same. the value of the tea annually imported by the English East India company. of the spiceries of the Moluccas. Frezier. the great abundance and cheapness of land. as to afford a gradual increase of employment to them all. perhaps. The retinue of a grandee in China or Indostan accordingly is. represents Lima as containing between twenty-five and twenty-eight thousand inhabitants. During the sixteenth century. the abundance of food must be much greater than in any corn country of equal extent. Tea. it seems. therefore. was not.seem. it marks an increase which is scarce inferior to that of the English colonies. has been almost continually augmenting. of all the European shipping employed in the East India trade. the direct trade between America and the East Indies. had been as abundant as those which supplied the European. of which the demand must increase much more rapidly than that of the most thriving country in Europe. has been continually augmenting. The tonnage. of which they have the disposal. the trade of the Dutch continually augmenting in a still greater proportion than that of the Portuguese declined. and of innumerable other articles. from Gottenburgh in Sweden. has increased very nearly in a like proportion. by a sort of caravans which go over land through Siberia and Tartary to Pekin.

The money price of diamonds. and for a much greater quantity of food than in Europe. upon account both of the small quantity of food which it will purchase. that those distant parts of the world are connected with one another. it has already been observed. furniture. etc. or at most twelve ounces of silver. of the greater part of European ships which sail to India. to carry silver thither than gold. silver has generally been one of the most valuable articles. the real quantity of the necessaries of life which is given to the labourer. the proportion between fine silver and fine gold is but as ten. We may from thence form some notion how great must be the annual consumption in all the different parts of the world. the almost universal custom of concealing treasures in the bowels of the earth. therefore. in Europe. the expense of land-carriage increases very much both the real and nominal price of most manufactures. both of coin and of plate. too. will naturally be much lower in those great empires than it is anywhere in Europe. however. There is scarce any commodity which brings a better price there. In China. In the greater part of the governments of Asia. too. and consequently of this money. and still continues to be. the greatest of all superfluities. would alone require a very great annual supply. the first of all necessaries. as it is much more rapid. In the manufactures of Birmingham alone. and that of food. will purchase or command a greater quantity of labour and commodities in India. than the mines which supplied the European. It is the most valuable article in the Acapulco ships which sail to Manilla. to be one of the principal commodities by which the commerce between the two extremities of the old one is carried on. a great deal lower in the one country than in the other. In the cargoes. in a great measure. the extent and variety of inland navigations save the greater part of this labour. is said to amount to more than fifty thousand pounds sterling. besides. Through the greater part of Europe. much more sensible. or at most as twelve to one. is very sensible. either in manufactures of the same kind with those of Birmingham. because in China. The wages of the labourer will there purchase a smaller quantity of food: and as the money price of food is much lower in India than in Europe. and thereby disqualified from ever afterwards appearing in the shape of those metals. and the greater part of the other markets of India. The money price of the greater part of manufactures. therefore. It costs more labour. embroideries. The continual consumption of the precious metals in coin by wearing. too. seem not to be much inferior to any part of Europe. and in plate both by wearing and cleaning. the money price of the greater part of manufactures will be in proportion to the money price of labour. In order to supply so very widely extended a market. to bring first the materials. the gilding of books. gold and silver stuffs. But in countries of equal art and industry. which is required in all thriving countries. will purchase an ounce of gold. the quantity of silver annually brought from the mines must not only be sufficient to support that continued increase. or in laces. A considerable quantity. China and Indostan. The silver of the new continent seems. therefore.the precious stones a good deal more so. in this manner. and thereby reduce still lower both the real and the nominal price of the greater part of their manufactures. In China and Indostan. is. though it may not perhaps be greater upon the whole than this gradual consumption. though inferior. than it is through the greater part of Europe. It is more advantageous. but to repair that continual waste and consumption of silver which takes place in all countries where that metal is used. and in commodities of which the use is so very widely extended. in proportion to the quantity of labour and commodities which it costs in Europe. The precious metals. and of the low price of that food. and afterwards the complete manufacture to market. The consumption of those metals in some particular manufactures. is lower both in China and Indostan. the quantity of gold and silver annually employed in gilding and plating. would be somewhat lower. and the greater part of the other markets of India. it requires from fourteen to fifteen ounces. extremely advantageous to carry from Europe to India. would naturally exchange in India for a somewhat greater quantity of the precious stones. must be annually lost in transporting those metals from one place to another both by sea and by land. and it is by means of it. or which. . and therefore more money. whereas in Europe it is as fourteen or fifteen to one. of which the knowledge frequently dies with the person who makes the concealment. and in manufacturing art and industry. But the real price of labour. ten. must occasion the loss of a still greater quantity. the precious metals are a commodity which it always has been. the two great markets of India. Upon all these accounts. the money price of labour is there lower upon a double account.

equal to about twenty millions sterling. sterling. add to this sum an eighth more. sometimes a little less. The account of what was imported under register. the annual importation of the precious metals into Spain. and of the particular quantities of each metal. I have been assured.250. But the consumption of Birmingham alone.101. The great experience of this judicious merchant renders his opinion of considerable weight. therefore.431:10s. The mines of America. by far the most abundant. by the amount of the tax paid to the king of Portugal. On account of what may have been smuggled. agree in making this whole annual importation amount. viz. is out of all proportion greater than that of gold and silver. so that the whole will amount to £ 2. be nearly equal to the whole annual produce. which has never had a second edition.878:4s. We do not. remains in the country.}.185 3/5 piastres of ten reals. The silver. from 1748 to 1753. to about six millions sterling. which the Spanish colonies carry on with those of other European nations. from 1747 to 1753. The whole annual consumption of gold and silver. perhaps. He gives us the detail of the particular places from which the gold and silver were brought. imagine that those coarse metals are likely to multiply beyond the demand. indeed. according to the best accounts. or £ 250. three years after the publication of the book. that if we were to judge of the quantity of gold annually imported from the Brazils to Lisbon. which. He makes an allowance. He gives the detail. however. The remainder may be no more than sufficient to supply the increasing demand of all thriving countries. too. in all the different countries of the world where those metals are used.333. is annually imported into Cadiz and Lisbon. which it seems. The produce of all the other mines which are known is insignificant. and sometimes well-informed. at an average of six years. may. at sixty two shillings the pound troy. sterling. at an average of eleven years. at an average. The annual importation of the precious metals into Cadiz and Lisbon. According to the eloquent. it is likewise acknowledged. at the rate of fifty thousand pounds a-year. which. the annual importation of registered gold and silver into Spain. amounted in silver to 1. which according to the register. for the quantity of each metal which. therefore. is equal to £ 3. and into Portugal. According to Mr Meggens {Postscript to the Universal Merchant p. each of them afforded. amounted to 13. or to become gradually cheaper and . however. the piastre. therefore.The quantity of gold and silver imported at both Cadiz and Lisbon (including not only what comes under register. at the rate of six millions a-year. The gold. of the particular places from which the gold and silver were brought. to be found in few copies. and in gold to 49. according to the register. he supposes. both inclusive. author of the Philosophical and Political History of the Establishment of the Europeans in the two Indies. to about six millions sterling a-year. On account of what may have been smuggled. mounts to about £ 6.000 sterling. According to this account. he assures us. and the far greater part of their produce. we might value it at eighteen millions of cruzadoes.940 pounds weight.984. at an average of seven years. he says. it corrects several errors in the book. both inclusive. Several other very well authenticated. as somewhat to raise the price of those metals in the European market. 6d. are by no means the only gold and silver mines in the world.000 sterling. the whole annual importation of the precious metals into both Spain and Portugal. each of them afforded.746. at forty-four guineas and a half the pound troy. is not equal to the whole annual produce of the mines of America. we may safely. amounts to £ 3. but what may be supposed to be smuggled) amounts.825. some part is employed in a contraband trade. at 4s. The quantity of brass and iron annually brought from the mine to the market. however. the whole annual importation. too. This postscript was not printed till 1756. It may even have fallen so far short of this demand. They. upon this account. or forty-five millions of French livres. is exact. may have been smuggled. however. and some part. are. sometimes a little more.446:14s. is one-fifth of the standard metal. besides. He informs us. it is acknowledged. viz. in comparison with their's. Some part is sent annually by the Acapulco ships to Manilla. no doubt.000 sterling. too. sterling. he supposes.000 sterling. though manuscript accounts. Both together amount to £ 5. both inclusive.107 pounds weight. and of the particular quantity of each metal. viz. amounts to £ 2.413.075. 15 and 16. from 1754 to 1764. The postscript is. is equal to the hundred-and-twentieth part of this annual importation. may have amounted to seventeen millions of piastres.

The quantity of silver commonly in the market. consumed. too. between the proportions of one to ten and one to twelve. some part of the gold which was brought from it two or three thousand years ago. 6d. though liable to slow and gradual variations. long before the end of this year. must supply the consumption of the world. however. for one ounce of gold there are imported a little more than twenty-two ounces of silver. and would therefore be as one to twenty-two.cheaper. About the middle of the last century. are put to much harder uses. that there are commonly in the market only fourteen or fifteen ounces of silver for one ounce of gold. and. were it not for this greater exportation of silver. The great quantities of silver carried annually from Europe to India. will always be nearly in proportion to the respective produce of those different years. rated too high for the value which it bears in the market of Bengal. may be still in use. have. in a great variety of ways. in different years. perhaps. still more from year to year than that of the greater part of corn fields. indeed. that is. that is. But the ordinary proportion between the respective values of two commodities is not necessarily the same as that between the quantities of them which are commonly in the market. must necessarily be the same as that between their quantities. because an ounce of gold will commonly purchase from fourteen or fifteen ounces of silver. The price of an ox. is much greater in proportion to that of . or in the quantity of silver which was given for it. Variations in the Proportion between the respective Values of Gold and Silver. Why should we imagine that the precious metals are likely to do so? The coarse metals. but silver sunk more than gold. and the proportion between the masses of gold will be still less affected by any such difference in the produce of the gold mines. or almost all. The price of all metals. Though the produce of the greater part of metallic mines. Though both the gold and silver mines of America exceeded in fertility all those which had ever been known before. The different masses of corn. been proportionally still greater than that of the gold ones. In the mint of Calcutta. less care is employed in their preservation. reckoned at 3s. In Japan. It would be absurd. he seems to think. varies. gradually reduced the value of that metal in proportion to gold. perhaps. or in the quantity of labour which they could purchase. are not necessarily immortal any more than they. reckoned at ten guineas. that is. to be lost. varies less from year to year than that of almost any other part of the rude produce of land: and the price of the precious metals is even less liable to sudden variations than that of the coarse ones. and it would be just as absurd to infer. will be very little affected by any accidental difference in the produce of the iron mines of those two years. an ounce of fine gold was supposed to be worth from ten to twelve ounces of fine silver. and. those variations have not the same effect upon the price of the one species of commodities as upon that of the other. the proportion of their values. the fertility of the silver mines had. is as one to twenty-two nearly. in the same manner as in Europe. or one to twelve. in some of the English settlements. But the proportion between the different masses of iron which may be in use in two different years. In China. it is probable. it is said to be as one to eight. The proportion between their values. that there are commonly in the market three score lambs for one ox. he supposes. an ounce of fine gold is supposed to be worth fifteen ounces of fine silver. as they are of less value. the proportion of gold to silver still continues as one to ten. Gold rose in its nominal value. therefore. perhaps. according to Mr Meggens' account. an ounce of fine gold came to be supposed worth between fourteen and fifteen ounces of fine silver. It is in the mint. the quantities of those metals which remain in Europe to the proportion of one to fourteen or fifteen. Before the discovery of the mines of America. but are liable. however. though harder. The durableness of metals is the foundation of this extraordinary steadiness of price. The great quantity of silver sent annually to the East Indies reduces. But some part of the iron which was brought from: the mine two or three hundred years ago. to infer from thence. between the proportions of one to fourteen and one to fifteen. wasted. which. Both metals sunk in their real value. it came to be regulated. The corn which was brought to market last year will be all. and consumed. is about three score times the price of a lamb. The precious metals. the value of fine gold to fine silver was regulated in the different mines of Europe. The proportion between the quantities of gold and silver annually imported into Europe. it seems.

gold is certainly somewhat nearer to this lowest price than silver. of the cheap commodity. or one-fifth part of the standard metal. In the British coin. be somewhat nearer to the lowest price for which it is possible to bring it thither. The superior value. The whole quantity. be said to be somewhat cheaper than silver. not only a greater quantity of it. with a moderate profit. be still more moderate than those of the undertakers of silver mines. the whole quantity of the one metal. in one sense of the word. which takes place in all countries. When we compare the precious metals with one another. be disposed of so advantageously as the whole quantity of the other. But. Though. that. though it did somewhat {See Ruddiman's Preface to Anderson's Diplomata. compare his own silver with his gold plate. It is the price which affords nothing to the landlord. besides. indeed. it has already been observed. The price of Spanish gold. must commonly be greater in proportion to the whole quantity of the dear one. be still nearer to the lowest price at which it is possible to bring them to market. perhaps. the value of the two metals is nearly equal. the whole mass of American gold comes at a price nearer to the lowest for which it is possible to bring it thither. than the whole quantity of wild fowl. the largest sums are commonly paid in that metal. whereas his tax upon silver amounts to onetenth part of it. than even the price of gold. and he will probably find. will much more than compensate the preponderancy of the gold coin above the silver. consists the whole rent of the greater part of the gold and silver mines of Spanish America. before the union with England. and it is there difficult to get more gold than what is necessary to carry about in your pocket. the gold preponderated very little. of the king of Portugal upon the gold of the Brazils. however. the stock which must be employed in bringing the commodity thither. The profits of the undertakers of gold mines. but a greater value can commonly be disposed of. is not only greater. but which resolves itself altogether into wages and profit. and such like trinkets. that not only the quantity. and that upon gold is still worse paid than that upon silver. whether. in the present state of the Spanish market. but of greater value. which is not only imposed upon one of the most proper subjects of taxation. The tax of the king of Spain upon gold is only onetwentieth part of the standard metal. not only a greater quantity. who has a little of both. therefore. This lowest price is that which barely replaces. The whole quantity of a cheap commodity brought to market is commonly not only greater. and gold a dear commodity. in another sense. even with those who have it. therefore. but according as that price is more or less above the lowest for which it is possible to bring it to market for any considerable time together. and probably always will be. of the silver plate above that of the gold. Though it is not very probable that any part of a tax. gold may perhaps. than the whole quantity of poultry. indeed. The price of diamonds and other precious stones may. must. In France. Let any man.}. as they more rarely make a fortune. than the value of a certain quantity of gold is to that of an equal quantity of silver. too. than the value of a certain quantity of the dear one. much cheaper than gold. greatly exceeds that of the latter.gold. too. cannot. to the general market of Europe. than the price of Spanish silver. The tax. as it affords both less rent and less profit. than the whole mass of American silver. There are so many more purchasers for the cheap than for the dear commodity. that there should always be in the market. The whole quantity of bread annually brought to market. In the coin of many countries the silver preponderates. is the same with the ancient tax of the king of Spain upon the silver of Mexico and Peru. in the Spanish market. Scotiae. but of greater value. but the value of the former. but which affords so very important .. silver always has been. is generally confined to watch-cases. yet. In the Scotch coin. which takes place only in some countries. than the whole quantity of butcher's meat. We ought naturally to expect. is to the value of an equal quantity of the cheap one. In these taxes. In the coin of some countries. therefore. in the Spanish market. in the present state of the Spanish market. or five per cent. A commodity may be said to be dear or cheap not only according to the absolute greatness or smallness of its usual price. etc. as it appears by the accounts of the mint. of which the whole amount is seldom of great value. snuff-boxes. or to ten per cent. When all expenses are computed. have a good deal of silver who have no gold plate. Many people. in general. It may therefore be uncertain. than the whole quantity of a dear one. but it is not so in that of all countries. of which rent makes not any component part. silver is a cheap. it would seem. a mere luxury and superfluity. and the whole quantity of poultry. must. the value of the gold preponderates greatly. which. the whole quantity of butcher's meat. but a greater value of silver than of gold.

than it otherwise would have been. at least ten per cent. appear to many people uncertain. produce one or other of the three following events: The increase of the expense must either. though it may not at this day be lower than before that reduction. however. there must be a certain period at which the annual consumption of those metals will be equal to that annual importation. As gold rose in its price in proportion to silver. These causes. or whether the value of silver may not still continue to fall in the European market. exceed the annual importation. notwithstanding a great diminution of the tax upon gold. deserves the name of belief. in the present times. therefore. however. the value of silver has. Their consumption must increase as their mass increases. that as the quantity of the precious metals naturally increases with the increase of wealth. which. the annual consumption will gradually and insensibly accommodate itself to what that annual importation can maintain. that after all that has been said. and their consumption consequently increases in a greater proportion than their mass. though they may not prevent altogether. perhaps. dispose many people to believe that their value still continues to fall in the European market. but whether the contrary may not have taken place. and the quantity of silver annually brought to market. their value diminishes. Grounds of the suspicion that the Value of Silver still continues to decrease. This third event is very possible. must certainly retard. on account of the greater depths at which it is necessary to carry on the works. is. That the silver mines of Spanish America. secondly. which. in the same manner as it made it necessary to reduce the tax upon gold to one-twentieth. must. has hitherto been so very small. therefore. and. which are equivalent to a growing scarcity of silver (for a commodity may be said to grow scarcer when it becomes more difficult and expensive to collect a certain quantity of it). provided that importation is not continually increasing. become equal to their annual importation. perhaps. or rather in a much greater proportion. it must be compensated partly by the one and partly by the other of those two expedients. made it necessary to reduce it from one-fifth to one-tenth. when the annual consumption has become equal to the annual importation. had the court of Spain continued to exact the old tax. and their value gradually and insensibly rise. the annual consumption of those metals must. must always be somewhat greater. If. It must be observed. indeed. is not supposed to be the case. lower than it would have been. thirdly. for some time. be compensated altogether by a proportionable increase in the price of the metal. during the course of the present century. The mass of those metals may gradually and insensibly diminish. and of supplying them with fresh air at those depths. notwithstanding this reduction. in time. in 1736. the annual consumption may. As their mass increases. that whatever may be the supposed annual importation of gold and silver. for the best opinion which I can form upon this subject. perhaps. it must be compensated altogether by a proportionable diminution of the tax upon silver. is acknowledged by everybody who has inquired into the state of those mines. In consequence of such reductions. and the still gradually increasing price of many parts of the rude produce of . After a certain period. or more properly to suspect and conjecture. the value of any given quantity somewhat less. yet the same impossibility of paying it. so silver might rise in its price in proportion to labour and commodities. or. begun to rise somewhat in the European market. till the annual importation becoming again stationary. first. supposing there has been any. may. In consequence of the reduction in 1736. more or less. The rise. many mines may be wrought which could not be wrought before. in this manner. That. dispose me to believe. it may. will ever be given up as long as it is possible to pay it. and less cared for. notwithstanding an equal diminution of the tax upon silver. and the popular notion.a revenue as the tax upon silver. because they could not afford to pay the old tax. and of the greater expense of drawing out the water. They are more used. Such successive reductions of the tax. may in time make it necessary to reduce it still further. the value of silver in the European market. the rise of the value of silver in the European market. become gradually more expensive in the working. the facts and arguments which have been alleged above. not only whether this event has actually taken place. like all other mines. scarce. or. probably. The increase of the wealth of Europe. so their value diminishes as their quantity increases. the annual importation should gradually diminish.

the obligation to deliver their wheat at this rate being considered as a tax upon the Sicilian farmers.land may confirm them still farther in this opinion. naturally grow dearer. for rare birds and fishes. but of the rise in their real price. but their real price. remaining the same. no effort of human industry could increase the number of those brought to market. These different sorts of rude produce may be divided into three classes. which rises in the progress of improvement. increase. and this had probably been reckoned the moderate and reasonable. therefore. for the same reason that all sorts of luxuries and curiosities resort to it. I have endeavoured to shew already. Three sestertii equal to about sixpence sterling. If woodcocks should become so fashionable as to sell for twenty guineas a-piece. or nearly the same. almost all wild-fowl. it will not from thence follow that silver has become really cheaper. and after the fall of the republic. That of the third. This price. The high price paid by the Romans. and such other vegetables as are raised altogether by human industry. That that increase in the quantity of the precious metals. I have endeavoured to shew already. come to exchange for a greater quantity of silver than before. The first comprehends those which it is scarce in the power of human industry to multiply at all. those in which the efficacy of industry is either limited or uncertain. of which the price rises in the progress of improvement. game of all kinds. etc. had occasion to order more corn than the tithe of wheat amounted to. When the Romans. much beyond what it is at present. When wealth. they were bound by capitulation to pay for the surplus at the rate of four sestertii. the demand for these is likely to increase with them. or will purchase less labour than before. many different sorts of game. and the luxury which accompanies it. while the competition to purchase them is continually increasing. as the society advances in wealth and improvement. yet in the same degree of improvement it may sometimes happen even to fall. and no effort of human industry may be able to increase the supply much beyond what it was before this increase of the demand. though it may rise greatly. and seems not to be limited by any certain boundary. though its natural tendency is to rise in the progress of improvement. Though such commodities. the useful fossils and minerals of the earth. and sometimes to rise more or less. or will purchase more labour than before. was probably below the average market price. not of any degradation of the value of silver. That of the second. therefore. The rise of their nominal price is the effect. Such are the greater part of rare and singular birds and fishes. than it is through the greater part of Europe at present. more or less successful. for sometime before. that all other sorts of rude produce. It consists in those things which nature produces only in certain quantities. but of the high value of such rarities and curiosities as human industry could not multiply at pleasure. The quantity of such commodities. was the price which the republic paid for the modius or peck of the tithe wheat of Sicily. poultry. . cattle. the ordinary or average contract price of those times. The real value of silver was higher at Rome. a certain boundary. and as soon as that superiority ceases. The third. which arises in any country from the increase of wealth. the real price of the first may rise to any degree of extravagance. and seems not to be limited by any certain boundary. their price may rise to any degree of extravagance. Gold and silver naturally resort to a rich country. in multiplying this sort of rude produce. The second. Different Effects of the Progress of Improvement upon three different sorts of rude Produce. has. and which being of a very perishable nature. however. If you except corn. according as different accidents render the efforts of human industry. but that such commodities have become really dearer. It is not their nominal price only. These prices were not the effects of the low value of silver in those times. it is impossible to accumulate together the produce of many different seasons. but because they are dearer. It is the superiority of price which attracts them. they necessarily cease to go thither. is that which it is scarce in the power of human industry to multiply at all. as well as many other things.—The first sort of rude produce. or eightpence sterling the peck. that is. may in this manner easily be accounted for. beyond which it cannot well pass for any considerable time together. or because a better price is given for them. therefore. not because they are cheaper there than in poorer countries. has no tendency to diminish their value. First Sort. in the time of their greatest grandeur. however. it is equal to about one-and-twenty shillings the quarter. all birds of passage in particular. sometimes to continue the same. those which it can multiply in proportion to the demand. In the progress of wealth and improvement.

cattle is. that is. Their real value. to appear to us about one third less than it really was. and that Asinius Celer {Lib. the ordinary contract price of English wheat. which compose this second sort of rude produce. was about one-third more than their nominal price is apt to express to us in the present times. During a long period in the progress of improvement. at the price of six thousand sestertii. What occasioned the extravagance of those high prices was. indeed. Of all the different substances. in the progress of improvement. Seius gave for the nightingale the command of a quantity of labour and subsistence. rises first to this height. X. The value of silver. probably. till at last it gets so high as to render them as profitable a produce as any thing else which human industry can raise upon the most fertile and best cultivated land. perhaps. their price must be continually rising. would purchase. When the price of cattle. gradually rises. that of which the price. was a good deal less than what the command of the same quantity of labour and subsistence would have procured to them in the present times. and. If it did. which can be applied to no other purpose but the feeding of cattle. till it gets so high. of which those Romans had the disposal. But it must always be late in the progress of improvement before tillage can be so far extended as to raise the price of cattle to this height. is that which human industry can multiply in proportion to the demand.} bought a white nightingale. to give in exchange for it. equal to about sixty-six pounds thirteen shillings and fourpence of our present money. consequently. must gradually rise. therefore. c. and which. are therefore forced to give place to some more profitable produce. seems. that their price could ever have risen so high as to render it profitable to cultivate land for the sake of feeding them. in some of which.Eight-and-twenty shillings the quarter was. must have been to its value in the present. equal to about fifty pounds of our present money.} purchased a surmullet at the price of eight thousand sestertii. till it has got to this height. or. Second sort. which in quality is inferior to the Sicilian. it cannot well go higher. therefore. When we read in Pliny. has got to this height. in uncultivated countries. the real quantity of labour which they will purchase or command. increases the demand. 17. for example. to have got to this height about the beginning of the last century. perhaps. that they are of little or no value. as cultivation advances. more corn land would soon be turned into pasture. before the late years of scarcity. by increasing the number of those who have either corn. however. The quantity of silver. and. before it got through the greater part of the remoter counties. Their real price. perhaps. It had not got to this height in any part of Scotland before the Union. In England. of which they had the disposal. more land and more industry would soon be employed to increase their quantity.—The second sort of rude produce. . it may scarce yet have got to it. some parts of Europe in which the price of cattle has not yet got to this height. but it was much later. c. while. of which the price rises in the progress of improvement. It consists in those useful plants and animals. if the country is advancing at all. it is scarce possible. which the country naturally produces without labour or cultivation. notwithstanding. as the abundance of labour and subsistence. diminishes the quantity of butcher's meat. therefore. is apt. Till the price of cattle. three ounces of silver would then have purchased the same quantity of labour and commodities which four ounces will do at present. as three to four inversely. the extravagance of those prices. The price of butcher's meat. in the neighbourhood of London. the quantity of labour and subsistence which was given away for them. which. When it has got so high. by diminishing the quantity of wild pasture. 29. in a country in which the quantity of land. and. nature produces with such profuse abundance. as a present for the empress Agrippina. it cannot well go higher. that it is as profitable to cultivate land in order to raise food for them as in order to raise food for man. would purchase in the present times. that it becomes as profitable to employ the most fertile and best cultivated lands in raising food for them as in raising corn. beyond what was necessary for their own use. it has already been observed. and Asinius Celer gave for a surmullet the command of a quantity equal to what £ 88:17: 9d. rises so high. therefore. There are. the price of cattle. and generally sells for a lower price in the European market. it seems scarce possible that the greater part. what comes to the same thing. perhaps. If it did. the demand for them is continually increasing. is so great in proportion to what can be applied to other purposes. how much soever it may surprise us. The extension of tillage. Had the Scotch cattle been always confined to the market of Scotland. not so much the abundance of silver. that Seius {Lib. IX. of cattle. in those ancient times. the quantity of these is continually diminishing. equal to what £ 66:13: 4d. the price of corn. at the same time.

In these circumstances. perhaps. or those. that is. after having been pastured in this wretched manner for six or seven years together. producing scarce any thing but some miserable pasture. because. can be completely abolished through all the different parts of the country. in the far greater part of those of every extensive country. in the neighbourhood of the farm-yard. can be completely cultivated. the farm. was the general system of management all over the low country of Scotland before the Union. the same rise of price. and another portion ploughed up. perhaps. notwithstanding a great rise in the price. A portion of this waste land. to ignorance and attachment to old customs. or by feeding them in the stable. being entirely exhausted. it is evident. in most places. It has not only raised the value of all highland estates. that price will be still less sufficient to pay for that produce. secondly. again. and brought into the stable to them. But how disadvantageous soever this system may appear. regularly cultivated and exhausted. and fit for tillage. The lands which were kept constantly well manured and in good condition seldom exceeded a third or fourth part of the whole farm. and. which Scotland has derived from the Union with England. and sometimes did not amount to a fifth or a sixth part of it. and half a century or a century more. either by pasturing the cattle upon it. which can for many years be applied to no other purpose but the feeding of cattle. Of all the commercial advantages. which is wearing out gradually. Such. will naturally be reserved for the lands to which it can be most advantageously or conveniently applied. the greater part of them. But unless the price of the cattle be sufficient to pay both the rent and profit of cultivated land. It the price of the cattle. however. which would render it advantageous for them to maintain a greater stock. no doubt. however. the farmer cannot afford to pasture them upon it. the great quantity of waste land. The land is manured. there can be scarce any improvement of land. to their not having yet had time to acquire a stock of cattle sufficient to cultivate their lands more completely. though much overstocked in proportion to what would be necessary for its complete cultivation. could produce but little in comparison of what it may be capable of producing. when it will yield. therefore. but a certain portion of them was in its turn. but it has. it is owing in many places. These. The rest were never manured. The increase of stock and the improvement of land are two events which must go hand in hand. when it must be collected with a good deal of additional labour. it still continues to prevail through a considerable part of the country. will be kept constantly in good condition. These natural obstructions to the establishment of a better system. What they afford. Without some increase of stock. being very frequently overstocked in proportion to its actual produce. notwithstanding. would require too much labour. therefore. to collect the scanty and scattered produce of waste and unimproved lands. the most fertile. or of some other coarse grain. because otherwise the land could not maintain it. cannot be removed but by a long course of frugality and industry. and in every thing . But these can never afford manure enough for keeping constantly in good condition all the lands which they are capable of cultivating. be allowed to lie waste. must be in proportion to the stock of cattle which are maintained upon it. even that part of the lands of Scotland which is capable of good cultivation. no more cattle can with profit be fed in the stable than what are necessary for tillage. If. therefore. In all farms too distant from any town to carry manure from it. In all new colonies. and he can still less afford to feed them in the stable. and of which the one can nowhere much outrun the other. must pass away before the old system. and this. just sufficient to keep alive a few straggling. it must be rested and pastured again as before. and from thence carrying out their dung to it. but in consequence of a considerable improvement of land. to the poverty of the tenants. being insufficient for the whole farm.even of those lands which are capable of the highest cultivation. but there can be no considerable increase of stock. this rise in the price of cattle is. before the Union. the low price of cattle seems to have rendered it almost unavoidable. when they are allowed to pasture it. perhaps. the quantity of well cultivated land must be in proportion to the quantity of manure which the farm itself produces. yet. accordingly. and then. rendering it more difficult for them to acquire it. been the principal cause of the improvement of the low country. and be too expensive. perhaps. the greatest. to be in the same manner exhausted and rested again in its turn. Under this system of management. is not sufficient to pay for the produce of improved and cuitivated land. may be ploughed up. perhaps. a poor crop or two of bad oats. to their not having yet had time to put their lands in condition to maintain this greater stock properly. It is with the produce of improved and cultivated land only that cattle can be fed in the stable. but. to the unavoidable obstructions which the natural course of things opposes to the immediate or speedy establishment of a better system: first. soon renders them extremely abundant. The rest will. supposing they were capable of acquiring it. half-starved cattle.

having long ago extirpated almost all the annual grasses. not unlike that which still continues to take place in so many parts of Scotland. It must be a long time after the first establishment of such colonies. the offals of the barn and stable will maintain a certain number of poultry. are likely to introduce there a system of husbandry. was among the ancient Romans. they clear and cultivate another piece of fresh land. in his opinion. They make scarce any manure for their corn fields. could not maintain one cow. before it can become profitable to feed cattle upon the produce of cultivated land. birds of passage which arrive lean in the country. by cropping them too early in the spring. before cattle can bring such a price as to render it profitable to cultivate land for the sake of feeding them. But the whole quantity of poultry which the farm in this manner produces without expense. which degenerated sensibly from me generation to another. These. the Swedish traveller. and as they cost the farmer scarce any thing. there is a very long interval. as he found it in 1749. {Kalm's Travels.} The annual grasses were. the poultry. is not near sufficient to compensate the expense of a deer park. As cattle are among the first. and that which brings to it the price of such a superfluity as venison. Thus. so he can afford to sell them for very little. They were probably not unlike that stunted breed which was common all over Scotland thirty or forty years ago.great cheapness is the necessary consequence of great abundance. Between that period in the progress of improvement. and the wealth and luxury of Great Britain increase as they have done for some time past. The poorness of the pasture had. that he can with difficulty discover there the character of the English nation. before they had time to form their flowers. the feeding of deer would soon become an article of common farming. The fattening of ortolans. it seems impossible that improvement can be brought near even to that degree of perfection to which it has arrived in many parts of Europe. the want of manure. called turdi. and to rise three or four feet high. without any owner thinking it worth while to claim them. in the same manner as the feeding of those small birds. But in countries ill cultivated. A piece of ground which. when he gives an account of the husbandry of some of the English colonies in North America. If it was otherwise. so perhaps venison is among the last parts of this sort of rude produce which bring this price. In this state of things. in the course of which many other sorts of rude produce gradually arrive at their highest price. according to different circumstances. the best natural grasses in that part of North America. that it was a most profitable article. it seems. he was assured. and when the Europeans first settled there. but when one piece of ground has been exhausted by continual cropping. must always be much smaller than . in every farm. Though it is late. though that expedient has been employed in some places. they used to grow very thick. so well skilled in all the different branches of agriculture. or any other sort of animal food. vol 1. as is well known to all those who have had any experience in the feeding of deer. they are perhaps the first which bring this price. accordingly. as by a more plentiful method of feeding them. that even horses were allowed to run wild in the woods. some sooner and some later. and became of so little value. therefore. which brings to its height the price of so necessary an article as cattle. is said to be so in some parts of France. yet of all the different parts which compose this second sort of rude produce. not so much by a change of the breed. are often fully sufficient to supply the whole demand. have maintained four. how extravagant soever it may appear. If venison continues in fashion. till they bring it. and which is now so much mended through the greater part of the low country. Almost all that he gets is pure gain. in the progress of improvement. and therefore but thinly inhabited. 343. are a mere save-all. pp. observes. because. The same causes. Mr Kalm. when he wrote. which are thus raised without expense. therefore. they are often as cheap as butcher's meat. Their cattle are allowed to wander through the woods and other uncultivated grounds. or to shed their seeds. its price may very probably rise still higher than it is at present. each of which would have given four times the quantity of milk which that one was capable of giving. where they are half-starved. The price of venison in Great Britain. he says. they soon multiplied so much there. proceed to a third. occasioned the degradation of their cattle. would in former times. Varro and Columella assure us. and when that is exhausted. 344. as they are fed with what would otherwise be lost. Though all the cattle of the European colonies in America were originally carried from Europe. therefore. and their price can scarce be so low as to discourage him from feeding this number. and the disproportion between the stock employed in cultivation and the land which it is destined to cultivate.

The cattle necessarily kept upon the farm produce more milk than either the rearing of their own young. the plenty would not be of long continuance. as England receives considerable supplies from France. however. cabbages. is always preferred to what is common. as well as these are paid upon the greater part of other cultivated land. In several provinces of France. like poultry. therefore. when it becomes necessary to raise food on purpose for feeding and fattening hogs. more land would soon be turned to this purpose. When it has got to this height. been frequently imputed to the diminution of the number of cottagers and other small occupiers of land. the scarcity must necessarily raise the price. The great rise in the price both of hogs and poultry. it cannot well go higher. turnips. For some time before this practice becomes general. which is thus produced at little or no expense. so the poorest occupiers of land can commonly maintain a few poultry. A middling farmer will there sometimes have four hundred fowls in his yard. or the consumption of the farmer's family requires. Sooner or later. dearer in England than in France. or to the price which pays the labour and expense of cultivating the land which furnishes them with food. As long as the number of such animals. in the progress of improvement. in consequence of these improvements. They are certainly. both somewhat sooner and somewhat faster than it would otherwise have risen. which can thus be reared at little or no expense. and in times of wealth and luxury. In France. however. and they find the rest in the neighbouring fields. that it becomes profitable to cultivate land for the sake of feeding them. at very little. in consequence of improvement and cultivation. In the warm season. milk is perhaps the most perishable. is originally carried on as a save-all. In most parts of Great Britain it is at present somewhat higher. in Great Britain. it will scarce keep four-and-twenty hours. must naturally be that which immediately precedes the general practice of cultivating land for the sake of raising it. in the same manner as for feeding and fattening other cattle. As wealth and luxury increase. The farmer. with only nearly equal merit. but which at the same time may have contributed to raise the price of those articles. he can afford to sell cheaper. and the state of its agriculture. supply those animals with a part of their food. But when the demand rises beyond what this quantity can supply. By diminishing the number of those small occupiers. originally kept as a save-all. and becomes proportionably either higher or lower than that of other butcher's meat. like the feeding of hogs and poultry. the price of pork is nearly equal to that of beef. After it has become general. is. is fully sufficient to supply the demand. it must at any rate have risen to the utmost height to which it is capable of rising. The hog. new methods of feeding are commonly fallen upon. etc. It has been probably in this manner that the introduction of clover. But of all the productions of land. for if he could not afford it. when it is most abundant. and their price must consequently have been raised both sooner and faster than it would otherwise have risen. the price necessarily rises. the period at which every particular sort of animal food is dearest. somewhat below what it was about the beginning of the last century. therefore. The feeding of poultry seems scarce yet to be generally considered as a matter of so much importance in England. but. according to Mr Buffon. As the poorest family can often maintain a cat or a dog without any expense. If it did. has contributed to sink the common price of butcher's meat in the London market.the whole quantity of butcher's meat which is reared upon it. what is rare. which enable the farmer to raise upon the same quantity of ground a much greater quantity of that particular sort of animal food. by making . that finds his food among ordure. without doing any sensible damage to any body. their whey. must certainly have been a good deal diminished. and sufficiently profitable to encourage the farmer to raise a considerable quantity of Indian corn and buckwheat for this purpose. the price of poultry gradually rises above that of butcher's meat. or a sow and a few pigs. skimmed milk. has. and they produce most at one particular season. and butter milk. an event which has in every part of Europe been the immediate forerunner of improvement and better cultivation. In the progress of improvements. this sort of butcher's meat comes to market at a much lower price than any other. The business of the dairy. happen to render the feeding of hogs more or less expensive than that of other cattle. The plenty not only obliges him to sell cheaper. carrots. The little offals of their own table. the feeding of poultry is considered as a very important article in rural economy. the quantity of this sort of provisions. till at last it gets so high. according as the nature of the country. and greedily devours many things rejected by every other useful animal.

filth. in order to find the best price which is to be had. of which the price naturally rises in the progress of improvement. If you except the neighbourhood of a few considerable towns. stores a small part of it for a week. is probably still too low to admit of it. and. the dairy is not reckoned a more profitable employment of land than the raising of corn. Gain is the end of all improvement. Part of all these is reserved for the use of his own family. where much good land is commonly employed in this manner. to pay the labour and expense of the farmer. more land would soon be turned to this purpose. he stores a much greater part of it for several years. In order to do this. would not pay the expense of the land and labour necessary for producing a much better quality. The increase of price pays for more labour. the greater part of what is brought to market could not. in the nominal or money price of all those different sorts of rude produce. perhaps. as it most certainly is. it is evident. the rest goes to market. can ever be completely cultivated and improved. If it is very low indeed. instead of being considered as a public calamity. and as is the case of many of them still. and nothing could deserve that name. first. ought to be regarded as the necessary forerunner and attendant of the greatest of all public advantages. is that in which the efficacy of human industry. the price of each particular produce must be sufficient. which human industry is obliged to raise upon them. It seems to have got to this height through the greater part of England. so. in other words. indeed. it cannot yet be even so profitable. think it worth while to have a particular room or building on purpose for it. and which can scarce be so low is to discourage him from sending thither whatever is over and above the use of his own family. too. perhaps. I apprehend. and cleanliness. to pay the rent of good corn land.—The third and last sort of rude produce. the two great objects of agriculture. This rise. this rise in the price of all those different sorts of rude produce. But this inferiority of quality is. but of a rise in their real price. of which loss was to be the necessary consequence. in consequence of the improvement of the country. If the complete improvement and cultivation of the country be. the increase of the demand. rather the effect of this lowness of price. and when it has got to this height. The lands of no country. or. it is probable. and nastiness of his own kitchen. raise. must evidently be previous to the improvement and cultivation of the land which is destined for raising it. The same causes which gradually raise the price of butcher's meat. Though the quality was much better. the greatest of all public advantages. of which the price naturally connects with that of butcher's meat. the diminution of the quantity which can be fed at little or no expense. but a greater quantity of labour and subsistence than before. as it is that which regulates the rent of the greater part of other cultivated land. care. in augmenting the . or with the expense of feeding cattle. when they are brought thither they represent. has been the effect. compared with that of the produce of English dairies. The inferiority of the quality. but will suffer the business to be carried on amidst the smoke. not of any degradation in the value of silver. As it costs a greater quantity of labour and subsistence to bring them to market. as well as they are commonly paid upon good corn land. The dairy becomes more worthy of the farmer's attention. Third Sort. though it has risen very considerably within these few years. and will scarce. as was the case of almost all the farmers' dairies in Scotland thirty or forty years ago. for a year. or the fattening of cattle. to replace with the ordinary profits the stock which he employs about it. and. If it did. that it becomes worth while to employ some of the most fertile and best cultivated lands in feeding cattle merely for the purpose of the dairy. and by making it into cheese. in the present circumstances of the country. Through the greater part of England. therefore. secondly. that of the produce of the dairy. They have become worth. or are equivalent to a greater quantity. merely for the purpose of the dairy. by making it into salt butter. But loss must be the necessary consequence of improving land for the sake of a produce of which the price could never bring back the expense. where common farmers seldom employ much good land in raising food for cattle. till once the price of every produce. Through the greater part of Scotland. he will be likely to manage his dairy in a very slovenly and dirty manner. be disposed of at a much better price. and the present price. has got so high as to pay for the expense of complete improvement and cultivation. The price of the produce. is fully equal to that of the price.it into fresh butter. notwithstanding the superiority of price. in the same manner. it seems not yet to have got to this height anywhere in Scotland. This rise in the price of each particular produce. The price at last gets so high. not only a greater quantity of silver. it cannot well go higher. than the cause of it. and the quality of its produce gradually improves.

the market for the latter commodities was confined within as narrow bounds as that for the former. I believe. however. the price of the whole beast necessarily rises. and in many other parts of Spanish America. the market. should have the same effect. and the market for such commodities may remain the same. would at least be brought much nearer to the place of growth than before. But the market for the wool and the hides. therefore. there is more demand for butcher's meat. or to be devoured by beasts and birds of prey. so that the quantity of the one which any country can afford. or which export to other countries any considerable part of their butcher's meat. naturally tends to rise in the progress of improvement. But the extent of their respective markets is commonly extremely different. yet. where the horned cattle are almost constantly killed merely for the sake of the hide and the tallow. according as different accidents happen to render the efforts of human industry more or less successful in augmenting the quantity. the industry of other countries may occasion a demand for them. Ireland. The same causes which. too. should ever come to flourish in the country. in very different periods of improvement. It should. gradually raise the price of butcher's meat. If the manufactures. It probably would be so. In some provinces of Spain. too. and as they are the materials of many manufactures. than in countries where. after such improvements. In countries ill cultivated. The state of the whole commercial world can seldom be much affected by the improvement of any particular country. even of a barbarous country. wool without any preparation. carry on a considerable trade in salt provisions. it happens almost constantly in Chili. in the rude beginnings of improvement. I have been assured. and populousness of the French plantations ( which now extend round the coast of almost the whole western half of the island) had given some value to the cattle of the Spaniards. yet the price of the carcase is likely to be much more affected by this rise than that of the wool and the hide. the price of the wool and the hide bears always a much greater proportion to that of the whole beast. is. it may be thought. and raw hides with very little. upon the prices of wool and raw hides. it can very seldom be enlarged in the same proportion. used to happen almost constantly in Hispaniola. The quantity of wool or of raw hides. if. must necessarily be extended in proportion to the improvement and population of that country. in the progress of improvement and population. be somewhat extended in consequence of them. sometimes to continue the same. This. The market for butcher's meat is almost everywhere confined to the country which produces it. Though. Though the real price of this sort of rude produce. and sometimes to rise more or less in the same period. is necessarily limited by that of the other. improvement and population being further advanced. often extending to the whole commercial world.quantity. while it was infested by the buccaneers. though that of the country which produces them might not occasion any. and therefore but thinly inhabited. There are some sorts of rude produce which nature has rendered a kind of appendages to other sorts. or very nearly the same. improvement. who still continue to possess. at Buenos Ayres. in the rude beginnings of improvement. of which those commodities are the materials. is necessarily limited by the number of great and small cattle that are kept in it. The carcase is often left to rot upon the ground. especially. as before. They can easily be transported to distant countries. and the nature of its agriculture. the only countries in the commercial world which do so. but the whole inland mountainous part of the country. and some part of British America. indeed. upon the whole. rather. not only the eastern part of the coast. though it might not be much enlarged. nearly in the same proportion. If this sometimes happens even in Spain. and the price of those materials might at least be . The market for wool and raw hides. but they are. and raise them. the sheep is frequently killed merely for the sake of the fleece and the tallow. it may happen sometimes even to fall. in the progress of improvement. The market for the carcase being in the rude state of society confined always to the country which produces it. for example. Mr Hume observes. in the natural course of things. the fleece was estimated at two-fifths of the value of the whole sheep and that this was much above the proportion of its present estimation. The state of its improvement. very seldom confined to the country which produces them. and before the settlement. that in the Saxon times. which any country can afford. on the contrary. again necessarily determine this number. is either limited or uncertain.

the Irish can work up but a smaller part of their own wool at home. ii. could never have happened in consequence of the natural course of things. too. But this seems not to have been the case with raw hides. or twenty-eight pounds of English wool. equal to about thirty shillings of our present money. the price of English wool has fallen very considerably since the time of Edward III. its real price. it ought naturally to rise somewhat. twelve shillings would in those times have purchased fourteen bushels and four-fifths of a bushel of wheat. which at this moment (February 1773) I understand to be the common price. notwithstanding the flourishing state of its woollen manufacture. Wool was commonly paid as a subsidy to the king. in consequence of the improvement of England. or as two to one. vol. twelve shillings contained about the same quantity of silver as four-and-twenty shillings of our present money. In 1425. An ox hide. was in this account valued at the same quantity of silver as 4s. and its valuation in that subsidy ascertains. which. In England. therefore. sixteen calf skins at two shillings. therefore. one-and-twenty shillings the tod may be reckoned a good price for very good English wool. the only market they are allowed. This degradation. five ox hides at twelve shillings. when the cattle were half starved during the greater part of the winter. 7. during the reign of that prince (towards the middle of the fourteenth century. was not less than ten shillings of the money of those times {See Smith's Memoirs of Wool. in the time of Edward III. But at half-a-crown the stone. is as twelve to six. There are many authentic records which demonstrate that. between the prior of Burcester Oxford and one of his canons. duty free: thirdly.}. But at the rate of six shillings and eightpence the quarter. at least as it was stated upon that particular occasion. would in those times have purchased as much corn as ten shillings and threepence would purchase at present. Though it might not rise. at least in some degree. six ounces of silver. at three and sixpence the bushel. and it ought certainly not to fall. is higher in the present than it was in those ancient times. was to its money price in the present times as ten to seven. 5. has been confined to the home market. where the wool of several other countries is allowed to come into competition with it. also vol. At the rate of six shillings and eightpence the quarter. the market for English wool. In those ancient times. if the real recompence of labour had been the same in both periods. It has accordingly been the effect of violence and artifice. as stated in the above account. at the rate of twentypence the ounce. viz. ten shillings was in those ancient times the price of twelve bushels of wheat. of the absolute prohibition of exporting wool from England: secondly. As the woollen manufactures. The proportion between the real price of ancient and modern times. An ox hide. gives us their price. instead of being somewhat extended. thirtysix sheep skins of two years old at nine shillings. and are therefore obliged to send a greater proportion of it to Great Britain. Its nominal price was a good deal lower than at present. In those ancient times. what was its ordinary price. In the present times. are fully as much discouraged as is consistent with justice and fair dealing. such a hide would at present cost only ten shillings. we cannot suppose that they were of a very large size. would in the present times cost 51s. i c. however. 6. 4/5ths of our present money. therefore. Fleetwood. the real quantity of subsistence which it will purchase or command. of the prohibition of exporting it from Ireland to another country but England. therefore. what was reckoned the moderate and reasonable price of the tod. however. is rather somewhat lower.increased by what had usually been the expense of transporting them to distant countries. is nearly in the common proportion to that of ox . and in those ancient times would probably have been reckoned a very good one. Through its nominal price. An ox hide which weighs four stone of sixteen pounds of avoirdupois. 4d. First. therefore. containing. or about 1339). and where that of Ireland is forced into competition with it. Its real value was equal to ten shillings and threepence of our present money. five cow hides at seven shillings and threepence. of Ireland. The money price of wool. from an account in 1425. The price of cow hides. therefore. At the rate of twenty-eight shillings the quarter. is not in the present times reckoned a bad one. in the same proportion as that of butcher's meat. one-and-twenty shillings is in the present times the price of six bushels only. In consequence of these regulations. a tod of wool would have purchased twice the quantity of subsistence which it will purchase at present. both in the real and nominal value of wool. I have not been able to find any such authentic records concerning the price of raw hides in ancient times. of the permission of importing it from Spain. Tower weight. The superiority of its real price was still greater. and consequently twice the quantity of labour.

and comparatively to raise that of those produced in a country which does manufacture them. have not been quite so successful as our clothiers. of the greater part of the lands of the country. That of sheep skins is a good deal above it. . because the greater part of the lands of the country being applicable to no other purpose but the feeding of cattle. In countries where the price of cattle is very low. have some tendency to raise the price of butcher's meat. however. is indifferent to the landlords and farmers. The price both of the great and small cattle. that the safety of the commonwealth depends upon the prosperity of their particular manufacture. are generally killed very young. The nature of the commodity renders it not quite so proper for being transported to distant markets as wool. neither has the commerce of Ireland been in this case oppressed hitherto. have been the most destructive regulation which could well have been thought of. which are fed on improved and cultivated land. ascribed to Edward III. This circumstance must necessarily have some tendency to sink the price of raw hides produced in a country which does not manufacture them. and where the wool and the hide made the principal part of the value of those cattle. and to raise it in modern times. and though this duty has been taken off from those of Ireland and the plantations (for the limited time of five years only). their real price has probably been somewhat higher than it was in those ancient times. their interest as landlords and farmers cannot be much affected by such regulations. they will soon cease to feed them. where the greater part of the lands could be applied to no other purpose but the feeding of cattle. The whole price of cattle would fall. but by reducing the price of the most important species of small cattle. on the contrary. Our tanners. but their importation from foreign countries has been subjected to a duty. Their interest as landlords and farmers would in this case be very deeply affected by such regulations. It would not only have reduced the actual value of the greater part of the lands in the kingdom. In an improved and cultivated country. been put among the enumerated commodities which the plantations can send nowhere but to the mother country. below what it naturally would he. Whatever regulations tend to sink the price. but is obliged to export them. Their skins. though their interest as consumers may. The same quantity of butcher's meat would still come to market. The perpetual prohibition of the exportation of wool. and sells for a lower price. The less there is paid for the one. is greatly below it. by the rise in the price of provisions. The exportation of raw hides has. which was done in 1769. That of calves skins. It must have some tendency to sink their price in a barbarous. duty free. and to raise it in an improved and manufacturing country. to sink it in ancient.hides. which is commonly. A salted hide is reckoned inferior to a fresh one. is not paid by the wool and the hide. The demand for it would be no greater than before. the importation of raw hides from Ireland. The fall in the price of the wool and the hide would not in this case raise the price of the carcase. Its price. as was the case in Scotland twenty or thirty years ago. and their interest as consumers very little. It would be quite otherwise. and to the allowing. owing probably to the taking off the duty upon seal skins. which are not intended to be reared in order to keep up the stock. It suffers more by keeping. therefore. yet Ireland has not been confined to the market of Great Britain for the sale of its surplus hides. The price of raw hides is a good deal lower at present than it was a few years ago. which their price would not pay for. It must have had some tendency. in order to support the manufactures of Great Britain. are commonly good for little. for a limited time. therefore. that is. must be sufficient to pay the rent which the landlord. but within these few years. Whatever part of this price. in an improved and cultivated country. either of wool or of raw hides. therefore. besides. therefore. in convincing the wisdom of the nation. Take the whole of the present century at an average. the more must be paid for the other. In what manner this price is to be divided upon the different parts of the beast. it would have retarded very much its subsequent improvement. and declared a nuisance. the calves. must be paid by the carcase. If it is not. must. and along with it both the rent and the profit of all those lands of which cattle was the principal produce. provided it is all paid to them. and the profit which the farmer. therefore. They had probably been sold with the wool. or of those which are not manufactured at home. but very falsely. would. would be the same as before.. indeed. been prohibited. has reason to expect from improved and cultivated land. the same number would still continue to be fed. in the then circumstances of the country. It saves the milk. in an unimproved and uncultivated country. and from the plantations. They have accordingly been much less favoured. The hides of common cattle have.

however. as upon this account it may in different countries be the same in very different periods of improvement. be thought is certain enough. its connection with the state of improvement is uncertain. in bringing or purchasing such superfluities as gold and silver. had not the rise in the price of butcher's meat fully compensated the fall in the price of wool. and rivers. either from its own mines. there come to be more buyers of fish. in consequence of which it can afford to employ a greater or a smaller quantity of labour and subsistence. have a greater quantity and variety of other goods. or of several years together. and by what may be called the fertility or barrenness of those seas. and it is of this sort of uncertainty that I am here speaking. first. without employing a quantity of labour greater than in proportion to what had been requisite for supplying the narrow and confined one. so it is uncertain so far as it depends upon the produce of other countries. and those buyers. . the price of a greater quantity and variety of other goods. The value of the greater part of the lands in the southern counties of Scotland. The fish must generally be sought for at a greater distance. from requiring only one thousand. But it will generally be impossible to supply the great and extended market. is limited. or. and very different in the same period. no doubt. to buy with. perhaps. upon the annual produce of its land and labour. Those metals frequently abound in countries which possess no mines. The quantity of those metals in the countries most remote from the mines. In multiplying this sort of rude produce. than upon the state of its wealth and industry. is not limited by any thing in its local situation. Though the success of a particular day's fishing maybe a very uncertain matter. by which it was excluded from the great market of Europe. In multiplying another very important sort of rude produce. upon the local situation of the country. as upon that which they do not manufacture. upon the state of its industry. more or less in every country. It so far depends not so much upon the quantity which they produce. larger vessels must be employed. that of the more precious ones particularly. the efficacy of human industry is not only limited. which are chiefly a sheep country. the general efficacy of industry in bringing a certain quantity of fish to market. As it depends more. too. It is limited by the local situation of the country. of their small bulk and great value. in every particular country. The real price of this commodity. taking the course of a year. seems to depend upon two different circumstances. as to this sort of rude produce. it may. it is likewise both limited and uncertain. would have been very deeply affected by this event. on account of the easy and cheap transportation of those metals. is so. upon its power of purchasing. Their quantity. without employing more than ten times the quantity of labour which had before been sufficient to supply it. so they necessarily render the efficacy of its efforts more or less uncertain. the efficacy of human industry seems not to be limited. I believe. what is the same thing.The wool of Scotland fell very considerably in its price in consequence of the union with England. The quantity of the precious metals which is to be found in any country. must be more or less affected by this fertility or barrenness. by the number of its lakes and rivers. but to be altogether uncertain. As population increases. and. As the efficacy of human industry. and upon the restraints which they may or may not think proper to impose upon the exportation of this sort of rude produce. and more expensive machinery of every kind made use of. A market which. secondly. naturally rises in the progress of improvement. Their quantity in China and Indostan must have been more or less affected by the abundance of the mines of America. therefore. but uncertain. comes to require annually ten thousand ton of fish. as the annual produce of the land and labour of the country grows greater and greater. in increasing the quantity either of wool or of raw hides. so far as it depends upon the produce of the country where it is exerted. therefore. and confined to the narrow one of Great Britain. and it. or from those of other countries. yet the local situation of the country being supposed. such as the fertility or barrenness of its own mines. can seldom be supplied. as they are altogether independent of domestic industry. These circumstances. It has accordingly done so. In increasing the quantity of the different minerals and metals which are drawn from the bowels of the earth. by the proximity or distance of its different provinces from the sea. the quantity of fish that is brought to market. upon the fertility or barrenness of the mines which may happen at any particular time to supply the commercial world with those metals. lakes.

or to the possible disappointment of human industry. The discovery of new mines.So far as their quantity in any particular country depends upon the former of those two circumstances (the power of purchasing). is a matter of the greatest uncertainty. like that of all other luxuries and superfluities. he who had a penny would be just as rich as he who has a shilling now. the quantity of gold and silver by which this annual produce could be expressed or represented. All indications. but its real value. more fertile than any that have ever yet been known. In the course of a century or two. Countries which have a great quantity of labour and subsistence to spare. as the old ones come to be gradually exhausted. would. may have somewhat a better chance for being successful than when confined within narrower bounds. As arts and commerce. can afford to purchase any particular quantity of those metals at the expense of a greater quantity of labour and subsistence. and a penny. no doubt. in the one case. . represent no more labour than a penny does at present. and such as no human skill or industry can insure. and the actual discovery and successful working of a new mine can alone ascertain the reality of its value. in the other. either to the possible success. their real price. and it is just equally possible. or even of its existence. however. are doubtful. it is acknowledged. to the real value of the annual produce of the land and labour of mankind. be very different. and the dearness and scarcity of those trifling superfluities. might represent as much as a shilling does now. So far as their quantity in any particular country depends upon the latter of those two circumstances (the fertility or barrenness of the mines which happen to supply the commercial world). and rise in proportion to the barrenness of those mines. however. Its nominal value. the search for new mines. is a circumstance which. the real quantity of labour and subsistence which they will purchase or exchange for. is of very little importance to the real wealth and prosperity of the world. and to fall with its poverty and depression. no doubt. would be precisely the same. The fertility or barrenness of the mines. the real quantity of labour which it could purchase or command. will. sink more or less in proportion to the fertility. it is possible that new mines may be discovered. being extended over a wider surface. the only inconveniency it could suffer from the other. he who had a shilling in his pocket would be no richer than he who has a penny at present. A shilling might. In this search there seem to be no certain limits. which may happen at any particular time to supply the commercial world. and in the other. It seems even to have no very necessary connection with that of the world in general. may have no sort of connection with the state of industry in a particular country. But in the one case. than countries which have less to spare. that the most fertile mine then known may be more barren than any that was wrought before the discovery of the mines of America. gradually spread themselves over a greater and a greater part of the earth. their real price. Whether the one or the other of those two events may happen to take place. is likely to rise with the wealth and improvement of the country. indeed. it is evident. The cheapness and abundance of gold and silver plate would be the sole advantage which the world could derive from the one event.

.

the high value of gold and silver. so neither is their high value. are. therefore. in proportion to that of corn. but to the accidental discovery of more abundant mines than any that were known before. any proof of its poverty and barbarism. not only of the scarcity of those metals. in the same manner as in other parts of Europe. A poor country. The money price of corn. and. in which neither prudence nor policy either had or could have any share. It is a proof only of the barrenness of the mines which happened at that time to supply the commercial world. as it cannot afford to buy more. not only with a freight and an insurance. their exportation being either prohibited or subjected to a duty. or the low money price either of goods in general. and the increase of its manufactures and agriculture. It clearly demonstrates. perhaps the two most beggarly countries in Europe. and. in other words. it has not been succeeded by a much better. As the wealth of Europe. some tolerable security that it shall enjoy the fruits of its own labour. The value of the precious metals. first. the countries which possess the mines. The greater part of the writers who have collected the money price of things in ancient times. has risen. as they come from those countries to all other parts of Europe. which represents national wealth as consisting in the abundance and national poverty in the scarcity. Spain and Portugal. therefore. therefore. are poorer than the greater part of Europe. from the fall of the feudal system. their great abundance in proportion to that of corn. their quantity must be greater in those countries than in any other part of Europe. either of goods in general. those countries. and. Though the feudal system has been abolished in Spain and Portugal. The increase of the quantity of gold and silver in Europe. is not likely to be higher in the former than in the latter. must have increased there as in other places. though they have happened nearly about the same time. secondly. however.Conclusion of the Digression concerning the Variations in the Value of Silver. however. and of goods in general. of gold and silver. has neither improved the manufactures and agriculture of the country. has not been owing to the increase of the real wealth of Europe. I shall only observe at present. This diminution of their value. and from the establishment of a government which afforded to industry the only encouragement which it requires. that the high value of the precious metals can be no proof of the poverty or barbarism of any particular country at the time when it took place. This increase of the quantity of those metals. and the value of those metals. yet have arisen from very different causes. but with the expense of smuggling. This notion is connected with the system of political economy. consequently. or of corn in particular. must be lower in Spain and Portugal than in any other part of Europe. is at this day as beggarly a country as it was before the discovery of America. seem to have considered the low money price of corn. the low value of this land in proportion to that of corn land. is a most decisive one. In China. etc. the low money price of some particular sorts of goods. the uncultivated and unimproved state of the far greater part of the lands of the country. such as cattle. consequently. or of corn in particular. indeed. the real value of the precious metals has fallen in Poland. increased that annual produce. however. game of all kinds. is no proof of the wealth and flourishing state of the country where it takes place. Poland. the great extent of the land which they occupied in proportion to what was occupied by corn. so it can as little afford to pay dearer for gold and silver than a rich one. the value of the precious metals is much higher than in any part of Europe. are two events which. has not. after Poland. a country much richer than any part of Europe. it seems. has increased greatly since the discovery of the mines of America. the other. Their quantity. nor mended the circumstances of its inhabitants. be no proof of the poverty or barbarism of the times. so the value of gold and silver has gradually diminished. loaded. But though the low money price. a system which I shall endeavour to explain and examine at great length in the fourth book of this Inquiry. of the annual produce of its land and labour. that the stock and population of the country did not bear the same proportion to the . however. and nearly in the same proportion to the annual produce of its land and labour. as a proof. however. where the feudal system still continues to take place. but of the poverty and barbarism of the country at the time when it took place. It clearly demonstrates. poultry. or. The one has arisen from a mere accident. and have scarce any natural connection with one another. therefore. As the low value of gold and silver. In proportion to the annual produce of the land and labour.

will. without supposing any degradation in the value of silver. or. The real wealth of the country. it may perhaps be said. If the rise in the price of some sorts of provisions be owing altogether to a fall in the value of silver. however. which has been the subject of so much reasoning and conversation. either upon the prices of corn. as in Portugal and Poland. The rise in the price of those other sorts of provisions. it is owing to a circumstance which indicates. or a fifth part higher. The opinion. according as silver happened to lose a third. the price of corn. or of corn in particular. It may surely be of some use. sufficiently explain this rise in those particular sorts of provisions. As to the high price of corn during these last ten or twelve years. upon that account be altogether useless. it may give some satisfaction to the public. is only to establish a vain and useless distinction. during the sixty-four first years of the present century. the annual produce of its land and labour. As to the price of corn itself. It may not. and to ascertain whether this change be owing to a rise in the value of those goods. I certainly do not pretend that the knowledge of this distinction will enable him to buy cheaper. and in that country. that silver is continually sinking in its value. and the most durable part of the wealth of every extensive country. the most important. we can infer only. or. and those which have been above assigned. even according to the account which has been here given. not that the country was rich or poor.demonstrates. perhaps. to have so decisive a proof of the increasing value of by far the greatest. which can be of no sort of service to the man who has only a certain quantity of silver to go to market with. may. and by Mr Dupré de St Maur. notwithstanding this circumstance. but by the public fiars of all the different counties of Scotland. Any rise in the money price of goods which proceeded altogether from the degradation of the value of silver. it has. The same quantity of silver. will. been somewhat lower than it was during the sixty-four last years of the preceding century. in the present times. from which nothing can be inferred but the fertility of the American mines. which at that time happened to supply the commercial world with gold and silver. and that it was either in a more or less barbarous state. not only by the accounts of Windsor market. or to a fall in the value of silver. a third. the most important. or a fourth. The land constitutes by far the greatest. that the stock and population of the country did not bear the same proportion to the extent of its territory. in consequence of more extended improvement and good cultivation. even by those who account for this rise by the degradation of the value of silver. seems not to be founded upon any good observations. This fact is attested. to its having been rendered fit for producing corn. or gradually advancing. which they commonly do in civilized countries. and before the late extraordinary course of bad seasons. Some other causes must be taken into the account. therefore. that the greater part of its lands were improved or unimproved. it can be sufficiently accounted for from the badness of the seasons. to its increased fertility. would affect all sorts of goods equally. But the rise in the price of provisions. and the most . or in a more or less civilized one. or upon those of other provisions. were fertile or barren. it is acknowledged. has risen much less than that of some other sorts of provisions. in the clearest manner. by affording an easy proof of the prosperous condition of the country. with a degree of probability that approaches almost to certainty. and that society was at that time. as in most other parts of Europe. From the high or low money price. we can infer. It may be of some use to the public. which have been collected with great diligence and fidelity by Mr Messance. therefore. without having recourse to the supposed degradation of the value of silver. cannot be owing altogether to the degradation of the value of silver. at least. and by the accounts of several different markets in France. be either gradually declining. and raise their price universally. But if this rise in the price of some sorts of provisions be owing to a rise in the real value of the land which produces them. But from the high or low money price of some sorts of goods in proportion to that of others. or a certain fixed revenue in money. Taking the course of the present century at an average. but in its infancy. of which the price has actually risen in proportion to that of corn. purchase a much smaller quantity of several sorts of provisions than it would have done during some part of the last century. or a fifth part of its former value. the prosperous and advancing state of the country. that the mines. that it was rich or poor. or a fourth. either of goods in general. does not affect all sorts of provisions equally. The evidence is more complete than could well have been expected in a matter which is naturally so very difficult to be ascertained. it is owing to a circumstance.

. in proportion to the price of corn. in regulating the pecuniary reward of some of its inferior servants. besides. cannot surely be so much distressed by any rise in the price of poultry. wild-fowl. in all of them without exception. will more than compensate all the advantages which can be derived from the best machinery. That of the manufacturing workmanship diminishes. therefore.durable part of its wealth. But in all cases in which the real price of the rude material either does not rise at all. it seems to have done through a great part of England more than a century ago). in consequence of the improved fertility of the land which produces such provisions. perhaps. and of a more proper division and distribution of work. and though. But in times of moderate plenty. etc. of greater dexterity. The extension of improvement and cultivation. and in the coarser sort of cabinet work. in the progress of improvement. because. There are. too. leather. cabbages. Effects of the Progress of Improvement upon the real Price of Manufactures. as of salt. their real recompence will evidently be so much diminished. their pecuniary reward. The improvements of agriculture. the necessary rise in the real price of barren timber. beer. and not more labour than corn. that of every sort of animal food. yet the great diminution of the quantity will generally much more than compensate the greatest rise which can happen in the price. except perhaps that of hogs flesh. Such are potatoes and maize. provided it was not too large before. which in the rude state of agriculture are confined to the kitchen-garden. any rise which can afterwards happen in that of any other sort of animal food. ought certainly to be augmented in proportion to the extent of this fall. the real price of one species of food necessarily rises. indeed. or does not rise very much. In consequence of better machinery. as they must be relieved by the fall in that of potatoes. and it becomes a matter of more nicety to judge how far the rise in the one may be compensated by the fall in the other. a few manufactures. and the most proper division and distribution of work. that of another as necessarily falls. or what is called Indian corn. has received from the great extension of its commerce and navigation. introduce many sorts of vegetable food. in which the necessary rise in the real price of the rude materials will more than compensate all the advantages which improvement can introduce into the execution of the work In carpenters' and joiners' work. however. to be introduced into common fields. It raises the price of animal food. must afford to the landlord anti farmer the rent and profit of corn land. the two most important improvements which the agriculture of Europe. too. the real price of labour should rise very considerably. with regard to every sort. But if this rise of price is owing to the increased value. or venison. If it is not augmented. Many sorts of vegetable food. I believe. The circumstances of the poor. by increasing the fertility of the land. every sort of vegetable food. candles. perhaps. it increases its abundance. come. etc. the natural rise in the price of any other sort of rude produce cannot much affect them. the greatest dexterity. It is the natural effect of improvement. which Europe itself. be of some use to the public. so it as necessarily lowers that of. carrots. It may. In the present season of scarcity. malt. If this rise in the price of some sorts of provisions be owing to a fall in the value of silver. and to be raised by the plough. When the real price of butcher's meat has once got to its height (which. either in what proportion any pecuniary reward ought to be augmented. by the artificial rise which has been occasioned by taxes in the price of some manufactured commodities. in its improved state. which requiring less land. cannot much affect the circumstances of the inferior ranks of people. and raised only by the spade. or whether it ought to be augmented at all. being rendered fit for producing corn. fish. If. come much cheaper to market. the high price of corn no doubt distresses the poor. in consequence of the flourishing circumstances of the society. soap. all of which are the natural effects of improvement. because a great part of the land which produces it. perhaps. a much smaller quantity of labour becomes requisite for executing any particular piece of work. that of the manufactured commodity sinks very considerably. as it necessarily raises more or less. such as turnips. ale. it becomes a much nicer matter to judge. through a great part of England. They suffer more. to diminish gradually the real price of almost all manufactures. in consequence of the improvement of land. It lowers the price of vegetable food. when corn is at its ordinary or average price.

The reduction in the real price of the coarse manufacture. the real price of a yard of fine cloth must. has. The man who bought it must have parted with the command of a quantity of labour and subsistence equal to what that sum would purchase in the present times. there has been. however. even upon this supposition. at that time. and in all those goods which are commonly known by the name of Birmingham and Sheffield ware. That of the Yorkshire cloth. in all the toys which are made of the coarser metals. though considerable. towards the end of the fifteenth century. should be supposed equal. that "whosoever shall sell by retail a broad yard of the finest scarlet grained. when the labour was probably much less subdivided. Valuing a quarter of wheat in the present times at eight-and-twenty shillings. In 1487. such cloth.. on the contrary. in those times. was. or of other grained cloth of the finest making. though not altogether so great as in watch-work. and as this is a sumptuary law. But the Yorkshire cloth which is now sold at four shillings the yard. than about the middle of the last century could have been bought for twenty pounds. however. In the clothing manufacture there has. during the same period. reckoned the average price of a quarter of wheat. it was said. Tenpence was then reckoned what is called the moderate and reasonable price of a bushel of wheat. however. it was enacted. a very great reduction of price. during the same period. has not been so great as in that of the fine. to have fallen a good deal in proportion to its quality. Six shillings and eightpence was then. In the work of cutlers and locksmiths. and the machinery employed much more imperfect. two shillings contained very nearly the same quantity of silver as four of our present money. But the reduction will appear much more sensible and undeniable. may now perhaps be had for twenty shillings. The real price is certainly a good deal cheaper. is probably much superior to any that was then made for the wearing of the very poorest order of common servants. and the machinery employed is not very different. that "no servant in husbandry nor common labourer. risen somewhat in proportion to its quality. containing about the same quantity of silver as four-and-twenty shillings of our present money. if we compare the price of this manufacture in the present times with what it was in a much remoter period. being the 4th of Henry VII. had usually been sold somewhat dearer. therefore. therefore. yet. shall forfeit forty shillings for every yard so sold. Sixteen shillings. was the price of two quarters and more than three bushels of wheat. may. Two shillings. who in many cases acknowledge that they can produce no work of equal goodness for double or even for triple the price. it was enacted. in which the division of labour can be carried further. or in which the machinery employed admits of' a greater variety of improvements. In 1463. Quality. A guinea may be reckoned the highest price in the present times. therefore. been most remarkable in those manufactures of which the materials are the coarser metals. be somewhat cheaper in the present than it was in those ancient times. been no such sensible reduction of price. owing. therefore. that I look upon all information of this kind as somewhat uncertain.This diminution of price has. Even the money price of their clothing. There are perhaps no manufactures. But its real price has been much more reduced. which consists altogether of Spanish wool. reckoned not an unreasonable price for a yard of the finest cloth." In the 3rd of Edward IV. than it is at present. have been equal to at least three pounds six shillings and sixpence of our present money. shall use or wear in their clothing any cloth above two shillings the broad yard. is said. In the clothing manufacture. in proportion to the quality. have been some small improvements in both. and that of the present times is most probably much superior. It has. indeed. been sufficient to astonish the workmen of every other part of Europe. is so very disputable a matter. and long afterwards. within these five-andtwenty or thirty years. A better movement of a watch. than those of which the materials are the coarser metals." Sixteen shillings. being the 3rd of Edward IV. the division of labour is nearly the same now as it was a century ago. The price of superfine cloth. Even though the quality of the cloths. which is made altogether of English wool. which may have occasioned some reduction of price. during the course of the present century. the money price of the finest cloth appears to have been considerably reduced since the end of the fifteenth century. to a considerable rise in the price of the material. There may. in the course of the present and preceding century. nor servant to any artificer inhabiting out of a city or burgh. it is probable.. I have been assured. above sixteen shillings. .

and must have paid some duty. besides. in the same manner as now. Their clothing. It was not then the policy of Europe to restrain. which facilitate and abridge. comes always much cheaper to market than that which is the principal or sole fund of the workman's subsistence. The consideration of these circumstances may. therefore. previous to the invention of those machines. carried on in England in the same manner as it always has been in countries where arts and manufactures are in their infancy. than it is in the present times. carried on in England. and which the industry of their own country could not afford them. Both in the coarse and in the fine woollen manufacture. in some measure explain to us why. But fourteen-pence was in those times the price of a bushel and near two pecks of wheat. many smaller ones. It was. but in the rich and commercial country of Flanders. the employment of the fulling-mill for thickening the cloth. This is a sumptuary law. a foreign manufacture. a greater quantity. would be worth eight shillings and ninepence. at three shillings and sixpence the bushel. which in the present times. In the time of Edward IV. besides. in those ancient times. was not. of which the price should exceed fourteen-pence the pair. in those times. instead of treading it in water. in some measure. by the same law. in a still greater proportion. an operation which. restraining the luxury and extravagance of the poor. Secondly. have paid what was really equivalent to this price for them. which in the present times. the great men with the conveniencies and luxuries which they wanted. It cost a greater quantity of labour to bring the goods to market. was the price of two bushels and near two pecks of wheat. but so as to be their work only when they had nothing else to do. therefore. the machinery employed was much more imperfect in those ancient. the ancient custom of tonnage and poundage at least. or the principal part of their subsistence from it. probably. the use of several very ingenious machines. The same order of people are. prohibited from wearing hose. in which every different part of the work was occasionally performed by all the different members of almost every private family. to the king. which. it has already been observed. on the other hand. by high duties. which may have been one of the causes of their dearness. The fine manufacture. at as easy a rate as possible. of which it may be difficult to ascertain either the number or the importance. and it was probably conducted then. with the same quantity of labour. the importation of foreign manufactures. the art of knitting stockings was probably not known in any part of Europe. explain to us why the real price both of the coarse and of the fine manufacture was so much higher in those ancient than it is in the present times. in any other part of Europe north of the Alps. They had been introduced into Italy some time before. perhaps. will perform more than double the quantity of work. The first person that wore stockings in England is said to have been Queen Elizabeth. He must however. This duty. The consideration of these circumstances may. nor. She received them as a present from the Spanish ambassador. in order that merchants might be enabled to supply. in those times. Thirdly. We should in the present times consider this as a very high price for a pair of stockings to a servant of the poorest and lowest order. It has since received three very capital improvements. Neither wind nor water mills of any kind were known in England so early as the beginning of the sixteenth century. perhaps. had commonly been much more expensive. Their hose were made of common cloth. The coarse manufacture probably was. in . or the proper arrangement of the warp and woof before they are put into the loom. equal to about eight-and-twenty pence of our present money. and not to be the principal business from which any of them derived the greater part of their subsistence. would cost five shillings and threepence. would not probably be very great. they must have purchased. When they were brought thither. the winding of the worsted and woollen yarn. first. The work which is performed in this manner. too. so far as I know. at three and sixpence the bushel. but rather to encourage it. The three capital improvements are. It was probably a household manufacture. For a yard of this cloth the poor servant must have parted with the power of purchasing a quantity of subsistence equal to what eight shillings and ninepence would purchase in the present times. the exchange of the rock and spindle for the spinning-wheel.therefore. by people who derived the whole. or exchanged for the price of. indeed. must have been extremely tedious and troublesome.

in proportion to that of the fine. the real price of the coarse manufacture was. so much lower than in the present times. .those ancient times.

They are the only one of the three orders whose revenue costs them neither labour nor care. The extension of improvement and cultivation tends to raise it directly. requires no more labour to collect it than before. A greater number of men and cattle are employed in its cultivation. That indolence which is the natural effect of the ease and security of their situation. or. it has already been observed. Whatever either promotes or obstructs the one. and afterwards the cause of their being still further extended. it appears from what has been just now said. Every increase in the real wealth of the society. the whole price of that annual produce. tends indirectly to raise the real rent of land. and the profits of stock. tend indirectly to raise the real rent of land. the rent of land. the rise in the real price of manufactures from the decay of manufacturing art and industry. to lower the real rent of land. too. therefore. necessarily promotes or obstructs the other. of its own accord. and in a still greater proportion. ornaments. at least. is strictly and inseparably connected with the general interest of the society. the proprietors of land never can mislead it. and the landlord is enabled to purchase a greater quantity of the conveniencies. which is first the effect of the extended improvement and cultivation. The interest of the first of those three great orders. for manufactured produce. The whole annual produce of the land and labour of every country. on the other hand. or the produce of the labour of other people. I shall conclude this very long chapter with observing. All those improvements in the productive powers of labour. and constituent. the produce increases with the increase of the stock which is thus employed in raising it. tends. Whatever reduces the real price of the latter. When the public deliberates concerning any regulation of commerce or police. every increase in the quantity of useful labour employed within it. to reduce the real wealth of the landlord. after the rise in its real price. or luxuries which he has occasion for. to those who live by rent. or. all tend. for example. original. A certain proportion of this labour naturally goes to the land. to raise the real rent of land to increase the real wealth of the landlord. or the produce of the labour. the price of that part of it. The landlord exchanges that part of his rude produce. too often defective in this tolerable knowledge. indeed. but comes to them. The real value of the landlord's share. naturally divides itself. raises that of the former. to raise the rent of land directly. the stock which employs that labour. what comes to the same thing. That rise in the real price of those parts of the rude produce of land. A greater proportion of it must consequently belong to the landlord. what comes to the same thing. They are. which tend directly to reduce the rent price of manufactures. that every improvement in the circumstances of the society tends. be sufficient to replace. if they have any tolerable knowledge of that interest. the declension of the real wealth of the society. the fall in the real price of any part of the rude produce of land. the neglect of cultivation and improvement. but the proportion of his share to the whole produce rises with it. and the rent increases with the produce. . the wages of labour. to those who live by wages. his power of purchasing the labour. his real command of the labour of other people. with the ordinary profit. which is over and above his own consumption. with a view to promote the interest of their own particular order. and to those who live by profit. either directly or indirectly. That produce. orders of every civilized society.Conclusion of the Chapter. of other people. A smaller proportion of it will. The landlord's share of the produce necessarily increases with the increase of the produce. and constitutes a revenue to three different orders of people. not only rises with the real value of the produce. and independent of any plan or project of their own. These are the three great. An equal quantity of the former becomes thereby equivalent to a greater quantity of the latter. from whose revenue that of every other order is ultimately derived. to diminish his power of purchasing either the labour. into three parts. as it were. The contrary circumstances. the rise in the price of cattle.

As during their whole lives they are engaged in plans and projects. is always the interest of the dealers. his voice is little heard. but to narrow the competition must always be against it. from a very simple but honest conviction. or to continue the race of labourers. his wages are soon reduced to what is barely enough to enable him to bring up a family. The order of proprietors may perhaps gain more by the prosperity of the society than that of labourers. His employers constitute the third order. an absurd tax upon the rest of their fellow-citizens. as that of the other two. Their superiority over the country gentleman is. and it is always highest in the countries which are going fastest to ruin. and can only serve to enable the dealers. when his clamour is animated. and supported by his employers. who have generally an interest to deceive and even to oppress the public. than about that of the society. in any particular branch of trade or manufactures. To widen the market. but their own particular purposes. # PRICES OF WHEAT Year Prices/Quarter Average of different Average prices of in each year prices in one year each year in money of 1776 £ s d £ s d £ s d . he is incapable either of comprehending that interest. however. both deceived and oppressed it. is always in some respects different from. but there is no order that suffers so cruelly from its decline. and his education and habits are commonly such as to render him unfit to judge. The interest of this third order. even when given with the greatest candour (which it has not been upon every occasion). but with the most suspicious attention. But the rate of profit does not. than with regard to the latter. has not the same connexion with the general interest of the society. rise with the prosperity. that of those who live by wages. His condition leaves him no time to receive the necessary information. their judgment. to levy. is much more to be depended upon with regard to the former of those two objects. and fall with the declension of the society. and ought never to be adopted till after having been long and carefully examined. ought always to be listened to with great precaution. set on. it has already been shewn. and who by their wealth draw to themselves the greatest share of the public consideration. are never so high as when the demand for labour is continually rising. was the interest of the public. and not his. by raising their profits above what they naturally would be. and to narrow the competition. therefore. the two classes of people who commonly employ the largest capitals. in this order. upon many occasions. therefore. To widen the market may frequently be agreeable enough to the interest of the public. or when the quantity employed is every year increasing considerably. for their own benefit. whose interest is never exactly the same with that of the public. not only ignorant. that their interest. The interest of the second order. are commonly exercised rather about the interest of their own particular branch of business. and who accordingly have. It comes from an order of men. they fall even below this. It is the stock that is employed for the sake of profit. As their thoughts. and even opposite to. they have frequently more acuteness of understanding than the greater part of country gentlemen. The proposal of any new law or regulation of commerce which comes from this order. The plans and projects of the employers of stock regulate and direct all the most important operation of labour. and persuaded him to give up both his own interest and that of the public. it is naturally low in rich. But though the interest of the labourer is strictly connected with that of the society. The wages of the labourer. as in their having a better knowledge of their own interest than he has of his. not only with the most scrupulous. is as strictly connected with the interest of the society as that of the first. even though he was fully informed. but incapable of that application of mind. and high in poor countries. not for his. In the public deliberations. like rent and wages. not so much in their knowledge of the public interest. which puts into motion the greater part of the useful labour of every society. On the contrary. Merchants and master manufacturers are. When this real wealth of the society becomes stationary. or of understanding its connexion with his own. that of those who live by profit. which is necessary in order to foresee and understand the consequence of any public regulation. and profit is the end proposed by all those plans and projects. except upon particular occasions. however. It is by this superior knowledge of their own interest that they have frequently imposed upon his generosity. When the society declines.renders them too often. and less regarded. The interest of the dealers. that of the public.

1202 0 12 0 1 16 0 1205 0 12 0 0 13 4 0 13 5 2 0 3 0 15 0 1223 0 12 0 1 16 0 1237 0 3 4 0 10 0 1243 0 2 0 0 6 0 1244 0 2 0 0 6 0 1246 0 16 0 2 8 0 1247 0 13 5 2 0 0 1257 1 4 0 3 12 0 1258 1 0 0 0 15 0 0 17 0 2 11 0 0 16 0 1270 4 16 0 6 8 0 5 12 0 16 16 0 1286 0 2 8 0 16 0 0 9 4 1 8 0 Total 35 9 3 Average 2 19 1¼ 1287 0 3 4 0 10 0 1288 0 0 8 0 1 0 0 1 4 0 1 6 0 1 8 0 3 0¼ 0 9 1¾ 0 2 0 0 3 4 0 9 4 1289 0 12 0 0 6 0 0 2 0 0 10 1½ 1 10 4½ 0 10 8 1 0 0 1290 0 16 0 2 8 0 1294 0 16 0 2 8 0 1302 0 4 0 0 12 0 1309 0 7 2 1 1 6 1315 1 0 0 3 0 0 1316 1 0 0 1 10 0 1 10 6 4 11 6 1 12 0 2 0 0 1317 2 4 0 0 14 0 2 13 0 1 19 6 5 18 6 4 0 0 0 6 8 1336 0 2 0 0 6 0 1338 0 3 4 0 10 0 Total 23 4 11¼ Average 1 18 8 1339 0 9 0 1 7 0 1349 0 2 0 0 5 2 1359 1 6 8 3 2 2 1361 0 2 0 0 4 8 1363 0 15 0 1 15 0 1369 1 0 0 1 4 0 1 2 0 2 9 4 1379 0 4 0 0 9 4 1387 0 2 0 0 4 8 1390 0 13 4 0 14 0 0 14 5 1 13 7 0 16 0 1401 0 16 0 1 17 6 1407 0 4 4¾ 0 3 4 0 3 10 0 8 10 1416 0 16 0 1 12 0 Total 15 9 4 Average 1 5 9½ .

FROM 1595 TO 1764 BOTH INCLUSIVE. .1423 0 8 0 0 1425 0 4 0 0 1434 1 6 8 4 1435 0 5 4 8 1439 1 0 0 1 6 8 1 3 4 2 6 8 1440 1 4 0 2 8 0 1444 0 4 4 0 4 2 0 4 8 0 4 0 1445 0 4 6 0 9 0 1447 0 8 0 0 16 0 1448 0 6 8 0 13 4 1449 0 5 0 0 10 0 1451 0 8 0 0 16 0 Total 12 15 4 Average 1 1 3¹/³ 1453 0 5 4 0 10 8 1455 0 1 2 0 2 4 1457 0 7 8 1 15 4 1459 0 5 0 0 10 0 1460 0 8 0 0 16 0 1463 0 2 0 0 1 10 0 3 8 0 1 8 1464 0 6 8 0 10 0 1486 1 4 0 1 17 0 1491 0 14 8 1 2 0 1494 0 4 0 0 6 0 1495 0 3 4 0 5 0 1497 1 0 0 1 11 0 Total 8 9 0 Average 0 14 1 1499 0 4 0 0 6 0 1504 0 5 8 0 8 6 1521 1 0 0 1 10 0 1551 0 8 0 0 8 0 1553 0 8 0 0 8 0 1554 0 8 0 0 8 0 1555 0 8 0 0 8 0 1556 0 8 0 0 8 0 1557 0 8 0 0 4 0 0 17 8½ 0 17 8½ 0 5 0 2 13 4 1558 0 8 0 0 8 0 1559 0 8 0 0 8 0 1560 0 8 0 0 8 0 Total 6 0 2½ Average 0 10 0½ 1561 0 8 0 0 8 0 1562 0 8 0 0 8 0 1574 2 16 0 1 4 0 2 0 0 2 0 0 1587 3 4 0 3 4 0 1594 2 16 0 2 16 0 1595 2 13 0 2 13 0 1596 4 0 0 4 0 0 1597 5 4 0 4 0 0 4 12 0 4 12 0 1598 2 16 8 2 16 8 1599 1 19 2 1 19 8 1600 1 17 8 1 17 8 1601 1 14 10 1 14 10 Total 28 9 4 Average 2 7 5½ PRICES OF THE QUARTER OF NINE BUSHELS OF THE BEST OR HIGHEST PRICED WHEAT AT WINDSOR MARKET. THE PRICE OF EACH YEAR BEING THE MEDIUM BETWEEN THE HIGHEST PRICES OF THESE TWO MARKET DAYS. ON LADY DAY AND MICHAELMAS.

£ s d 1595 2 0 0 1596 2 8 0 1597 3 9 6 1598 2 16 8 1599 1 19 2 1600 1 17 8 1601 1 14 10 1602 1 9 4 1603 1 15 4 1604 1 10 8 1605 1 15 10 1606 1 13 0 1607 1 16 8 1608 2 16 8 1609 2 10 0 1610 1 15 10 1611 1 18 8 1612 2 2 4 1613 2 8 8 1614 2 1 8½ 1615 1 18 8 1616 2 0 4 1617 2 8 8 1618 2 6 8 1619 1 15 4 1620 1 10 4 26)54 0 6½ Average 2 1 6¾ 1621 1 10 4 1622 2 18 8 1623 2 12 0 1624 2 8 0 1625 2 12 0 1626 2 9 4 1627 1 16 0 1628 1 8 0 1629 2 2 0 1630 2 15 8 1631 3 8 0 1632 2 13 4 1633 2 18 0 1634 2 16 0 1635 2 16 0 1636 2 16 8 16)40 0 0 Average 2 10 0 1637 1638 1639 1640 1641 1646 1647 1648 1649 1650 1651 1652 1653 1654 1655 1656 1657 1658 1659 1660 1661 1662 1663 1664 2 2 2 2 2 2 3 4 4 3 3 2 1 1 1 2 2 3 3 2 3 3 2 2 13 0 17 4 4 10 4 8 8 0 8 0 13 0 5 0 0 0 16 8 13 4 9 6 15 6 6 0 13 4 3 0 6 8 5 0 6 0 16 6 10 0 14 0 17 0 0 6 .

1665 2 9 4 1666 1 16 0 1667 1 16 0 1668 2 0 0 1669 2 4 4 1670 2 1 8 1671 2 2 0 1672 2 1 0 1673 2 6 8 1674 3 8 8 1675 3 4 8 1676 1 18 0 1677 2 2 0 1678 2 19 0 1679 3 0 0 1680 2 5 0 1681 2 6 8 1682 2 4 0 1683 2 0 0 1684 2 4 0 1685 2 6 8 1686 1 14 0 1687 1 5 2 1688 2 6 0 1689 1 10 0 1690 1 14 8 1691 1 14 0 1692 2 6 8 1693 3 7 8 1694 3 4 0 1695 2 13 0 1696 3 11 0 1697 3 0 0 1698 3 8 4 1699 3 4 0 1700 2 0 0 60) 153 1 8 Average 2 11 0¹/³ 1701 1702 1703 1704 1705 1706 1707 1708 1709 1710 1711 1712 1713 1714 1715 1716 1717 1718 1719 1720 1721 1722 1723 1724 1725 1726 1727 1728 1729 1730 1731 1732 1733 1734 1 1 1 2 1 1 1 2 3 3 2 2 2 2 2 2 2 1 1 1 1 1 1 1 2 2 2 2 2 1 1 1 1 1 17 8 9 6 16 0 6 6 10 0 6 0 8 6 1 6 18 6 18 0 14 0 6 4 11 0 10 4 3 0 8 0 5 8 18 10 15 0 17 0 17 6 16 0 14 8 17 0 8 6 6 0 2 0 14 6 6 10 16 6 12 10 6 8 1 8 4 1 18 10 1 6 8 1 12 10 8 4 18 10 .

1735 2 3 0 2 3 0 1736 2 0 4 2 0 4 1737 1 18 0 1 18 1738 1 15 6 1 15 1739 1 18 6 1 18 1740 2 10 8 2 10 10) 18 12 8 1 17 3½ 0 6 6 8 1741 2 6 8 2 6 8 1742 1 14 0 1 14 0 1743 1 4 10 1 4 10 1744 1 4 10 1 4 10 1745 1 7 6 1 7 6 1746 1 19 0 1 19 0 1747 1 14 10 1 14 10 1748 1 17 0 1 17 0 1749 1 17 0 1 17 0 1750 1 12 6 1 12 6 10) 16 18 2 1 13 9¾ 1751 1 18 6 1752 2 1 10 1753 2 4 8 1754 1 13 8 1755 1 14 10 1756 2 5 3 1757 3 0 0 1758 2 10 0 1759 1 19 10 1760 1 16 6 1761 1 10 3 1762 1 19 0 1763 2 0 9 1764 2 6 9 64) 129 13 6 Average 2 0 6¾ .

BOOK II. ACCUMULATION. . AND EMPLOYMENT OF STOCK. OF THE NATURE.

both to make among his workmen the most proper distribution of employment. The quantity of materials which the same number of people can work up. must be stored up somewhere. so that accumulation naturally leads to this improvement. the produce of a man's own labour can supply but a very small part of his occasional wants. be previous to the division of labour. I have endeavoured to explain the nature and operation of money. the effects of its accumulation into capital of different kinds. But the number of workmen in every branch of business generally increases with the division of labour in that branch. When he is hungry. unless there is before-hand stored up somewhere. In that rude state of society. As the division of labour advances. As the accumulation of stock must. in order to carry on the business of the society. but. But this purchase cannot be made till such time as the produce of his own labour has not only been completed. he repairs it. and as the operations of each workman are gradually reduced to a greater degree of simplicity. either in his own possession. therefore. therefore. must be accumulated before-hand. sufficient to maintain him. considered as a particular branch of the general stock of the society. what is the same thing. so labour can be more and more subdivided in proportion only as stock is previously more and more accumulated. Such are in general the effects of the increase of stock upon industry and its productive powers. In the following book. he clothes himself with the skin of the first large animal he kills: and when his hut begins to go to ruin. In the second. and to supply him with the materials and tools of his work. in which there is no division of labour. it is not necessary that any stock should be accumulated. He endeavours. Every man endeavours to supply. As the accumulation of stock is previously necessary for carrying on this great improvement in the productive powers of labour. therefore. with the price of the produce. and to furnish them with the best machines which he can either invent or afford to purchase. with the trees and the turf that are nearest it. in both these respects. in consequence of that increase. This book is divided into five chapters. or. till such time at least as both these events can be brought about. as well as he can. his own occasional wants. the same quantity of industry produces a much greater quantity of work. a variety of new machines come to be invented for facilitating and abridging those operations. A stock of goods of different kinds. of his own. therefore. or of a great society. in order to give constant employment to an equal number of workmen. His abilities. The far greater part of them are supplied by the produce of other men's labour. may either be employed by the person to whom it . The quantity of industry. or rather it is the increase of their number which enables them to class and subdivide themselves in this manner. a stock sufficient to maintain him. or stored up before-hand. when his coat is worn out. either of an individual. he goes to the forest to hunt. are generally in proportion to the extent of his stock. necessarily wishes to employ it in such a manner as to produce as great a quantity of work as possible. I have endeavoured to explain the nature of stock. and the effects of the different employments of those capitals. by his own industry. but sold his web.INTRODUCTION. or in that of some other person. and a greater stock of materials and tools than what would have been necessary in a ruder state of things. increases in a great proportion as labour comes to be more and more subdivided. This accumulation must evidently be previous to his applying his industry for so long a time to such a peculiar business. The stock which is accumulated into a capital. I have endeavoured to shew what are the different parts or branches into which the stock. not only increases in every country with the increase of the stock which employs it. in which exchanges are seldom made. but sold. or to the number of people whom it can employ. But when the division of labour has once been thoroughly introduced. an equal stock of provisions. which he purchases with the produce. and to supply him with the materials and tools of his work. The person who employs his stock in maintaining labour. naturally divides itself. as they occur. In the first chapter. and in which every man provides every thing for himself. in the nature of things. till he has not only completed. A weaver cannot apply himself entirely to his peculiar business.

or it may be lent to some other person. . I have endeavoured to examine the manner in which it operates in both these situations. and of the annual produce of land and labour. In the third and fourth chapters. The fifth and last chapter treats of the different effects which the different employments of capital immediately produce upon the quantity.belongs. both of national industry.

in his revenue. by his labour. His capital is continually going from him in one shape. or successive changes. are instruments of trade which cannot be erected without a very great expense. therefore. The goods of the merchant yield him no revenue or profit till he sells them for money. the slit-mill. the forge. First. by the price of the work. A master tailor requires no other instruments of trade but a parcel of needles. the machinery necessary. the furnace for melting the ore. however. for example. Secondly. that which is employed in the wages and maintenance of his labouring servants is a circulating capital. therefore. or all of these three articles. OF THE DIVISION OF STOCK. thirdly. and which are not yet entirely consumed. This is the state of the greater part of the labouring poor in all countries. and the money yields him as little till it is again exchanged for goods. or circulating any further. unless his shop or warehouse be considered as such. for example. may very properly be called circulating capitals. or continues in the same shape. Those of the weaver rise a good deal above those of the shoemaker. That part of the capital of the farmer which is employed in the instruments of agriculture is a fixed. while it either remains in his possession. it maybe employed in raising. This part. or purchasing goods. His revenue is. The other is that which supplies his immediate consumption. in such things as had been purchased by either of these in former years. and mines of every kind. is distinguished into two parts. though but a very little. and of the other by . he seldom thinks of deriving any revenue from it. Those of the master shoemaker are a little. in that portion of his whole stock which was originally reserved for this purpose.CHAPTER I. His whole stock. Such capitals. more expensive. In one or other. may very properly be called fixed capitals. consists the stock which men commonly reserve for their own immediate consumption. In other works a much greater fixed capital is required. The capital of a merchant. The capital employed in this manner yields no revenue or profit to its employer. as it gradually comes in. manufacturing. There are two different ways in which a capital may be employed so as to yield a revenue or profit to its employer. But when he possesses stock sufficient to maintain him for months or years. Different occupations require very different proportions between the fixed and circulating capitals employed in them. and for other purposes. is altogether a circulating capital. he naturally endeavours to derive a revenue from the greater part of it. both for drawing out the water. In a great iron-work. and endeavours. derived from his labour only. Such capitals. and it is only by means of such circulation. that it can yield him any profit. with a profit. first. or. secondly. however. In coal works. That part which he expects is to afford him this revenue is called his capital. it may be employed in the improvement of land. or in such like things as yield a revenue or profit without changing masters. When the stock which a man possesses is no more than sufficient to maintain him for a few days or a few weeks. He makes a profit of the one by keeping it in his own possession. and which consists either. and repaid. or in the price of their materials. therefore. from whatever source derived. and the like. in this case. He has occasion for no machines or instruments of trade. reserving only so much for his immediate consumption as may maintain him till this revenue begins to come in. and returning to him in another. Some part of the capital of every master artificer or manufacturer must be fixed in the instruments of his trade. is frequently still more expensive. and selling them again with a profit. The far greater part of the capital of all such master artificers. is very small in some. in the purchase of useful machines and instruments of trade. He consumes it as sparingly as he can. or. to acquire something which may supply its place before it be consumed altogether. household furniture. is circulated either in the wages of their workmen. such as a stock of clothes. and very great in others.

however. and not of his revenue. The farmer makes his profit. Secondly. Undertakers let the furniture of funerals by the day and by the week. The profit is made by keeping them. a stock of furniture half a century or a century. but by its increase. which. no doubt. stables. is brought in neither for labour nor for sale. of all useful machines and instruments of trade. not by its sale. naturally divides itself into the same three portions. either of an individual or of a society. but in order to make a profit by their wool. it never changes masters. ceases from that moment to serve in the function of a capital. and by parting with their maintenance. In countries where masquerades are common. as the house itself can produce nothing. subsisting at anyone time in the country. must always be ultimately drawn from some other source of revenue. Though the period of their total consumption. A dwelling-house. contributes nothing to the revenue of its inhabitant. their maintenance is a circulating capital. and may be considered in the same light. in the same manner as that of the labouring servants. which he derives. The profit is made by parting with it. It consists in the stock of food. A flock of sheep or a herd of cattle. which is derived from such things. what is laid out in houses is most slowly consumed. is more distant. nor serve in the function of a capital to it. The revenue. and thereby serve in the function of a capital to him. in the same manner. These are very different from mere dwelling-houses. that it affords a revenue or profit without circulating or changing masters. Though a house. It consists chiefly of the four following articles. reserved for immediate consumption. The first is that portion which is reserved for immediate consumption. Many people let furnished houses. farm-houses.parting with it. Clothes and household furniture. is the fixed capital. or stock. but which are not yet entirely consumed. however. either from labour. that. etc. it is as his clothes and household furniture are useful to him. but for sale. of which the characteristic is. it cannot yield any to the public. The second of the three portions into which the general stock of the society divides itself. not for labour. If it is to be let to a tenant for rent. and get a rent. . and by their increase. The general stock of any country or society is the same with that of all its inhabitants or members. of what has been profitably laid out in clearing. and the revenue of the whole body of the people can never be in the smallest degree increased by it. they are still as really a stock reserved for immediate consumption as either clothes or household furniture. not only for the use of the house. The farmer makes his profit by parting with them. granaries. of all those profitable buildings which are the means of procuring a revenue. as such. work-houses. and it comes back with both its own profit and the profit upon the whole price of the cattle. The farmer makes his profit by keeping the labouring cattle. Upholsterers frequently let furniture by the month or by the year. which facilitate and abridge labour. is properly a fixed capital. may yield a revenue to its proprietor. in the price of the wool. with all their necessary buildings. in a breeding country. Thirdly. each of which has a distinct function or office. which have been purchased by their proper consumers. or land. make a part of his expense. and of which the characteristic is. A stock of clothes may last several years. Though it goes backwards and forwards between the ground and the granary. the milk. and therefore does not properly circulate. The stock that is laid out in a house. it is a trade to let out masquerade dresses for a night. too. warehouses. but for that of the furniture. therefore. such as shops. Their maintenance is a circulating capital. the tenant must always pay the rent out of some other revenue. is a fixed capital. and thereby serve in the function of a capital to particular persons. clothes. may last many centuries. draining. if it is to be the dwelling-house of the proprietor. but a stock of houses. extremely useful to him. in the same manner as that of the instruments of husbandry. not only to the proprietor who lets them for a rent. First. Both the price and the maintenance of the cattle which are bought in and fattened. of the improvements of land. and though it is. make a part of this first portion. and pays that rent for them. that it affords no revenue or profit. sometimes yield a revenue. however. are a circulating capital. household furniture. Of all parts of the stock. and the increase. well built and properly taken care of. They are a sort of instruments of trade. etc. The whole value of the seed. too. or to afford any revenue to its owner. but to the person who possesses them. and. by their milk. The price or value of his labouring cattle is a fixed capital. The whole stock of mere dwelling-houses. therefore.

repays that expense with a profit. but which is still in the hands of the merchant and manufacturer. and reducing it into the condition most proper for tillage and culture. of the acquired and useful abilities of all the inhabitants and members of the society. First. materials. The third and last of the three portions into which the general stock of the society naturally divides itself. study. the carpenters and joiners. and drapers. frequently requiring no other repairs than the most profitable application of the farmer's capital employed in cultivating it. as they make a part of his fortune. the cabinet-maker. An improved farm is equally advantageous and more durable than any of those machines. and lastly. the manufacturers. etc. as it were. the goldsmith. So great a part of the circulating capital being continually withdrawn from it. the china-merchant. To maintain and augment the stock which maybe reserved for immediate consumption. of the work which is made up and completed. of the money. Fourthly. which furnishes the materials of which they are made. the corn-merchant. furniture. and finished work of all kinds that are in the hands of their respective dealers. An improved farm may very justly be regarded in the same light as those useful machines which facilitate and abridge labour. too. clothes. Land. Fourthly. of the materials. so do they likewise that of the society to which he belongs. without the circulating capital. but which remain in the hands of the growers. of which the characteristic is. is the circulating capital. or apprenticeship. the grazier. which maintains the labourers who cultivate and collect its produce. by the maintenance of the acquirer during his education. manuring. It is this stock which feeds. and from the sale of which they expect to derive a profit. that it affords a revenue only by circulating or changing masters. the brewer. The acquisition of such talents. Of these four parts. No fixed capital can yield any revenue but by means of a circulating capital The most useful machines and instruments of trade will produce nothing. of the provisions. and of the money that is necessary for circulating and distributing them to those who are finally to use or to consume them. will yield no revenue without a circulating capital. and requires to be continually supported by. three—provisions. the timber-merchants. the brick-makers. materials. All useful machines and instruments of trade are originally derived from a circulating capital. in this manner. is the sole end and purpose both of the fixed and circulating capitals. etc. which affords the materials they are employed upon. Every fixed capital is both originally derived from. They require. by means of which all the other three are circulated and distributed to their proper consumers. whether altogether rude. and placed either in the fixed capital. and which. a circulating capital. regularly withdrawn from it. The circulating capital consists. Thirdly. and lodges the people. though it costs a certain expense. the mercers. the jeweller. and building which are not yet made up into any of those three shapes. a capital of the same kind to keep them in constant repair. in order to be placed in . the farmer. are either annually or in a longer or shorter period. It is composed likewise of four parts. and the maintenance of the workmen who employ them. Their riches or poverty depend upon the abundant or sparing supplies which those two capitals can afford to the stock reserved for immediate consumption. Secondly. such as the finished work which we frequently find ready made in the shops of the smith. and not yet disposed of or distributed to the proper consumers. or more or less manufactured. and by means of which an equal circulating capital can afford a much greater revenue to its employer. or in the stock reserved for immediate consumption. of the stock of provisions which are in the possession of the butcher. of clothes. always costs a real expense. etc.inclosing. however improved. and the maintenance of the workmen who make them. which is a capital fixed and realized. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour. and finished work. Those talents. in his person.

in most other governments of Asia. and neither to the finder nor to the proprietor of the land. and to which no particular person could prove any right. From mines. of mines. which. indeed.the other two branches of the general stock of the society. the manufactured produce he has occasion for. and the manufactured produce of the other. These supplies are principally drawn from three sources. are directly bartered for one another. in case of their being threatened with any of those disasters to which they consider themselves at all times exposed. of which part is afterwards wrought up into finished work and by which are replaced the provisions. and the manufacturer replaces to the farmer the finished work which he had wasted and worn out in the same time. where there is a tolerable security. require continual. who. and their produce replaces. where men are continually afraid of the violence of their superiors. without a special clause in the charter. He sells. in some one or other of those three ways. is in proportion to the extent and proper application of the capitals employed about them. to the very same person of whom he chuses to purchase the clothes. . and must. therefore. require all both a fixed and circulating capital to cultivate them. and fisheries. It consisted in such treasure as was found concealed in the earth. because it seldom happens that the farmer sells his corn and his cattle. his rude produce for money. be either lost or sent abroad. like the other three. however. too. necessarily withdrawn from it. in order to be placed in the other two branches of the general stock of the society. in part at least. as things of smaller consequence. and instruments of trade. and. and it is the produce of the surface of the earth which extracts the minerals from its bowels. This was regarded. they frequently bury or conceal a great part of their stock. It is the produce of land which draws the fish from the waters. unless the right to it had been conveyed to the latter by an express clause in his charter. The produce of land. These afford continual supplies of provisions and materials. that it was always considered as belonging to the sovereign. it must. though no doubt much smaller supplies. mines. In those unfortunate countries. considered as no contemptible part of the revenue of the greatest sovereigns in Europe. in these times. For though. and finished work. it must in its turn require continual supplies without which it would soon cease to exist. or by going from him. this part is not. and coal were. therefore. it is in proportion to their natural fertility. in the ordinary course of business. too. though mines of lead. with which he can purchase. In all countries where there is a tolerable security. when their natural fertility is equal. Land even replaces. but all the others in the society. copper. with a profit not only those capitals. This is said to be a common practice in Turkey. and sometimes. in the other it is a circulating capital. as so important an object. and the materials which he had wrought up the year before. It was put upon the same footing with gold and silver mines. in procuring either present enjoyment or future profit. whether it be his own. it must procure this profit either by staying with him. like all other things. every man of common understanding will endeavour to employ whatever stock he can command. In the one case it is a fixed. which he wants. When the capitals are equal. his flax and his wool. be wasted and worn out at last. and of fisheries. the capitals with which fisheries and mines are cultivated. A man must be perfectly crazy. continually withdrawn from the circulating capital. were never supposed to be comprehended in the general grant of the lands. in Indostan. I believe. furniture. This is the real exchange that is annually made between those two orders of people. and equally well applied. does not employ all the stock which he commands. If it is employed in procuring future profit. mines. tin. in order to have it always at hand to carry with them to some place of safety. is drawn what is necessary for maintaining and augmenting that part of it which consists in money. materials. or borrowed of other people. If it is employed in procuring present enjoyment. It seems to have been a common practice among our ancestors during the violence of the feudal government. though it seldom happens that the rude produce of the one. Thus the farmer annually replaces to the manufacturer the provisions which he had consumed. wherever it is to be had. Treasure-trove was. Lands. the produce of land. it is a stock reserved for immediate consumption. in those times. and fisheries.

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and a very few in which it consists altogether in one. the profits of their stock. the neat rent. The intention of the fixed capital is to increase the productive powers of labour. the ornaments of his house and furniture. The gross revenue of all the inhabitants of a great country comprehends the whole annual produce of their land and labour. of those three parts. and constitutes a revenue to. Their real wealth. secondly. every part of it which goes neither to rent nor to wages. In a farm where all the necessary buildings. we distinguish between the gross rent and the neat rent. indeed. taken complexly. etc. and amusements. their circulating capital. without hurting his estate. is in proportion. But though the whole value of the annual produce of the land and labour of every country. communications. some commodities of which the price is made up of two of those parts only. The whole expense of maintaining the fixed capital must evidently be excluded from the neat revenue of the society. it has been observed. nor the produce of the labour necessary for fashioning those materials into the proper form. His real wealth is in proportion. The gross rent of a private estate comprehends whatever is paid by the farmer. But in other sorts of labour. but to his neat rent. not to their gross. or to spend upon his table. and all other necessary charges. equipage. but that the price of every commodity necessarily resolves itself into some one or other. either as the wages of their labour. so may we likewise in the revenue of all the inhabitants of a great country. the wages of labour. after deducting the expense of management. they can place in their stock reserved for immediate consumption. of repairs. what remains free to the landlord. CONSIDERED AS A PARTICULAR BRANCH OF THE GENERAL STOCK OF THE SOCIETY. too. not to his gross. whose subsistence. the same number of labourers and labouring cattle will raise a much greater produce. In manufactures. or all. fences. their fixed. its different inhabitants. conveniencies. yet. the produce to that of other people. and. OF MONEY. with regard to every particular commodity. and amusements. their profitable buildings. as in the rent of a private estate. or the rent of their land. can ever make any part of it. that the price of the greater part of commodities resolves itself into three parts. Neither the materials necessary for supporting their useful machines and instruments of trade. or what. etc. conveniencies. his private enjoyments and amusements. the price to that of the workmen. both the price and the produce go to this stock. are in the most perfect good order. and the profits of stock. as the workmen so employed may place the whole value of their wages in their stock reserved for immediate consumption. the neat revenue. Since this is the case. or what. but to their neat revenue. but not furnished with equal conveniencies. are augmented by the labour of those workmen. or to enable the same number of labourers to perform a much greater quantity of work. he can afford to place in his stock reserved for immediate consumption. the wages of labour. . what remains free to them. It has been shown in the First Book. than in one of equal extent and equally good ground. and a third the rent of the land which had been employed in producing and bringing them to market: that there are. is thus divided among. it must be so with regard to all the commodities which compose the whole annual produce of the land and labour of every country. taken separately. being necessarily profit to some body. The price of that labour may indeed make a part of it. and be parcelled out among the different inhabitants of the country. OR OF THE EXPENSE OF MAINTAINING THE NATIONAL CAPITAL.CHAPTER II. drains. or spend upon their subsistence. without encroaching upon their capital. after deducting the expense of maintaining first. The whole price or exchangeable value of that annual produce must resolve itself into the same three parts. another the profits of the stock. of which one pays the wages of the labour.

if he can reduce this expense to five hundred. money. therefore. are deductions from the neat revenue of the society. which had before been employed in supporting a more complex and expensive machinery. will work up a much greater quantity of goods than with more imperfect instruments of trade. and makes a part of the neat revenue of the society. Though the whole goods in a merchant's shop must by no means be placed in his own stock reserved for immediate consumption. Whatever portion of those consumable goods is not employed in maintaining the former. to be wrought up by an additional number of workmen. The fixed capital. and increases the annual produce by a much greater value than that of the support which such improvements require. or in their stock reserved for immediate consumption. of which the maintenance can occasion any diminution in their neat revenue. The expense which is properly laid out upon a fixed capital of any kind. assisted with the best machinery. as those machines and instruments of trade. who. and the labour of a certain number of workmen. are. and afterwards to support them. however. so the stock of money which circulates in any country must require a certain expense. in the same manner. etc. is always repaid with great profit. and that part of the circulating capital which consists in money. without occasioning any diminution either of his capital or of theirs. The expense of repairs may frequently be necessary for supporting the produce of the estate. and placed either in the fixed capital of the society. it can be diminished without occasioning any diminution of produce. and afterwards to support it. from a revenue derived from other funds. require a certain expense. both of which might have been immediately employed to augment the food. First. the gross rent remains at least the same as before. will naturally employ the other five hundred in purchasing an additional quantity of materials. so far as they affect the revenue of the society. A certain quantity of materials. It is upon this account that all such improvements in mechanics. the three last. however. The maintenance of those three parts of the circulating capital. together with its profits. withdraws no portion of the annual produce from the neat revenue of the society. and the neat rent is necessarily augmented. provisions. still requires a certain portion of that produce. both which expenses. as enable the same number of workmen to perform an equal quantity of work with cheaper and simpler machinery than had been usual before. are regularly withdrawn from it. This support. will naturally be augmented. besides what is necessary for maintaining the fixed capital. the subsistence and conveniencies of the society. Money. That of an individual is totally excluded from making any part of his neat revenue. But though the circulating capital of every individual makes a part of that of the society to which he belongs. which his machinery was useful only for performing. The undertaker of some great manufactory. are always regarded as advantageous to every society. though they make a part of the gross. The quantity of that work. who employs a thousand a-year in the maintenance of his machinery. and the labour of a certain number of workmen. they may in that of other people. A certain quantity of materials. which must consist altogether in his profits. When by a more proper direction. The circulating capital of a society is in this respect different from that of an individual. may very properly be compared to that of repairs in a private estate. highly advantageous indeed. both which expenses. though they make a part of the gross. Of the four parts of which this latter capital is composed. clothing. and consequently both the gross and the neat rent of the landlord. materials. and with it all the advantage and conveniency which the society can derive from that work. is the only part of the circulating capital of a society. goes all to the latter. are thus diverted to another employment. But though the whole expense of maintaining the fixed capital is thus necessarily excluded from the neat revenue of the society. can afterwards be applied to augment the quantity of work which that or any other machinery is useful only for performing. it is not the same case with that of maintaining the circulating capital. and finished work. first to collect it. therefore. therefore. bear a very great resemblance to one another. may regularly replace their value to him. it is not upon that account totally excluded from making a part likewise of their neat revenue. deductions from the . The expense of maintaining the fixed capital in a great country. first to erect them.the same number of hands. and lodging. but still different from this one. it has already been observed.

by means of which every individual in the society has his subsistence. make no part either of the gross or of the neat revenue of either. by any particular sum of money. his real weekly revenue. and of very curious labour. the wealth or revenue which it in this case denotes. or the quantity and quality of the necessaries and conveniencies of life in which he can with propriety indulge himself. Thus. A certain quantity of very valuable materials. as the machines and instruments of trade. the real weekly or yearly revenue of all of them taken together. When. may be. to the money's worth more properly than to the money. Though the weekly or yearly revenue of all the different inhabitants of any country.neat revenue of the society. which compose the fixed capital either of an individual or of a society. when we say that the circulating money of England has been computed at eighteen millions. and to the latter more properly than to the former. we must always. conveniencies. we mean commonly to ascertain what is or ought to be his way of living. If it could be exchanged for nothing. conveniencies. Thus. and sometimes we include in our meaning some obscure reference to the goods which can be had in exchange for it. their real riches. Secondly. of which not a single farthing can ever make any part of either. It is the ambiguity of language only which can make this proposition appear either doubtful or paradoxical. if a guinea be the weekly pension of a particular person. not only the amount of the metal pieces which are annually paid to him. but only to one or other of those two equal values. we sometimes mean nothing but the metal pieces of which it is composed. and amusements. and not in the wheel which circulates them. it would. and to the latter more properly than to the former. conveniencies. gold and silver. or to the power of purchasing which the possession of it conveys. When we talk of any particular sum of money. like a bill upon a bankrupt. does not so properly consist in the piece of gold. deduct the whole value of the money. In computing either the gross or the neat revenue of any society. from the whole annual circulation of money and goods. his revenue surely would not so properly consist in the piece of paper. instead of augmenting the stock reserved for immediate consumption. In proportion as this quantity is great or small. paid to them in money. is equal only to one of the two values which are thus intimated somewhat ambiguously by the same word. not in gold. to the guinea's worth rather than to the guinea. the subsistence. A guinea may be considered as a bill for a certain quantity of necessaries and conveniencies upon all the tradesmen in the neighbourhood The revenue of the person to whom it is paid. we mean not only to express the amount of the metal pieces of which it is composed. regularly distributed to him in their proper proportions. we mean commonly to express. and amusements of individuals. The whole revenue of all of them taken together is evidently not equal to both the money . makes itself no part of that revenue. But when we say that a man is worth fifty or a hundred pounds a-year. so are his real riches. in proportion to the quantity of consumable goods which they can all of them purchase with this money. If the pension of such a person was paid to him. His weekly revenue is certainly not equal both to the guinea and to what can be purchased with it. is employed in supporting that great but expensive instrument of commerce. as in what he can get for it. The revenue of the society consists altogether in those goods. be of no more value than the most useless piece of paper. When properly explained and understood. in the same manner. etc. and in reality frequently is. to circulate in that country. or in what he can exchange it for. he can in the course of the week purchase with it a certain quantity of subsistence. The great wheel of circulation is altogether different from the goods which are circulated by means of it. by means of which the whole revenue of the society is regularly distributed among all its different members. or rather have supposed. but to include in its signification some obscure reference to the goods which can be had in exchange for them. but in a weekly bill for a guinea. so money. which some writers have computed. however. we mean only to express the amount of the metal pieces. and amusements. but the value of the goods which he can annually purchase or consume. must always be great or small. it is almost self-evident. as in what he could get for it.

But in what manner this operation is performed. may pay that of another to-morrow. the great instrument of commerce. which does not diminish the introductive powers of labour. the great wheel of circulation. cannot consist in those metal pieces. and a very valuable part. as they are successively paid. but only to one or other of those two values. the machines and instruments of trade. and sometimes equally convenient. There are several different sorts of paper money. is often precisely equal to his revenue. therefore. probity and prudence of a particular banker. of which the amount is so much inferior to its value. and though the metal pieces of which it is composed. like all other instruments of trade. But the amount of the metal pieces which circulate in a society. even with regard to an individual. that as every saving in the expense of erecting and supporting those machines. those notes come to have . We still consider his revenue as consisting in this power of purchasing or consuming. or the value of the goods which he can annually afford to consume. too. as must likewise be the revenue of the different persons to whom they are paid. they make themselves no part of that revenue. but in the power of purchasing. Money. the amount of the metal pieces which annually circulate in any country. it is because the amount of those pieces regulates the extent of his power of purchasing. been explained already. and puts industry into motion. and to the latter more properly than to the former. must always be of much less value than the whole money pensions annually paid with them. etc. The amount of the metal pieces which are annually paid to an individual. Circulation comes to be carried on by a new wheel. and may therefore require some further explication. it is still more so with regard to a society. replaces a very expensive instrument of commerce with one much less costly. That revenue. the smaller the one part. Thirdly. in the goods which can successively be bought with them as they circulate from hand to hand. and lastly. therefore. But if this is sufficiently evident.and the consumable goods. distribute to every man the revenue which properly belongs to him. It is sufficiently obvious. though it makes a part. must increase the fund which puts industry into motion. It is the circulating capital which furnishes the materials and wages of labour. and consequently the annual produce of land and labour. When the people of any particular country have such confidence in the fortune. As the same guinea which pays the weekly pension of one man to-day. therefore. therefore. can never be equal to the revenue of all its members. in what manner every saving in the expense of supporting the fixed capital is an improvement of the neat revenue of the society. which compose the fixed capital. is an improvement of the neat revenue of the society. The substitution of paper in the room of gold and silver money. and in what manner it tends to increase either the gross or the neat revenue of the society. Every saving. makes no part of the revenue of the society to which it belongs. But the power of purchasing. and not in the pieces which convey it. bear this further resemblance to that part of the circulating capital which consists in money. express a person's revenue by the metal pieces which are annually paid to him. and that of a third the day thereafter. While his whole capital remains the same. the greater must necessarily be the other. but the circulating notes of banks and bankers are the species which is best known. of the capital. the real revenue of every society. The whole capital of the undertaker of every work is necessarily divided between his fixed and his circulating capital. is not altogether so obvious. or the goods which can successively be bought with the whole of those money pensions. as to believe that he is always ready to pay upon demand such of his promissory notes as are likely to be at any time presented to him. in the course of their annual circulation. and which seems best adapted for this purpose. so every saving in the expense of collecting and supporting that part of the circulating capital which consists in money is an improvement of exactly the same kind. and it has partly. which does not diminish the productive powers of labour. must always be precisely of the same value with those pensions. and is upon that account the shortest and best expression of its value. which it costs less both to erect and to maintain than the old one. in the expense of maintaining the fixed capital. Though we frequently.

therefore. or in what is called the carrying trade. This interest is the source of his gain. that sum being over and above what can be employed in the circulation of the country. twenty thousand pounds in gold and silver may. and that annual produce cannot be immediately augmented by those operations of banking. therefore. because at a distance from the banks which issue it. there would remain. cannot run into it. whatever profit they make will be in addition to the neat revenue of their own country. the same quantity of consumable goods may be circulated and distributed to their proper consumers. The goods to be bought and sold being precisely the same as before. at the same time. who produce nothing. they may purchase an additional stock of materials.. and a million of bank notes. it is too valuable to be allowed to lie idle. twenty thousand pounds in gold and silver perform all the functions which a hundred thousand could otherwise have performed. or that its proprietors make a present of it to foreign nations. his debtors pay him the same interest as if he had lent them so much money. etc. purchase such goods as are likely to be consumed by idle people. that some time thereafter. therefore. and the channel of home circulation will remain filled with a million of paper instead of a million of those metals which filled it before. they may either. But though this sum cannot be employed at home. domestic business being now transacted by paper. Though he has generally in circulation. foreign silks. be sent abroad. for example. be carried on by many different banks and bankers. is poured into it beyond this sum. It is like a new fund. created for carrying on a new trade. Let us suppose. If they employ it in purchasing foreign goods for home consumption. By this operation. will remain precisely the same as before. One million we have supposed sufficient to fill that channel. from the confidence that such money can at any time be had for them. But though so great a quantity of gold and silver is thus sent abroad. part of them continue to circulate for months and years together. will be sufficient to circulate it after them. therefore. let us suppose. different banks and bankers issued promissory notes payable to the bearer. Whatever. in order to seek that profitable employment which it cannot find at home. Gold and silver. that the whole circulating money of some particular country amounted. Though some of those notes are continually coming back upon him for payment. if I may be allowed such an expression. we must not imagine that it is sent abroad for nothing. One million eight hundred thousand pounds are poured into it. It will. . it will not be received in common payments. in order to supply the consumption either of some other foreign country. by means of his promissory notes. that sum being then sufficient for circulating the whole annual produce of their land and labour. such as foreign wines. to the extent of one million. be a sufficient provision for answering occasional demands. to the extent. or of their own. must overflow. and from the country in which payment of it can be exacted by law. first.the same currency as gold and silver money. the whole circulation may thus be conducted with a fifth part only of the gold and silver which would otherwise have been requisite. They will exchange it for foreign goods of some kind or another. therefore. tools. of a hundred thousand pounds. The same exchanges may be made. secondly. eight hundred thousand pounds in gold and silver. too. frequently. A particular banker lends among his customers his own promissory notes. in circulation. at a particular time. notes to the extent of a hundred thousand pounds. or. the same quantity of money will be sufficient for buying and selling them. If they employ it in purchasing goods in one foreign country. to one million sterling. reserving in their different coffers two hundred thousand pounds for answering occasional demands. or eighteen hundred thousand pounds of paper and money together. but must overflow. But the annual produce of the land and labour of the country had before required only one million to circulate and distribute it to its proper consumers. we shall suppose. will be sent abroad. But the paper cannot go abroad. One million. therefore. therefore. as by an equal value of gold and silver money. to the value of a hundred thousand pounds. Eight hundred thousand pounds. As those notes serve all the purposes of money. can in this manner be spared from the circulation of the country. to the amount of eight hundred thousand pounds. and the gold and silver being converted into a fund for this new trade. in order to supply the consumption of another. The channel of circulation. and if different operations of the the same kind should. therefore. Eighty thousand pounds of gold and silver. therefore.

Money is neither a material to work upon. So far as it is employed in the first way. without increasing production. but the quantity of industry which the whole capital can employ. tools. seems not only probable. we maybe assured that no class or order of men ever does so. in consequence of some improvement in mechanics. employed in purchasing those of this second kind. it provides a permanent fund for supporting that consumption. in order to maintain and employ an additional number of industrious people. tools. is employed in purchasing foreign goods for home consumption. and maintenance. resembles that of the undertaker of some great work. three things are requisite. but in what can be got for them. after deducting what is necessary for supporting the tools and instruments of their trade. therefore. materials. who. and finished work. and though the wages of the workman are commonly paid to him in money. therefore. and not for the maintenance of idleness. The operation. a very small part of the money which. with a profit. the annual produce of their land and labour. Money may be requisite for purchasing the materials and tools of the work. who reproduce. But the revenue of idle people. consists. Their expense in general. takes down his old machinery. The demand of idle people. and to the materials.and provisions. though that of a few individuals among them may. tools. and the wages or recompence for the sake of which the work is done. materials to work upon. That the greater part of the gold and silver which being forced abroad by those operations of banking. but in the money's worth. Though some particular men may sometimes increase their expense very considerably. the people who consume reproducing. and adds the difference between its price and that of the new to his circulating capital. we must always have regard to those parts of it only which consist in provisions. The greater part of it will naturally be destined for the employment of industry. and maintenance. and a maintenance suitable to the nature of the work. the other. is. his real revenue. considered as a class or order. though their revenue does not increase at all. in the smallest degree. So far as it is employed in the second way. it promotes prodigality. they always influence that of the majority of every class or order. as well as the maintenance of the workmen. is employed in purchasing foreign goods for home consumption. When we compute the quantity of industry which the circulating capital of any society can employ. and to the latter more properly than to the former. is increased by the whole value which the labour of those workmen adds to the materials upon which they are employed. and in reality sometimes is. in some measure. cannot be much increased by them. The gross revenue of the society. is certainly not equal both to the money which purchases. which are purchased with it. but only to one or other of those two values. or establishing any permanent fund for supporting that expense. and their neat revenue by what remains of this value. with a profit. The quantity of industry which any capital can employ. and which serves only to circulate those three. must always be deducted. nor a tool to work with. the quantity of the materials. tools to work with. to the fund from which he furnishes materials and wages to his workmen. and must be. increases expense and consumption. it promotes industry. not in the money. the whole value of their annual consumption. like that of all other men. though the principles of common prudence do not always govern the conduct of every individual. for foreign goods. The whole value of the great wheel of circulation and distribution is added to the goods which are circulated and distributed by means of it. which the whole circulating capital can supply. because. the value of their annual consumption. being the same. cannot. must evidently be equal to the number of workmen whom it can supply with materials. but almost unavoidable. or very nearly the same as before. which consists in money. is likely to be employed in purchasing those for their use. In order to put industry into motion. and though it increases the consumption of the society. be increased by those operations of banking. not in the metal pieces. may be increased by the whole value of gold and silver which used to be employed in purchasing them. What is the proportion which the circulating money of any country bears to the whole value of the . and is in every respect hurtful to the society. When paper is substituted in the room of gold and silver money. being forced abroad by those operations of banking.

It seems to have constituted almost the whole circulation of that country. on the contrary. that the trade of the city of Glasgow doubled in about fifteen years after the first erection of the banks there. which had then no rival. except in the change of a twenty shilling bank note. and which. when it becomes due. of which the one. The payment of the bill. who advances to the merchant whose bill he discounts. When. In the present times. for though the circulation of the Bank of Scotland. and frequently but a small part. has really increased in so great a proportion. was established by act of parliament in 1695. consequently. it seems to have made but a very small part of the whole. by the erection of new banking companies in almost every considerable town. its real riches and prosperity do not appear to have suffered any. it is perhaps impossible to determine. of that produce. and there was. manufactures. most probably. But though the circulating gold and silver of Scotland have suffered so great a diminution during this period. The whole value of the gold and silver. of which that part which consists in gold and silver. it seems to be an effect too great to be accounted for by the sole operation of this cause. There were a good many people. therefore. with which purchases and payments of all kinds are commonly made. and at a thirtieth. the whole circulation of Scotland cannot be estimated at less than two millions. and. But though the conduct of all those different companies has not been unexceptionable. and even in some country villages. That the trade and industry of Scotland. was considerable. has the advantage of being able to discount to a greater amount by the whole value of his promissory notes. either of Scotland in general. the country. It has been computed by different authors at a fifth. He is thereby enabled to make his clear gain of interest on so much a larger sum. called the Bank of Scotland. too. did not bring their silver into the Bank of Scotland. together with a clear profit of the interest. The commerce of Scotland. If either of them has increased in this proportion. The business of the country is almost entirely carried on by means of the paper of those different banking companies. immediately after it. that the value of the gold annually coined somewhat exceeded that of the silver. and trade. It is chiefly by discounting bills of exchange. But how small soever the proportion which the circulating money may bear to the whole value of the annual produce. is ever destined for the maintenance of industry. within these five-and-twenty or thirty years. at a tenth. a fifth part of the former quantity. are commonly in circulation. by advancing money upon them before they are due. it must make a very considerable addition to the quantity of that industry. who. cannot be doubted. Its agriculture. An operation of this kind has. therefore. No account has been got of the gold coin.annual produce circulated by means of it.117: 10: 9 sterling. They deduct always. The value of the silver money which circulated in Scotland before the Union in 1707. if the value of only the greater part of the other four-fifths be added to the funds which are destined for the maintenance of industry. at a twentieth. and gold still seldomer. and that the trade of Scotland has more than quadrupled since the first erection of the two public banks at Edinburgh. it must always bear a very considerable proportion to that part. The effects of it have been precisely those above described. which circulated in Scotland before the Union. have evidently been augmented. the annual produce of its land and labour. have increased very considerably during this period. but it appears from the ancient accounts of the mint of Scotland. was brought into the Bank of Scotland. upon this occasion. to the value of the annual produce of land and labour. which at present is not very great. and has accordingly required an act of parliament to regulate it. part of that value. some English coin. besides. Silver very seldom appears. The banker. does not amount to half a million. however. perhaps. was still more inconsiderable when . from a diffidence of repayment. but his own promissory notes. that is. by the substitution of paper. which was not called in. or of the city of Glasgow in particular. as but a part. and the other. cannot be estimated at less than a million sterling. which he finds. I have heard it asserted. in order to be recoined. has evidently derived great benefit from their trade. called the Royal Bank. by experience. I do not pretend to know. notwithstanding. amounted to £411. the legal interest till the bill shall become due. by royal charter in 1727. upon whatever sum they advance. been performed in Scotland. that the greater part of banks and bankers issue their promissory notes. the gold and silver necessary for circulation is reduced to. replaces to the bank the value of what had been advanced. Whether the trade. and that the banks have contributed a good deal to this increase. during so short a period. not gold and silver.

either in his own coffers. the additional conveniency of their cash accounts. peculiar to them. another method of issuing their promissory notes. had he not been obliged to keep such a sum unemployed. gives the English merchants a conveniency equivalent to the cash accounts of the Scotch merchants. had they confined their business to the discounting of bills of exchange. But the Scotch merchants. and can thereby both make a greater profit himself. By means of those cash accounts. If there are two merchants. therefore. and almost all men of business. generally advance it to them in their own promissory notes. and thus almost the whole money business of the country is transacted by means of them. When they actually come upon him. Let us suppose that he generally disposes of his whole stock upon hand. it must be remembered. once in the year. With the same stock. or of goods to the value of his whole stock upon hand. in order to answer the demands continually coming upon him for payment of the goods which he purchases upon credit. by five hundred pounds. The whole paper money of every kind which can easily circulate in any country. and the merchants again return them to the banks. to the extent of a certain sum (two or three thousand pounds for example). by readily receiving their notes in all payments. and gradually replaces the sum borrowed with the money or paper which comes in from the occasional sales of his goods. so far as I know. who gives him no interest for it.the two first banking companies were established. or in those of his banker. than the London merchant. that is. and have. By being obliged to keep so great a sum unemployed. by twenty and thirty pounds at a time. by giving credit. indeed. and of the benefit which the country has received from it. the landlords repay them to the merchants for the conveniencies and luxuries with which they supply them. The London merchant must always keep by him a considerable sum of money. or to replace what they my have borrowed of them. Let the ordinary amount of this sum be supposed five hundred pounds. by granting what they call cash accounts. carry on a greater trade than he otherwise could do. the farmers to their landlords for rent. to any individual who could procure two persons of undoubted credit and good landed estate to become surety for him. have at all times in his warehouse a larger quantity of goods than the London merchant. and borrows a thousand pounds upon it. therefore. without imprudence. therefore. he can. than it would have been. and give employment to a greater number of people. every merchant can. in order to balance their cash accounts. and are thereby interested to promote the trade of those companies. should be repaid upon demand. Hence the great trade of those companies. find it convenient to keep such cash accounts with them. without imprudence. and have perhaps been the principal cause. His annual profits must be less by all that he could have made by the sale of five hundred pounds worth more goods. the manufacturers to the farmers for materials and provisions. he must sell in a year five hundred pounds worth less goods than he might otherwise have done. the value of the goods in his warehouse must always be less. without imprudence. the company discounting a proportionable part of the interest of the great sum. carry on a greater trade. together with the legal interest. both of the great trade of those companies. he satisfies them from his cash account with the bank. besides. The facility of discounting bills of exchange. Whoever has a credit of this kind with one of those companies. within the sum for which the credit had been given. may repay this sum piece-meal. I believe. when their customers apply to them for money. Hence the great benefit which the country has derived from this trade. on the other hand. They invented. till the whole be in this manner repaid. and those companies would have had but little trade. The merchant in Edinburgh. one in London and the other in Edinburgh. Credits of this kind are. for example. But the easy terms upon which the Scotch banking companies accept of repayment are. The banks. who employ equal stocks in the same branch of trade. that whatever money should be advanced to him. it may be thought. and the number of people employed in preparing his goods for the market must be less by all those that five hundred pounds more stock could have employed. can discount their bills of exchange as easily as the English merchants. These the merchants pay away to the manufacturers for goods. All merchants. and give constant employment to a greater number of industrious people who prepare those goods for the market. the Edinburgh merchant can. never can exceed . keeps no money unemployed for answering such occasional demands. and by encouraging all those with whom they have any influence to do the same. from the day on which each of those small sums is paid in. commonly granted by banks and bankers in all different parts of the world.

yet must empty themselves much faster than if their business was confined within more reasonable bounds.the value of the gold and silver. for answering the occasional demands of the holders of its notes. ought to increase the first article of their expense. and this continual exportation of gold and silver. accountants. etc. in finding new gold and silver in order to replenish those coffers. There would immediately. and must require not only a more violent. be a run upon the banks to the whole extent of this superfluous paper. and if they showed any difficulty or backwardness in payment. in the expense of replenishing those coffers as fast as they are emptied by answering such occasional demands. If twenty shilling notes. secondly. and of which the excess is continually returning upon them for payment. Such a company. and it will lose the whole expense of continually collecting four thousand pounds in gold and silver. cannot be employed in the circulation of the country. over and above what can be employed in it too. in order to find that profitable employment which it cannot find at home. not only in proportion to this excessive increase of their circulation. the four thousand pounds which are over and above what the circulation can easily absorb and employ. be sent abroad. Had every particular banking company always understood and attended to its own particular interest. this bank is obliged to keep at all times in its coffers ten thousand pounds in gold and silver. The coffers of such a company. in one shape or another. Should this bank attempt to circulate forty-four thousand pounds. amounts exactly to forty thousand pounds. but in a much greater proportion. Such a company. therefore. which is thus continually drawn in such large quantities from their coffers. The coin. A banking company which issues more paper than can be employed in the circulation of the country. Let us suppose that all the paper of a particular bank. which will be continually going out of its coffers as fast as they are brought into them. Over and above the expenses which are common to every branch of trade. therefore. too. it must. or which (the commerce being supposed the same) would circulate there. a large sum of money. in the expense of keeping at all times in its coffers. of which it supplies the place. they would immediately demand payment for it from the banks. increase the second article of their expense still more than the first. For answering occasional demands. for example. must in proportion to this forced increase of their business. and as they could not send it abroad. Should the circulating paper at any time exceed that sum. But every particular . the expenses peculiar to a bank consist chiefly in two articles: first. therefore. which empty themselves so very rapidly. must necessarily enhance still farther the expense of the bank. but a more constant and uninterrupted exertion of expense. not eleven thousand pounds only. but they could find none while it remained in the shape of paper. It will thus gain nothing by the interest of the four thousand pounds excessive circulation. will return upon it almost as fast as they are issued. their notes returning upon them much faster than in proportion to the excess of their quantity. as the excess could neither be sent abroad nor be employed in the circulation of the country. ought to increase the quantity of gold and silver which they keep at all times in their coffers. to a much greater extent. When this superfluous paper was converted into gold and silver. this bank ought to keep at all times in its coffers. cannot exceed the sum of gold and silver which would be necessary for transacting the annual exchanges of twenty shillings value and upwards usually transacted within that country. the wages of servants. too. by enhancing the difficulty. But as that coin will not be allowed to lie idle. Many people would immediately perceive that they had more of this paper than was necessary for transacting their business at home. they could easily find a use for it. and is. It comes in place of a paper which is over and above what can be employed in that circulation. but in a much greater proportion. therefore. if there was no paper money. not only in proportion to this forced increase of their business. though they ought to be filled much fuller. such as the expense of house-rent. to be exchanged for gold and silver. the alarm which this would occasion necessarily increasing the run. by sending it abroad. it must immediately return upon the banks. clerks. and. the circulation never could have been overstocked with paper money. which the circulation of the country can easily absorb and employ. and that. of which it loses the interest. in order to replenish them. the whole of that currency which can easily circulate there. but fourteen thousand pounds. therefore. for answering occasional demands. are the lowest paper money current in Scotland.

not only for its own imprudence. or fifteen shillings on the hundred pounds. It was the newest. which were carefully picked out of the whole coin. Those agents were not always able to replenish the coffers of their employers so fast as they were emptied. and from the continual rise in the price of gold bullion. At home. is indirectly obliged to supply the whole kingdom. or when melted down into bullion at home. therefore. therefore. but they were of more value abroad. By issuing too great a quantity of paper. from the distress into which their excessive circulation had thrown them. The Bank of England. together with the interest and commission. to draw upon their correspondents in London bills of exchange. either by the Bank of England or by the Scotch banks. and the same sum. or. paid all of them very dearly for their own imprudence and inattention: but the Bank of England paid very dearly. notwithstanding the great quantity of good and new coin which was every year issued from the bank. losing in this manner between two and a half and three per cent. at an average. those heavy pieces were of no more value than the light. and the circulation has frequently been overstocked with paper money. the Bank of England was for many years together obliged to coin gold to the extent of between eight hundred thousand pounds and a million a-year. about eight hundred and fifty thousand pounds. When those correspondents afterwards drew upon them for the payment of this sum. though the government was properly at the expense of this coinage. the bank (inconsequence of the worn and degraded state into which the gold coin had fallen a few years ago) was frequently obliged to purchase gold bullion at the high price of four pounds an ounce. some of those banks. into which coin is continually flowing from those coffers in a great variety of ways. whatever vacuities this excessive circulation occasioned in the necessary coin of the kingdom. In this case. of which the excess was continually returning. instead of growing better and better. Even those Scotch banks which never distinguished themselves by their extreme imprudence. in consequence of an excess of the same kind. were all obliged to employ constantly agents at London to collect money for them. but by drawing a second set of bills. paid no seignorage. at an expense which was seldom below one and a half or two per cent. the state of the coin.banking company has not always understood or attended to its own particular interest. was the original cause of this excessive circulation of paper money. to their astonishment. or upon some other correspondents in London. . the resource of the banks was. Though the bank. that there was every year the same scarcity of coin as there had been the year before. either upon the same. and either sent abroad or melted down. the debtor bank paying always the interest and commission upon the whole accumulated sum. The Scotch banks. in order to be exchanged for gold and silver. Every year they found themselves under the necessity of coining nearly the same quantity of gold as they had coined the year before. and the best pieces only. in consequence of the continual wearing and clipping of the coin. being likewise over and above what could be employed in that circulation. and that. and sometimes melted down and sold to the Bank of England at the high price of four pounds an ounce. This money was sent down by the waggon. were sometimes obliged to employ this ruinous resource. had sometimes no other means of satisfying this draught. and insured by the carriers at an additional expense of three quarters per cent. no doubt. was wanted to support this excessive circulation both of Scotch and English paper money. The Scotch banks. every year. The over-trading of some bold projectors in both parts of the united kingdom. was sometimes sent abroad in the shape of coin. this liberality of government did not prevent altogether the expense of the bank. or rather bills for the same sum. it is to be observed. and while they remained in the shape of coin. would in this manner make sometimes more than two or three journeys. the Bank of England was obliged to supply them. sometimes melted down and sent abroad in the shape of bullion. by supplying its own coffers with coin. to the extent of the sum which they wanted. the heaviest. in exchange for that part of their paper which was over and above what could be employed in the circulation of the country. The Bank of England. The gold coin which was paid out. For this great coinage. upon the coinage of so very large a sum. but for the much greater imprudence of almost all the Scotch banks. which it soon after issued in coin at £3:17:10 1/2 an ounce. the expense of this great annual coinage became. notwithstanding their great annual coinage. found. became every year worse and worse. Whatever coin. greater and greater.

together with the interest. By this attention. it may safely continue to deal with such customers. and did not care to deal with any person. but that part of it only which he would otherwise be obliged to keep by him unemployed and in ready money. whatever might be his fortune or credit. without any further care or attention. ought to observe with great attention. so that. within the course of such short periods. however. upon such occasions. and scarce ever to require any extraordinary expense to replenish them. were for a long time very careful to require frequent and regular repayments from all their customers. men being. as the money comes in from the occasional sale of his goods. upon the easy terms of the banking companies of Scotland. it dispenses him entirely from the necessity of keeping any part of his stock by him unemployed and in ready money for answering occasional demands. the sum of the repayments which it commonly receives from them. such sums upon his cash account. it only advances to him a part of the value which he would otherwise be obliged to keep by him unemployed and in ready money. as soon as it becomes due. those coffers are likely to be always equally or very near equally full. drawn by a real creditor upon a real debtor. beyond what its own books afford it. whether. replaces to the bank the value of what it had advanced. he can answer them sufficiently from his cash account. either regular or irregular in their repayments. six. the pond keeps always equally. that which is continually running into them must be at least equally large. besides saving almost entirely the extraordinary expense of replenishing their coffers. The bank. five. But a banking company. according as their circumstances are either thriving or declining. advances him likewise.What a bank can with propriety advance to a merchant or undertaker of any kind. so that. at least if they continue to deal with it in this manner. fully equal to that of the advances which it commonly makes to them. If the paper money which the bank advances never exceeds this value. in dealing with such customers. is necessarily much larger than that which is continually running in. unless they are replenished by some great and continual effort of expense. is. falls commonly very much short of the advances which it makes to them. for answering occasional demands. the sum of the repayments from certain other customers. The banking companies of Scotland. and accepts of a piece-meal repayment. A merchant. it can never exceed the value of the gold and silver which would necessarily circulate in the country if there was no paper money. When a bank discounts to a merchant a real bill of exchange. or very near equally full. it can never exceed the quantity which the circulation of the country can easily absorb and employ. what they called. and of which the attention is continually occupied by objects of a very different kind. observe and inquire both constantly and carefully into the conduct and situation of each of them. for the most part. frequent and regular operations with them. fully equal to that which runs out. Though the stream which is in this case continually running out from its coffers may be very large. or is not. in the course of some short period (of four. without over-trading. is not either the whole capital with which he trades. If. without being obliged to look out for any other evidence besides what their own books afforded them. resemble a water-pond. The stream which is in this case continually running out from its coffers. which lends money to perhaps five hundred different people. so far as its dealings are confined to such customers. is really paid by that debtor. may frequently have occasion for a sum of ready money. who did not make. the sum of the repayments from certain customers is. Little or no expense can ever be necessary for replenishing the coffers of such a bank. The payment of the bill. may. or even any considerable part of that capital. fully equal to that of the advances. When a bank. accordingly. If. from which. for answering occasional demands. A private man who lends out his money to perhaps half a dozen or a dozen of debtors. or eight months. and which. though a stream is continually running out. so that. First. on the contrary. those coffers must soon be exhausted altogether. The coffers of the bank. even when he has no bills to discount. besides discounting his bills. can have no regular information concerning the conduct and circumstances of the greater part of its debtors. for example). upon most occasions. they gained two other very considerable advantages. without any further care or attention. either by himself or his agents. When such demands actually come upon him. In requiring frequent and regular . by this attention they were enabled to make some tolerable judgment concerning the thriving or declining circumstances of their debtors. yet another is continually running in. it cannot with any safety continue to deal with such customers. when it becomes due.

had there been no paper money. and continually going from him in the same shape. that within moderate periods of time. the ordinary amount of his repayments could not. had there been no such advances. and amount of his repayments. his work-houses. is continually returning to every dealer in the shape of money. in building farmhouses. or even the greater part of the circulating capital with which he trades. or to render it extremely improbable that those creditors should incur any loss. and that. and warehouses. might soon come to exceed the whole quantity of gold and silver which ( the commerce being supposed the same ) would have circulated in the country. fully equal to the advances which they had made to him. etc. It is this part of his capital only which. of the capital which the undertaker of a mine employs in sinking his shafts. and going from him in the same shape. and ploughing waste and uncultivated fields.. and which it is meant . employs in erecting his forge and smelting-houses. by means of the same dealings was continually running out. This second advantage. advance to a trader the whole. partly by the conveniency of discounting bills. for example. with all their necessary appendages of stables. by means of his dealings. if I may say so. in erecting engines for drawing out the water. they can reasonably expect no farther assistance from hanks and bankers. exceeded the quantity of gold and silver which he would otherwise have been obliged to keep by him for answering occasional demands. In justice to their creditors. within moderate periods of time. the creditable traders of any country can be dispensed from the necessity of keeping any part of their stock by them unemployed. of the capital which the undertaker of an iron forge. consequently. though that capital is continually returning to him in the shape of money. consistently with their own interest and safety. which they had circulated by his means. and. have equalled the ordinary amount of its advances. very seldom return to the undertaker till after a period of many years. etc. the dwelling-houses of his workmen. would sufficiently demonstrate that the amount of their advances had at no time exceeded that part of his capital which he would otherwise have been obliged to keep by him unemployed. Traders and other undertakers may. could not have been equal to the stream which. was continually running into the coffers of the bank. The advances of the bank paper. when they have gone thus far. was not. Even with this precaution. consistently with its own interest. and in ready money.repayments from all their customers. though equally real. A bank cannot. too. inclosing. because. The returns of the fixed capital are. the capital of those creditors. at any time. the money which is borrowed. he would have been obliged to keep by him for answering occasional demands. for answering occasional demands. and partly by that of cash accounts. to exceed the quantity which the circulation of the country could easily absorb and employ. cannot. even though the success of the project should fall very much short of the expectation of the projectors. in almost all cases. If the advances of the bank had commonly exceeded this part of his capital. draining. no doubt with great propriety. and in ready money. that is. the banking companies of Scotland had probably this advantage in view. The stream which. by this attention they secured themselves from the possibility of issuing more paper money than what the circulation of the country could easily absorb and employ. much slower than those of the circulating capital: and such expenses. for answering occasional demands.. a period by far too distant to suit the conveniency of a bank. however. for the purpose of keeping the rest of his capital in constant employment. yet the whole of the returns is too distant from the whole of the outgoings. The frequency. by exceeding the quantity of gold and silver which. upon most occasions. Secondly. in making roads and waggon-ways. and the excess of this paper money would immediately have returned upon the bank. of the capital which the person who undertakes to improve land employs in clearing. had there been no paper money. Still less could a bank afford to advance him any considerable part of his fixed capital. the repayments of a particular customer were. consequently. regularity. manuring. they might be assured that the paper money which they had advanced to him had not. within moderate periods of time. When they observed. the paper money. etc. who. even when laid out with the greatest prudence and judgment. their own capital ought in this case to be sufficient to insure. perhaps. When. carry on a very considerable part of their projects with borrowed money. so well understood by all the different banking companies in Scotland as the first. had not at any time exceeded the quantity of gold and silver which would have circulated in the country. granaries. go farther. whether paper or coin. in order to be exchanged for gold and silver. and the sum of his repayments could not equal the sum of his advances within such moderate periods of time as suit the conveniency of a bank.

have given such extraordinary privileges to bills of exchange. Those traders and other undertakers. From England it was brought into Scotland. or rather was somewhat more than fully equal. willing to lend that capital to such people of good credit as are likely to keep it for several years. when the bill becomes due. it had passed through the hands of several other persons. and had brought upon themselves that loss.should not be repaid till after a period of several years. They had even done somewhat more. ought not to be borrowed of a bank. who had successively advanced to one another the contents of it. indeed. served their purpose. without taking the trouble themselves to employ the capital. which were established when the barbarous laws of Europe did not enforce the performance of their contracts. wished to get still more. of such private people as propose to live upon the interest of their money. It is now more than five and twenty years since the paper money issued by the different banking companies of Scotland was fully equal. written their names upon the back of the bill. were of a different opinion. is said to have been carried on to a very great extent. though at a much greater expense. if he fails to pay. especially when they are made payable within so short a period as two or three months after their date. The customs of merchants. he becomes from that moment a bankrupt. I shall endeavour to explain it as distinctly as I can. or with what they had credit to borrow of private people in the usual way of bond or mortgage. would. during the course of the two last centuries. This expedient was no other than the well known shift of drawing and redrawing. and to provide them with all the capital which they wanted to trade with. Those companies. either in money or goods. and which. If. therefore. but ought to be borrowed upon bond or mortgage. The bill is protested. in proportion to the very limited commerce. before it came to the person who presents it to the acceptor for payment. to express that each of them had in his turn received those contents. be thought unnecessary to give any account of it. and who. which. The banks. during the course of the late war. had all of them in their order indorsed. extend their credits in proportion to the extension of the trade of the country. to give. which lends its money without the expense of stamped paper. generally understood. and. where. and. when they are upon the brink of bankruptcy. he . who. perhaps. each indorser becomes in his turn liable to the owner of the bill for those contents. they seem to have thought. they said. The banks. for a time. The banks. it was soon carried on to a much greater extent than it ever had been in England. or at least that diminution of profit. be a very convenient creditor to such traders and undertakers. and who are. some of those traders had recourse to an expedient which. or of attorneys' fees for drawing bonds and mortgages. upon that account. the acceptor does not pay it as soon as it is presented. that is. and to the very moderate capital of the country. they seem to have thought. when the high profits of trade afforded a great temptation to over-trading. have been adopted into the laws of all European nations. that money is more readily advanced upon them than upon any other species of obligation. could extend their credits to whatever sum might be wanted. The practice of raising money in this manner had been long known in England. The practice of drawing and redrawing is so well known to all men of business. to what the circulation of the country could easily absorb and employ. having got so much assistance from banks and bankers. were in honour bound to supply the deficiency. the extension of their own projects beyond what they could carry on either with their own capital. and upon their refusing to extend their credits. and as the effects of this practice upon the banking trade are not. the shift to which unfortunate traders have sometimes recourse. A bank. becomes likewise a bankrupt. But such traders and undertakers would surely be most inconvenient debtors to such a bank. however. But as this book may come into the hands of many people who are not men of business. that it may. yet as effectually as the utmost extension of bank credits could have done. in this particular business. and returns upon the drawer. no doubt. consistently with their own interest. had so long ago given all the assistance to the traders and other undertakers of Scotland which it is possible for banks and bankers. even by men of business themselves. by the extension of that trade. if he does not immediately pay it. never fails to attend the smallest degree of over-trading. They complained of the contracted views and dastardly spirit of the directors of those banks. no doubt. If. and which accepts of repayment upon the easy terms of the banking companies of Scotland. meaning. perhaps. without incurring any other expense besides that of a few reams of paper. They had over-traded a little. which did not.

no doubt. against Edinburgh. the exchange between Edinburgh and London. This bill. and A enabled C to discharge it. in the year and sometimes a great deal more. must have cost A something more than eight per cent. as soon as it was accepted. . and with its contents purchased bills upon London. I believe. {The method described in the text was by no means either the most common or the most expensive one in which those adventurers sometimes raised money by circulation. not only for several months. therefore. they very seldom. another bill. Though all of them may be very likely to become bankrupts. besides. either at the end of their projects. but he agrees to accept of A 's bill. This other bill was made payable to the order of B. payable at sight to the order of B. before the expiration of the first two months. a good surplus profit to the projector. This commission being repeated more than six times in the year. but it is a chance if it falls to-night. In a country where the ordinary profits of stock. still the shortness of the date gives some security to the owner of the bill. discounted it in the same manner with some banker in London. upon its being accepted by C. but for several years together. This third bill was made payable to the order of C. being payable to his own order. the bill always returning upon A in Edinburgh with the accumulated interest and commission of all the former bills. In reality B in London owes nothing to A in Edinburgh. in London. by drawing. or when they were no longer able to carry them on. upon each repetition. however. together with the legal interest of five per cent. in the greater part of mercantile projects. of which the returns could not only repay the enormous expense at which the money was thus borrowed for carrying it on. on each draught. draws a bill upon B in London. or when he was obliged to pay compound interest upon the interest and commission of former bills. Many vast and extensive projects. in the year. the exchange between Edinburgh and London was frequently three per cent. upon each repetition. Upon their awakening. who. payable likewise two months after date. we shall suppose. and will not stand very long. however. fourteen per cent. It frequently happened. by drawing. yet. who. sometimes upon his first correspondent B. Though the drawer. acceptor. a second bill at three months date upon the same B in London. in the same manner as that described in the text. but upon some third person. when either the price of the commission happened to rise. and sometimes upon some fourth or fifth person. B accordingly. again before the expiration of the second two months. and I will venture. says a weary traveller to himself. This practice was called raising money by circulation. from that moment. in the year. therefore. discounted it with some banker in London. to whom he sent them by the post. that A in Edinburgh would enable B in London to pay the first bill of exchange. it must have been a very fortunate speculation. The house is crazy. By saving. The projectors. were undertaken. a few days before it became due. for example. a third bill likewise at two months date. The interest was five per cent. payable two months after date. upon condition. The trader A in Edinburgh. payable likewise two months after date. who. at least. D or E. and indorsers of the bill. This practice has sometimes gone on. but afford. it is a chance if they all become so in so short a time.becomes too. A sold in Edinburgh at par. a bankrupt. C. should all of them be persons of doubtful credit. Towards the end of the late war. and being loaded with a commission of at least one half per cent. and those bills at sight must frequently have cost A that premium. and for several years carried on. and before the expiration of the third two months. At other times A would enable to discharge the first bill of exchange. B in London redraws upon A in Edinburgh another bill payable also two months after date. Such operations being repeated at least six times in the year. without any other fund to support them besides what was raised at this enormous expense. a few day's before it became due. redraws this bill upon A in Edinburgh. not upon B. that before the term of payment he shall redraw upon A in Edinburgh for the same sum. must at that period have cost A. and the commission was never less than one half per cent. to sleep in it to-night. a few days before it became due. draws a second bill upon B in London. and being loaded with a commission of at least one half per cent. it was less expensive than that mentioned in the foregoing part of this note. This transaction. being repeated at least four times in the year. this method of raising money. a second bill at two months date. for example. however. had in their golden dreams the most distinct vision of this great profit. whatever money A might raise by this expedient might necessarily have cost him something more than eight per cent. had the good fortune to find it. are supposed to run between six and ten per cent. by drawing. together with the interest and a commission.

or manufactures. the immediate occasion. after a certain time. he would necessarily make them all bankrupts. Whatever was advanced upon such circulating bills was in Edinburgh advanced in the paper of the Scotch banks. he might sometimes make it too late. they said. another bill was always drawn to somewhat a greater amount than the bill which was soon to be paid: and the discounting of this other bill was essentially necessary towards the payment of that which was soon to be due. he must immediately discover what they are about. For his own interest and safety. he as regularly discounted. get out of the circle. upon that account. he regularly discounted two months before they were due. before each bill became due. Though the bills upon which this paper had been advanced were all of them repaid in their turn as soon as they became due. and. which did not give a sufficiently liberal aid to the spirited undertakings of those who exerted themselves in order to beautify. and not merely to that part of it which. in order to be exchanged for gold and silver. and see clearly that they are trading. however. those projectors.} The bills which A in Edinburgh drew upon B in London. When two people. not with any capital of their own. and enrich the . and bad conduct of the banks. but occasionally run the round of a great circle of projectors. to go on for some time. and a bill for which there was properly no real creditor but the bank which discounted it. or to other methods of raising money: so as that he himself might. therefore. or with some other banker in London. in order to force these projectors by degrees to have recourse. and the bills which B in London redrew upon A in Edinburgh. It was over and above. and when the two same persons do not constantly draw and redraw upon one another. either to other bankers. without their having the most distant suspicion that they had really advanced it. to withdraw gradually. not only alarmed. The greater part of this paper was. but enraged. with some bank or banker in Edinburgh. The stream which. that. he might find it necessary. and in London. and which even the more prudent Scotch banks began. who find it for their interest to assist one another in this method of raising money and to render it. endeavouring. which the principal bankers in London. This payment. therefore.but then it required an established credit with more houses than one in London. discount their bills always with the same banker. commerce. was never replaced by any stream which really ran into them. not only without their knowledge or deliberate consent. because. by means of those circulating bills of exchange. perhaps. and thus by ruining them. had there been no paper money. therefore. upon many occasions. and this distress of the country. The paper which was issued upon those circulating bills of exchange amounted. had there been no paper money. to make about discounting. consequently. either with the Bank of England. immediately returned upon the banks. improve. they called the distress of the country. But this discovery is not altogether so easy when they discount their bills sometimes with one banker. for answering occasional demands. When a banker had even made this discovery. between a bill drawn by a real creditor upon a real debtor. of which this prudent and necessary reserve of the banks was. what the circulation of the country could easily absorb and employ. nor any real debtor but the projector who made use of the money. was altogether owing to the ignorance. might perhaps ruin himself. as difficult as possible to distinguish between a real and a fictitious bill of exchange. The difficulties. but with the capital which he advances to them. no doubt. and sometimes with another. to the whole fund destined for carrying on some vast and extensive project of agriculture. as soon as possible. and upon that account. when they were discounted at the Bank of England in the paper of that bank. pusillanimity. which the Bank of England. yet the value which had been really advanced upon the first bill was never really returned to the banks which advanced it. who are continually drawing and redrawing upon one another. the projector would have been obliged to keep by him unemployed. but for some time. making every day greater and greater difficulties about discounting. upon that account. accordingly. in this very perilous situation. and might find that he had already discounted the bills of those projectors to so great an extent. It was a capital which those projectors had very artfully contrived to draw from those banks. and when all of them had already gone too far. which they were to find as they could. in the highest degree. over and above the value of the gold and silver which would have circulated in the country. an advantage which many of these adventurers could not always find it easy to procure. had once been made to run out from the coffers of the banks. was altogether fictitious. and in ready money. Their own distress. by refusing to discount any more.

which were at that time carrying on in different parts of the country. The capital which had been subscribed to this bank. had. enabled to carry on business for more than two years. for which it was continually drawing bills of exchange upon London. paying it. when they paid in their first instalment. to lend for as long a time. which were continually returning upon it as fast as they were issued. A great part of the proprietors. were really pledged for answering all its engagements. But had the coffers of this bank been filled ever so well. as they might wish to borrow. amounted to one hundred and sixty thousand pounds. no doubt. and. it seems to have made scarce any distinction between real and circulating bills. they seemed to think. it had in the circulation about two hundred thousand pounds in bank notes. of which eighty per cent. and was consequently losing more than three per cent. This sum ought to have been paid in at several different instalments. It was the avowed principle of this bank to advance upon any reasonable security. With regard to the latter. therefore. upon more than three fourths of all its dealings. thinking themselves obliged to treat their own proprietors with the same liberality with which they treated all other men. in little more than the course of two years. advanced to different people upwards of eight hundred thousand pounds at five per cent. together with interest and commission. without any other deduction besides the expense of management. and to as great an extent. When it was obliged to stop. amounted to upwards of six hundred thousand pounds. and in discounting bills of exchange. well understood. The design was generous. the whole capital which was to be employed in those improvements of which the returns are the most slow and distant. or the public credit of the country. therefore. and enabled them to carry on their projects for about two years longer than they could otherwise have done. over and above what the circulation of the country could easily absorb and employ. The operations of this bank seem to have produced effects quite opposite to those which were intended by the particular persons who planned and directed it. This bank was more liberal than any other had ever been. but to have discounted all equally. at two different subscriptions. such as the improvements of land. But those bank notes being. Its coffers having been filled so very ill. They seem to have intended to support the spirited undertakings. at the same time. By its liberality in granting cashaccounts. might perhaps be considered as a clear gain. it was. only put into one coffer what had the moment before been taken out of another. as fast as they were issued. and the directors. the greater part of them. upwards of eight per cent. To promote such improvements was even said to be the chief of the public-spirited purposes for which it was instituted. its excessive circulation must have emptied them faster than they could have been replenished by any other expedient but the ruinous one of drawing upon London. it was paying. were not. it had been constantly in the practice of drawing bills of exchange upon London. when it stopt. it. perhaps. only was paid up. for as such they considered them. a new bank was established in Scotland. allowed many of them to borrow upon this cash-account what they paid in upon all their subsequent instalments. But upon upwards of six hundred thousand pounds. of which the number and value were continually increasing. for the express purpose of relieving the distress of the country. It was the duty of the banks. and when the bill became due. opened a cash-account with the bank. In order to support the circulation of those notes. by another draught upon the same place. and. particularly those established at Edinburgh. by refusing in this manner to give more credit to those to whom they had already given a great deal too much. issued great quantities of its bank notes. This bank. in the way of interest and commission. By means of the great credit which so great a pledge necessarily gave it. But it thereby only . whose backwardness in discounting bills of exchange had given some offence. this five per cent. by their subscription to the original bond or contract of the bank. The estates of the proprietors of this bank were worth several millions. returned upon it. it is said to have been driven to this resource within a very few months after it began to do business. This bank. in order to be exchanged for gold and silver. but the execution was imprudent. Such payments. In the midst of this clamour and distress. no doubt. The banks. Its coffers were never well filled. both in granting cashaccounts. by drawing the whole banking business to themselves.country. took the only method by which it was now possible to save either their own credit. Upon the two hundred thousand pounds which it circulated in bank notes. and in discounting bills of exchange. and. and the nature and causes of the distress which it meant to relieve. notwithstanding its too liberal conduct. to supplant all the other Scotch banks. however. gave some temporary relief to those projectors.

yet. and of drawing the proper bond or assignment. they must have suffered a loss of every such operation. as fast as they issued it. it might easily replenish them. so that. as a mercantile company. it was the opinion of some people. by raising money upon the securities of those to whom it had advanced its paper. The sober and frugal debtors of private persons. It would have been much better for themselves. and in whose sober and frugal conduct he thinks he has good reason to confide. The debtors of such a bank as that whose conduct I have been giving some account of were likely. those rivals whom it meant to supplant. from which they could not otherwise have disengaged themselves without incurring a considerable loss. of negotiating with those people. is not likely to be more judicious in the choice of its debtors than a private person who lends out his money among a few people whom he knows. Those who wanted to borrow must have applied to this bank. But though this operation had proved not only practicable. and for the payment of which they were themselves continually obliged to borrow money. by employing a number of people to go continually with buckets to a well at some miles distance. their creditors. on the contrary. would never repay the expense which they had really cost. and have been so much clear loss upon the balance of their accounts. so that in the long-run they must have ruined themselves as a mercantile company. could be replenished by no other expedient but the ruinous one of drawing bills upon London. instead of making a profit. It could only have erected this bank into a sort of general loan office for the whole country. and which emptied themselves so very fast. and perhaps. the quantity of money to be lent. were enabled to get very easily out of that fatal circle. The temporary relief. on the contrary. which. had recourse to this new bank. had the greater part of them been obliged to stop two years sooner than they actually did. when ruin came. though perhaps not so soon as by the more expensive practice of drawing and redrawing. perhaps to five hundred different people. but profitable to the bank. the whole expense of this borrowing. and when they became due. therefore. But though they had been able by this method to raise money as fast as they wanted it. therefore. would be more likely to employ the money borrowed in . they would probably never be able to complete. the greater part of whom its directors can know very little about. I believe. paying them by other draughts on the same place. This operation could not augment. from a very great distress. which those other banks had become so backward in discounting. who would employ the money in extravagant undertakings. the drawers and redrawers of circulating bills of exchange. and which. that how fast soever its coffers might be emptied. the operations of this bank increased the real distress of the country. At the first setting out of this bank. returned upon them in order to be exchanged for gold and silver. being over and above what the circulation of the country could absorb and employ. instead of relieving. therefore. the greater part of them. and that coffers which originally were so ill filled. to be chimerical projectors. But a bank which lends money. All the dealers in circulating bills of exchange. of employing agents to look out for people who had money to lend. in order to bring water to replenish it. The operations of this bank. The project of replenishing their coffers in this manner may be compared to that of a man who had a water-pond from which a stream was continually running out. however. if they should be completed. yet the country could have derived no benefit front it. Experience. Those other banks. even some degree of discredit. which. in the smallest degree. On the contrary. In the long-run. and effectually relieved. which it meant to relieve. which this bank afforded to those projectors. proved a real and permanent relief to the other Scotch banks. and their country. must have suffered a very considerable loss by it. They could still have made nothing by the interest of the paper. soon convinced them that this method of raising money was by much too slow to answer their purpose. but who proposed to keep it always equally full. would never afford a fund capable of maintaining a quantity of labour equal to that which had been employed about them. with all the assistance that could be given them. in reality aggravated in the long-run the distress which those projectors had brought both upon themselves and upon their country. but. too. it fell so much the heavier both upon them and upon their creditors. where they were received with open arms. and into which no stream was continually running. must have fallen upon them. instead of applying to the private persons who had lent it their money. with accumulated interest and commission.enabled them to get so much deeper into debt.

the bank cancelled exchequer bills to the amount of £ 1. therefore. In pursuance of the 3rd George I. by Mr Du Verney.775. perhaps.000. It was incorporated.402. In 1703. In 1697. and was at the same time allowed to take in subscriptions for doubling its capital. in consequence of the subscriptions which it had taken in for enabling it .995:14:8d. with some variations.448:12:11d.559. The different operations of this scheme are explained so fully. The principles upon which it was founded are explained by Mr Law himself. By establishing a bank of a particular kind. and which would thus afford a fund capable of maintaining a much greater quantity of labour than that which had been employed about them. the common legal and market rate of those times. tallies had been at forty.171: 10s. the bank was allowed to enlarge its capital stock. established by the Revolution.} During the great re-coinage of the silver. stock to the amount of £4. would only have transferred a great part of it from prudent and profitable to imprudent and unprofitable undertakings. c. In consequence of those two calls. contributed to that excess of banking. the credit of government was as good as that of private persons. By a call of fifteen per cent. in a discourse concerning money and trade. still continue to make an impression upon many people. p. at that time regent of France.000. therefore.001. must have been very low. The Bank of England is the greatest bank of circulation in Europe. and £4.000 a-year. interest. would have more of the solid and the profitable. In pursuance of the same act. that I shall not give any account of them.000 year for the expense of management. The credit of the new government.027:17 10d. 7. and have. interest. therefore.027: 17s: 10½d. there was paid in. It at that time advanced to government the sum of £1. In 1696. by a charter under the great seal. the bank purchased of the South-sea company. the bank delivered up two millions of exchequer Bills to be cancelled. The success of this operation. which he seems to have imagined might issue paper to the amount of the whole value of all the lands in the country. and fifty.600. making in all the sum of £1. discount. advanced to government £5.171:10s.027:17:10½d.375. and which. and sixty. In 1708. c. which necessarily occasioned their discredit.. the bank had thought proper to discontinue the payment of its notes. was the opinion of the famous Mr Law. {James Postlethwaite's History of the Public Revenue. per cent.343. therefore. In pursuance of the 7th Anne. It was afterwards adopted. in pursuance of an act of parliament. in part.000.21.000 for expense of management. The idea of the possibility of multiplying paper money to almost any extent was the real foundation of what is called the Mississippi scheme. since it could borrow at six per cent. which has of late been complained of. and bank notes at twenty per cent. interest at the rate of eight per cent. without increasing in the smallest degree the capital of the country. in 1709. the most extravagant project. by the Duke of Orleans. It had at this time.375. therefore.200. which was going on at this time. or for £ 96. when it was obliged to borrow at so high an interest. In pursuance of the 8th George I. The splendid but visionary ideas which are set forth in that and some other works upon the same principles. we may believe.sober undertakings which were proportioned to their capitals. the capital of the bank amounted to £4. both in Scotland and in other places. and £4.8. the bank advanced and paid into the exchequer the sum of £400. though they might have less of the grand and the marvellous. and by another of ten per cent. in his Examination of the Political Reflections upon commerce and finances of Mr Du Tot. when he first proposed his project. by an ingraftment of £1. both of banking and stock-jobbing. in 1710.201. did not think proper to adopt it. £ 656. That the industry of Scotland languished for want of money to employ it. The parliament of Scotland. the bank capital amounted to £ 5. c.000 for an annuity of £100. dated the 27th of July 1694. and made stock.301.000 interest. and it had advanced to government the sum of £3. and with so much order and distinctness. therefore. which he published in Scotland when he first proposed his project. amounted at this time to £2. This ingraftment is said to have been for the support of public credit. which would repay with a large profit whatever had been laid out upon them. he proposed to remedy this want of money.000: and in 1722. £501. so clearly. which it had advanced upon its original annuity of £96. that perhaps the world ever saw.000. Its whole capital stock. at six per cent.204:1:9d.

Over and above the accidents to which they are exposed from the unskilfulness of the . its capital stock was increased by £ 3. the bank agreed to pay to government for the renewal of its charter £110. either to him or to his country. the bank dividend has been at five and a half per cent. all dead stock. is. upon several different occasions. The state of those two sums has continued to be the same ever since. Upon one occasion.to make this purchase. in other words.959. 10½d. very considerably. that the most judicious operations of banking can increase the industry of the country. therefore. the bank had advanced to the public £ 9. This rate of interest has gradually been reduced from eight to three per cent. by substituting paper in the room of a great part of this gold and silver. began first to exceed its capital stock. and by means of which. about £1. not only as an ordinary bank. That part of his capital which a dealer is obliged to keep by him unemployed and in ready money. enable the country to convert a great part of this dead stock into active and productive stock.000. but of Hamburgh and Holland. without any fault of its directors. or the shortness of the time. No other banking company in England can be established by act of parliament. not only of England. by providing. a great part of it in bullion. c. The stability of the bank of England is equal to that of the British government. or can consist of more than six members.000. The judicious operations of banking enable him to convert this dead stock into active and productive stock. it is said to have advanced for this purpose. or the sum for which it paid a dividend to the proprietors of bank stock.600. into stock which produces something both to himself and to his country. The gold and silver money which circulates in any country may very properly be compared to a highway. In 1746. it circulates exchequer bills.995:14:8d.375. and thereby to increase. I do not. a great part of its highways into good pastures. The gold and silver money which circulates in any country. It was upon this occasion that the sum which the bank had advanced to the public.. All that it has advanced to the public must be lost before its creditors can sustain any loss. It is a very valuable part of the capital of the country.000. suspended upon the Daedalian wings of paper money. It has continued to have an undivided capital of the same kind ever since. upon different occasions. It is not by augmenting the capital of the country. at different times. as when they travel about upon the solid ground of gold and silver. but by rendering a greater part of that capital active and productive than would otherwise be so. The judicious operations of banking. pretend to warrant either the greatness of the sum. the produce of its land and labour is annually circulated and distributed to the proper consumers. without interest or re-payment. into tools to work with. which. produces nothing. however. Upon other occasions. The dividend of the bank has varied according to the variations in the rate of the interest which it has. in 1763. however. For some years past. It likewise discounts merchants' bills. It acts. but as a great engine of state.000. It receives and pays the greater part of the annuities which are due to the creditors of the public. as it were. This sum. and its capital stock amounted only to £ 8. which are frequently not paid up till some years thereafter. which. in the same manner as the ready money of the dealer. the bank had.25. and corn fields. enable the country to convert.027 17s. it must be acknowledged. while it circulates and carries to market all the grass and corn of the country. though they may be somewhat augmented. as well as according to other circumstances. In these different operations. to overstock the circulation with paper money. advanced to the public £11. that the bank began to have an undivided capital. over and above its divided one.686. and into provisions and subsistence to work for. and has. for answering occasional demands. this great company has been reduced to the necessity of paying in sixpences.400. a sort of waggon-way through the air. into materials to work upon. or. therefore did not increase either of those two other sums. which produces nothing to the country.800. At this time.780. into stock which produces something to the country. and its divided capital had been raised by different calls and subscriptions to £ 10. supported the credit of the principal houses. when they are thus. if I may be allowed so violent a metaphor. the annual produce of its land and labour. and for which it received interest. The judicious operations of banking. as it were. its duty to the public may sometimes have obliged it. cannot be altogether so secure. The commerce and industry of the country. in one week. is so much dead stock. produces itself not a single pile of either. and it advances to government the annual amount of the land and malt taxes. so long as it remains in this situation. In pursuance of the 4th of George III. received for the money it had advanced to the public.

Before the Act of parliament which put a stop to the circulation of ten and five shilling notes. they can generally be transacted with a much smaller quantity of money. An unsuccessful war. the prince would not have wherewithal either to pay his troops. as it is carried on by wholesale. The value of the goods circulated between the different dealers never can exceed the value of those circulated between the dealers and the consumers. Paper money may be so regulated as either to confine itself very much to the circulation between the different dealers. and filled almost the whole of that circulation. so that it often returns into the hands of a dealer before the consumer has spent the fortieth part of the money. to carry it on. will get it to be received without scruple when it is issued for so small a sum as a sixpence. and the state of the country would be much more irretrievable than if the greater part of its circulation had consisted in gold and silver. That between the dealers and the consumers. A prince. requires generally a pretty large sum for every particular transaction. from which no prudence or skill of those conductors can guard them. for example. serving as the instrument of many more purchases of the one kind than of the other. When a ten pound bank note comes into the hands of a consumer. A shilling changes masters more frequently than a guinea. being often sufficient. whatever is bought by the dealers being ultimately destined to be sold to the consumers. the circulation of the dealers with one another. In the currencies of North America. In some paper currencies of Yorkshire. are at least equal in value to those of all the dealers. as much as it does at present in London. and sometimes even a very great calamity. frequently requires but very small ones. that no bank notes were issued in any part of the kingdom for a smaller sum than £5. anxious to maintain his dominions at all times in the state in which he can most easily defend them. many mean people are both enabled and encouraged to become bankers. therefore. each requires a certain stock of money. whether paper or metal. The usual instrument of commerce having lost its value. Paper money would then. on the contrary. it filled a still greater part of that circulation. the same pieces. but even against that multiplication of it which enables them to fill the greater part of the circulation of the country with it.conductors of this paper money. The circulation between the dealers. to many poor people who had received their notes in payment. and a halfpenny more frequently than a shilling. he is generally obliged to change it at the first shop where he has occasion to purchase five shillings worth of goods. and consequently of that treasure which supported the credit of the paper money. Though the annual purchases of all the consumers. Where the issuing of bank notes for such very small sums is allowed. or even for 20s. Where bank notes are issued for so small sums as 20s. a shilling. probably. yet as both are constantly going on at the same time. than in one where the greater part of it was carried on by gold and silver. Where no bank notes are circulated under £10 value. and commonly practised. no exchanges could be made but either by barter or upon credit. But small sums circulate much faster than large ones. or to furnish his magazines. or to extend itself likewise to a great part of that between the dealers and the consumers. in which the enemy got possession of the capital. of one kind or another. and the circulation between the dealers and the consumers. It were better. as in Scotland. confine itself. as it is generally carried on by retail. by a more rapid circulation. paper money confines itself very much to the circulation between the dealers. paper money extends itself to a considerable part of the circulation between dealers and consumers. would occasion a much greater confusion in a country where the whole circulation was carried on by paper. they are liable to several others. as in London. A person whose promissory note for £5. The circulation of every country may be considered as divided into two different branches. in every part of the kingdom. to the circulation between the different dealers. ought upon this account to guard not only against that excessive multiplication of paper money which ruins the very banks which issue it. may be employed sometimes in the one circulation and sometimes in the other. it was issued even for so small a sum as a sixpence. perhaps. would be rejected by every body. paper was commonly issued for so small a sum as a shilling. Though the same pieces of money. or even a halfpenny. But the frequent bankruptcies to which such beggarly bankers must be liable. where no bank . may occasion a very considerable inconveniency. All taxes having been usually paid in paper money.

is. issued by people of undoubted credit. But those exertions of the natural liberty of a few individuals. and consequently diminishing the value. Such regulations may. But as the quantity of gold and silver. to restrain a banker from issuing such notes. A paper money. was allowed to be issued. for answering occasional demands. Where paper money. there was then more paper money in the country than at present. from the circulation of ten and five shilling bank notes. is pretty much confined to the circulation between dealers and dealers. Where it extends itself to a considerable part of the circulation between dealers and consumers. Though no paper money. be considered as in some respect a violation of natural liberty. always readily paid as soon as presented. for answering occasional demands. In 1751 and 1752. £5 being. as £10 are amidst the profuse expense of London. without any condition. and in ready money. a sum which. in fact. though. no doubt. is a manifest violation of that natural liberty. The increase of paper money. is as much considered. The proportion between the price of provisions in Scotland and that in England is the same now as before the great multiplication of banking companies in Scotland. To restrain private people. to have been more abundant before the institution of those currencies. banks and bankers might still be able to relieve the greater part of those dealers from the necessity of keeping any considerable part of their stock by them unemployed. in every respect. as in Scotland. paper money does not necessarily increase the quantity of the whole currency. is a violation of natural liberty. who are his customers. little more than half the quantity of goods. it banishes gold and silver almost entirely from the country. which might endanger the security of the whole society. since the suppression of some of their paper currencies. it has been said. From the beginning of the last century to the present time. almost all the ordinary transactions of its interior commerce being thus carried on by paper. payable upon demand. exactly of the same kind with the regulations of the banking trade which are here proposed. though it will purchase. . equal in value to gold and silver money. and who bring ready money to him. and still more in North America. and is as seldom spent all at once. but to support. therefore. it may be said. The obligation of building party walls. or. Whatever is either bought or sold for such paper. as they had done when paper money filled almost the whole circulation. which is taken from the currency. The ready money which a dealer is obliged to keep by him. in order to prevent the communication of fire. in most part of the kingdom. of the whole currency. when Mr Hume published his Political Discourses. Though paper money should be pretty much confined to the circulation between dealers and dealers. The suppression of ten and five shilling bank notes. They might still be able to give the utmost assistance which banks and bankers can with propriety give to traders of every kind. provisions never were cheaper in Scotland than in 1759. are. fully as cheap in England as in France. and scarce any in France. but for such sums as would confine it pretty much to the circulation between dealers and dealers. of the most free. He has no occasion to keep any by him for the circulation between himself and the consumers. consisting in bank notes. somewhat relieved the scarcity of gold and silver in Scotland. yet banks and bankers might still be able to give nearly the same assistance to the industry and commerce of the country. is destined altogether for the circulation between himself and other dealers of whom he buys goods. and ought to be. whether great or small. by augmenting the quantity. perhaps. must necessarily be bought or sold as cheap as it could have been for gold and silver. as at London. restrained by the laws of all governments. which it is the proper business of law not to infringe. when they themselves are willing to receive them. and the suppression of twenty shilling notes will probably relieve it still more. Corn is. Those metals are said to have become more abundant in America. and. is always equal to the quantity of paper which is added to it. when all his neighbours are willing to accept of them. likewise. yet partly by discounting real bills of exchange. as well as or the most despotical. from receiving in payment the promissory notes of a banker for any sum. though there is a great deal of paper money in England. instead of taking any from him. since gold and silver money can at anytime be had for it. upon most occasions. there is always plenty of gold and silver. and partly by lending upon cash-accounts. it is to be observed. necessarily augments the money price of commodities.notes are issued under £10 value. They are said.

against Dumfries. owing. to accept of this as full payment for a debt of £100. been attempted by the government of any other country which pretended to be free. But at Carlisle.and soon after the great multiplication of paper money in Scotland. there was a very sensible rise in the price of provisions. though this town is not thirty miles distant from Carlisle. perhaps. was an act of such violent injustice. according as the difficulty or uncertainty of obtaining immediate payment was supposed to be greater or less. or. During the continuance of this abuse (which prevailed chiefly in 1762. but much less. because it may direct the courts of justice to discharge the debtor who has made that tender. unless such demanders would content themselves with a part of what they demanded. while the exchange between London and Carlisle was at par. which this uncertainty of payment necessarily degraded below value of gold and silver money. of which the immediate payment depended. declared all such clauses unlawful. in a country where interest is at six per cent. actually paid down in ready money. value. but no positive law can oblige a person who sells goods. accordingly. with a paper money. a regulation equally tyrannical. effectual. consisting in promissory notes. a legal tender of payment for the full value for which it was issued. and 1764). It bears the evident marks of having originally been. not in bank notes payable to the bearer on demand. of which the payment was not exigible till several years after it was issued. therefore. to accept of a shilling as . bills were paid in gold and silver. or according to the greater or less distance of time at which payment was exigible. in the mean time. A positive law may render a shilling a legal tender for a guinea. that between London and Dumfries would sometimes be four per cent. that the holder of the note should bring the change of a guinea to the person who issued it. Such a paper money would. below the value of that coin. or upon a condition which the holder of the notes might not always have it in his power to fulfil. fall more or less below the value of gold and silver. by enacting penalties against all those who made any difference in the price of their goods when they sold them for a colony paper. sometimes depended upon the condition. they declared it to be. at that time. for example. To oblige a creditor. and sometimes threatened those who demanded gold and silver in exchange for a considerable number of their notes. than that which it was meant to support. in 1722. either upon the good will of those who issued them. under 20s. In the paper currencies of Yorkshire. but in a government paper. no doubt. suppressed likewise this optional clause. in the option of the directors. £100. and when they sold them for gold and silver. and the uncertainty of getting these bank notes exchanged for gold and silver coin. and though the colony governments paid no interest to the holders of this paper. what the honest and downright Doctor Douglas assures us it was. what they called an optional clause. indeed. together with the legal interest for the said six months. The government of Pennsylvania. payable to the bearer. and not to the multiplication of paper money. 1763. all promissory notes. Some years ago the different banking companies of Scotland were in the practice of inserting into their bank notes. either as soon as the note should be presented. a condition which the holders of such notes might frequently find it very difficult to fulfil. The directors of some of those banks sometimes took advantage of this optional clause. in any respect. and which. It would be otherwise. a scheme of fraudulent debtors to cheat their creditors. or to what the course of trade and remittances might happen to make it. the payment of so small a sum as 6d. and in fact rendered it. The promissory notes of those banking companies constituted. upon their first emission of paper money. indeed. and who is at liberty to sell or not to sell as he pleases. six months after such presentment. by which they promised payment to the bearer. had thus degraded them four per cent. is worth little more than £40 ready money. to render their paper of equal value with gold and silver. payable fifteen years hence. that they would take advantage of it. in the same manner as in Scotland. the far greater part of the currency of Scotland. whereas at Dumfries they were paid in Scotch bank notes. bore no interest. as has scarce. and suppressed. But allowing the colony security to be perfectly good. and which must have degraded this currency below the value of gold and silver money. to the badness of the seasons. An act of parliament.. The same act of parliament which suppressed ten and five shilling bank notes. The paper currencies of North America consisted. or of which the payment was not exigible till after a certain number of years. pretended. probably. and thereby restored the exchange between England and Scotland to its natural rate.

might thereby give a certain value to this paper money. which happen at any particular time to supply the great market of the commercial world with those metals. is in a great measure chimerical. according as the quantity of paper issued was more or less above what could be employed in the payment of the taxes of the particular colony which issued it. for the full value for which it had been issued. or occasion equal quantities of them to exchange for a smaller quantity of goods of any other kind. This account of the bank of Amsterdam. from the real or supposed distance of the term of its final discharge and redemption. A paper currency which falls below the value of gold and silver coin. The pretence for raising the denomination of the coin was to prevent the exportation of gold and silver. however. and in others to so great a sum as £1100 currency. colony currency. and afterwards for 6s:8d. It was found. Pennsylvania was always more moderate in its emissions of paper money than any other of our colonies. therefore. it appeared. however. and when that currency was turned into paper. or sell for somewhat more in the market than the quantity of gold or silver currency for which it was issued. sterling to pass in the colonies for 6s:3d. . which declared. who should enact that a certain proportion of his taxes should be paid in a paper money of a certain kind. was more than thirty per cent. and in the distance and probability of the term of its final discharge and redemption. by the course of exchange with Great Britain. as they pretend. that no paper currency to be emitted there in time coming. not upon the nature and quantity of any particular paper money. and had. the bank money sells for a premium. ordered 5s. they say. but upon the richness or poverty of the mines. in some of the colonies. This additional value was greater or less. it will appear hereafter. is said never to have sunk below the value of the gold and silver which was current in the colony before the first emission of its paper money. that is. that the price of all goods from the mother country rose exactly in proportion as they raised the denomination of their coin. the demand for it might be such as to make it even bear a premium. or for the superiority of bank money over current money. Before that emission. it was seldom much more than thirty per cent. It is upon this account. they allege. does not thereby sink the value of those metals. the colony had raised the denomination of its coin. It depends upon the proportion between the quantity of labour which is necessary in order to bring a certain quantity of gold and silver to market. even though the term of its final discharge and redemption should depend altogether upon the will of the prince. depends in all cases. Its paper currency. Some people account in this manner for what is called the agio of the bank of Amsterdam. by a transfer in the books of the bank. accordingly. to £130. should be a legal tender of payment. by act of assembly. could be more equitable than the act of parliament. by making equal quantities of those metals pass for greater sums in the colony than they did in the mother country. are careful to keep the whole quantity of bank money always below what this use occasions a demand for. below that value. therefore. or bears an agio of four or five per cent. A prince. below the value of £1 sterling. that £100 sterling was occasionally considered as equivalent. it necessarily derived from this use some additional value. If the bank which issued this paper was careful to keep the quantity of it always somewhat below what could easily be employed in this manner.equivalent to a guinea in the price of them. even when that currency was gold and silver. It was in all the colonies very much above what could be employed in this manner. and the directors of the bank. over and above what it would have had.. this difference in the value arising from the difference in the quantity of paper emitted in the different colonies. so that their gold and silver were exported as fast as ever. A pound. Notwithstanding any regulation of this kind. cannot be taken out of the bank at the will of the owner. The proportion between the value of gold and silver and that of goods of any other kind. above the same nominal sum of the gold and silver currency of the country. No law. and that which is necessary in order to bring thither a certain quantity of any other sort of goods. so unjustly complained of in the colonies. The greater part of foreign bills of exchange must be paid in bank money. though this bank money. which may be current in any particular country. The paper of each colony being received in the payment of the provincial taxes.

if any branch of trade. It restrains the circulation of each particular company within a narrower circle. or any division of labour. By dividing the whole circulation into a greater number of parts. lest their rivals should carry them away. in the course of things. becomes of less consequence to the public. be advantageous to the public. the freer and more general the competition. It obliges all of them to be more circumspect in their conduct. increases the security of the public. . instead of diminishing. be rendered in all other respects perfectly free. an accident which. or notes payable to the bearer. which the rivalship of so many competitors is always ready to bring upon them. it will always be the more so. the failure of any one company. In general. too. their trade may.If bankers are restrained from issuing any circulating bank notes. by not extending their currency beyond its due proportion to their cash. and reduces their circulating notes to a smaller number. obliges all bankers to be more liberal in their dealings with their customers. must sometimes happen. The late multiplication of banking companies in both parts of the united kingdom. and. and if they are subjected to the obligation of an immediate and unconditional payment of such bank notes as soon as presented. This free competition. an event by which many people have been much alarmed. with safety to the public. to guard themselves against those malicious runs. for less than a certain sum.

.

the effect of their labour this year. the more in the one case. {Some French authors of great learning and ingenuity have used those words in a different sense. how honourable. The labour of the latter. I shall endeavour to shew that their sense is an improper one. yet when it first comes either from the ground. etc. Though the whole annual produce of the land and labour of every country is no doubt ultimately destined for supplying the consumption of its inhabitants. can never be infinite. unproductive labour. and for which an equal quantity of labour could afterwards be procured. is. OR OF PRODUCTIVE AND UNPRODUCTIVE LABOUR. on the contrary. Though the manufacturer has his wages advanced to him by his master.} Thus the labour of a manufacturer adds generally to the value of the materials which he works upon. that of his own maintenance. players. together with a profit. unproductive of any value. for which an equal quantity of service could afterwards be procured. or from the hands of the productive labourers. The labour of the meanest of these has a certain value. In the last chapter of the fourth book. with all the officers both of justice and war who serve under him. as a smaller or greater proportion of it is in any one year employed in maintaining unproductive hands. lawyers. The former as it produces a value. men of letters of all kinds. physicians. and defence. churchmen. It is. buffoons. it naturally divides itself into two parts. the value of those wages being generally restored. They are the servants of the public. what is the same thing. regulated by the very same principles which regulate that of every other sort of labour. therefore. OF THE ACCUMULATION OF CAPITAL. he grows poor by maintaining a multitude or menial servants. upon some other occasion. has its value. may be called productive. or vendible commodity. which endures after that labour is past.CHAPTER III. being the effect of productive labour. like that of menial servants. to be employed. the whole annual produce. opera-singers. and are maintained by a part of the annual produce of the industry of other people. musicians. and of his master's profit. But the labour of the manufacturer fixes and realizes itself in some particular subject or vendible commodity. The protection. According. and seldom leave any trace of value behind them. for example. but must have certain limits. will remain for the productive. A man grows rich by employing a multitude of manufacturers. produces nothing for which an equal quantity of service can afterwards be procured. as it were. on the contrary. His services generally perish in the very instant of their performance. The labour of a menial servant. will not purchase its protection. and some of the most frivolous professions. The labour of the menial servant. does not fix or realize itself in any particular subject or vendible commodity. adds to the value of nothing. or how necessary soever. and those who do not labour at all. The sovereign. and that of the noblest and most useful. One of them. the harangue of the orator. There is one sort of labour which adds to the value of the subject upon which it is bestowed. he in reality costs him no expense. the latter. for the year to come. and the next year's produce will be greater or smaller accordingly. are unproductive labourers. produces nothing which could afterwards purchase or procure an equal quantity of labour. or the tune of the musician. can afterwards. put into motion a quantity of labour equal to that which had originally produced it. or. Like the declamation of the actor. security. and deserves its reward as well as that of the former. of the commonwealth. Their service. and the less in the other. the work of all of them perishes in the very instant of its production. This produce. the price of that subject. if necessary. which lasts for some time at least after that labour is past. the whole army and navy. In the same class must be ranked. in the first place. and does not fix or realize itself in any permanent subject. some both of the gravest and most important. a certain quantity of labour stocked and stored up. in the improved value of the subject upon which his labour is bestowed. opera-dancers. That subject. however. if necessary. and frequently the largest. security. how useful. are all equally maintained by the annual produce of the land and labour of the country. how great soever. But the maintenance of a menial servant never is restored. The labour of some of the most respectable orders in the society is. and for procuring a revenue to them. and defence. if we except the spontaneous productions of the earth. Both productive and unproductive labourers. destined . there is another which has no such effect.

These are the two sorts of revenue of which the owners have generally most to spare. This proportion is very different in rich from what it is in poor countries. by that part which. either as rent or as profit. It is his spare revenue only. therefore. he always expects it to be replaced to him with a profit. as soon as it comes either from the ground. in the same manner. which. is destined for replacing the capital of the rich and independent farmer. which had been originally destined to replace a capital. either as the rent of land. They might both maintain indifferently. of the produce of land. Of the produce of a great manufactory. the smallness of their contribution. however. in some measure. either as profit or as rent. of which productive labourers have seldom a great deal. and thus constitutes a revenue both to the owner of this capital. frequently the largest. before he can employ any part of them in this manner. if his wages are considerable. the other for constituting a revenue either to the owner of this capital. by that part of the annual produce which is originally destined for constituting a revenue to some particular persons. too. that part is from that moment withdrawn from his capital. or to some other person. be considered as a part . replaces the capital of the undertaker of the work. a very small portion of the produce was sufficient to replace the capital employed in cultivation. by the employment of his revenue. indeed. the other pays his profit. to have some predilection for the latter. may be employed in maintaining indifferently either productive or unproductive hands. one part. first. Thus. one part replaces the capital of the farmer. and finished work. The expense of a great lord feeds generally more idle than industrious people The rich merchant. depends very much in every country upon the proportion between that part of the annual produce. They seem. portion of the produce of the land. and those who do not labour at all. during the prevalency of the feudal government. They generally have some. yet when it comes into their hands. It consisted commonly in a few wretched cattle. The workman must have earned his wages by work done. as the rent of his land. But anciently. or as the profits of stock. the other pays his profit and the rent of the landlord. is generally but a small one. Whenever he employs any part of it in maintaining unproductive hands of any kind. either. Thus. and in the payment of taxes. more honourable and useful. the other for paying his profits. and placed in his stock reserved for immediate consumption. It pays the wages of productive labour only. are all maintained by revenue. as the profit of his stock. either productive or unproductive hands. He employs it. as the profits of his stock. it constitutes a revenue to them. is destined for replacing a capital. the greatness of their number may compensate. and that always the largest. No part of the annual produce. materials. maintained altogether by the spontaneous produce of uncultivated land. a very large. but even the common workman. between the productive and unproductive hands. and so contribute his share towards maintaining one set of unproductive labourers. That part of the annual produce of the land and labour of any country which replaces a capital. not only the great landlord or the rich merchant. and that which is destined for constituting a revenue. or he may pay some taxes. or all that it could put into motion in the way in which it was employed. yet by his expense. and to some other person as the rent of his land. and thus help to maintain another set. and for maintaining productive labourers only. but equally unproductive. or from the hands of the productive labourers. Unproductive labourers. though with his capital he maintains industrious people only. the principal sources from which unproductive hands derive their subsistence. till after it has put into motion its full complement of productive labour.for replacing a capital. and after having served in the function of a capital to him. at present. and which might. he feeds commonly the very same sort as the great lord. therefore. or for renewing the provisions. may maintain indifferently either productive or unproductive hands. in the opulent countries of Europe. Whatever part of his stock a man employs as a capital. The proportion. and thus constitutes a revenue to the owner of this capital. or he may sometimes go to a play or a puppet-show. may maintain a menial servant. therefore. which had been withdrawn from a capital. however. in maintaining productive hands only. whatever part of it is over and above their necessary subsistence. or. That which is immediately destined for constituting a revenue. is ever directed towards maintaining unproductive hands. therefore. never is immediately employed to maintain any but productive hands. Thus. however. that is. though originally destined for replacing a capital. secondly. That part. and the rent of the landlord. The rent of land and the profits of stock are everywhere.

The great trade of Rouen and Bourdeaux seems to be altogether the effect of their situation. whose persons and effects were equally his property. however. rent. The rate of interest was nowhere less than ten per cent. they are in general industrious. as in many English. the entrepot of the wines which grow upon the banks of the Garronne. The rent of land. in the improved parts of Europe. In the other parliament towns of France. must have yielded very large profits. and this third or fourth part of the annual produce is. These. they are in general idle. All the rest of the produce properly belonged to him too. and was by him advanced to the occupiers of the land. it seems. and Fontainbleau. than to work for nothing. Those who were not bond-men were tenants at will. and of those who come to plead before them. however. is not only much greater in rich than in poor countries. as soon as it comes either from the ground. are in general idle and poor. In mercantile and manufacturing towns. have generally a predilection for the latter. and though the rent which they paid was often nominally little more than a quit-rent. it is because the stock is much greater. where the inferior ranks of people are chiefly maintained by the employment of capital. than they were two or three centuries ago. great capitals are at present employed in trade and manufactures. sometimes not a fourth part of the whole produce of the land. At present. Such advantageous situations necessarily attract a great capital by the great employment which they afford it. because. has been tripled and quadrupled since those ancient times. the little trade that was stirring. it is so low as four. If you except Rouen and Bourdeaux. in all the improved parts of the country. the share of the landlord seldom exceeds a third. in the present times. says the proverb. or from the maritime provinces of France. Though they lived at a distance from his house. the profits are generally much less. That part of the annual produce. and which seems to produce the wine fittest for exportation. there is little trade or industry in any of the parliament towns of France. In those towns which are principally supported by the constant or occasional residence of a court. for the consumption of the great city of Paris. and in some of the most improved. and in which the inferior ranks of people are chiefly maintained by the spending of revenue. and two per cent. The funds destined for the maintenance of productive labour are not only much greater in the former than in the latter.. Versailles. but bears a much greater proportion to that which is immediately destined for constituting a revenue either as rent or as profit. it really amounted to the whole produce of the land. too. Bourdeaux is. Though that part of the revenue of the inhabitants which is derived from the profits of stock. The proportion between those different funds necessarily determines in every country the general character of the inhabitants as to industry or idleness. In the opulent countries of Europe. the rate of interest. they were equally dependent upon him as his retainers who lived in it. In the present state of Europe. But the whole produce of the land undoubtedly belongs to him. three or four times greater than the whole had been before. required but very small capitals. and the few homely and coarse manufactures that were carried on. is destined for replacing a capital. and thriving. being chiefly maintained by the expense of the members of the courts of justice. sober. but bear a much greater proportion to those which. We are more industrious than our forefathers. Compeigne. or from the hands of the productive labourers. or as profit upon this paltry capital. to play for nothing. dissolute. It is better. is nowhere higher than six per cent. diminishes in proportion to the produce of the land. very little more . It generally. as at Rome.of that spontaneous produce. and of the rivers which run into it. In the ancient state. though it increases in proportion to the extent. belonged to the landlord. and poor. in the same manner. in proportion to the stock. is always much greater in rich than in poor countries. the funds destined for the maintenance of industry are much greater in proportion to those which are likely to be employed in the maintenance of idleness. either as rent for his land. or best suited to the taste of foreign nations. The occupiers of land were generally bond-men. Their lord could at all times command their labour in peace and their service in war. and their profits must have been sufficient to afford this great interest. though they may be employed to maintain either productive or unproductive hands. and in most Dutch towns. who can dispose of the labour and service of all those whom it maintains. which. three. Our ancestors were idle for want of a sufficient encouragement to industry. therefore. In the progress of improvement. Rouen is necessarily the entrepot of almost all the goods which are brought either from foreign countries. one of the richest wine countries in the world. and the employment of this capital is the cause of the industry of those two cities. and the inferior ranks of people.

The same thing may be said of Paris. Every increase or diminution of capital. Madrid. still continues to be spent in it. wherever revenue. after having made considerable progress in manufactures. that is. or enables some other person to do so. therefore. it has sometimes been observed. A considerable revenue. the industry of those who ought to be maintained by the employment of capital. Of those three cities. can be increased only in the same manner. and either employs it himself in maintaining an additional number of productive hands. It still continues. it is much inferior to Glasgow. The proportion between capital and revenue. by increasing the fund which is destined for the maintenance of productive hands. which gives an additional value to the annual produce. in consequence of a great lord's having taken up his residence in their neighbourhood. it is immediately employed as a capital. and Copenhagen. and its own consumption is the principal object of all the trade which it carries on. and renders it less advantageous to employ a capital there than in other places. as. the only three cities in Europe. In trade and industry. by lending it to him for an interest. who leave nothing behind them in return for their consumption. that is. What is annually saved. It puts into motion an additional quantity of industry. therefore. consumed by idle guests and menial servants. The situation of all the three is extremely advantageous. and nearly in the same time too. seems everywhere to regulate the proportion between industry and idleness Wherever capital predominates. manufacturers. and naturally fits them to be the entrepots of a great part of the goods destined for the consumption of distant places. little more than the smallest capital which can be employed in them. There was little trade or industry in Edinburgh before the Union. indeed. therefore. therefore. but Paris itself is the principal market of all the manufactures established at Paris. of the boards of customs and excise. of which the inhabitants are chiefly maintained by the employment of capital. is probably more difficult than in one in which the inferior ranks of people have no other maintenance but what they derive from the employment of such a capital. Paris is by far the most industrious. is as regularly consumed as what is annually spent. to be the residence of the principal courts of justice in Scotland. Parsimony. or as cities which trade not only for their own consumption. That portion which he annually saves. naturally tends to increase or diminish the real quantity of industry. The inhabitants of a large village. Parsimony. but whatever industry might acquire. and diminished by prodigality and misconduct. which are both the constant residence of a court. and consequently the exchangeable value of the annual produce of the land and labour of the country. to employ with advantage a capital for any other purpose than for supplying the consumption of that city. is the immediate cause of the increase of capital. Industry. when it ceased to be the necessary residence of the principal nobility and gentry of Scotland. etc. It tends. London. idleness. however. it became a city of some trade and industry. In a city where a great revenue is spent. Capitals are increased by parsimony. the real wealth and revenue of all its inhabitants. and Vienna. for a share of the profits. Lisbon.capital seems to be employed than what is necessary for supplying their own consumption. perhaps. provides the subject which parsimony accumulates. but for that of other cities and countries. to increase the exchangeable value of the annual produce of the land and labour of the country. for the sake of the profit. is consumed in the same manner. and can at the same time be considered as trading cities. are. the capital would never be the greater. corrupts. is. and nearly in the same time too: but it is consumed by a different set of people. it is probable. the number of productive hands. That portion of his revenue which a rich man annually spends. and not industry. which is the same with that of all the individuals who compose it. so the capital of a society. and . When the Scotch parliament was no longer to be assembled in it. Whatever a person saves from his revenue he adds to his capital. tends to increase the number of those hands whose labour adds to the value of the subject upon winch it is bestowed. industry prevails. As the capital of an individual can be increased only by what he saves from his annual revenue or his annual gains. if parsimony did not save and store up. The idleness of the greater part of the people who are maintained by the expense of revenue. have become idle and poor. in most cases. but by a different set of people: by labourers.

by any trust-right or deed of mortmain. the same quantity of money would remain in the country as before. By what a frugal man annually saves. would tend not only to beggar himself. The consumption is the same. not being in foreign goods. The interest of whoever possesses it requires that it should be employed. be sent abroad. as that part is. the full value of their consumption. however. The same quantity of money would. we shall suppose. in this case. The same quantity of money. clothing. clothing. for the sake of the profit. provisions. continue for some time to add something to the annual consumption of the country beyond the value of its own annual produce. Every year. By saving a part of it. But the money which. by a very powerful principle. Its annual exportation will. a perpetual fund for the maintenance of an equal number in all times to come. the conduct of every prodigal. which can be annually employed in any country. By means of it. There would have been two values instead of one.artificers. had been distributed among productive hands. His revenue. and no part of it in foreign commodities. as it were. but like the founder of a public work-house he establishes. and not occasioning any exportation of gold and silver. as it were. therefore. he necessarily diminishes. must diminish as the value of that produce diminishes. If the prodigality of some were not compensated by the frugality of others. is not always guarded by any positive law. besides. employed in maintaining unproductive hands. which may be of some use at home. must be determined by the value of the consumable goods annually circulated within it. are necessarily reserved for the latter. which may be purchased with it. and . It is always guarded. for that of the ensuing year. the real wealth and revenue of its inhabitants. in spite of all laws and prohibitions. and employed in purchasing consumable goods. he pays the wages of idleness with those funds which the frugality of his forefathers had. By diminishing the funds destined for the employment of productive labour. by this annual diminution of produce. are bought and sold. consecrated to the maintenance of industry. can not long remain in any country in which the value of the annual produce diminishes. its effect upon the productive funds of the society would still be the same. and. But if the quantity of food and clothing which were thus consumed by unproductive. Though the expense of the prodigal should be altogether in home made. but having no employment at home. together with a profit. The perpetual allotment and destination of this fund. the plain and evident interest of every individual to whom any share of it shall ever belong. indeed. so far as it depends upon him. the food. is annually thrown out of domestic circulation. which the whole could have purchased. besides. These must consist. the value of the annual produce of the land and labour of the whole country. will not be allowed to lie idle. or in something which had been purchased with some part of that produce. but the consumers are different. he encroaches upon his capital. Had he spent the whole. The sole use of money is to circulate consumable goods. therefore. This expense. by feeding the idle with the bread of the industrious. it will. No part of it can ever afterwards be employed to maintain any but productive hands. Like him who perverts the revenues of some pious foundation to profane purposes. consequently. would have been distributed among the former set of people. with a profit. there would still be some diminution in what would otherwise have been the value of the annual produce of the land and labour of the country. and distributed to their proper consumers. he not only affords maintenance to an additional number of productive hands. in this manner. and along with it the quantity of money which can be employed in circulating them. either by himself or by some other person. is paid him in money. equally have remained in the country. and lodging. materials. What in the days of its prosperity had been saved from that annual produce. immediately employed as a capital. and there would. the quantity of that labour which adds a value to the subject upon which it is bestowed. have been a reproduction of an equal value of consumable goods. who reproduce. but to impoverish his country. The quantity of money. they would have reproduced. Every year there would still be a certain quantity of food and clothing. indeed. either in the immediate produce of the land and labour of the country itself. The prodigal perverts it in this manner: By not confining his expense within his income. which ought to have maintained productive. it may be said. without an evident loss to the person who thus perverts it from its proper destination. Their value. therefore. and finished work. the value of their annual consumption. and lodging. the food.

Gold and silver are purchased everywhere in the same manner. The quantity of money. as plain reason seems to dictate. comes with us from the womb. for some little time. yet as. perhaps. will never belong without the quantity of those metals which it has occasion for. a desire which. or in the quantity of the precious metals which circulate within it. An augmentation of fortune is the means by which the greater part of men propose and wish to better their condition. and every frugal man a public benefactor. the profusion or imprudence of some being always more than compensated by the frugality and good conduct of others. A part of the increased produce. It is the means the most vulgar and the most obvious. Such are the people who compose a numerous and splendid . therefore. The food. will require a greater quantity of money to circulate them. The whole. Bankruptcy is. perhaps. alleviate the misery of that declension. Though the principle of expense. The country which has this price to pay. tends in the same manner to diminish the funds destined for the maintenance of productive labour. employed in maintaining unproductive hands. therefore. as vulgar prejudices suppose. the number of prudent and successful undertakings is everywhere much greater than that of injudicious and unsuccessful ones. in either view of the matter. or manufactures. is the desire of bettering our condition. the revenue and maintenance. is in general only momentary and occasional. the unhappy men who fall into this misfortune. of all those whose labour or stock is employed in bringing them from the mine to the market. that the circumstances of a great nation can be much affected either by the prodigality or misconduct of individuals. perhaps. the additional quantity of gold and silver necessary for circulating the rest. be the effect. than one in a thousand. But the principle which prompts to save. indeed. It can seldom happen. In every such project. Whatever. which. on the contrary. every prodigal appears to be a public enemy. therefore. though generally calm and dispassionate. we may imagine the real wealth and revenue of a country to consist in. The effects of misconduct are often the same as those of prodigality. The value of the consumable goods annually circulated within the society being greater. not much more. Some. is to save and accumulate some part of what they acquire. in most countries. After all our complaints of the frequency of bankruptcies. though sometimes violent and very difficult to be restrained. The increase of those metals will. by the injudicious manner in which they are employed. With regard to profusion. in which any man is so perfectly and completely satisfied with his situation. the principle which prompts to expense is the passion for present enjoyment. The exportation of gold and silver is. not the cause. therefore. taking the whole course of their life at an average. though they sometimes are by public prodigality and misconduct. must in every country naturally increase as the value of the annual produce increases. Every injudicious and unsuccessful project in agriculture. the principle of frugality seems not only to predominate. as to be without any wish of alteration or improvement of any kind. wherever it is to be had. as some do not avoid the gallows. and no country will ever long retain a quantity which it has no occasion for. do not avoid it. fisheries. to support its consumption in adversity. In the whole interval which separates those two moments. and never leaves us till we go into the grave. and lodging. a single instance. make but a very small part of the whole number engaged in trade. are sufficiently careful to avoid it. mines. With regard to misconduct. Great nations are never impoverished by private. either regularly and annually. indeed. they do not reproduce the full value of their consumption. clothing. or almost the whole public revenue is.employed in purchasing gold and silver. is the price paid for them in Peru as well as in England. will contribute. there must always be some diminution in what would otherwise have been the productive funds of the society. or upon some extraordinary occasion. for some little time. of the public prosperity. and in some men upon almost all occasions. in this case. but the effect of its declension. in this case. and all other sorts of business. but to predominate very greatly. trade. and the most likely way of augmenting their fortune. though the capital is consumed by productive hands only. yet in the greater part of men. the greatest and most humiliating calamity which can befal an innocent man. not the cause. whether in the value of the annual produce of its land and labour. The greater part of men. prevails in almost all men upon some occasions. there is scarce. will naturally be employed in purchasing. and may even.

its manufactures more numerous and more flourishing. and pretending to demonstrate that the wealth of the nation was fast declining. with such abilities as to gain some authority with the public. that of the third year will be still less than that of the second. To form a right judgment of it. that the country was depopulated. and if the same disorder should continue. not only the private prodigality and misconduct of individuals. at the restoration of Charles II. the state of a nation at two different periods. things which sometimes happen. This frugality and good conduct. but the public extravagance of government. doubt of this. upon most occasions. than had been taken from it either by the private misconduct of others. as not to leave a sufficiency for maintaining the productive labourers. and uninterrupted effort of every man to better his condition. requires a much greater capital than where every man is occasionally employed in every different part of the work. is. Though at present few people. The progress is frequently so gradual. but in consequence either of some addition and improvement to those machines and instruments which facilitate and abridge labour. it appears from experience. Like the unknown principle of animal life. is certainly much greater than it was a little more than a century ago. to an unnecessary number. in spite not only of the disease. When multiplied. there frequently arises a suspicion. that all the frugality and good conduct of individuals may not be able to compensate the waste and degradation of produce occasioned by this violent and forced encroachment. but of the absurd prescriptions of the doctor. the improvement is not only not sensible. I believe. will be less than that of the foregoing. therefore. and of the greatest errors of administration. for example. upon the funds destined for the maintenance of productive labour. Those unproductive hands who should be maintained by a part only of the spare revenue of the people. but by increasing either the number of its productive labourers. indeed. or the productive powers of those labourers who had before been employed. The annual produce of the land and labour of England. an additional capital is almost always required. is frequently powerful enough to maintain the natural progress of things towards improvement. But we shall find this to have been the case of almost all nations.court. even while the war lasts. from the declension either of certain branches of industry. great fleets and armies. even of those who have not enjoyed the most prudent and parsimonious governments. and its trade more extensive. sufficient to compensate. we must compare the state of the country at periods somewhat distant from one another. therefore. a great ecclesiastical establishment. and trade undone. that its lands are better cultivated. or make a more proper distribution of employment among them. It is by means of an additional capital only. manufactures decaying. it is evident. the principle from which public and national. The uniform. though the country in general is in great prosperity. at near periods. are all maintained by the produce of other men's labour. yet during this period five years have seldom passed away. The productive powers of the same number of labourers cannot be increased. In either case. The number of its productive labourers. When the work to be done consists of a number of parts. written. therefore. in spite both of the extravagance of government. that. as they themselves produce nothing. and find that the annual produce of its land and labour is evidently greater at the latter than at the former. or of more proper division and distribution of employment. too. in all tolerably quiet and peaceable times. and in time of war acquire nothing which can compensate the expense of maintaining them. but. who should reproduce it next year. as well as private opulence is originally derived. The next year's produce. to keep every man constantly employed in one way. it frequently restores health and vigour to the constitution. or of certain districts of the country. that the undertaker of any work can either provide his workmen with better machinery. constant. or by the public extravagance of government. they may in a particular year consume so great a share of this produce. we may be assured that its capital must have increased during the interval between those two periods. can never be much increased. who in time of peace produce nothing. or of the funds destined for maintaining them. Such people. that the riches and industry of the whole are decaying. but in consequence of an increase of capital. agriculture neglected. the wretched offspring of . in which some book or pamphlet has not been published. and that more must have been added to it by the good conduct of some. may consume so great a share of their whole revenue. however. and thereby oblige so great a number to encroach upon their capitals. Nor have these publications been all party pamphlets. The annual produce of the land and labour of any nation can be increased in its value by no other means. When we compare.

the war in Ireland. could they have been foreseen. more lands would have been improved. will do so in all future times. great perversion of the annual produce from maintaining productive to maintain unproductive hands. They are themselves always. which has maintained the progress of England towards opulence and improvement in almost all former times. not only the impoverishment. more manufactures would have been established. and to restrain their expense. many expensive and unnecessary wars. the greatest spendthrifts in the society. either by sumptuary laws.000. was certainly much greater at the Restoration than we can suppose it to have been about a hundred years before. it is to be hoped. it has not been able to stop it. since the Revolution. as it certainly did. than during the confusion of the Saxon heptarchy. in the happiest and most fortunate period of them all. therefore.000 of debt. too. it is not perhaps very easy even to imagine. If their own extravagance does not ruin the state. and those which had been established before would have been more extended. has. therefore.falsehood and venality. The annual produce of its land and labour is undoubtedly much greater at present than it was either at the Restoration or at the Revolution. More houses would have been built. that of the subject never will. As frugality increases. but to have left the country. the country was much more advanced in improvement. by their universal. which. the disorders of the revolution. it was certainly a more improved country than at the invasion of Julius Caesar. the natural accumulation of riches. however. continual. probably. England. The annual produce of the land and labour of England. and for no other reason but because they believed it. so that the whole cannot be computed at less than £200. the public capital. in kings and ministers to pretend to watch over the economy of private people. and without any exception. so parsimony has at no time been the characteristic virtue of its inhabitants. at the end of the period. again. the greater part of it would naturally have been employed in maintaining productive hands. in maintaining an extraordinary number of unproductive hands. It is the highest impertinence and presumption. and they may safely trust private people with theirs. Many of them have been written by very candid and very intelligent people. It is this effort. such absolute waste and destruction of stock. protected by law. In the midst of all the exactions of government. not only to retard.000. at the accession of Elizabeth. there was not only much private and public profusion. however. So great a share of the annual produce of the land and labour of the country. whose labour would have replaced. poorer than at the beginning. At this period. in the confusion of civil discord. Thus. and 1756. in a better condition than it had been at the Norman conquest: and at the Norman conquest. Even then it was. this capital has been silently and gradually accumulated by the private frugality and good conduct of individuals. the whole value of their consumption. Even at this early period. In each of those periods. the two Dutch wars. as it has never been blessed with a very parsimonious government. or by prohibiting the importation of foreign luxuries. and to what height the real wealth and revenue of the country might by this time have been raised. But had not those wars given this particular direction to so large a capital. must likewise be much greater. than it had been about a century before. The capital. who wrote nothing but what they believed. and uninterrupted effort to better their own condition. the nation has contracted more than £145. towards the close of the dissensions between the houses of York and Lancaster. But though the profusion of government must undoubtedly have retarded the natural progress of England towards wealth and improvement. but the total ruin of the country would have been expected from them? The fire and the plague of London.000. In the course of the four French wars. and allowed by liberty to exert itself in the manner that is most advantageous. and prodigality diminishes. The value of the annual produce of the land and labour of the country would have been considerably increased by it every year. the four expensive French wars of 1688. when its inhabitants were nearly in the same state with the savages in North America. with a profit. we have all reason to believe. annually employed in cultivating this land. and every years increase would have augmented still more that of the following year. as might be supposed. been employed upon different occasions. but sometimes. 1742. and which. together with the two rebellions of 1715 and 1745. so the conduct of those . over and above all the other extraordinary annual expense which they occasioned. and in maintaining this labour. how many disorders and misfortunes have occurred. Let them look well after their own expense. and those which had been improved before would have been better cultivated. 1701. that which has passed since the Restoration.

and in which one day's expense can neither alleviate nor support that of another. The expense. so is it likewise to that of a nation. in useful or ornamental buildings. for example. which. and which are supposed to imply some acknowledgment of preceding bad conduct. or. are changes which cannot escape the observation of his neighbours. in amassing a great wardrobe of fine clothes. In some ancient cities. are frequently both an ornament and an honour. was. and though the genius which planned them seems to be extinguished. What was formerly a seat of the family of Seymour. as he chooses. as a present fit for a sovereign to make to a sovereign. or it may be spent in things mere durable. The marriage-bed of James I. In countries which have long been rich. To reduce very much the number of his servants. however. They are able to purchase them when their superiors grow weary of them. Noble palaces. or have gone somewhat to decay. the furniture. till ruin and bankruptcy oblige them. in useful or ornamental furniture. though antiquated pieces of furniture. he may lay out the greater part of it in adorning his house or his country villa. the one chiefly in the one way. not only to the neighbourhood. of Great Britain. be the richer man of the two. though the wealth which produced them has decayed. or in things more frivolous. in books. at the end of the period. you will sometimes scarce find a single house which could have been built for its present inhabitants. a few years ago. magnificent villas. If you go into those houses. but to frugality. and few attendants. every day's expense contributing something to support and heighten the effect of that of the following day. or pictures. neither increases nor diminishes it. Were two men of equal fortune to spend their revenue. and other curiosities. Versailles is an ornament and an honour to France. like the favourite and minister of a great prince who died a few years ago. Stowe and Wilton to England. the clothing of the rich. great collections of books. which his queen brought with her from Denmark. without either accumulating or encroaching. contenting himself with a frugal table. you will frequently find many excellent. perhaps from not having the same employment. statues. and the effects of ten or twenty years' profusion would be as completely annihilated as if they had never existed. in collecting books. statues. is now an inn upon the Bath road. would be continually increasing. and in which every day's expense may. pictures. that of the other. The former too would. when this mode of expense becomes universal among men of fortune. of those who have once been so unfortunate as to launch out too far into this sort of expense. at any time. the magnificence of the person whose expense had been chiefly in durable commodities. or support and heighten. No trace or vestige of the expense of the latter would remain. too. which can therefore be accumulated. by the number of monuments of this kind which it possesses. Italy still continues to command some sort of veneration. which are still very fit for use. and a multitude of dogs and horses. If a person should at any time exceed in it. but of which neither the one could have been built. though it might not be worth all that it cost. he can easily reform without exposing himself to the censure of the public. become useful to the inferior and middling ranks of people. the effect of that of the following day. As the one mode of expense is more favourable than the other to the opulence of an individual. no imprudence can be inferred from his . may either spend his revenue in a profuse and sumptuous table. Some modes of expense. The revenue of an individual may be spent. nor the other have been made for their use. would always be worth something. to reform his table from great profusion to great frugality. in furniture. to lay down his equipage after he has once set it up. been at too great an expense in building. A man of fortune. which either have been long stationary. the other in the other. pictures. on the contrary. He would have a stock of goods of some kind or other. but to the whole country to which they belong. and which could as little have been made for them. in a little time. and the general accommodation of the whole people is thus gradually improved. which is laid out in durable commodities. would be no greater at the end of the period than at the beginning. seem to contribute more to the growth of public opulence than others. therefore. jewels. or. you will frequently find the inferior ranks of people in possession both of houses and furniture perfectly good and entire. But if a person has. Few.whose expense just equals their revenue. have afterwards the courage to reform. is favourable not only to accumulation. ingenious trinkets of different kinds. too. either in things which are consumed immediately. the ornament of an alehouse at Dunfermline. and in maintaining a great number of menial servants. what is most trifling of all. either alleviate. The houses. baubles.

a quantity of provisions of equal value would have been distributed among a still greater number of people. the little ornaments of dress and furniture. in the other unproductive hands. gives maintenance. that the one sort of expense. it increases. as it always occasions some accumulation of valuable commodities. jewels. and gives nothing to any body without an equivalent. and not have lost or thrown away a single ounce of them. and when a person stops short. is thrown to the dunghill. that the one species of expense always betokens a more liberal or generous spirit than the other. consequently. and. not because he has exceeded his fortune. etc. These are things in which further expense is frequently rendered unnecessary by former expense. The expense. upholsterers. in the other it does not increase the exchangeable value of the annual produce of the land and labour of the country. I would not. this expense maintains productive. commonly. to a greater number of people than that which is employed in the most profuse hospitality. and there is always a great deal wasted and abused. but when he employs it in purchasing such durable commodities. to the increase of the public capital. but a base and selfish disposition. perhaps. he often spends the whole upon his own person. as it is more favourable to private frugality. he appears to do so. therefore. gew-gaws. In the one way. who would have bought them in pennyworths and pound weights. frequently indicates. conduces more than the other to the growth of public opulence. . not only a trifling. that is laid out in durable commodities. especially when directed towards frivolous objects. he shares the greater part of it with his friends and companions. besides. mechanics. In the one way. but because he has satisfied his fancy. besides. and as it maintains productive rather than unproductive hands. be understood to mean. one half. All that I mean is. by all this. which may sometimes be served up at a great festival. however. When a man of fortune spends his revenue chiefly in hospitality. The latter species of expense. carpenters. trinkets. therefore. But if the expense of this entertainment had been employed in setting to work masons. Of two or three hundred weight of provisions.changing his conduct.

which. but such a capital as the owner does not care to be at the trouble of employing himself. to those who he thinks will employ it profitably. it is those goods only which he can place in that stock. therefore. but what the borrower really wants. is. and maintenance necessary for carrying on their work. Even among borrowers. that it cannot happen so very frequently as we are sometimes apt to imagine. they constitute what is called the monied interest. to which of the two sorts of people he has lent the greater part of his stock. as in these last the owners themselves employ their own capitals. and that. The stock which is lent at interest is. the lender. in almost any proportion. the borrower is to pay him a certain annual rent for the use of it. than the amount of the money which serves as the instrument of their conveyance. or the goods which it can purchase. but in order to replace a capital which had been spent before. either of paper. contrary to the interest of both parties. The quantity of stock. in all cases. that people do both the one and the other. who reproduce the value. no doubt. what was destined for the support of the industrious. He expects that in due time it is to be restored to him. both restore the capital. or from the hands of the productive labourers. or. and though it no doubt happens sometimes. whether paper or coin. yet. as soon as it comes either from the ground. and what the lender readily supplies him with. therefore. which serves as the instrument of the different loans made in that country. The stock which is lent at interest is always considered as a capital by the lender. however. If he uses it as a capital. Those capitals may be greater. materials. is not the money. as it were. occasionally employed in both these ways. The only people to whom stock is commonly lent. If he wants it as a capital for employing industry. where gross usury is out of the question. but the deed of assignment. therefore. the number of the frugal and industrious surpasses considerably that of the prodigal and idle. By means of the loan. in the maintenance of the idle. such as the property or the rent of land. and dissipates. If he uses it as a stock reserved for immediate consumption. of money. Ask any rich man of common prudence. are country gentlemen. or to those who will spend it idly. without either alienating or encroaching upon some other source of revenue. from the regard that all men have for their own interest. the . the money is. he employs it in the maintenance of productive labourers. in the mean time. which can be lent at interest in any country. and he will laugh at you for proposing the question. in this case. he acts the part of a prodigal.CHAPTER IV. but in the former much more frequently than in the latter. as it is commonly expressed. assigns to the borrower his right to a certain portion of the annual produce of the land and labour of the country. and pay the interest. but by the value of that part of the annual produce. one may say. to be employed as the borrower pleases. without their being expected to make any very profitable use of it. that they find it necessary to borrow at interest. not only for replacing a capital. we may be assured. but the money's worth. If he wants it as a stock for immediate consumption. advanced to them upon credit by shop-keepers and tradesmen. or of gold and silver. He can. The borrower may use it either as a capital. not the people in the world most famous for frugality. with a profit. As such capitals are commonly lent out and paid back in money. It is distinct. Even in the monied interest. in this case. is not regulated by the value of the money. OF STOCK LENT AT INTEREST. is commonly spent before they borrow it. it is from those goods only that the industrious can be furnished with the tools. who borrow upon mortgage. It is not properly borrowed in order to be spent. The man who borrows in order to spend will soon be ruined. is destined. Almost all loans at interest are made in money. and he who lends to him will generally have occasion to repent of his folly. or as a stock reserved for immediate consumption. Even they scarce ever borrow merely to spend. without alienating or encroaching upon any other source of revenue. neither restore the capital nor pay the interest. To borrow or to lend for such a purpose. as it were. which conveys from one hand to another those capitals which the owners do not care to employ themselves. What they borrow. in order to pay the debt. not only from the landed. but from the trading and manufacturing interests. The capital borrowed replaces the capitals of those shop-keepers and tradesmen which the country gentlemen could not have replaced from the rents of their estates. He can. They have generally consumed so great a quantity of goods.

without being at the trouble of employing them themselves. necessarily diminishes. which at first sight seems so plausible. or from the hands of the productive labourers. seem to have imagined that the increase of the quantity of gold and silver. . both the value and the use of the loans. increases in any country. the profits which can be made by employing them necessarily diminish. be considered as an assignment. for the same reason. called the repayment. has been so fully exposed by Mr Hume. B having no occasion for the money himself. however. and. as it were. as stock increases. the use of any particular portion of them necessarily became of less value too. too. Those loans. either coin or paper. It becomes gradually more and more difficult to find within the country a profitable method of employing any new capital. Labourers easily find employment. what is called the monied interest naturally increases with it. in the same manner. the interest. W. unnecessary to say any thing more about it. perhaps. annually assign to the lender a small portion. The increase of those particular capitals from which the owners wish to derive a revenue. B. was the real cause of the lowering of the rate of interest through the greater part of Europe. the rate of interest. A. it is itself altogether different from what is assigned by it. naturally accompanies the general increase of capitals. called the interest. upon condition that the burrower in return shall. assigned to the three borrowers. equal to the whole amount of those pieces. and of three different purchases. that it is. In proportion as that share of the annual produce which. with a profit. and sinks the profits of stock. he must sometimes. In this power consist . the owner of one endeavouring to get possession of that employment which is occupied by another. as well as many other writers. so they may likewise successively serve as the instrument of repayment. in other words. to bring back. lends them to Y who again purchases goods with them of D. having become of less value themselves. consequently. the quantity of stock to be lent at interest grows gradually greater and greater. and. X. of a certain considerable portion of the annual produce. may. and for the same reason. and Mr Montesquieu. either of coin or of paper. the price which could be paid for it. But when the profits which can be made by the use of a capital are in this manner diminished. in value. a competition between different capitals. upon most occasions. The stock lent by the three monied men is equal to the value of the goods which can be purchased with it. Their competition raises the wages of labour. as soon as it comes either from the ground. lends the identical pieces to X. in due time. and C. but. The demand for productive labour. he can hope to justle that other out of this employment by no other means but by dealing upon more reasonable terms. in the course of a few days. in consequence. in order to get it to sell. both to the smaller and to the more considerable portion. the goods purchased by the different debtors being so employed as. the price which can be paid for the use of it. for example. As the quantity of stock to be lent at interest increases. but from other causes which are peculiar to this particular case. A. that is. the same pieces. they say. but the owners of capitals find it difficult to get labourers to employ. with which W immediately purchases of B £1000 worth of goods. but. A capital lent at interest may. at both ends. or the price which must be paid for the use of that stock. in this manner. There arises. from the lender to the borrower. each of which is. as well as for many different purchases. to thirty times their value. Those metals. in consequence of the discovery of the Spanish West Indies. This notion. is destined for replacing a capital. by the increase of the funds which are destined for maintaining it. Mr Locke.same pieces of money successively serving for many different loans. serves generally as the deed of assignment. As capitals increase in any country. The following very short and . serve as the Instrument of three different loans. And as the same pieces of money can thus serve as the instrument of different loans to three. C. at the end of it. an equal value either of coin or of paper. and Y is the power of making those purchases. What the three monied men. and is three times greater than that of the money with which the purchases are made. a portion equally considerable with that which had originally been assigned to him. He must not only sell what he deals in somewhat cheaper. may be all perfectly well secured. must necessarily be diminished with them. or. during the continuance of the loan. Mr Lawe. Though money. buy it dearer. not only from those general causes which make the market price of things commonly diminish as their quantity increases. with which X immediately purchases of C another £1000 worth of goods. In this manner. grows every day greater and greater. or. lends to W £1000.

The nominal value of all sorts of goods would be greater. But the profits of stock are not computed by the number of pieces of silver with which they are paid. By altering the rate. therefore. They would all trade with the same advantages and disadvantages. would really be the same. Before the discovery of the Spanish West Indies. The deeds of assignment. on the contrary. we give for the use of a capital. therefore. They would be exchanged for a greater number of pieces of silver. It has since that time. his wages appear to be increased. They might be paid with a smaller quantity of money. The capital of the country. and ten per cent. the same must necessarily have lowered that of the interest. the competition between the different capitals of individuals into which it was divided would likewise be the same. where interest has been reduced from ten to five per cent. would. a-week are said to be the common wages of labour. and yet might appear to sink. Let us suppose. I believe. therefore. besides that of raising the value of the money. would be more cumbersome. but the thing assigned would be precisely the same as before. Any increase in the quantity of commodities annually circulated within the country. the demand for it would be the same. that in every particular country the value of silver has sunk precisely in the same proportion as the rate of interest. would be the same. The profits of stock would be . produce many other important effects. Its wages would naturally rise with the demand. in a particular country. and could produce only the same effects. it is utterly impossible that the lowering of the value of silver could have the smallest tendency to lower the rate of interest. which is supposed to be equal to one half of its former value. even upon this supposition. ten per cent. however. while that of the money which circulated them remained the same. be found anywhere agreeable to the truth. Whatever were the causes which lowered the value of the capital. in different countries. on the contrary. but that smaller quantity might purchase a greater quantity of goods than a greater had done before. would be precisely the same. The proportion between the value of the capital and that of the interest must have remained the same. The quantity of productive labour which it could maintain and employ would be increased. and that in those countries. but their real value would be precisely the same as before. therefore. but the whole capital of the country being the same as before. and. £10 must now be of no more value than £5 were then.plain argument. from ten to five per cent. the proportion between those two values is necessarily altered. for example. Its price or wages. If £100 now are worth no more than £50 were then. but by the proportion which those pieces bear to the whole capital employed. An increase in the quantity of silver. both nominally and really. the number of people whom they could maintain and employ. the same quantity of silver can now purchase just half the quantity of goods which it could have purchased before. may serve to explain more distinctly the fallacy which seems to have misled those gentlemen. This supposition will not. could have no other effect than to diminish the value of that metal. but it is the most favourable to the opinion which we are going to examine. the common profits of stock. and consequently the common interest of money. The funds for maintaining productive labour being the same. though the rate had never been altered. If £100 are in those countries now of no more value than £50 were then. sunk to six. what can commonly be given for the use of money being necessarily regulated by what can commonly be made by the use of it. and exactly in the same proportion. The capital of the country would be the same. The common proportion between capital and profit. though nominally greater. £5 now can be worth no more than £2:10s. 5s. It might continue to be expressed by the same quantity of money. though they may sometimes be no greater than before. Thus. When that is increased. They would be paid in a greater number of pieces of silver. The wages of labour are commonly computed by the quantity of silver which is paid to the labourer. though it might nominally be the same. five. though a greater number of pieces might be requisite for conveying any equal portion of it from one hand to another. The profits of stock would be the same. while that of the commodities circulated by means of it remained the same. and consequently the demand for that labour. four. but the quantity of labour which they could command. but they would purchase only the same quantity of goods. like the conveyances of a verbose attorney. but it would command a greater quantity of labour. were then. and three per cent. By reducing the rate of interest. seems to have been the common rate of interest through the greater part of Europe. would really be augmented. an interest which is equal to one fourth only of the value of the former interest.

In countries where interest is permitted. both really and in appearance. he is obliged. which again would soon raise its ordinary price. if the advantages should much more than compensate the difference. something ought everywhere to be paid for the use of it. keeping pace always with the profits of stock. the competition between the different capitals of which it was composed would naturally be augmented along with it. If the legal rate of interest in Great Britain. This regulation. might. to prodigals and projectors. ought not to be much above the lowest market rate. would be lent to prodigals and projectors. The owners of those particular capitals would be obliged to content themselves with a smaller proportion of the produce of that labour which their respective capitals employed. though it ought to be somewhat above. will generally dispose him to content himself with a smaller revenue from land. This rate ought always to be somewhat above the lowest market price. But as something can everywhere be made by the use of money. or the price which is commonly paid for the use of money by those who can give the most undoubted security. or lend it out at interest. sober people are universally preferred. for example. Notwithstanding the edict of 1766. not only for the use of the money. A great part of the capital of the country would thus be kept out of the hands which were most likely to make a profitable and advantageous use of it. The creditor will not lend his money for less than the use of it is worth. by which the French king attempted to reduce the rate of interest from five to four per cent. and thrown into those which were most likely to waste and destroy it. and if the rent of land should fall short of the interest of money by a greater difference. money continued to be lent in France at five per cent. but they will compensate a certain difference only. who will give for the use of money no more than a part of what they are likely to make by the use of it. than what he might have by lending out his money at interest. the credit of all those who cannot give the very best security. In a country such as Great Britain. Where the legal rate of interest. and obliges them to have recourse to exorbitant usurers. five per cent. If this legal rate should be fixed below the lowest market rate. with honest people who respect the laws of their country. If it is fixed precisely at the lowest market price. without taking the trouble to employ it himself. and his money is much safer in the hands of the one set of people than in those of the other. if one may say so. The legal rate. though the value of money. nobody would buy land. The debtor being obliged to pay. On the contrary. The interest of money.diminished. the present legal rate. be greatly diminished. These advantages are sufficient to compensate a certain difference of revenue. or the quantity of goods which any particular sum could purchase. everybody would buy land. Sober people. The person who lends money gets nearly as much interest from the former as he dares to take from the latter. the law in order to prevent the extortion of usury. to insure his creditor from the penalties of usury. In some countries the interest of money has been prohibited by law. depends everywhere upon the ordinary market rate of interest. No law can reduce the common rate of interest below the lowest ordinary market rate at the time when that law is made. A great part of the capital of the country is thus thrown into the hands in which it is most likely to be employed with advantage. which would soon reduce its ordinary price. the law being evaded in several different ways. but for the risk which his creditor runs by accepting a compensation for that use. and the debtor must pay him for the risk which he runs by accepting the full value of that use. as borrowers. The ordinary market price of land. is fixed but a very little above the lowest market rate. it ruins. has been found from experience to increase the evil of usury. was fixed so high as eight or ten per cent. the greater part of the money which was to be lent. at four and four and a-half. The whole capital of the country being augmented. it is to be observed. where money is lent to government at three per cent. generally fixes the highest rate which can be taken without incurring a penalty. together with some other advantages which almost everywhere attend upon this species of property. . instead of preventing. would not venture into the competition. was greatly augmented. the effects of this fixation must be nearly the same as those of a total prohibition of interest. The person who has a capital from which he wishes to derive a revenue. and to private people. is perhaps as proper as any. upon good security. deliberates whether he should buy land with it. on the contrary. it is to be observed. in this manner. who alone would be willing to give this high interest. When interest was at ten per cent. The superior security of land.

In England it commonly sells at thirty.land was commonly sold for ten or twelve years purchase. in France at twenty years purchase. the price of land rose to twenty. As interest sunk to six. and thirty years purchase. five-and-twenty. and the common price of land is lower. five. and four per cent. The market rate of interest is higher in France than in England. .

it either would never be produced. cannot exceed what is sufficient to purchase that quantity. This would generally be inconvenient to the rich. mines. in the third. The capital. and much more so to the poor.CHAPTER V. a great part of the stock which he employs as a capital in the instruments of his trade. first. or even from hour to hour. either. is limited by the demand of that town and its neighbourhood. and thus encourages the industry. which can be sold in a particular town. every man would be obliged to purchase a greater quantity of the goods he wanted than his immediate occasions required. though they may so as to hurt one another. he would be forced to place in that part of his stock which is reserved for immediate consumption. secondly. no more of either could be produced than was necessary for the consumption of the neighbourhood. those of all retailers. those of all master manufacturers. or. The prejudices of some political writers against shopkeepers and tradesmen are altogether without foundation. or. A capital may be employed in four different ways. that they can never be multiplied so as to hurt the public. it would be of no value in exchange. in the second. in procuring the rude produce annually required for the use and consumption of the society. If a poor workman was obliged to purchase a month's or six months' provisions at a time. Unless a capital was employed in transporting either the rude or manufactured produce from the places where it abounds to those where it is wanted. He is thereby enabled to employ almost his whole stock as a capital. It is difficult to conceive that a capital should be employed in any way which may not be classed under some one or other of those four. every man would be obliged to purchase a whole ox or a whole sheep at a time. for example. and in the fourth. In the first way are employed the capitals of all those who undertake improvement or cultivation of lands. for example. because there could be no demand for it. Unless a capital was employed in manufacturing that part of the rude produce which requires a good deal of preparation before it can be fit for use and consumption. as does likewise the value which that employment adds to the annual produce of the land and labour of the country. He is thus enabled to furnish work to a greater value. therefore. or to the general conveniency of the society. If this capital is divided . The capital of the merchant exchanges the surplus produce of one place for that of another. OF THE DIFFERENT EMPLOYMENTS OF CAPITALS. or to restrict their numbers. either to the existence or extension of the other three. or if it was produced spontaneously. in dividing particular portions of either into such small parcels as suit the occasional demands of those who want them. Unless a capital was employed in breaking and dividing certain portions either of the rude or manufactured produce into such small parcels as suit the occasional demands of those who want them. and which yields him a revenue. as he wants it. thirdly in transporting either the rude or manufactured produce from the places where they abound to those where they are wanted. Though all capitals are destined for the maintenance of productive labour only. and could add nothing to the wealth of the society. or in the furniture of his shop. and increases the enjoyments of both. So far is it from being necessary either to tax them. in manufacturing and preparing that rude produce for immediate use and consumption. and the profit which he makes by it in this way much more than compensates the additional price which the profit of the retailer imposes upon the goods. varies extremely according to the diversity of their employment. The quantity of grocery goods. or fisheries. yet the quantity of that labour which equal capitals are capable of putting into motion. those of all wholesale merchants. Each of those four methods of employing a capital is essentially necessary. which can be employed in the grocery trade. lastly. If there was no such trade as a butcher. and which yields him no revenue. Unless a capital was employed in furnishing rude produce to a certain degree of abundance. or. Nothing can be more convenient for such a person than to be able to purchase his subsistence from day to day. neither manufactures nor trade of any kind could exist.

and instruments of trade employed in the business. that of the merchant of whom he purchases goods. It puts immediately into motion. but his labouring cattle. and it may safely be trusted to their discretion. is the business of the parties concerned. too. Part of his circulating capital is employed in purchasing materials. It augments the value of those materials by their wages. and augment. when properly directed. This is all the productive labour which it immediately puts into motion. materials. and though her labour costs no expense. Their competition might. may sometimes decoy a weak customer to buy what he has no occasion for. of the merchant.between two different grocers. It can never hurt either the consumer or the producer. and generally adds to its price the value at least of their own maintenance and consumption. employed in each of those four different ways. the capitals of the farmers and miners of whom he purchases them. No equal capital puts into motion a greater quantity of productive labour than that of the farmer. are all drawn from the price of the goods which the two first produce. as well as that of the most expensive workmen. too. not only of his profits. nor would it necessarily be prevented by restricting their numbers. however. are productive labourers. His capital employs. that of some other artificer of whom he purchases them. This evil. The capital of the retailer replaces. the sailors and carriers who transport his goods from one place to another. perhaps. but that disposition. as to direct the fertility of Nature towards the production of the plants most profitable to man. ruin some of themselves. and the chance of their combining together. too. and thereby enables him to continue his business. the capital's of the farmers and manufacturers of whom he purchases the rude and manufactured produce which he deals in. a much greater quantity of productive labour. with their profits. The capital of the wholesale merchant replaces. The retailer himself is the only productive labourer whom it immediately employs. and replaces. in very different proportions. and all the value which it immediately adds to the annual produce. or in a much shorter period. together with its profits. Its operation in both these respects is a good deal superior to that of the capital of the retailer. A field overgrown with briars and brambles. Planting and tillage frequently regulate more than they animate the active fertility of . Equal capitals. in order to raise the price. Part of the capital of the master manufacturer is employed as a fixed capital in the instruments of his trade. fixes and realizes itself in the subject or vendible commodity upon which it is bestowed. is of too little importance to deserve the public attention. may frequently produce as great a quantity of vegetables as the best cultivated vineyard or corn field. The persons whose capitals are employed in any of those four ways. and thereby enables them to continue their respective trades. its produce has its value. In agriculture. on the contrary. perhaps. just so much the less. and it augments the price of those goods by the value. arising from other causes. distributed among the different workmen whom he employs. either annually. therefore. that occasions a general disposition to drunkenness among the common people. The most important operations of agriculture seem intended. It is not the multitude of alehouses. together with its profits. The profits of the farmer. Some of them. not so much to increase. and the two last buy and sell. and replaces. and by their masters' profits upon the whole stock of wages. and adds a much greater value to the annual produce of the land and labour of the society. it must tend to make the retailers both sell cheaper and buy dearer. Nature labours along with man. of the manufacturer. necessarily gives employment to a multitude of alehouses. In his profit consists the whole value which its employment adds to the annual produce of the land and labour of the society. however. are themselves productive labourers. the value of the annual produce of the land and labour of the society to which they belong. and to increase the value of its annual produce. Their labour. than if the whole trade was monopolized by one or two persons. will immediately put into motion very different quantities of productive labour. than an equal capital in the hands of any wholesale merchant. their competition will tend to make both of them sell cheaper than if it were in the hands of one only. But a great part of it is always. and if it were divided among twenty. It is by this service chiefly that he contributes indirectly to support the productive labour of the society. together with their profits. and retailer. to give the must suspicious example. but to take care of this. their competition would be just so much the greater. but of their wages. though they do that too. Not only his labouring servants.

be a native or a foreigner. in other words. too. It as effectually replaces the capital of the person who produces that surplus. they regularly occasion the reproduction of the rent of the landlord. to the quantity of productive labour which it employs. Their employment is confined almost to a precise spot. after deducting or compensating every thing which can be regarded as the work of man. both from the place where the materials grow. but may wander about from place to place. is of very little importance. can ever occasion so great reproduction. belong to resident members of the society. no doubt. It may. reside where the manufacture is carried on. In them Nature does nothing. according to the supposed extent of those powers. a great part of the work always remains to be done by her. If he is a foreigner. and frequently more than a third. Over and above the capital of the farmer. but where this shall be. and thereby encourage them to continue the production. though there are some exceptions to this. No equal quantity of productive labour employed in manufactures. therefore. and the value of their annual produce. The capital of a foreigner gives a value to their surplus produce equally with that of a native. therefore. The capital of a wholesale merchant. together with its owner's profits. the service by which the capital of a wholesale merchant chiefly contributes to support the productive labour. to the real wealth and revenue of its inhabitants. The capital of the manufacturer must. not only occasion. be very useful to the country. by one man only. It necessarily puts into motion a greater quantity of productive labour. however. is not always necessarily determined. The capitals employed in the agriculture and in the retail trade of any society. to the farm. The people of fashion in Sicily are clothed in silks made in other countries. and after all their labour. and adds a greater value to the annual produce of the land and labour of the society. and all its profits. must always reside within that society. in the same manner as if he had been a native. Those materials are a part of the surplus produce of those countries. They must generally. unless it was annually exchanged for something which is in demand here. are surely very useful to the countries which produce them. according to the supposed natural or improved fertility of the land. the number of their productive labourers is necessarily less than if he had been a native. seems to have no fixed or necessary residence anywhere. but of a much greater value. it is by far the most advantageous to society. and to the shop of the retailer. the use of which the landlord lends to the farmer. It is seldom less than a fourth. The capitals of the British manufacturers who work up the flax and hemp annually imported from the coasts of the Baltic. but in proportion. which. It is the work of Nature which remains. and the reproduction must always be in proportion to the strength of the agents that occasion it. man does all. and from those which consume them. Of all the ways in which a capital can be employed. The merchants who export it. and as effectually enables him to continue his business. may still belong indifferently either to his country.Nature. or to some third country. of the whole produce. too. The capital employed in agriculture. or to their country. by the profits of that one man. employed in agriculture. like the workmen in manufactures. and . It may frequently be at a great distance. from the materials which their own produces. Lyons is very distant. by exchanging it for something for which there is a demand at home. the reproduction of a value equal to their own consumption. though it should not reside within it. replace the capitals of the people who produce it. according as it can either buy cheap or sell dear. would be of no value. Part of the wool of Spain is manufactured in Great Britain. It is of more consequence that the capital of the manufacturer should reside within the country. it adds a much greater value to the annual produce of the land and labour of the country. and some part of that cloth is afterwards sent back to Spain. and to augment the value of the annual produce of the society to which he belongs. The sailors or carriers whom he employs. The labourers and labouring cattle. both from the places which afford the materials of its manufactures. on the contrary. not only puts into motion a greater quantity of productive labour than any equal capital employed in manufactures. This rent may be considered as the produce of those powers of Nature. or. and would soon cease to be produced. Whether the merchant whose capital exports the surplus produce of any society. or to the capital which employs them. It is greater or smaller. and from that where the complete manufacture is consumed.

indeed. instead of accelerating. to acquire a sufficient one. after a long land carriage through very bad roads. If there are any merchants among them. where it can be exchanged for something for which there is a demand at home. however. The country. were they to attempt. for want of a capital to manufacture it at home. It is likely to increase the fastest. That which is employed in the trade of exportation has the least effect of any of the three. The capital of all the individuals of a nation has its limits. prematurely. But the revenue of all the inhabitants of the country is necessarily in proportion to the value of the annual produce of their land and labour. of which the inhabitants have not capital sufficient to transport the produce of their own industry to those distant markets where there is demand and consumption for it. a great part of it. to monopolize to themselves their whole exportation trade. and which are the work of the women and children in every private family. may frequently not have capital sufficient both to improve and cultivate all its lands. This would be still more the case. unless. Even the stores and warehouses from which goods are retailed in some provinces. therefore. and to transport the surplus part either of the rude or manufactured produce to those distant markets. and. that ever were in the world. and of the ancient state of Indostan. according to all accounts. has not arrived at that degree of opulence for which it seems naturally destined. by their continually accumulating and adding to it whatever they save out of their revenue. is certainly not the shortest way for a society. is carried on by the capitals of merchants who reside in Great Britain. to do all the three. indeed. only the agents of wealthier merchants who reside in some of the great commercial cities. no more than it would be for an individual. The course of human prosperity. and adds the greatest value to the annual produce. After agriculture. either by combination. Even those three countries. The wool of the southern counties of Scotland is. in the same manner. they would retard. that almost their whole capitals have hitherto been employed in agriculture. When the capital of any country is not sufficient for all those three purposes. the greater will be the quantity of productive labour which it puts into motion within the country. of those of ancient Egypt. they are. divert any considerable part of their capital into this employment. when it is employed in the way that affords the greatest revenue to all the inhabitants or the country. and with an insufficient capital. which necessarily accompany the progress of agriculture. in proportion as a greater share of it is employed in agriculture. to manufacture and prepare their whole rude produce for immediate use and consumption. by thus giving a monopoly to such of their own countrymen as could manufacture the like goods. A particular country. instead of promoting. The greater part. Were the Americans. in the same manner as that of a single individual. the progress of their country towards real wealth and greatness. belong many of them to merchants who reside in the mother country. the capital employed in manufactures puts into motion the greatest quantity of productive labour. There are many little manufacturing towns in Great Britain. we give credit to the wonderful accounts of the wealth and cultivation of China. which has not capital sufficient for all those three purposes. The . They have no manufactures. as will likewise be the value which its employment adds to the annual produce of the land and labour of the society. The capital of all the individuals of a nation is increased in the same manner as that of a single individual. are chiefly renowned for their superiority in agriculture and manufactures. They do not appear to have been eminent for foreign trade. in the same manner as a particular person. perhaps. those household and coarser manufactures excepted. To attempt. or by any other sort of violence. seems scarce ever to have been of so long continuance as to unable any great country to acquire capital sufficient for all those three purposes. and afford one of the few instances of the retail trade of a society being carried on by the capitals of those who are not resident members of it. as they will thus be enabled to make the greatest savings. the further increase in the value of their annual produce. and would obstruct. both of the exportation and coasting trade of America.the British manufacturers replace the capitals of those merchants. and is capable of executing only certain purposes. properly. the wealthiest. manufactured in Yorkshire. particularly in Virginia and Maryland. It has been the principal cause of the rapid progress of our American colonies towards wealth and greatness. to stop the importation of European manufactures. The inhabitants of many different parts of Great Britain have not capital sufficient to improve and cultivate all their lands.

either immediately. and add a greater or smaller value to the annual produce of its land and labour. When it sends out from the residence of the merchant a certain value of commodities. according to the different proportions in which it is employed in agriculture. The capital which sends British goods to Portugal. is very great. necessarily replaces. therefore. the foreign trade of consumption. These last. must have been purchased. of a capital employed in such a round-about foreign trade of consumption. should be as quick as those of the home trade. The foreign trade of consumption is employed in purchasing foreign goods for home consumption. the same as those of one employed in the most direct trade of the same kind. or with something else that had been purchased with it. frequently gold and silver. the produce of the industry of that country. too. however. But the returns of the foreign trade of consumption are very seldom so quick as those of the home trade. and thereby enables them to continue that employment. or in carrying the surplus produce of one to another. by every such operation. generally replaces. two distinct capitals. It is thus that the same capital will in any country put into motion a greater or smaller quantity of productive labour. The greater part of the surplus produce of all those three countries seems to have been always exported by foreigners. employed in the home trade. by every such operation. which had both been employed in Supporting productive labour. and the Chinese have never excelled in foreign commerce. and sometimes not till after two or three years. before a capital employed in the foreign trade of consumption has made one. The returns of the foreign trade of consumption seldom come in before the end of the year. in every respect. but one of them only is employed in supporting domestic industry. It comprehends both the inland and the coasting trade. a superstition nearly of the same kind prevails among the Indians. The other is a Portuguese one. are. replaces. The capital which is employed in purchasing in one part of the country. the case of war and conquest excepted. replaces. by every such operation. only one British capital. by every such operation. too. when this purchase is made with the produce of domestic industry. All wholesale trade. therefore. and thereby enables them to continue that support. When both are the produce of domestic industry. The effects. two distinct capitals. all buying in order to sell again by wholesale. foreign goods can never be acquired. and selling in another. of the foreign trade of consumption. will sometimes make twelve operations. The home trade is employed in purchasing in one part of the same country. or be sent out and returned twelve times. A capital. The capital employed in purchasing foreign goods for home consumption. not with the produce of domestic industry but with some other foreign goods. two British capitals. either immediately with the produce of domestic industry. who gave in exchange for it something else. or after two or more different exchanges. the capital employed in it will give but one half of the encouragement to the industry or productive labour of the country. The foreign goods for home consumption may sometimes be purchased. and the carrying trade. and sometimes three or four times in the year. except that the final returns are likely to be still . The returns of the home trade generally come in before the end of the year. for which they found a demand there. which had both been employed in the agriculture or manufactures of Great Britain. for. Though the returns. The difference. and brings back English corn and manufactures to Edinburgh. the one will give four-and-twenty times more encouragement and support to the industry of the country than the other. but in exchange for something that had been produced at home. If the capitals are equal. it necessarily replaces. maybe reduced to three different sorts: the home trade. in order to sell in another. therefore. manufactures. according to the different sorts of wholesale trade in which any part of it is employed. it generally brings hack in return at least an equal value of other commodities. and brings back Portuguese goods to Great Britain.ancient Egyptians had a superstitious antipathy to the sea. the produce of the industry of that country. and wholesale trade. The carrying trade is employed in transacting the commerce of foreign countries. by every such operation. The capital which sends Scotch manufactures to London. therefore. that had both been employed in the agriculture or manufactures of that country. two distinct capitals.

the people of such countries being the carriers to other countries. If those two or three distinct foreign trades should happen to be carried on by two or three distinct merchants. in this case. than an equal capital employed in a more direct trade of the same kind. or just as slow. and constitute the whole addition which this trade necessarily makes to the annual produce of the land and labour of that country. When. seem essential to the nature of the trade that it should be so. as they must depend upon the returns of two or three distinct foreign trades. the foreign trade of consumption. and the third buys those imported by the second. If they are purchased with the gold of Brazil. has all the advantages and all the inconveniencies of any other equally round-about foreign trade of consumption. as the productive labour of the country is concerned. and at a smaller expense. the carrying trade of any particular country is carried on with the ships and sailors of that country. replaces by every such operation two capitals. to support that of some foreign countries. and no goods. or in the encouragement and support which it can give to the productive labour of the country from which it is carried on. had the manufactures and the flax and hemp been directly exchanged for one another. Whatever be the foreign commodity with which the foreign goods for home consumption are purchased. in this manner. and their insurance not greater. though it may with regard to the particular merchants. are less liable to suffer by the carriage. but the final returns of the whole capital employed in the trade will be just as slow as ever. Though it may replace. carried it on in this manner. A Dutch merchant may. That part of the capital of any country which is employed in the carrying trade. The whole capital employed. yet neither of them belongs to that particular country. but with the sugar and rum of Jamaica. employ his capital in transacting the commerce of Poland and . before he can employ the same capital in repurchasing a like quantity of British manufactures. therefore.more distant. So far. than by that of any other foreign goods. than would have been necessary. like the tobacco of Virginia. It seems even to have one advantage over any other equally round-about foreign trade. but one of them in supporting that of Poland. a certain number of productive labourers of that country. If the hemp and flax of Riga are purchased with the tobacco of Virginia. either in the nature of the trade. It does not. for example. or with the silver of Peru. neither of which had been employed in supporting the productive labour of Holland. two distinct capitals. in fact. a trade of this kind is likely to impoverish the country from which it is carried on in any other way. may frequently be purchased with a smaller quantity of the produce of domestic industry. besides. Almost all nations that have had any considerable share of the carrying trade have. by the continual exportation of those metals. indeed. by every operation. and brings back the fruits and wines of Portugal to Poland. If the tobacco of Virginia had been purchased. which is carried on by means of gold and silver. receive the returns of his own capital more quickly. Whether. which had been purchased with British manufactures. in such a round-about foreign trade of consumption. is altogether withdrawn from supporting the productive labour of that particular country. however. I shall have occasion to examine at great length hereafter. Whether the whole capital employed in such a round about trade belong to one merchant or to three. is less expensive than that of almost any other foreign goods of equal value. be supplied more completely. or that had been purchased with something else that was so. which had been purchased with those manufactures. on account of their small bulk and great value. The profits only return regularly to Holland. will. Their freight is much less. must have been purchased with something that either was the produce of the industry of the country. The demand of the country may frequently. not with British manufactures. therefore. than in any other. that part of the capital employed in it which pays the freight is distributed among. for example. indeed. in order to export them again. it can occasion no essential difference. he must wait for the returns of three. and will replace. The trade itself has probably derived its name from it. this gold and silver. and puts into motion. just as fast. The capital of the Dutch merchant. which carries the corn of Poland to Portugal. will generally give less encouragement and support to the productive labour of the country. Three times a greater capital must in both cases be employed. by the intervention of gold and silver. An equal quantity of foreign goods. can make no difference with regard to the country. of whom the second buys the goods imported by the first. in order to exchange a certain value of British manufactures for a certain quantity of flax and hemp. therefore. the merchant must wait for the returns of two distinct foreign trades. the capital which is immediately employed in supporting that productive labour. and the other that of Portugal. The transportation of those metals from one place to another. each merchant.

But the great object of the political economy of every country.000 hogsheads are annually purchased. in proportion to their value. a part of the productive labour of the country must cease. and exchanged for something more in demand at home. If the remaining 82. It ought. and the value of its annual produce diminish. The coal trade from Newcastle to London. for example. therefore. the surplus part of them must be sent abroad again. must be sent abroad. The capital. When the capital stock of any country is increased to such a degree that it cannot be all employed . to give no preference nor superior encouragement to the foreign trade of consumption above the home trade. does not depend upon the nature of the trade. as the most direct. more than an equal capital employed in the foreign trade of consumption. woollens. employed in the home trade of any country. more than 14. upon some occasions. nor to the carrying trade above either of the other two. About 96. by extraordinary encouragements. The surplus part of them. a still greater advantage over an equal capital employed in the carrying trade. in both these respects. therefore. than the demand of the home market requires. will not always necessarily increase the shipping of that country. perhaps. therefore. be as necessary for supporting the productive labour of the country. It is only by means of such exportation. than what would naturally flow into them of its own accord. by carrying part of the surplus produce of the one to the other. and partly upon the distance of the ports between which they are to be carried. must cease to be produced. Each of those different branches of trade. or even in the home trade. and the value of its annual produce. The most round-about foreign trade of consumption. could not be sent abroad. therefore. It maybe presumed. The neighbourhood of the seacoast. The number of sailors and shipping which any particular capital can employ. however. therefore. The riches. and exchanged for something more in demand at home.000. however. when carried on by coasting vessels. 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. But the demand of Great Britain does not require. When the foreign goods which are thus purchased with the surplus produce of domestic industry exceed the demand of the home market. the fund from which all taxes must ultimately be paid. and the capital employed in this latter trade has. but necessary and unavoidable. and so far as power depends upon riches. It is upon this account. and being deprived of that which they had abroad. when the course of things. the surplus must be sent abroad. not in Dutch. the power of every country must always be in proportion to the value of its annual produce. is to increase the riches and power of that country. and exchanged for something for which there is a demand at home. Those goods. is not only advantageous. When the produce of any particular branch of industry exceeds what the demand of the country requires. Without such exportation. may.Portugal. employs more shipping than all the carrying trade of England. without any constraint or violence. having no market at home. therefore. and increase the value of its annual produce. that this surplus can acquired value sufficient to compensate the labour and expense of producing it. as it could in the carrying trade. only because they facilitate the exportation and exchange of such surplus produce for something else which is more in demand there. and hardware. It ought neither to force nor to allure into either of those two channels a greater share of the capital of the country. than what would naturally go to it. and exchanged for something for which there is a demand at home. the importation of them must cease immediately. though the ports are at no great distance. which are part of the produce of the land and labour of Great Britain. The land and labour of Great Britain produce generally more corn. are advantageous situations for industry.000. but in British bottoms. and the banks of all navigable rivers. that the carrying trade has been supposed peculiarly advantageous to such a country as Great Britain. But the same capital may employ as many sailors and shipping. To force. that he actually does so upon some particular occasions. either in the foreign trade of consumption. chiefly upon the former of those two circumstances. naturally introduces it.000 hogsheads of tobacco are annually purchased in Virginia and Maryland with a part of the surplus produce of British industry. but partly upon the bulk of the goods. a larger share of the capital of any country into the carrying trade. of which the defence and security depend upon the number of its sailors and shipping. will generally give encouragement and support to a greater quantity of productive labour in that country.

every day. within these few years. by the value of the surplus produce of all the different countries in the world. Its possible extent. is in a manner infinite in comparison of that of the other two. A single instance of such a fortune. that private persons frequently find it more for their advantage to employ their capitals in the most distant carrying trades of Asia and America than in the improvement and cultivation of the most fertile fields in their own neighbourhood. The extent of the home trade. according as it is employed in one or other of those different ways. a very simple observation may satisfy us that the result of them must be false. however. though what commonly passes for the carrying trade of England will frequently. and supporting the productive labour of that particular country. has not. in every corner of it. therefore. therefore. but it does not seem to be the natural cause of it. perhaps. that of the foreign trade of consumption. the trades which carry the goods of the East and West Indies and of America to the different European markets. The consideration of his own private profit is the sole motive which determines the owner of any capital to employ it either in agriculture. the capitals of individuals will naturally be employed in the manner most advantageous to the whole society. in a great measure. perhaps. and of what can be purchased with it. make. Holland. and the greater part of what is cultivated. or in some particular branch of the wholesale or retail trade. The different quantities of productive labour which it may put into motion. never enter into his thoughts. or with something else which had been purchased with that produce. perhaps the second richest country of Europe. frequently from a very small capital. and from such a capital. however. is likewise supposed to have a considerable share in it. . the principal branches of what is properly the carrying trade of Great Britain. amused the public with most magnificent accounts of the profits to be made by the cultivation and improvement of land. The profits of agriculture. is necessarily limited by the value of the surplus produce of all those distant places within the country which have occasion to exchange their respective productions with one another. We see. indeed. is far from being improved to the degree of which it is capable. Those statesmen who have been disposed to favour it with particular encouragement. The carrying trade is the natural effect and symptom of great national wealth. seem to have no superiority over those of other employments in any part of Europe. sometimes from no capital. has accordingly the greatest share of the carrying trade of Europe. the surplus part of it naturally disgorges itself into the carrying trade. and the different values which it may add to the annual produce of the land and labour of the society. and some trade of the same kind carried on by British merchants between the different ports of India. In all the great countries of Europe. Projectors. during the course of the present century. in proportion to the extent of the land and the number of it's inhabitants. In countries. Such are. Agriculture. is almost everywhere capable of absorbing a much greater capital than has ever yet been employed in it. much good land still remains uncultivated. and is capable of absorbing the greatest capitals. by far the richest country in Europe. by the value of the surplus produce of the whole country. be found to be no more than a round-about foreign trade of consumption. and of the capital which can be employed in it. by trade and manufactures. that have been acquired in the course of a single life. The trade which is carried on in British bottoms between the different ports of the Mediterranean. where agriculture is the most profitable of all employments. seem to have mistaken the effect and symptom for the cause. England. perhaps. I shall endeavour to explain at full length in the two following books. that of the carrying trade. What circumstances in the policy of Europe have given the trades which are carried on in towns so great an advantage over that which is carried on in the country. and the final returns of those trades are generally used or consumed in Great Britain. either immediately with the produce of British industry. and farming and improving the most direct roads to a splendid fortune. Without entering into any particular discussion of their calculations.in supplying the consumption. in manufactures. have. the most splendid fortunes. acquired by agriculture in the same time. therefore. Those goods are generally purchased. occurred in Europe. and is employed in performing the same offices to other countries.

BOOK III. OF THE DIFFERENT PROGRESS OF OPULENCE IN DIFFERENT NATIONS .

not only to the winds and the waves. It consists in the exchange of rude for manufactured produce. The gains of both are mutual and reciprocal. than either in manufactures or in foreign trade. As subsistence is. than they must have employed had they attempted to prepare them themselves. by giving great credits. besides. or what is over and above the maintenance of the cultivators. and the division of labour is in this. or nearly equal profits. that constitutes the subsistence of the town. the towns could nowhere have increased beyond what the improvement and cultivation of the territory in which they were situated could support. OF THE NATURAL PROGRESS OF OPULENCE. gain. therefore. must necessarily be prior to that which ministers to the latter. not only pay the expense of raising it and bringing it to market. though it forms no exception from the general rule. must. either immediately. it has never been pretended that either the country loses by its commerce with the town. who is obliged frequently to commit it. rather in the improvement and cultivation of land. The town. the whole value of this carriage in the price of what they buy. But the price of the latter must. as the whole of that territory was completely cultivated and improved. and the more extensive that market. in the price of what they sell. it is always the more advantageous to a great number. in distant . or the town by that with the country which maintains it. though not in every particular country. and this. upon this account. generally. but from very distant countries. The cultivation and improvement of the country. in which there neither is nor can be any reproduction of substances. with that of those which lie at some distance from it. advantageous to all the different persons employed in the various occupations into which it is subdivided. the whole value of the carriage of the like produce that is brought from more distant parts. The town. has occasioned considerable variations in the progress of opulence in different ages and nations. over and above the ordinary profits of agriculture. till such time. or even from the territory to which it belongs. may not always derive its whole subsistence from the country in its neighbourhood. The town affords a market for the surplus produce of the country. The country supplies the town with the means of subsistence and the materials of manufacture. Among all the absurd speculations that have been propagated concerning the balance of trade. however. sells there for the same price with that which comes from twenty miles distance. at least.CHAPTER I. The corn which grows within a mile of the town. but to the more uncertain elements of human folly and injustice. but afford. has it more under his view and command. is in every particular country promoted by the natural inclinations of man. Compare the cultivation of the lands in the neighbourhood of any considerable town. therefore. The proprietors and cultivators of the country. or of some sort of paper which represents money. Upon equal. too. which furnishes only the means of conveniency and luxury. That order of things which necessity imposes. It is the surplus produce of the country only. The man who employs his capital in land. as in all other cases. We must not. so the industry which procures the former. may very properly be said to gain its whole wealth and subsistence from the country. The greater the number and revenue of the inhabitants of the town. prior to conveniency and luxury. in the nature of things. the ordinary profits of agriculture to the farmer. The town repays this supply. most men will choose to employ their capitals. be prior to the increase of the town. indeed. which affords subsistence. necessarily. or what is over and above the maintenance of the cultivators. The great commerce of every civilized society is that carried on between the inhabitants of the town and those of the country. or by the intervention of money. The inhabitants of the country purchase of the town a greater quantity of manufactured goods with the produce of a much smaller quantity of their own labour. in general. which can therefore increase only with the increase of the surplus produce. and his fortune is much less liable to accidents than that of the trader. by sending back a part of the manufactured produce to the inhabitants of the country. and it is there that the inhabitants of the country exchange it for something else which is in demand among them. and you will easily satisfy yourself bow much the country is benefited by the commerce of the town. the more extensive is the market which it affords to those of the country. imagine that the gain of the town is the loss of the country. which lies in the neighbourhood of the town. If human institutions had never thwarted those natural inclinations. and they save.

from whom he derives his subsistence. In our North American colonies. the cultivation of land cannot be carried on. The capital of the landlord. and. to men with whose character and situation he can seldom be thoroughly acquainted. in order to be exchanged for something for which there is some demand at home. and thus form a small town or village. be consequential. If the society has not acquired sufficient capital. indeed. which is fixed in the improvement of his land. But whether the capital which carries this surplus produce abroad be a foreign or a domestic one. indeed. the tranquillity of mind which it promises. and derives his necessary subsistence from the labour of his own family. Had human institutions. carpenters. is of very little importance. and as to cultivate the ground was the original destination of man. and who contribute still further to augment the town. in distant countries. and thereby improved and refined in a great variety of ways. and the means of their subsistence. must be sent abroad. but in proportion to the augmentation of the demand from the country for finished work. every artificer who has acquired more stock than he can employ in the occasional jobs of the neighbourhood. to which the inhabitants of the country resort. have charms that. of every society. As the capital of the landlord or farmer is more secure than that of the manufacturer. Smiths. therefore. and neither the large wages nor the easy subsistence which that country affords to artificers. Those different manufactures come. attract everybody. therefore. masons and bricklayers. and those of the country. too. the brewer. is more secure than that of the foreign merchant. which may easily be conceived. no manufactures for distant sale have ever yet been established in any of their towns. and in proportion to the improvement and cultivation of the territory of country. the independency which it really affords. but employs it in the purchase and improvement of uncultivated land. but with great inconveniency and continual interruption. or none that can be had upon easy terms. for the same reason that agriculture is naturally preferred to manufactures. never disturbed the natural course of things. The inhabitants of the town. and as their residence is not. manufactures are. and independent of all the world. in order to exchange their rude for manufactured produce. together with many other artificers and retailers. and the baker. In countries. Without the assistance of some artificers. naturally preferred to foreign commerce. tanners. both to cultivate all its lands. and this demand can augment only in proportion to the extension of improvement and cultivation. the progressive wealth and increase of the towns would. and to manufacture in the completest manner the whole of its . attempt to establish with it a manufacture for more distant sale. The smith erects some sort of iron. to be gradually subdivided. wherever the injustice of human laws does not disturb it. is really a master.but to the more uncertain elements of human folly and injustice. When an artificer has acquired a little more stock than is necessary for carrying on his own business in supplying the neighbouring country. and tailors. in every political society. In every period. so the capital of the manufacturer. in process of time. so. are mutually the servants of one another. can augment. seems to be as well secured as the nature of human affairs can admit of. It is this commerce which supplies the inhabitants of the town. endeavours to prepare work for more distant sale. in North America. they naturally settle in the neighbourhood of one another. but that a planter who cultivates his own land. The town is a continual fair or market. necessary or useful for supplying their occasional wants. From artificer he becomes planter. being at all times more within his view and command. and which it is therefore unnecessary to explain any farther. are people whose service the farmer has frequent occasion for. Such artificers. necessarily regulates the quantity of the materials and provisions which they buy. The beauty of the country. he does not. more or less. where uncultivated land is still to be had upon easy terms. on the contrary. the surplus part both of the rude and manufactured produce. he seems to retain a predilection for this primitive employment. or that for which there is no demand at home. the weaver some sort of linen or woollen manufactory. the pleasure of a country life. wheelwrights and ploughwrights. on the contrary. shoemakers. where there is either no uncultivated land. soon join them. In seeking for employment to a capital. The quantity of the finished work which they sell to the inhabitants of the country. by giving great credits. can bribe him rather to work for other people than for himself. besides. upon equal or nearly equal profits. both with the materials of their work. He feels that an artificer is the servant of his customers. in every stage of his existence. The butcher. like that of the farmer. necessarily tied down to a precise spot. Neither their employment nor subsistence. stand occasionally in need of the assistance of one another.

in order that the whole stock of the society may be employed in more useful purposes. been in many respects entirely inverted. The manners and customs which the nature of their original government introduced. though the greater part of its exportation trade be carried on by foreigners. and some sort of coarse industry of the manufacturing kind must have been carried on in those towns. that in every society that had any territory. directed to agriculture. had no capital but what belonged to themselves been employed in exporting their surplus produce. The wealth of ancient Egypt. The foreign commerce of some of their cities has introduced all their finer manufactures. and. afterwards to manufactures. it has. the greater part of the capital of every growing society is. first. sufficiently demonstrate that a nation may attain a very high degree of opulence. I believe. would have been much less rapid. According to the natural course of things. necessarily forced them into this unnatural and retrograde order. Some of their lands must have been cultivated before any considerable towns could be established. This order of things is so very natural. and which remained after that government was greatly altered. But though this natural order of things must have taken place in some degree in every such society. . that of China and Indostan. or such as were fit for distant sale. The progress of our North American and West Indian colonies. it has always. therefore. been in some degree observed. last of all. before they could well think of employing themselves in foreign commerce. in all the modern states of Europe.rude produce. and manufactures and foreign commerce together have given birth to the principal improvements of agriculture. there is even a considerable advantage that the rude produce should be exported by a foreign capital. to foreign commerce.

and to hinder any part of the original estate from being carried out of the proposed line. and when all other things are equal. it is still likely to endure for many centuries. and consequently the security of the monarchy. not of subsistence merely. Laws frequently continue in force long after the circumstances which first gave occasion to them. of all of whom the subsistence and enjoyment may be supposed equally dear to the father. That the power. To divide it was to ruin it. In the present state of Europe. was left without a proprietor. interrupted the commerce between the towns and the country. like them. AFTER THE FALL OF THE ROMAN EMPIRE. depended upon its greatness. OF THE DISCOURAGEMENT OF AGRICULTURE IN THE ANCIENT STATE OF EUROPE. and which could alone render them reasonable. however. and the western provinces of Europe. beggars all the rest of the children. though not always at their first institution. accordingly. either by gift. than we do in the distribution of moveables. or . The rapine and violence which the barbarians exercised against the ancient inhabitants. still continues to be respected. the confusions which followed so great a revolution lasted for several centuries. nothing can be more contrary to the real interest of a numerous family. either by succession or by alienation. and the country was left uncultivated. in the succession of landed estates. might have been but a transitory evil. In those disorderly times.CHAPTER II. for the same reason that it has generally taken place in that of monarchies. not immediately indeed. it was thought better that it should descend undivided to one. the proprietor of a single acre of land is as perfectly secure in his possession as the proprietor of 100. Among the children of the same family there can be no indisputable difference but that of sex. than a right which. like moveables. and as of all institutions it is the fittest to support the pride of family distinctions. but upon some plain and evident difference which can admit of no dispute. and sometimes against his sovereign. therefore. but of power and protection. and that of age. must be determined by some general rule. The security of a landed estate. frequently against his neighbours. the elder everywhere takes place of the younger. Entails are the natural consequences of the law of primogeniture. He made war according to his own discretion. This natural law of succession. A great part of them was uncultivated. are no more. among all the children of the family. and in some respects their legislator in peace and their leader in war. between male and female. but no part of them. came to take place. it must descend entire to one of the children. and the greater part by a few great proprietors. the greater part of the lands of those countries. When land. or usurped to themselves. When the German and Scythian nations overran the western provinces of the Roman empire. which had enjoyed a considerable degree of opulence under the Roman empire. and broke into small parcels. Hence the origin of the right of primogeniture. The male sex is universally preferred to the female. and to expose every part of it to be oppressed and swallowed up by the incursions of its neighbours. whether cultivated or uncultivated. The towns were deserted. But when land was considered as the means. sunk into the lowest state of poverty and barbarism. They might soon have been divided again. of which the law of primogeniture first gave the idea. During the continuance of those confusions. and of what is called lineal succession. This original engrossing of uncultivated lands. is considered as the means only of subsistence and enjoyment. the natural law of succession divides it. They were introduced to preserve a certain lineal succession.000. the protection which its owner could afford to those who dwelt on it. To which of them so important a preference shall be given. but in process of time. The law of primogeniture. His tenants were his subjects. He was their judge. therefore. The law of primogeniture hindered them from being divided by succession. the chiefs and principal leaders of those nations acquired. the introduction of entails prevented their being broke into small parcels by alienation. All of them were engrossed. in order to enrich one. took place among the Romans who made no more distinction between elder and younger. may not be weakened by division. in the inheritance of lands. every great landlord was a sort of petty prince. founded not upon the doubtful distinctions of personal merit. In every other respect. though a great. The right of primogeniture.

which pleases his fancy. though some French lawyers have thought proper to dress the modern institution in the language and garb of those ancient ones. of his house and household furniture. but the possibility of their being divided again was as much as possible precluded for ever. particularly. as it did very frequently. of his equipage.device. They were supposed to belong more directly to the land than to their master. but that the property of the present generation should be restrained and regulated according to the fancy of those who died. he would be a bankrupt before he had finished the tenth part of it. are still respected. When great landed estates were a sort of principalities. but their slavery was of a milder kind than that known among the ancient Greeks and Romans. They were all. Compare the present condition of those estates with the possessions of the small proprietors in their neighbourhood. It seldom happens. he generally found it more profitable to employ his annual savings in new purchases than in the improvement of his old estate. and you will require no other argument to convince you how unfavourable such extensive property is to improvement. are at present supposed to be under strict entail. They were altogether unknown to the Romans. When the establishment of law and order afforded him this leisure. and finds. he had no stock to employ in this manner. in both parts of the united kingdom. still less was to be hoped for from those who occupied the land under them. or in extending his jurisdiction and authority over those of his neighbours. and they are accordingly more restricted there than in any other European monarchy. he has been accustomed to have some anxiety about. The common law of England. If he was an economist. If the expense of his house and person either equalled or exceeded his revenue. and almost always the requisite abilities. some great estates which have continued. provided it was with the consent of their master. but not separately. In those countries. either by the folly. from his infancy. entails might not be unreasonable. when small as well as great estates derive their security from the laws of their country. They could. They could marry. or even in our West Indian colonies. that if he was to improve his whole estate in the same manner. The situation of such a person naturally disposes him to attend rather to ornament. Neither their substitutions. They are founded upon the most absurd of all suppositions. Entails are thought necessary for maintaining this exclusive privilege of the nobility to the great offices and honours of their country. If little improvement was to be expected from such great proprietors. There still remain. In the disorderly times which gave birth to those barbarous institutions. it is thought reasonable that they should have another. more than one fifth. of which a man born to a great fortune. nothing can be more completely absurd. Great tracts of uncultivated land were in this manner not only engrossed by particular families. they might frequently hinder the security of thousands from being endangered by the caprice or extravagance of one man. in the hands of the same family since the times of feudal anarchy. slaves. through the greater part of Europe. He embellishes. at ten times the expense which the land is worth after all his improvements. and he could not afterwards dissolve the marriage by selling the man and wife to different persons. . in which noble birth is a necessary qualification for the enjoyment either of civil or military honours. To improve land with profit. perhaps five hundred years ago. however. though even England is not altogether without them. even though naturally frugal. nor fidei commisses. however. bear any resemblance to entails. In Scotland. follows him when he comes to think of the improvement of land. like all other commercial projects. and that order having usurped one unjust advantage over the rest of their fellow-citizens. for which he has so little occasion. The turn of mind which this habit naturally forms. without interruption. or by the misfortune of any of its successive owners. perhaps more than one third part of the whole lands in the country. and to all that it possesses. four or five hundred acres in the neighbourhood of his house. requires an exact attention to small savings and small gains. are objects which. be sold with it. or almost all. perhaps. Entails. is said to abhor perpetuities. that a great proprietor is a great improver. But in the present state of Europe. indeed. and he has little taste for any other. The elegance of his dress. He had no leisure to attend to the cultivation and improvement of land. Like what are called the fundamental laws of some monarchies. the supposition that every successive generation of men have not an equal right to the earth. than to profit. the great proprietor was sufficiently employed in defending his own territories. lest their poverty should render it ridiculous. is very seldom capable. In the ancient state of Europe. therefore. the occupiers of land were all tenants at will. he often wanted the inclination. or alienation.

are capable of acquiring property. a territory of boundless extent and fertility. A slave. The proprietor furnished them with the seed. The planting of sugar and tobacco can afford the expense of slave cultivation. A person who can acquire no property can have no other interest but to eat as much and to labour as little as possible. It is probable that it was partly upon account of this advantage. like the plains of Babylon. The experience of all ages and nations. Such slaves could acquire nothing but their daily maintenance. The produce was divided equally between the proprietor and the farmer. would require. was properly carried on by their master. gradually encouraged their villains to make upon their authority. and which seem. Poland. The pride of man makes him love to domineer. in the present times. necessary for cultivating the farm. In the English colonies. and the profits of a tobacco plantation. and nothing mortifies him so much as to be obliged to condescend to persuade his inferiors. and not by any interest of his own. that in this case occupied his own lands. Had they made any considerable part of their property. Hungary. Whatever cultivation and improvement could be carried on by means of such slaves. Land occupied by such tenants is properly cultivated at the expense of the proprietors. on the contrary. and having a certain proportion of the produce of the land. There is. In our sugar colonies. such a resolution could never have been agreed to. of which the principal produce is corn. known at present in France by the name of metayers. Both can afford the expense of slave cultivation but sugar can afford it still better than tobacco. is much greater. They are called in Latin Coloni Partiarii. and the instruments of husbandry. when it fell under the management of slaves. In ancient Italy. cattle. the whole work is done by slaves. he was liable to some penalty. they are least of all to be expected when they employ slaves for their workmen. he will generally prefer the service of slaves to that of freemen. To the slave cultivators of ancient times gradually succeeded a species of farmers. and partly upon account of the encroachments which the sovereigns. and he could take it from them at pleasure. are generally much greater than those of any other cultivation that is known either in Europe or America. that at present I know no English name for them. as much as that occupied by slaves. therefore. at . It was properly the proprietor himself. how much the cultivation of corn degenerated. he says. together with their women and servants. they have a plain interest that the whole produce should be as great as possible. however. in proportion to that of whites. It was at his expense. may satisfy us that their number cannot be very great. The raising of corn. In the time of Aristotle. The profits of a sugar plantation in any of our West Indian colonies. when the farmer either quitted or was turned out of the farm. in our sugar than in our tobacco colonies. is remarked both by Pliny and Columella. They have been so long in disuse in England. I believe. Such tenants. capable of acquiring property. it seems. is in the end the dearest of any. therefore. and the nature of the work can afford it. how unprofitable it became to the master. it had not been much better in ancient Greece. though inferior to those of sugar. consults his own ease. after setting aside what was judged necessary for keeping up the stock. The number of negroes. accordingly. Wherever the law allows it. Bohemia. cannot. in order that their own proportion may be so. by making the land produce as little as possible over and above that maintenance. This species of slavery still subsists in Russia. and in our tobacco colonies a very great part of it. the far greater part of the work is done by freemen. as has already been observed. They were not. and other parts of Germany. the cattle. were all his.If he maimed or murdered any of them. demonstrates that the work done by slaves. in short. can be squeezed out of him by violence only. are superior to those of corn.. to set at liberty all their negro slaves. the whole stock. being freemen. who can acquire nothing but his maintenance. however. on the contrary. But if great improvements are seldom to be expected from great proprietors. The seed. It was for his benefit. Whatever work he does beyond what is sufficient to purchase his own maintenance. Speaking of the ideal republic described in the laws of Plato. always jealous of the great lords. though it appears to cost only their maintenance. The late resolution of the Quakers in Pennsylvania. Moravia. though generally but to a small one. Whatever they acquired was acquired to their master. which was restored to the proprietor. one very essential difference between them. and instruments of husbandry. It is only in the western and south-western provinces of Europe that it has gradually been abolished altogether. and cultivated them by his own bondmen. to maintain 5000 idle men (the number of warriors supposed necessary for its defence).

but gave them damages. was to get one half of whatever it produced. enfranchised. the writ of right or the writ of entry. and as a great part of the yeomanry have freeholds of this kind. who laid out nothing. so favourable to the yeomanry. in the other they share them with their landlord. This species of tenants still subsists in some parts of Scotland. that the action of ejectment was invented. the proprietors complain. is. that their metayers take every opportunity of employing their master's cattle rather in carriage than in cultivation. is one of the most obscure points in modern history. The tithe. I believe. where five parts out of six of the whole kingdom are said to be still occupied by this species of cultivators. by the fictitious action of a common recovery. before the expiration of the lease. the country. which never amounted to a real loss. that tenure in villanage gradually wore out through the greater part of Europe. therefore the security of the tenant is equal to that of the proprietor. To this species of tenantry succeeded. to have been such as rendered this species of servitude altogether inconvenient. . A tax. a lease for life of forty shillings a-year value is a freehold. with a large profit. to have been rather a pious exhortation. and trusting that the honour of his landlord would take no advantage of so important an improvement. A villain. that of the proprietor on the one hand. however. than a law to which exact obedience was required from the faithful. which amounted to one half. properly so called. This action has been found so effectual a remedy. before the expiration of their term. because. however. not damages only. They are called steel-bow tenants. on account of the political consideration which this gives them. the whole order becomes respectable to their landlords. by the writ of ejectment. Even in England. It seems. because they may sometimes expect to recover it. is found to be a very great hindrance to improvement. they get the whole profits to themselves. and must therefore have been what the French call a metayer. Those laws and customs. where the yeomanry has always been most respected. It might be the interest of a metayer to make the land produce as much as could be brought out of it by means of the stock furnished by the proprietor.least. in England. If they were turned out illegally by the violence of their master. than all their boasted regulations of commerce taken together. but it could never be his interest to mix any part of his own with it. perhaps of Europe. he seldom makes use of the actions which properly belong to him as a landlord. and entitles the lessee to a vote for a member of parliament. in the one case. and it is certain. It could never. be legally ousted of their leases by a new purchaser. In England. having no stock of his own. The time and manner. though by very slow degrees. was long extremely precarious. which is but a tenth of the produce. even of such farmers. and in which his claim is not necessarily concluded by the uncertain decision of a single assize. therefore. and still is so in many parts of Europe. any part of the little stock which they might save from their own share of the produce. In England. The possession. They could. it was not till about the 14th of Henry VII. There is. be the interest even of this last species of cultivators. the action by which they obtained redress was extremely imperfect. when the landlord has occasion to sue for the possession of the land. who cultivated the land with their own stock. Those ancient English tenants. but possession. to lay out. have perhaps contributed more to the present grandeur of England. except in England. because the landlord. they may sometimes find it for their interest to lay out part of their capital in the further improvement of the farm. however. by which the tenant recovers. so far as I know. but sues in the name of his tenant. The law which secures the longest leases against successors of every kind. properly so called. in the modern practice. who are said by Chief-Baron Gilbert and Dr Blackstone to have been rather bailiffs of the landlord than farmers. must have been an effectual bar to it. In France. that. till it was gradually abolished by the joint operation of the two interests above mentioned. published a bull for the general emancipation of slaves. in the further improvement of the land. besides. and that of the sovereign on the other. any instance of the tenant building upon the land of which he had no lease. When such farmers have a lease for a term of years. It did not always reinstate them in the possession of the land. paying a rent certain to the landlord. and at the same time allowed to continue in possession of the land. in which so important a revolution was brought about. nowhere in Europe. The church of Rome claims great merit in it. even. Slavery continued to take place almost universally for several centuries afterwards. however. that so early as the twelfth century. could cultivate it only by means of what the landlord advanced to him. were probably of the same kind. Alexander III. farmers.

in the same manner. These services. to have been taxes of the same nature with the taille. seem. as no leasehold gives a vote for a member of parliament. therefore. or regulated by any precise rule. the taille is almost equal to a prohibition of its ever being employed upon the land. but that of a burgher. besides. but drives away all other stock from it. I believe. has been much obstructed by entails. though they are still by much too strait. to appear to have as little as possible. though with different degrees of oppression in different countries. in France. The taille. I believe. compared with one who trades with his own. The public taxes. and whoever rents the lands of another becomes subject to it. compared with the proprietor. were anciently. To make and maintain the high roads. therefore. The public services to which the yeomanry were bound. In Scotland the abolition of all services not precisely stipulated in the lease. a servitude which still subsists. besides. This tax. affect their own revenue. frequently for more than one year. for example. in the end. must always improve under great disadvantage. No gentleman. and provisions. but by the use and wont of the manor or barony. somewhat slackened their fetters. Under all these discouragements. in the course of a few years. It is his interest. at a price regulated by the purveyor. subjected the tenant to many vexations. the only monarchy in Europe where the oppression of purveyance has been entirely abolished. The farmer. were as irregular and oppressive as the services The ancient lords. The farmers. Great Britain is. were all calculated for what they supposed the interest of the proprietor. any pecuniary aid to their sovereign. indeed. the full value of his land. The proprietors of land were anciently the legislators of every part of Europe. very much altered for the better the condition of the yeomanry of that country. to nine years from the commencement of the lease. It was for his interest. with only equal good conduct. bound to perform a great number of services to the landlord. Its beneficial influence. and had not knowledge enough to foresee how much this must. were not less arbitrary than the private ones. In other parts of Europe. the yeomanry were bound to provide them with horses. being almost entirely arbitrary. is supposed to dishonour whoever is subject to it. the real interest of the landlord. The lands cultivated by the farmer must. and they did not foresee how much this regulation must obstruct improvement. and to degrade him below. was not the only one. their tenants. little improvement could be expected from the occupiers of land. everywhere. therefore. during a long term of years. and none in its improvement. too. easily allowed him to tallage. the term of their security was still limited to a very short period. It was introduced into Scotland so early as 1449. when his household. to which they were subject. It still subsists in France and Germany. it was supposed. who has stock. after it was found convenient to secure tenants both against heirs and purchasers. nor even any burgher. therefore. with all the liberty and security which law can give. not only hinders the stock which accumulates upon the land from being employed in its improvement. which they estimate by the stock that he has upon the farm. in this respect. as they called it. It is a tax upon the supposed profits of the farmer. in the long-run. Avarice and injustice are always short-sighted. is as a merchant who trades with burrowed money. so far as they affected the land. as it still subsists in France may serve as an example of those ancient tallages. not only the rank of a gentleman. The ancient tenths and fifteenths. Should any stock happen to accumulate in the hands of a French farmer. they had imagined. has. themselves. A late act of parliament has. or his officers of any kind. by a law of James II. That order of people. will submit to this degradation. with only equal good . which were seldom either specified in the lease. been lately extended to twentyseven. besides paying the rent. This tax. In Scotland. It has in that country. but that of the one. When the king's troops. and consequently to employ as little as possible in its cultivation. and thereby hurt. so usual in England in former times.peculiar to Great Britain. The laws relating to land. the heirs of entail being generally restrained from letting leases for any long term of years. carriages. though extremely unwilling to grant. the yeomanry are upon this account less respectable to their landlords than in England. passed through any part of the country. on account of the large share of the profits which is consumed by the interest of the loan. however. a period still too short to encourage the tenant to make the most important improvements. must always improve more slowly than that of the other. that no lease granted by any of his predecessors should hinder him from enjoying. The stock of both may improve.

stock is commonly acquired most slowly. not only of corn. by the general prohibition of the exportation of corn. have generally been acquired by fanning. perhaps. After small proprietors. and forestallers. the farmers are said to be not inferior to those of England. regraters. and. There are more such. To what degree such restraints upon the inland commerce of this commodity. rich and great farmers are in every country the principal improvers. . In the republican governments of Holland. but of almost every other part of the produce of the farm. obstructed the cultivation of ancient Italy. the trade. from the nature of things. secondly. and less favourably circumstanced. little stock is likely to go from any other profession to the improvement of land in the way of farming. he might have employed in the further improvement of the land. joined to the general prohibition of exportation. though even there the great stocks which are in some places employed in farming. that a man of any considerable stock should quit the superior. the yeomanry are regarded as an inferior rank of people. by the absurd laws against engrossers. unfavourable to the improvement and cultivation of land. inferior to that of a proprietor. which seems to have been a very universal regulation. and by the privileges of fairs and markets. therefore. perhaps. besides. on account of the large share of the produce which is consumed in the rent. of all others. and which. even to the better sort of tradesmen and mechanics. It can seldom happen. over and above all this. It has already been observed in what manner the prohibition of the exportation of corn. in order to place himself in an inferior station. however. Through the greater part of Europe. The ancient policy of Europe was. in England than in any other European monarchy. perhaps. in Great Britain than in any other country. therefore. very easy to imagine. had the farmer been proprietor. whether carried on by the proprietor or by the farmer. and in all parts of Europe to the great merchants and master manufacturers. naturally the most fertile country in Europe. perhaps. in which. without a special licence. More does. must have discouraged the cultivation of countries less fertile. by the restraints which were laid upon the inland commerce.conduct. The station of a farmer. and at that time the seat of the greatest empire in the world. and of Berne in Switzerland. is. together with some encouragement given to the importation of foreign corn. Even in the present state of Europe. first. be improved more slowly than those cultivated by the proprietor. it is not.

either to the king. of several of the towns of England. and stallage. and sometimes of the general amount only of all those taxes. upon some occasions. must. chap. After the fall of the Roman empire. OF THE RISE AND PROGRESS OF CITIES AND TOWNS. the sovereigns of all the different countries of Europe. both those poll-taxes and those exemptions seem to have been altogether personal. and who found it convenient to build their houses in the neighbourhood of one another. That part of the king's revenue which arose from such poll-taxes in any particular town. I believe. that they arrived at liberty and independency much earlier than the occupiers of land in the country. each of them. The burghers themselves frequently got credit enough to be admitted to farm the revenues of this sort winch arose out of their own town. 223. on the contrary. in the same manner as in several of the Tartar governments of Asia at present. would grant to particular traders. They. indeed. it appears evidently. like the hawkers and pedlars of the present times. first edition. but in return being allowed to collect it in their own way. Firma Burgi.CHAPTER III. in the same state of villanage with the occupiers of land in the country. and from fair to fair. when they passed through certain manors. for a rent certain. they becoming jointly and severally answerable for the whole rent. mention is frequently made. during a term of years. that they might give away their own daughters in marriage without the consent of their lord. sect. or very nearly. to have been of servile. and sometimes to other persons. for the sake of common defence. who had. p. indeed. the proprietors of land seem generally to have lived in fortified castles on their own estates. In the very imperfect accounts which have been published from Doomsday-book. to such particularly as lived in their own demesnes. mean set of people. sometimes of the tax which particular burghers paid. during either their lives. authority to do this. They seem. were upon this account called free traders. The inhabitants of cities and towns were. AFTER THE FALL OF THE ROMAN EMPIRE. sufficiently show what they were before those grants. They consisted. At first. Sometimes the king. it seems. or to some other great lord. or the pleasure of their protectors. for this sort of protection. a general exemption from such taxes. usually paid to their protector a sort of annual poll-tax. The people to whom it is granted as a privilege. was quite agreeable to the usual economy of. and being thus altogether freed from the insolence of the king's officers. 18. etc. should succeed to their goods. that upon their death their own children. and to surround them with a wall. and not their lord. The privileges which we find granted by ancient charters to the inhabitants of some of the principal towns in Europe. and to have affected only particular individuals. who used frequently to let whole manors to all the tenants of those manors. and this tax might perhaps be considered as compensation for what their patrons might lose by their exemption from other taxes. when they erected in it a booth or stall to sell them in. Such traders. These last were composed chiefly of the proprietors of lands. pontage. p. or very nearly of servile condition.} But how servile soever may have been originally the condition of the inhabitants of the towns. to have been a very poor. and that they might dispose of their own effects by will. sometimes a great lord. a circumstance . p. in those days. who seemed to travel about with their goods from place to place. not more favoured than those of the country. have been either altogether. These different taxes were known in England by the names of passage. In all the different countries of Europe then. The towns were chiefly inhabited by tradesmen and mechanics. when they carried about their goods from place to place in a fair. and in the midst of their own tenants and dependants. and to pay it into the king's exchequer by the hands of their own bailiff. sometimes to the sheriff of the county. among whom the public territory was originally divided. taxes used to be levied upon the persons and goods of travellers.} To let a farm in this manner. used commonly to be let in farm. 3. v. in return. In those days protection was seldom granted without a valuable consideration. though in other respects of servile. after the fall of the Roman empire. or very nearly of servile condition. of a very different order of people from the first inhabitants of the ancient republics of Greece and Italy. who seem. they becoming jointly and severally answerable for the whole rent. 10. lastage. before those grants. {See Madox. also History of the Exchequer. when they went over certain bridges. {see Brady's Historical Treatise of Cities and Boroughs.

as individuals. he had no reason either to hate or fear the burghers. I reckon it not improbable that they were. as individuals. In process of time. he might despise. They were the enemies of his enemies. therefore. it might have been extremely inconvenient to have left them to seek this sort of justice from any other tribunal. The king hated and feared them too. In order to understand this. they were capable of making no contemptible resistance. but as a parcel of emancipated slaves. the privilege of making bye-laws for their own . the exemptions. along with the freedom of trade. and it was his interest to render them as secure and independent of those enemies as he could. which. In those disorderly times. be necessary to grant to such towns as were admitted to farm their own revenues. and that they might dispose of their own effects by will. ceased to be personal. for a term of years only. through the whole extent of his dominions. as anciently understood. they now at least became really free. But it must seem extraordinary. to become either his slaves or vassals. that they might give away their own daughters in marriage. probably. without either expense or attention of their own. Those exemptions. but though. considered as single individuals. but as burghers of a particular burgh. the important privileges. were left to the decision of their own magistrates. had no power to defend themselves. almost of a different species from themselves. of making bye-laws for their own government. and of reducing all their inhabitants under a sort of military discipline. besides. {See Madox.own bailiff. that is. some sort of compulsive jurisdiction to oblige their own citizens to make payment. and his Successors of the House of Suabia. for the same reason that they had been called free burghers or free traders. the sovereign of perhaps no country in Europe was able to protect. much greater and more extensive jurisdictions were frequently granted to them. a circumstance in those days regarded as of the greatest importance. though I cannot produce any direct evidence of it. Mutual interest. which was. the most likely to be improved by the natural course of things. in those days. By granting them magistrates of their own. the principal attributes of villanage and slavery being thus taken away from them. I know not. reserving a rent certain. In England they were generally exempted from suit to the hundred and county courts: and all such pleas as should arise among them. above mentioned. the pleas of the crown excepted. and being thus altogether freed from the insolence of the king's officers. by obliging them to watch and ward. and who were not strong enough to defend themselves. Whether such privileges had before been usually granted. it seems to have become the general practice to grant it to them in fee. The payment having thus become perpetual. Along with this grant. disposed them to support the king. that the sovereigns of all the different countries of Europe should have exchanged in this manner for a rent certain. that is for ever. that branch of their revenue. or to enter into a league of mutual defence for the common protection of one another. with the privilege of having magistrates and a town-council of their own. Nor was this all. They were generally at the same time erected into a commonalty or corporation. never more to be augmented. have in this manner voluntarily erected a sort of independent republics in the heart of their own dominions. by night as well as by day. Those whom the law could not protect. in our present sense of the word freedom. for which it was made. in return. But however this may have been. perhaps. was called a free burgh. it must be remembered. were obliged either to have recourse to the protection of some great lord. of all others. the weaker part of his subjects from the oppression of the great lords. The burghers naturally hated and feared the lords. therefore. The wealth of the burghers never failed to provoke their envy and indignation. were generally bestowed upon the burghers of the town to whom it was given. and they plundered them upon every occasion without mercy or remorse. and could not afterwards be considered as belonging to individuals. but by entering into a league of mutual defence with their neighbours. In other countries. Firma Burgi. whom they considered not only as a different order. and the king to support them against the lords. The inhabitants of cities and burghs. and in order to obtain it. perhaps. of building walls for their own defence. The lords despised the burghers. At first. that their children should succeed to them. however. and that they should. See also Pfeffel in the Remarkable events under Frederick II. in the same manner as it had been to other farmers. that. naturally became perpetual too.} It might. to particular burghers. never afterwards to be augmented. upon this account. to guard and defend those walls against all attacks and surprises. the farm of the town was probably let to the burghers.

on account either of their distance from the principal seat of government. and conquered all the nobility in their neighbourhood. They became. oppressed with the servitude of . and along with them the liberty and security of individuals.government. This is the short history of the republic of Berne. The princes who lived upon the worst terms with their barons. with the bishops of the royal demesnes. more favourable to his power. Their advice consisted of two different proposals. too. might only tempt the injustice of their oppressors. when they are secure of enjoying the fruits of their industry. Order and good government. or of some other reason. however. not to have been inferior to that of the country. It is from this period. like other peaceable inhabitants. for of that city the history is somewhat different. They were. and that the famous Hanseatic league first became formidable. for his allies. because. without some authority to compel their inhabitants to act according to some certain plan or system. One was to erect a new order of jurisdiction. {See Madox. appears to have been a most munificent benefactor to his towns. but the conveniencies and elegancies of life. and that of reducing all their inhabitants under a sort of military discipline. he gave them all the means of security and independency of the barons which it was in his power to bestow. or have enabled them to give the king any considerable support. so considerable.} The militia of the cities seems. But men in this defenceless state naturally content themselves with their necessary subsistence. or by granting it to some other farmer. they naturally exert it to better their condition. march out upon proper occasions to the assistance of the king. as well as of several other cities in Switzerland. besides the stated farm-rent of the town. In countries such as Italy or Switzerland. were exposed to every sort of violence. under the command of their own magistrates. The other was to form a new militia. his son Lewis. and to live. in those times. where the authority of the sovereign. was established in cities long before it was commonly practised by the occupiers of land in the country. all ground of jealousy and suspicion. by establishing magistrates and a town-council in every considerable town of his demesnes. of the natural strength of the country itself. Hence the origin of the representation of burghs in the states-general of all great monarchies in Europe. that the greater part of the free towns of Germany received the first grants of their privileges. that the sovereign could impose no tax upon them. which aims at something more than necessary subsistence. obliging them to pull down their castles in the country. That industry. for example. were in this manner established in cities. consulted. without their own consent. It was during the unprosperous reigns of the princes of the house of Suabia. though frequently very low. and. he took away from those whom he wished to have for his friends. that he was ever afterwards to oppress them. the sovereign came to lose the whole of his authority. they frequently had the advantage in their disputes with the neighbouring lords. if one may say so. On the contrary. some extraordinary aid to the king. Towards the end of his reign. the cities had no opportunity of becoming entirely independent. {See Pfeffel. that of building walls for their own defence. their deputies seem sometimes to have been employed by him as a counterbalance in those assemblies to the authority of the great lords.} Philip I. to acquire more. that we are to date the institution of the magistrates and councils of cities in France. In countries such as France and England. where they might join with the clergy and the barons in granting. never was destroyed altogether. King John of England. of which so great a number arose and perished between the end of the twelfth and the beginning of the sixteenth century. therefore. called upon to send deputies to the general assembly of the states of the kingdom. in the city. If. in which. upon urgent occasions. seem accordingly to have been the most liberal in grants of this kind to their burghs. in the hands of a poor cultivator. of France lost all authority over his barons. according to the French antiquarians. at a time when the occupiers of land in the country. therefore. and as they could be more readily assembled upon any sudden occasion. If you except Venice. the cities generally became independent republics. Being generally. concerning the most proper means of restraining the violence of the great lords. according to Father Daniel. By granting them the farm of their own town in fee. it is the history of all the considerable Italian republics. either by raising the farm-rent of their town. and to acquire not only the necessaries. known afterwards by the name of Lewis the Fat. Without the establishment of some regular government of this kind. by making the inhabitants of those towns. no voluntary league of mutual defence could either have afforded them any permanent security.

were extremely favourable to that of some Italian cities. naturally endeavoured to establish some manufactures of the same kind in their own country. But those of a city. perhaps. There were. Thus the wool of England used to be exchanged for the wines of France. and all those provinces of Spain which were under the government of the Moors. or by performing the office of carriers between distant countries. and Pisa. The cities of Italy seem to have been the first in Europe which were raised by commerce to any considerable degree of opulence. that seem to have been established in the western provinces of Europe. are the produce of their own industry. A taste for the finer and more improved manufactures was. than in those rich ones that are said to abound in them. it must always be understood of the finer and more improved. afforded some food to the vanity of the great proprietors. for the manufactured produce of more civilized nations. either in exchange for the manufactured produce of their own industry. or of such as are fit for distant sale. either of its subsistence or of its employment. Hence the origin of the first manufactures for distant sale. The great armies which marched from all parts to the conquest of the Holy Land. accumulated in the hands of the industrious part of the inhabitants of the country. and may draw them from the most remote corners of the world. by the great waste of stock and destruction of inhabitants which they occasioned. introduced by foreign commerce into countries where no such works were carried on. was Egypt till it was conquered by the Turks. Such was the Greek empire as long as it subsisted.villanage. he would naturally conceal it with great care from his master. and that of the Saracens during the reigns of the Abassides. No large country. The commerce of a great part of Europe in those times. some part of the coast of Barbary. and for the silks and velvets of France and Italy. after the fall of the Roman empire. was a source of opulence to those republics. In every large country both the clothing and household furniture or the far greater part of the people. and always in supplying them with provisions. The inhabitants of a city. as the only sanctuaries in which it could be secure to the person that acquired it. to whom it would otherwise have belonged. in this manner. within the narrow circle of the commerce of those times. and the fine cloths of Flanders. sometimes in transporting them thither. it is true. in this manner. but all of them taken together. who eagerly purchased them with great quantities of the rude produce of their own lands. The inhabitants of trading cities. Genoa. from the country. the merchants. too. gave extraordinary encouragement to the shipping of Venice. some little stock should accumulate. they must necessarily have retarded the progress of the greater part of Europe. But when this taste became so general as to occasion a considerable demand. In the latter you will generally find. some countries that were opulent and industrious. grow up to great wealth and splendour. that if he could conceal himself there from the pursuit of his lord for a year. if one may say so. They have a much wider range. and take the first opportunity of running away to a town. consisted chiefly in the exchange of their own rude. naturally took refuge in cities. too. situated near either the sea-coast or the banks of a navigable river. They were the commissaries. accordingly. The law was at that time so indulgent to the inhabitants of towns. by importing the improved manufactures and expensive luxuries of richer countries. taken singly. and the most destructive frenzy that ever befel the European nations. must always ultimately derive their subsistence. This is even more universally the case in those poor countries which are commonly said to have no manufactures. and exchanging the produce of one for that of another. Whatever stock. therefore. but all those to which it traded. are not necessarily confined to derive them from the country in their neighbourhood. ever did or could subsist without some sort of manufactures being carried on in it. while not only the country in its neighbourhood. Each of those countries. The crusades. and so desirous of diminishing the authority of the lords over those of the country. could afford it but a small part. in order to save the expense of carriage. in the same manner as the corn in Poland is at this day. were in poverty and wretchedness. Italy lay in the centre of what was at that time the improved and civilized part of the world. both in the clothes and household furniture of the lowest . A city might. and when it is said of any such country that it has no manufactures. though. it must be observed. exchanged for the wines and brandies of France. could afford it both a great subsistence and a great employment. however. of those armies. Such. and the whole materials and means of their industry. he was free for ever.

They are thus both encouraged and enabled to increase this surplus produce by a further improvement and better cultivation of the land. is sometimes established in a maritime city. The manufacturers first supply the neighbourhood. by the gradual refinement of those household and coarser manufactures which must at all times be carried on even in the poorest and rudest countries. and brocades. They give a new value to the surplus part of the rude produce. The cultivators get a better price for their surplus produce. page 247 and 256. Abundance. and can purchase cheaper other conveniencies which they have occasion for. and afterwards. and as the fertility of she land had given birth to the manufacture. or caprice. When the Venetian manufacture was first established. and they furnish the cultivators with something in exchange for it that is either useful or agreeable to them. a much greater proportion of foreign productions than in the former. Those manufactures which are fit for distant sale. what is the same thing. not of the first woollen manufacture of England. and which were introduced into England in the beginning of the reign of Elizabeth. of the stocks of particular merchants and undertakers. and increases still further it's fertility. In a small bulk it frequently . upon easier terms than they could have obtained it before. it may frequently be difficult to send this surplus abroad. and offered to introduce there the silk manufacture. judgment. who find that their industry can there procure them more of the necessaries and conveniencies of life than in other places. the refined and improved manufacture easily may. and they began the manufacture with three hundred workmen. could. Manufactures introduced in this manner are generally employed upon foreign materials. seem to have been the manufactures of fine cloths that anciently flourished in Flanders. more distant markets. seem not to have been common in the northern parts of Italy before the sixteenth century. and sometimes in an inland town. without the greatest difficulty. which flourished in Lucca during the thirteenth century. was so. {See Sandi Istoria civile de Vinezia. but of the first that was fit for distant sale. naturally fertile and easily cultivated. who established them in imitation of some foreign manufactures of the same kind. nor even the coarse manufacture. so the progress of the manufacture reacts upon the land. The more ancient manufacture of Lucca was likewise carried on with foreign materials. They were banished from thence by the tyranny of one of Machiavel's heroes. Spanish wool was the material. The cultivation of mulberry trees. are the offspring of foreign commerce. and the breeding of silk-worms. or. by saving the expense of carrying it to the water-side.rank of people. therefore. indeed. many privileges were conferred upon them. Such manufactures are generally employed upon the materials which the country produces.} Their offer was accepted. and inconveniency of river navigation. as their work improves and refines. or very nearly the whole. Such manufactures. and such are the present silk manufactures of Lyons and Spitalfields. More than one half the materials of the Lyons manufacture is at this day foreign silk. if one may say so. happen to determine. the materials were all brought from Sicily and the Levant. or to some distant market. and on account of the expense of land carriage. In 1310. and encourages a great number of workmen to settle in the neighbourhood. the price of it. and exchange their finished work. too. For though neither the rude produce. and as it were of their own accord. support the expense of a considerable land-carriage. velvets. as they are generally introduced by the scheme and project of a few individuals. and such seem to have been the ancient manufactures of silks. An inland country. Castruccio Castracani. by the violent operation. when it was first established. the whole. manufactures for distant sale grow up naturally. They work up the materials of manufacture which the land produces. and they seem frequently to have been first refined and improved In such inland countries as were not. Sometimes they have been introduced in the manner above mentioned. of whom thirty-one retired to Venice. No part of the materials of the Spitalfields manufacture is ever likely to be the produce of England. At other times. being imitations of foreign manufactures. at a very great. therefore. renders provisions cheap. The manufactures of Flanders were carried on chiefly with Spanish and English wool. seem to have been introduced into different countries in two different ways. Those arts were not introduced into France till the reign of Charles IX. according as their interest. Such. for more materials and provisions. i. The seat of such manufactures. and sometimes even from all water carriage. but at a considerable distance from the sea-coast. part 2 vol. produces a great surplus of provisions beyond what is necessary for maintaining the cultivators. nine hundred families were driven out of Lucca.

and. Such manufactures are the offspring of agriculture. for example which weighs only eighty pounds. and may easily be sent to the remotest corners of the world. as it were. of their own accord. Birmingham. and of the manufactures immediately introduced by it. their extension and improvement have generally been posterior to those which were the offspring of foreign commerce. . Sheffield. The extension and improvement of these last could not take place but in consequence of the extension and improvement of agriculture. the manufactures of Leeds.contains the price of a great quantity of rude produce. is in this manner virtually exported in that of the complete manufacture. In the modern history of Europe. contains in it the price. more than a century before any of those which now flourish in the places above mentioned were fit for foreign sale. not only of eighty pounds weight of wool. The corn which could with difficulty have been carried abroad in its own shape. and of their immediate employers. A piece of fine cloth. the maintenance of the different working people. Halifax. but sometimes of several thousand weight of corn. and Wolverhampton. and which I shall now proceed to explain. England was noted for the manufacture of fine cloths made of Spanish wool. the last and greatest effect of foreign commerce. In this manner have grown up naturally.

.

Merchants are commonly ambitious of becoming country gentlemen. The merchant is commonly a bold. Mr Hume is the only writer who. who had before lived almost in a continual state of war with their neighbours. the other. Secondly. not be too large for his company. surrounded with a multitude of retainers and dependants. and with them the liberty and security of individuals. situated in an unimproved country. and might frequently. in three different ways: First. and attention. to which mercantile business naturally forms a merchant. he can make use of it in no other way than by maintaining a hundred or a thousand men. that he strewed the floor of his hall with clean hay or rushes in the season. with profit and success. but extended more or less to all those with which they had any dealings. the wealth acquired by the inhabitants of cities was frequently employed in purchasing such lands as were to be sold. whereas a mere country gentleman is accustomed to employ it chiefly in expense. HOW THE COMMERCE OF TOWNS CONTRIBUTED TO THE IMPROVEMENT OF THE COUNTRY. commerce and manufactures gradually introduced order and good government. If this surplus produce is sufficient to maintain a hundred or a thousand men. consumes the whole in rustic hospitality at home. If he improves at all. A merchant is accustomed to employ his money chiefly in profitable projects. when he has a probable prospect of raising the value of it in proportion to the expense. the other. however. has hitherto taken notice of it. is by far the most important of all their effects. render him much fitter to execute. He is at all times. having no equivalent to give in return for their maintenance. they gave encouragement to its cultivation and further improvement. when they do. Before the extension of commerce and manufactures in Europe. besides. from the sovereign down to the smallest baron. economy.CHAPTER IV. and yet afford it as cheap to the consumers as that of more distant countries. a country gentleman a timid undertaker. if he has any capital. necessarily derived the greatest benefit from this market. This benefit was not even confined to the countries in which they were situated. Its rude produce being charged with less carriage. by affording a great and ready market for the rude produce of the country. The one often sees his money go from him. they are generally the best of all improvers. very seldom expects to see any more of it. Their own country. and. we can easily form a notion of Westminster-hall was the dining-room of William Rufus. than those of mere country gentlemen. though it has been the least observed. but being fed entirely by his bounty. perhaps. must have frequently observed how much more spirited the operations of merchants were in this way. This. a great proprietor. It was reckoned a piece of magnificence in Thomas Becket. the hospitality of the rich and the great. exceeded every thing which. having nothing for which he can exchange the greater part of the produce of his lands which is over and above the maintenance of the cultivators. Thirdly. The habits. and of servile dependency upon their superiors. it is commonly not with a capital. who. seldom ventures to employ it in this manner. consequently. The increase and riches of commercial and manufacturing towns contributed to the improvement and cultivation of the countries to which they belonged. any project of improvement. Those different habits naturally affect their temper and disposition in every sort of business. which is not always the case. on account of its neighbourhood. gave some encouragement to the industry and improvement of all. Whoever has had the fortune to live in a mercantile town. of which a great part would frequently be uncultivated. must obey him. of order. but with what he can save out or his annual revenue. The one is not afraid to lay out at once a large capital upon the improvement of his land. so far as I know. In a country which has neither foreign commerce nor any of the finer manufactures. in order . To all of them they afforded a market for some part either of their rude or manufactured produce. when once he parts with it. among the inhabitants of the country. for the same reason that soldiers must obey the prince who pays them. and. and return to him again with a profit. in the present times. the traders could pay the growers a better price for it. and lastly. therefore.

and the leaders in war. A crown. No other person had sufficient authority to do this. not being what was then called a lord of regality. and those jurisdictions. and its continuance depends upon his good pleasure. and must obey him with as little reserve. have been very great to admit of such exaggeration. so he feeds his tenants at their houses. therefore. a gentleman of Lochaber in Scotland. It seems to be common in all nations to whom commerce and manufactures are little known. is as dependent upon the proprietor as any servant or retainer whatever. was founded the power of the ancient barons. all necessarily flowed from the state of property and manners just now described.000 people. They necessarily became the judges in peace. says Doctor Pocock. or too large a family. because each of them could there turn the whole force of all the inhabitants against the injustice of anyone. Upon the authority which the great proprietors necessarily had. and invite all passengers. He was. we may find. A tenant at will. Without remounting to the remote antiquities of either the French or English monarchies. They could maintain order. almost the same effort as to extinguish a civil war. in particular. and execute the law. were all rights possessed allodially by the great proprietors of land. I have seen.that the knights and squires. to leave the command of the country militia to those whom that militia would obey. Such a proprietor. many proofs that such effects must always flow from such causes. It is a mistake to imagine that those territorial jurisdictions took their origin from the feudal law. and. where all the inhabitants were armed. obliged to abandon the administration of justice. through the greater part of the country. to whom. had not. the other great proprietors paid certain respects. The subsistence of both is derived from his bounty. The authority and jurisdiction of the Saxon lords in England appear to have been as great before the Conquest as that of any of the Norman lords after it. of coining money. might not spoil their fine clothes when they sat down on the floor to eat their dinner. nor will money at present purchase a greater quantity of commodities there than in other places. half a crown. It is not thirty years ago since Mr Cameron of Lochiel. for the same reason. The occupiers of land were in every respect as dependent upon the great proprietor as his retainers. several centuries before even the name of the feudal law was known in Europe. in such a state of things. to those who were capable of administering it. he was little more than the greatest proprietor in his dominions. in the Highlands of Scotland. it must. an Arabian chief dine in the streets of a town where he had come to sell his cattle. The king. and with out being so much as a justice of peace. both civil and criminal. Not only the highest jurisdictions. a lamb. 30. but a vassal of the Duke of Argyll. within their respective demesnes. of all who dwelt upon their estates. A hospitality nearly of the same kind was exercised not many years ago in many different parts of the Highlands of Scotland. were tenants at will. was some years ago. But the feudal law is not supposed to have become the common law of England till after the Conquest. who could not get seats. That the most extensive authority and jurisdictions were possessed by the great lords in France allodially. Even such of them as were not in a state of villanage. for the sake of common defence against their common enemies. a sheep. and even that of making bye-laws for the government of their own people. even common beggars. would have cost the king. it will frequently be more convenient for the proprietor. over their tenants and retainers. who paid a rent in no respect equivalent to the subsistence which the land afforded them. at his different manors. In a country where the surplus produce of a large estate must be consumed upon the estate itself. That authority. to sit down with him and partake of his banquet. long before the feudal law was introduced into that country. He is thereby saved from the embarrassment of either too large a company. that part of it be consumed at a distance from his own house. however. used. and accustomed to stand by one another. and though the number here may have been exaggerated. notwithstanding. is a matter of fact that admits of no doubt. nor even a tenant in chief. The great Earl of Warwick is said to have entertained every day. a common rent for lands which maintained a family. to exercise the highest criminal jurisdictions over his . In some places it is so at this day. had he attempted it by his own authority. in much later times. without any legal warrant whatever. To have enforced payment of a small debt within the lands of a great proprietor. but the power of levying troops. In those ancient times. provided they who consume it are as dependent upon him as either his retainers or his menial servants. who possesses land sufficient to maintain his family for little more than a quit-rent. as he feeds his servants and retainers at his own house.

whose rent never exceeded £500 a-year. whereas.000 a-year cannot well employ his revenue in any other way than in maintaining. the rent. as they could find a method of consuming the whole value of their rents themselves. and to weaken that of the great proprietors. he maintains as great. because it could not alter sufficiently that state of property and manners from which the disorders arose. nor any of the finer manufactures. the meanest. and no other human creature was to have any share of them. Though he contributes. and too strong in the inferior members. and it is not improbable that the state of that part of the country at that time made it necessary for him to assume this authority. than he could have done by the ancient method of expense. to a very few. therefore. 1000 families. however. But what all the violence of the feudal institutions could never have effected. it could not do either sufficiently for establishing order and good government among the inhabitants of the country. In the present state of Europe. to many not a hundredth. perhaps. He generally contributes. though without any of the formalities of justice. carried. By paying that price. the number of workmen employed in collecting and preparing it must necessarily have been very great. who are all of them necessarily at his command. from the king down to the smallest proprietor. and the most sordid of all vanities they gradually bartered their whole power and authority. in the more ancient method of expense. During the minority of the proprietor. It established a regular subordination. and with it the whole weight and authority which it could give them. as before. and the open country still continued to be a scene of violence. almost continually upon one another. . perhaps. The introduction of the feudal law. may be regarded as an attempt to moderate. not a tenth. too weak in the head. and thus indirectly contributes to the maintenance of all the workmen and their employers. he indirectly pays all those wages and profits. the silent and insensible operation of foreign commerce and manufactures gradually brought about. and disorder. The buckles. The authority of government still continued to be. or for something as frivolous and useless. who was charged with the maintenance and education of the pupil. and who. but a very small proportion to that of each. or. and he generally does so. provided it was in a manner not unsuitable to his rank. or even a greater number of people. perhaps. perhaps. These gradually furnished the great proprietors with something for which they could exchange the whole surplus produce of their lands. 800 of his own people into the rebellion with him. because generally they can all be maintained without him. They still continued to make war according to their own discretion. seems. the price of the maintenance of 1000 men for a year. without sharing it either with tenants or retainers. That gentleman. in 1745. or even a ten thousandth part of their whole annual maintenance. this difference was perfectly decisive. therefore. together with the management of his lands. were to be all their own. for the gratification of the most childish. Its great price generally arises from the wages of their labour. so far from extending.own people. what is the same thing. rapine. a man of £10. With the judges that were to determine the preference. was supposed to have a right of disposing of him in marriage. to have been the vile maxim of the masters of mankind. In a country where there is no foreign commerce. He is said to have done so with great equity. however. they must have shared with at least 1000 people. the king was as incapable of restraining the violence of the great lords as before. and very frequently upon the king. consequently. not worth the commanding. fell into the hands of his immediate superior. But though this institution necessarily tended to strengthen the authority of the king. or being able to command more than ten footmen. and the excessive strength of the inferior members was the cause of the weakness of the head. they exchanged the maintenance. For though the quantity of precious productions for which he exchanges his whole revenue be very small. For a pair of diamond buckles. All for ourselves. and the profits of all their immediate employers. in every age of the world. those of all great proprietors into the hands of the king. without directly maintaining twenty people. they had no disposition to share them with any other persons. and.000 a-year can spend his whole revenue. to the maintenance of them all. the authority of the great allodial lords. As soon. Indirectly. they are all more or less independent of him. and nothing for other people. and thus. in order to maintain the public peace. from his authority as guardian. accompanied with a long train of services and duties. a man of £10. After the institution of feudal subordination. and which they could consume themselves. and to some not a thousandth.

taken singly. or to his affection for his own person. and his benevolence. His tenants could agree to this upon one condition only. Even a tenant at will. and there is a history written by a Tartar Khan. . they may. and such a tenant will expose neither his life nor his fortune in the service of the proprietor. It does not. what is the same thing. perhaps. was obtained for the proprietor. he frequently has no bounds to his expense. Among simple nations. Each tradesman or artificer derives his subsistence from the employment. such as the Tartars and Arabs. it seems. is not altogether dependent upon the landlord. but of a hundred or a thousand different customers. Though in some measure obliged to them all. in the same manner as he had done the rest. perhaps maintain as great. it was impossible that the number of their retainers should not as gradually diminish. such as have possessed some considerable estate from father to son for many successive generations. By the removal of the unnecessary mouths. beyond what is either expressly stipulated in the lease. the great proprietors were no longer capable of interrupting the regular execution of justice. and his landlord must not expect from him even the most trifling service. are very rare in commercial countries. the price of a greater surplus. nobody having sufficient power to disturb its operations in the one. such as Wales. in the actual state of their improvement. or the Highlands of Scotland. therefore. The expensive vanity of the landlord made him willing to accept of this condition. The cause continuing to operate. a greater number of people than before. any more than in the other. But where he can spend the greatest revenue upon his own person. for a mess of pottage in time of hunger and necessity. for trinkets and baubles. they are very common. The Arabian histories seem to be all full of genealogies. notwithstanding the complaints of depopulation. and which contains scarce any thing else. A regular government was established in the country as well as in the city. The same cause gradually led them to dismiss the unnecessary part of their tenants. contributes often but a very small share to the maintenance of any individual of this greater number. or of disturbing the peace of the country. very seldom remain long in the same family. however. not of one. according to the imperfect state of cultivation and improvement in those times. In commercial countries. The personal expense of the great proprietors having in this manner gradually increased. he is altogether independent. or. till they were at last dismissed altogether. in spite of the most violent regulations of law to prevent their dissipation. and hence the origin of long leases. that very old families. Having sold their birth-right. and by exacting from the farmer the full value of the farm. But if he has a lease for along term of years. all of them taken together. The pecuniary advantages which they receive from one another are mutual and equal. not like Esau. therefore. The tenants having in this manner become independent. he was desirous to raise his rents above what his lands. who pays the full value of the land. or. and the retainers being dismissed. without any regulations of law. reduced to the number necessary for cultivating it. But when they spend them in maintaining tradesmen and artificers. they became as insignificant as any substantial burgher or tradesmen in a city. or imposed upon him by the common and known law of the country. is seldom so violent as to attempt to maintain more than he can afford. but I cannot help remarking it. he is apt to run out. he is not absolutely dependent upon any one of them. and the occupiers of land. riches. In countries which have little commerce. Each of them. on the contrary. with profit. the consumable nature of their property necessarily renders all such regulations impossible. for among nations of shepherds. fitter to be the playthings of children than the serious pursuits of men. relate to the present subject. a greater surplus. but. on the contrary. each of them maintains entirely all his own tenants and all his own retainers. they frequently do.When the great proprietors of land spend their rents in maintaining their tenants and retainers. whatever they should lay not in the further improvement of the land. a proof that ancient families are very common among those nations. which has been translated into several European languages. because he frequently has no bounds to his vanity. that they should be secured in their possession for such a term of years as might give them time to recover. in the wantonness of plenty. Farms were enlarged. on account of the waste which attends rustic hospitality. could afford. In countries where a rich man can spend his revenue in no other way than by maintaining as many people as it can maintain. which the merchants and manufacturers soon furnished him with a method of spending upon his own person.

but must bid adieu for ever to all hope of either great fortune or great illustration. besides. acted merely from a view to their own interest. of the great extent of the sea-coast in proportion to that of the whole country. however. which would otherwise have taken that direction. and afford the conveniency of water carriage to some of the most inland parts of it. the most intelligent. the English legislature has been peculiarly attentive to the . Such a person. of manufactures for distant sale. the law of primogeniture. of which the wealth is founded altogether in agriculture. instead of applying to trade or to some profession. too. by a different employment of his stock. Such land. Compare the slow progress of those European countries of which the wealth depends very much upon their commerce and manufactures. fifty or sixty pounds is often found a sufficient stock to begin a plantation with. and the high price of what is brought thither. might indeed expect to live very happily and very independently. who had not the least intention to serve the public. and the most successful. naturally inspires. that. burdened with repairs and other occasional charges. For the sake of the superior security. The free rent of the land would go no nearer to pay the interest of the purchase-money. is perhaps as well fitted by nature as any large country in Europe to be the seat of foreign commerce. instead of being the effect. who. to which the interest of money is not liable. will often disdain to be a farmer. is in North America to be had almost for nothing.A revolution of the greatest importance to the public happiness. that it could no longer sell at a monopoly price. should employ a capital of two or three thousand pounds in the purchase and cultivation of a small piece of land. The rent never pays the interest of the purchase-money. England. too. too whose revenue is derived from another source often loves to secure his savings in the same way. was in this manner brought about by two different orders of people. when he retires from business. and perpetuities of different kinds. and the industry of the other. To gratify the most childish vanity was the sole motive of the great proprietors. the number of inhabitants is not supposed to double in less than five hundred years. though he cannot aspire at being a proprietor. prevents a great number of capitals from being employed in its cultivation and improvement. The same regulations. is generally of all improvers the most industrious. and of the many navigable rivers which run through it. is. or at a price much below the value of the natural produce. views it with all the affection which property. In Europe. who knows every part of his little territory. This order. The merchants and artificers. So much land would come to market. In North America. indeed. was gradually bringing about. is necessarily both slow and uncertain. on account of the natural fertility of the soil. so that what is sold always sells at a monopoly price. have been the cause and occasion of the improvement and cultivation of the country. and is. In several of our North American colonies. much less ridiculous. with the rapid advances of our North American colonies. To purchase land. the commerce and manufactures of cities. not only in cultivating. which is brought to market. will sometimes choose to lay out his little capital in land. and a small capital might be employed in purchasing land as profitable as in any other way. especially small property. Through the greater part of Europe. were divided equally among all the children. keep so much land out of the market. through the greater part of Europe. From the beginning of the reign of Elizabeth. prevent the division of great estates. and who upon that account takes pleasure. a thing impossible in Europe. but in adorning it. however. and the most direct road to all the fortune and illustration which can be required in that country. indeed. he might have had the same chance of acquiring with other people. that there are always more capitals to buy than there is land to sell. a most unprofitable employment of a small capital. a man of moderate circumstances. A small proprietor. and in pursuit of their own pedlar principle of turning a penny wherever a penny was to be got. everywhere in Europe. A man of profession. The small quantity of land. however. therefore. and thereby hinder the multiplication of small proprietors. and of all the improvements which these can occasion. or indeed in any country where all lands have long been private property. it is found to double in twenty or five-and-twenty years. besides. the estate would generally be sold. Neither of them had either knowledge or foresight of that great revolution which the folly of the one. which. being contrary to the natural course of things. If landed estates. upon the death of any proprietor who left a numerous family. The purchase and improvement of uncultivated land is there the most profitable employment of the smallest as well as of the greatest capitals. But a young man. It was thus. on the contrary.

and it is but of late that it was permitted from thence. upon the whole. France seems to have had a considerable share of foreign commerce. The law of England. The cultivation and improvement of the country has. The marine of France was considerable. is very considerable. altogether illusory. the importation of foreign corn is loaded with duties that amount to a prohibition. Italy is the only great country of Europe which seems to have been cultivated and improved in every part. and the great number of independent status which at that time subsisted in it. These encouragements. That to their colonies is carried on in their own. No part of it can be said to belong to any particular country. though chiefly carried on in foreign ships. and a very great part of it still remains uncultivated.. and where perpetuities. by means of foreign commerce and manufactures for distant sale. But it has never introduced any considerable manufactures for distant sale into either of those countries. and is much greater. was cultivated not less in the most mountainous and barren parts of the country. more favourable to this sort of industry. What would it have been. a period as long as the course of human prosperity usually endures. over the face of that country. except in the obscure histories of the thirteenth and fourteenth centuries. bread and butcher's meat. except Italy. Holland itself not excepted. not only indirectly. In times of moderate plenty. but by several direct encouragements. together with it. however. till some part of it has been secured and realized in the cultivation and improvement of its lands. therefore. is prohibited at all times. and as respectable. and a very trifling disgust will make him remove his capital. probably contributed not a little to this general cultivation. to Naples. and at a distance. till it has been spread. the exportation of corn is not only free. it has been said very properly. Such. The law of the country has never given the same direct encouragement to agriculture. Italy. which pays tithes. which the right of primogeniture takes place. all the industry which it supports. no doubt. near a century before England was distinguished as a commercial country. It is not impossible. The foreign commerce of Portugal is of older standing than that of any great country in Europe. is the state of its cultivation. No vestige now remains of the great wealth said to have been possessed by the greater part of the Hanse Towns. The capital. according to the notions of the times. can give more encouragement to agriculture than England. No country. The advantageous situation of the country. had the law given no direct encouragement to agriculture besides what arises indirectly from the progress of commerce. is not necessarily the citizen of any particular country. from one country to another. is. as I shall endeavour to show hereafter. Before the invasion of Charles VIII. therefore. notwithstanding. is always a very precarious and uncertain possession. however. It is even uncertain where some of . and in reality there is no country in Europe. upon the whole. or in the lasting improvement of lands. the more rapid progress of commerce and manufactures. but encouraged by a bounty. inferior to that of England. sufficiently demonstrate at least the good intention of the legislature to favour agriculture. but it seems to have followed slowly. The importation of live cattle. are admitted in some cases. But what is of much more importance than all of them. perhaps. although at bottom. before the expedition of Charles VIII. It is in a great measure indifferent to him from what place he carries on his trade. that is acquired to any country by commerce and manufactures. The foreign commerce of Spain and Portual to the other parts of Europe. however. A merchant. and the cultivation of the far greater part much inferior to what it might be. as it were. favours agriculture. though contrary to the spirit of the law. have a monopoly against their countrymen for the two greatest and most important articles of land produce. and the greater part of both still remains uncultivated. and had left the yeomanry in the same condition as in most other countries of Europe? It is now more than two hundred years since the beginning of the reign of Elizabeth. Those who cultivate the land. according to Guicciardini. The cultivation and improvement of France. too. as law can make them. been gradually advancing too. except from Ireland. on account of the great riches and extent of those colonies. Commerce and manufactures have accordingly been continually advancing during all this period. Except in times of scarcity. however. and. notwithstanding this general expression of one of the most judicious and reserved of modern historians. the yeomanry of England are rendered as secure. that Italy was not at that time better cultivated than England is at present. either in buildings. of which the law is. as independent.interest of commerce and manufactures. The greater part of the country must probably have been cultivated before the reign of Elizabeth. by the protection of commerce. than in the plainest and most fertile.

Ghent. and most populous provinces of Europe. . and the Spanish government which succeeded them. in the end of the fifteenth and beginning of the sixteenth centuries. The ordinary revolutions of war and government easily dry up the sources of that wealth which arises from commerce only. But though the misfortunes of Italy. and cannot be destroyed but by those more violent convulsions occasioned by the depredations of hostile and barbarous nations continued for a century or two together. best cultivated. chased away the great commerce of Antwerp. or to what towns in Europe the Latin names given to some of them belong. That which arises from the more solid improvements of agriculture is much more durable. those countries still continue to be among the most populous and best cultivated in Europe. greatly diminished the commerce and manufactures of the cities of Lombardy and Tuscany. But Flanders still continues to be one of the richest. and Bruges. The civil wars of Flanders.them were situated. such as those that happened for some time before and after the fall of the Roman empire in the western provinces of Europe.

and. secondly. It proposes to enrich both the people and the sovereign. has given occasion to two different systems of political economy.BOOK IV. Political economy. I shall endeavour to explain both as fully and distinctly as I can. and shall begin with the system of commerce. first. . to enable them to provide such a revenue or subsistence for themselves. proposes two distinct objects. The one may be called the system of commerce. considered as a branch of the science of a statesman or legislator. the other that of agriculture. to supply the state or commonwealth with a revenue sufficient for the public services. or. with regard to enriching the people. The different progress of opulence in different ages and nations. more properly. to provide a plentiful revenue or subsistence for the people. OF SYSTEMS OF POLITICAL ECONOMY. It is the modern system. and is best understood in our own country and in our own times.

is said to be indifferent about it. We say of a rich man. must endeavour. in common language. who are generally ignorant of the use of money. Wealth. To grow rich is to get money. that the wealth which consists in them cannot be much depended on. Of the two. as among all other nations of shepherds. cannot be done. was the nearest to the truth.CHAPTER I. be in great want of them the next. with countries which have connections with foreign nations. that he is worth a great deal. as the instrument of commerce. Spain and Portugal. in short. is not very liable to be wasted and consumed. or a profuse man. a monk sent ambassador from the king of France to one of the sons of the famous Gengis Khan. but by sending abroad money to pay them with. which were circulated by means of this money. therefore. is supposed to be a country abounding in money. but merely by their own waste and extravagance. and to maintain fleets and armies in distant countries. though to little purpose. that if a nation could be separated from all the world. without any exportation. he says. and wealth and money. All other moveable goods. according to the Spaniards. is to get money. in the same manner as a rich man. and to heap up gold and silver in any country is supposed to be the readiest way to enrich it. according to him. consisted in cattle. they allow. Among the Tartars. But it is otherwise. that when occasion requires. in time of peace. the proprietors of the principal mines which supply Europe with those metals. if there was any gold or silver to be found in the neighbourhood? By the information which they received. or a man eager to be rich. considered as in every respect synonymous. there is no difficulty in making any subsequent purchase. and as the measure of value. or in gold and silver. cattle are the instruments of commerce and the measures of value. are of so consumable a nature. upon that account. that he is worth very little money. a generous. it may have wherewithal to carry on foreign wars. they say. Every such nation. the Tartar notion. When that is obtained. A rich country. to be the great object of its political economy. In consequence of its being the measure of value. have either prohibited their exportation under the severest penalties. For some time after the discovery of America. every possible means of accumulating gold and silver in their respective countries. unless it has a good deal at home. and of a poor man. is said to love money. the first inquiry of the Spaniards. or subjected it to a . would only be exchanged for a greater or a smaller number of pieces. on the contrary. In consequence of those popular notions. as. Gold and silver. though it may travel about from hand to hand. but the real wealth or poverty of the country. In consequence of its being the instrument of commerce. all the different nations of Europe have studied. The great affair. used to be. and a nation which abounds in them one year may. we estimate that of all other commodities by the quantity of money which they will exchange for. would depend altogether upon the abundance or scarcity of those consumable goods. we always find. perhaps. to accumulate gold and silver. and a careless. are. says. Plano Carpino. OF THE PRINCIPLE OF THE COMMERCIAL OR MERCANTILE SYSTEM. and which are obliged to carry on foreign wars. The consumable goods. are. than by means of any other commodity. it consisted in gold and silver. therefore. That wealth consists in money. he thinks. yet if it can be kept from going out of the country. Mr Locke remarks a distinction between money and other moveable goods. is a popular notion which naturally arises from the double function of money. they judged whether it was worth while to make a settlement there. They wanted to know if the country was rich enough to be worth the conquering. when we have money we can more readily obtain whatever else we have occasion for. if there was plenty of sheep and oxen in the kingdom of France? Their inquiry had the same object with that of the Spaniards. they think. is a steady friend. which. This. the must solid and substantial part of the moveable wealth of a nation. that the Tartars used frequently to ask him. it would be of no consequence how much or how little money circulated in it. Others admit. according to them. therefore. A frugal man. when they arrived upon any unknown coast. and a nation cannot send much money abroad. and to multiply those metals ought. or if the country was worth the conquering. Money.

did not always diminish the quantity of those metals in the kingdom. that the exportation of gold and silver. that. secondly. might bring back much more treasure than was originally sent out to purchase them. in asserting that the high price of exchange necessarily increased what they called . render it more expensive: that the exchange was thereby turned more against the country which owed the balance.considerable duty." says he. the more the balance of trade became necessarily against it. upon many occasions. in some old Scotch acts of Parliament. Mr Mun compares this operation of foreign trade to the seed-time and harvest of agriculture. could not prevent it. the money of that country becoming necessarily of so much less value. when he casteth away much good corn into the ground. because. if the consumption of foreign goods was not thereby increased in the country. to prohibit the exportation of those metals. and being there sold for a large profit. or to carry to some other foreign country. and the other so much more English money to Holland. as this difference amounted to: and that the balance of trade. would necessarily be so much more against England. which was necessarily paid to them in the same manner. and expense of sending the money thither. by the difference of the exchange: that the one would draw so much less Dutch money to England. could easily be smuggled abroad. "the actions of the husbandman in the seed time. but only. The like prohibition seems anciently to have made a part of the policy of most other European nations. and would require a greater balance of gold and silver to be exported to Holland. a contrary balance became due to foreign nations. but that 100 ounces of silver in Holland. a balance became due to it from foreign nations. extremely inconvenient. those goods might be re-exported to foreign countries. That when the country exported to a greater value than it imported. therefore. They were solid. and the Dutch goods which were sold to England so much dearer. where we should least of all expect to find it. for example. But they were sophistical. in asserting that no prohibition could prevent their exportation. we shall find the worth and plentiful increase of his actions. would be worth only 100 ounces of silver in Holland. but that the more the exchange was against any country. first. It is even to be found. that either to preserve or to augment the quantity of those metals required more the attention of government. They were solid. the merchants found this prohibition. than it otherwise might have been. They represented. but for the extraordinary risk arising from the prohibition. not only for the natural risk. on account of the smallness of their bulk in proportion to their value. therefore. But that when it imported to a greater value than it exported. the foreign goods which they wanted. we shall account him rather a madman than a husbandman. When those countries became commercial." They represented. which forbid. under heavy penalties. which is the end of his endeavours. perhaps. and thereby diminished that quantity: that in this case. by making it more dangerous. the merchant who purchased a bill upon the foreign country being obliged to pay the banker who sold it. against this prohibition as hurtful to trade. and thereby increased the quantity of those metals in the kingdom. it might frequently increase the quantity. on the contrary. either to import into their own. which was necessarily paid to it in gold and silver. That this exportation could only be prevented by a proper attention to what they called the balance of trade. on the contrary. which the freedom of trade. in comparison with that of the country to which the balance was due. when private people found any advantage in exporting them. than to preserve or to augment the quantity of any other useful commodities. that this prohibition could not hinder the exportation of gold and silver. would be worth 105 ounces in England. in supposing. But when we consider his labours in the harvest. They remonstrated. was five per cent. without any such attention. "If we only behold. so far as they asserted that the exportation of gold and silver in trade might frequently be advantageous to the country. it would require 105 ounces of silver in England to purchase a bill for 100 ounces of silver in Holland: that 105 ounces of silver in England. which. That if the exchange between England and Holland. the carrying gold or silver forth of the kingdom. too. never fails to supply in the proper quantity. that the English goods which were sold to Holland would be sold so much cheaper. than with any other commodity. Those arguments were partly solid and partly sophistical. The like policy anciently took place both in France and England. too. They could frequently buy more advantageously with gold and silver. against England. in order to purchase foreign goods. They were sophistical. and would purchase only a proportionable quantity of Dutch goods. therefore. and would purchase a proportionable quantity of English goods. trouble.

experience demonstrated to the nobles and country gentlemen. therefore. They are to be bought for a certain price. and in some other places. to nobles. naturally . without any attention of government. The merchants knew perfectly in what manner it enriched themselves. will always supply us with the wine which we have occasion for. in order that they might have this high exchange to pay upon as small a sum as possible. or occasioned the exportation of a greater quantity of gold and silver. nor carried any out of it. it would not necessarily carry any more money out of the country. It neither brought money into the country. They were addressed by merchants to parliaments and to the councils of princes. this liberty was extended even to the coin of the country. Such as they were. either in circulating our commodities or in other uses. produced the wished-for effect. the most important of all. We trust. and thereby diminishing their consumption. and the manner in which those effects were obstructed by the laws as they then stood. in France and England. A country that has wherewithal to buy wine. This expense would generally be all laid out in the country. by those who were supposed to understand trade. it was said. The quantity of every commodity which human industry can either purchase or produce. as the only cause which could occasion any augmentation or diminution of those metals. and as they are the price of all other commodities. In Holland. It does not seem necessary. and creates the greatest employment to the people of the country. too. will never be in want of those metals. They paid so much dearer for the bills which their bankers granted them upon those countries. as well as to the merchants. will always get the wine which it has occasion for. like all other commodities. those arguments convinced the people to whom they were addressed. A country that has no mines of its own. must necessarily have operated as a tax. not of England only. so all other commodities are the price of those metals. and we may trust. Those arguments. it was their business to know it. But to know in what manner it enriched the country. to watch over the balance of trade. what they called the unfavourable balance of trade. but of all other commercial countries. it appeared a most satisfactory account of the matter. But though the risk arising from the prohibition might occasion some extraordinary expense to the bankers. It then became necessary to say something about the beneficial effects of foreign trade. or in what manner. To the judges who were to decide the business. would naturally dispose the merchants to endeavour to make their exports nearly balance their imports. The prohibition of exporting gold and silver was. the trade in which an equal capital affords the greatest revenue. That foreign trade enriched the country. The attention of government was turned away from guarding against the exportation of gold and silver. but when they had occasion to apply to their country for some change in the laws relating to foreign trade. with equal security. that the freedom of trade. was extremely disadvantageous to the merchants who had any money to pay in foreign countries. therefore. The country. The subject never came into their consideration. The high price of exchange. The exportation of foreign coin and of bullion was made free. was no part of their business. besides. but how. but that the laws in question hindered it from bringing so much as it otherwise would do. and consequently the exportation of gold and silver. The title of Mun's book.the unfavourable balance of trade. From one fruitless care. and a country that has wherewithal to buy gold and silver. in the same manner as one that has no vineyards of its own must draw its wines. and just equally fruitless. The inland or home trade. must undoubtedly draw its gold and silver from foreign countries. but to diminish. It would tend. that it will always supply us with all the gold and silver which we can afford to purchase or to employ. became a fundamental maxim in the political economy. in smuggling the money out of it. England's Treasure in Foreign Trade. however. That high price. when they were told that foreign trade brought money into the country. that the attention of government should be more turned towards the one than towards the other object. except so far as its prosperity or decay might indirectly influence the state of foreign trade. to those who were conscious to them selves that they knew nothing about the matter. indeed. with perfect security. confined to the coin of those respective countries. and could seldom occasion the exportation of a single sixpence beyond the precise sum drawn for. it was turned away to another care much more intricate. therefore. however. none of them well knew. was considered as subsidiary only to foreign trade. could never become either richer or poorer by means of it. and to country gentlemen. The high price of exchange. much more embarrassing. in raising the price of foreign goods. not to increase.

but. at five guineas a-ton. If there were in England. the money price of all other commodities. The price of those metals. than that of almost any other commodity. for example. whose projects have . but gradually. gold and silver should at any time fall short in a country which has wherewithal to purchase them. When the quantity of gold and silver imported into any country exceeds the effectual demand. just so many times more difficult to smuggle. indeed. In Europe. as when directed to watch over the preservation or increase of the quantity of money in any country. when the market happens to be either over or under-stocked with them. a packet-boat could bring from Lisbon. If. so as to raise their price above that of the neighbouring countries. If the materials of manufacture are wanted. and the different dealers compensating their credits with one another. All the sanguinary laws of Spain and Portugal are not able to keep their gold and silver at home. But if there were an effectual demand for grain to the same value. or once a-year. or a thousand ships of a thousand tons each. like that of the greater part of other commodities. Those who have either. But no commodities regulate themselves more easily or more exactly. and uniform. gradual. their quantity fell short of the effectual demand. is about a hundred times the bulk of one of the highest prices. perhaps. or according to the demand of those who are willing to pay the whole rent. but the changes to which it is liable are generally slow. or of the wine which they have occasion for. so as to raise or lower at once. to those where they are dear. not withstanding all this. that the price of those metals does not fluctuate continually. is more common than that of a scarcity of money. with some advantages. like wine. sinking in their value. than gold and silver. is not always confined to improvident spendthrifts. from the places where they are cheap. on account of the continual importations from the Spanish West Indies. to import it would require. it is supposed. fifty tons of gold. in any particular country. no vigilance of government can prevent their exportation. All the sanguinary laws of the customs are not able to prevent the importation of the teas of the Dutch and Gottenburg East India companies. a million of tons of shipping. Those metals. and more than two thousand times the bulk of the same price in gold. must always be scarce with those who have neither wherewithal to buy it. however. on the contrary. It is partly owing to the easy transportation of gold and silver. however. and profits. in some cases. If provisions are wanted. which must be paid in order to prepare and bring it to market. the people must starve. or from wherever else it was to be had. the government would have no occasion to take any pains to import them. The continual importations from Peru and Brazil exceed the effectual demand of those countries. no commodities can be more easily transported from one place to another. therefore. that during the course of the present and preceding century. Sober men. requires such a revolution in commerce as that occasioned by the discovery of America. on account of the small bulk and great value of those metals. from the places where they exceed. industry must stop. it would not be able to effectuate it. It is sometimes general through a whole mercantile town and the country in its neighbourhood. that is commonly paid for it in silver. according to this effectual demand. because. Buying and selling upon credit. No complaint. is not altogether exempted from variation. once a-month. which are hindered by their bulk from shifting their situation. Money. barter will supply its place. when the Spartans had got wherewithal to purchase them. nor credit to borrow it. however. But if money is wanted. labour. the attention of government never was so unnecessarily employed. A pound of tea. Upon every account. there are more expedients for supplying their place. though with a good deal of inconveniency.regulates itself in every country according to the effectual demand. an effectual demand for an additional quantity of gold. This complaint. they have been constantly. If. without much foundation. sensibly and remarkably. and sink the price of those metals there below that in the neighbouring countries. will supply it with less inconveniency. But to make any sudden change in the price of gold and silver. If it were even to take pains to prevent their importation. sixteen shillings. Over-trading is the common cause of it. because somewhat cheaper than those of the British company. consequently. will seldom be in want either of the money. A well-regulated paper-money will supply it not only without any inconveniency. and. for example. which could be coined into more than five millions of guineas. to those where they fall short of this effectual demand. broke through all the barriers which the laws of Lycurgus opposed to their entrance into Lacedaemon. from the places where they abound to those where they are wanted. of the scarcity of money. The navy of England would not be sufficient.

The annual produce of its land and labour. which can ever be destined for purchasing gold and silver from their neighbours. Though gold and silver. necessarily runs after goods. an unusual quantity of goods. than the trade which consists in the exchange of such lasting for such perishable commodities. it is pretended. indeed. but the other can never have done more than the one half of his business. and their credit with it. in the long-run they draw it more necessarily than even it draws them. and is valuable only for purchasing. than when he has got their price in his coffers. and he is. but because money is the known and established instrument of commerce. The whole capital of a merchant frequently consists in perishable goods destined for purchasing money. but for the sake of what they can purchase with it. may sometimes be ruined by not being able to sell them in time. and everybody tells them that they have none to lend. The man who buys. Consumable commodities. Before their projects can be brought to bear. And though goods do not always draw money so readily as money draws goods. It would be too ridiculous to go about seriously to prove. which they send to some distant market. but it has already been shown that it generally makes but a small part. that wealth does not consist in money. can be more disadvantageous to any country. reckon that trade . in hopes that the returns will come in before the demand for payment. therefore. therefore. but they buy upon credit. The one may frequently have done the whole. It is not any scarcity of gold and silver. Goods can serve many other purposes besides purchasing money. because the same. than to buy money with goods. They do not always send more money abroad than usual. Even such general complaints of the scarcity of money do not always prove that the usual number of gold and silver pieces are not circulating in the country. upon all these accounts. however. are as likely to have neither wherewithal to buy money. no doubt. It might. therefore. but goods do not always or necessarily run after money. Over and above all this. It is not for its own sake that men desire money. suffer some loss and inconveniency. are more perishable than money. might be accumulated for ages together. that the merchant finds it generally more easy to buy goods with money. and they have nothing at hand with which they can either purchase money or give solid security for borrowing. with abundance of goods in his warehouse. They run about everywhere to borrow money. as prodigals. But though a particular merchant. but which is not always with equal readiness to be got in exchange for every thing. whereas he who sells always means to buy again. both at home and abroad. makes always a part of the national capital. It is not because wealth consists more essentially in money than in goods. besides. it is said. but money can serve no other purpose besides purchasing goods. their stock is gone. Nothing. whereas gold and silver are of a more durable nature. to the incredible augmentation of the real wealth of the country. would be the same. When his goods are upon hand. and he may frequently sustain a much greater loss by keeping them. for which every thing is readily given in exchange. a nation or country is not liable to the same accident. When the profits of trade happen to be greater than ordinary over-trading becomes a general error. his profit arises more directly from selling than from buying.been disproportioned to their capitals. but the difficulty which such people find in borrowing. too. and be forced upon some of those expedients which are necessary for supplying the place of money. But it is but a very small part of the annual produce of the land and labour of a country. The greater part of goods. both among great and small dealers. are soon destroyed. but that many people want those pieces who have nothing to give for them. generally much more anxious to exchange his goods for money than his money for goods. The far greater part is circulated and consumed among themselves. nor credit to borrow it. that occasions the general complaint of the scarcity of money. Money. and even of the surplus which is sent abroad. the greater part is generally destined for the purchase of other foreign goods. whose expense has been disproportioned to their revenue. Money. but frequently to use or to consume. The demand comes before the returns. does not always mean to sell again. or very nearly the same as usual. or very nearly the same consumable capital would be employed in maintaining it. however. but in what money purchases. could not be had in exchange for the goods destined to purchase them. and which their creditor find in getting payment. the nation would not be ruined. and were it not for this continual exportation. We do not. or in gold and silver. and always the most unprofitable part of it. he is more liable to such demands for money as he may not be able to answer.

not with gold and silver. increase that value. can maintain foreign wars there. that the quantity of gold and silver is. Fleets and armies are maintained. as plate. so the expense of purchasing an unnecessary quantity of gold and silver must. and a part of this increased wealth will most probably be employed in purchasing. increase the number and wealth of such families. from the annual revenue arising out of its lands. is generally withdrawn from this channel in the case of foreign war. limited by the use which there is for those metals. an additional quantity of plate. some part of its accumulated gold and silver. the number of pots and pans would readily increase along with it. which consists in the exchange of the hardware of England for the wines of France. Something. whether in the shape of coin or of plate. first. as much as the furniture of the kitchen. and less money becomes necessary to circulate them. because in that there can seldom be much redundancy. it must be remembered. may be distinguished into three parts. wherever it is to be had. and the loss which attends their lying idle and unemployed so great. first. is as absurd as it would be to attempt to increase the good cheer of private families. to the incredible augmentation of the pots and pans of the country. however. which maintains and employs the people. has wherewithal to purchase those consumable goods in distant countries. from the annual produce of its domestic industry. or in maintaining an additional number of workmen whose business it was to make them. Gold and silver. you will as infallibly diminish the use. and consumable stock. secondly. The nation which. managed. some part of its annual rude produce. in order to enable a country to carry on foreign wars. but if you attempt by extraordinary means to increase the quantity. and prepared by means of them. but with consumable goods. and even the quantity too. By the great number of people who are maintained abroad. that it would be absurd to have more pots and pans than were necessary for cooking the victuals usually consumed there. clothes. last of all. in every country. either by introducing or by detaining in it an unnecessary quantity of gold and silver. It should as readily occur. if the quantity of victuals were to increase. The value of goods annually bought and sold in any country requires a certain quantity of money to circulate and distribute them to their proper consumers. that the quantity of coin in every country is regulated by the value of the commodities which are to be circulated by it. that no law could prevent their being immediately sent out of the country. as necessarily diminish the wealth which feeds. by sending abroad either. and yet hardware is a very durable commodity. the additional quantity of coin requisite for circulating them: that the quantity of plate is regulated by the number and wealth of those private families who choose to indulge themselves in that sort of magnificence. and lodges. and can give employment to no more. or stored up in any country. that their use consists in circulating commodities. instead of increasing. which in those metals can never be greater than what the use requires. and labour. An extraordinary quantity of paper money of some . It can seldom happen that much can be spared from the circulating money of the country. in every country. and immediately a part of it will be sent abroad to purchase. and you will infallibly increase the quantity. their transportation is so easy. or. by obliging them to keep an unnecessary number of kitchen utensils.disadvantageous. But it readily occurs. and in affording a species of household furniture. last of all. Were they ever to be accumulated beyond this quantity. A nation may purchase the pay and provisions of an army in a distant country three different ways. the circulating money. or. Fewer goods are circulated there. Increase the use of them. and were it not for this continual exportation. and that. the money which may have been collected by many years parsimony. wherever it is to be found. increase the consumable commodities which are to be circulated. and never admits any more. that to attempt to increase the wealth of any country. a part of the increased quantity of victuals being employed in purchasing them. and to maintain fleets and armies in distant countries. fewer are maintained at home. and. that the number of such utensils is in every country necessarily limited by the use which there is for them. The channel of circulation necessarily draws to itself a sum sufficient to fill it. either the quantity or goodness of the family provisions. It is not always necessary to accumulate gold and silver. the plate of private families. As the expense of purchasing those unnecessary utensils would diminish. might too be accumulated for ages together. and laid up in the treasury of the prince. The gold and silver which can properly be considered as accumulated. some part of the annual produce of its manufactures. as coin. are utensils. secondly.

000. never appeared more empty than usual during any part of this period. is always attended with a considerable profit. or of the plate of private families. two different times in so short a period. Should this be supposed.000. he would endeavour to send them to some other country in which he could purchase a bill upon that country. to accumulate treasure seems to be no part of the policy of European princes. that. who had neither wherewithal to buy it. even according to this computation. gold and silver together. the most expensive perhaps which history records. nor credit to borrow it. than by that of gold and silver. however. it amounted to £30. or of the treasure of the prince. which always follows over-trading. of great expense. and this again occasioned the usual complaint of the scarcity of money. but from the sale of the returns. in England.000. however. The accumulated treasures of the prince have in former times afforded a much greater and more lasting resource. is generally issued upon such occasions. a general over-trading in all the ports of Great Britain. The enormous expense of the late war. in the pound land-tax. what it always occasions. the whole money of the country must have gone from it. gives an opportunity of sending a greater quantity of it abroad. were generally to be had for their value. Gold and silver. including not only the £75. in the East and West Indies. not by the exportation of gold and silver. America. by those who had that value to give for them. and returned to it again. but especially towards the end of it. Let us suppose. is accordingly remarked by the author of the Present State of the Nation. therefore. All this. therefore. He naturally. indeed. in the beginning of the last war. the whole of it must. and. When the government.000.000. We never heard of any extraordinary quantity of plate being melted down. Portugal. The transportation of commodities. The kings of England had no accumulated treasure. could afford but a poor resource for maintaining a foreign war. More than two-thirds of this expense were laid out in distant countries. The last French war cost Great Britain upwards of £90. but the additional 2s. Few people wanted money who had wherewithal to pay for it. not from the purchase. This occasioned. upon this supposition. it is believed to have been a good deal under-rated.sort or other. there is in all great commercial . have been sent out and returned again. The funds which maintained the foreign wars of the present century. in Germany. but by that of British commodities of some kind or other. such as exchequer notes. he gets no returns. according to the most exaggerated computation which I remember to have either seen or heard of. and what was annually borrowed of the sinking fund. when properly suited to the market. the creditors found it difficult to get payment. without any body's knowing any thing of the matter. Besides the three sorts of gold and silver above mentioned. too. therefore. The circulating gold and silver of the country had not been supposed to exceed £18. and consequently no profit. The French. The channel of circulation. however. But when they are sent abroad merely to pay a debt. by supplying the place of circulating gold and silver. or those who acted under them. Many people wanted it. if you except the king of Prussia. When those metals are sent abroad in order to purchase foreign commodities. and because the debtors found it difficult to borrow. did not derive so much advantage from this expedient as to compensate the loss of the fashion. been found a still more insignificant one. must have been chiefly defrayed. seem to have had little dependency upon the exportation either of the circulating money. In the present times. by sending abroad rather commodities than gold and silver. contracted with a merchant for a remittance to some foreign country. The profits of foreign trade. whereas that of gold and silver is scarce ever attended with any.000 of new debt that was contracted. and bank bills. upon whom he granted a bill.000. The great quantity of British goods. The melting down of the plate of private families has. to demonstrate how unnecessary it is for government to watch over the preservation of money. exerts his invention to find out a way of paying his foreign debts. If the commodities of Great Britain were not in demand in that country. since. navy bills. upon every occasion. exported during the course of the late war.000. in the ports of the Mediterranean. the merchant's profit arises. at least twice in a period of between six and seven years. were greater than usual during the whole war. however. rather by the exportation of commodities. he would naturally endeavour to pay his foreign correspondent. Had the war been carried on by means of our money. and several years duration. Since the late recoinage of the gold. without bringing back any returns. it would afford the most decisive argument.

secondly. that so great an annual expense must have been defrayed from a great annual produce. and. to the annual produce of the land and labour of the country. any foreign war of long duration. may carry on for many years a very expensive foreign war. such as contain a great value in a small bulk.000. and only the surplus part of their work is exported. to suppose. would scarce have paid four months expense of the late war. seem to be the finer and more improved manufactures. and can therefore be exported to a great distance at little expense. Part of this money of the great mercantile republic may have been. The expense of sending such a quantity of it into a foreign country as might purchase the pay and provisions of an army would be too great. This bullion. The whole gold and silver annually imported into both Spain and Portugal. which still brings us back to commodities. too. It is natural. and begin to decay upon the return of its prosperity. The English in those days had nothing wherewithal to purchase the pay and provisions of their armies in foreign countries. which are usually exported to foreign countries. the war will have a double demand upon them. in some years. on the contrary. and in the neighbouring countries. in the same manner as the national coin circulates in every country. the money in the mercantile republic. therefore. or some part of the money of the mercantile republic to be employed in purchasing them. amounted to more than £19. in this case. from those circulated between different countries. indeed. Few countries. A considerable part of the annual surplus of its manufactures must.000. without interruption. it must have been annually purchased. either with British commodities. In time of a general war. does not commonly much exceed £6. would be to send abroad a part of the necessary subsistence of the people. different from what it usually follows in profound peace. But whatever part of this money of the mercantile republic Great Britain may have annually employed in this manner. for paying the bills drawn upon foreign countries for the pay and provisions of the army: and. The maintenance of the people employed in them is kept at home. in order to purchase there the pay and provisions of an army. of which. that it should circulate more about the seat of the war. or even having any such quantity to export. however. the one between different individuals of the same. and for some time after the peace. The commodities most proper for being transported to distant countries.000 sterling. or a few manufactures of the coarsest kind. which could have supported it. The manufacturers during. but either the rude produce of the soil. In the midst of the most destructive foreign war. without either exporting any considerable quantity of gold and silver. to work up such as are necessary for purchasing the common returns that had usually been consumed in the country. Mr Hume frequently takes notice of the inability of the ancient kings of England to carry on. The different state of many different branches of the British manufactures during the late war. employed in carrying on the late war. for the purposes of foreign trade.000. the other between those of different nations. though it does to the merchant. or with something else that had been purchased with them. The expense of 1761. The national coin receives its movement and direction from the commodities circulated within the precincts of each particular country. may serve as an illustration of what has been just now said. in order to purchase there either the pay and provisions of an army. Some part of this surplus. the greater part of manufactures may frequently flourish greatly. There is no annual produce.countries a good deal of bullion alternately imported and exported. the pay and provisions of the different armies. may still continue to bring back a return. as well as of the rude produce. according to the best accounts. for example. A country whose industry produces a great annual surplus of such manufactures. it is natural to suppose that a movement and direction should be impressed upon it. of which no considerable part could be spared from the home consumption. which. could conveniently be carried on by the exportation of the rude produce of the soil. Both are employed in facilitating exchanges. and be more employed in purchasing there. and probably was. indeed. No foreign war. It is otherwise with the exportation of manufactures. they may decline on the return of peace. even of gold and silver. as the ultimate resources which enabled us to carry on the war. may be considered as the money of the great mercantile republic. of great expense or duration. be exported without bringing back any returns to the country. the government purchasing of the merchant his bills upon foreign countries. as it circulates among different commercial countries. produce much more rude produce than what is sufficient for the subsistence of their own inhabitants. and be called upon first to work up goods to be sent abroad. They may flourish amidst the ruin of their country. the transportation was . therefore. No accumulation could have supported so great an annual profusion. To send abroad any great quantity of it.

Between whatever places foreign trade is carried on. could scarce have occasion to freight a ship in a century. This inability did not arise from the want of money. They naturally. it encourages them to improve its productive power. It gives a value to their superfluities. by exchanging them for something else. however. In that simple state. the narrowness of the home market does not hinder the division of labour in any particular branch of art or manufacture from being carried to the highest perfection. but of the finer and more improved manufactures. or. which a nation derives from its foreign trade. naturally disposed to the parsimony requisite for accumulation. The insignificant pageantry of their court becomes every day more brilliant. The French kings of the Merovingian race had all treasures. The first exploit of every new reign was commonly to seize the treasure of the preceding king. The quantity of circulating money must have borne the same proportion. and hospitality to his retainers. and the expense of it not only prevents accumulation. not . To import the gold and silver which may be wanted into the countries which have no mines. By opening a more extensive market for whatever part of the produce of their labour may exceed the home consumption. much less the sole benefit. but few soldiers. but is employed in bounty to his tenants.too expensive. rather. which it does to those transacted at present. These great and important services foreign trade is continually occupied in performing to all the different countries between which it is carried on. The treasures of Mazepa. Buying and selling was transacted by means of money in England then as well as now. the famous ally of Charles XII. though that in which the merchant resides generally derives the greatest. The importation of gold and silver is not the principal. Every Tartar chief. they all of them derive two distinct benefits from it. By means of it. and many servants. to the number and value of purchases and sales usually transacted at that time. which it would have cost in the fifteenth century. Among nations to whom commerce and manufactures are little known. It carries out that surplus part of the produce of their land and labour for which there is no demand among them. and brings back in return for it something else for which there is a demand. and to augment its annual produce to the utmost. and the first kings after the Conquest. the expense even of a sovereign is not directed by the vanity which delights in the gaudy finery of a court. But bounty and hospitality very seldom lead to extravagance. though vanity almost always does. Europe can annually purchase about three times the quantity of plate which it could have purchased at that time. which may satisfy a part of their wants and increase their enjoyments. It is not by the importation of gold and silver that the discovery of America has enriched Europe. When they divided their kingdom among their different children. but little strength. upon extraordinary occasions. that he generally endeavours to accumulate a treasure. may be applied to that of several European princes. Independent of this necessity. in such a situation. it must have borne a greater proportion. and carrying out the superfluities of his own. that he saw there much splendour. and their expense comes to be regulated by the same extravagant vanity which directs that of all the other great proprietors in their dominions. What Dercyllidas said of the court of Persia. for reasons which shall be explained hereafter. perhaps necessarily. a most insignificant part of it. and thereby to increase the real revenue and wealth of the society. accordingly. seem likewise to have accumulated treasures. as he is generally more employed in supplying the wants. The sovereigns of improved and commercial countries are not under the same necessity of accumulating treasures. the sovereign. they divided their treasures too. is. A service of plate can now be purchased for about a third part of the corn. because they can generally draw from their subjects extraordinary aids upon extraordinary occasions. those metals have become cheaper. With the same annual expense of labour and commodities. They are likewise less disposed to do so. follow the mode of the times. has a treasure. are said to have been very great. therefore. By the abundance of the American mines. as the most essential measure for securing the succession. A country which carried on foreign trade merely upon this account. It is in such countries. The Saxon princes.. They all derive great benefit from it. or a third part of the labour. as the only resource against such emergencies. But when a commodity comes to be sold for a third part of what bad been its usual price. It is. than of any other particular country. he is. but frequently encroaches upon the funds destined for more necessary expenses. because there was then no paper. no doubt a part of the business of foreign commerce. can seldom draw any considerable aid from his subjects. chief of the Cossacks in the Ukraine. which now occupies a great part of the employment of gold and silver.

have excited much envy against them. superior to the savages. and carry about a shilling in our pocket. that their trade by this continual exportation of silver. this inconveniency. but more than twenty or thirty times the quantity of plate which would have been in it. even though we should credit. gained a real conveniency. for want of a market to take off the greater part of their produce. So far Europe has. By the annual exportation of silver to the East Indies. though surely a very trifling one. on account of the great quantities of silver which it every year exports from the countries from which it is carried on. and through them. and Danes. what plainly deserves no credit. The exclusive privileges of those East India companies. Neither the one nor the other could have made any very essential change in the state of Europe. is free to all its subjects. even in its present state of improvement. and more advanced in all arts and manufactures. In order to make the same purchases. or. as it certainly did to the old continent. their great riches. might indeed tend to impoverish Europe in general. French. the latter a very small advantage. have all followed their example. however. between almost every nation of Europe and its own colonies. so that no great nation of Europe has ever yet had the benefit of a free commerce to the East Indies. they vested their whole East India commerce in an exclusive company. it annually brought home a much greater quantity of that metal than it carried out. we must load ourselves with a greater quantity of them. and coined silver probably purchases a larger quantity both of labour and commodities. but not the particular country from which it was carried on. Indostan. it gave occasion to new divisions of labour and improvements of art. perhaps to more than ten. not only more than three times. This envy has frequently represented their trade as altogether pernicious. ruinous and destructive to several of those unfortunate countries. The parties concerned have replied. opened perhaps a still more extensive range to foreign commerce. It is difficult to say which is most trifling. than either Mexico or Peru. The trade to the East Indies. than with savages and barbarians. and its produce increased in all the different countries of Europe. which in the narrow circle of the ancient commerce could never have taken place. better cultivated. notwithstanding the greater distance. which happened much about the same time. The English. Swedes. by the exportation of a part of the returns to other European countries. Europe. which ought to have been beneficial to all. but it is brought down to the level of a much greater number of purchasers. what comes nearly to the same . The rest were mere savages. Both the objection and the reply are founded in the popular notion which I have been just now examining. than from that with America. because. The commodities of Europe were almost all new to America. certainly made a most essential one. which had never been thought of before. the great favour and protection which these have procured them from their respective governments. where a groat would have done before. began to take place. perhaps to more than twenty times the former number. But the empires of China. much richer. the exaggerated accounts of the Spanish writers concerning the ancient state of those empires. or the opposite conveniency. in any respect. in the beginning of the last century. as well as several others in the East Indies. The productive powers of labour were improved. both too insignificant to deserve any part of the public attention. that the other nations of Europe could either send out or receive any goods from that country. in every other respect. and these were destroyed almost as soon as discovered. began to encroach upon them. The former of these two effects is a very small loss. So that there may be in Europe at present. It is therefore unnecessary to say any thing further about either. plate is probably somewhat dearer in Europe than it otherwise might have been. which.only those who purchased it before can purchase three times their former quantity. had the discovery of the American mines never been made. without having richer mines of gold or silver. and which should naturally have proved as advantageous to the new. But rich and civilized nations can always exchange to a much greater value with one another. There were but two nations in America. Japan. The cheapness of gold and silver renders those metals rather less fit for the purposes of money than they were before. has hitherto derived much less advantage from its commerce with the East Indies. The Portuguese monopolized the East India trade to themselves for about a century. When the Dutch. The discovery of America. and together with it the real revenue and wealth of the inhabitants. and it was only indirectly. no doubt. The discovery of a passage to the East Indies by the Cape of Good Hope. than even that of America. by opening a market to the commodities of Europe. however. The savage injustice of the Europeans rendered an event. and many of those of America were new to Europe. A new set of exchanges. No other reason need be assigned why it has never been so advantageous as the trade to America. By opening a new and inexhaustible market to all the commodities of Europe. were. therefore.

Those different restraints consisted sometimes in high duties. or by exporting to a greater value than it imported. that even they who are convinced of its absurdity. either of some beginning manufactures. the lands. and consumable goods of all different kinds. however. By the establishment of colonies in distant countries. either the whole or a part of it was frequently drawn back upon their exportation. The restraints upon importation were of two kinds. that wealth consists in money or in gold and silver. and. is probably owing to the restraints which it everywhere labours under. though at the hazard of being tedious. to take it for granted as a certain and undeniable truth. to the gold and silver which is purchased with those commodities. beyond what were granted to those of other countries. The two sorts of restraints upon importation above mentioned. only by the balance of trade. are very apt to forget their own principles. either the whole or a part of this duty was sometimes given back upon such exportation. or of such sorts of industry of other kinds as were supposed to deserve particular favour. By advantageous treaties of commerce. in common language. not in its gold and silver only. and the strain of their argument frequently supposes that all wealth consists in gold and silver. and encouragement to exportation. in the course of their reasonings. and sometimes in absolute prohibitions. When the home manufactures were subject to any duty or excise. I shall examine chiefly what are likely to be the effects of each of them upon the annual produce of its industry. not only particular privileges. Its two great engines for enriching the country. seem to slip out of their memory. by turning the balance of trade in its favour. houses. I thought it necessary. Some of the best English writers upon commerce set out with observing. however. Money. particular privileges were procured in some foreign state for the goods and merchants of the country. and sometimes by the establishment of colonies in distant countries. According as they . sometimes by advantageous treaties of commerce with foreign states. constitute the six principal means by which the commercial system proposes to increase the quantity of gold and silver in any country. and. and when foreign goods liable to a duty were imported. it necessarily became the great object of political economy to diminish as much as possible the importation of foreign goods for home consumption. In the course of their reasonings. Exportation was encouraged sometimes by drawbacks. First. and this ambiguity of expression has rendered this popular notion so familiar to us. restraints upon the importation of such foreign goods for home consumption as could be produced at home. that wealth consisted in gold and silver.thing. to examine at full length this popular notion. houses. sometimes by bounties. together with these four encouragements to exportation. and consumable goods. in order to be exported again. and that those metals could be brought into a country which had no mines. were restraints upon importation. from those particular countries with which the balance of trade was supposed to be disadvantageous. I shall consider each of them in a particular chapter. and consequently the real wealth and revenue of Europe. without taking much farther notice of their supposed tendency to bring money into the country. must necessarily tend to increase the annual production of European commodities. The two principles being established. as I have already observed. Bounties were given for the encouragement. but a monopoly was frequently procured for the goods and merchants of the country which established them. that the wealth of a country consists. and that to multiply those metals is the great object of national industry and commerce. Drawbacks were given upon two different occasions. That it has hitherto increased them so little. from whatever country they were imported. frequently signifies wealth. restraints upon the importation of goods of almost all kinds. therefore. Secondly. but in its lands. and to increase as much as possible the exportation of the produce of domestic industry.

they must evidently tend either to increase or diminish the real wealth and revenue of the country. .tend either to increase or diminish the value of this annual produce.

CHAPTER II. First. either by high duties. The high duties upon the importation of corn. The prohibition of the importation of foreign woollen is equally favourable to the woollen manufacturers. his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. of which the importation into Great Britain is prohibited. and it is by no means certain that this artificial direction is likely to be more advantageous to the society. a monopoly against their countrymen. It can only divert a part of it into a direction into which it might not otherwise have gone. As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital. has lately obtained the same advantage. and if he should happen to be deceived. leads him to prefer that employment which is most advantageous to the society. or by absolute prohibitions. which he has in view. is not. The variety of goods. must generally be the one half of it at Koningsberg. indeed. and no part of it is ever necessarily brought home. though altogether employed upon foreign materials. Many other sorts of manufactures have. The natural residence of such a merchant should either be at Koningsberg or . or rather necessarily. No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain. and the foreign trade of consumption to the carrying trade. or under certain circumstances. but is making great strides towards it. and fruit and wine from Lisbon to Koningsberg. or to give it the most advantageous direction. altogether so evident. or placed under his own immediate view and command. and not that of the society. In the home trade. provided always that he can thereby obtain the ordinary. the monopoly of the home market is more or less secured to the domestic industry employed in producing them. in times of moderate plenty. amount to a prohibition. the importation of such goods from foreign countries as can be produced at home. divided between two foreign countries. every wholesale merchant naturally prefers the home trade to the foreign trade of consumption. he knows better the laws of the country from which he must seek redress. or not a great deal less than the ordinary profits of stock. OF RESTRAINTS UPON IMPORTATION FROM FOREIGN COUNTRIES OF SUCH GOODS AS CAN BE PRODUCED AT HOME. It is his own advantage. the capital of the merchant is. But the study of his own advantage naturally. greatly exceeds what can easily be suspected by those who are not well acquainted with the laws of the customs. and consequently as much as he can in the support of domestic industry. give a like advantage to the growers of that commodity. so the number of those that can be continually employed by all the members of a great society must bear a certain proportion to the whole capital of the society. Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. He can know better the character and situation of the persons whom he trusts. which. Thus. No part of it need ever come to Amsterdam. The silk manufacture. But whether it tends either to increase the general industry of the society. cannot be doubted. perhaps. and never can exceed that proportion. every individual endeavours to employ his capital as near home as he can. as it were. The linen manufacture has not yet obtained it. secures to the graziers of Great Britain the monopoly of the home market for butcher's meat. and frequently turns towards that employment a greater share of both the labour and stock of the society than would otherwise have gone to it. than that into which it would have gone of its own accord. That this monopoly of the home market frequently gives great encouragement to that particular species of industry which enjoys it. in the same manner obtained in Great Britain. either absolutely. or very nearly. By restraining. The capital which an Amsterdam merchant employs in carrying corn from Koningsberg to Lisbon. In the carrying trade. and the other half at Lisbon. Thus the prohibition of importing either live cattle or salt provisions from foreign countries. or nearly equal profits. The general industry of the society can never exceed what the capital of the society can employ. either altogether. upon equal.

as in many other cases. but assume an authority which could safely be trusted. would not only load himself with a most unnecessary attention. though. A merchant. and it can only be some very particular circumstances which can make him prefer the residence of Amsterdam. By pursuing his own interest. when he collects goods for foreign markets. necessarily endeavours so to direct that industry. he intends only his own gain. both to employ his capital in the support of domestic industry. so will likewise be the profits of the employer. who is engaged in the foreign trade of consumption. The uneasiness. in order to save a second loading and unloading. he thus converts his foreign trade of consumption into a home trade.Lisbon. therefore. he intends only his own security. He generally. led by an invisible hand to promote an end which was no part of his intention. or only nearly equal profits. becomes always the emporium. therefore. The merchant. or to exchange for the greatest quantity either of money or of other goods. and of the Lisbon goods which he destines for that of Koningsberg. and of which the produce is likely to be of the greatest value. Upon equal. who should attempt to direct private people in what manner they ought to employ their capitals. generally determines him to bring part both of the Koningsberg goods which he destines for the market of Lisbon. every individual. and so to direct that industry that its produce maybe of the greatest value. every individual necessarily labours to render the annual revenue of the society as great as he can. indeed. It is an affectation. He saves himself the risk and trouble of exportation. in the same manner. every individual naturally inclines to employ his capital in the manner in which it is likely to afford the greatest support to domestic industry. upon equal or nearly equal profits. and though this necessarily subjects him to a double charge of loading and unloading as well as to the payment of some duties and customs. which he feels at being separated so far from his capital. endeavour to employ it in the support of that industry of which the produce is likely to be of the greatest value. endeavours as much as he can. But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry. and gives revenue and employment to a greater number of the inhabitants of the country. and one employed in the foreign trade of consumption has the same advantage over an equal capital employed in the carrying trade. and he is in this. to sell as great a part of them at home as he can. that its produce may be of the greatest possible value. But it is only for the sake of profit that any man employs a capital in the support of industry. than an equal capital employed in the foreign trade of consumption. therefore. In proportion as the value of this produce is great or small. as much of the goods of all those different countries as he can. nor knows how much he is promoting it. and to give revenue and employment to the greatest number of people of his own country. not only to no . if I may say so. round which the capitals of the inhabitants of every country are continually circulating. not very common among merchants. By preferring the support of domestic to that of foreign industry. so far as he can. every individual who employs his capital in the support of domestic industry. and by directing that industry in such a manner as its produce may be of the greatest value. and thus. and he will always. or general market. necessarily puts into motion a greater quantity of domestic industry. indeed. As every individual. it is evident. neither intends to promote the public interest. I have never known much good done by those who affected to trade for the public good. it has already been shown. can in his local situation judge much better than any statesman or lawgiver can do for him. to Amsterdam. he frequently promotes that of the society more effectually than when he really intends to promote it. Nor is it always the worse for the society that it was no part of it. Secondly. The produce of industry is what it adds to the subject or materials upon which it is employed. and very few words need be employed in dissuading them from it. they may sometimes be driven off and repelled from it towards more distant employments. and towards which they are always tending. and it is in this manner that every country which has any considerable share of the carrying trade. endeavours always to sell in the home market. so far as he can. however. yet. will always be glad. he willingly submits to this extraordinary charge. What is the species of domestic industry which his capital can employ. for the sake of having some part of his capital always under his own view and command. for the goods of all the different countries whose trade it carries on. to convert his carrying trade into a foreign trade of consumption. But a capital employed in the home trade. The statesman. Home is in this manner the centre. when. or rather is precisely the same thing with that exchangeable value. by particular causes.

or. The industry of the society can augment only in proportion as its capital augments. had it been left to follow its natural course. it would not upon that account necessarily be the poorer in anyone period of its duration. than in the foreign country. In every period of its duration its whole capital and industry might still have been employed. What is prudence in the conduct of every private family. very good grapes can be raised in Scotland. but buys them of the shoemaker. The farmer attempts to make neither the one nor the other. and the exchangeable value of its annual produce. what is the same thing. but employs those different artificers. employed in a way in which we have some advantage. therefore. is in some measure to direct private people in what manner they ought to employ their capitals. The shoemaker does not attempt to make his own clothes. it could therefore have been purchased with a part only of the commodities. the society should never acquire the proposed manufacture. The natural advantages which one country has over another. which the industry employed by an equal capital would have produced at home. better buy it of them with some part of the produce of our own industry. and after a certain time may be made at home as cheap. But though the industry of the society may be thus carried with advantage into a particular channel sooner than it could have been otherwise. and what diminishes its revenue is certainly not very likely to augment its capital faster than it would have augmented of its own accord. though upon different objects. had both capital and industry been left to find out their natural employments. It is the maxim of every prudent master of a family. can be made of them. it will by no means follow that the sum-total. that commodity could be purchased from foreign countries cheaper than it can be made at home. with the price of a part of it. But the immediate effect of every such regulation is to diminish its revenue. but employs a tailor. what is the same thing. It is certainly not employed to the greatest advantage. the regulation is evidently useless. for want of such regulations. that it is acknowledged by all the world to be in vain to struggle with them. when it is thus directed towards an object which it can buy cheaper than it can make. According to the supposition. and to purchase with a part of its produce. All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbours. indeed. or. with a part only of the price of the commodities. are sometimes so great. The industry of the country. never to attempt to make at home what it will cost him more to make than to buy. and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. whatever else they have occasion for. The value of its annual produce is certainly more or less diminished. is thus turned away from a more to a less advantageous employment. The general industry of the country being always in proportion to the capital which employs it. will not thereby be diminished. in any particular art or manufacture.single person. but to no council or senate whatever. The tailor does not attempt to make his own shoes. can scarce be folly In that of a great kingdom. must necessarily be diminished by every such regulation. too. at about thirty times the expense for which at least . If a foreign country can supply us with a commodity cheaper than we ourselves can make it. a particular manufacture may sometimes be acquired sooner than it could have been otherwise. instead of being increased. either of its industry. If the produce of domestic can be brought there as cheap as that of foreign industry. To give the monopoly of the home market to the produce of domestic industry. but only left to find out the way in which it can be employed with the greatest advantage. Though. and its capital can augment only in proportion to what can be gradually saved out of its revenue. By means of such regulations. in producing particular commodities. or cheaper. or of its revenue. no more than that of the abovementioned artificers. and very good wine. in the manner that was most advantageous at the time. when it is thus turned away from producing commodities evidently of more value than the commodity which it is directed to produce. and hot-walls. according to the intention of the lawgiver. and both capital and revenue might have been augmented with the greatest possible rapidity. If it cannot. and must in almost all cases be either a useless or a hurtful regulation. hot-beds. can ever be augmented by any such regulation. By means of glasses. In every period its revenue might have been the greatest which its capital could afford. it must generally be hurtful.

but must be drove through those very extensive countries. The short sea between Ireland and Great Britain. to which. Would it be a reasonable law to prohibit the importation of all foreign wines. were made ever so free. But the freest importation of the rude produce of the soil could have no such effect upon the agriculture of the country. whereas breeding countries are generally uncultivated. is in this respect of no consequence. in turning towards any such employment a thirtieth. indeed. at no small expense and inconveniency. therefore. which one artificer has over his neighbour. If the importation of foreign cattle. indeed. The common people of Ireland. the only commodity of which the transportation is more expensive by sea than by land. By sea. is said to follow this maxim at present. In manufactures. even in the home market. that the grazing trade of Great Britain could be little affected by it. must always be highly improved. though not altogether so glaring. and Northumberland. who exercises another trade. they could easily. so few could be imported. renders the importation of Irish cattle more easy. accordingly. Wales. Feeding and fattening countries. But if the exporters had found any great advantage in continuing the trade. when the law was on their side.equally good can be brought from foreign countries. The high price of lean cattle. which was lately permitted only for a limited time. Merchants and manufacturers are the people who derive the greatest advantage from this monopoly of the home market The prohibition of the importation of foreign cattle and of salt provisions. before they could arrive at their proper market. yet exactly of the same kind. it will always be more advantageous for the latter rather to buy of the former than to make. and seem destined by nature to be the breeding countries of Great Britain. and yet they both find it more advantageous to buy of one another. by augmenting the value of uncultivated land. which in times of moderate plenty amount to a prohibition. is like a bounty against improvement. It is an acquired advantage only. it could have no considerable effect upon the interest of the graziers of Great Britain. Live cattle are. It will require a very great one to enable them to do so in the rude produce of the soil. for example. To any country which was highly improved throughout. it would be more advantageous to import its lean cattle than to breed them. Irish cattle could never be imported for their use. are not near so advantageous to the graziers and farmers of Great Britain. were rendered perpetual. that even the breeding countries of Great Britain are never likely to be much affected by the free importation of Irish cattle. seem to demonstrate. Lean cattle. Those parts of Great Brit