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Lorsque ie document est trop grand pour dtre reproduit en un seul cliche, il est film6 A partir de I'angle aupArieur gauche, de gauche A droite, et de haut en bea, en prenant le nombre d'imegea nAceaaaire. Lea diagrammes suivanta iliuatrent le m6thode. 1 2 3 1 2 3 4 5 6 C. BAGE AN IN CL U I R Y INTO THE Nature and Caufes OF THE ;^ ''iAU WEALTH OF NATIONS By A1>AM SMTTlf. 1.%,. D* and F. R. S. Jommrly Profeflbr of Moral PhUofophy in the Univeifitr of Glasgow-; # ■ni- IN TWO VOLUMES. V OL.iL 'i - ■^'S 9 LONDON: PRINTED FOR W. 8TRAHAN ; AND T. CADELL, IN THE STRANI>, MDCCLJULVU diJA;i ) /VV-J/^A "/• Bublijhed by the fame A u T h or,, THE THEORY OF MORAL SENTIMENTS:: An Essay towEards an Analyiis of Hie Principles by which Men naturally judge concerning the Condu(5t and Charai5ter,, firft of theic Neighbours, and afterwards of themfelyeSk I . TO WHICH IS ADDED. A DISSERTATION on the, Origin of Lanouags. The Fourth Edition. Price 6 s,. *' ..i . -iw» ^#H%*wi*".'"'-i»'^..^r— --^vm,^. f t \ .-••n- V ■*■ 1 , ,^y t > t .*n.Y M- t r\ Sj " '*% CONTENTS 0« TH£ FIRST VOLUME. ,''«.■ Introouctiou and Plan op the Work • Page i BOOK!. 'Of the Caufes of Improvement in the pro- duftive Powers of Labour, and of the Order according to which its Produce is naturally diftri- buted among the difierent Ranks of the People c CHAP. L Of the Divifion of Labour ibid. .. r". ^.^ ■):'C^v*. C H A P. II. Of the Principle which gives Occafion to the Divifion of Labour i6 C H A P. IM. ^Jtat the Divifion of Labour is limited by the Extent of the rt. Market - - «» 2i A 2 j %. CONTENTS- CHAP. IV. Off the Origin and VJe of Mbney -i Page 27- e H A P. V. ©/* the real and nomhial Price cf Commoditiei, or of their Price in Labour, and their Price in Mi^ney. - . "t 35. C H. A 14 VI. Of the component Parts of the. Price of Commodities- ^ 5^* _. :^i. >>/ •'I ■'. ' 6«-. 76 108 CHAP. VII. df the natural and market Price of Commodities^ g- C H A P. VJIIl Of the Images of Labour - ^ ^ ^ G H A e; IX. - Of the Prof ts of Stock. - - s -'.^ ;r;nv/ c h:a P.. x; - -Vv>.- Of Wsges and Proft in- the different "Bmphyments tf Labour and Stock - - - - 121 Fa R T 1 ft. Inequalities in Usages and Profits ar^Sng fr^n the Natureof the. different Employments of both. - 122: '■■-''.} * Part 2d. ImquaUties occafioned by the Policy of Europe 147; C H A P. Xf. Of the Rent of Land CO KT E KTl FART J ft. 0/ the Produce of Land which always affords Kent — . . - M^, - Page 1 8a -■* ' ' " ■ ,Tf : a !t • * - ■ ' ' - Part 2d. Of the Produce of Land which fometimes does, and fimetimij. diet not, n^rd Rent *■ . -im ,;r. 209 i» * . - ' ■ Part 3d; Of the Variations in the Proportion between the' reJ^ttSive Values of that Sort of Produce which alwojiS' ,^ . affords Rent, and of that which fometimes does, andfonutimes does not afford Rent — — — aijjfc* TS^igreffon. concerning the Variations in the Vabu (f, Siher dur-^ ing the Courfe of the Four laft Centuries,. Firft Period Second Period ^hird Period' , -JE \ ^Ai 22r 240 242 Variations in the PtopprtUiH- hittween. the reJ^iSiive Values of Gold and Silver — — ' . — 264. Grounds ef the Sujpicionthat the Value of Silver ^iH-continues to decreafe m^-- ^ -» « «»•■ 37© Different EffeBs of the Progrefs of Improvement upon the real Price of three different Sorts of rude Produce - - 2.71 " •x/ ■l«r •"■ ''' i7Z '■'••Ifr'".- .274 ' 286 Pirjl Sort Second Sort Xhird Sort; Qonclufion of the Dsgrejion concerning the Variations in tbt Value: of Silver - ... ^. g^ BffeSls of the Progrefs of linpjrovement upon the real Price of ManufaHures ••• : — — ^©6 GMcluJon of the Chapter m- j-- qir CONTENTS^ » ,, B O O K II. of the Nature, Accumulation, and Employment of Stock. Introduction CHAP. I. Of the Divijhn of Stock Page 327 CHAP. II. Of Money confer ed as a particular Branch of the general Stock of the Society, or of the Expence of maintaining the National ' Capital — — - 341 .,3«.>.>v.v.< ^,„^p_ „,_ -.i. H <*V*5H Of the Aci.u:nflation of Capital, or of produSlive and unpro* duSlive Labour — - ^ ^©^ Of Stock lent at Interejl CHAP. IV. C H A P. V. Of the different Employment of CapitaU — ^ .*u 437 Jh \fJ4i\. I i MMMMIM CONTENTS^ BOOK iir. ' Of the diffdrent ^rogrefs at Opulence- in different Nations* r =• Page 459r :' ■ ■ ' i> C H A R I. (^T tbe natural Fngrefi ofi Opulenci' ■ ■ ■ * CHAP. II. - ..-«-- . Of the Djfcouragement of Agriculture in the antient State of Europe after the Fall of tbe Roman Empire - 466^ C H A P. III. Of the Rife and Brogrefs of Citiet and Towns, after, tie Fall of tt . tjbe Roman Empire — — — 480 e H A p. iv: How tie Commerce of tie Towns contributed to tie Improvement ^ tie Country — — "• 494- .. ' ' '•• ■ > ' ' '. , • t; -tY^ »- •.•,■■."■' V AM V/'. 'j;'; \0 |; ^\\kmi\v^y S-^M.'\- u-a\ ^ • ^^•i''4i-0: U H COH TENTS ,-jf' OF THE SECOND VOLUME. H^ ^ BOOK IV. v,f:i VWl ' ■"%r^in (oncernuif^ ik Corn trade and Corn Laws CHAP. VI. Of Trtatia of Commerci . -^. U t-) • ■•• 13© U H A P. VII. QfCotonie^ ^ - ,- '^5, «>..»v\v* -h ,<> .1 '. 14^ Part I. Of the AUtives for efiaiiijhinf^ ntpCoionie*^ y IbicL Part II. Caufes of the PjoAenty^ofnew^^^^^^ ^y ■,■ }SJ Part III. Oftbe Advantages nobicb Europe bos derived from ' tbe Difcovery of America, andfrotfs, tbat if a,PaJ/fige to tbe ^ E4fi Indies fy tbt CJkpe if'l^pd m^ ' -i*^ *'>•."'! .'ii* 't* « »». 4 .« CHAP. VIII4 Of tbe AgricuUurai Sy/fems, or of tbofe S^Jiems of political *^ ^'.Oeconomy 'ubifb reprefent tbe Produce of'jband, as eitBh^ ^ tbe file or tbe principal Source if tbe Revenue and Wealtb of roerjrCounhj ^ '^V^V^' .% ;•-■;'" 'ajd- 'W- mm ■Cf^t, \Va"^^ W.\i'71 Vj ttiiVi»l\'>\.' .V /I :■.:':: .) .Vi\ *^ -fi^ - B O OK V. "^ ■ - ■ , .1."-;;'. >.'/,; ^v^U -j>^ij^\^.-^V!"A^i v,v^y\pi.X. Of the Revenue of the Sovereign or Commonwealth C7i »- • - CHAP. I. />'«v*^*W»>\* •^v''¥*'''^»? '^9 O/* />^^ Expenees of the Scyereign or Commomnealtb Page 291 .li i . i A i* »y , l^fVRT I. Of the Expfttce of Dtfence " ^ * ' "iblfi. ^ATiiT II. tf'thr'Empinei^fuJ^ci PXRT III. Cy /iJf Expence of puhltc Works and fuhlic Infii- '*'*''" ■ ,v:-, A> vA •^. vlL 'lv.;,-.7 ^^•r^\«;^^i\;vv -^^i \0 ".Ui ". .^5?9 ^RTICLE m. Of n>e pmiU( Worpy^^imjtij^ h'tatfMg the Commerce ;. ; , .^^ , , ^©jj, • ,- % • "'- . '"- ' - i iK .' Conclufton (f the Chapter t^, B & 4x0 ■'ti jJ-*'*''! 'Ah B ♦ 1 .loV CHAP. II. Of the Swrces of the general orj^ubUc JUvemne of the Society 412 CONTENTS. Part I. Of the Funds or Sources of Revenue nvbicb may peculiarly belong to the Sovereign or Commonwealth Page 412 Part II. Of Taxes 42Z Article ift. Taxes upon Rent rr * . S* 4^^ Taxes upon the Rent of Land •» — -' ibid. Taxes which are proportioned, not to the Rent, But to the Pro^ duce of Land — — — — 438 Taxes upon the Rent of Houfes — — -» * 442 Article 2d. Taxes upon Profit, or upon the Revenue arifing 1 from Stock - ■» k* ; «* 452 Taxes upon the Profit of particular Employments — 459 Appendix to Articles ift and ad. Taxes upon the Ca- pital yydue of Lands, Houfis, and Stock — ^ *> 467 ; * ,.^ ''-■'' w»f ♦wi^. Article ^A. Taxes upon the Wages tf Labour 475 Article 4th. Taxes which, it is intended, Jbould faU indif" ferently upon every different Species of Revenue • 479 Capitation Taxes — — — ibid. Taxes upon confumable Commodities ** §• 482 CHAP. III. OfpubUc Debts 2 ,«.... g * ^* fff m 533 -.f' f C'* -,„ M. ♦.rir.iti 4J *1 fi ;1 > AN INQJJIRY li • I ',:.\. .> T yt ii..r^-:A o- ;> ♦ , > »^. >S> IV. \^. .iT;!A or .ajaMKiiA XHXVi^^mXSiZ il .^. A H J t : '» i\\i .,. :> OF T H E '^ ^-'^ WEALTH OF NATIONS. INTRODUCTION AND PLAN OF THE WORK- TH E annual labour of every nation is the fund which ori- ginally fupplies it with all the neceffaries and conveniencies of life which it annually confumes, and which confift always, either in the immediate produce of that labour, or in what is purchafed with that produce from other nations. '/■■ ■ V , , fc.-x f ^ ■ ^ ' "- " -■■■■.■ •: i > According therefore, as this produce, or what is purchafed with it, bears a greater or fmaller proportion to the number of thofe who are to confume it, the nation will be better or worfe fupplied with all the neceffaries and conveniencies for which it has occafion. ^ But this proportion muft in every nation be regulated by two different circumftances ; firft, by the fkill, dexterity and judgment Vol. I. B ^ith ■' '-X'^ S THE NATURE AND CAUSES OF Introduflion. with which labour is generally applied in it ; and, fecondly, by the proportion between the number of thofe who are employed in uLf ul labour, and that of thofe who are not fo employed. What- ever be the foil, climate, or extent of territory of any particular nation, the abundance or fcantinefs of its annual fupply muft» in that particular fituation, depend upon thofe two circumftaaces. The abundance or fcantinefs of this fupply too feems to de- pend more upon the former of thofe two circumAatices than upon the latter. Among the favage nations of hunters and fifhers, every individual who is able to work, is more or lefs employed in ufeful labour, and endeavours to provide, as well as he can, the neceflaries and conveniencies of life, for himfelf, and fuch of his family or tribe as are either too old, or too young, or too infirm to go a hunting and fifhing. Such nations, however, are fo miferably poor, that, from mere want, they are frequently reduced, or, at lead, think themfelves reduced, to the neceflity fometimes of direftly de- ftroying, and fometimes of abandoning their infants, their old peo- ple, and thofe afflidled with lingering dlfeafes, to perifli with hunger, or to be devoured by wild beafts. Among civilized and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom confume the produce of ten times, frequently of a hundred times more labour than the greater part of thofe who work ; yet the produce of the whole labour of the fociety is fo great, that all are often abundantly fupplied, and a workman, even of the lowed and poorefl order, if he is frugal and induilrious, may enjoy a greater fhare of the neceflaries and con- veniencies of life than it is poilible for any favage to acquire. The caufes of this improvement, in the productive powers of labour, and the order, according to which its produce is naturally diftributed . I, -^^ THE WEALTH OF NATIONS. 3 diftrlbuted among the different ranks and conditions of men in the- ^^*^"^"^'"" - ibciety, make tiie fubje£l of the Firft Book of this Inquiry. Whatever be the adlual ftate of the (kill, dexterity, and judg- ment with which labour is applied in any nation, the abundance or fcantinefs of its annual fupply, muft depend, during the con- tinuance of that ftate, upon the proportion between the number of thofe who are annually employed in ufeful labour, and that of thofe who are not fo employed. The number of ufeful and produdlivc labourers, it will hereafter appear, is every where in proportion to the quantity of capital ftock which is employed in fetting them to work, and to the particular way in which it is fo employed. The Second Book, therefore, treats of the nature of capital ftock, 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 fkill, dexterity, and judg- ment, in the application of labour, have followed very different plans in the general condud or direction of it ; and thofe plans have not all been equally favourable to the greatnefs of its produce. The policy of fome nations has given extraordinary encouragement to the induftry of the country; that of others to the induftry of towns. Scarce any nation has dealt equally and impartially with every fort of induftry. Since the downfal of the Roman empire, the policy of Europe has been more favourable to arts, manufac- tures, and commerce, the induftry of towns ; than to agriculture, the induftry of the country. The circumftances which feem to have introduced and eftabliflied this policy are explained in the Third Book. Though thofe different plans were, perhaps, firft introduced by the private interefts and prejudices of particular orders of men, with- B 2 out frff THE NATURE AND CAUSES OF introduflion. ©ut any regard to, or forefight of, their confequences upon the general welfare of the fociety; yet they have given occafion to very different theories of political oeconomy ; of which fome magnify the importance of that induftry which is carried on in towns, others of that which is carried on in the country. Thofe theories have had a confiderable influence, not only upon the opinions of men of learn- ing, but upon the public conduct of princes and fovereign ftates. I have endeavoured, in the Fourth Book, to explain, as fully and di(^ tindly as I can, thofe different theories, and the principal effects which they have produced in different ages and nations. In what has confifted the revenue of the great body of the people, or what is the nature of thofe funds which, in different ages and nations, have fupplied their annual confumption, is treated of in thefe four firfl: Books. The Fifth and laft Book treats of the revenue of the fovereign, or commonwealth. In this Book I have endeavoured to Ihow ; firft, what are the neceffary expences of the fovereign, or commonwealth; which of thofe expences ought to be defrayed by the general contribution of the whole fociety ; and which of tliem, by that of fome particular part only, or of fome particular members of the fociety : fecondly, what are the different methods in which the whole fociety may be made to contribute towards defraying the expences incumbent on the whole fociety, and what are the principal advantages and inconveniencles of each of thofe methods : and, thirdly and laftly, what are the reafons and caufes which have induced almoft all modern governments to mort- gage fome part of this revenue, or to contrail debts, and what have been the effeds of thofe debts upon the real wealth, the annual produce of the land and labour of the fociety. > f« ;•>.— BOOK --THE WEALTH OF NATIONS. ■'l?*f>:. iW-; BOOK I. Of the Caufes of Improvement in the produdive Powers of . Labour, and of the Order according to which its Pro- duce is naturally diftributed among the different Ranks of the People. . ;.ti. „\ CHAP. I. CHAP. L c - ; ^.-M Of the Divlfion of Labour. ' ' TH E greateft improvements ia the produ(Sl:ive powers of La- B o o ic hour, and the greater part of the fkill, dexterity, and judg- ment with which it is any where diredled, or applied, fcem to have been theeffeda of the divilion of labour. ' > The efFeds of the divifion of labour, in the general bufinefs of fociety, will be more eafdy underdood, by confidering in what manner it operates in fome particular manufactures. It is com- monly fuppofed to be carried furtheft in fome very trifling ones J not perhaps that it really is carried further in them than in others of more importance : but in thofe trifling manufadures which are deflined to fupply the fmall wants of but a fmall number of people, the whole number of workmen muft necefliarily be fmall ; and thofe employed in every different branch of the work can often be collected into the fame worklioufe, and placed at once under the view of the fpec- tator. In thofe great manufactures, on the contrary, which are deftined to fupply the great wants of the great body of the people, every different branch of the work employs fo great a number of workmen*. THE NATURE AND CAUSES OF workmen, that it is impoffible to coUcdt them all into the fame work- houre. We can feldom fee more, at one time, than thofe employed in one fingle branch. Though in them, therefore, the work may really be divided into a much greater number of parts, than in thofe of a more trifling nature, the divifion is not near fo obvious, and has accordingly been much Icfs obferved. To take an example, therefore, from a very trifling manufac- ture ; but one in which the divifion of labour has been very often taken notice of, the trade of the pin -maker ; a workman not edu- cated to this bufinefs (which the divifion of labour has rendered a di(lin£t trade), nor acquainted with the ufe of the machinery employed in it (to the invention of which the fame divifion of labour has probably given occafion), could fcarce, perhaps, with his utmoft induftry, make one pin in a day, and certainly could not make twenty. But in the way in which this bufinefs 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 likewife peculiar trades. One man draws out the wire, another firaights it, a third cuts it, a fourth points it, a fifth grinds it at the top for re- ceiving the head ; to make the head requires two or three diAindt operations ; to put it on, is a peculiar bufinefs, to whiten the pins is another ; it is even a trade by itfelf to put them into the paper ; and the important bufinefs of making a pin is, in this manner, di- vided into about eighteen diftin(St operations, which in fome manu- factories are all performed by diftinft hands, though in others the fame man will fometimes perform two or three of them. I have feen a fmall manufactory of this kind where ten men only were employed, and where fome of them confequently performed two or three diftin£t operations. But though they were very poor, and there- fore but indifferently accommodated with the neceflary machinery, ihey could, when they exerted themfelves, make among them about 8 twelve 4 THE WEALTH OF NATIONS^ * twelve pounds of pins in a day. There are in a pound upwards of ^ HA i'. four thoufand pins of a middling fize. Thofe ten perfons, there- fore, could make among them upwards of forty- eight thoufand pins in a day. Each perfon, therefore, making a tenth part of forty- eight thoufand pins, might be confidered as making four thoufand eight hundred pins in a day. But if they had all wrought fcparatcly and independently, and without any of them having been educated to this peculiar bufinefs, 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, perhapa not the four thoufand eight hundredth part of what they are at prcfent capable of per- forming, in confequence of a proper divifion and combination of their different operations. In every other art and manufadure, the effects of the divifion of labour are funilar to what they are in this very trifling one ; though, in many of them, the labour can neither be fo much fub- (iivlded, nor reduced to fo great a fimplicity of operation. The di- vifion of labour, however, fo far as it can be introduced, occafions, in every art, a proportionable increafe of the produdive powers of labour. The feparation of different trades and employments from one another, feema to have taken place, in confequence of this advantage. This feparation too is generally carried furtheft in thofe countries which enjoy the higheft degree of induftry and im- provement ; what is the work of one niin, in a rude ftate of fociety, being generally that of feveral, in an improved one. In every im- proved fociety, the farmer is generally nothing but a farmer ; the manufacturer nothing but a manufacturer. The labour too which is neceffary to produce any one complete manufacture, is almoft always divided among a great number of hands. How many different trades are employed iri each branch of the linen and woollea manufactures, from the growers of the flax and the wool, to the bleachers f 8 BOOK I. ^Sif. K THE NATURE AND CAUSES OF bleachers and fmoolhers of the linen, or to the dyers and dreflTers of the cloih ! The nature of agriculture, indeed, does not admit of fo many fubdivifiona of labour, nor of fo complete a fcparation of one biiliiicrs from another, as manufactures. It is impoffible to feparate fo entirely, the bufinefs of the grazier from that of the corn-farmer, as the trade of the carpenter is commonly fcparated from that of the fmith. The fpinner is almoft always a diAindt perfon from the weaver ; but the ploughman, the harrower, the fower of the feed, and the reaper of the corn, are often the fame. The occafions for thole different forts of labour returning with the different feafons of the year, it is impoffible that one man fhould be conftantly employ- ed in any one of them. This impoffibility of making fo complete and entire a fcparation of all the different branches of labour em- ployed in agriculture, is perhaps the reafon why the improve- ment of the produdtive powers of labour in this art, docs not always keep pace with their improvement in manufadlurei. The moft opulent nations, indeed, generally excel all their neighbours in agriculture as well as in manufactures; but they are commonly more diftinguilhed by their fuperiority in the latter than in the former. Their lands are in general better cultivated, and having more la- bour and expence beftowed upon them, produce more, in propor- tion to the extent and natural fertility of the ground. But the fuperiority of produce is feldom much more than in proportion to the fuperiority of labour and expence. In agriculture, the labour of the rich country is not always much more productive than that of the poor ; or, at leaft, it is never fo much more productive, as it commonly is in manufactures. The corn of the rich country, there- fore, will not always, in the fame degree of goodnefs, come cheaper to market than that of the poor. 1 he corn of Poland, in the fame degree of goodnefs, is as cheap as that of France, notwithftanding the fuperior opulence and improvement of the latter country. The corn of France is, in the corn provinces, fully as good, and in moft years THE WEALTH OF NATIONS. years nearly about the fame price with the com of England, though, ift opulence and improvement, France is perhaps in- ferior to England. The lands of England, however, are better cultivated than thofe of France, and the lands of France are faid to be much better cultivated than thofe of Poland. But though the poor country, notwithflanding the inferiority of its culti- vation, can, in fome meafure, rival the rich in the cheapnefs and goodnefs of its corn, it can pretend to no fuch competition in its manufadlures ; at lead if thofe manufactures fuit the foil, climate, and fituation of the rich country. The filks of France are better and cheaper than thofe of England, becaufe the filk manufacture does not fuit the climate of England. JBut the hardware and the coarfe woollens of England are beyond all comparifon fuperior to thofe of France, and much cheaper too in the fame degree of goodnefs. In Poland tliere are faid to be fcarce any manufactures of any kind, a few of thofe coarfer houfehold manufactures ex- cepted, without which no country can well fiibfiflr. cUii 4rtvi?j,: ; » ■:h-m'ii htm \7k1mh yiom muf ..> lU: i- :: .!>»t'i. ».'.'. i Ct i^ This great increafe of the quantity of work, which the fame number of people are capaUe of performing, in confequence of the divifion of labour, is owing to three different circumftances j firft, to the increafe of dexterity in every paiticular workman ; fecondly, to the faving of riie time which is commonly loft in pafling from one fpecies oif. work to another; and laftly, to the invention of a great number of machines whi^h facilitate and abridge labQur, and enable one man to do the work of many. First, ,the improvement of the dexterity of the workman ne- cefTarily increafes the ^quantity of the work he can perform, and the divifion; of -labour, by reducing every man's buiinefs to fome one fimple operation, and by. making this operation the fole em- ployment of his life, necefiarily increafes very much the dexterity Vol. I. C of CHAP. I. 10 THE NATURE AND CAUSES OF of the worfcmMi. A common imith, who, though aecoftomed to handle the hammer, has never been ufed to make naik, if upoa fome particular ocoafion he is obliged to attempt it, will Tcaroe, I am alTured, be able to make i^ve two or tL^e hundred nails in a day, and thofe too very bad ones. A fmith who has been $cc\iCm tomed to make nails, but whoie folc or principal bufiners has not hcen that of a nailer, can (eldom with lits utmiG^ ^ili^^ce mi^ 'inore than eight hundred or a riioufand nails in a day. I kawc fcen feveral boys under twenty years of age who had never .cKa- cifed any other trade but that of making nails, and wk , wh;:^! they exerted themfdves, could make, oach o{ them, upw^vct ojF two thoufand three hundred nails in a day. 'i'hc > ' ing «f a nail, however, is by no means one of the fuBplcft o^iitions. Thr: iame perfon blows the bellows, Airs or mends the fire as tliore ia occftfion, heats the iron, and forges eviery fart of the nail: In forging the head too he is obliged to diange his iooli. The dtSeront operations into which the making of a pin, or of a metal button* is fubdivided, are all of them much more fimple, and the dex- terity of the perfon, of whoTe life it has been the fole bufmefs to peiform thera, is uibally much ^nater. The ra^xdity with «vhichfome of the operations of thofe«ianufa6hues are performed* exceeds what the human hand conld, by thofe who had never leea "them, be fuppofed capable of acquiring. -— -. "Secondly, the advantage which is gained hy faving the time commonly loft in paffmg from one fort of work to another, is much greater than we ihould at 6rft view be apt to imagine it. It is impoilible to pafs very quickly irm\> -^ne kind of MM)rk to an- other, that is carried on in a difR »mt«r8 a little in tnrning his haral from one fort of cmi>byment to another. When he fivik bcguis the new work he is feMom very keen and hejiity ; his mimi, as they fay, docs not go to it, and for fbmc time he rather trifles than applies to good purpofe. The habit of £iuntering snd of indolent ci. ^«v'is :ip- plication, which is naturally, or rather neceflarily acqi red by every country workman who is obliged to change pun wor*^ and his tools every half hour, and to apply his hand in twenty Hiit, fmt ways almoft everyday of his lifcj renders him almoft alv^ s {[nfh- ful and laty, and incapable of any vigorous appi cation m , n the moft prefllng occafions. Independent, therctore, of *i.s dc - ficiency in point of dexterity, this catife alone mufl always i^4ii4^ confiderably the quantity of worl. which he is capable of pdiiMn* ing. ^*' '!• ...-if.'siti i^j^'ix- ' Thirdly, and laftly, eveiy boly muft be fenfible how n ich labour is facilitated and abridged by the application of proper ft^ - chineiy. It is unneceflary to give any example. I fl'^all, thercfc>"c, only obferve that the invention of all thofe machines by wMMfi labour is fo much facilitated and abridged, feems to have bean originally owing to the divifion of laoour. Men are much more Kkely to difiiover cafier and readier methods of attaining any objea: when the whole attentibn of their minds is direflcd towards that fingltt objeft, than when it is difllpated among a great variety of things. But in confequence of the divifion of labour, tlie whole of every man's attention comes naturally to be direfled towards fbmc one very fimple objeft. It is naturally to be expefted, tJiere- foref, t!hat fome onfe ef oilier of thofe v/ho are cmpisiyed in each partictd&r branch of labdin^ fhould fgon find out eafier and reridier methods of perfbrmihg their own particular work wherever tlie ^ * nature 12 THE NATURE AND CAUSES OF BOOK nature of it admits of fuch improvement. A great part of the machines employed in thofe manufaQures in which labour is mod fubdivided, were originally the inventions of common workmen, who, being each of them employed in fome very fimple operation, naturally turned their thoughts towards finding out eafier and readier methods of performing it. Whoever has been much accuftomed to vilit fuch manufactures, muft frequently have been fhovvn very pretty machines, which were the inventions o£ common workmen in order to facilitate and quicken their own particular part of the work. In the firft fire-engines, a boy was conftantly employed to open and ftiut alternately the commimi- cation between the boiler and the cylinder, according, as thfe pifton either afcended or defcended. One of thofe boys, who loved to play with his companions, obferved that, by tying a firing from the handle of the valve, which opened this communication, to another part of the machine, the valve would open and fhut witliout his affiftance, and leave him at liberty to divert himfelf with his play-fellows. One of the gieatefl improvements that has been made upon this machine, fince it was firfl invented, was in this manner tlie difcovery of a boy who wanted to fave his own labour.. t»Vi-l4 > ti\'itii-' III All the improvements in machinery, however, have by no means been the inventions of thofe who had occafion to ufe the macliines. Many improvements have been- made by the ingenuity of the makers of the machines, when to make them became the bufinefs of a peculiar trade ; and fome by that of thofe. who are called philofophers or men of. fpeculation,. whofe trade it is, not to do any thing, but to obfeive every thing j and who, upon that account, are often capable of combining together the powers of the mofl diftant and diflimilar objefts. In the progrefs of fociety, philofophy or fpeculation becomes, like every other em* ' ^ , "' ployment. THE WEALTH OF NATIONS. »3 ployment, the principal or fole trade and occupation of a particular C HA P; clafs of citizens. Like every other employment too, it is fub- divided into a great number of different branches, each of which afFoids occupation to a peculiar tribe or dafs of philofophers ; and this fubdivifion of employment in philofophy, as well as in every other bufmefa, improves dexterity and faves time. Each indi- vidual becomes more expert in his own peculiar branch, more work is done upon the whole,, an^ the quantity, of fcicnce is con-i- fiderably increafed by it^ ■* \ . • ; , •.•.;:'.: £.*;' •,t.r .!. „vl Tt is the great multiplication of the produftions of all. the diiFerent arts, in confequence of the divifion of labour, which occafions in. a well governed fociety that univerfal opulence which extends itfclf to the loweft ranks of. the people. Every workman . has a great quantity of his own work to difpofe of beyond what he himfelf has occafion for; and every other workman being exactly in the fame fituation,. he is. enabled to exchange a great quantity of his own. goods for a great quantity, or, what comes to the fame thing, for the price, of a great quantity, of theirs. He fupplies them abundantly with what they, have occallon for,, and they accommodate him as amply with what he has occafion for, and a general plenty diffufes itfelf, through all the different ranks of the l9ciety. U » I y < / S!''^ ^ V:V^ * Observe the accommodation of the moft commoa artificer ox day-labourer in a civilized and thriving country, and you will perceive that the number of people of whofe induflry a parti though but a fmall part, has been employed in procuring him this accommodation exceeds all computation. The woollen coat, for example, which covers the day-labourer, as coarfe and rough as it may appear, is the produce of the joint labour, of a great multitude of workmen. The fliepherd, the foiter of the wool, I>. .; the f# THE NATURE AND CAUSES OP ; 1 BOOK the wool- comber at carder, the dyer, the fcribbler, the fpinner, the weaver, the fuller, the drefler, with many other?, muft all join their different arts in order to complete even this homely production. How many merchants and carriers, beftdes, muft have been employed in tranfporting the materials from fome of thofe workmen to others who often live in a very diftant part of the cott^nfry ! how much commerce and navigation in particu- lar, Iww many fliip-builders, failors, fail-makers, rope-makers, muft have been employed in order to bring together the different drugs made ufe of by the dyer, which often come from the remoteft comers of the world ! What a variety of labour too is neceflfery in order to produce the tools of the meaneft of thofe workmen ! To fay nothing of fuch complicated machines as the fliip of the failor, tlie mill of the fuller, or even the loom of the weaver, let us confider only what a variety of labour is requifite in order to form that vei7 fimple machine, the (hears with which the (hepherd clips the wool. The mrher, the builder of the furnace for fmelt- ing the ore, the feller of the timbei', the burner of the charcoal to be made ufe of in the fmelting houfe, the brick-maker, the i>fick-layer, the workmen who attend the furnace, the mill- Wright, the forger, the fmith, muft all of them join their differ- ent arts in order to produce them. Were we to examine, in the fame manner, all the different parts of his drefs and houfehold furniture, the coarfe linen fliirt which he wears next his Ikin, the fhoes which cover his feet, the bed which he lies on, and all the diffcient paftts which compofe it, the kitchen grate at which he pi'cpares his vi(5hials, the coats which he makes ufe of for that purpofr, dug ft'om the bowels of the earth, and brought to him perhflps by a tehg fea and a long land carriage, all the other utenfils o£ his kitchen, aH the furniture of his table, tlie knives and forks, the earthen or pewter phtes upon which he ferves up and divides his victuals, the different hands employed in preparing his bread and THE WEALTH OF NATIONS. »5 lets and the light, CHAP. and his beer, the glafs window which and keeps out the wind and the rain, with all the knowledge and art requilite for preparing that beautiful and happy invention, without which thetfe northern parts of the world could fcasce have afforded a very comfortable habitation, together with the tools of all the different workmen employed in producing thofe different conveniencies j if we examine^ I fay, all thefe tilings, and confider w'hat a variety of labour is employed about each of them, we Ihall l)e fenfible that without the affiftance and co-operation of many dioufands, the very meaneft perfon in a civilized country could not 'be provided, even accorcKng'to what we very falfely imagine the eafy and fimple manner in which h6 is commonly accommodated. Com- pared, indeed, with the more extravagant luxury of the great, his accommodation muft no doubt appear extremely fimple and eafy i. and yet it may be true peiliaps that the accommodation - of aa European prince does not always fo much exceed that of an jn- duftrious and frugal peaiant, as the acco;mmodation of the latter exceeds that of many an African king, the abfolute mafter of the lives and liberties of ten thoufand naked fevages. ;, :r->t w jmtnrr i .'v. Ir, EJj ,T.-. -.r •)* i] '){*JV/ 'tin: th: -HI •Sr'^ ti :}/ ■jriJu^i ! i CAi i \IJ,,., IJ, \liiit lUnn'Q.''\:..1.. .'it V fc :ji .-«. ■j/rJ'; 't ;■>': ..t.Ml ,1- nV - <1 1 »1.>. 'i:\ ,f'l!L .iilv <.J 't^/ i: .'!{ lo ii.'f ;m ,l,\uU, i(i>;j > '10 h v-i -r. .n>'Uii: 16 THE NATURE AND CAUSES OF ..,,.. . ■ CHAP. II. l,'-^, *"-^ ■■■■■■ i hnu •.'j.uifp'. : 0/ the Principle 'which gives Occajion to the Divifion of Labour. THIS divifion of labour, from which fo many advantages are derived, is not originally the efFeft of any human wifdom, which forefees and intends that general opulence to which it gives occafion. It is tlie neceflary, though very flow and gradual con- fequence of a certain propenfity in human nature which has in view no fuch extenfive utihty; the propenfity to truck, barter, and exchangee one thing for another. • j;^.,^ ,, ^,; :,,,,,^^,^.^ '^■r:i^i:ir^ r ■' '• ■ ■ ' ■ ■ - •=■• < .-. . ■• . ■; '•■ . ' ..rs ■; r.- Whether this propenfity be one of thofe original principles in human nature, of which no further account can be given; or whether, as feems more probable, it be the neceflTary confcquence of the faculties of reafon and fpeech, it belongs not to our prefent fubjeiSl to enquire. It is common to all men, and to be found in no otl:er race of animals, which feem to know neither this nor any other fpecies of contradts. Two greyhounds in running down the fame hare, have fometimes the appearance of adling in fome fort of concert. Each turns her towards his companion, or endeavours to intercept her when his companion turns her towards himfelf. This, however, is not the efFeft of any contraft, but of the acci- dental concurrence of their paflions in the fame objedl at that particular time. Nobody ever faw a dog make a fair and deH berate exchange of one bone for another with another dog. Nobody ever faw one animal by its gellures and natural cries fignify to another, this is mine, that yours ; I am willing to give this for that. When an animal wants to obtain fomething either of a man or of another animal, it has no other means of perfuafion but to gain the favour of thofe whofe fervice it requires. A puppy fawns upon its dam, and a fpaniel endeavours by a thoufand attra^ions THE WEALTH OF NATIONS;' 17 L".^. «ttra6lion8 to engage the attention of its mailer who is at dinner, C HA p. when it wants to be fed by hiiti. Man fomctiraes ufcs the fame' arts with his brethren, and when he has no other means of en- gaging ti)im to a£t according to his inclinations, endeavours by every fci-vile and fawning attention to obtain their good will. He has not tim^j however, to do this upon every occafion. In civi- lized fociety he Hands at all times in need of th$ co-operation and afTiflance of great multitudes, while his whole life is fcarce fuf- ficient to gain the friendship of a few perfons. In almoft every other race of animals each individual, when it is grown up to maturity, is.inti^fly independant, and in its natural ftate has oc- cafion for the affiftance of no other living creature. But man has almoil conftant occafion for the help of his brethren, and it is in vain for him to expedl it from their benevolence only. He will be more likely to prevail, if he can interefl their felf-love in his favour, and fhew them that it is for their own advantage to do for him wliat he requires of them. Whoever offers to another a bargain of any kind, propofes to do this. Give me that which I want, and you fhaJl have this which you want, is the meaning of every fudi offer i and it is in this manner that we obtam from one an- other the far greater, part of thofe good offices which we fland in need of. It is not from the benevolence of the butcher, the brewer, or the baker, that we expeft our dinner, but from their regard to their own interefl. We addrefs ourfelves not to their humanity but to their felf-love, and never talk to them o£ our own neceffities but of their advantages. Nobody but a beggar chufes to depend chiefly upon the benevolence of his fellow citi- ksens. Even a beggar does not depend upon it entirely. The charity of well difpofed people, indeed, fupplies him with the whole fund of his fubfiflence. But though this principle ultimately provides him with all the necefTaries of life which he has occafion for, it neither does nor can provide him with them as he has Vol. I. D occafion 1 i8 THE NATURE AND CAUSES OF occaficm for them. The greater part of his occafional wants are fupplied in the fame manner as thoTe <)f dther people» by treaty* by barter, and by purchafe. Wiih the. money y^hkh one man gives him he pnrchafes food. The old cloaths winch another beftows upon him he exchanges for other old cloaths which fuit him better, or for locking, or for food, 6r for money, with which he can buy either food, ckxKhs, or lodging, as he has occafion. As it is by treaty, by barter, and Tjy liurchafe, thkt \^ obtaiii from one another the greater part of thofb ititiittial good oSkei which we ftand in need of, fo it is ^his ikhte thitkihg diJ(pofition whldh originally gives occaficm to thfc tlivifiori of labour. !In li tribe of hunters or ihej^erds a particular "pierfon nudces bciws arid arrows, foi' example, with mor6 feadinefs and de)cterity than any other. He frequently exchangts them for cattle ot for venifbn toith his dompanions j and he iihds at ktft that ht tan in this man'^ her get more cattle and Veriifbn, than if he hirrtfeliF Went 'to the field to catch them. From a regard tt> his bwn intei and the very different genitis which spears to diftmguilh niert of cfiflfertnt profeflllons, wheh grown up to rtiatority,' is not upon many ^dcdafionsfo much thte caufe, as the tfkO^ 6i the diVifian of labour. The difllerence between the moft diffimUar dharaf^rs, between a phitofbpher and a common'ftreet porter, for Example, fe*nis to arilbiiotfd'niuch from nature, as from habit, curtom, and education. When thw came into the' wond, and fbr the firft fix or eight years ctf thea: exigence, they were perhaps very much alike, and neither their parents nor phiy-fcllows could perceive any remarkable difference. About that ag^' 6r foton after, they come to be employed in very diffeknt bccupatidhsv The difierenoe (^ taleiit& (ionics then to be taken notice of, and w^^9 by degi^et, till at taft^he vattity of the philofbpher is willing to aoknowle<%e icarce any re&m- blance. But without the difpofttion to truck, barter, and ex<- change, every man mufl have procured to himfelf every neceflary and conveniency of life which he wanted. All mufl have had the fame duties to perform, and the fame work to do, and there could have been no fuch difference of employment as could alone give occafion to any great difference of talents. As it is this difpofition which forms that difference of talents, fo remarkable among men of different profefTions, fo it is this fame difpofition which renders that difference uiefal. Many tribes of animals acknowledged to be all of the fame fpecies, derive from nature a much more remarkable diflinaion of genius, than what, antecedent to cuflom and education, appears to take place among men. By nature a philofopher is not in genius and difpofition D 2 half 20 THE NATURE AND CAUSES OF B O O K half fo different from a ftreet porter, as a maftifF is from a grcyv hound, or a greyhound from a ipaniel, or this laft finoin. la ftiepv herd's dog. Thofe different tribes of animals, however, tho' all of the ftme fpecies, are of fcarce any ufe to one another. The ftrength of the mafliff is not, in the leaft, fupported eitl^er by the fwiftnefs of the gi'cyhound, or by thefagacity of the fpaniel, or by the docility of the fhepherd's, dog. The reflects of thofe different geniufes and talents, for want of the' power or difpoiitioa to barter and exchange, cannot be brought into a common flock, •and do not in, the leaft contribute to the better accommodation, and conveniency of the fpecies. Each, animal is fUll obliged to ^uppoit and defend itfelf, feparately and iadependantly,, and derive^ no fort of advantage from, that variety of talents with which nature has diflinguifhed its fellows. A'.nong, men, on. the conr trary, the molt diffimilar geniufes are of ufe to ope another;, the different produces of their refpeftive talents, by. the general difr pofition to truck, barter, and exchange, being brougl^t, as it were, into a common flock, where every man may purchafc whatever part of, the produce of other men's, talents, he has, oc}- cafion. for.. ..i^j .'.• Ji . I ' IJ XiA J I iJ 1 I '■■ yjiirr; ItA ■>fi:i::^' '■li sh "v. ..".[{ io yytv. ■» ( ... ', ' . . , , r.' !,'.r»f . ■'■'•H'ri'S" - » s .,??>;*, ''.'.Tf;} .•'■^ y^Bl ''■. ■;;in.'rv:"'^(^ */"(• ■■" ::;'f'>');o f THE WEALTH OF NATIONSw 9i ?>&/// /-5^ Dhijion of Labour is limited by the Extent of the Market. AS it is< the. power of exchanging that gives occafion to the C HA P, dividon of labour, fo the extent of this divifion mufl: always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very fmall, no perfon can have ainy encouragement to dedicate himfcilf entirely to one employment,, for want of the power to exchange all that furplus part of the pixxluce of his own labour, which is. over and above his own confumption, for fuch paits of the produce of other m^ns labour as he has occafion fbr^ »v " i ^« Jf-f^v^^- m', v^ : There are fome forts^ of induftry, even of the loweft kind,. . which can: be carried on no where but in a great town.. A poitoiv for example, can find employment and fubfiftence in no other place. A village is by much too- narrow a fphere for him ; even an ordinary market town is fcarce large enough to afford him conflant occupation. In the lone houfes and very fmall vil- lages which are fcattered about in fb defart a country as the highlands of Scotland, every farmer muft be butcher,, baker and brewer for his own family. In fuch fituations we can fcarce expea to find even a fmith, a carpenter, or a mafon, within lefs than twenty miles of another pf the fame trade. The fcattered families that live at eight or ten miles diflance from.the nearefl of them, muft learn to- perform themfelves a great number of little pieces of work,, for which, in. more populous countries, they would call in the affiftance of thofe workmen. Countiy workmen are almofl eveiy where obliged to apply themfelves to all the differ- ent branches of induflry that have fo much affinity to one another : !• ^ L '" as 22 THE NATURE AND CAUSES OF B O o K as to be employed about the fame fort of materials. A country carpenter deals in every foit of work that is made of wood : a country fmith in every fort of worlc that is made of iron. The former is not only a carpenter, but a ].oiner» a cabtnet*aiaker» aad even a carver in wood, as well as a wheel-wright, a plough- wright, a cart and waggon maker. The employntents of the Utter are ftill mere variou». It is* impoffible there diould' be fbch'a trade as even that of a nailer in the remote and inland parts of the highlands of Scotland. Such a workman at the rat* of a thoufand naik a day, and three hundred working days iln the' ye«r, will make three, hundred thoufand nails in the year. Bat in ^h a fituation it would be impofllible to dii^^ofe <^ ont fhdufaild, that is, of one day's work in the yetr^ As by means of water-carriage a more extendve market it opened to every fort of induftry than what land-carriage atone can afford i^, fo it is upon the Ara coaft, and along the banks of navi- gable rivers, that induftry of every kind naturally begins to fub- dtvide and improve itfelf j rrd it is fi-equently not till a long time after that thofe improvements extend thcmfelves to the inland parts of the country. A broad-wheeled waggon, attended by two men and drawn by eight hories, in about fix weeks time carries and brings back between London and Edinburgh near four ton wdght of goods. In about the fame time a (hip navigated by fix or eight men, and failing between the ports of London and Leith, fre- quently carries and brings back two hundred ton weight of goot's. Six or eight men, therefore, by the help of water-carriage, can carry and bring back in the fame time the fame quantity of goods between London and Edinburgh as fifty broad-wheeled waggons, attended by a hundred men, and drawn by four hundred horfes. Upon two hundred tons of goods, therefore, carried by the cheapefl land-carriage from London to Edinburgh, there mufl; be charged ^ ^ • the 4 THE WEALTH OF NaTIO' S» country trood: a 1. The Ler» aad plough- he Utter i fiKh'a parts of 'at« of a the year. in ^h ind, that larket Is itoile can of navi- s to fub- 3ng time ind parts two men rrlcs and >n wdght or eight sith, fre- jf goo with the value of the fuperior rifle or the difference of the infurance 'between land and water-carrii^. Were there no other communication between thofe two places, therafore, but by land- carriage, as no goods could be tranfported from the one to the other except fucfa whofe price was very confiderable in proportion to their weight, they oould carry on, but a fmall pftrt of that commerce vrhich is at prefbnt carried on between them, and con- fequently could give but a fmall part of that encouragement which they at prefent mutually afford to each other's induAry. There couU be little or no commerce of any kind, between the diftant parts of the world.: ' Whtt goods coukl bear the expieiKe of land^ carriage between London and Calcutta ? Or if there was any >fo precious as to be «ble to fupport this expence, with what fafety could they be tr^nfyot^ thjrough the territoi;ics i of £0 many barbarous nations ? Thofe two cities, however, ^t prefent carry on together a very confifierabie commerce, and, by mutually affording a market^ 4;ive a jgood deal of encouragement to each other's induftry.,.^. 'io^ihU^^:? ^ni^n^^^nLi: ... . , . ..,.,, ,,. SiwcE fuch, therefofc, are the advantages of water canriage, it is natural that the fJrft improvements of art and induftry fhould be made where this conveniency opens the whde world for a market to the produce of every fort of labour, and that they fhouW always be -much later in extendmg themfelves into the in- land parts of the countiy. The inland parts of the country can for a long time have no other market for the greater .part of their •'^""■f-r"' ■ s goods. CHAP. III. H THE NATURE AND CAUSES OF B O^O K goods, but the country which lies round alx)ut them, and fcjta* Fates them from the fca coaft, and the great navigable rivei's. The extent of their market, therefore, rouft for a long time be in proportion to the riches and populoufnefs of that country, and confequently their improvement muft always be pofterioi* to the improvement of that country. In our North American colonics the plantations have conftantly followed either the fea coaft or the banks of the navigable rivers, and have fcarce any where ex- tended thcmfelves to any confidcrable diftance from both, wnimun The nations that, according to the beft authenticated hiflory, appear to have been firft civilized, were thofe that dwelt round the coaft of the Mediterranean fea. That fea, by far the greateft inlet that is kno',vn in the world, having no tides, nor confequently any waves except fuch as are caufed by the wind only, was, by fhe fmoothnefs of its furfac?, as well as by the multitude of its iilands, and the proximity of its neighbouring fhores, extreamly favourable to the infant navigation of the world { when from their Ignorance of the compafs, men were afraid to quit the view of the coaft, and from the imperfeftion of the art of fhip-building, to abandon themfelves to the boifterous waves of the ocean. To pafs beyond the pillars of Hercules, that is, to fail out of the ftreights of Gibraltar, was, in the antient world, long confidered as a moft wonderful and dangerous exploit of navigation. It was late before even the Phenicians and Carthaginians, the moft flcilful navigators and ftiip-buiiders of thofe old times, attempted it, and they were for a long time the only nations that did at- tempt It. rfii>fh-\ •li.V lo I J Tbft i« « '>('t Of all the countries on the coaft of the Mediterranean fca, Egypt feems to have been the firft in which either agriculture or manufaftures were cultivated and improved to any confiderablc ' ■'■'-„ degree. THE WEALTH OF NATIONS. «S J fc'iia- . The : be ill ■y, and to the colonics loaft or lici-e cx- tUlltUliJ ,'j; jii ia.i hiftory,i ; round greateft :qucntly was, by io of its Ktreamly om their view of >uilding, in. To of the )nridered It was He moft tempted t did at- i Ui Kill lean Tea, ilture or fiderable degree. degi'C*. Upper Egypt extends itfelf no where ^bove a few mites C HA P. from the Nil«> and in Lower Egypt that great river breaks itfelf inta many different canals, which, with the aflillance of a little art, feetn to have afforded a communication by water carriage, not only between all the great towns, but between all the coii«i iiderabfe villages, and even to many farm houfes in the country j ncuAj m the fame mamier as the Rhine and the Macfc do in Holland at prefent. The extent and eafinefs of this inland navigation was probably one of the principal caufes of the early improvement of Egypt, ." '^'i. -^ i >•■ n > . r. :" tnt improvements in agrieultore and m^ufafhires ieem ' wife to have been of very great antiquity in the provinces of Bengal in the Eaft Indies, and in fome ctf the caHern provinces of' China j though the gpeat extent of thin antiquity is< not authenticated by arty hiftorks of whoOf authority wt, in this part of the- world, are weH afiuredk In Bengal the Ganges and feveral other great rivers break themfelve» into many canals in the fame manner a* the Nile does in Egypt. In the' cafltern provinces of China' too feveraf great rivers formi by 'their diflferent branches, a multitude of canals, and by communicating with one another afford an inland naviga- tion much more extenfive than that either of the Nile or the Ganges, or perhaps than both of them put together. It is re- markable that neither the antient Egyptians, nor the Indians, nor the Chinefc, encouraged foreign commerce, but feem all to have derived their great opulence from this inland navigation. All the inland parts of Africa, and all that part of Afia which lies any confiderable way north of the Euxine and Cafpian feas, the ancient Scythia, the modern Tartary and Siberia, feem in all ages of the world to have been in the fame barbarous and uncivilized ftate in which we find them at prefent. The fea of V°^- '• B Tartary a6 THE NATURE AND CAUSES OF BOOK Tartary is the frozen ocean which admits of no navigation, and though fome of the greateft rivers in the world run through that country, they are at too great a diftance from one another to carry commerce and communication through the greater part of it. There are in Africa none of thofe great inlets fuch as the Baltic and Adriatic feas in Europe, the Mediterranean and Eux- ine feas in both Europe and Afia, and the gulphs of Arabia, Perfia, India, Bengal and Siam, in Afia, to carry maritime com* merce into the interior parts of that great continent : and the great rivers of Africa are at too great a diftance from one another to give occafion to any confiderable inland navigation. The com- merce befides which any nation can carry on by means of a river which does not break itfelf into any great number of branches or canals, and which runs into another territory before it reaches the fea, can never be very confiderable j becaufe it is always in the power of the nations who poiTefs that other territory to obftrudl the communication between the upper countiy and the fea. The navi- gation of the Danube is of very little ufe to the different ftates of Bavaria, Auftria and Hungary, in comparifon of what it would be if any one of them poffeiTed the whole of its courfe till it falls into the Black fea. ■y'\. m ion, and ugh that other to part of h as the nd Eux- Arabia, ne com- and the another 'he com- f a river branches it reaches ys in the ftruft the rhe navi- - ftates of it would iU it falls ii -'J" u 'jiJ THE WEALTH OF NATIONS; *t I'* ' Of the Origin and XJfe of Money. *i- ■' ■■■' ■- --'il 1: :;: - -f.: XT J HEN the divifion of labour has been once thoroughly cHAP. VV eftablifhed, it is but a very fmall part of a man's wants ^^' which the produce of his own labour can fupply. He fupplies the far greater part of them by exchanging that furplus part of the produce of his own labour, which is over and above his own con- fumption, for fuch parts of the produce of other men's labour as he has occafion for. Eveiy man thus lives by exchanging, or becomes in fome meafure a merchant, and the fociety itielf grows to be what is properly a commercial fociety. < < ^^i '■' /Ss ; ? i' / But when the diviAon of labour firft began to take place, this power of exchanging muft frequently have been very much clogged and embarrafled in its operations. One man, we fhall fuppofe, has more of a certain commodity than he himfelf has occafion for, while another has lefs. The former confequently would be glad to difpofe of, and the latter to purchafe, a part of this fuperfluity. But if this latter fliould chance to have nothing that the former ftands in need of, no exchange can be made between them. The butcher has more meat in his fliop than he hinifelf can confume, and the brewer and the baker would each of them be willing to purchafe a part of it. But they have nothing to offer in exchange, except the different produdlions of their refpec- tive trades, and the butcher is already provided with all the bread and beer which he has immediate occafion for. No exchange can, in this cafe, be made between them. He cannot be their merchant, nor they his cuftomersj and they are all of them thus mutually lefs ferviceable to one another. In order to avoid the inconveniency E 2 of :uii,: iS THE NATURE AND CAUSES OF B o O K of fuch fituations, every prudent man in every period of fociety, after the firfl eflablifhment of the dlvifion of labour, muft naturally have endeavoured to manage his affairs in fuch a manner, as to have at all times by h]im^ hefides the peculiar produce of his own induftry, a certain quantity of fome one commodity or othw, fuch as he imagined f/ew people would be likdy ^ re^o^fe in exc^afiae for tl^ pcodupe of tiieir 'u^\3£tfy, •> ,; ;- ?• ,!;inii'Jdi( Vt ■ Many different comiinoidities, it is probai^le, were fuccdfively both thought of anyd employed for this purpoCb. In the rude 9ge$ of ijbciety, cjtftle are faid to h9ve been the conMnoji Inftni- q}ei>t of conun^rce; and> thoiugh they mud have been a moft in- conyenieot one, yet in old times we find things were ficquently valued according to the number of cattle which had been given in exchange for them. The armour of Diomed, fays Homer, cof): only nine oxen; but that of Glaucus coft a hundred o»en. $alt is faid to be the common inftrument of commerce and ex- changes in AbyfTmia s a fpecies of fhells in fome parts of the (oaft of Indi^; dried cod at Newfoundland; tobacco in Vir- ginia ; fugaf in fome of our Wefl India colonies ; hides or dreffed leather in fome other countries j and there is at this day a village in Scotland where it is not uncommon, lam told, for a workman to carry nails inflead of money to the baker's fhop or the akhouie. .1,. f} *> f*^ In all countries, however, men feem at lafl to have been deter- mined by irrefiftable reafons to give the preference, for this em- ployment, to metals above every other commodity. Metal* can not only be kept with as little lofs as any other commodity, fcarce any thing being lefs perifhable than they are, but they can likewiie, without any lofs, be divided into any number of parts, as by fufion thofe parts can eafily be reunited again; a quality 'Ism 1 'TH]5 WEALTH OF NATIONS* S9 ity, after laturally ;r, as to his own er, fuch ;xc)ia|i^ . .Vf M ibiihv cceffively the rude I inlhii- moft ia« fcquently en given Homer, ed o]($n. and ex** ;s of the in Vir- hides or bis day a >ld, for a I ihop Off n^itp «n deter- this em- Metals mmodity» but they umber of again; a quality fluality v^ich no ^i»cr equally durable commodities pofibfs, and C HA P. which mose jthan any o\htr quality renders them fit to be the iuftrunaenits 'of commerce and circulation. The man who wanted to buy £ilt» for example, and had nothing but cattle to ^ve in exchange for it, muft have been obliged to buy felt to the value of a wl»ole,. becaufe what he was to give for it could feMom be divided without lo& ; and if he had a mind to buy more, he mufl, for the fame reasons, have been obliged to buy double or triple the quantity, the value, to wit, of two or three oxen, or of twx) or three flieep. If, ii Qi ■:)U: Uj . Those metals feem originally to have been made ufe of for this purpofe in mde bars without any ftamp or coinage. Thus we are told by Phny, upon the authoiity of one Remeus an antient author, that, till the time of Servius Tullius, the Romans had no coined morey, but made ufe of unftamped bars of copper to purchafe whatever they had occafion for. Thcfe rude bars, there- fore, performed at this time the function of money. The ufe of metals in this rude ftate was attended with two very confiderable inconveniencies ; firft, with the trouble ot weighing them ; and, fecondly, with the trouble of affaying them. 30 THE NATURE AND CAUSES OF B O O K In tiie precious metals, where a fmall difference in the quantity makes a great difference in the value, even the bufinefs of weigh- ing, with proper exa^lnefs, requires at leafl very accurate weights and fcales. The weighing of gold in particular is an operation of fome nicety. In the coarfer metals, indeed, where a fmall error would be of little confequence, iefs accuracy would, no doubt, be neceffary. Yet we fhould find it excefTively troublefome if every time a poor man had occafion either to buy or fell a farthing's worth of goods, he was obliged to weigh the farthing. The ope- ration of afTaying is ftill more difficult, flill more tedious, and» unlefs a part of the metal is fairly melted in the crucible, with proper diffolvents, any conclufion that can be drawn from it, is cxtreamly uncertain. Before the inftitution of coined money, however, unlefs they went through this tedious and difHcult ope- ration, people muft always have been liable to the grofTefl frauds and impofitions, and inflead of a pound weight of pure filver, or pure copper, might receive, in exchange for their goods, an adulterated compofition of the coarfefl and cheapeft materials, which had, however, in tlieir outward appearance, been made to refemble thofe metals. To prevent fuch abufes, to facilitate ex- changes, and thereby to encourage all forts of induftiy and com- merce, it has been found neceflary, in ail countries that have made any confiderable advances towards improvement, to affix a publick ftamp upon certain quantities of fuch particular metals, as were in thofe countries commonly made ufe of to purchalc goods. Hence the origin of coined money, and of thofe publick offices called mints -, inflitutions exaftly of the fame nature with thofe of the aulnagers and ftampmaflers of woollen and linen cloth. All of them are equally meant to afcertain, by means of a publick (lamp, the quantity and uniform goodnefs of thofe different commodities when brought to market. -, The ■•■u:'> THE WEALTH OF NATIONS. 3» ][uantitf weigh- weights peration all error i doubt, iJF every arthing's 'he ope- us, and* )le, with >m it, is money, :ult ope- ;ft frauds re filver, oods, an naterials, made to itate ex- md com- lat have to affix r metals, purchafc e publick nature lien and jy means of thofe The firft publick ftamps of this kind that were affixed to the C HA P. I V • current metals, feem in many cafes to have been intended to afcertain, what it was both moft difficult and moft important to afcertain, the goodnefs or finenefs of the metal, and to have refembled the fterling mark which is at prefent affixed to plate and bars of filver, or the Spanifli mark which is fometimes affixed to ingots of gold, and which being ftruck only upon one fide of the piece, and not covering the whole furface, afcertains the fine- nefs, but not the weight of the metal. Abraham weighs to Ephron the four hundred fhekels of filver which he had agreed to pay for the field of Machpelah. They are faid however to be the current money of the merchant, and yet are received by weight and not by tale, in the fame manner as ingots of gold and bars of filver are at prefent. The revenues of the antient Saxon kings of England are faid to have been paid, not in money but in kind, that is, in vi6tuals and provifions of all forts. William the conqueror introduced the cuftom of paying them in money. This money, however, was, for a long time, received at the ex- chequer, by weight and not by tale. The inconveniency and difficulty of weighing thofe metals with cxaftnefs gave occafion to the inftitution of coins, of which the ftamp, covering entirely both fide of the piece and fometimes the edges too, was fuppofed to afcertain not only the finenefs, but the weight of the metal. Such coins, therefore, were received by tale as at prefent, without the trouble of weighing. The denominations of thofe coins feem originally to have exprefled the weight or quantity of metal contained in them. In the time of Servius Tullius, who firft coined money at Rome, the Roman As or pondo contained a Roman pound of good copper. It was divided in the fame manner as our Troye* pound. 32 THE NATURE AND CAUSES GF B O O E pound, into twelve oimces, each of which contained a real ounce of good copper. The Englifh pound fleiiing^ in the time of Edward I. contained a pound, Towei* weight, of Aberof aknown fineneP?. The Tower pound feems to have been fomething more than the Roman pound, and fomething lefs: than the Troyes pound. This laft was not introduced into the mint of Engr land till the i8th of Henry VIII. The French livre contained in the time of Charlemagne a pound, Troycs' weight, of (ilver of a known finenels. Tlie fair of Troyes in Champaign wa« at that time frequented hy all the nations of Europe^ and the weights and meafures of fo famous a market were generally known and efteemed. The Scots money pound contained^ from the time of Alexander the fxrft to that of Robert Bruce, a pound of filver of^ the. &me wdght and finenefs with the Englilh pouad fteding^ E^lifh, French and Seots^ pennies too, contained all of them originally a real pennyweight of filvor, the twentieth part of ai\ ounee* and the two hundred and fortieth part of a ppund. The (hilling- too (eems originally ta have beea tlte <^enomination of a weight, ff^^en whtat is at'tneelve Jkillings. the quarter^ fays an antient ftatute of Henry III. then noajlel bread of a.farihing Jhall weigh eleven Jbillings and. four pjcnce* The pro- portion, however, b^weeu the Ihilling and either the penny on the one hand, or the pound on the other* feems not to have been fo conftant and uniform as that between the penny and the pound. During, the firft race of the kings of France, the French fou or (hilling appears upon different occafions to have contained (ive, twelve, twenty, forty, and forty- eight pennies. Among the antient Saxons a (hilling appears at one time to have contained only five pennies, and it is not improbable that it may have bvv;n as variable among them as among their neighbours, the antient Franks, From the time of Charlemagne among the French, and from that of William the conqueror among the Engli(h, the proportion between the pound, the fliilling, and the penny, feems S to i^ THE WEALTH OF NATIONS. 33 sal ounce timiQ of a known jng more ie Troyes of Engr contained of filveir laign wai and the Hy known from the pound of ih pouad itained all twentieth fieth part ; beea tlte \illmgs. the ajlel bread The pio- pcnny on have been Jie pound, 'rench fou contained ^mong the contained have W(x\ he andent rench, and igllfh, the my, fcems to m h';. -^. to have been uniformly the fame as at prefent, though the value C H^A P. of each has been very different. For in every country of the world, I believe, the avarice and injuftice of princes and fovereign ftates, abufing the confidence of their fuhjefts, have by degrees diminiflied the real quantity of metal which had been originally contained in their coins. The Rom^n As, in the latter ages of the Republick, was reduced to the twenty fourth part of its original value, and, inftead of weighing a pound, came to weigh only half an ounce. The Englidi pound and penny contain at prefent about a third only ; the Scots pound and penny about a thirty-fixth ; and the French pound and penny about a fixty-fixth part of their original value. By means of thofe ope- rations the princes and fovereign ftates wliich performed them were enabled, in appearance, to pay their debts and to fulfil their engagements with a fmaller quantity of filver than would otherwife have been requifite. It was indeed in appearance only ; for their creditors were really defrauded of a part of what was due to them. All other debtors in the ftate were allowed the fame privilege, and might pay with the fame nominal fum of the new and debafed coin whatever they had borrowed in the old. Such operations, there- fore, have always proved favourable to the debtor, and i-uinous to the creditor, and have fometimes produced a greater and more univerfal revolution in the fortunes of private perfons, than could have been occafipped, by a very great publick calamity. It is in this manner that money has become in all civilized nations the univerfal inflrument of commerce, by the intervention of which goods of all kind^ are fought and fold, or exchanged for one another, .aj ,| t.ujljjn -.i d\ U-^^-: r j' -i,- !,:•;, i\ . What are the rules which men naturally obferve in exchanging them either for money or for one another, I (hall now proceed Vol. I. p xo H THE NATURE AND CAUSES OF B o o K to examine. Thcfe ruks determine what m^^ l^^^fr^^d, tj[je ^relative or exchangeabk value of goods.. , ,,, ..,.,„, ,,• ^: „.,;„, ^ ,,;, . ,., ^ . ' 'The' word' vAlue^ ft' is tb fei'dbiciMedr R^S tw6 differeiit mean^ ings, andfometlmes cxpreffts the uttlity 6f fome particular objedl, and fometimcs the power of piircliafihg, other goods which the pof- feflion of that objeft conveys. The one may be called, " value in •* ufeV*^ the other, ** value in exchange." The things which have the greateft value in ufe have frequently little or no value in Exchange i Juid, on the fcontraiy,^ tliolS'Vhifch Have thlufii. •r, wherein conHfts the real price of all commodities^ ^ . ^^| Secondly, what are the diffisrent £>arts of which. this real j[y'ice isconkwfedormadcup.-'' ^'* ^' ^-'^^k «-''^*' ^ifi^^uoicdi xwa Avbt Mly-,' what are the dififerent cu'cumfhnces whicH /ome- times raife fbme or iall of thefe different parts of price above, and* fometunes- fmk thctn belbw thdr natural' or ordinary rate; or,, what are the caufes which ibmetimes hinder the market price; that is, the actual price, of commodities, from coinciding ex'* a£tly with what may be called their natural price. ^ , I SHALL endeavour, to explain, as fully and diftin£lly as I can,, thofe three fubje£ls in the three following chapters, for which I muft V, r be relative mt mean- lar obje<5l:, h the pof- " value in igs whicK no value he greatcff le in ' ijfe. Iiafe fcarce' for it. A ife; but a had in ex-- I exchange* iblt vdliifh THE WEALTH OF NATIONS. $S ■i Oil isreal^ice hicH fi^me'- above, and' rate; or,, rkct price; iciding ex** [y as I can,. for which I muft 'if mult very carneftly entreat both the pitienbe 'arid akentron tyf the CH A P. leader his patience in order to exariiine a detail which may per- haps m fome places appear unneceiTarily tedious ; and his attention in order to underftand what n)ay, perliaps, after the fuljeft expli- cation which I am capable of giving, of it, . appear . ftill ^ri.fome degree obfcure. I am always willing to run fome hazai'd of being tedious in order to be Aire that I am peripicuous < and after taking the utmofl pains that I can tp be perfpicuous, fome. obicurity may ftill appear to risraai^ v»p9» a fubjefl;,wlwch„is in its ^wn^^w^uw extremely abftraaed^; ^I^^^I ^Hno^p^a avj^rf ognr-rf^W' iii-HHrA" h^ .'->nf bRri 9(1 )(|jn3t?fm> yRra 81k)ojj -lorfto lo vtinini/f* tfiST;^ 'nav CHAP. V. .^jv^^^iiMh Of the nhtSfiimikr''Prftt^*fCom»n^^ W-bf fhelr Price in Labaur, and their ' Price tit' 'Mbn^, • -^ • ^ - ■ • - EVEkY'mari is rich' or ^oor according to ^^' degree In %hich he can afford to enjoy the nicdiaries, Cbhvfeniericiesi arid amu{bments of human life. But after, the diviiipn of |ab9\U' has once thoroughly taken place, it is but a veiy (raajU part pf thefe with which a man's own labour can fupply him. The far greater part of 'ttiitti he ' miift derive ' from ' the labour of other people, and he muft be rich or poor accoi-vling to tfeip quantity of that labour which he can tdmmdiidi br whicH ' he can afibrd to purchafb. Th6 value of any >comnlodityi\' therefore, to the perfon who po(!efles it and wild iliean^ ttot to ufe pr^coAFumc'it himfelf, but to exchinge it for bther iomriiodifies,:ii equal to the quamtlty of labour which it enables him to pyrchafe or command. Labour, therefore, is the real meafure dt tiie excHangeaible' Vatiii^ of all commodities. F 2 Thb 36 THE NATURE AND CAUSES OF The real price of every thing, what every thing really cofts to the man who wants to acquire it, is the toil and trouble of ac- quiring it. What every thing is really worth to the man who has acquired it, and who wants to difpofe of it or exchange it for fomething elfe, is the toil and trouble which it can fave to him- lelf, and which it can impofe upon other people. What is bought with money or with goods is purchafed by labour as much at what we acquire by the toil of our own body. That money or thofe goods indeed fave us this toil. They contain the value of a certain quantity of labour which we exchange for what it fuppofed at the time to contain the value of an equal quantity. Labour was the firft price, the original purchafe money that was paid for all things. It was not by gold or by fdver, but by labour, that all the wealth of the world was originally purchafed ; and its value, to thofe who poiTefs it and who want to exchange it for fome new produ6lions, is precifely equal to the quantity of labour which it can enable them to purchafe or command.. JJ'UiM k •i».»i tin But though labour be the real meafure of the exchangeable value of all commodities, it is not that by which their value is commonly eftimated. It is often difficult to afcertain the pro- portion between two different quantities of labour. The time fpent in two different forts of work will not always alone determine this proportion. The different degrees of hardfhip endured, and ci ingenuity excrcifed muft likewife be taken into account. There may be more labour in an hour's hard work than in two hours eafy bufineis j or in an hour's application to a trade which it coft ten years labour to learn, than in a month's mduftry at an ordinary and obvious employment. But it is not eafy to find any accurate meafure either of hardfliip or ingenuity. In exchanging indeed the different produftions of different forts of labour for one another,, fome allowance is commonly made for both. It is adjufled, how- » ; ever,, THE WEALTH OF NATIONS. 37 ever, not by any accurate meafure, but by the higgling and CH^AP. bargaining of the market, according to that fort of rough equality which, though not exa£t, is fufficient for carrying on the bufinefs of common life. - ""-i-- u; .,U',A' vi; ...' ;ii.«. *« W *#J Every commodity befides, is more frequently exchanged for, and thereby compared with, other commodities than with labour. It is more natural, therefore, to eftimate its exchangeable value by the quantity of fome other commodity than by that of the labour which it can purchafe. The greater part of people too underftand better what is meant by a quantity of a particular commodity, than by a quantity of labour. The one is a plain palpable object ; the other an abftra£l notion, which, though it can be made fufficiently intelligible, xs not altogether fo natural and obviou»«j ,,^,^^ . .„ , But when barter ceafes, and money has become the common inftrument of commerce, every particular commodity is more frequently exchanged for money than for any other commodity. TJie butcher feldom carries his beef or his mutton to the baker, or the brewer, in order to exchange them for bread or for beer; but he carries them to the market, where he exchanges them for money, and afterwards exchanges that money for bxead and for beer. The quantity of money which he gets for them regulates too the quantity of bread and beer which he can afterwards pur- chafe. It is more natural and obvious to him, therefore, to efti- mate their value by the quantity of money, the commodity for which he immediately exchanges them, than by that of bread and beer, the commodities for which he can exchange them only by the intervention of another commodity; and rather to fay that his butcher's meat is worth threepence or fourpence a pound, than that it is worth three or four pounds of bread, or three or four quarts of fmall beer. Hence it comes to pafs that the exchange- -P . ' able S8 THE NATURTi AND CAUSES OlF nble value of every cbmmbdlty U iiiorc ffcqiiently c^irtiatcd by 'the quantity of money, than by the quantity either 6f Idbour or of any other commodity which can be had in exchange for it. .».; 'I 'i.^' Gold and filver, however, like every other commodity^ vary in their value, are fometimes cheaper and fometimes dearer, fometimcs of eafier and fometimes of more difficult purchafe. The quantity o( labour which any particular quantity of them can purchafe or command, or the quantity of other goods which it will exchange for, depends always upon the fertility or barrenncfs of the mine* which happen to be known about the time when fuch exchangel ^rc made. The difcovery of the abundant mines of America •reduced, in the fixteenth centuiy, the value of gold and filver in Europe to about a third of what it had been before. As it toft Icfs labour to bring thofe metals from the mine to the market, (6 when they were brought there they could purchafe or command lefs labcnif ) and this revolution in their value, though perhaps the greateftt lii' by iu> means the only one of which hidory gives Comt Qccdunti But as A' tDteafiire of ijuantity, fuch as the tnltural foot, fathom, or handful, which is continually vai7ing in its own quan<<> tityi ciwi never be an accurate mcafure of the quantity of othef things i fo a commodity which is itfelf continually varying in its own value, can never be an accurate meafure of the value of other commodities. Equal quantities of labour muft at all times and pfeces 4* of equal value to the labourer. He muft always lay down tht fame portion of his eafe, his liberty, and his happinefs. The price which he pays muft always be the fame, whatever may be thequan*> tity of goods which he receives in return for it. Of thtfe, ihdeed; it may fometimes purchidft a greater and fometimes a fmaller quantity ; but it is their value which varies, not that of the hbour which pur- chafe^ them. At all times and places that is dear which h is difficult lo come at, or ¥rhich it cofts much labour to acquire j and thatcheap § ; ■'■ which i THE WEALTH, OF, NATIONS. 39 or of any ;).»i;'q !>I >: ' iMtRmrno') to 'j!i:ri-)?r/f| hlno'j vnh '»i3f(t trij^noirj iJiow v*!f(J nsi!'', In this popular fcnfe, therefore. Labour^ like commodities; may be faid to have a real amd a nominal priee«: Its real price may be faid to confift in the quantity of the neceflari?s and conveniencies of life which are given for it j its^ nominal price,, in the quantity oi money. The labourer is rich or poor, is well or ill rewarded^ in propg^ipii tq the.real^ not to the nominal price, of hi».labour. The diftinftion between the real and th« nominal price of com- modities and labour, is not a matter of. mere fpeculation, \i\A may fometimes be of confidcrable ufe in praftice. The fame real price is always of the fame value y but on account of the variations in the value of gold and filver, , the fame nominal price is fometimes of veiy different values. When a landed eftate, therefoie, is fold with a refci-vation of a perpetual rent, if it is intended that this rent ftiould always be of the fame value, it is of importance to the family in whofe favour it is referved, that it fhould not confift in a particular. 40 THE NATURE AND CAUSES OF I. B O^o K. a particular fum of money. Its value would in this cafe be liable to variations of two different kinds ; firft, to thofe which arife from the different quantities of gold and filver which are contsuned at different times in coin of the fame denomination ; and, fecondly, to thofe which arife from the different yalues of equal quantities of gold and filver at different times. Princes and fovereign flates have frequently fancied that they had a temporary intereft to diminifh the quantity of pure metal cont^ncd in their coins ; but they feldom have fancied that they had any to augment it. The quantity of metal contained in the coins, I believe, of all nations has, accordingly, been almofl con- tinually diminifhing, and hardly ever augmenting. Such variations therefore tend almofl always to diminifh the value of a money rent. The difcoveiy of the mines of America diminifhed the value of gold and filver in Europe. This diminution, it is commonly fuppofed, though, I apprehend, without any certain proof, is ftiU going on gradually, and is likely to continue to do fo for a long time. Upon this fuppofition, therefore, fuch variations are more likely to diminifh, than to augment the value of a money rentv even though it fhould be flipulated to be paid, not in fuch a quantity of coined money of fuch a denomination, (in fo many pounds ilerling, for example) but in fo many ounces either of pure filver, or of filver of a certain flandard. -^ r The rents which have been referved in corn have preferved their value much better than thofe which have been referved in money, even where the denomination of the coin has not been altered. By the 1 8th of Elizabeth it was enafted. That a third of the rent of all college leafes fhould be referved in corn, to be paid, either in kind, or according to the current prices at the neareft publick • market. km B THE WEALTH OF NATIONS. 4» '# tiiarkk.' The money arlfing from this wm rent, though origmally CH^ap. but a third of the whole, is in the prefent times, Recording to Doftoi* Blackftone, commonly near double of what arifes from the other tvvo-thirds. The old money rents of colleges muft; according to this account, have funk almoft to a fourth part of their antient value j or are worth little more than a fourth pait of the corn which they were formerly worth. But fince the reign of Philip and Mary the denomination of the Englifh coin has undergone little or no alteration, and the fame number of pounds, fhillirigs and pence, have contained very nearly the fame quantity ©f pure filver. This degradation, therefore, in tlie value of the money rents of colleges, has arifen altogether fix>m the degradation m the value of filver. ./^■_ ^ , ;f . . hiat i'JiMH »» iO'juiL' :>nj liuuu iih'^^i cViSWyR tlOmlfl pat J ■, ' When the degradation in the value of filver is combined with the diminution of the quantity of it contained in the coin of the fame denomination, the lofs is frequently dill greater. In Scotland, where the denomination of the coin has undergone much greater alterations than it ever did in England, and in Prance, where it has undergone dill greater than it ever did in Scotland, fome antient rents, originally of confiderable value, have in this manner been reduced almoft to nothing, f ill/iQ^n 'y. ^ihisuib .,, f. nf Eqjjal quantities of laboiir will at diftaht times be purchafcd more nearly with equal quantities of corn, the fubfiftence of the labourer, than with equal quantities of gold and filver, or perhaps of any other commodity. Equal quantities of corn, therefore, will, at djftant times, be more nearly of the fame real value, or enable the pofleflbr to purchafe or command more nearly the fame quantity of the labour of other people. They will do this, I fay, more nearly than equal quantities of almoft any other commodity ; for even equal quantities of corn will not do it exaiSlly. The fub- fiftence of the labourer, or the real price of labour, as I fliall Vol. I. . ^ 6 endeavour 42 THE NATtJRE AND CAUSES OF B o O K endeavour to (how hereafter, is very different upon different occa- fionsj more liberal in a fociety advancing to opulence than in one that is ftanding (till ; and in one that is ftanding ftill than in one that is going backvrards. Every other commodity, how- ever, will at any particular time purchafe a greater or fmaller quantity of labour in proportion to the quantity of fubiiftence which it can purchafe at that time. A rent therefore referved in corn is liable only to the vai'lations in the quantity of labour which a certain quantity of corn can purchafe. But a rent referved in any other commodity is liable, not only to the variations in tlie quantity of labour which any particular quantity of com can purchafe, but to the variations in the quantity of com which can be purchafed by any particular quantity of that commodity, :nn n. # Though the real value of a corn rent, it is to be obferved however, varies much lefs from centuiy to century than that of i money rent, it varies much more from year to year. The monc: price of labour, as I fliall endeavour to (how hereafter, does nor fluctuate from year to year with the money price of com, but feems to be every where accommodated, not to the temporary or occafional, but to the average or ordinary price of that neceflary of life. The average or ordinary price of corn again is regulated, as I fliall likewife endeavour to fhow heirafter, by the value of fUver, by the richnefs or barrennefs of the mines which ilipply the market with that metal, or by the quantity of labour which mufl be em- ployed, and confequently of corn which mull be Confumed, in order to bring any particular quantity of it from the mine to the market. But the value of filver, tiiough it fometimes varies greatly from century to century, feldom varies much from year to year, but frequently continues the fame or very nearly the fame for half a century or a century together. The ordinary or average money price of corn, therefore, may, during fo long a period, .. continue THE WEALTH OF NATIONS. ♦J continue the fame or very hearty the iame too, and along ivlth C HA P. it the money price of labour, provided, at leaft, the fociety con- tinues, in other refpefts, in the fame or nearly in the fame condition. In the mean time the temporary and occafional price of corn, may frequently be double, one year, of what it had been the year before, or flu6h]ate from five dnd twenty to fifty (hilling* the quarter, for example. But when com is «t the latter piice, not only the nominal, but the real value of a coin rent will be double of what it i« when at the former, or will command double the quantity either of labour or of the greater part of other commodities ; the money price of labour, and along with it that of moft other things, continuing the fame during all thefe fluc- tuations. H- ■n ft- Labour, therefore, it appears evidently, is the oi - umverfal, as well as the only accurate mtafure of vAlue, 'dr the on ftandard by which we can compare the values 'fif diferent co. nodities at all times and at all places. We cannot eftimate, it is allowed, tlie real value of different commodities from century to century by the quantities of filvel* Which were given for tljem. We cartn<*t eftimate it from year tb year by the quantities of com. By the quantities of labour we can, with the greateft accuracy, efti- mate it both from century to century and from year to year. From cefttuiy to centuiy, corn is a better meafurc than filter, becaufe, fmm century to century, equal quantities of com will command the fame quimtity of labour xnore nearly than equal quantities of filver. From jtar to year, on the contrary, filver is a better meafure than com, becaufe equal quantities of it will more nearly command the fame quantity of labour. . . j But though in eflaUilhing peipetual rents, or even in letting very long leafes, it may be of ufe to diftinguifti between real and G 2 nominal 44 THE NATURE AND CAUSES OF B O^O K nominal price ; it is of none in buying and felling, the more common am) ordinary tranfadtions of human life. At the fame time and place the real and the nominal price of all commoditiesL-aEe>«x9£iiy in > proportion tG one another. The more or lefs Tmney you f get [.for 'any commodity^ in the London: market* for example^ -the more or lefs labour it will at that timet and place enable you to /purchafe) or coKinu^d. At ttre»s . monay r is ithe . txnAi m^^vfi of thd real exchanq^eable value of all commodities. It is fo, however, ati the fame time and; place only^»'i3V3v/on ^eim as jiiovv s dxn v.i .'t. '(.^..ornmj-. lB{^JJms^f a to esuibv isai iiifn-jhib x'; 'iinqciou u> TH)otf«9 at dSftjOtt ^pkcis;> iiher« is no negular, prapoctiiott) betwlQ^n lh<^^fe}Aband|l!he^nioney price of coiiMbnditaes, yist the nk|rchah6^M^^catd^good^fi:oni( the one ito theothdr has. noliiin^^ to cohfideifliult^ifNiil'inonry price, or: the difference between thc^ quantity- of '^l^NrfW/^lluch he biifs them, and that for which he is Ghety to ^i^the^i -^^italf an oimosof filver'at>QantaitJniChina. may 60tt^siitdba-gi^t6r,>qiuuitityibath oflaboilv ahd, of the aeceft-^ ^^ andf^^dnVfcnlbnGles of lifd^^than an^obnce at London. A commodity, i^epofbire,^ ivhiich f^ for. haif aa> ounce of fUver at Canton liiay the^e bjS^reMly deareri,. of more seal, importance to the man who^ poflf^s it rhff/t^ tlian one which' fiflis i for an ouAco at London to> '^e m^n who pofieffes it at Loiidolu if, a London merchant, however, can- bu^ at Canton for hatf an ounce of filver, a commodity which- hdxaniafterwardsiUl. at London foK an ounce, he gains a hundred per cent by.ihe bai;gain ju(l.as much as if an ounce of filver was at London exactly of the fame valu^^as at Canton. It is of no importance to him that: half an ounce of filver at Canton would have given him the command of more laboui' and of a- greater quantity of the nece^aries and conve- itiencies of lire than an ounce can do at London*. An ounce at London. m m un F, I '1 THE WEALTH OF NATIONS. 4S 'MM m MB'* London will always give him the command ©f double the quantity C HA P. •f all thefe which half an ounce could have done there, and tlus isprccifely what he wants. As it is the nominator money price of goods, therefore, which finally determines the prudence or imprudence of ail purchafes and fales, and thereby regulates almoft the whole bufinefs of ^ramon life in which price is concerned, we cannot wonder that It iliould have been io much more attended to than the real price. Tn fuch a work as this, however, it may fometiines Be of ufe to compare the different real values of a particular commodity at different times and- places, or the different degrees of power over the labour of other peopb which it may, upon different occafionsi have given to thofe whopofleffedit. We muft in this- cafe com«> pare, not fb^much. the different quantities of iilver for which it was commonly fold,, as the: different quantities, of labour which thofe different quantities of filver could have purchafed. But th^. current prices, of labour at diftant times and places- can fcarce ever be known with any degree of exa£hiefs. Thofe of com, thocrgh they have in few place: been regularly recorded, are in general better known and have been more frequently taken notice of by hiflorians and- other writers. We muft generally, therefore, con* tent ourfelves with them, not as being always exadtly in the fame proportion as- the current prices of labour, but as being^the nearefl approximation which can commonly be had to that proportion. I fhall hereafter have occafion to make fevcral comparifons of this kiixdi I ■ '■ In the progrefs of indiiftry, commercial nations have found' it convenient tq coin feveral different metals into money i gold for larger payments, filver for purchafes of moderate value, and copper or 46 THE NATURE AND CAUSES OF or Tome other cbarfe tndal, for thofe of Aill fmaller confideration. They have al^hrays, however, coiifniBred one of thofe metals as more peculiarly the meafure of value thaii any of the other two; and tlus pieference feems generally to have been given to the metal which tliey happened firft to make ufe of at the ihftrument of commerce. Having once beguato ufe It as their il.indard, which the/ mufl have done when thry had no. other money, tliey have gene- rally coatii^ed to, do, ^eveuwliea the. necdfity was not the fame. The Romans aie faid to have had nothing butcoppci money till within £ve years before the firft Punic war, when the^ firft began to coin fiWeiv Copper^ theiiefore, appears to have oon- tinucd always tine tOfeafure r any copper till that of James I. of Great Britain. In England, therefore, and for the fame reafon, I believe, in all other modern nations of Europe, all accounts are kept and the value of all goods and of all eftates IS generally computed in filver: and when we mean to exprefs the amount of a perfon's fortune, we feldom mention the number 5 ' of •■>ii 1 m deration, netalt as liei* two; he metal iment of hich thtf ivc gent- le fame. Bi money :he^ firft ave con* f\t Rome 11 teftates The Ai mated in noy, wa« ittle gold 1 that of 1 for the Europe, ill ellates exprefs ; number of THE WEALTH OF NATIONS, number pf pounds which y/9 iiippo 47 of guineas, but the number pf pounds which w9 iuppofe would chap. be given for it,. 'llltC )QV>i Uh ,i "- i Im aU countries, I believe* a If^al tender of payment could originally be made in the coin o£ that metal only which was pecu-> liarly coufidercd as th« ftandard ot meaifure of value. In England gdd was not confidered its « IqgpL tender for « long time after it was coined into mooey. The pr^ortion between the values of gold and filver money was not fixed by any publick law or pro- clamation j bu was left to be fettled l^ the market. If a debtor Q&red pa^eol; in gold, the creditor nw^ht eitb^r veje^ C^ch pay- ment ahiogetbflr, or accept of it at fvi^h a v^luatiop' of tlie gvid as he and his debfor could ag^eupc .). (i^i^Kii' i. .dt at prefent a legal tender, except ki the change of the ' iiioH}ar ftWer coins. In this ftate of things the dtftin6lioa betnnrsm the metal which was the ftanii"'''^' and that which was not the ilandacd,. wa& fom^thiii^ more than *«iominal:diftini£Uon* im^ ''x^^ oy-gt'.asbu/fil .-ji^l; % In procefs of tiwie, and ac people became gra^ally more familiar with the ufe of the different m^^ls ih- coin, and. consequently better acquainted with the proportion between their refpc^tive values, it has, in moft countries I belicVis, been fou^rdi convenient to after- tain this proportion, and to declarfe by a pubKck law that a guinea, for example, of fach a weight and fincneft, (hould exchange for one and twenty (Wllings, or be a legal tendei^Yor a -debt of that ftim. In this ftate of things, and during the eon^uance of any one reg'Ttated proportion of this kind, the diftinftibn between the metal which is the ftandard and that wliich is not the fbndard, becomes little more than a nominal diftinaion. ■ - -. ■ - - In confcquence of any change, however, in this regulated propor- tion, this diftinftion becomes, or at Icail feems to become, fomcthing more 4» THE NATURE AND CAUSES OP B O O K more than nominal again. If the regulated value of a guinea, for example, was either reduced to twenty, or raifed to two and twenty (hillings, all accounts being kept and almod all obli- gations for debt being exprelled in filver money, the greater part of payments could in either cafe be made witli the fame quantity of filver money as before j but would require very different quan- tities of gold moneys a greater in the one cafe, and a fmallerin the other. Silver would appear to be more invariable in its value than gold. Silver would appear to meafure the value of gold, and gold would not appear to meafure the value of filver. The value of gold would feem to depend upon the quantity of filver which it would exchange fori and the value of filver would not fecm to depend upon the quantity of gold which it would exchange for. This diiference however would be altogether owing to the cuftom of keeping accounts and of expiring the amount of all great and fixiall.fums rather in filver than in gold mon^. One of Mr. Drummond'c notes for five and twenty or fifty guineas would, after an alteration of this kind, be flill payable with five and twenty or fifty guineas in the fame manner as before. It ^wvuld, after fuch an alteration, be payable with the fiune quan- tity of gold as before, but with very different quantities of filver. In the payment of fuch a note, gold would appear to be more invariable in its value than filver. Gold would appear to mea- fiire the value of filver, and filver would not appear to meafiire the value of gold. If the cuftom of keeping accounts, and of exprefling promifibry notes and other obligations for money in this manner, fhould ever become general, gold, and not filver, would be confidered as the metal which was peculiarly the ilandard or meafiire of value... ,:^.;. ,}.,,, !.,.,f,^j,,j,.;^;,j.,^^,j;g.^,^^ , 7,.,, ; In reality, during the continuance of any one regulated pro- portion between the refpe^ive values of the different metals in coin, I vr ^*'| 'Mil H THE WEALTH OP NATIONS/ 49 coin, the value of the moft precious mctil regulates the value C H^A P. of the wh(i>te com. Twelve copper pence contain half a pound, avoit<(Jii^bis, of copper, of not the heft quality, which, before iVis c6\ticdi is' fcldom worth fcvenpertte in filver. But as by the f^^atlttti tw^lvcf ftich pence nte ordered to exchange for a (hiliWg, they art in the market con fidered" as worths fhiHing; aiVd a Ihilling can atjftiy time be had for them. Even before the late rcfomlation' of thc^^goM coin of Great Britain, rtiegold, that part' of^it:tet^ l«l(t "(\Hlch dt^Ifelted in London aiid tts neig!wOur- hotidj Wa.i( in ]i;6nenirief8 degraded belov^ its itandaitl weight tlian •Ae^eiitei' paitof'the ftlver. One and twenty worn and defaced ihilUngs, howe^r, were coniidered a» equivalent to a guinea/'whkh'perhapcr^' indeed, was Worn and defaoed too, but fcl^iA ib'tumh^fo. The late regulations have l>r^ght< the gold coin id rieiir pd^hap^ to its'ftandard weight as It is pp^ble to bring th^' current coin of any nations and t^e orders ta> receive no gold^ tit the l^bfick Alices but by wei^t, is lihely to preiefve it fa a$ldng^'As-^IiM.'ordei^is> ienforced. The filvencdin (lilt continlies in the fitri^ ' wdrn and degraded ftktt as belbrt xhs reformation of the- gold coin, fn the market, however, otth and twchty ftiilfings of this degraded iilvei coirv are flili confidered as wortli a giiinea of this excellent gold coin. ij -^ • » i >/ u.^mi^.j „., , ,. , . ;.:■ ) '■^^V^h iih.Al ^ulftV -f- .'U t>l(Jl5i (»V. • . Thb reformation of the ^Id coiii/'liai^tvidetttty^raifcd the Valiife' of the filver coin which can be exchanged for it. . In the Englidi mint a poUftd wdglit of gold is ttAicd into' forty* four guineas Sitd a half, which at one »n!rf twferity /hillings the guinea', is equal to forty-fix pounds fourteen (hiHlhgSand fixpence. An ounce of fuch gold coin, thei^fore, is worth 3/. lys. io paid upon the coinage, and he who carries a pound weight or an ounce weight of ^o^- '• H .ftandard 49 THE NATURE AND CAUSES QF ■M B OjO K ftandard gold bullion to the mint, gets back a pound weight, or an ounce weight of gold in coin, without any deduftion. Three pounds feventeen (hillings and ten-pence halfpenny an ounce, therefore, is faid to be the mint price of gold in England, or the quantity of gold coin which the mint gives in ^f(^ma for ftandard gold bullion. - rvMUtti^^vHr MVmf't i' •• ■ J,. I ,, , ,.,. - .. .... II. .1. -....> .._•„.. »» I., BfiFoftE the reformation of the gold coin, the price of ftandard gold bullion in the market had for many years been upwards of 3/. 1 8 J. fometimes 3/. 19/. and very frequently 4/. an ounce; that fum it is probable, in the worn and degraded gold coin, feldom containing more than an ounce of ftandard gold. Since the reform- ation of the gold coin, the market price of ftandard gold bullion feldom exceeds 3/. 17/. yd. an ounce. Before the reformation of the gold coin the market price was always more or lefs above the mint price. Since that reformation the market price has been conftantly below the mint price. But that market price is the fame whether it is paid in gold or in filver coin. The late reformation of the gold coin, therefore, has railed not only the value of the gold coin, but likewife that of the filver coin in pro- portion to gold bullion, and probably too in proportion to all other commodities ; though the price of the greater part of other com- modities being influenced by fo many other caufes, the rife in the value either of gold or filver coin in proportion to them, may not be fo diftinft and fenfible. In the Englifh mint a pound weight of ftandard filver bullion is coined into fixty-two (hillings, containing, in the fame manner, a pound weight of ftandard fUver. Five (hillings and two-pence an ounce, therefore, is faid to be the mint price of (ilver in England, or the quantity of filver coin which the mint gives in return for ftandard filver bullion. Before the reformation of the gold coin, the market price of ftandard filver bullion was, upon 8 different »^i>J % THE WEALTH OF NATIONS. *t different occaflons, five (hillings and four-pciicc, five fliillings and C HA P. five-pence, five (hillings and fixpence, five (hillings and feven- pence, and very often five (hillings and eight-pence an ounce. Five (hillings and feven-pence, however, feems to have been the moft common price. Since the reformation of the gold coin, the market price of (landard filver bullion has fallen occafionalty to five (hillings and three-pence, five (hillings and four-pence, and five (hillings and five-pence an ounce, which laft price it has fcarce ever exceeded. Though the market price of filver bullion has fallen confiderably fince the reformation of the gold coin, it han not fallen fo low as the mint price. ;„,.;,, » . . ^ f e -I . ' . I _ rf . A 4. '. * . ■ .--.♦.■..- . ■-. - In the proportion between the diiferent metals in the Engli(h coin, as copper is rated very much above its real value, fo filver is rated fomewhat below it. In the market of Europe, in the French coin and in the Dutch coin, an ounce of fine gold ex- changes for about fourteen ounces of fine filver. In the EnglUh coin, it exchanges for about fifteen ounces, that is, for more filver than it is worth according to the . ommon cftimation of Europe. But as the price of copper in bars is not, even in England, raifed by the high price of copper in Engli(h coin, fo the price of filver in bullion is not funk by the low rate of filver in Englifii coin. Silver in bullion (till preferves its proper proportion to gold; foi the fame reafon that copper in bars preferves its proper propoition to filver. Upon the reformation of the filver coin In the reign of William III. the price of filver bullion ftiU continued to be fomewhat above the mint price. Mr. Locke imputed this high price to the per- mi(non of exporting filver bullion, and to the prohibition of ex- portmg filver coin. This permiffion of exporting, he faid rendered the demand for filver buUion greater than the demand ' • «2 (br !• THE NATURE AND CAUSES OF for filver coin. But the number of people who want filver coin for the common ufcs of buying and felling at home, ii furely much greater than that of thofc who want filver bullion either for the ufe of exportation or for any other ufe. There fubfifts at pre- fent a like permiflion of exporting gold bullion and a like prohibi- tion of exporting gold coin ; and yet the price of gold bullion has fallen below the mint price. But in the Englifh coin filver was then, in the fame manner as now, under-ratod in proportion to gold } and the gold coin (which at that time too was not fup- pofcd to require any reformation) regulated then, as well as now, the real value of the whole coin. As the reformation of the filver coin did not then reduce the price of filver bullion to the mint price, it is not very probable that a like reformation will do fonow. . ♦ Were the filver coin brought back as near to its ftandard weight as the gold, a guinea, it is probable, would, according to the prefent proportion, exchange for more filver in coin than it would purchafe in bullion. The filver coin containing its full ftandard weight, there would in this cafe be a profit in melting it down, in order, firfV, to fell the bullion for gold coin, and afterwards to exchange this gold coin for filver coin to be melted down in the fame manner. Some alteration in tlie prefent proportion feems to be the only method of preventing this incon» veniency. . . The inconveniency perhaps would be lefs if filver was rated in the coin as much above its proper proportion to gold as it is at prefent rated below it ; provided it was at the fame time enadled that filver fhould not be a legal tender for more than the change of a guinea ; in the fame manner as copper is not a legal tender for more than the change of a fliiliing. No creditor could in 4 this THE WEALTH OF NATIONS. w this cafe be cheated in confequcncc of die high valuatian of filver C HA p. in coin; as no creditor can at prclcnt be cheated in confequcncc of the high valuation of copper. The bankers only would fuffcr by this regulation. When a run comes upon them tliey fometimea endeavour to gain time by paying in fixpences, and they would be precluded by this regulation from this difcreditable method of evad« ing immediate payment. They would be obliged in confequenca to keep at all times in their coffers a greater = .-antity of ca(h than at prefent j and though this might no doubt ! e a confiderable in- oonveniency to them, it would at the fame time be a confiderable iccurity to their creditors*. i( Thres pounds feventeen fltillin^js and ten- pence halfi)enny (the mint price of gold) certainly cIjcs not ontain, even in our prefent excellent gold coin, more than an o i. xc of ftandard gold, . and it may be thought, therefore, (hould not purchafe more ftan- dard bullion. But gold in coin \i :,«ore conveniciii than gold in bullion, and though, in England, the coinage is free, yet the gold which is carried in bullion to the mint, can feldom be returned in coin to the owner till after a delay. of feveral weeks. In the prefent hurry of the mint, it could not be returned till after a delay of feveral months. This delay is equivalent to a fmall duty, and renders gold in coin fomewhat more valuable than an equal quantity of gold in bullion. If in the EngliHi coin filver was rated according to its proper proportion to gold, the price of filver bullion would pr^^bably fall below the mint price even without any reformation of tl.. 'i'ver coin; the value even of the prefent worn and defaced filver coin being regulated by the value of the. eocccUent gold coin for which it can be changed. A SMALL feignorage or duty upon the coinage of both gold and ' filver would probably incrcafe ftill more the fui)eriority of thofe metals 54 THE NATURE AND CAUSES OF BOOK metals in com above an equal quantity of either of them in bul- '■ lion. The coinage would in this cafe increafe the value of the metal coined in proportion to the extent of this fmall duty; for the fame reafon that the fafhion increafes the value of plate in propor- tion to the price of that fafhion. The fuperiority of coin above bullion would prevent the melting down of the coin, and would difcourage its exportation. If upon any publick exigency it ftiould become neceflary to export the coin, the greater part of it would foon return again of its own accord. Abroad it could fell only for its weight in bullion. At home it would buy more than that weight. There would be a profit, therefore, in bringing it home again. In France a feignorage of about eight per cent, is im- pofed upon the coinage, and the French coin, when exported, is laid to return home again of its own accord. The occafional ilu£luations in the market price of gold and niver bullion arife from the fame caufes as the like flufVuations in that of all other commodities. The frequent lofs of thofe metals from various accidents by fea and by land, the continual wade of them in gilding and plating, in lace and embroidery, in the tear and wear of coin, and in the tear and wear of plate; require, in all countries which poffefs no mines of their own, a continual importation in order to repair this lofs and this wafte. The mer- chant importers, like all other merchants, we may believe, endea- vour« IS well as they can, to fuit their occafional importations to what, they judge, is likely to be the immediate demand. With all their attention, however, they fometimes over-do the bufinefs, and fometimes under-do it. When they import more bullion than is wanted, rather than incur the rifk and trouble of exporting it again, they are fometimes willing to fell a part of it for fomething Ififs than the ordinary or average price. When, on the other hand, they import lefs than is wanted, they get fomething more than this price. ■M THE WEALTH OF NATIONS. 55 m in bul- lue of the Yi for the n propor- :oin above ind would y it (hould f it would :11 only for than that iig it home :nt. is im- xportedy is f gold and ituations in hofe metals il wafte of in the tear require, in continual The mer- :ve, endea- 3itations to nd. With le bufinefs, ullion than xporting it fomcthing >ther hand, e than this price. 1 -fcufe price. But when, under all thofe occafional fluftuations, the mar- C HA P. ket price either of gold or filver bullion continues for feveral years together fteadily and conftantly, either more or lefs above, or more or lefs below the mint price; we may be affured that this fteady and conftant, either fuperiority or inferiority of price, is the efFe6t of (bmething in the ftate of the coin, which, at that time, renders a certain quantity of coin either of more value or of lefs value than the precife quantity of bullion which it ought to contain. The conftancy and fteadinefs of the effeft, fuppofes a propor- tionable conftancy and fteadinefs in the caufe. The money of any particular country is, at any particular time and place, more or lefs an accurate meafure of value according as the current coin is more or lefs exaftly agreeable to its ftandard, or contains more or lefs exadlly the precife quantity of pure gold or pure filver which it ought to contahfi. If in England, for example, forty- four guineas and a half contained exafUy a pound weight of ftandard gold, or eleven ounces of fine gold and one ounce of alloy, the gold coin of England would be as accurate a meafure of the actual value of goods at any particular time and place as the nature of the thing would admit. But if, by rubbing and wearing, forty- four guineas and a half generally contain lefs than a pound weight of ftandard gold ; the diminution, however, being greater in feme pieces than in others; the meafure of value comes to be liable to the fame fort of uncertainty to which all other weights and meafures are commonly expofed. As it rarely happens that thefe are exaftly agreeable to their ftandard, the merchant adjufts the price of his goods, as well as he can, not to what thofe weights and meafures . ought to be, but to what, upon an average, he finds by experience, they actually are. In confequence of a like drforder in the coin, the price of goods comes, in the fame manner, to be adjufted, not to the quantity of pure gold or filver which the com, 5« THE NATURE AND CAUSES OF ti. coin ought to contain, but to that which, upon an atcrage, it is found by experience, it a^ually does contain. " ^"'" ""v r'-' By the money price crfgpods, it k to beohferved, 1 Uiiderftand always the quantity of pure gold or filver for which they are fold, without any regard to the denomination of the coin. Six fhillings and eight-pence, for example, in the time of Edward I. I confider as the fame money price with a pound fterling in the prefent times j becaufe it contained as nearly as we can judge the fame quantity of pure filver. *^ ;! h?«ru,i;u, i>:i7 itl .itvjii; g/UHi>p>6 m IniKjl xi Hum jriij ^ ■.--■■■-. - - - . . .. ^ ■—..-.-> — ^t>^^^— ■ I'Slc ilrifilKj h.'i. ill ;ijt;!i| jivsi-j 'Jiu.i v'.'jwiou^ iUmi liiilJi yinat CHAP. VI. <(} hI Of the component Parts of the Price of Commodities f,.,^^ ^^; IN tiiat early and rude flatc of focicty which preceeds both the accumulation of flock and the appropriation of land, the pro* portion between the quantities of labour neceflary for acquiring different obje6ls feems to be the only circumftance which can afford any rule for exchanging them for one another. If among a nation of hunters, for example, it ufually cofh twice the labour to kill a beaver which it does to kill a deer, one beaver fhould naturally exchange for or be worth two deer. It is natural that what is ufually the produce of two days or two hours labour fhould be worth double of what is ufually the produce of one day's or. one hour's labour. . ;iMi J'^ii fi '«" >« %i iiftjn ibTiiSJ If the one Ipedes of labour fliould be more feverc than the other; fome allowance will naturally be made for this fuperior hardfiiipj and t'-l 4 r -.55 THE WEALTH OF NATIONS. h itcrage, it - ■> . ,-, underlland y are fold, »ix fhillirigs , I confider ;fent times; quantity of ql 'id mm if*f''fi|ijft ft. tds both the id, the pro* )r acquiring h can afford ng a nation )ur to kill a Id naturally :!iat what is fhould be day's or one in the other; or hardlliip} and M and the produce of one hour's labour in the one way may frequently ^ ^^ P- exchange lor that of two hours labour in the other. Or if the one fpecies of labour requires an uncommon degree of dexterity and ingenuity, the efteem which men have for fuch talents, will naturally give a value to their produce, fuperior to what would be due to the time employed about it. Such talents can feldom be acquired but in confequence of long application, and the fuperior value of their produce may frequently be no more than a reafonablc compenfation for the time and labour which muft be ^nt in acquiring them. lu the advanced ftate of fociety, allowances of this kind, for fuperior hardship and fuperior fkill, arc commonly made in the wages of labour; and ibmething of the fame kind muft probably have taken place in its earlieft and rudcft period. . . - - ' I In this ftate of things the quantity of labour comthonly employed in acquiring or producing any commodity, is the only circum- ftance which can regulate the quantity of labour which it ought commonly to purchafe, command, or exchange for. As foon as ftock has accumulated in the hands of particular perfons, fome of them will naturally employ it in fetting to work induftrious people, whom they will fupply with materials and fubfiftence, in order to make a profit by the fale of their work, or by what their labour adds to the value of the materials. In ex- changing the complete manufaaure either for money, for hbour, or for other goods, over and above what may be fufficient to pay the price of the materials, and the wages of the workmen, fome- thing muft be given for the profits of the undertaker of the work who hazards his ftock in this adventure. The value which the workmen add to the materials, therefore, refolves itf;lf in this ^^^•'- . f cafe THE NATURE AND CAUSES OF BOOK cafe into two parts, of which the one pays their wages, the other the profits of their employer upon the whole ftock of materials and wages which he advanced. He could have no intereft to employ them, unlefs he expe6led from the fale of their work fomething more than what was fufficient to replace his ftock to him ; and he could have no intereft to employ a great ftock rather than a fmall u'\lefs his profits were to bear fome proportion to the extent on-i of his ftock. <'S'.'Of'^ ,JlJr,'f;' •',j 'brif; ;ir!')nS The profits of ftock, it may perhaps be thought, are only a different name for the wages of a particular fort of labour, the labour of infpc6tion and diredlion. They are, however, altogether different, are regulated by quite different principles, and bear no proportion to the quantity, the hardfliip, or the ingenuity of this fuppofed labour of infpeiSlion and dire6lion. They are regulated altogether by the value of the ftock em'^'oyed, and are greater or fmaller in proportion to the extent of this ftock. Let us fuppofe, for example, that in fome particular place, where the common annual profits of manufaduring ftock are ten per cent, there arc two different raanufatSlures, in each of which twenty workmen arc employed at the rate of fifteen pounds a year each, or at the ex- pence of three hundred a year in each manufactory. Let us fup- pofe too, that the coarfe materials annually wrought up in the one coft only feven hundred pounds, while the finer materials in the other coft feven thoufand. The capital annually employed in the one will in this cafe amount only to one tlioufand pounds; whereas that employed in the other will amount to feven thoufand three hundred pounds. At the rate of ten per cent, therefore^ the un- dertaker of the one will exped an yearly profit of about one hundred pound.i only; while that of the other will expeft about {even hundred and thirty pounds. But though their profits are f6 very difierent, their labour of infpedioa and direaion may be I •' cither THE WE A LT 11 O i^ ■ 1ST aVI O K$/ i 59 le other the iterials and t to employ . fomething m ; and he han a fmali 3 the extent are only a labour, the , altogether nd bear no luity of this re regulated e greater or : us fuppofe, he commoa nt. there are rorkraen arc or at the ex- Let usfv,,p- t up in the niaterials in loyed in the ids; whereas >urand three 3re^ the un- f about one expe6l about [Mofits are f6 ion may be either wV .4 cif hei^ altogcthel* or vciy nearly the fame. In many great works, C FT A p. almoft the whole labour of this kind is frequently committed to fbme principal clerk. His wages properly exprefs the value of this labour of infpe^ion and direction. Though in fettling them fome regard is had commonly, not only to his labour and (kill, but to the truft which is repofed in him, yet they never beai any regular proportion to the capital of which he overfees the manag;- mentj aud tlie owner of this capital, though he is thus difcharged of almofl all labour, ftill expe(5ts that his profits fhould bear a regular proportion to it. In the price of commodities, there- fore, the profits of flock are a fource of valut altogt '^er dlfTerent from the wages of labour, and regulated by quite different prin- ciples. .-'.flj lo vuuftiisnt •j■•> io •0 J . As foort as the land of any country has all become private pro- perty, the landlords, like all other men, love to reap v/here they never lowed, and demand a rent even for Its natural produce. The wood of the forefl, the grafs of the field, and all the natural fruits of the earth, which, when land was in common, coft only the trouble of gathering them, come to have an additional price fixed upon them. Men muft then pay for the licence to gather them; and in exchanging them either for money, for labour, or for other goods, over and above what is due, both for the labour of ga- thering them, and for the profits of the flock which, employs that ^ V^ labour. )%#^ ^o THE > NATURE AND CAUSEii Of j. '!ii ^ 91*^ ^ labour, ibme atidwance' ra^uA be made for the price of the licence* which conftitutes the firft rent of kiid. In the price, therefore* of the g'.eater pait of commodkies the rent of land Comes in this iT'.anner to conftkute a thii'd i'ouicq of vaUie, -•*•* tm^^ ^T» «t 1 •»' < In this ftate of thing?, neithitthe calamity of I, i>our commonly employed in a< quiring oi prodticivig any cohimofJiiv, nor the pro- fits of the ftock which ad v meed i'i« wages and furniflied the ma- terials of Uiat labou r, are the only circumftances which can regulate the quantity of labour which it caght conrnwiJy to purchafe* command, or exchange for. A third circuvjvftance muft likewife be taken into confideration ; che rent of t :. land j and the commo- dity mult commonly purchafe, co:t;mand, or exchange for, aa additional quantity of labour, in order to enable the perfon who brings it to market to pay this rent. -j. -awS io rj'm iih aT iv ^ui 10 i^ij^t^fi wU hrtf- , ..iu;:? vrit '^o ?;irlra..l 3flt ,fi1c1 sr ., The real value of all the ., i.j . ,.- Tke price of flax refolves itfelf into the fame three part's as that of corn. In the price of linen we muft add to this price the wages of the flax-drefler, of the fpinner, of t!ie weaver, of the bleacher, &c. together with the profits of tlieir refpeftive em- ployers. A« any particular commodity comes to be more manufaclured,. that part of the price which refolves itfelf into wages and profit, Komes to be greater in proportion to that which refolves itfelf into rent. Ci THE 'kATURE AND CAUSES OF renF. " In the prdgi-eJs of tlic rrinufa'flart, ' riot oiily' the tiuh^cr of profits incieafe, but every fublcquent profit is greater than the foregoing; bccaufe the capital from which it is derived mnft al- ways be greater. The cnpital which employs the weavers, for examj)!e, mull: be greater than that whicli employs the fpinnersj becaufc it not only jeplaccs that capital with its profits, but pays, bcfidcs, the wageb; of the weavers; and the profits muft always beai- ibn:e proportion to the capital. In the mofl improved focieties, however, there are always a few commodities of which the price refolves itfelfinto two parts only, the wages of labour, and the profits of llcck; and a (I'll fmallcr number in v;iiich it confifts altogether in the wjges of labour. In the price of fca filh, for example, one part pays the labour of the filhermen, and the other the profits of the capital employed in the filhery. Rent very feldom makes any part of it, though it docs fomctimes, as I Ihall fhevv hereafter. It is other- wile, at lead: through the greater part of Europe, in river fifiieries. A ialmon filhery pays a rent, and rent, though it cannot well be called the rent of land, makes a part of the price of a falmon as well as wages and profit. In fome i arts of Scotland a few poor people make a trade of gathering, along the fea fliore> thofc little variegated ftones commonly known by the name of Scotch Pebbles. The price which is paid to them by the flone-cutter is altogether the wages of their labour; neither rent nor profit make any part of it. •i r But the whole price of every commodity muft ftill finally re- folve itlelf into fome one or other or all of thole three parts; as whatever part of it remains after paying the rent of the land, and the price of the whole labour employed in raifing, manufadturing, and bringing it to market, muft neceflariiy be profit to fomebody. 7 As ■'li '^\ o ? ^1 le'^uh^er ^H T than the HH avers, for m^m : fpinnersi ■»■ but pays, ^U| .iH; always 1^1 :\h2^.'l. ^9 always a ^9 two parts .'wSi and a ftill fffl wages of '^ t pays the ,^ the capital fM part of it, f« t is other- ^^^^H ir fiflieries. '^^ 3t well be "^ a falmon a few poor ,1 thofe little » ;h Pebbles. Ji altogether .M| e any [art -^1 i , ■ finally re- parts; as land, and ifafluring, < \^ )mebody. ^| A9 *^ T-HE yr.^ALTH OF NATIONS. *3 As the price or exchangeable value of every particular commo- C HA P. dity, taken feparately, refolves itfclf into fome one or other or all of thofe three parts j fo that of all the commodities which compofe the whole annual produce of the labour of every country, taken complexly, rauft refulve itfelf into the fame three parts, and be parcelled out am nig diflcrcnt inhabitants of the country, either as the wages of their labour, the profits of thtir flock, or the rent of their land. The whole of what is annually cither colledcd or l)roduced by the labour of every fociety, or what comes to the fame thing, the whole price of it, is in this manner originally diftributcd among fome of its different members. Wages, profit, and lent, arc the three original fources of all revenue as well as of all ex- ciiaiigeable value. All otlicr revenue is vdtimately derived from Ibme one or other of theie. ai .tun t-.; lo ^i, i-piji rti .iium 'j^ij .H.r iu >'!n'.ii', M'l ;j:i H- V»' SMU ,iU(;n^tfSii '3L\i lo liM'fh I Whoever derives his ixvenue from a fund which is his ov.-n, muft draw it either from his labour, from his ftock, or from his land. The revenue derived from labour is called wages. That de- rived from ftock, by tlie pcrfon who manages- or employs it, is called profit. I'hat derived from it by the perfon who does not employ it himfelf, but lends it to another, is called the intereft or the ufe of money. It is the compcnfation which tlie borrower pays to the lender, for the profit which he has an opportunity of making by the ufe of the money. Pai t of that profit naturally belongs to the borrower, who runs the rilk and takes the trouble of employing it; and part to the lender, who affords him the opportunity of making this profit. The intercft of money is always a derivatl\ o revenue, which, if it is not paid from the profit which is made by the ufe of the money, muft be jjaid from fome other- fource of revenue, unlefs perhaps the borrower is a fpendthrift, who con- tracts a fecond debt in order to ])ay the intereft of the firft.. The revenue which proceeds altogether from land, is called rent, and belongs i m \%^ %H^f^^^VKU ANP CAUSES OF ^ li^k^ng-? t9 the Um^t:^- Th« i'cv^qim of the iarmir it tkiiwed pgi tly fiom Ilia labour, aud partly from his ftock. To ium,. land i^ only the inilrkimeut whid) (;n4bles luni to earn tbe WQgies oi this labour, and to make tlie promts o£ this Qtoak, All t«xcs» and ail tlie revenue which is founded upon them, all ihlaries, penfions, and annuities of every kind, are ultimately derived from fomc one or other of thofe three original fources of revenue, and are paid either immediately or mediately from the wages of labowr, tlic profits of ftock, or the rent of land, . ^ . . > , When thofe three different forts of revenue belong^to diffferent perfons, they are readily diftinguiflied ; but when they belong to the fame they are fometimes confounded with one another, at Icaft in common language. .,^. ^^ ,j.. „u,^ ^,(v Ji^/Ki»*r> A < A GENTLEMAN who farms apart of his own cftatc, after paying the expence of cultivation, fliould gain both the rent of the land- lord and the pro^tof the farmer. He is apt to denominate, how- fit. But wages evidently make a part of it. The farmer, hy faving thefe wages, mud necefTariiy gain them. Wages, therefore, are in this cafe confounded with profit. jt «i*ii ' kf . '■•I^..-*'* An independent manufacturer, who has ftock enough both to purchafe materials and to maintain himfelf till he can carry his work to market, (hould gain both the wages of a journeyman, wh6 works under a mafter, and the profit which that mafler makes by the fale of his work. His whole gains, however, are commonly called profit, and wages are, in this cafe too, confounded with profit. pit* ji'»fi'-' H;-t ii;sdi?|.^.iiii'f> (iuji.gr» j^e i^*ii , •( • ■ ■ ■ * t- i\ f ■• -y ■ * ••: ' . T ■• • - f * - ;, , T. * tt ■ . r *•» ' .1 *«•.»* Ml N , . <• . 1 * As In a civilized country there are but few commodities of which the exchangeable value arifes from labour only, rent and profit contributing largely to that of the far greater part of them, fo the annual produce of its labour will always be fufiicient to purchafe or command a much greater quantity of labour than what was em- ployed in raifing, preparing, snd ^ringing that produce to market. If the focicty was annually to c.nploy all the labour which it can annually purchafe, as the quraitky of labour would incrcaie greatly every year, Co the produce of eveiy fucceeding year would be of vaftly greater value than that of the foregoing. But there is no country ill which the whole annual produce is employed in maintaining the Vol. I. % Induftrious. ■» ^ THE NATURE AM> CAUSES OF B O O K induftrioiM. The idle eveiy irht re conAime a great part of !t i and according to the different prof>ortions in which it is annually divided between thole two dtflferent orders of people, its ordinary or average value muft either annually increaife^ or dinuniHit or continue the fame from one year to another. r'l- ._^ ,,:, CHAP. vn. ., ..,, ,,„, ,,„; Of the natural and market Price of Commodities » " ' '' THERE is in every fociety or neighbourhood an ordinary or average rate both of wages and profit in cveiy different em- ployment of labour and ftock. This rate is naturally regulated, as I fhall^ow hereafter, partly by the general circumftances of the fociety, their riches or poverty, their advancing, ftationary, or declining condition i and partly by the paiticular nature of each employment. .itii-i 7 1. There is likewife in every fociety or neighbourhood an ordinary or average rate of rent, which is regulated too, as I fhaH (how hereafter, paidy by the general circumftances of the fociety or neighbourhood in which the land is fituated, and partly by the natural or improved fertility of the land. These ordinary or average rates may be catted the natural rates of wages, profit, and rent, at the tin^e and place in which they commonly prevail. ^ ^ , Whem the price of any commodity is neither mofft nor lefs than what is fufiicient to pay the rent of the land, the wages of the 7 labour. m m THE WEALTH OF NATION$. «)- part of it i s annually ts ordinary ininifht or ordinary or liferent em- y regulated, uices of the itionary, or ire of each an ordinary fhaH (how fociety or rtly by the the natural ue in which x'e nor lefs vages of the labour. 1 A^ labour, and the profiti of the ftock employed in raifing, preparing, C H^A f. and bringing it to market, according to their natural ratet , the commodity ii then fold for what may bo called its natural price. The commodity if then fold precifely for what it is worth* or for what it really cofls the perfon who brings it to market j for though in common language what is called the prime coft of any commodity does not comprehend the profit of the perfon who is tu fell it again, yet if he fells it at a price which does not allow him the ordinary rate of profit in his neighbourhood, he is evidently a lofer by the trade { fince by employing bis ftpck in f&me other way he might have made that profit. His profit, befides, is his revenue, the proper fund of his lubfiflence. As, while he is preparing and bringing the goods to market, he advances to his woi kihen their wages, or their fubfiftence, fo he advances to himfelf, in the fame manner, his own fubfiftence, which is generally fuitabU^'to tht profit which he may reafonably expe£l: from the fale of his goods. Unlcfs they yield him this profit, therefore, they do not repay him what they may very properly be faid to have really coll him. Though the price, therefore, which leaves him this profit, is not always the loweft at which a dealer may fometimes fell his goods, it is the loweft at which he is likely to fell them for any confiderable time; at leaft where theie is perfcft liberty, or where he may change his trade as often as he plcafcs. Thb a6lual price at which any commodity Is commonly (bid is called its market price. It may cither be above, or below, or ejcat^Iy the fiune with its natural price. K 2 The 69f THE NATURE AND CAUSES OP The market price of every particular commodity is regulated by the proportion between the quantity which is aftually brought to market, and the demand of thofe who are willing to pay the natural price of the commodity, or the whole value of the rent, labour, and profit, which mud be paid in order to bring it thither. Such people may be called the effectual demanders, and their de- mand the effectual demand; fince it may be fuificient ' > effectuate the bringing of the commodity to market. It is different from the abfolute demand. A very poor man may be faid, in fome fenfe, to have a demand for a coach and fix j he might like to have it; but his demand is not an effe£lual demand, as the commodity can never be brought to market in order to fatisfy it» When the quantity of any commodity which is brought to. market falls fhort of the effe£lual demand, all thofe wlio are wil- ling to pay the whole value of the rent, wages, and profit, whick mufl be paid in order to bring it thither, cannot be fupplied with the quantity which they want. Rather than want it. altogether, fome of them win be willing to give more. A competition will immediately begin among them, and the market price will rife more or lefs, above the natural price, according as the greatnefs of the deficiency increafes more or lefs the eagernefs of this competition. The feme deficiency will generally occafion a more or lefi eager com- petition, according as the acquifition of the commodity happens ta be of more or lefs importance to the competitor. Hence the e^* erbitant price of the necefTaries of life during the. blockade of a-, town or in a famine, . %J& When the quantity brought to market exceeds the efTedVuar demand, it cannot be all fold to thofe who are willing to pay the- whole value of the rent, wages and profit, which muft be paid" in order to bring it thither. Some pait muft be fold to thofe who ar& **■* • • THE WEALTH OF NATIONS. are willing to pay kfs, and the low price which they give for *t ^^^^n muft reduce the price of the whole. The market price? will fink more or leis below the natural price, according as the greatnefs of theexcefs increafes more or lefs the competition of the fellers^ or according as it happens to be more or lefs important to them to get immediately rid of the xomn^odity. The fame excefs in the impoi tation of peiilhable, will occaflon a much greater com- petition than in that of durable commodities ; in the importation of oranges, for example, than in that of old iron. , . ** .rm filial >qoc( yiA- a nui»mvl> >ti>l0£a/> •■'■:) When the quantity brought to market is juft fufficient to fupply the effeflual demand and no more, the market price naturally comes to be either exa^ly, or as nearly as can be judged of, the irjne with the natural price. The whole quantity upon hand can be difpofed of for this price, and cannot be difpofed of for more. The competition of the different dealers obliges them all to accept of this price, but does not oblige them^ to accept of lefs. "■ft -T;ojiii )i tni;v> fT! -'• The quantity of every commodity brought to ijiarket naturaily fuits itfelf to the efFedual demand. It is the intereft of all thoft; who employ tlieir land, labour, or ftock, in bringing any com- modity to market,, that the qiiantity never (hoivld exceed tJjiei effecr tual demand; and it is the intereft of all other people that it; never ihould fall Ihort of it. If at any time it exceeds the effe6lual demandj fome of the component parts of its price muft be paid below their natural rate. If it is rent, the intereft of the landlords will immediately prompt them to withdraw a. part of their land; and if it is wages or profit, the intereft of the labourers in the one. cafe,, and ©f their employers in the other, will prompt them to withdraw a part: f'll I THE NATURE AND CAUSES OF BOOK a part of their labour or ftock frcan ^h'la employment. The quantity brought to marki?t will foon be no more than /^.^^ent to fupply the dfieftual demand. All the diiecenii: pwt^. of ifm price will rife to their natural rate, and the whole price to its natural price. • ... If, on the contrary, the quantity brought to market ihoid4 at any time fall (hort of the effe6tual demand, fome of the com- ponent paits of its price mud rife above their natural rate. If it is rent, the intereft of all other landlords will naturally prompt them to prepare more land for the raifmg of thi« commodity i if it is wages or profit, the intereft of all other labourers and dealers will foon prompt them to employ more labour and ftock in pre- paring and bringing it to market. The quantity brought thither will foon be fufficient to fupply the effedual demand. All the different parts of its price will foon fink to their natural rate, and the whole price to its natural price. -, ■■■'■^ The natural price, therefore, is, as it were, the central price, to which the prices of all commodities are continually gravitating. Different accidents may fometinies keep them fufpended a good deal above it, and fomctimes force them down even fomcwhat below it. But whatever may be the obftacles which hinder them from fettling in this center of repofe and continuance, they are conftantly tending towards it. The whole quantity of induftry annually employed in order to bring any commodity to market, naturally fuits itfelf la this manner to the effeftual demand. It naturally aims at bringing always that precife quantity thitlwr which may be fufficient to fupply, and no more than fupply, that demand. Jut fHfi WEALtrt OF NATIONS. 7i I - BtfT in Ibihe employments the fame quantity of induftry will ^^j^^* ih diffeiWrt years produce very different quantities of commbditiesj while in dthtrs it will produce always the fame, or very ne?^rly die lteii» The ferhfe number of labourers in hufbandry wiii, in differttit years, produce very different quantities of corn, wine, oil, hops, &c. But the fame number of fpinners and weavers will every year product the fame or very nearly the fame quantity of linen and woollen cloth. It is only the average procii re of the onfc IJjccies of induftry which can be fuited in any -'f^ei/t to the effe£lual demand ; and as its aftual produce is freque. aJi greater and frequently much lefs than its average produce, the quantity of the commodities brought to market will fometimes exceed a good deal, and fometimes fall fliort a good deal of the effeftual demand. Even though that demand therefore (hould continue always the fame, their market price will be liable to great ftu6tuations, will fometimes fall a good deal b6low, and fometimes rife a good deal above their natural price. In the other fpeeies of induftry, the produce of equal quantities of labour being always the fame or very nearly the fame, it can be more exaaiy fuited to the effeftual demand. While that demand con- tinues the fame, therefore, 'Lhe market price of the commodities is likely to do fo too, and to be either altogether, or as nearly as can be judged of, the i ■ le with the natural price. That the price of linen and woollen cloth is liable neither to fuch frequent nor to fuch great variations as the price of corn, every man's ex- perience will inforn. him. The price of the one fpeeies of com- modities varies only with the variations in the demand : That of the other varies, not only with the variations in the demand,. but with the much greater and more frequent variations in the quantity of what is b?9ug|it to market in order to fupply tliat demand, . - -^ ^ TWE ^a, %: THE NATURE AND CAUSES OF BOOK The occaiional and temporary fludluations in the market price of any commodity fall chiefly upon thofe parts of its price which refolve themfelves into wages and profit. That part which refolves itfelf into rent is lefs aifeftcd by them. A rent certain in money is not in the leaft aflfeded by diem either in its rate or in its value. A rent which confifts either in a certain proportion or in a certain quantity of the rude produce, is no doubt affeifled in its yearly value by all the occafional and temporary fluctuations in the market price of that rude produce : but it is feldom affedled by them in its yearly rate. In fettling the terms of the leafe, the landlord and farmer endeavour, according to their befl: judge- ment, to adjufl that rate, not to the temporary and occafional, but to the average and ordinary price of the produce. Such fluctuations affe<5t both the value and the rate either of wages or of profit, according as the market happens to be either over-ftocked or under-ftocked with commodities or with labour ; with work done, or with work to be done. A publick mourning raifes the price of black cloth (with which the market 'itE «'>Jt*-^f<^J*v» |^yaft«sixt> i|viv=<*lr ^ 'fitfT tliotigh th^ ' itiarket prkc^'ot't^i^' pfki^^Iciilair coWmoSty is in this ihantier cohtfritially gr^vltftfihg, "if one niay fay fo, towards the natural price, yet fometirties particular accidents, (bme- times natural caufes, and fbmetimes particular regulations of police; may, in many corfiinodities, keep up the market price, for a long time together, a good dedl above the' natural price. \ /j When by an incrcafe in the effeftual demand, the market price of fome particuhr commodity happens to rife a good deal above the natural price, thofe who employ their ftocks in fupplying that market are generally careful to conceal this change. If it was commonly known, their great profit would tempt fo many new rivals to employ their ftocks in the fame way that, the efFe6lual demand being fully fupplied, the market price would foon be re- duced to the natural price, and perhaps for fome time even below it. If the market is at a great diftance from the refiderce of thofe who fupply it, they may fometimes be able to keep the fecret for feveral years together, and may fo long enjoy their extra- ordinary profits without any new rivals. Secrets of this kind however, it muft be acknowledged, can feldom be long kept; and the extraordinary profit car* laft very little longer than they are kept. n CHAP. VII. Secrets in manufad:ures are capable of being longer kept than fccrets in trade. A dyer who has found the means of pro- ducing a particular colour witli materials which coft onlv half the price of thofe commonly made ufe of, may, with good manage- ment, enjoy the advantage of his difcovery as long as he lives, and even leave it as a legacy to his p')fterity. His extraordinaiy Vol. 1. ' L gauis f^ 74- THE NATURE AND CAUSES OF 9 O O K gains afife £i:om tke high price which is paid for his private labour. hiff^«t,j They properly confift in the high wages of that labour. But a» they arc repeated upon every part of his ftock, and as their whole amount bears* upon that account, a regular prc^ortion to it, they are convmonly conlidered as extraordinary profits of ftock. SvCH enhancements of the market price are evidently th« cfie€l» of particular accidents* of which, however, the operatiou may fometimes laft for many yeais together. Some natural produftions require fuch a fmgularity of foil and fituation, that all the land n\ a great country, which is fit for pro- ducing them, may not be fufficient to fupply the effeftual demand. The whole quantity brought to nuirket, therefore, may be dif- pofed of to thofe who are willing to give more than what is fufficient to pay the rent of the land which produced them, together with tlie wages of the labour, and the profits of the ftock which weie em- ployed in preparing and bringing them to market,, according to their natural rate$. Such commodities may continue to be fold at this high price for whole centuries together, and that part of it which refolves itfelf into the rent of land is in this cafe the part which is generally paid above its natural rate. The rent of the land which affords fuch fingular p.nd efleemed produ£lions, like the rent of fome vineyards in France of a peculiarly happy foil and frtuation, bear« no regular proportion to the rent of other equ^iUy fertile and equally well cultivated land in its neighbourhood. The wages of the labour and the profits of the ftock employed in bringing fuch commodities to market, on the contrary, aie felclom ou. of their natural proportion to thole of the other employments of labour and ftock \i\ their neighbourhood. ,. ., Such enhancements of the market price are evidently the effeft of natural caufes which may hinder the effe(5lual demand from THE WEALTH OF NATIONS. f$ from ever bsing fully fupplieti, and which may continue, therefore, C HAP. to operate fiwrever. \'...,h>i-j.'i : *" ■ * ' •• A MONOPOLY granted either to an individual or to a trading company has the fame effeft as a fccrct in trade or manufaftures. Tl>e monopoHfts, by keeping the market conftantly underftocked, uy never f«rily fupplying the efFe6hial demand, fell their commo- dities much above the natural pi-ice, and raife thdr emoluments, whether they confift in wages or profit, gtreatly abovt their nata- lal rate. The price of monopoly is upon every occafion the higheft which can be got. The natural price, or the price of free cortipetitioin, on" the contrary, is- the loweft which can be taken, not upon every occafion, indeed, but for any confiderable time together. The one is upon every occafion the higheft wliich can be fqueezed out of the buyers, or which, it is fuppofed, they will confent to give : The other is the loweft which the fellers can commonly afford to take, and at the fame time continue their bufineis. The cxclufive privileges of corporations, ftatutes of apprcntkc- fhip, and all thofc laws which reftrain, in particular emjdoyments, the competition to a fmaller number than might otherwife go into them, h.avc the fame tendency, though in a lefs degree. They are a fort of enlarged monopolies, and may frequently, for ages to- gether and in whole clafles of employments, keep up the market price of particular commodities above the natural price, and main- tain both the wages of the labour and the profits of the ftock employed about them (omsw^ ab9v$ their natural rate. Such enhancements of the market price may laft as long as^ the regulations of police which give occafion to them. L 2 The THE NATURE AND CAUSES OF The market price of any particular commodity, though it may continue long above, can feldom continue long below its natural price. Whatever part of it was paid below the natural rate, the perfons whofe intereft it affefted would immediately feel the lofs, and would immediately withdraw either fo much land, or fo much labour, or fo much ftock; from being employed about it, that the quantity brought to market would foon be no more than fufficient to fupply the efFe6lual demand. Its market price, therefore, would' foon rife to the natural price. This at leaft would be the cafe where there was peife6l liberty. The fame ftatutes of apprentlcefhip and other coi-poration laws indeed, which^ when a manufacture is in profperity, enable the workman to raife his vjrages a good deal above their natural rate, fometimes oblige him, when it decays, to let them down a good deal below it. As h\ the one cafe they exclude many people from his employment, fo in the other they exclude him from many employments. The efte6l of fuch regulations, however, is not near fo durable in fmking the workman's wages below, as in railing tliem above their natural rate. Their operation in the one way may endure for many centuries, but in the other it can hfl no longer than the lives of fome of the workmen who were bred to the bufinefs in the time of its profperity. Wlien they are gone, the number of thofe who are afterwards educated to the trade will natu- rally fuit itfelf to the effeftual demand. The police muft be as violent as that of Indoftan or antient Egypt (where eveiy man was bound by a principle of religion to follow the occupation of his father, and was fuppofed to commit the moft horrid facrilege if he changed it for another) which can in any particular employment, and for feveral generations together, fink either the wages of labour pr the profits of ftock below tlieir natural rate,. ' .' , ' ' ■41 ■ .SI This THE WEALTH OF NATIONS. 77 This is all that I think neceflary to be obferved at prefent con- C H^A P. ccrning the deviations^ whether occafional or permanent, of the market price of commodities from the natural price. , The natural price itfelf varies with the natural rate of each of its component parts, of wages, profit, and rent i and in every fociety this rate varies according to their circumftances, accord- ing to their riches or poverty, their advancing, ftationary, or de- clining condition. I fliall, in the four following chapters, endea- vour to explain, as fully and diftin-^ly as I can, the caufes of thofe different variations ► First, I Ihall endeavour to explain what are the circumftances which naturally determine the rate of wages, and in what manner thofe circumftances arc affeftedby the riches or poverty, by the advancing, ftationary, or declining ftate of the fociety. Secondly, I fliall endeavour to ftiow what are the circum* ftanccs which naturally determine the rate of profit, and in what manner too thofe circumftances are affeded by the like variations in the ftate of the fociety.. m, .r^-jiivitt* ms. n ,.: ;;,. . • . Though pecuniary wages and profit are very different In the different employments of labour and ftock ; yet a certain propor- tion feems commonly to take place between both the pecuniary v«ages in all the different employments of labour, and the pecu- niary profits in ail the different employments of ftock. This proportion, it will appear hereafter, depends partly upon the nature of the different employments, and partly upon the different laws and policy of the fociety in which they are carried on. But. though in many refpefts dependant upon the laws and jolicy» this proportion fcems to be little affefted by the riches ou 73 THE NATURE AND CAUSES QF or poverty of that fociety; by its advancing, ilaianary, or de- clining condition ; but to remain the fame oi very nearly the fame in all thofe different ftates. I fliall, in the third place, en- deavour to explain all the diff'v.*ut circumftanccs which regulate this proportion. In the fourth and laft place I fliall endeavour to fhow what are the circumftanccs which regulate the rent of land, and which either rai(e or lower the real price of all the different fubftanccs which it produces. ' • I :ii CHAP. VIII. f- M'^ Of the Wages of Labour, H E produce of labour conftitutes the natural reconipence or wages of labour. Ik that original ftate of things, which precedes both the appro- priation of land and the accumulation of ftock, the whole pro- duce of labour belongs to the labourer. He has neither landlord nor mafter to Ihare with him. %u Had this ftate continued, the wages of labour would have aug- mented with all thofe improvements in its produ£live powers, to which the divilion of labour gives occafion. All things would gradually have become cheaper. They would have been produced by a fmaller quantity of labour ; and as the commodities produced by equal quantities of labour would naturally in this ftate of 7 things IP ry, or dc- :>early the place, en- h regulate ^ what are lich cither CCS which iipence or ;lli^ he appro- hole pro- ' landlord 1 ^ave aug- owers, to gs would produced produced i ftate of 1 4 things ] TiiB WEALtH OF NATIONS. 5 e^cchati^ for one another, they would ha chafed likewife with the produce of a fmaller quantity. 79 things be e^cchatiged for one another, they would have been pur- C ha p. Bui" though all things v^ould have become cheaper in reality, in appearance many things might have become dearer than be- fore, or have been exchanged for a greater quantity of other goods. Let us fuppofe, for examjile, that in the greater part of employ- ments the produf^lve powers of labour had been improved to . n • fold, or that s labour could produce ten times the ^^ufiiuiiy of work wl' '^ne originally; but that in a parti>..iiar em- ployment the) improved only to double, or that a day's labour could pi aucc unly twice the quantity of work which it had done before. In exchanging the produce of a day's labour in the greater pait of employments, for that of a day's labour in this par- ticular one, ten times the original quantity of work in tliem would purchafe only twice the original quantity in it. Any particular qirntity in it, therefore, a pound weight, for example, would appear to be five times dearer than before. In reality, however, it would be twice as cheap. Though it required five times tlie quantity of other goods to pui'chafe it, it would require only half the quantity of labour either to purchafe or to produce it. The acquifition, therefore, would be twice as eafy as before. • But this original ftate of things, in which the labourer enjoyed the whole produce of his own labour, could not lafl: beyond" tiie firft introducftion of the appropriation of land and the accumulation of ftuck. It was at an end, thei-efore, long before the moft con- fiderablc improvements were made in the produ<5tive powers of labour, and it would be to no purpofe to trace further what miglit have been its effeils upon the recompenec or wages of labour. As foon as land becomes private property, the landlord demands- a fhare of whatever produce the labourer can either raife, or coU A«. IMAGE EVALUATION TEST TARGET (MT-3) h fe 4 ^ 1.0 1.1 Ii&|2j8 |25 m 122 i2.2 12.0 IE 1 L25||U|j^ < 6" » Photographic Sciences CQrporallon ^^ ^\ ^r\\ 23 WIST MAIN STRIIT WIBSTIR,N.Y. 145M (716)t7a-4S03 'a So THE NATURE AND CAUSES OF B O^O K lefl from it. His rent makes the firft dedu£lion from the produce of the labour wluch is employed upon land. .., y.,!,. It feldom happens that the perfon who tills the giround has wherewithal to' maintain himfelf till he reaps the harvcft. His maintenance is generally advanced to him from the ftock of a mafter, the farmer who employs him, and who would have no interell to employ him, unlefs he was to fhare in the produce of his labour, or imlefs his ftock was to be replaced to him ynih a profit. This profit makes a fecond dedu£tion from the produce of the labour which is employed upon land. The produce of almoft all other labour is liable to the like dedu6lion of profit. In all arts and manufaflures the greater part of the workmen ftand in need of a mafter to advance them the materials of their work, and their wages and maintenance till it be compleated. He (hares in the produce of their labour, or in the value which it adds to the materials upon which it is beftowedj and in this (hare confifts his profit. It fometimes happens, indeed, that a (ingle independant work- ir.an has ftock fufficient both to purchafe the materials of his work, and to maintain himfelf till it be compleated. He is both mafter and workman, and enjoys the whole produce of his own labour, or the whole value which it adds to tlie materials upon which it is beftowed. It includes what are ufually two diftinft revenues, belonging to two diftin£t perfons, the profits of ftock, and the wages of labour. Such cafes, however, are not very frequent, and in every part of Europe, twenty workmen ferve under a ibafter for one that is independant; and the wages of labdur are every where undefftood to THE WEALTH OF NATIONS. i « to'i)C, what they ufually are, when the labourer is one peHan, and ^5?in^' the owner of t^e flock which employs him another. -f'- /- What are the common wages of labour depends every where upon the contract ufually made between thole two parties, whole interefts are by no means the fame. The workmen delire to get as mud), the mafters to give as little as pofiiUe. T-fae former are difpofed to combine in order to raife, the latter in order to lower the w^ges of la|x»ir. It is not, however, difficult to forefee which of the two parties muft, upon all ordinary occalions, have the advantage in the dif-> pute, and force the other into a compliance with their terms. •The mafters, being fewer in number, cannot only combine more ■«aAly, but the law authori&s their combinations, or at leaftdoes not prohibit them, while it prohibits th(^e of the workmen. We have no ads of parliament againft combuiing to lower the price of .work; but many againft combining to raile it. In all fuch dif- putes the mafters can hold out much longer. A landlord, a far- mer, a mafter manufacturer, or merchant, though they did not employ a fmgle workman, could generally live a year or two upon the ftocks which they have already acquired. Many workmen could not fubfift a week, few could fubfift a month, and Icarce any a year without employment. In the long-run the workman may be as necefl^ry to his mafter as his mafter is to lumj but the neceftity is not fo immediate. We rarely hear, it has been faid, of the combinations of mafters; though frequently of thofe of workmen. But whoever imagines, .upon this account, that mafters rarely combine, is as ignorant of the world as of the fubjeil. Mafters are always and every where in a fort o| tacit, but conftant and uniform combination, iwt to Vol. I, ^ M raife ti THE NATURE AND CAUSES OF BOOK raife the wages of labour above their aftual rate. To violate this '■ combination is every where a moft unpopular a£tion, and a fort of reproach to a mafter among his neighbours and equals. We feldom, indeed, hear of this combination, becaufe it is the ufual, and one may fay, the natural ftate of thbgs which nobody ever hears of. Mafters too fometimes enter into particular combina- tions to fink the wages of labour even below thi» rate. Thefc are always 'conducted with the utmoft filence and fecrecy, till the moment of execution, and when the workmen, yield, as they fome- times do, without refiftance, though feverely felt by them, they are never heard of by other people. Such combinations, however, are frequentiy refifted by a contrary defenfive combination of the workmen; who fometimes too, wdthout any,, provocation of this kind, Cjombi^ie q( their own accord to raUe .thd(:e, «f their la- bour. Their ufual pretences are, fometimes, the.high price of pror vifionsj fometimes the great profit which their mafters make by their work. But whether their combinations be offisnfive or defenfiw they are always abundantly heav4, of. In order to biang the i>oint toafpeedy decifion, they have always, recourfe to the loudeft cla^- 'mour, and fometimes to themofi ihocking violence and outrage. They are defperate, and a6b with the folly and extravagance of def- perate men, whomuft ftarve or frighten their mailers into an ini- mediate compliance with their demands, 'l lalllers upon thefe occafions are juft as ckunorous upon the o.uyr fide, and never ceafe to call aloud for the affiftance of the civitmagiftrate, and the rigorous execution of thofe laws which have been enadled with fo much feverity againft the combinations of fervants, labourers, and journeymen. The workmen, accordingly, very feidom derive any advantage from the violence of thofe tumultuous combinations, which, partly from the interpofition of the civil ma^ftrate, paitly from the fuperior fteadinefs of the mafters, partiy from the ne- cefiity which the greater part of the workmen are under of fub- mitting :i,j THE WEALTH OF NATiaN^. mitting for the fake of prefent fubfiftcnce, generally eiiditi no- thing, but the punifliment or ruin of the ringleaders. •'' • ' «^ tf/ud L-m^ . ■ • ■''-- ■'--'■-'- - "■ ■'■•■'■4' But 'though in difptitfcs With th^ worlciS^n, ffiift(er»' irnufl: geilera%^liave the advantage, there U however a certairt tate below which it ftefms impoflible to reduce, for any confiderable time, the ordinary wages even of the loweft fpecies of labour. «i CttAP. VIII. ;4' A MA^ muft'i^ways'llve 1)y his work, and his wages mufr at UaA be fiifficlent to niialntain him. Tliey muft even upon moil occafiOns be fomewhat more; otherwile it would be Impolflible to bring up a fkfnily; and the race of fuch workmen ^ould not laft beyond the firfl'gen(iratioh.' Mr. Cantllton (eems, upon this ac- count, to fupptffe that the lo\Veft fpecies of coimmon labtouriers mull every where earn at lead double their own maintenance, in order t^at one with another they may be enabled to bring up two children { die labour <^ tiie wife, on account of her necel&iy at- tendance on the children, being fuppofed no more than fufficient to provide for heHelf. But one-half the children born, it is com- puted, die before the age of manhood. The pooreft labourers, therefore, according to this account, muft, one with another, attempt to rear at leaft four children, in order that two may have an equal chance of living to that age. But the neceflary maintenance of four children, it is fuppofed, may be nearly equal to that of one man. The labour of an able-bodied flave, the iame author adds, is computed to be worth double his maintenance; and that of the meaiieft labourer, he thinks, cannot be wortli lefs than that of an able-bodied flave. Thus far at leaft feems certain, that, in order to bring up a family, the labour of the hufband and wife together muft, even in the loweft fpecies of common labour, be able to earn fomething more than what is pnaciiely neceflary for their own maintenancci but in what proportion, whether in that above Ma mentioned. H THE NATURE AND CAUSES OF BOOK mentioned, or in anyother» I ihall not take upon me to deter- " mine. v>i^-i? jpj/ i^uuy There ^re certain circumftances, however, which fomctiraea give the labourers an advantage, and enable them, to raife their wages confiderably above this rate j evidently , the loweft which i$ confillent with common humanity. When in any country ^e demand forthofe who live by wages ;^ labourers, journeymen, iervants of every kind, is continually in- treafmgi when every year furniflies employment for a greater number than had been employed the year before, the woikmen have no occafion to combine in order to raife their wages. The fcarcity of bands occafions a competition aniong mailers, who bid s^nft one another in order to get them, and thus voluntaiily break. through the natural, combination- of mafters not to raiie wages. p'l ofji ic Tnr demand for thofe who live by wages, it is evident, cannot increafe but in proportion to the increafe of the funds which are deftined for the payment of wages. Thefe funds are of two kinds j. firfti the I'evcnue which is over and above what is neceflary for the maintenance^ and, fecondly, the flock which is over and above what is neceflary for the employment of their matters. .lit When the landlord; annuitant, or monied man, has a greater revenue than what he judges fufRcient to maintain his own family, he employs either the whole or a part of the furpliis in maintaining one or more menial fervant3. Increafe this furplus, and he will naturally increafe the number of thofe fervants. When an independant workman, tath as a weaver or flboe- vifdker, has got more fh>ck than what is fufficient to pUrchafe 7 . . . . the Ilm fffita^ of Jii« o^Nfn work,, anf to inaintatp. ^ipj^lff^^ h« ^^j^,'' $j|n jdUp9ftt r«f »<:» ;** '^^^M'^^y en^ojrs ^nc or. njwwpe jre, iiataniifljr increafb with tte lAcTdi^isi ftatitthll Wdfhh,''^iMi''culnBt i>dnbly increafeP wil!^ i< ;.'lT is not^the a^aal gnatncfr of juitianal: wealth;, hul »tf ^pi|r^ timial incisaie, which ocoiiwee i^;n(e ia ihe w^ge^ cHf i»tH>u(. I» lis^'Dotk «coQntingly,t Ja .(he^iacheftutpunttieftt ^ut ixk the mfi^ tltdinng Qit Ul thoiq.wthwhiuare.. growiagitjmlk lh»i ibAsft*; J^i^ dthe wages of labour , are higheft. £iigknd-» cerMioly» in the piiiQiiit times* a much richer coimtny than any part of North V^ai9fi<9l< The wages of labour, however, are much higher, Ml^I^Mth Aifnericia .than in .any part of England. In (the p!r(^^^l»f Njew lYock, common lafaonrers , earn three rihiUing* ^ aiif) i^i|NnH)e>. ^l^ffCQcy, ^usd in^to Ax ihillintgs and itxpence fterUng;,J^^carpent(urs ;4nad btickl%yc well re<^arded that a numerous family . children is the greateflof all encouragements to marriage. We cannot,, therefore, wondbr that the people uiNorth- America fhoidd generally marry very young. Notwithfianding the gieat increafe i occafioned by fuch early marriages, there is a continuah complaint i of the fcarcity of hands in North America. The demand for /^bourers, the funds deftined for maintaining them, increafe,. it feems, ftill fafhr than they can find labourers to empldy-. '*'• TirouoH ..f^ THE WEALTH OF NATIONS. \ni Though the wealth of a country fliould be very great, yet ^{^jfi|** if it has been long ftationary, we muft not expert to find the wages of labour very high in it. The funds deftined for the pay- ment of wages, the revenue and ftock of its inhabitants, may be of the g|%atefl extent, but if they have continued for feveral cen- turies of the fame, or very nearly of the fame extent, the number of labourers employed every year could eafily fupply, and even- more than fupply> ^e number wanted the following year. There could, ffildom beany fcarcity of hands, nor could the mafters be obligedl to bid againfk one another in order to- get thenr. The hands, on- the contrary, would, in this cafe, naturally multiply beyond their employment. There would be a conftant fcarcity of employment^ and the labourers would be obliged to bid againfl. one another in: order to get it. If in fuch a country the wages of labour had ever been more than fufficient to maintain the labourer and to enable him^ to bring up a family, the competition of the labourers and the intereft of the mafters would foon reduce them to this loweft rate which is confiftent with common humanly. China, has been long; one of the richefl, that is, one of the moft fertile, beft cultivated,, moft induftrious and mofVpopulous countries in the world. It feems,. however, to have. been long ftationary. Marco Polo, who vifited it more than five hundred years ago, defcribes its cultivation, induftry and populoufnefs almoft in the fame terms in which they are de- finibed by travellers in the prefent times. It had perhaps even long; before his time acquired that full complement, of liches which the nature of its laws and inftitutions permits it ta acquire; The^ accounts of all travellers, inconfiftent in many, other refpeds, agree : in the low wag?s of labour, and in the difficiJty which a labourer finds in bringing up a family in China. If by diggingthe ground ai whole day he can get what will purchafe a fmall quantity of rice in: the evening, he is contented. The condition of artificers is, if BofSble, ftill worfe. Inftead of waiting indolently in their work- houfes,. 88 THE NATURE AND CAUSES OF BOOK hpules, for the calb df their euftomera, as in Europe, they are continually running about the ftrects with the tods ef thnr refpedtive trades* <^ring their fervice, and as it were ^begging employment. The poverty of the lower ranks of people in China far fui-pafles that of the moft beggarly nations in Europe, th the neighbourhood of Canton many hundred, it is comm^MiIy Aid, many thoufand families have no habitation on the land, 4)ut live conftantly in little fifhing boats upon the rivers and canals. The fubfiftence which they find there is fo fcanty that they are eager to fiHi up the naftieft garbage thrown overboard from any European ftiip. Any carrion, the carcafe of a dead dog or cat, for example, though half putrid and (linking, is as welcome to them as the moft wholelbme food to the people of other countries. Marriage is encouraged in China, not by the profitableness of children, but by the liberty of deflroying them. In all great towns feveral are every night expofed in the ftreet or drowned like puppies in the water. The performance of this horrid office is even faid to be the avowed bufinefs by which fbme people earn their fubfiftence. China, however, though it may perhaps ftand ftill, does not feem to go backwards. Its towns are nowhere deferted by their inhabitants. The lands which had once been cultivated are no- where negleded. The fame or very nearly the fame annual labour muft therefore continue to be performed, and the funds deftined for maintaining it muft not, confequently, be fenfibly diminifhed. The loweft clafs of labourers, therefore, notwithftanding their fcanty fubfiftence, muft fome way or another make fhift to continue their race fo far as to keep up their ufual numbers. But it Would be otherwife in a country where the funds deftined for the maintenance of labour were fenfibly decaying. Every year the demand for fervants and labourers would, in all the different clafles THE WEALTH OF NATIONS. •! clafTes of employments, be lefs than it had bom the yearbtfore. ^^^f[^' Many who had been bred in the fuperior clafles, not being able to find employment in their own bufinefs, would be glad to feek it in the loweft. The loweft daft being not only overftofked with its own workmen, but with the overflowings of all the other daiTes, the competition for employment would be fo great in it, as to reduce the wages of labour to the moft miferable and fcanty fubfiftence of the labourer. Many would not be able to find employment even upon thefe hard terms, but would either ftarve, or be driven to feek a fubfiftence either by begging, or by the perpetration perhaps of the greateft enormities. Want, famine, and mortality would immediately prevail in that clafs, and from thence extend themfelves to all the fuperior clafles, till the number of inhabitants in the country was reduced to what could eafily be maintained by the . revenue and ftock which remained in it, and which had efcaped either the tyranny or calamity which had deftroyed the reft. This perhaps is nearly the prefent ftate of Bengal, and of fome other of the Englifh fettlements in the Eaft Indies. In a fertile country which had before been much depopulated, where fubfiftence, con- fcquently, fhould not be very difficult, and where, notwithftanding, three or four hundred thoufand people die of hunger in one year, we may be afiured that ti\e funds deftined for the maintenance of the labouring poor are faft decaying. The difference, between the genius of the Britifli conftitution which prote£ts and governs North America, and that of the mercantile company which oppreflcs and domineers in the £c*.ft Indies, cannot perhaps be better illuf- tiated than by the difierent ftate of thofe countries. The liberal reward of labour, therefore, as it is the necefliary effcft, fo it is the natural fymptom of increafing national wealth. The fcanty mamtenance of the labouring poor, on the other hand, is the natural fymptom that things are at a ftand, and their ftar- ving condition that they arc going faft backwards. Vol. I, N In 9<5 The nature and causes of I. B o.o K In Great Britain thb wages of labour fcem. in ihe prelenk tiiMi^ to be e>^ently more than what is preeifely neoeilarjr to enable the labourer to bring up a family. In order to fatisfy ourfelves upon this point it will not be neceflary to enter into sihy ceHious or doubtful calculation of what may be the loweft fum upoi. vhich it is poflible to do this. There are many plain fymptoms that the wages of labour are nowhere in this country regulated by this loweft rate which is confident with common humanity. First, in almoft every pait of Great Britain there is a dif- tin£tion, even in the loweft ipecies of labour, between fummer and winter wages. Summer wages are always hjgheft. But on account of the extraordinary expence of fewel, the maintenance of a family is moft expenfive in winter. Wages, therefore, being higheft when this expence is lowieft, it feems evident that they are not regulated by what is necefliuy for this expencci but I^y the quan- tity and fuppofed value of the work. A labourer, i^ may be faid indeed, ought to fave part of his fiimmer wag^ ^ order to defray his winter expence ; and that through the w)^ole ye^ they do not exceed what is neceflary to maintain his family thi^ough the whole year. A flave, however, or one abfolutely dependent on lis for immediate fubfiftence, would not be treated in this manner. His daily fubfiftence would be proportioned to his daily necefllties. Secondly, the wages of labour do not in Great Britain fluc- tuate with the price of provifions. Thefe vary everywhere from year to year, frequently from month to month. But in many places the monisy price of 'labour remains uniformly the fame fometimes for half a century together. If in thefe plaices, there- fore, the labouring poor can maintain thsir families in dear years, they muft be at their eafe in times of moderate plenty, and ..in aflluence in thofe of extraordinary cheapnefs. The high price of provifions during thefe ten yeais paft has not in many parts of the . kingdom THE WEALTH OP NATIONS. 9' kingdom been accompenied with any Tenfible rife in the money ^^.A ^* price of labour. It has, indeed, in ibme > owing probably more to the increafe of the demand for labour than to that of the price of pronfionti. THiRDLVr as the price of provifions varies more from year to year than the wages of labour, fo, on the other hand, the wages of labour vary more from place to place than the price of pro- vifions. Tlic prices of bread and butcher's meat are generally the fame or very nearly the (ame through the greater part of the united kingdom. Thefe and moft other things which are fold by retail, the way in which the labouring poor buy all things, are generally fully as cheap or cheaper in great towns than in the remoter parts of the country, for reafohs which I (hall have oc- cafion to explain hereafter. But the wages of labour in a great town and its neighbourhood are frequently a fourth or a fifth part, twenty or five and twenty per cent higher than at i few miles diftance. Eighteen pence a day may be reckoned the common price of labour in London and its neighbourhood. At a few miles diAance it falls to fourteen and fifteen pence. Ten-pence may be reckoned its price in Edinburgh and its ndghbourhood. At a few miles diiVance it falls to eight pence, the ufual price of com- mon labour through the greater part of tKe low country of Scot- land, where it varies a good deal lefs than in England. Such a difference of prices, which it feems is not always .fuflicient to tranfport a man from one pari(h to another, would neceffarily oc- cafion fo great a iranfportation of the moil bulky commodities, not only fiom one pari(h to another, but from one end of the kingdom, almoft from one end of the world to the other, as would foon reduce them more nearly to a level. After all that has been faid of the levity and inconftancy of human nature, it appears evi- dently from experience that a man is of all forts of luggage the moft N 2 difficult M 9a THE. NiA/TJBJREi AND CAUSES OF fi o^O K diffictilt to be tranfpdrtKl. U the; labouring poori rtherelQrQ« can maintain -their families intbofc parts of the kingdom whef« the price of labour is loweft, they muft be in affluence where it is highelL FoitrthlV, the variatibns in the price of labour not only, do not correfpond either in place or time vnth thofc in the price of provifions; but thejr are frequently quite c^pofite^ '».oa*;i Grain, the food of the comihoh peopte, Ti dearer in Scotland* ■■.Ml ■.■■■■/■ i ■ ' ■" " ' -J ■-.■■- t ( than in England, whence Scotland receives armbfl <^vei'y year very large fupplies. But Engliih corn muft be fold dearer in Scotland, the country to which it is brought, than in England, the country from which it cofx^s; jqid in propprt)|on tp its ,quaUt^ It cannot be fold; dearer in. Scotland) , t^ th? Scotch cop, tliat^ comes to the fame market in competition with it.. The quality of grain depends chiefly upon the quantity of flour or meal which it yielc^s at tHemill,. andt in this refpe^ Eng^(hg}'(^n if fo much fu^ierior to the Scotch that,, though often dearer in appearance,, or in,p^rppo|tion to. the mea-r fure of its bulk, it is generally cheaper in reality or. in proportion: to its quality, or even, to the meafure of its weight.. The pricet of labour^ on the contrary, is dearer ia England than in. Scotland. . If the labouring, poor, therefore, can maintain t;heir families in^ the one part of the united kingdom, they muil. be in affluence in the other. Oatmeal indeed fupplies the. common people icii Scotland with the greateft. and. the beft.part of their food> which: is in general much inferior to that of their neighbours of the fame rank in England, This difference,, however, in the mode, of their fubfiftence is not the caufe, but the effei£t of the. difference in their wages ; though, by a ftrange mifapprehenficn, I have fre-. quently heard it reprefented as the caufe. It is not.becaufe one pian keeps a coach while his neighbour walks arfoot, that the . . 4 * «»°« THE WEALTH OF NATIONS. 9^ oWir i#'i4ch-»id^'th* other poor/ i tut bdeaufer the x>iie 19 rich he ^J^j^j^* keeps ft ^oach, and becaafe th« other is poor he walla a-^foot. DvRiNG the courfe of the la(V century, taking one year wth another, grain was dearer in both parts of the united kingdom than during that of the prefent. This is a matter of fa6t which cannot now admit of any reafonable^ doubt ; and the proof of- it is, if poffible, ftill more decifnre with regard to Scotland than with regard to England. It' is in Scotland fupported by the evi- dence of the publick fiars, annual valuations made upon oath, according to the a£tual ftate of the markets, of all the different forts of grain in every different county of. Scotland. If fuch direft^ proof could require any collateral evidence to confirm it^ I would obferve that thi^ has likewife been the cafe in France, and probably in moft other parts of Europe; With regard to France there is the cleared; proof. But though it is certain that in both parts of the united kingdom grain was fomewhat dearer in the laft century than in the prefent, it is equally certain that labour wasr much cheapen If the labouring' poor, therefore, could bring up their families theni they muft be much more at their eafe now. In the laft century, the moft ufoal day*wages of common labou;r through the greater part- of Scotland were fixpence infummer and five-pence in winter. Three (hillings a week, the fame pric& very nearlyi ftill 'continues to be paid in fome parts of the High* lands and weftern Iflands. Through the greater part of the low country the moft ufual wages of -common labour are now eight- pence a day j ten-pence, fometimes a (hilling about Edinburgh, in the counties- which border upon England, probably on account. of' that neighbourhood, and in • a few other places where there has lately been a confiderable rife in the demand for labour, about Glafgow, Carron, Ayr-(hire, &c. In England the improvements of. agriculture, manufactures andcommeixe began much earlier than. 94 THE NATURE AND CAUSES OF I B O O K than in Scotland. The demand for labour, and confequently its price, muftneceflariiy have increafed with thofe improvements. Inthelaft century, accordingly, as virell as in the prefent, the wages of labour were higher in England than in Scotland. They have ri&n too conftderably fince that time, thoitigh oh account of the greater variety of wages paid there in different places, it is more difficult to afcertain how much. In 1614, the pay of a foot (bldier was the fame as in the prefent times, eight pence a day. When it was firft eftabliihed it would naturally be regulated by the ufual wages of common labourers, the rank of people from which foot foldiers are commonly drawn. Lord Chief Juflice Hales, who wrote in the time of Charles II. computes the nectlTary expence of a labourer's family, confining of &x peribns* the father and mother, two children able to do fomething^ and two not able, at ten (hillings a week, or twenty-fix pounds a year. If they can- not earn this by their labour, they mufl make it up, he fuppofes« either by begging or flealing. He appears to have enquired very carefully into this fubje^l. In 1688, Mr. Gregory King, whofe fkill in political arithmetick is fo much extblled by Doctor Dave- nant, computed the ordinary income of labourers and out-fervants to be fifteen pounds a year to a family, which he fuppofed to- confifl, one with another, of three and a half perfons. His cal- culation, therefore, though different in appearance, correfponds very nearly at bottom with that of judge Hales. Both fuppofe the weekly expence of fuch families to be about twenty-pence a head. Both the pecuniary income and expence of fuch families have increafed confiderably fince that time through the greater part of the kingdom; in fome places more, and in (bme lefsj tliough perhaps fcarce any where Co much as fome exaggerated accounts of the prefent wages of labour haye lately reprafented them to the publick. The price of labour, it muft be obferved, cannot be afcertained very accurately anywhere, difl^ent prices • ^ ' being THE WEALTH OF NATIONS. 95 being often p at the fame pla(;ejui4 for the Tame fort of labour, ^^ A P. not only aco oing.to the different atnUties of the workmen, but according to the eafinefi or hardnefs of the mafters. Where wages are not r^ulated bylaw, aU tha^ we can pretend to deter- mine is what are the moil ufuali and experience feems to (how that law can never r^gv^lat^ tiffin prop^ly, though it has often pretended to do fo. , ^jcj sHi , y.. ..\ ;, The real recompence of la\>our, the real quantity of the ne* ceflaries and conveniencies of life wluch it can procure to th& labourer, has, during the courfe of the prefent century, increafed perhaps in a ftill greater proportion than its nooney price. Not only grain has become fomewhat cheaper, but many other things from which the induftrious poor derive an agreeable and whole- ibme variety' of food, have become a great deal cheaper. Potatoes^, for example, do not at prefent, through the greater part of the kingdom, cofl half the price which they ufed to do thirty or forty years ago. The fame thing may be faid of turnips, carrots,, cabbages; things which were formerly never railed but by the ^de, but which are now commonly ralfed by the plough. All ibrt of garden ftuif too has become cheaper. The greater part of the apples and even of the onions confumed in Great Britain, were in the laft century imported from Flanders. The great im- provements in the coarfer n^anufaflures of both linen and woollen ctoth fumilh the labourers with cheaper and better cloathingj and thole in the manufa£lures of the coarfer metals, with cheaper and better inftruments of trade, as well as with many agreeable and convenient pieces of houfehold furniture. Soap, fait, can- dles, leather, and fermented liquors have, indeed^ become a good deal dearer ; chiefly from the taxes which have been laid upon them. The quantity of thefe however which the labouring poor are under any neceffity of confuming, is fo veiy finall that 7 ^ ^^ ^ THE NATURE AND CAUSES OF ^^9^^ the mcnaie m thdu* pike does not compenfate the diminntioii in V--^^-^ tluit of To many other things. The common complaint that ^ury extends itfelf even to the loweft ranks of the people, and that idle labouring poor will not now be contented with the fame fpQ4» cloathjng and lodging which falisfied them in former times, may convmce us that it is not the money price of labour only, but its i:^ re^ompence which has augmented. ■ Is this improvement in the circumftances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the ibcw«y I The anfpirer feems at firft fight abundantly plain. Servants, labourers and workmen of different kinds, make up the far greater part of every great political fociety. But what improves the circumftances of the greater part can never be re- garded as an inconveniency to the whole. No fociety can furely 'be' llourifhing aild happy, of which the far greater part of tht tnembefs are poor and miferable. It is but equity, befides, that iiv fo cold a foil and fo f<^ere a climate, fiioM witfaen flow and gradual in the fecond, and altogether ftationary in thie laft. . .'icYierfi tear and wear of a flave, it has been faid, is at theexpence of l^s mafter; but that of a free fervant is at his own e^^pence. The tear and weai* of the latter, however, is, in reality, as much at the expence of his mafter as that of the former. The wages paid to journeymen and fervants of every kind muft be fuch as may enable them, one with another, to continue the race of journey- men and fervants, according as the increafmg, diminifhing, or 'ftationary demand of die fociety may happen to require. But though the tear and wear 6f a fi»e fervant foe ct(|ually at the expence of THE WEALTH OF NATIONS. 99 of his maft«r, it generally cofts him much left than. th«^t of a 9^.{!lP', flavc. The fund deftii>«d for replacing or repainng, if I may f?iy fo, the tear and wear of the flave, is commonly managed l^ f negligent mafter or carelefs overfeer. That deftined foi: performj ing the fame office with regard to the free man> is managed by th^ fi-ee man himfelf. The diforders which generally prevail iiji th^ Gcconomy of the rich, naturally introduce themfelves into the management of the former : The ftridl frugality and parflmonipy^ attention of the poor as naturally eftabliih themfelves in tha^ of the latter. Under fuch different management, the fame pur- pofe muft require very different degrees of expence to execute it. It appears, accordingly, from the experience of all ages and nsf tions, I believe, that the work done by freemen comes che;ip^ in the end than that performed by (laves. It is found to do ij> even at Bofton, New York, and Philadelphia, wh^re the wag^s of common labour are fo very high. . /u.b.«v.^ i-jrho The liberal reward of labour, therefore, as it is the ef&(9;,9f increafmg wealth, £b it is the cauie of increafing population. , 7^0 complain of it is to lament over the neceflary efte£l and c^fe^ipf the greateft publick prosperity. . . ; . a ., i It deferves to be remarked, perhaps, that it is in the progreffive ftatej while the iociety is advancing to the further acqw^on, rather than when it has acquired its full complement of riches, that the condition of tiie labouring poor, of the great body of the ptqo- pie, keam to be the happiell and the mofk comfortable. Jt ia \kmd in the ftationuy, and nufcrable in the decUnmg ftate. The^fip- greflive ibte is 4a feality the •chearful and the hearty Q^at^ ^to^ll the diffcorent prd^s of ^ ^m^' Th<: i^ationany is dnUj #e dcdiiniig* «i«teocholy. , ■^rrmmmnil O 2 .^t The xoo THE NATURE AND CAUSES OF B O o K The liberal reward of labour, as it encourages the propagation, fo it increafes the induflry of the common people. The wages of labour are the encouragement of ^nduftry, which, like every other human quality, improves in proportion to the encouragement it receives. A plentiful fubfiftence increafes the bodily ftrengthof the labourer, and the comfortable hope of bettering his condition, and of ending his days perhaps in eafe and plenty> animates him to exert that fli-ength to the utmoft. Where wages are high, ac- cordingly, we (hall always find the workmen more a£Vive, diligent, and expeditious, than where they are' low; in England, for ex.- ample, than in Scotland; in the neighbourhood of great townsy than in remote country places. Some workmen. Indeed, when they can earn in four days what will maintain them through the week, will be idle the other three. This, however, is by no means the cafe with the greater part. Workmen, on the contrary, when they are liberally paid by the piece, are very apt to over-work themfelves, and to ruin their health and conftitution in a few years. A carpenter in London, and in fome other places, is not fuppofed to laft in his utmoft vigour above eight years. Some- thing of the fame kind happens in many other trades, in which the workmen are paid by the piece; as they generally are in manu- factures, and even in country labour, wherever wages are higher than ordinary. Almoft every clafs of artificers is fubjeCl to (bme peculiar infirmity occafioned by exceffive application to their pe- culiar fpecies of work. Ramuzxini, an eminent Italian phyfician, has written a particular book concerning fuch difeafes. We do not reckon our fbldiers the moft induftrious fet of people among us. Yet when foldiers have been employed in (bme particular (brts of work, and liberally pdd by the piece, their officers have frequently been obliged to ftipulate mth the undertaker, that they (hould not be allowed to earn above a certsun fum every day, aecor^g to the rate at which they were paid. Till this (lipulation was made, 4 mutual THE WEALTH OF NATIONS, «PI mutual emulation and the defire of greater gain, frequently prompt- ed them to over- work themi'elves, and to hurt their health bj excefiive labour. Exceflive application during four days of the week, 18 frequently the real caufp of the idlenefs of ^e other three. To much and fo loudly complained of. Great labour, either of mind or body, continued for feveral days together, is inmoft men naturally followed by a great defire of relaxation,, which, if not retrained by. force or by feme ftrong neceflity, is almodft ir- refiftable. It is the call of nature, which requires to be relieved by fome indulgence, fometimes of eafe only, but fometinies tod of diflipation and diverfton. If it is not complied with^ the oonfe* quences are often dangerous, and fometimes fatal,, and fuch as almoft always, fooner or later, bring on the peculiar infirmity of the tradie. If mailers would always lilten to the> dictates of reafon and humanity, they have frequently occafion rather to moderate, than to animate the application of many of their workmen. It will be found, I believe, in every fort of trade, that the man who works fb moderately, as to be able to work conftantly, not only preferves his health the longeil, but> in the courfe of the year, exec,i,^tes the greateft quantity of work.. .-.lo ^rjiu. vni. In cheap years, it 'is pretended, workmen are generally , mor« idle, and in dear ones more induftrious than ordinary, > A plenr tiful fubfiftenee, therefore, it has been concluded, rdUxes, and a fcanty one quickens their induftry. That a little more plenty than ordinary may render fome workmen idle». cannot well be doubted^ but that it (hould have this effect upon the greater part, or that men in general (hould work better when, they are ill fed than when they are well fed,, when they/are difheartened than v^rhen they are in good fpirits, when they are frequently fick than when they are generally in gpod health, feems not very probable. Years of dearth, it is to be obferved, are generally among the common ^, people loi tHE KAfORE AND CAUSES OP ^ ^P ^ people years of fickntft tftd mortality, which cannot fail to diiiii« ^ niili the product 6f their indulb y. !m yedrs of plenty , fehrants frequently leave their maA«rs, and truft their fubfiftence to what they can make by their own induftry. But the famecheaphefs of provifions, by increafing tlie fund which is deftinid for the tnaintenanct of fervants, encourages maften, farmer^ e(peciiilly, to employ a greater number. Farmers upon fuch occafions expeA more profit from their com by maintaining a ftvf more labourin|; fefvants, than by felling it at a low price in the! mai'ket. The demand for fervants increafes, while the number of thofe who otkt to fupply that demand diminifhes. The price of labour, therefore, frequently rifes in cheap years. \u yiiLti of fcarcity, the difficulty and'uncertainty of fubfiftence iti^ke all fuch people eager to return to fei-vice. But the high price of provifions, by diminifliing the funds deftined for the maintenance of fervants, difpofes maflers rather to diminifh than to increafe the number of thofb they have. In dear years too, poor independant workmen frequently confume the little flocks with which they had ufed to fupply themfelves with the materials of their work, and are obliged to become journeymen for fubfiftence. More people want -employment than can eafily get itj many are willing to take it u]p6h Idwer terms than ordinary^ and the wages of both fervants iM journeymen frequently fink in dear years. Mast EH s of all foils, therefore, frequently make better bar- jg^iiis With their fervants in ilear than in cheap years, and find t1i6ih mote Immble and dependant in the former thaninthelattO'. They naturally, therefore, commend ^e former as more favomvble to induflry. Landlords and farmers, befides, two of the larg«ft clafTcs of mafters, have another reafon for being pleafed with dear 7 y^n. THE WEALTH OF NATIONS. 103 years. The rents of the one and the profits of the other depend C H A P. very much upon the price of provifions. Nothing can be more abfurd, however, than to imagine that men in general (hould work lefs when they work for themfelves, than when they work, for other people. A poor independant workman will generally be more induftrious than even a joumeym^ who works by the piece. The one enjoys the whole produce of his own induftry ; tlic other (hares it with bis naafter. The one, in l>is ieparate, inde- pendant jftate, is lels liable to the temptations of bad company, which in large manufa£tories fo frequently ruin the morals of the other. The fuperiority of the independant workman over thofc iervants who are hired by the mooth or by the year, and whofe wages and nuuntenance are the fame wliethe^* they do much or do little, is likely to be ftiU greater. Cheap years tend to increafe the propoition of independant workmen to journeymen and fer- vants of all kinds, and dear years to diminifh it. A French author of great knowledge and ingenuity, Mr. Meflanee, receiver of the taitles in the eledion of St. Etienne, endeavours to fhow that the. poor do more work in cheap than in dear years, by comparing tlie quantity and value of the goods made upon thofe different occafions in three dtffeient manufactures; one of coarfe woollens carried on at Elbeuf j one of linen, and another of filk, both which extend through the whole generality of Rouen. It appears from his account, which is copied fiom the regiflers of the publick offices, that the quantity and value of the goods made in all thofe three manufadures has generally been greater in cheap than in dear years; and that it has always been greatell in the dieapeft, and leaft in the deareft years.. All the three feen^ to be ftationary manu£a6lures, or which, though their produce may vary fomewhat from year to year„ are upon the whole nei- ther going backwards nor forwards.. '< .i Tmt \ 104 THE NATURE AND CAUSES OP / BOOK I. Thb manufa^re of linen in Scotland, and that of coarfe wool* lens in the weft riding of York(hire, are growing manufaflurei, of which the produce is generally, though with fome variations, increafing hoth in quantity and value. Upon examining, how- ever, the accounts which have been publi(hed of their annual pro- duce, I have not been able to obferve that its variations have had any fcnflble conneftion with the deamefs or cheapnefs of the fea- fons. In 1740, a year of great fcarcity, both manufadures, in- deed, appear to have declined very confiderably. But in 1756, another year of great fcarcity, the Scotch manufadlure made more than ordinary advances. The Yorkfhire manufa£lure, indeed, declined, and its produce did not rife to what itiiad been in, 1755 till 1766, after the repeal of the American ftamp a&. In that and the following year it greatly exceeded what it had ever been before, and it has continued to do fo ever Ance. The produce of all great manufaflures for diftant fale muft ne* celTarily depend, not fo much upon the deamefs or cheapnels of the iieafons in the countries where they are carried on, as upon the circumftances which affect the deniund in the countries where they are confumed; upon peace or war, upon the proiperity or de- denfion of other rival manufadtures, and upon the good or bad humour of tlieir principal cuftomers. A great part of the extra- ordinary work* befldes, which is probably done in cheap years, never enters the publick regifters of manufa£lures. The men-fervants whr^ .eave their matters become independant labourers. The wo- men return to their parents, and commonly fpin in order to make cloaths for themfelves and their families. Even the i 'dependant workmen do not always work foi publick fale, but nrc entJoyed by fome of their neighbours in manufaftures for fen-jly u^i. The produce of their labour, therefore, frequently makes no figure in thofe pub'ick regifters of which the records are fometimes pub- Ufhed THE WEALTH OP NATIONS. 105 liihcd with To much pariule. and from which our merchanti and ^(/A''* manufa^lurera would often vainly pretend to anounce the proiperity or declenfion of the greatc() 'nnpires. Though the variations in the price of Uboui, not only do not always correfpond with thole in the price of proviftons, but \n frequently quite oppofite, we muft not, upon this account, ima* ipne that the price of provifions has no influence upon that of \ai our. The money price of labour is neceflarily r^ulated by \.\v^j circumftancesi the demand for labour, and the price of the neceflaries and conveniencies of life. The demand foi- labour, according as it happens to be increaflng, (lationary, or declining, or to require £.n increaflng, ftationary, or declining population, determines the quantity of the neceflaries and convcn'wncies of life which mufl: be given to the labourer j and the money price of labour is determined by what is requifite for purchafli .g this quan- tity. Though the money price of labour, therefore, is fometimcs high rvhere the price of provifions is low, it would be ftill higher, the demand continuing the lame, if the price of pr&vilions was It is becaufe the demand for labour increafes in years of fudden and extraordinary plenty, and diminiflies in thofe of fudden and extraordinary fcarcity, that th,e money price of labour fometimes rifes in the one, and finks in the other. In a yoar of fudden and extraordinary plenty, there are fun4i in the hands of many of the employers of mduftry, fufliicient to maintain and employ a greater number of induftriQUs people than had been employed the year before; and this extraordinary num- ber cannot always be had. Thofe mafters, therefore, whowafit more workman bid agaii^ ope another, in order to get them, Vol.1. p which io6 THE NATURE AND CAUSES OF BOOK which fometimes raifes both the real and the money price of their labour. ' The contrary of this happens in a year of fudden and extraordinary fcarcity. The funds deftined for employing induftry are lefs than they had been the year before. A confidcrable number of people are thrown out of employment, who bid againft one another in order to get it, which fometimes lowers both the real and the money price of labour. In 1740, a year of extraordinary fcarcity, many people were willing to work for bare fubfiftence. In the fucceeding yeai"s of plenty, it was more difficult to get labourers and fervants.. The fcarcity of a dear year, by diminifhing the demand for la- bour, tends to lower its price, as the high price of provifions tends to raife it. The plenty of a cheap year, on the contrary, by increafmg the demand, tends to raife the price of labour, as the cheapnefs of provifions tends to lower it. In the ordinary variar- tions of the price of provifions, thofe two oppoiite caufes feem to counter-balance one another; which is probably in part the reafon why the wages of labour are every where fo much more fteady and permanent than the price of provifipns, f. , , . ' ' ■ The increafe in the wages of labour neceilarily increafes the price of many commodities, by increafing that part of it which refolves itfelf into wages, and fo far tends to diminifh their con- fumption both at home and abroad. The fame caufe, however* which raifes the wages of labour, the increafe of flock, tends .to increafe its produflive powers, and to make a fmaller quantity of ' labour produce a greater quantity of work. The owner of the flock which employs a great number of labourers, neceflarily en- deavours, for his own advantage, to make fuch a proper divifion and diflribution of employment, that they may be enabled to pro- duce THE WEALTH OF NATIONS. come to be produced by fo much lef& labour than before, that the in- creafe of its price does not compenfate the diminution of its qiian-i .1 i Ji(.>j,i yi rT.i«i»>r^ ^-iii*. '^^ ■■ iic hiivfc .;.;:^ii ;..;,J1: tmhj^ mdi ^'Mim P 2 |o8 THE NATURE AND CAU«£S OF : -..■ "i •' ;''^ ■'^tionrie :;:■:■(! r>>Ml 5^f!V* ^:> :' v f CHAR IX. "'■ '. *" *iil\ ' ..'V, : 4..' .' iy*/^tf J^rg^/l efStocJL BOOK '"l^HE iHe and M ilk tbe 'profits: of ftodc. d^tfnd up^ tlie JL &me caufts ^th the life and &U in the Wiigpes of labour*, the incFeafing or deolming ftitterof die wealth of the fixdetyj but thofe caufes a£Q:£b the one and the other very differently.. .^u The increafe of ftock, which raifes wages, tendis to^ lower prc^t. When the ftocks- of many rich merchants are turned inta> the fame trade, their mutual competition naturally tends to lower its profit^ and when there is a like increafeof ftock in all the dif- ferent trades carried on in the fame fbciety, the fame competition, muft produce the fame effect in them. all. It is not eafy, it has already been observed, to afcertain whaH are the average wages of labour even in a particular place, and at a particular time. We can, even in- this cafe, feldom determine: more than what are the moft ufiial wages. But even this cani feldom be done with regard to the profits of (lock. Profit is fa very fluctuating,, that the perfon who carries on a paiticular trade cannot always tell you himfelf what is the average of hia annual profit. It is aflbfted, not only by every variation of price in the; commodities which he deals in, but by the good or bad fortunftt both of his rivals and of his cuilomera, and by a.thoufand othec accidents THE -WEALTH OF NATIONS. 109 aeddents to wtucb goods when carried dther by fea or by land, or ^ ^^^^ tven when ftored in a warehoufe, are liable. It varies, therefore, not only from year to year, but from day to day, and almoft from hour to hour. To afcertain what is the average profit of all the different trades carried on in a great kingdom, mufl be much more difficult ; and to judge of what it may have been formerly, or in femote periods of time, with any degree of precifion, muft be al* together impoffible. - But though it may be impofTible to determine, with any degree of precifion^ what are or were the average profits of flock, either in the pre&nt, or in antient times, fome notion may be formed of them from the intereft of money. It may be laid down, as a maxim, that wherever a great deal can be made by the ufe of money, a great deal will commonly be given- for the u(e of it ; and that wherever litdie can be made by it, lefs will commonly be given for it. According, therefore, as the uAial market rate of interefl varies in any eoimtry; we may be afTured that the ordinary profits of flock mufl vary with it, mufl fink as it finks, and rife as it rifes. The progrefs of interefl, therefore, may lead us t(0 &}rm fome notion of the progrefs of profit. By the 37th of Henry VIII, all interefV above ten' per cent, was declared unlawful. More, it feems, had fometimes been* taken before that. In the reign of Edward VI; religious zeal prtf- hibited- dl interefV. This prohibition, however, like all others of the fame kind, is faid to have produced no efFe£l, and probably sadiec increafed than- diminifhed the evil of ufury. The flatute of Henry VIII was revived by the i3jth of Elizabeth cap; 8, and ten fer cent, continued to be the legal rate of interefl till the 21 ft of James L when, it was reflri£led to eigfit per cent. It was reduced: ■ ■ tO' no THE NATURE AND CAUSES OF B O O K to fix per cent, foon after the reftoration, and by the 12th' of Queen Anne, to five per cent. All thefe different flatutary regu- lations feem to have been made with great propriety. They feem to have followed and not to have gone before the market rate of intereft, or the rate at which people of good credit ufually borrowed. Since the time of Queen Anne, five per cent, feems to have been rather above than below the market rate. Before the late war, the government borrowed at three per cent, j and people of good credit in the capital, and in many other parts of the kingdom* at three and a half, four^ and four and a half per cent. Since the time of Henry VIII, the wealth and revenue of the country have been continually advancing, and, in the courfe of their progrefs, their pace feems rather to have been gradually dece- lerated than retarded. They feem, not only to have been going on, but to have been going on fafVer and fafler. The wages of labour have been continually increafing during the fame period, and in the greater part of the different branches of trade and manu- factures the profits of ftock have been diminifhing. ^: It generally requires a greater flock to carry on any fort of trade in a great town than in a country Village. The great flocks employed in every branch of trade, and the number of rich com- petitors, generally reduce the rate of profit in the former below what it is in the latter. But the wages of labour are generally higher in a great town than in a country village. In a thriving town the people who have great flocks to employ, frequently can- not get the number of workmen they want, and thereifore bid againfl one another in order to get as many as they can, which raifes the wages of labour, and lowers the profits of flock. In the, remote parts of the country there is frequently not flock fufficient to employ all the people, who therefore bid againfl one another in order THE WEALTH OF NATIONS. Ill order to get employment, which lowers the wages of labour, and ^?J^^* jaifes the profits of ftock» In Scotland, though the legal rate of intereft is the fame as in England, the market rate is rather higher. People of the beft credit there feldom borrow under five per cent. Even private bankers in Edinburgh give four per cent, upon their promiflbry notes, of which payment either in whole or in part may be de- manded at pleafure. Piivate bankers in London give no intereft for the money which is depofited with them. There are few trades which cannot be carried on with a fmaller ftock in Scotland than in England. The common rate of profit, therefore, muft be fomewhat greater. The wages of labour, it has already been obferved, are lower in Scotland than in England. The country too is not only much poorer, but the fteps by which it advances to a better condition, for it is evidently advancing, feem to be much flower and more tardy. The legal rate of intereft in France has not, during the courfe of the prefent century, been always regulated by the market rate. In 1720 intereft was reduced from the twentieth to the fiftieth penny, or from five to two per cent. In 1724 it was raifed to the thirtieth penny, or to 34 per cent. In 1725 it was again raifed to the twentieth penny, or to five per cent. In j 766, during the ;adminiftration of Mr. Laverdy, it was reduced to the twenty-fifth penny, or to four per cent. The Abbe Terray raifed it afterwards to the old rate of five per cent. The fuppofed purpofe of many of thofe violent reduftions of intereft was to prepare the way for reducing that of the public debts j a purpofe which has fometimes been executed. France is perhaps in the prefent times not fo rich a country as England j and though the legal rate of intereft has 4 ' \ in 112 THE NATURE AND CAUSES OF In France frequehdfy Wen lower 'thtn ik £h^larto/ tlie mail:et rate ha§ generally been higher; for there, a^ ^i ^ot^ier countries, they have feveral very fife and eafy methods of evading the law. The profits pf trade, I have been aiTi^-ed by: &iti||i iqtr- chants who had traded, in bofji, <:ouiitrifiS« are higher it| fi:aiice than in England ; and it is no dg^ubt upon this account that many Britiih fubje£ts chufe rather to employ their capitals in a country where trade is in difgrace, than In one where it is highly refpe£ted. The wages of labour are lower in France than in En^^and. When you go from Scotland to England, the difference which you may remark between the drefs and countenance of tlie common people in the one country and in the other, fufUciently indicates the dif- ference in thdr condition. The contrail is flill greater when you return from France. France, though no doubt a richer country than Scotland, feems not to be going forward fo faft. It is a common and even a popular opinion in the country that it is going backwards ; an opinion which, I apprehend. Is ill founded even with regard to France, but which nobody can pofllbly entertain with regard to Scotland, who fees the country now and who iaw it twenty or thirty years ago. The province of Holland, on the other hand, in proportion to the extent of its territory and the number of its people, is a richer country than England. The goveriunent there bonx)w at two per cent, and private people of good credit at three. The wages of labour are faid to be higher in Holland than in England ; and the Dutch, it Is well known, trade upon lower profits than any people in Europe, The trade of Holland, it has been pre- tended by fome. people, is decaying, and it may perhaps be true that fome particular branches of it are fo. But thefe fymptoms fecm to indicate fufficiently that there is no general decay. When 7 ' ."t 'jrfi ni ffiinnai :rf'ioii ^uh' , profit dmfSi ihbugli'th* dkiiimitton ofiprofit is thb ntntM^fbiitoe k« ' piYX^ty, ixcf a givMer ftock being employ^ in kthaiif'bcfoiv. During the late war the Dutch gain^ the whole cairyiAg trade of I^hmce, 0)f whidi they Aill retain a very iargie fhare. Th^ great property Whitih they poiTefs both in the French and Englifh il^nds; abbbt forty millions^ it is faid, in the lattery (in which I Aifpef^*^ hlnweWr, there ts a confiderabie exaggeration), the great fum» Which they lend to private people in countries where the ratbof iftttttrlb H highei' ^thanf in* thdrown>' are= drcu^nftances which no d6tibt demonfbtite the redundancy of their flock, or 'that it h8» iricrcafedbtyond-trtiat they cart ertjploywith toleraUe profit in the prbper bufinefs of their own. country : but they do not demonftrate* th^tthat bufmefs has decrieaiH. As the capital of a private man, tll«)i^gh ' «x|tdrcd by a 'particaliu>! trttde; tnlttf hicreafe beyond' what i he Cflh employ in it; ^nd y^ttbattrade continue to increffeutooil fo may llkewife tile capital qf a great nation. bvtrj^n *^,A . J^ , our North An^eric^n w4 . ,We^, Indi^M Mpn^. . ppX only tlji?.wages!^ l*bQUi', but tbe,.intei:eft,6f oipwsy* »?»4 ?onreqv^nUy, tlxe profits of ftock are higher, .lijian in England. |ri tjie. 4iiferQ0t co|ig>nies b^oth the legal and the market rate of interefl run iroai fix tQ jEi^ht per cent. High wages of labour aqd lug)h profits ^ l^oplt;* hfipl^^rr are. things, perhaps, which fcarceeyerga(q^e|her,^xc^|: »4iiMHfc;pep»li?r circumftances of new colpnies.. A, new. ^plppy,. mUft always for fome time be more und^rftocked in pri^rtipn tQu the extent of its territory, and more underpeopled in proportion, to the extent of its ftock, than the greater part of other countries. „ They have more land than they have ftock to <:ulti,vate. What they have, tlierefore, is applied to the cultivation only of whatsis moft fertile and moft favourably fituated, the lands near the lea fliore, and along the banks of navigable rivers. Such land too is frequently purchafed at a price below the value even of its natural Vol. L - CL ' produce. iH THE J^ATURE AW© CAU&E8 OF fiich lafMb itfuft yitld a very lu^ profit, and eonfci^umtly a^i t» piy a v«i|r Uuge iatereft* Its fi^ ac<;ttBU)latio« in ib pui^^lp^ 89 fm^loyncn* pvM» ^ ^laiaiter to infivcAie ^ omn^ f)^ t))i!| bands iafter tl^an \» can fisd them in a OMir fettjiieiVMBn^ TM^ whom he can find, tbecefone, «re very U!>ataUy fewafdii)4f 4# ^ c Wl^ the moft feitUe and he& fttuated lands isave been all «coupted» 1^^ ^(^t can be made by the cultivation of what i« ii)|ui«r botb t» ioU and (ituatJon, apd leTsiateveft'Canlif s#>ridfl4^or t)iqr#ofk,iKfeMd|f is {o employed. In the greater part of our co^onle^ .^ ow i in g1y» both the legal and t\it mariket sate of interqft hauft ]^fsa. cpo^dpf^ ably reduced during the courie of the prelent century. As a£hsif[f improvement, and population have inoreafed, intereA; has Reclined,, The wages of labpur donot fii^ wj^ ,t^ pi^t^tqil^ ;ilw|K. ;^!l^. demand for labour increases wi^ thfi ,iiM:tea£B qf Attck whatever hp its profits; and aftei* theie are diminif)^, Jftock B9f^ a»t po^ continue to increafe, but to increafe much fafter than before. It is with indttftrious iiatiims who ore advancitig in th* acqulfiti«fM)f riehcft* as ^itli indtiftrioui iiittividUats. A great IkoA, ihiHigll wii^ 4iMtt-pre4ts, generally inortafeS'fafler tSian a finall llock^ wkl^ gUBafe profits. Money, ftys the proverb, makes montj. When you have g6t ^ littk, 'it is often eafy to get more. The gl.,»-uj| J> ■?.,■- rzfi'f THE WEALTH OF NATIONS. US for the whole acccffion of bufinefs, which fuch acquifition. prefcnt ^ ^^ ^* to the difFerent people among whom it is divided, is applied to thofe particular branches only which afford the greateft pro' t. Part of what had before been employed in other trades, is necefTa- rily withdrawn from them, and turned into fome of the new and more profitable ones. In all thofe old trades, therefore, the com- petition comes to be lefs than before. The market comes to be lefs fully fupptied with many different forts of goods. Their price neceffarily rifes more or lefs, and yields a greater profit to thofe who deal in them, who can, therefore, afford to borrow at a higher intereft. For fome time after the conclufion of the late war, not only private people of the beft credit, but fome of the greateft com- panies in London, commonly borrowed at five per cent, who before that had not been ufed to pay more than four, and four and a half per cent. The great acceflion both of territory and trade, by our acquifitions in North America and the Weft Indies, will fuf- ficiently account for this, without fuppofing any diminution in the capital ftock of the fociety. So great an acceffion of new bufinefs to be carried on by the old ftock, muft neceflarily have diminifhed the quantity employed in a great number of particular branches, in which the competition being lefs, the profits muft have been greater. I (hall hereafter have occafion to mention the reafons which difpofe me to believe that the capital ftock of Great Britain was not diminifhed even by the enormous expence of tlie late war. The diminution of the capital ftoclt of the fociety, or of the funds deftined for the maintenance of induftry, however, as it lowers the wages of labour, (b it raifes the profits of ftock, and corifequently the intereft of money. By the wages of labour being lowered, the owners of what ftock remains in the fociety can bring their goods cheaper to market than before, and lefs ftock Q^a > •> being ii6 THE NATURE ANP CAUSER PF being em|)loycd in fupplying tKie market t)\an before, they pan fell thctn dearer. Their goods coft them lefs, an4 they get more for them. Their profits, therefore, being augmented at both encis, can vveli afford a large intcreft. Th^ gre^it fortunes (q fud4(nly an4 fo cafily acquired in Bengal and the other Britifh fettlements in the Eafl; Indies, may fatisfy us that as the wages of labouj: arf very low, fo the profits of (lock are very high in thofe ruined countries. The intereft of money is proportionably fo. Jn fi^n^Bl* money is frequently lent to the farmers at forty, fifty, and fixty pier cent, and the fucceeding crop is mortgaged for the payment. As the profits which can afford fuch an intereft muft eat up almofl: the whole rent of the landlord, fo fuch enormous ufury muft in its turn eat up the greater part of thofe profits. Bcfoie the fall of the Roman republick, a ufuiy of the fame kind feems to have been common in the provinces, under the ruinous adminiftration of their proconfuls. The virtuous Brutus lent money in Cyprus at five and forty per cent, as we learn from the letters of Cicero. In a country which had acquired that (ull cQv.i)4cment of riches which the nature of its ibjl and qlimatc and its fituation with refpe6l to other countries allowed it to acquire; which could, therefore, advance no further, and which was not going back- wards^ both the wages of labour and the profits of ftock would probably be very low. In a country fully peopled in proportion to what either its territory could maintain or its ftock employ, the competition for employment would neceflfarily be fo great as to reduce the wages of labour to what was barely fuificient to keep up the number of labourers, and, the country being already fully peopled, that nuniber could never be augmented. In a country fully ftocked in proportion to all the hufinefs it had to tranfaft, as great a quantity of ftock would be employed in every particular branch as the nature and extent of the trade would admit. The 7 , , i / . competition. THE WEALTH OF NATIONS. ^\ competitioii, therefore; would everywhere be at great, and con- ^ ^' "^ '• fequently the ordinary profit as low as poflible. ' But perhaps no country has ever yet arrived at this degree of opulence. China feems to have been Icmg (Vationary, and had probably long ago acquired that full complement of riches which is contiftent with the nature of its laws and inftitutions. But this ctunplement may be much inferior to what, with other laws and inftitutions, the nature of its foil, climate, and fituation might admit of. A country which negleds or defpifes foreign commerce, and which admits the veffels of foreign nations into one or two of its ports only, cannot tranfa6t the fame quantity of bufmefs which it might do with different laws and inftitutions. In a country too, where, though, the rich or the owners of large capitals enjoy a good deal of fecurity, the poor or the owners of fmall capitals enjoy fcarce any, but are liable, under the pretence of juftice, to be pillaged and plundered at any time by the inferior mandarines, the quantity of ftock employed in all the different branches of bufin'^fs tranfafted within it, can never be equal to what the nature and extent of that bufincfs might admit. In every different branch, the opprefllcn of the poor niuft eftablifh the monopoly of the rich, who, by engrofling the whole trade to them- felves, will be able to make very large profits. Twelve per cent, accordingly is (aid to be the common intei'eft of money in China,, and the ordinary profits of ftock muft be fufficient to afford this^ large intereft. '^' '^''^ ■*■ rf KfiW-iVM I «ir*^ ■■.*<<'«''■ *^ J -- 1 ■■ ■%» h*» I'M *'3 --J ^%^ .'/iKO V^yf.: A DEFECT in the law may (bmetimes raife the rate of intereft confiderably above what the condition of the country, as to wealth or poverty, would require. When the law does not enforce the performance of contrafts, it puts all borrowers nearly upon the fame footing with bankrupts or people of doubtful credit in. y^: . -. - better ii8 THE NATURE AND CAUSES OF B O O K better regulated countries. The uncertainty of recovering his money makes the lender exa£t the fame ufurious intereft which is ufually required from bankrupts. Among the barbarous nations who over- run the weftem provinces of the Roman empire, the performance of contrafls was left for many ages to the faith of the contracting .parties. The courts of juftice of their kings feldonr -ntermeddled in it. The high rate of intereft which took place in thofe antient times may perhaps be partly accounted for from this caufc. When the law prohibits intereft altogether, it does not prevent it. Many people muft borrow, and nobody will lend without fuch a confideration for the ufe of their money as is fuitable, not only to what can be made by the ufe of it, but to the difficulty and danger of evading the law. The high rate of intereft among all Mahometan nations is accounted for by Mr. Monteiqnieu, not from their poverty, but ple thoib countries to Ml as cheap as their lefs thriving neighbours, itAoti^ whbni thfe' wigtfs of labour may be lovver. ' -'^--i.-it-^^Mv mfy^arr^^** -i ? ,. . Jit n^q !::r3n Jl !«' « « • •■ ':, ,.3 i'ni;-* r:i i . 'vrJ-ti THE WEALTH OF NATIONS. I2X .f 'ibs^^-it*: ' -y. . C H A P. X. Of t^ages dnd P/ofit \n the dtjereiit Employments of Labour and THE whole of the advantages and difadvantages of the dif- CHAP, ferent employments of labour and ftock muft, in the fame neighbourhood, be either perfeftly equal or continually tending to equality. If in the fame neighbourhood, there was any employment either evidently more or lefs ady^ntagqpus than the reft, fo many people would crowd into it in the one cafe, and fo many, woujd d^f^ft. it in the other, that its advantages, yvould foon return to the l^vel of (pther employments. Tl^is at leaft would be the cafe in a foci^ty where thir^gs were left to follow their natural cburfe, where there was perfeft liberty, and where every man was perfe£liy free both to chufe what occupation Lj thought proper, and to change it as often as he thought proper. Every man's intereft would prompt him to feek the advantageous and to ftxun tlie.diiadvantageous employmenu ,^^..^^,^^^^^^ ^.^. „ PfictrJj'rARY wages 'and profit, Ihdced, are every where in Eu- rope extreamly different according to the different employments of labour and ftock. But this difference arifes partly from certain circumft:ances in the employments themfelves, which, either really, or at leaft in the imaginations of men, make up for a fmall pecuniary gain in fome, and counter- balance a great one in others j and partly from the policy of Europe, which nowhere leaves things at perfect libeity. Vol. I. The 122 THE NATURE AND CAUSES OF BOOK The particular confideration of thofe eircumftances and of that policy will divide this chapter into two parts. Part I. >' -i'-A s •:•»'■'■: .!)h ■'■' Inequalities arijing from the Nature of the Employments tbemfehes. ^T*HE .five following are the principal eircumftances which, fa far as I have been able to oblerve, make up for a fmall pecuniary gain in fome employments, and counter-balance a great one in others : firft, the agreeablenefs or difagreeablenefs of the employments themfelves ; fecondly, the eafniefs and cheapnefs, or the difficulty and expence of learning them •» thirdly, the conftancy or inconftancy of employment in' them \ fourthly, the finall or great truft which mult be repofcd in thofe who exercifc them; and, fifthly, the probability or improbability of fuccefs in them.i"* First, The wages of labour vaiy with the eafe or hardfliip, the cleanlinefs or dirtinefs, the honourablenefs or diflionour- ablenefs of the employment. Thus in moft places, take the year round, a journeyman taylor earns lefs than a journeyman weaver. His work is much eafier. A journeyman weaver earns Icfs than a journeyman fmith. His work is not always eafier, but it is ■ much cleanlier. A journeyman blackfmith, though an artificer, feldom earns fo much in twelve hours as a collier, who is only a labourer, does in eighth His work is not quite fo dirty, is lefs dangerous, and is carried on in day-light, and above ground. Honour makes a great part of the reward of all honourable pro- feffions. In point of pecuniary gain, all things confidered, they are generally under-recompenled, as I fhall endeavour to fhow , by and by. Difgrace has the contrary effed. The trade of a butcher N •THE WEALTH OF NATIONS. 123 butcher is a brutal and an odious bufinefs >, but it is in moil: places CHAP. more profitable than the greater part of common trades. The moft deteftable of all employments, that of public executioner, is, in proportion to the quantity pf v/ork done, better paid than any common trade whatever. K /, Ji'.y HuNTiNG and fifliing, the moft important employments of mankind in the rude ftate of fociety, become in its advanced ftatg their moft agreeable amufements, and they purfue for pleafure what they once followed from necefllty. In the advanced ftate of fociety, therefore, they are all very poor people who follow as a trade, what other people purfue as a paftime. Fifliermen have been fo fince the time of Theocritus. A poacher is every where a very poor man in Great Britain. In cojntries where the rigour of the law fuffers no poachers, the licenfed hunter is not in a much better condition. The natural tafte for thofe employ- ments makes more people follow them than can live comfortably by them, and the produce of their labour, in proportion to its quantity, comes always too cheap to market to afford any thing but the moft fcanty fubfiftence to the labourers. DisAOREEABLENEss and dilgracc afFe6l the profits of ftock in the fame manner as the wages of labour. The keeper of an inn or tavern, who is never maftcr of his own houfe, and who is expofed to the brutality of every drunkard, exercifes neither a very agreerble nor a very creditable bufinefs. But there is fcarce any common trade in which a fmall ftock yields fo great a profit. Secondly, The wages of labour vary with the eafinefs and cheapnefs or the difficulty and cxpence of learning the bufi- nefs. R 2 When 124 BOOK I THE NATURE AND CAUSES OF ' . When any expenfive machine is creeled, the extraordinary work to be performed by it, before it is worn out, it muft be ex- pedcd, will replace the capital laid out upon it, with at leaft its ordinary profits. A man educated at the expence of much labour and time to any of thofe employments which require e;(traordinary dexterity and Ikill, may be compared to one of thofe expenfive machines. The work which he learns to perform, it mull be expeflcd, over and above the ufual wages of common labour, will replace to him the whole expence of his education, with at leaft the ordinary jjrofits of an equally valuable capital. It muft do this too in a reafonable time,, regard being had to the very uncertain du- ration of human life, in the fame manner as to the more certain, duration of the machine. The difference between the wages of fl^illed labour and thole: of common labour, is founded upon this principle. The policy of Europe confiders the labour of all meclianicks, artificers, and manufafturers, as (killed labour; and that of all; country labourers as common labour. It feems to fuppofe that of the former to be of a more nice and delicate nature than that of the latter. It is fo perhaps in fome cafes j but in the greater part it is quite otherwife, as I fhall endeavour to (hew by and by. The laws and cuftoms of Europe, therefore, in order to qualify any perfon for exercifing the one fpecies of labour, impofe the necef- fity of an apprentice(hip, though with different degrees of rigour in different places. They leave the other free and open to every body. During the continuance of the apprenticefhip, the whole labour of *he apprentice belongs to his mafter. In the mean time he muft. in many cafes, be maintained, by his parents or relations* and in almoft all cafes muft be cloathed by them. Some money too is commonly given to the mafter for teaching him bis trade. They 4 who THE WEALTH OF NATIONS. "5 who cannot give money, give time, or become bound for more C HA P. tlian the ufual number of years j a confiderat'on v^rhich, though it is not always advantageous to the mafter, on account of the ufual idlenefs of apprentices, is always difadvantageous to the apprentice. Ill country labour, on the contrary, the labourer, while he is em- ployed about the eafier, learns the more difficult parts of his bufmefs, and his own labour maintains him through all the diiferent ftages of his employment. It is reafonable, therefore, that in Europe the wages of mechanicks, artificers, and manufacturers, fliould be fomewhat higher than thofe of common labourers. They are fo accordingly, and their fuperior gains make them in moft places be confidered as a fuperior rank of people. This fuperiority, however, is generally very fmallj the daily or weekly earnings of journeymen in the more common forts of manufiiftures, fuch as thofe of plain linen and woollen cloth, computed at an average, are, in moft places, very little more than the day wages of common labourers. Their employment, indeed, is more fteady and uniform, and the fuperiority of their earnings, taking the whole year together, may- be fomewhat greater. It feems evidently, however, to be no greater than what is fufficient to compenfate the fuperior expencff of their education. .> viSi , ;-. • .; ; 4* - Education in the ingenious arts and in the liberal profef- fions, is ftill more tedious and expenfive. The p.cuniaiy re- compencc, therefore, of painters and Iculptors, of lawyers and! phyficians, ought to be much more liberal,, and it is fo accord- ingly. r» The profits of ftock feem to be very little affedled by the cafi- nefs or difficulty of learning the trade in which it is employed.. All the different ways in which ftock is commonly employed in great towns feem, in reality, to be almoft equally eafy and , equally 126 THE NATURE AND CAUSES OF BOOK equally difficult to learn. One branch cither of foreign or domef- tick trade, cannot well be a mr.ch more intricate bufincfs than another. Thirdly, The wages of labour in different occupations vary with the conftancy orinconftancy of employment. Employment is much more conflant in fome trades than in others. In the gre.iterpart of manufactures, a journeyman may be pretty fure of employment almoft every day in the year that he is able to work. A mafon or bricklayer, on the contrary, can work neither in hard froll nor in foul weather, and his employ- ment at all other times depends upon the occafional calls of his cu- ftomers. He is liable, in confequence, to be fiequently without any. What he earns, therefore, while he is employed, muft not only maintain him while he is idle, but make him fame compcjnfation for thofe anxious and defponding moments which the thought of fo piecarious a fiiuation muft fometimes occafion. Where the computed earnings of the greater part of manufacturers, accord-^ ingly, are nearly upon a level v.ith the day wages of common la- bourers, thofe of mafons and bricklayers are generally from one- half more to double thofe wages. Where common labourers earn four and five fliillings a week, mafons and bricklayers frequently earn feyen and eight; where the former earn fix, the latter often earn nine and ten; and where the former earn nine and ten, as in London, the latter commonly earn fifteen and eighteen. No fpecies of fkilled labour, however, feems more eafy to learn than that of mafons and bricklayers. Chmrmen in London, during the fum- mer feafon, are faid fometimes to be employed as bricklayers. The high wages of thofe workmen, therefore, are not fo much the recompence of their ikill, as the compenfation for the inconftancy of thdr employment. • - •.m«o.l .!.,■•' A HOUSE THE WEALTH OF NATIONS. A HOUSE carpenter feenis to cxercife ratlier a nicer and more ingenious trade than a mafoii. In moft places, however, for it is not univerfally fo, his diy-wagcs are fomewhat lower. His employment, though it depends much, does not depend fo en- tirely upon the occafional calls of his cuftoraersi and it is not liable to be interrupted by the weather. 127 Wk.:n the trades which generally afford conflant employment,, happen in a particular place not to do fo, the wages of the work- men always rife a good deal above their ordinary proportion to- thofe of common labour. In London almoft all journeymen ar- tificers are liable to be called upon and difmifled by their mafters from day to day, and from week to week, in the fame manner as- day-labourers in other places. The lovveft order of artificers. Journeymen taylors, accordingly eatn there half a crown a-day,. though eighteen-pence may be reckoned the wjgcs ot common; labour. In fmall towiis and country villages, the wages of journeymen taylors frequently fcarce equal thofe of common labour; but in London they are often many weeks without employment,, particularly during the fummer. When the Inconftancy of employment is combined with the hardfliip, difagreeablenefs and dlrtinefs of the work, it fometimes. raifes the wages of the moft common labour above thofe of the moft ikilful artificers. A collier working by the piece is fuppofed, at Ncwcaftle, to earn commonly about double, and in many parts of Scotland about three times the wages of common labour. His. Viigh wages arife altogether from the hardfliip, difagreeablenefs, and dirtinefs of his work. His employment may, upon moft oc- cafions, be as conftant as he pleafes. The coal-heavers in Lon- don exercife a trade which in hardfliip, dirtinefs, and difagreeable- nefs, almoft equals that of colliers 5 and from the unavoidable 7 irregularity. JWr THE NATURE AND CAUSES O^ irregularity in the arrivals of coal (hips, the employment of ''the greater part of them is neceffarily very inconftant. If colliers, therefore, commonly earn double and triple the wages of common labour, it ought not to feem unreafonable that coal-heavers (hould fometimes earn four and five times thofe wages. In the enquiry made into their condition a few years ago, it was found that at the rate at which they were then paid, they could earn from fix to ten {hillings a-day. Six {hillings are about four times the wages of common labour in London, and in every particular trader the lowe{l common earnings mayi always be confidered as thofe of thg, far greater number. How extravagant foevcr thofe camings njay aj)pear, if they were more than fufHcient to compenfate all the difagreeable circum{lances of the bufincfs, there would foon be fo great a number of competitors as, in a trade which- has no exclufive privilege, would quickly reduce tliera to z lower -I'ate. .^. The coitftancy or inconllancy of employment cainnotw affeft the ordinary profits of flrock in any particular trade. Whet' jr the ftock is or is not conllantly employed depends, not upon the trade. but the trader. i'i*« ji"j» „vm ,<«»*«.«»v» «»*§ "5»»»* ias-AM * >iiii'Ukilti}iivl ^ U it FouRTHLy, The wages of labour vary according 1^ tl^^^qj^U or^r^at^truft^ which niuft be rcpofed in the workmen.,^^:^^ ^ f:\iii3m > , '• ^ ' ' » . ■■„.*,•• «,■ ■. . .. ■■ .,. • • ». • . , -.• , •?('?./? . The wages of goldfmiths and jewellers are every where luperioi" to thofe of many other workmen, not only of equal, but of much fuperior ingenuity j on account of the precious materials y^t|i^y^if^ t^ey.^i|iiitrufted^^jj^^\rf^ ^„v-, ' ,,^,j,,,j ^igj yif^,^' - .;We truft our health to the phyficianj our fortime and {bmc- times our life and reputation to the lawyer and' attorney. Such ^iia*je^,^. Z , confidence THE WEALTH OF NATIONS. t29 coiAdtnst could not &fely be repofed m people of a vciy mean or C HA P. low condition. Their < ' 'vard muft be fuch, therefore, as may give them that rank in the focicty which ib important a truft re- quires. The long time and the great expence which muft be laid out in their education, when combined with this cir-* cumftance, neceflarily enUance ftill further the price of their la- bour. : • Whkn a peribn employs only his own ftock in trade, there it no truftj and the credit which he may get from other people, depends, not upon the nature of his tra^, but upon their opi- nion of his fortune, probity, and prudence. The different rates of proifit, therefore, in the different branches of trade, cannot arife from the difiierent d^rees cf truft repofed in the traders. FiPTHXY, The wages of labour in different employments vary according to the probability or improbability of fuccefs in them. The probability that any particulai* perfon fhall ever be qualified for the eu.ployment to which he is educated^ is very different in different occupations. In the greater part of mschanick trades, fuccefs is almoft certain; but very uncertain in the liberal profef- iions. Put your fbn apprentice to a fhoemaker, there i.« little doubt of his learning to make a pair of ihoes: But fend him to ftudy the law, it is at leaft twenty to one if ever he makes fuch pi-oficiency as will enable him to live by the bufincfs. In a per- fedtly fair lottery, thofe who draw the prizes ought to gain all that is loft by thofe who draw the blanks. In a profeffion where twenty fail ft>r one that fticcecds, that one ought to gain all that fhould have been gained by the unfuccelsful twenty. The Vol. I, S counfcllor ^^9 T.H'E NATURE- AND CAlPSEff CTF B <^Q i^ cQwr^Uor at.Uw who, perhaps, at near forty y«ars of age^i ibcgins; ' tp make ipmething by his pjrofdTian,' ought to receive the retribu«> tlon, not only of his own- ib tedious and' expenfive education, but of that of more tlian twenty others who are never likely to make any thing by it. How extravagant foever the fees of cotmfeUors at law may fometimes appear, thair real retribution is never equal to this. Compute in any particular place, what is likely to be annually gained, and what is likely to be annually fpent, by all the different workmen in any common Uade* iUch aa that of (hoemakei's or weavers, and you will find that the former fiira wilLgenerally V exceed the latter. Biut make the, (ams. computation with regard to all the counfellorsi and iludenta of law, in ^11 the different inilB of court, and you will find that, thein. annual guns. bearbut a very fmall proportion to their. annual expenoe, event though you rate the former as high, and the latter as low, as can well be done. The lottery of the law, therefore, is very far from being a perfectly fair lottery;, and. that, as well as many other liberal and honourable profefrfon8,.j^e,,ifl^,gtattts, of. pecuniary gain, cyj^^ptly.^yn^^ijceco^^ ^^Vu i^u.-x ^avAtu i.-ui bit:7/-Ji jy( J . Those profeffions keep their level, however, with other occu- pations, and,, notwithftanding theie difcouragements, all the moft generous and liberal fpirits are eager to crowd into them. TW6 different caufes contiibute to recommend them. Firft, the defire pf the repu/tation which attends upon fuperior excellence in any of them; and, fecondly, the natural confidence which every man has more or lefs^ not only in his own abilities, but in his own good fortune.! yUUj,U0wu«i 'Mt-^- -^ : -^^'^ W^i^^ 'i(^ If: Vff^'^.S"*"*^^ : To excel in. any profeflion, in which, but few arrive at medio* crity, is the moft decifive mark of what is called genius or fuperior ^ents. The publick admiration which att^ds upon fuch dif>. ^(^ 0, . ^ S. .V tinguilhed THE WEALTH OP NATIONS. »!' tinguiflicd abilities, makes always a jiart of their reward j a greater C HA P. oritnaller in proportion as it is higher or lower in degree. It makes a cohfiderable part of it in the profeflion of phyfick ; a fVill gi'eater perhaps in that of law; in poetry and philofbphy it makes almoft the whole irvj iioHl >5ian(;£ . Hhi There are fbme very agreeable and beautiful talents of which the poffeflion commands a certain fort of admiration ; but of which the exei'cife for the lake of gain is cohfidered, whether from reafon or prejudice, as a fort of publick proftitulion. The pecuniary re- 'Coitiponce, therefore, of thofe who exercife them in this manner,' muft be fufficient, not only to pay. for the time, labour, and expence of aoqairing the talents, but for the difcredit which attends the employment of them as the means of fubfiftence. The exor- bitant rewards of play«'rs, opera-fingers, opera-dancers, &c. are founded upon thofe two principles ; the rarity and beauty of the talents, and the difcredit of employing them in this manner. It ieems abfurd at firft fight that we (hould defpife their perfons, and yet reward their talents with the moft profufe liberality. While we do the one, however, we mufl of neceffity do the other. Shquld the publick opinion or prejudice ever alter with regard to fuch occupations, their pecuniary recompence would quickly 4iminifh. More people would apply to them, and the competition would quickly reduce the price of their labour. Such talents, vthough far from being common, are by no means fo rare as is imagined. Many people poiTefs them in great perfcdHon, who dif- 4ain to make this ufe of them y and many more are capable of acquiring them, if any thing could be made honourably by them. The over- weening concdt whkh the greater part. of men have of their ovyn abilities, is an antient evil remarked by the philofb^ phers and moralifls of all ages. Their abfurd prefumption in fj-jrlUtfj^n!? ' S 2 • . their ip THE NATURE AND CAUSES OF % O O K their own good fortune^ hai been left taken notice of. It it, How- ever, hf podiblo, Hitl more univerfai. Then; is no man living who, when in tolehable health and f{Mrits, has not ibme (hare of it. The chance of gain is by every man more or lefs over-^ valued, and the chance of loft is by mod men under-valued, md by fearoe any man, who is in tolerable health and ipirits, valued more than it is worth. ''^'^* ufimitp:^ ^au mfix*-^<4i-^ mn ^f<%fw|i -if/WF^ it w.rrml IM .ofH um ■/vumon,i^%$<\'iLip'>\u,{.i f^^i\^ ;i}iif\s^^^ni f^iifAHi'^ti That the chance of gain is naturally overvalued, we may karn from the univerfai fucceft of lotteries. The world neither ever faw, nor ever will ftie,^a per£bftly fair bttery f or one in which the wbde gain compenfated the whole loTs j becduft the undertaker could make nothing by it. In the ilate lotteries the tickets ave really not worth the price virhich is paid by the original fbbftribers, and yet commonly fell in the market for twenty, thirty, and Ibmetimes forty per edit, advance. The vaih hope of gaining Ibme of the great prizes is the fbfe eauie of this demand* The fobereft people fcarce look upon it as a fblly to pay a fmall fum for the chance of gaihing tto or twenty thousand pounds ; though they know that even that fmall fum is peHiaps twenty or thirty p«r cent, more than the cliance iS' Worth. In a lottery in which no pr\tc exceeded twenty pounds, though in other refpe^s it approached much nearer to a perfectly fair one than the common ftate lot- teries, there would not be the iane demand for tickets. In order to have a better ehiuice for ferae of the gre^ priaes, ibme people purchafe ieveral tickets, and others, fmaU fbares in a ftiU greater number. There is not, however, a more certain propofitic«i in mathematlcks tlian that the more tickets you adventure upon,, the more likely you are to be a lofer. Adventure upon all the tickets in the lottery, and you lofib for certain ; and the greater the number cf your tickets the nearer you approach to this certaiiity. Tha* THE WEALTH OF NATIONS. *33 * That the chance of lofs is frequently undcr/alued, mid kanx CHAP. ;ivci' valued more than it is worth, we may learn from the vciy -moderate profit of infurers. In order to make infuraiice. eithei' from tire or fea rifk, a trade at all, the common premium mu(l be fufHcient to compcnfate the common loffes^ to pay the expence oi management, and to a6ford fuch a profit as might have been drawn from an equal capital employed in any common trade. The pcrfon who pays no more than this, evidently pays no more than the real .value of the rifk, or the lowed price at which he can reafonably expert to infure it. But though many people have made a little money by inCurance, very few have made a great fortune ) and from this confi- deration alone it Teems evident enough that the ordinary balance of ji^roEt ^ad lofs is not more advantageous in this than in other com- mon trades by which fo many people make foitunes* ^odptAtfn^. however, as the premium of .'nfurance commonly, is, many people defpifc the rifk too much to care to pay it. Taking the whole kingdom at an average, nineteen houfes in twenty, or rather per- . haps ninety-nine in a hundred^ are not infured from fire. Sea: jilk is more alarming to- the greater part of people, and the pro- portion of fhips infured to thofe not infured is much greater.. Many fail, however, at all feafons and even in time of war, with-- out any infurai »v,e. This may fometimes, perhaps, be done without any impriuloicc. When a great company, or even a great mer- chant, has twenty or thirty fhips at fea, they may, as it were,, infure one another. The premium faved upon them: all, may more than compenfatc fuch loffes as they are likely to meet with in; the common courfe, of chances. The negleft- of infurance upohi fhipping, however, in the fame manner as upon houfes, is, ini moft cafes, tl^ ef!e£t of no fuch nice calculation; but of mere, thoughtlefs ralhnefs and prefunHjtuous contempt of the rifk; The contempt of rifk and the prefumptuous hope of fucceis,, arc in no period.of life more active than at the age at which young- . peoples m THE NAT;UR£ A^P CAV6ES of ^%9^ ppopje chuf? tl^^r pro^eijions. .j^ow litt|p ^^19 fear of inis%t«pjp is then capable of ba}ancu>g the hope of gopd luctc, 9ppc;?U's.fti^ Wiore evidently in the readinefs of the common people to enlift as foldiers or to go to fea, thai;i in the eagernefs of thofe .c^f j^e;^^ feft^jpn tO;en^(^ ^<;>M-vytet. a«? cj^l^.tlxe ^bei;9)i,pi;Q^pftjj,,.j ,,,ij^ . What a common foldier may lofe is obvious enough. Withr> out regarding the danger, however, young volunteers never enlift Co readily as at the beginning of a new war; and^ though, they liave fcarce any chance of preferment, they figure to thenifelues it iheiryoutliful fancies a thoufand occafions of acquiring honour and ^iftindlion which never occur. Thefe romantick ho^es make thfc whole price of their blood. Their pay is left than tiiat of -common labourers, ^nd in actual fervice their fatigues are mitth greater. '^ty i^> '" The ^^ahgcrs and hdr-bread(th eicapes of a life of adventures, inftead of diflieartening young people, feem frequently to recom- mend a trade to them. A tender mother, among the inferior ranks; 13* THE NATURE AND CAUSES OF tiaskt of peopk, it oftm afraid to fend her (ba to ichool «t t (et«> port town, left the fight of the ftiips and the converiation and adventures of the failors Should entice htm to go to fea. The dtftant pffo^€t of haza^, from mrhich w« can hope to extricate ourfeWea fey cenraeB and vtdnfs, is notdi&greeable to us, and does noft raife the wages of labour ia any trnplaynntot* U n otherwiie wit^ thofe in which. courag;e and addreft oin be of no avail. In trades which are known to be very unwholefome, the wages of iabour are^ always remaskably high. Unwholefomeneft is a i|>edes pf diiagreeablenefs> and its eifefb upon the wages of labour are* to be ranked under that general head. tir all the different employments of (lock, the ordinary rate of profit vdries more or lefs with the certainty or uncertainty of the returns. ' Theie ^I'e in general tefs uncertain in the inland than in the foragn trade, and in fome branches of foreign trade than in others ; in the trade to North America, for example, than in that to Jamaica. The ordinary rate of profit always riies more or lefs with the rift:, It does not, however, leem to riie in proportion to it, or fo as to compenfate it compleatly. Bankruptcies are moft frequent in the molt hazardous trades. The moft hazardous of all trades, that of a fmuggler, though when the adventure ilicceeds it is likewife the moft profitable, is the infallible road to bankruptcy. The prefumptuous hope of fuccels (stmn to a£l here as upon alt other occafions, and to entice fb many adventuren into thofe hazardous trades, that their competition reduces the profit below whit li fufiicient to compenfate the rifle. To compeniate it compleatly, the common returns ought, over and above the ordi- nary profits of flock, not only to make up for all occafional lodes, but to afford a furplus profit to the adventuiers of the fame nature with the profit of infiirers. But if the common returns were fuf> 7 ficient f ft fi^ ^#^fe«AL1«il''Of ^NXtlONIi'T H7 ^aJreeaWeii^cjf tWe toittifs,' ^^Htfrfflt^ fecttrky with which if'isaftaiW. ' frt)(j'6iht'of apt^WerfelV'dtdifa^ealilbttfcft,' Iftc^ ii' itttc oi- 'no (iiferwiceift 'thrf^f^r iit«!ei^ part of the' aiffeltrtrt Smpioynientf of Itock ; but a girtfi^t deal ift' thofe of labour /' JWd tlie ominary iprbfit of ftock, though it iifes ^th tht'r^, ddes rtot' always fc«m to rife in proportion' toat. It thouM folfow fron\ all tl»s, that^ in the fame focicty or neighbourhood, the average and owUnswy . wiles *j)f -.profit in f I»W W^rept empjoyments of (lock fhouMlNrflionbili^arly upon a ie,vel |han the pecuniary wages of '.ciifibrfintibrtsioflabpMr. They are fo, accordingly, Thp difr i>.::t^jsOr bctivcea^ the jear;iings ,of a coffumon labourer and thpfe.^ aiweUxmpIoyed, lajvyef pr phyfi^ian^, i§ evident^ njuchl^ea^eri, tlisia- tkat^ btttweoi the ordinary profiits. in any two different bmfMhPSiqfttadei The. apparent diirerence« befides, i|i the profits b^diflRHNiAt trades, is generally a deception ariAng from our not «hiray»^difttagui(hing what ought to be confidered as wages, from ^ha* uch, mcer and more d^lio^tc matter tftan that of any artificer whatcvw ; and the truft which is iteppfe^l in him ift of much greater impoitance. He is the phyiician of th|B pool' in all cafes, and of tlie rich when the diftrefs or danger is Vtot "V^ gt^t« His reward, therefore, ooight to be fui^ab^e to fiis -fkill and his ti-uft, and it arifcs generally from the price at ^ Vol. I. T ' which 13* THE NATURE AND CAUSES GF B O^O K which ( he Ms his drugs: ' F'li the whole drugs whidv^thc bcft employed apothecary, in a lai^ market town, . will fell in a year, may not perhaps coft him above thirty or forty pounds.' Though he (hould fe*'' them, therefore, fcM: <;hree or four hundred j ioP country villages. Grocery goods, for example, are generally much cheaper ; bread and butchcr's-meat frequently as cheap. It cods no more to bring grocery goods to the great town thah to the country village j but it oofts a great deal more to bring com and cattle^ as the greater patt of them muft be brought from a much greater diftance. The prime coft of grocery goods, th^refore^ being the fame in both places, they are cheapeft where thfe leaft profit i& charged upon thorn. The prime coft of bread and butcher's- meat is greater in the great town tlian in the country village J and though the profit is lefs, ' therefore^ they are not al#ayb chbaper there, but often equally cheap. ' In fuch artidesi as bread and butcher's-meat,. the fame qaufe, which ditniniflfi«s apparent profit, increafes prime coft The extent of the market, by giving employment to f /eater ftocks, diminifties apparent prbfit « but by requiring fupplies from a greater diftance, it increafes prime coft. This diminution of the one and increafe of the other feem, in moft cafes, neariy to counter-balance one another i which is probably the reafon that, though the prices of com and cattle are commonly v'-y diiierent in diffeient parts of the !nngdom, th<^ of bread and butcher'»-fHcat are generally very nearly the fitme through the greater part of it. -ii inxi .icy Though the profits of ftock both in the wholefale and i^etail trade are generally lefs in the captal than in fmall towns and country villages, yet great fortunes are frequently acquired from T z , fmaU (SfliU^ ^di ;;i ?amti'j/p3nt 'jjci; .>Ji> t* 140 THE NATURE AND CAUSES OF B O O K foudl bf filings an the fof mer» «nd (carce ever in the latter. In rsftaU towns and country viUages, on account of the narrowneik of the market* tirade omnot always be extended as ftock extends. In fuch pkces, thereibt'e» though the rate of a particular perfon's- profits may b« ^j^ high, the fum or amovmfe of them can neva* be very great, nr .or^equently that of his annu^i accunmlation. In great towns» ctn the contrary, trade can be extended as flock increafes, and the cre^ of a frugal and thriving man in* creafts much fafter than Ids ftodc. His trade as extended in pro^ portion to' tiitt' amount x)f bodi, and the iuoi or amount of his> profits is in propordon to llhe extent of his trade, and his annual accumuhition in proportion to the amount of his profits. It feldom. happens, howeve , that- great fortunes are made even in great towns by any one regular, eftablifhed» and well known branch of bufmefs, but in confequence of a long life of indufhy, frugality, and attention. Sudden foituaes, indeed, are ibmetimes made ia fuch places by what is called the trade of fpecuhtion%. The fpe- culative merchant exeitifes no one regular, eflablifhed, or weli known branch of bufmefs. He is a com merchant this year, and a wine merchant the next, and a fii^gar, tobacco* or tea. merchant the yeai' after. He enters into every trade when he forefees that jt is likely to be moic than comm,only profitable, and he quits it when he forcfees that ifis^pvoiits are likely to xetum to the level o^ other trades. His profits and lofies, therefore, cmi bear no regu- lar profXHtioA to tiio& of any one eftabUflied and w:ell known branch of iwiihefi., A hdtA adventurer may fonKtimies acquire a confideraUe fortune b^ ttVo or three fuccefsful ipeculations j but b ;ufl as likely to lofe one by two or three uniocce^fid Ones. This trade can be carried on no where but in great towns. It is only in places of the moijk el$e»i^iv6 con^tmetce and corref^^deaca that the in^eUig^nce requifite for it cai% be ha4^ The five circumflances above mentioned, though they occafion confiderable inequalities in the wages of labour and profits of flock, J occafion THE WEALTH OF NATIONS. HI occafion none in the whole of the advantages and diiadvantages, C HA P. real or imaginary, of the different employments of either. The nature of thofe circumftances is fuch, diat they make up for a fmall pecuniary gain in fome, and counter-balance a great one in others. * In order, however, that this equality may take place in the whole of their advantages or difadvantages, thi'ee things are re- quifite even where there is die moft perfect freedom. Firi^, the emfdoyments muft be well known and long eftabliihed in the neigh- bourhood { fecondly, they muft be in their ordinary, or vliat may be called their natural ftate; and, thirdly, they m aft be the Ible or principal employments of thofe who occupy xhisttu.-M ^e i • v.uiiyi yao vftfi Vfl sA^y ertploytd ib*wt ftreh d<«hitt6(ttties. Hf* ^ti^feaOeurt't^ Buy thttn tip whfctttit fbie^ fees that their' pilctt'ii likely to rilb, and to ftll thtm wHen iris likely to fall, ■■'i';"'^-^ --i--' - '-^^^ ''^ ' •^'-^' " -n.. )t Thirdly, Tnw equality m the whole of the advantages ana disadvantages of thcdjnerent emp^naepts of lalpour and Itock* can take place only in fnicn as are the foiie pr princlpaL cniplo^n^pnts When a perfon derives his fubnttence fnnn one employment, w^hich does OGi. occupy, the great ej- partof hia %tft»^\n th^^^er- vals of lus leifuce he is often willing to ytfprjf «t.iDptl]^^r,.,% ks wage9.,tiian^ i^fffi^^^pth^m^^^^^^^ 1 .-Tbejik ftill fttbfifts in many parts , of ScptUn^ .<^ , ietr q£ profile qsd^d Cotters or Cottagers, though they wem, more frcguci^t f^taf years ago than, they are now. They are a fort pf put-feryai^t^ of the landlords and farmers. The ufual reward which thf^y ^receive £ronii tjhdr uMifters is a bouie, a. fmall garden fthctr]abottr^ and the cultivmion/iof^ their - tient THE WEALTH OF NATIONS. H5 tient timet they feem to Have been common all ova' Europe. In C HA P. countrict.iU cultivated and worfe inhabited, the greater pait of Landlords and farmers could not otherwife provide themfelves with the extraordinary number of hands, which country labour requires at certain fcafons. The daily or weekly recompence which fuch hibourers occafionally received from their mafters, was evidently not the wholf price of their labour. Their fmall tenement made a confiderable part of it. This daily or weekly recompence, how- ever, feems to have been confidered as the whole, of it, by many writers who have colteded the prices of labour and proviftons in antient times, and who have taken plcafure in reprefenting both as wonderfully low. r Jill ^viMfi- ••s.n leriw b«»; Tttt produce df fuch labour comes frequently cheaper to market than would otherwife be fuitable to its nature. Stockings in many parts df Scotland are knit much cheaper than they can any where be wrought upon the loom. They are the work of ^rvants and la- bourers, who derive the principal part of their fubfiftence from fome other employment. More than a thoufand pair of Shetland (lockings are annually imported into Leith, of which the price is from five-pence to feven-pence a pair. At Learwick, the finall capital of the Shetland iflands, ten- pence a day, I have been af- fured, is a ct>nnnon price of common labour. In the fame iflands they knit worfted ftockings to the value of a guinea A pair and upwards* Dtctn: tmit jo+ti/^ Uinfiv -ifr"- ■■*■ - i^m^ihWr:}:!--'. M-i^i¥*^'-- -i Tut fpinnihg of linen yam is carried on in Scotlahd nearly in the fame way as the knitting of ftockings, by fervants who are thiefly hired for other purpofes. They earn but a very fcanty fub- iiftence, who endeavour to get their whole livelihood by dther of thofe trades. In moft parts of Scotland ihe is a good ipinner who ban earn twenty-pence a week. Vol. I. U In i! THE KATVRfi' AND CAUSES OF Im ophlenf cowiVrtM' tfacr tniflttt if gthwrallf b exftBnfive^' thtfe any one trade is fofficien« ttt employ th« iih«l0 liibour aiuUftotk of thofe who occupy it. Inftanct»of people* d living by one employ- fnent, and at the fame time deKJving ibme little advantage fronn another, occur chiciiy in poor countries. The following inftance,. however, of foniething of theftlne kiiubiy to bfr fi»und in the capital of a very rkh one. There is no city in Europe* 1 believe^ in which houfe'-rent is deaf er than in Londoit, and yet I k^KKw |i# f!apital in which a furniflied aparifneht citi be hktd fb i^heap. Lodging is pot only much cheaper In London fhafi In l^st^^ St i« fnoch chdiper than* in Edinboi^ df the fanie degree of gbddn^ft^ and what may feem extraordinary* the deamefs of htoafe>#ent is the caufe of the cheapneTs of lodging. The deamefs of hduft-rent in LondOHt anfes, not only from ttiofe caufcs which render it dear in alt great capitnk, the deameft o^Iabwip, tkie deit^tfeftdf alltha materials of building, whidi nraft g(^Mer jifiy^ bi IpAm^ Awh tk ptat dlAanee, and abeve tAl the dtearnefif of 'gft)ilrid^i1en4r* «v«k^ lai^lord ad!i^ the part of ainoiiopoiift, dnd fbei|Meh^ty eJciiAihg: a higltet itnt foi- a ^gte acre oi baifland in a towny tkai^ ca» 'ist had for a htrndred of the betl in the cotimryj but It allies' ihoqA ^m the ptfculiar manifera and cii/!;otns of the people,. v«^ich obllg^ every maimer of a fkmily to hire a whole hourc from top to bottom. A dwelUng-hpuie in England meana every utinaf that is contained under the iame roof. In France, Scotland, and many odier parts of Europe, it frequently means no more than a fmgle ftory. A tradefman in London is obligipd to hire a whole hp^ie.in ^^ jpart of the town where his cuftomers live. His (hop is upon the ground- floor, and he and his family flc4^ in the gavretjandheende^^vpurs to pay a part of his houfe-rent by lettiii^ the two 9|id4^ Apfi^^ \^ lodgers. He expe£ls to maintain his family by his trade, and not by his lodgers. ' Whereas, at Paris ai^, Edinburgh* the people who let lodgings, h^ve, cQmeapi^y 09 P^H^^icsias cf.4*%fift tj/'i I'i .- and THE WEALTH OF NATIONS. «47 mA the > price of H» iodging niioft. p«y* not oily tht rent of iChe C ha P. hottic^ but the wbok fnnr.n^i, .if vrffronn orfvf '»|ort! CUfCj^ ait the ineQugl^tiei in tpe whole of the aovai^tag^fl and ,^^, (^ziiiWX^%s of t||e 4iiiFerent ei^piloymentf of labqur and iV.ck, lyhM^hJ^^e.^efe^ of 41^ 9^ the three ieq,uUItes above mentioned mu,ft,9!9caf)on» .^ycn^hprcitl^ere is the o'oftpeifeft liberty. But th^ Policy of Europe, by not leaving things at perfe£^ libeity, oc- caGQirii o^ec inequalities of much greater impoptftncc. ifll jk> o)or/) a. ). ' .'It does this chiefly in the three following ways. Firft, ' y re- ftraining the coimpetttion in fome employments to < frnai)*^ num- ber thaj) would otherwife be difpofed to enter into u <'mi Secondly, by increafing it Ih others beyond what it nati rally wduld be; ^nd, thii<)iy, by obftru6ling the free circulation of labour and fVock, both from employment to employment and iVom place to f^^'Z iWiiiufwiU^^ ^;{} *i» '.nK>f; ' ..." •'rji{u39<|.i>rit.mo'.»1 'y^^l t^'^di Europe occaflons a ve^ mtp^k inei. qiialii^ in the whole of the advantages and difadvantages of the diflerent employments of labour and ftock, by reftralining ^e competition in fome employments to a fmaller number than might otherv^ife be diipofed to enter into thc^;. The ejtclUfive privileges of corporations are the principal meaiits it Qiakes ufc of for this purpofe. . : - . ' ''■' Tint exdative privilege of an incorporated trade neceflarily rieftrains the competition, in the town where it is eftablUhed, to ^' U 2 thofe >. : #? TH© >iN'ArT^R'D . AMD I CAUSES tOF Wi«^^ «i the town, ,^»Wqy a. 9M^«?r.proj?ip4y.,qimU^4» iak,fOiTunpJ,i|jf; tj^e ne(;effai7 rpquifite for 9btav;iing,?his fiecdqw^^iTliie, l^y^^w»tof the corporatioii regulate ^ foffx^tiit^p^ jijljis nu^b^i; f^ ,9pfuqitiiqes wliich any mafter, is^ ^l9,w^ ,tp ^^ave^, ^^id 4)T^oft^ay?oth(e A\m3!»l^er of years which each appreii^e l^. obUg^^ .t;Q . fecve. « TJ^e lint^nitionf of both regulations is to re(lraiiii..ifhe,qcinpetition to, a i;nuch, Di>aH?r number than mij^t otharwife be 4iff)^^4 :<<> center into rfk^.ti'^. 't^c 'limitation 6( the n^W^of apprentices jn2ftw»w,j^f4«^^ /^'Ibtig %TTia^^t^ api^ticeltiip rei!tf kinf it;,ropr? ipdirsfifc^, !b|«t, 48 cifeftually^ by mcrejmng tfie titpcrio^ of educ^tioot. mni^bimns 'm t- •« rU/ Iir Shefiieldina maftfsr cutter .caiivi|uire. mor^ than opp' apprentice at a time, by a fcye*-law of the corporation. inNorfollc arid Nor- voeh'iii^iDaAer/wsavier cam )hav«:inore (than two apprentices, un^er plain .of I forfoitiii^ ^e pounds a>. month to the king. No mafter hattw can have rhcfre than two appientices any where i^ ^^ngland, or: in the EngUih plantations, :i^xidienp(ain of forfeiting 4ve pounds a^mpnJt^i;^ half to' the kii^g* and; half toi him wh^l ihaU) fi|e in: g^y ceHlut' of cecoed. > Botth thdTe r^ulauons^ though they have; l^qn confirmed by a pubUck law of the kingdbm^' 'are* evidently. 419- tated by the fame corporation fpirit which ena^ed the bye>law of Sheffield.' The filk weavers in London had fearce, beent m- corperated a year vs^en they eiiaifiieid a bye-law itiftraini;ng aijy maAef from having mbre than two appittitice^ at a time, |t jn^ quired a particular aft of paciiament to refdnd this b^e-law^ ^^^^ , Seven years feem antiently to have bcen.'all 6ver Europe, the ufual term >eftabli(hed for- the duration of apprenticelhips in. the greater part of incorporated trades. All fuch incorporations were antiently called univerfitiesj which indeed, is tha prc^r Latin name for any incorporation whatever. The univerfity of fmiths^ the univerfity of taylors* Scc^ ace expreflions which we commonly ■ju€- nj meet THE WEALTH OF NATIONS. «4f i». ^ ineet With in ^ oU cbdrtera of antieiittowhs. WheA thole par* C ^ P, tkutar tncorporatioiu which are aoir peentiarly called umvtrfitios were firH eftakKflicd, the tarn of jiean which it was ncc«0bry to ftudys in order ta obtain the degree of mafter of arts» appears evideatly to liave been copied firaD the term of apprentieeih^ in common tradet, of which the incdrpoiations were nuich more antient. As to have wrought {&rcn yean, under a mafter properly qualified, was neceflfavy in order to intifle any pcrfon to become a mailer and to hare himfctiF appreotioes in a common trade; fa to havt ftudied kvtti years under a maftcr praperly <}uatificd» was m- ceflary to entide him to become a mafter, teacher, pr doffaw (words antiently fynonimous) la tiie liberal arts, and to have fchtrfars or appreatiees (words likewife Oirigimdly iynonimotti) to Audy under him. , ; -ii. -;«■-. ^»^« ,iui.u^iii«uuu ,>j:. By the 5th of Elisabeth, commonly called the Statute of Ap« ^ prenticefliip, it was eoajEted, that no perfon ihould for the future exercife any trade, craft, or mii^eiy at that time exercifed in England, unlefs he had previQufly Cerved to it an apprenticefhip of (even years at leaftj and what before had been the bye-taw of many particular corporations, became in England the general and public law of all trades carried on in market towns. For though the words of the flatute are very general, and feem plainly to include the whole kingdom, by interpretation its operation has been limited to market-towns* it hawing been held tliat in country viUnges « person may ex«rcUe (everal diiferent trades^ ijlhoiifih hff hM not ierved a f«ven ycais gpprenticelhip to each, they being n«Q«(|avy (of tb* ooQvewency of the inhabitants, ati4 xl» nunber ttf people freqtientiy not being fnl^icnt to iu^ljf g Mich with A pwticttlar^ett^f hand*. ffs?»it. ./ •33V .** ' By a iirift ipterpretatlbn of the wor. zabeth. But a wheel-wiight, though he has.hever feived lan apprenticeflupi to « coach-maker,, may, either himfeif make or employ journeymen to make coaches j the trade of a coach- maker not being within the ftatute, becauie nqt exet'cifed in England at the time ^ when it was made. , The manufa£tures of Manchefter> Birmingham, and Wolverhampton,, are jmany of them, upon this account, not within the ftatute; not having been fxercifed in England before the 5th of Elizabeth. In France^ the duration of apprenticefliips is different in dif- ferent towns and in different trades. In Paris,, five years is the ■term required in a great number; but before any perlbn can be qualified to exercife the trade as a mafter, he mu0, in many of them, ferve five years more as a journeymari. During thjs latter teroir he is called the companion of his mafter, and the term itfelf is called his companionfhip. ''In Scotland there is no general law which regulates univeifally the duration of apprenticefiiips. The term is different in different corporations. Where it is long, « part of it may generriljr be redeemed by paying a fmall fine. In moft towns too a very fmall fine 16 fufficient to purchaie the freedom of any corporation. The wea^ vers of linen and hempen cloth, the principal m^ufadtu'res ^ the country, as well as all other artificers iubfervient to th^m, wheel- makers, reel-makers, &c. may exerdie thpir trades in any ♦I .iv town 'the fWB>ALTi^^Of;5^TA^T40pjf^ ip pr^ccH4|»,evpi| i» fofne Yi^fgr i^^ |ji^4e?, an4 in general iknow of ao C(Ow>j3rjE,ii|iJf;ifi^9|)^fn ,1^^ i^Qt^xfif^ Iftws arc ib Htds 't'BE pr^^brtjr w!iic!i every mai^ Iia»Tn his cmnjjjioimrf aait 19 the bri^hat Ybundatibn of all other prppertjry, i|3 it is ^he ,mp^ fecrd an^ invioljable. 1*he j>ateimonv^ of a jpppr jman lic|s in tjie: fbrei^gtti and diexterlty of lus ij^znd^y ,ai^4 t^ hinder ^ liiij^ ,^Vot^ employing this ftrength and dexterity in wKat manner he thintu» proper without injury to his neighbour^ is a^lun violation; of thia moK facred property. It i» a manifeft encroadiiment upcm th» )uff 'lil^erty bioth of the workman^ and of thofe who mi^t ' bfr difpofed to employ hin?. As it hinders the one horn working at what he thinks proper, fo it hinders the whcr from (employing; whom they tfufik'pcopen HTo judge whether l^e is^ fit to be em« ployed, niat lurriy be trufted to' the difcretioit of die^m|d(^er» WMJIe interetH^ it fa mikh concerns. The affedted anxiety of the law-giver left they fhould employ an improper perfbn,. is evidentljf^ as in^rtinent as it is oppreffivc -d ..n-t ^vl ix^jbV ■ ' . t. I t -tx jr\ •\' .,■■.■■ ■ llM-,,',' l(> Tub inftitiition: of long a^rentlce0up» ^m givs nq iecuj^tf that infufficient workmanihip (hall not frequently be exp9{ > A ' joamcyitiaft' who>w«rk* by the ]^Uee is likely to be mduftifioui> becaofe he'dcrii^et tf benefit ii>dm every exertion of his induftty^ An apprentii^ki likely to be idle^ and aimoft always i»' £>, beew^k^ku-no jnunediateinteieft t^be otherwife* In the inferior employments, the iWeefs of'lahdlu' confifl altogether in the cec^oipence of labour. They who .|M:e ^neft in a condition to enjoy the fweets of it, are likely fooneil: to conceive a relifh for It, and to, acquire th^ surly habit Of induftry^j A young man naturally iconceive^ anxavierfion to labour, when; ii»r a long lime he receive^ no benisfit from it^ >. The boys who are put 6nt a{:(p]|%ntices from^^ublick charities are generally boimd for JDlore' dian the ufua^ ni;MnbiBr of years, and they generally turn ^of 'a few-Jidays mig^t b Ititfve commdn nwehanick trades, thofe of a few days might certahil^ be fuffieicilt. ' Tbe'deyteiity of hand, indeed, even in cptv>]p6rtion to the little work which hi could e?(Jeciite, and pffying' in his turn for the mateiials whith he mt^ht Ibmetimos fpotl through r ukwardlidfs and inexperience. His education would generally in this way be more efie£hial, and always lefs tedious and expenftve. The mafter, indeed, would be a^j^r,.^ H^ would Ipfe aU the wages of the apprentice^ which he i^^vy /j^Yfi?, .fo|:,,, (even years together. In the ;^ cad. peihapsj, the ,^pp;]Qn^ce, himfclf would be a lofer. In a trade fo eafily learnt h^y^jpi^ldi^xe mprp competitors, and his wages, «'heti became toem ivere lofers by thefe regulations. But in their dealings with ths jj,^ ■ country THE WEALTH OF NATIONS. 155 CQunUy titey werie ,sm greiit gaifier^Si and in thelib latter deal- CHAP, ipgs conCti^ ^he ^h»U tirade which fiippprts and enriches EvJiKV it;o^,di:aws its iMfholefubrtiftenoe, And lUl the n^terials of its induftry, from the country. It pays for thefe chiefly in two ways: fitfk, by fQndiuKg ^|ck to the cosufitry a part of thofe materials wrought up and manufa^red ; in which cafe thdr price is aujgment^ by the wages of the Workmen^ and the profits of their mailers or immediate employers : fecondly, by fending to it » part both of the rude and manufa6Vured producb, either of oth^r countries, or of diflant pants of the i&ime country, imported into /thse town; -in which cafe too the oiiginal price of thofe goods k augmented by the wages of the carriers or fallors, and hy the pro- ^V) of the merchants who employ them. In what is gained upon the iirfl of thofe two branches of commerce, confifls the advantage which the town makes by its manufaflures j in what is gained upon the fecond, the advantage of its inland and foreign trade. The wages of the workmen, and the profits of their different em-, ployers, m^dce up the whole of what is gmned upon both. What- ever regulations, therefore, tend to increafe thofe wages and profits beyond what they otherwife would be, tend to enable the town to purchafe, with a fmaller quantity of its labour, the pro- duce of a greater quantity of the labour of the country. They give the traders and artificers in the town an advantage «ver the landlords, farmers, and labourers in the country, and break down that natural equsility which would otherwife take place in the commerce which is carried on between them. The whole annual produce of the labour of the fbciety is annually divided between 'thofe two different fetts of people. By means of thofe regiiIatiW ^utl i . ,.. • . i, ;, Tub inhabitants of a town, being colle^ed into one place, can eafily combine together. The mofl infignificant trades carried on in towns have accordingly, in forae place or other, been incprriorated ; and even where they have never been incorporated, yet the corporation fpirit, the jealoufy of ftrangers, the averfion to take apprentices, or to communicate the fecret of their trade» generally prevail in them, and often teach them, by voluntary afTociations and agree- ments, vO prevent that free competition whicli they cannot pro- hibit by bye-laws. The trades which employ but a fmall number of hands, run mofl eafily into fuch combinations. Half a dozen wool-combers perhaps are necefTary to keep a thoufand fpinners and f HE WEALTH OF NATIONS. ''ff arid ¥itAitfi%t ^rk. By combining not to tsdce apprentices they C H^A P. can nbt '6hty engprofs the employment, l)ut reduce ' the whole manu- fa£hire Int6 a fort of flavery to themfelves, and raife the price of theii' labour much above what is dUe to the nature of their work. " -'^'""'^^f oh all goo^s imported by alien merchaTtts, alt tend to ihe fame pur^oie. dorporatidri U^s enable the inhabitants of towns to raif^ their prices, without feeing to be under-fbld by the free competition of their own countrymen. Thofe other regulations fecure t^em equdfly dgalnft that of fomgne^s« The enhancement of priic dccalibhed by both is i\^ery Where fihalty p^d by the lanalords, farmers* and labourers df the cbuntry, who have feldom oppbie^ the ellablifliment of futh monopolies. They haive com- monly neitker iDclinatibh hot- fitnef^ to enter into combinations i and tile clamour dhd Ibphif^ry of merchants and manuikflurers eafily perfuade them that- th; piivate intereft of a part, and of a fub- ordinate part of. the fociety, is the general intereft of the whole. > In Great Britain the fuperiority of the ihduftry of the towns over that of the couutiy, feeims to hive been greater formerly than in the prefent times. The wageis of country labour ap- proach nearer to thofe of manufafturing labour, and the profits of ftock employed in agriculture to thofe of trading and manu- faftuiing ftock, than they are faid to have done in the laft century, or in the beginning of the prefent. This change may be regarded as the neceffary, though very late confequence of the extraordinary encouragement given to the induftry of the towns. The ftock . accumulated in them comes in time to be fo great, that it can no > longer be employed with the antient profit in that fpecies of in- duftry. which is peculiar to them. That induftry has its limits like every other; and the increafe of ftock, by increafing the c(Mn- - petition, neceffarily reduces the profit. Tl^ lowering of profit in the town forces out ftock to the country, where, by creating a new demand for country labour, it neceffarily rajfes its wages. It then fpreads itfcl/, if I may fay fo, over the face of the land, and by being 159 BOQj^r beingr employed i^ agno^lturc iiin.iMUt reftorcd tQ tht tOK^klry, at tlw expence of wl^ch, in a great meafure, it had ori^pnally been ,accumuUted in thie town. That every where in Europe the greateft improvements of the country luve been owing to fuch overflowings of the flock originally accumulated in the towns, I.fhaU endeavour to fhow hereaftcri and at the iiune time. to de- monflrate* ■ that though fbme countries have by this courfe attained^ to a con0derable degree of opulence* it is in itfelf neccfCirily. flow»- unicei;tain, li9l;>le to be diilurbed and interrupted by innumenble. accidentsi as;4 ^^ ^^T refpe6l contrary to the Ofder of mature and. of re^on. The int^refls^ prejudicest laws and cufloms whicl^ have given occafion to it, I fhall endeavour to explain as fully and diflindly as I (;ai^ in the tl^rd and fourth hooks of thlK enquiry. . •- . , , PEOPI.B of thef^me trade fjbldom meet togethei', even for. merriment and dlverfion, but the converfation ends in a confpiracy; agdinf^ ^he publick, or in fome contrivance to raife prices, Jtiai, imppfTible indc^ to pre^qit f^ch meetings, by any Uvr whii;h;i either coi^ld be executed, or would be confident with liberty aind j juftice. But though the law cannot hinder people of the fapiQ trade from fbmetimes afTenjibling together, it ought to. do no-,, thing to^f^cgitote^^f^^^^ lei^:^.^B^d5£ ^B' Mjil *^?-Sf)% lie rri ?ril k.» -yawt m m5^,tooia^^ ' •''^■^y^fMtmlos .,_^ , ,_ ^ ■ . -', ':■■■ -,.-.( '•■ ; •*»;>-• iv-Mfi * A REGULATION which obliges all thofe of the fame tr<»dc in a particular town to enter their names and places of abodcin a- publick regifler, facilitates fuch afTcmblies. It connects indivirr; duals who might never otherwife be known to one another, and,- gives every man of the trade a diredlion where to find CVC17 other man of it, .™ . ' , , • ■'fff';'^ 4-f^ ,'..ijii'jqmo5''tj/.^ A RBGUI ATIO^ THE WEALTH OP NATIONS. 161 A tt«OLATioM which entblct thofe of the fiune tnitiotki CHAP, themfeW«i m order to provide for their poor, their ficfc. their wi(k)wi and orphini, by giving them a common intereft to manage, renders fuch aflfemblies neceffiny. ■ pi ■) fi Am Incorporarionnot only renders (hem neceflary, but makes the aft of the majority binding upon the whole. In a free trade an effe6lual combination cannot be eftablifiied but by the unanimous conftnt of every fingle member of it, and it cannot laft longer than every fmgle member of it continues of the fame mind. The majority of a corporation can enaCf a bye-law with proper penal- ties, which will limit the competition more effeftuaUy and more durably thati any voluntary combination whatever. 'Mifh\ The pretence that corporations are neceflhry for the better government of the trade, is without any foundation. The real and eife£tual difcipline which' is exercrfed over a workman, is not that of his corporation, but that of his cuftomers. It is the fear of lofing their employment which reftrains his frauds and correfls his negligence. An exclufive corporation necefliarily weakens the force of this difcipline. A particular fettoof work- men muft then be employed, let them behave well or ill. It is upon this account that in many large incorporated towns no tolerable workmen are to be found, even In fome of the mod necef- fery trades. If you would have your work tolerably executed, it muft be done in the fuburbs, where the Workmen having no exclufive privilege, have nothing but their chara£ler to depend upon, and you muft then fmuggle it into the town as well as you can. ' m * : It is in this manner that the policy of Europe, by reftraining the competition in fome employments to a fmaller number than . Vol.. I. Y \ would IHl TH» NATURB AJ*^D CAWE5 OP BOOK wo«ld Qthtmie bf 5li4)o^ to oBtMr into dwim ocoafionfta vikfjfr ' important inequ»lit]r bifthe whidB' of- ibe advantages, andf difiiik vantage of the difforent empioyaenta oS laiBODf andi flocks ati -j^ Secondly, The policy of Europe, by mcveafmg the compel lition in feme eQipIoymenta beyond what it naturally would be^ Qc^ailons another inequality of an oppofite kind in tiie whole of th^ advantages and difadvant^fs of the dil^iacent employments olS laboui; and toH«- I i 1 * 1 « I. ! 1 1- f Ai Ir^ :K>rri . It has been: confidered ais of £> much in^tortance that a proper qium of private founders have eftabliihed many penfions, fcholarfhip^ ex-- hibttians,, buriaries* 4cc* f^r tl^ipuipoie,. which dranr many-iqore people into thofe. tradestthan could othtrwife pretend to ifoUovgt; l^env III all chfMtian oowitries* I believe, the edueattoav of the gieater part of chyr^hmea is paid for in thir manner. V«cy fern 9^ th^ ace e4u(;at6d altoge^iev at their owaexpence. Tiiciong». tedions and expenfive education, thi?refore» of thole who aie,,wiU not a)w^yj procure them, a fuitable j%ward, the church bong crowded' with people who, in order to get employment, are.wiHin^ to accept of a much finaUeir recompenfse tha^ )ybair4ch an eda«- cation would otherwife have entitled them toj and in tins manner the competition of the poor take^ away the reward of , the rich. It would be indecent, no doubt, to compare either a cuiate or a chaplain with a journeyman in any common trade. The pay of a curate or chaplain, however, may very properly be conruler«4 as of the fame nature with the wages of a journeyman. They are, all three, psud for their work according to the contrafl which they may happen to make with their refpe^tive fuperiors. Till j^jter the ipiddle of th^ fourteenth century^ five merks, containing •M-'* about ^HE WEALTH OF NATIOWS. W3 «lffnit!»imiscli)iU»ttits 1(7^ pounds of oar preibttt imoti^t was in GflAF, £n|;lanfll the ufiulpay 'of a ciuate or ftipendiaryipariih prieft* as we find it equated by ihe decrees of feveral different national councils. At the fame period four^ence a day, containing the ^feme quantity of-^lvttr as a .fliilMng of t}ur prefent mcmey, was 'decldred to be the pdy of il thcifter ^afen, and three-pence a day, equal to nine-pence of burprefent money, that of a journeyman mafon. The wages of both thefe labourers, therefore, fuppofing them to have been conftantly employed, were much fuperior to thofe of the curate. The wages of the matter mafon, fuppofing him to have been without employment one-third of the year« \irould have fully equalled them. By the 19th of Qiieen Anne, c 12, it is declared, ** That whereas for want of fufHcient main- d in all Roman. Catholick countries, the lottery of the church is in reality much more advantageous than is neceflary. The example of the churches of Scotland, of Geneva, and of feveral other proteftant churches,, may fatisfy us that in fo creditable a profelfion, in which education is fo eafily procured, the hopes of much more moderate benefices- will draw a fufficient number of learned, decent and, refpe«Stable men into holy orders. <*- In profeflions in which there arc no benefices, fuch as law and; phyfick, if an equal proportion of people were educated at tlie publick expence, the competition would foon be fo great, as to fink very much their pecuniary reward. It might then not be worth any man's while to alncate his fon to either of thofe pro- feflions at his own expenoe. Tlicy would be entirely abandoned to fach as had been educated by thofe publick charities, whofe numbers and neceffities would oblige them in general to content themfclves with a very miferable recompence, to the entire degra- «Ution of .fhe now refpedabLe profeflions of law and phyfick. . ' That THE WEALTH OF Kh^TlOHifSi i»; ^TwAiv' iaiprofyaeovis race of men commonly dalfecb mea of <3H^ap. letters, are pretty much in the iituation which lawyers and phyfi- «aans probably would be in upon the foregoing fuppofition^ In every part of Europe the greater part of them have been educated forthechurdi, but have been hindered by different reafons from entering into holy orders. They have generally, therefore, been educated at the publick expence, and their numbers arc every where fb great as commonly to reduce the price of their labour to a very paiajiy recompence. :_,M^^:i^fiio hnn z^non:>d trrig 3i?T ^ . Before the.mvention of the art of prmtmg, the only employ>- ment by which, a inan of letters could make any thing by his talents, was- that of a publick teacher, or by communicating to other people the curious and ufeful knowledge which he hjid acquired himfelf : And this is ftill furely a. more honourable, a more ufeful, and in general even a more profitable employment than that other of writing for a bookfeller, to which the art (tf printing has given occafion. The time and ftudy, the genius, knowledge and application requifite to qualify an eminent teacher of the fciences, are at leaft equal to what is neceffary for the greateft practitioners in law and phyfick. But the ufual reward of the emi- nent teacher bears no proportion to that of ihe lawyer or phyfi*. cJan J becaufe the trade of the one is crowHed with indigent people, who have been brought up to it at the p;:jlick expence j whereas thofe of the other two are incumbered with very few who have not been educated at their own. The ui'ual recompence, however, of publick and private teachers, {,v.?\[ as it may appeal, would undoubtedly be lefs than it is, if the competition of thofe yet more indigent men of letters who write for bread was not tal.en out of the market. Before the invention of the art of printing, a fcholar and a beggar feem to have been terms veiy nearly fynonymous. The different governors of the univerfities before that time appear to have often granted Ugenccs to their fcho»ai"s to be^. ^ W ^ la- W .1 'i I \ \: ' :Cd6 THB -NATURE AKD CAWSEt OT fi 0€ IC Ik antkrit times, before any <:harItio of thi« kind had bee» efti* 1:^^d for the education of indigent people to tlw learned ,pro|ie(^ iions, the rewards of eminent teachers appear to have been muck lAore conilderable. liberates* in what i& univeriaJly agreed, both by him and his fatlier Philip, thought it worth while, notwithftanding, to return to Athens, in order, to refume the teaching of his ichool.. Teachers^ of the fciences were probably in thofe times lefs common than they came to be in an age or two afterwards, when the competition had probably fomewhat reduced both ihe piicc of their labom- and the admiration for their perfons. The moft eminent of them, however, appear always to have enjoyed .a degree of confideration • much fuperior to any of the like profeflion in the prefent timeSr- The Athenians fent Carneades the academick, and Diogenes the Aoick, upon a folemn embafly to Rome -, and though their city had ; then declined from its former grandeur, it was flill an independent and confiderable republick. Carneades too was a Babylonian by birth, and as there never was a people more jealous of admitting foreigners to publick offices than the Athenians* their confideration . for him muft have been very great* I This inequality is upon the whole, perhaps, rather advantageous ■than hurtful to the publick. . It may fomdVvhat degrade the profef- fion of a publick teacher j but the cheapnefs of literary education is forely an advantage which greatly over- balances this triflmg incon-- veniency. The puWick too might derive ftill greater benefit from i it, if the conftitution of thofe fchools and colleges, in which educa- - tion is carried on, was more reafonable than it is at prefent through the greater part of Europe. fsfi-S ni I 1 ."}*lf s t 111 ;^ ^ Thirdly, The policy of Europe, by obftru6Hng th« free circw- • UtioB of labour and (lock botl|i in^mj^ypltxyjpmXio employment '?>» am ',\- 1 and s68 THE NATURE AN,D CAU$ES Of BOOK and from place to (49ce, oecafions in fome cafi» a very, iin«<>avc4 nient inequaUty in the /whole of the adya^tag<» and dUM ^j; i^k different c|i!iploymen!t?vif{<|8 "to rttu^nf\ "$41 'yrjnfhi iKnhr .-;The ftatuteof apprenticeihip obftru^ts the free ciiisuktM»«f labour from one employment to another, even in the £ime place. The exclufive privileges of corporations obftriift it frwn one place to another, even in the fame employment. ^ntq -irtt noqit It frequently hapi^ens t]>at while high wages are given to^he workmen in one manufatSture, thofe in another arc obliged to 4.ontent themfelves with bare fubfiftence. The one is in an ad- vancing flate, and has, therefore, a continual demand for new hands: The other is in ? declining ftate, and thefuper'>abundianGe -^f hands is, contuiually increafiug. Thole two manuia6tui«s may sometimes be in the fame town, and fometimes in the fame neigh- bourhood, without being able to lend the leaft afliftance to one another. The ftatute of apprenticeHiip may oppofe it in the <»ie cafe, and both that and an exclufive corporation in the other. In many diffei'ent manafadures, however, the operations are fo nmch alike, that the workmen could eafily change trades with one an- other^ if thofe abfurd laws did not hinder them. The arts of weaving plain linen and jxlain filk, for example, are almoii; entirely the Cime. That of weaving plain woollen is fomewhat different ; ]but the difference is fo infigniiicant that either a linen or a filk weaver ni^ht become a tolerable workman in a very few days. If any cif thofe three capital manufactures, therefore, were decaying, the workmen might fnd a refource in one of the other two whkh Mras in a more profperous condition j ? d their wages would neither rife too high in the thriving, nor fink too low in the decayiilg manu- fafture. The linen manufadure indeed is, in England, by a particular itatute, open to eveiy body ; but as it is not much cul- - . . , tivated m dffttetl through the grcatei- part of the coiktry, it(!aii attbrd iio geiMrai rdburoe to the workmen of other decaying manufaftures, who, wherever the ftatute of apprsnticefhip takes place, have rio other choice but either to come upon the parifli, or to work as eomMMfk lltboiirers, f«r which, 1>y theSr bibit^^ they ai-e miich worfe qatlified than for any fort of manufd^ure that bears any refem- blance to theii own. They generally* therefore, chufe to comt upon the parilh. ' h*t9rftY^>rqfttd i5«*8> ^ift m tm'^ .isrfloftK o'? '^1 Whatever obftrufts the free circulation of labour from bnc employment to another, obftru£ts that of ftock likewife ; the quan- tity of ftock which can be employed in any branch of bufinefs depending very much upon that of labour which can be employed in it. €orpo!ration laws, however, give lefs obftmdtibn to thi free circulation of ftock from one place to another than to that of ^abour. It is every where much eafier for a wealthy merchant to obtain the privilege of trading in a town coiporate, than for a l^oor artificer to obtain that of working in it. : ; ; l :.:uuai; .-: 1 i.ar: ifH* fhod hnu ,^ljr) The obftruftion which corporation laws give to the free circu- lation of labour is common, I believe, to every part of Europe. That whidi is given to it by the poor laws, fo far as I know, is peculiar to England. It confifts m the difficulty which a poor man finds in obtaining a fcttlement, or even in being allowed to exercile his induftiy in any p:iii(h but that to which he Iselongs. It is the labour oi artificers and manufa6lurers only of which the free cir- culation is ob'ftrudted by corporation laws. The difficulty of obtaining fettlements obftrufts even that of common labour. It may be worth while to give forae account of the rife, progrefs, and prefent ftate of this diforder, the greateft |)€ft!aps of any in the police of England. »« » » ;ii,' M ll if. Vol. h m "When 170 THE NATURE AND CAUSES OF When by the dslfa'uftion of monafteries the poor had been deprived of the charity of tliofe religious houfes, after fome other inefteClual attempts foi' their relief, it was enadVed by the 43d of Elizabeth, c. z, that every parifh ihouid be bound to provide for its own poor; and tiiat overfeers of the poor fliould be annvfally appointed, who, with the churchwardens, fhould raife by a paiiib rate, competent fums, for this purpofe. . y. .wt, . By this ftatute the ncceflity of proviling for their own poor was indifpenfibly impofed upon every parifli. Who were to. be confidered as the poor of each parifli, therefore, became a queftiou of fome importance. This queftion, after fome variation, was at lafl determined by the 13th and i4t,h. of Charles II. when it was enafted that forty days undifturbed. relldence ihould gain any perfon a fettlement in any parifli i but that within that time it fliould be lawful for two juftices of the peace, upon complaint made by the church-waidens or. overfeers of the poor, to .r2move any new inhabitant to the parifli where. he. was kfl: legally fettled j vmlels he either rented a tenement of ten pounds a year, or could give fuch fecurity for the difcharge of the parifh where he was then, living, as thofe juftices fliould judge fufficient. Some frauds, it is faid, were committed in confequence of this ftatut« J parifli officers fometimes bribing, their own poor to go clandeftinely to another parifh, and by keeping themfelves con- cealed for forty days to gain a fettlement there, to the difcharge of that to which they properly belonged. It was cnafted, therefore, by the ift of James II. that the forty days undifturbed refidence of any perfon necciTary to gain a fettlement, fliould be accounted only from the time of his delivering notice in writing, of the place of his abode and the number of his family, to one of the church* wardens or overfeers of the parifli where he came to dwell. iUi4- (t* ' But THE WEALTH OF NATIONS. «7« toBvT parilh officers,! it feemsj were not always more honeft with C HA P. regard to their own, than they had been with regard to other parifhes, and fometimes connived at fuch intrufions, receiving the notice, and taking no proper fteps in confequence of it. As every perfon in a parifli, therefore, was fuppofed to have an intereft to prevent a& much as poflible their being burdened by fuch intruders, it was further enabled by the 3d of William III, that the forty days refidencc fhould be accounted only from the publicat'on of fuch notice in writing on Sunday in the church immediately after divine fcrvice. . , . , — ir!+: riH'-r"' -'•:' *n -jfv -^^ 1 1* hfFt/."- «( <( T <« After all, fays Doftor Burn, this kind of fcttlement, by ♦* continuing forty days after publication of notice in writing, is f* very feldom obtained ; and the defign of the a£ts is not fo much for gaining of fettlements, as for the avoiding of them, by perfons cotping into a parifli dandeftinely : for the giving of '* notice is only putting a force upon the parifli to remove. But *' if a perfon's fituation is fuch, that it is doubtful whether he is ** a^ually removeable or not, he fliall by giving of notice compel •* the parifli either to allow him a fcttlement uncontefted, by fuf- '• fering him to continue forty days; or, by removing him, to tiy , *' the right." Tbts ftatute, therefore, rendered it almofl: imprafticable for %. poor man to gain a new fcttlement in the old way, by forty days inhabitancy. But that it might not appear to preclude altogether the common people of one parifli from ever efliablifliing themfelves with fecurity in another, it appointed four other ways by which a fcttlement might be gained without any notice delivered or pub- liflied. The firft was, by being taxed to parifli rates and paying them; the fecond, by being elected into an annual pvirifli office and ferving in it a year; the third, by ferving an apprenticefliip in the ^— , -,- 2 2 paiifli; »•• /> J7* THE NATURE AND CAUSES OP p*riifli; the fourth, by being hired into fervice there for a year, and continuing in the i. ic fci-vicc during the whole of it. tjjfflt vstlj ■ Nobody can gain a ftttlcment by cither of the two firft ways, but by the publkk deed of the whole parifli, who are t6o wcH aware of the confequences to adopt any new comer who has nothing but his labour to fupport him, either by taxing him to parifh ratfes, or byelefting him iiito a parilh office. '^- ■U^^ -4 ■, ■IL, No married man can well gain any fettlement in either of the two laft ways. . An apprentice is fcarce ever married, and it is exprcfly enafled, that no married fervant fhall gain any fettlement by being hired for a year. The principal efFeft of introducing fettlement by fervice, has been to put out in a great meafure the old faftiion of hiring for a year, which before had been fo cuftomary in England, that even at this day, if no particular term is agreed upon, the law intends that every fervant is hired for a year. But maftcrs are not alwiys willing to give their fervants a fettlement by hiring them in th\5i i-naanerj artd fervants are-not always willing to be fo hired, beet aJe an every laft fettlement difcharges all tlie fore- going, they migi t thereby lofe their original fettlement in the places of their nativity, the habitation of their parents and. re- 1 t'ons '"' ''"' ''"'' ■'^^'"■'' "■-^iMii-i.^^'^ ii,^,i^w. 5;j ^^tu.. ■ ur^.a .tr:' iijii No independent workman, it is evident, whether labourer or, artificer, is likely to gain any new fettlement either by apprentice- Ihip or by fervice. When fuch a p ;rfon, therefore, carried his in- duftry to a new parifh, he was liable to be removed, how healthy and induftrious foever, at the caprice of any churchwarden or overfeer, unlefi he either rented a tenement of ten pounds a year, . a thing impoflible for one who has nothing but his labour to live by; or could give fuch fecurity for the difcharge of the parifh as 4 two THE WBALTH OF NATIONS. ^72 two juAic«8 cf the peace fliouM judge iuflicient. Whflt ftonrtty CHAP. they (hall require, indeed, is left altogether to their difcretion; but they cannot well require lefs than thirty pounds, it having^ been enacted* that th^ purchafe even of a freehold eftate of leis than thirty pottinds value, fliallnot gain any perfpn a fettlement, as not beipg fujficient for the difcharge of the parifli. But this is a fe- outity whiqh fcarce any man who. lives by laboux' can give; aud TOUch greatq; ftciwity is frequency tlfrnaiide.c^ , . , .„ In order to reftorc in fome ^rcecircjjlation of labour which thofe different ftatutcs, h; .ntircly taken away, the ioventipn of certificates was fallci. u^on. By the 8th and 9th of WilliainJII* it was eitaftcd, that if any pcrfon Ihoold bring a certi- ficate from the parifli where he was laft legally fettled, fubfcribed by th^ churchwardens and overfcers of the poor, and allowed by two juftices of the peace, that every, other parifh fliould be obliged to receive hinJi.tliat he fhould not be removable merely upon ac- count of hi? beji^g likely to become chargeable, but only upon, his becoming actually chajgeable, and that then the parifli which granted the certificate fliould be obliged to pay the expence both . of his maintenance and of his removal. And in order to give the moft perfeft fecurity to the parifh wherr fuch certificated man fliould come to rcfide, it was further enafted by the fame ftatute,, that he fli uld gain no fettlement there by any means whatever,, except either by renting a tenement of ten pounds a year, or by fcrving upon his own account in an annual parifli office for one whole year J and confeqacntly neither by notice, nor by fervice,^ nor by apprcnticcftiip, nor by paying parifli rates.. By the 12th; of Queen Anne too, fl:at. i. c. 18. it was further enafted, that, neither the fervants nor apprentices of fuch certificated man fliould gain any (ettloment in the parifli where he refidcd under fiich cer*- tificate. How ftil *l V TBI 'fr .i <^. ,V ^nO-^ IMAGE EVALUATION TEST TARGET (MT-3) ^\^. 1.0 1.1 I^|2j8 |25 Lw 12.0 lit lU I u ■yuu i III nnll L25 ill 1.4 1.6 FhotogFaphic Sdeoces Corporation 23 WIST MAIN STREIT WnSTM.N.Y. M5M (716)872-4303 ■ss \ iV \ \ 4^. '<««L ^. - 4f ' ^ '7* THE. NA.TJURE( .ANJ>. CAUSES OF ,B^yr fai; ^his iny^ion i^W) rflftQi;ed;ithat(fiy:ec QircaUitiiim of labour wliich, the proceeding ilatutes hadifllmoft entirely ;itakeii away, we way learn .from the; followang very judicimns ob&r^ vation of Do^orBum.- «?lt 19 obvious^! fays hcv thftbthersuafe ** divers good reafons for requiring certificatei with perlbtls< coni4 " ing to fettle in any place; namely, that perfons refiding under ** them can gain no fettlcment, neither by apprenticefhip^ non by ** Ibrvice, nor by giving notice^ nor t^ paying parifh rate&i that *' they can fettle neither apprentices nor fervants; that, if they " become chaFgeali)le, it is certainly known whither r-ta^eipove ** them, and the parilh fiiall be paid Ibif the reiaoiyfll» andi for ** their maintenance in the mean time f and that if thefjr.fhUffifck* ** and caimot be removed, the parifh which gav« tho'certiiicfite ** mufl maintain them: None of all wluch can be without aicer*- ** tificate. Which reafons will hold proportionably fonp^riihos «* not granting certificates in ordinary c^esj for it is fariWQfci *' than an equal chance, but that theywill hkve the certificated *' perfons again, and in a worfe cbndition '* ThemionUof ithla observation feems to be, that eertificsltek «(ighft' sil^«ys>to'ibe*r«i^ quired by the parifh where any pobr man eotties to refide, 4!nd that they ought very felddm to be granted by that which he proi? poles to leave. *' There is fomewhat 6f hardfliip in this matter " of certificates," fays the. fame very intelligent author in his Hiftoryof the poor laws, •* by putting it in the powef of a pariflt^ " officer, to iuiprifon a man as it were for li#?i however inconii' '* venient it may be for him to continue at that place where he '* has had the misfortune to acquire what is called a lettlemoit, ot ** whatevei' advantage he may propofe to himfelf by living elfeiJ' •* where." *' Though a certificate carries along with it no teftimonial of good behaviouj', and certifies nothing but that the perlbn belongs* to THE W^EALTH OF NATlOPTS. 'I75 to the p^ik to^hich' he really does belong, it 19 altogetfier dif- ^^J^ ^• cretlOnai^ in the parifli m one parifh to another without a ceitifieate'. A fingle man, indeed, who is healthy andiiiiduftribus, may fometimesf refide by fufferance without one; hut) a man with a wife and iamily who fhould attempt to do fo, would in nioft pariflies be fure of being removed, and if the fingl& man (hould afterwards marry, he would generally be removed lakewifew The fcai^ity of hands in one parifh, therefore, canfnot alwaysi be. odievediiby their fiiper-abundanee in another, as it is conftantly in Scotland, and, I believe,, in all other countries where there istno difilculty fd. fettlemeut. In fuch countries, though w^es may. fometim^s rife a little in the ndghbourhood of a great town, or wbprever eUe tliece is an extraordinary demand for la« bour, and fink gradually- as the diftance from fueh places increafes; till they fall' back to the. common rate of the country; yet we never meet with thoie. fudden and unaccountable differences in the wages of neighbouring. plaqes. which we fometimes find in England, where it is often more difficult for a poor man to pafs the artificial boun* dary of a parifh, than an arm of the fca or a ridge of high mountains, . natural boundaries, which fometimes feparate very .di- ftin£tly different rates of wag':s in- other countries. ^ To. remove a man who has committed no mifdemeanour from the.parifh wthere h& chufes to refide, is ane.vident violation of na« turali Xy6 THE NATURE AND CAUSES OF fi p O K tural liberty ain4 ju^ice. yhfi commpn >p^lfr«f |£vgland, how- ever, fo jtaloHs pf tjiar ,1tbet:Qr^<)>iit Ukfitlus ironunan ipsdplt o( moft otber countries nprer rJgh^y- iMPxderftaocU^ , wImtwI) it ocwih itfts, have no^ ff^r vfion tii^^^ i^plt,n^ pg^ thcMi* felye? to be ^xpofed t9 Jft*^ ojjpn^i^fl^ |V\#ff^t H mwMjr* i . ^ifamfagh men, of reflexion top h^)^ fon^^jt;^9f^ jQjMnjrt^npd-off.jtl^itfewvotif fettlements as a pvibUfl, .^i^?Vjaj|^08i y^l^.M' ^§« j^viy ^l^c^nuthe object of ai]fy gei|ieral,pop^Cjjj<^V,; f*»fK..§8ftftlwfi tffAu^ jrcncr^ waprant^, ^R; |*wfijfe^j)ra^p!i?^idoMl^fi% a on^ as wajj ^ J^Iy %fP|Cj5j^n;.,^y. dsaei^irtCfftMOrailK There wfcarc^ j^^o^i^jji^ ^ .^Hg]Lin^,|C|f fo^|r9MS «f ngfyil will y^nturjB .to fay, v^ho.i!^ iHit In (fpqiffart c^^ hirlifdifdh himf^lf . moft Gruffly, <^prBlJ; bjr.ilbiB ,411 ,«o»t|ivo(i flawiof &tlteM •"•f.rr.n r^:^1■rT^ r 'cilrn'r ^::f'/' nirrr^" r. ftf^Ht oMom avip o* tor k sVA^LConduae^ilo^gchapttw^Hh^^c^ andently it wa? ufaal tor^e wag;es, i^'byf«ii0Fal'l«ws elitieikiinif over the' whole kingdoin, and afterwards by '^aflicuklt.ordeai'of t!hc jq^des of |ieace m ,^^ c«v^^,,|i0th^ei«(.prac- trces^ave now gone k^if^y iqto ^Jifuile, ; V\ By ^iDlt'^xjttlcnce' of ** above four hondred fears, fays Doi^or $urrt> -itfceois tinieto ** lay afide all endeavours to bring under " '£t rsgatations, whftt «* in its own natune feems incapable of ute limitation : for " if all perfons in the fame kind pf work were to receive equal ; •* wages, there would be no emulation, and no room left for in- «' duftrytir ingttiuity." i'y' l»ARTicuLAR afts of parliament, however, ftill attempt fome- » times to regulate Vvagcs in pafticular trades and m particular jilaces. Thus the 8th of George III. prohibits under heavy penalties all . matter tailors in London, and five miles round it, from giving, ; and Aeir workmen from accepting, teore thtn tv?o lhiUiB|;t .and m n i W=K A>L t tt ■' O t'^ W'!a^ o W*/ ^i^ fntftsrt. ^htoi-thtf itgulatfort/ tlifi^ in favour of th<^' wi9|lRiian»iH9'«tiHiys jUfU'iihd^^teai; "hkk isTohletimes ottier*' Wife ^min^fgtfim^P'm mmf^!''^th^i die /siw whkh oblig^ ^ thcl mtifttf^ ki ^ftVertil diffeltftt tiiert«»8ee^ cirtf ^eHiai%i!^'iik^d^'y;c(^h^^ena^^^^ thokwt>WDiild'pilirt(h them Very fiwerefy; *t34^'Ji'd^tirnpartiallvi hh^wopia^litei4''«hei on hm ^no'^ihluin^ on od bliio*t jji^'t <2i3i.w ** Im antient times too it was ufual to attempt to regulate the profits of merchants and other dealers, by rating the price both qF pro^t^rii and other goods. The afTize of breiid is,, fo far as I kiwSi^^^'^hfe' 'bdljr relmnant of thi^ antiictit ufag& Where there is aii'txdttfiVe corporation, it may perhaps be proper ^o regulate ^e price c& the firft neccffary of life. But where theb is nbhe,' tie competititt^ Win regufatc it inudi bctttr -ih^ • Yot^ I. A a methodi 4>t THE HATV Rffi)) AND ; /C AUS E5 i W .n A hi D BO^OK method of fixing the aflize of bread eftabliflied by the 31ft of George II. could not be > put in pra6Hce4n Scotland, on account of a defeat in the law j its execution depending upon the office of clerk of the market, which does not^xift there. This defe6t was not remedied till the 3d of George, ^11, , The waj^t of ai^ f|(Qz^oc-. k cafioned no fenfible incoanveniencyv andtthe.efi:aibUih9\ent^,9f ^tf, in the few plaoea where it has yet taken pUcCj hsu prx)4uoe4 ,s^o fenfible advantage. In the greater part of the to>ynft 9f St^tl^^l, -however, there, is '^ii! incxiirpQraition ^f; )Hik«i? w,ho.claLq(ij959^%c privilegea, though tl>ey ?ur? n(?l; very fkriaiy gfiardqd^ .,4, ^jrOfmut iUiv^ i,?»ij'j;sjo4 .ni)'tJKiiwti'nfi 3b:rR;) arfj ?,/tiR^ 2irP¥^'^«d»,^,^l^p,,f|j^^ or poverty, the advancing, ftati^n^p ^idfi(;liflg»jg|(|!j^9g,95i^^lj^^ all differcnlj employments. -Theprpipprtiop bftj^^f^ thj^pp, tjjf;;?^!;?^ 4nuft reodain the famci, and cjwftpt ^4^ b(?, a^fiil>tftfiteft%jj^iy ix»6derabl»,tamf,. by joy.fij^ r^/rf^ ^..^^.^ ,vttlBiodil fcnt; iuoinofj. eirfi oci|j ^?( -.jhrlwamol k> ^(ftoon ntiri ?MBm\ llylmtfl uiomoj oj lu .^iom JEflv/a/not ^r.q of a^ifinabfii; rn/ri aajlsrn. ai jlDofl ^nim'ifi^ ^o ajitoiq (iBnihio arft rjRrfj abl tjulwomol dJiwr biiiohiino? 3d Hifi /nm /ov^wori .norfioq ?MT .hoorhmd dyi^bn ^dr , lllmmm 3X If .ilj^feff .Jpl^ifiafj adt .aQ^.bftBrio jf^?. UimfM Jrit-e* V *33iLQd.Jmi.iiofa 3xlj ioi.hli/cMit h/ul iiirfj inBa/A. \ tHM 'W'UAUTH OF NATIONS, 379 to (li> 3ilJ s((l fmflildiiii'j |j£oifl 10 3\i|ie 3flj jjiuxft Ho. hcilJorr- >l O O fl /liWo^DB iro ,J)nhlJo:)rf,/(OK'^;P; -ij^l^d jon bhun .11 gjfjbsx) v.^^ Thf^'j^f, WfM^fed'^aS thi^i5rf&'>aa W'tlie ufe of land;fe ^?^^* Jry*Viitiiart[l^'t!^'%hdft^*vftieh^^t^ cart afford to pay in the ^oriff 'di^Utnfhnees^^ 6f tfheiland.^ It« adjuftin^ the terms of tlie lii^e^.'the kn '^i^k' thie labour ftnd |mrd)iafel) atid^nmiiv- tains the cattle and other inftruments of hulbandry, together with ^t bi^harjrpfMts of fah^^ ftddk in the neighbourhood. This is SMntifm fiih^li(iflriha!re <«7lth'ivhi<:h the tenant din content himfelf ^6^^ ^•i/i^ifi^&^rt' '6f the prod^d>^»or, iv*»t i* tha faflia.thing, i^Mij^iii^'^V^ it^^^^ is b^i< and abim thtsiaiara, he-naturally ^idi^iiii/!'tt^'iM^/tb hi&^lBlf ^yib ^^^^ fcnt iof Ms landy i which. is «Vl&ntt^ m^'W^m' ^htf ttih^iit ''&n 'ftflW i'tft'^pay in' the "k^^uit^ ftwliifeftariiii'' of ' 'tht ^Wttd. ' Sometitnei, in«teed,'! the liberality, more friequetittj^'^iSi^rignorincei' of the landlord,, makes him accept of fbmewhat- le£i dian this portion; and fometimes too, though more rarely,- the ignorance of the tenant makes him undertake to pay fomewhat more, or to content. himfelf with fomewhat lefs than the ordinary profits of farming ftock im the neighbourhood. This portion, however, may ftill be confidered: as the natural rent of land, or the rent for which it is naturally, meant that land fhould for the moft. part be. lett.. The rent of land, it may be thought, is frequently no more: than a reafonabk profit or inteieft for die ftocklaidout.by the land- lord upon its improvementi This, no doubt, may be partly the caifi upon fome occafionsj for it can fcarceever be more than partly Aaa the. ft9o m^B' 'NATURE AND CAUSES OF tlvtf t^fe. The 1«ndk>rd demands a rent rren for unimproved land, and the fuppofed intercft or profit tipcnl the expence of improvement is generally an addition to this original rent. Thofe improvements, beffdes, are not always mdde by the ftock of the landlord, butfome- times by that of the tenant. When the leafe comes to be renewed, however, the landlord commonly demands the fame angmentation of rent, as if they had been all made by his own* Hi fometimes demands rent for what is altogether ihcapable of human improvement. Kelp is a (pecles of Tea-weed, which^ when burnt, yields an alkaline fait, ufefiil for inaking glafs; (bap, toad for leveral other puqxifes. It grows in feveral parts of Qreat Britsun, particularly in Scotiahd, upon fucfi rocks'only as ^e within the high water made, which are twice eyeiy d^ay covered' '^^'tke fea, and of which the produce, therc£>re. Was nev«^1iili^iyieAt!ed by bujaaan induftry. The landlord, however, wJiofe eidate' is bounded by akdp (bore of this kind, ddnands a rent tot it as much is for his com ficWs. . .k.( ;:..„. ^ . Tub fea in the n«ighbo«lHXKi 9^ tba iflapds of Shetlafid is .more 4^n. commonly abuodaat iafifh, ivhich make a great part of the Tub- ,. fiAettce «f their infaaUiimts. But in order to profitby the produce of , the^tCTi thty muil hAV«> a Mntation upon the neighbouring land. Tbc cull df the landlord \s in propoition, not to what the larmer „ can make by the land, but to ^ndut he, can make both by the land and ^ water. It is partly, paid in fea fifli » and one of the very few inftances in which, rent qiakss a part of the price of that com- modity, is to be found in that country. ^ T»s r«nt of landt thereford, eonfiderftd as the pri«« paid for the ufe of tSie land, is naturally a monopoly price, k is not at all pro^«rdkHiQd to ^vhat the htudfoM may htva lakl out upoit- the ^»^ improvement THE WEALTH OF NATIONS. c1t%l improvement of the Itnd, or t9 what he can afford to Thbub are fome parts of the produce of land for which the ^eoiandmuft always be fuck as to afford a greater pnce^ than what is Sufficient to bring them to market i an^ tliere i^re dthers for which it jsither may or may not be fiich as to afforil this greater price. Thp former muft always afford a ren^ to ^'landlord. The latter fometimes may» and fbmetimes mdy not, according to diflSerent circumftances. R^i^Tj it b to b9 obferved» therefore, vnters into !d)e compo- fition of the price of comn^ties Jn A diflbrottt wi^ ^rmd wages arid profit. High dr low wages arid profit, ai^e the canfes bf high or k>w price » high ortaiw rent is ^ diSea t^it. It Is beidlriHe^gh Qftow w«g0e and prdfit muit be puu^ In order to bring a'par&Ailar commodity to market^ tbat its price h hi|^ or low. Btitltis be- ctafe itsf rice Ls hi^ or tow i a great deal nsore, or rery Htde mbce, or no more» than what is ibffident to pay thofe -vi^i^ iad profit, that it affoiids a bi^ rtnt, or a low rent, or no reat at all. ^ TvB .particular.icanfidfiration, ,Mk» pf Mk B^i^ of ^ firpduce of Und which ahivays afford ioxKreol:; ftcpndJy, ^^ thoie >whi<:h fometimes %u THE NAttRE Al^b cXlT^ES OF fom^times ihajr kn^'lbmdiihes may not i^hl itol; tua, tUbSlfl dt the variations which, in the diflEeitnt periods of impnWdheht; naturally take place, in the nhitive value of tho^ tWo (fiffi^renlt fbrts of rode pioduce; ^h^rt icompared ' boith Witli one' kitothlrf-, ^d '\Wth numiiifaAv^ed ioitimbditit^;' Will" diir^de'^^is cha^ 'iht()''tK^ t^artS '•JK^P'i' ^i** C'l^i '<■(' -i^^ ,;*i«a^ to inluwn vjilsi^ i» ztuu ^. , - , -_ . ,. ,jjJo tuo kjrusJaj'iun rJ iium O/toe Produce of Land wotco always affords Renti. AS men, like adl other animals^ naturally; multijily inpnoportion^ ^ to the meamstof liuir ihbfiftcsce,' foadtia aiimysiiimainjoclbii^ aiiidemand^i Iticad aiwayafaiiBhafe or command ilgreatalorJwiflllif quantity )io£ l^xniTyrpndiiimeiBodyjcaaiJidwaijFsi becibtodnivtoiii willing to do'lanietfaing in order tof.obtam ifiLi - Tliciiquantityxlal' labour* Indeed^: which item purduTeiiift notahn9s;e<)iial;tOiwii8t it could maintuB»>; if managed] liniithe moft sepnoriufcab v^mstuttf on account oit thti hightwa^lvvlikkiaivifemetitiieargiwlai^ But it can ^ ollvayik |aischa& ibch 1 9i > qiilantilTi of: ikbouBi as Jtti tait< mainddn^ «ibcdvcbi% to difrrateiat whidiftfaatifiNtoflaboiir ircomit) Aionly maintpned ffl thc'neig^bQiU!hood.i-M \it>A\ iDrl^Irl v^WAmv'^ -'i -jcl JUj/ii pioi'iivrlj ,<,jl(j.wl toiliiiiufut ;;nft )<, noil.ocjo'Kj ii)IIwri; BoT Itod, in almoft any fituatibn^ prod(ieekc>f^inter(qiiit|titif • of food ^han what is fufficient to maintain all the kibour neceflSuy for bringing it i to market, ia t^, moft liberal way in, wh^i that labour is.ibver maintuned. The furplus too is always nioi;e ^laat fu^(^qit 4p repl^ the ^9<^yrhich employed that la)bipi^^ ^f^fSf^ with^ts pro^,,, ^?P:q#?«;*t'^fftoviiiarktt« . lA greater quantiiytotf labour^ ^erefore^iimulb b4[( maintained ont of ik:|..and thel>n>iftniprJidiich«ja:«dcawik^botj^. the profit of the farmer and the jentnof tih» landlord^ muft 'be dimhuAned; - But j in remoM pacts of thei«duntryther^AWR^O AH» aMWES' ^Cf tiinfa coiuiti> Jhpt^ ihiiy MitmdM«» Ibmt rM «0mmoditMitkii^ old miirket, .^n^ qgm mwj nfw iwiikoNvtti 'm p w ^ a ce ,^ > > IMi»« po)>, mi^A k )« iim^^ ifieniif to 0>^*nfmmamu vil^di cmi univerikl noiQpciition ^hieh foKmfmy'M^i^hm ti'w ^ mU td it for the fake of i^6e£coeit. It it not iMortihtt fifty ^viri ago thft ibme of the ooontka in the ne^hbourfcdoA of lAtnion^ peci« (ipne^ thf pwlifMnent ngidiift tfi0 extenfian * mS' Him mn^kk mtH it^tp % refi^r fl9udnalU(ii^ and wojuld t^iei^) reduce thdr iwts an4 Hdn^their' cwlifcraiiMii Tyf.i;9^^..hMmWr>lnmrt».e Ml i M iiiii»iM> twmt . > .tittuJ k A CORN fidd of moderate fertility pfodoeee t much gnaUt quantity o|f (pod foe muv than the bdi pd|<^, fft/ t y a),nimt> Tkott|(h Itt'^yatidoiwiu^ty^aMMh Mwstl^oaitf jn^llip iiiffMii»^ which f«mai*t after n^aciag iIm iM ai^l JMdn«aiiikig,f|l IM^ kbottr, if likemfe jsitMh greater. If a pound «f biiM^er|^,iiifai^, therefore, was nfycr, iiippoied to be worth out than a, po^fad ,9K bread, thie grea^ Attplm W9^1d- averj wheer. be of gii a ^r . i|ine». and coni^^ n gpater ^ond hptk for the.fiii|« of ||t| 4i|R^ps and the tent pi ^e laqdlord., , It ic^oms. ^ have dona lb uniiffffiilljp in tte rude h^ginpinp c<«^^ ^,^, «.^ ,,,5^^^ . BvT tike telMhw vihUi «f r^olb two diftriM iJMiat^ftiMl; bread aa4 b«Miv't^ineM!> aiarf^y diftnnt ill thpdiliMp^ •I i^gpienkwe. fai in rude ieginninfir i« hiilflkcr'tHneat fha»hnad^ 7 pad THE WBALTH OP NATIONS. lii tnd WeMlr(tlMitfart, b ilM food for which there te thf greiteft ^^f ^' cu«yeiiliwir mm^ which conftquently brings the g^tateft price. At Bulnoe AyiWi w« ve tok bjr Ulloa, four reab, one and twm»f fm\C9 htAtpmnf ftcrliai, mtm, forty or fifty yetn ago/ th« QiJl iU fy t pwt e of moi^ ohoftn irom ■ heitl «f two or three hun- dndw ' Hi %• AOlkiiig ' of the price of bi>itd, probably becaufe he fownd Aothing remarkabla about it. An ox there, he fays, cofta litda.mora than the hibour of catching him. But corn can no wheve be faiM without a great deal of labour^ and m a country wbit^ ^.upentlie river Hate, at that time thedireft road from Europe to. the filrer mines. of Potofi» the money price of labour could nat. be vary cheap. It ii otherwife when' cuhifation is ex* tended oeer the greater part of the country i There is then mor^. bnid liuh .hmchaa'e'meat. The competition changes its dSredkMi, and the price of butcher's-meat becomes great then the piice of bread. I'll iU '9f^flie itttediion befides of cultivation, the unimproved witdi] bee^MM) lAfiJIIicient t6 fupply the demand for butchfci^s-meat. A grek jpartief the cnhivated lands muft be employed in rearing and fiJttieM&ng dMtle, of which the price, therefore, mtift be fufficient to pay,' ifot oftly the labour ncce(&ry for tending them, but the rent wHi^the lalklWd and the profit which the 'farmer could have drMfHtfit»A(i Ihch hind employed m tillage. The cattle bred upon themMll'^tlniCultivated moors, when brought to the fame market, are, in proportion to their weight or goodnefs. Ibid at the iame price as thofe which are reared upon the mod improved land. The proprieiert of thofe moors profit by k, and raife the rent of thtir iandin^'jjroportion tothe price of their eattlev It is not more thanr a eentuify i^ , that in oismy parts of the highlands of Scotland/ butchar's-meat 'Wasas cheap or cheaper than even bread made "of oatmeaL- The mien opened the market of Enghind to the high^ Vol. L B b land greater tRanf at the beginning of £h6 ceiifdry^ atid th^ rentsieff tUtif highlaiid eftates have bs6h trSpred and qtiadrti^ed' kt the AttM tinM. In* almbft d««vy part of Griat.Brkaiivtt pdtiifd 6f th« bdl bcttdhef'sw mtat Ui in the prefent tuiie»» generMty worfk i]i r«ifRei« tim^ Worth three dr fibbrpDuntfii^ ^rt iv;6r) -^Ht /)ff« sIbi"? ^jIj Hir>f» ' It is thm that in the progrefil of hnprclveiindit'&e rent andptoftt of uniitoproved pafture eome tey tie ' rDgoiatiid in fothe meafiifei ^■ the rent and profit of Whati» impraired^ and thele again iay) this rent and profit of com. Com is an annual crop. BtitdMr^$i4iieat; a crop which niqmres four or five years to grovrv As an' acre' of IfMidi^ ther^fore^>#iH plifodii^e ^ wluch fmattei^ (}tttfittity^e Y' 1*1116 equality, hdwev«ei^; httween the renit and prdfitof gnifi'aiid thofe of tiorti ; of the land of whith ^' immediate produce is food for <»tt]ei^aiid'6f that of Whith the knthediate prodntti iifodd ibr meni nauft^ he>'UiVd^ood 4o take place idnly thrdigh the pdAttt part o# the improved ]arfd« of a great cottntryl In i^Mt' par- ticular local iituations h i« quite otherwife, and' the rent and profit of grafs are much fuperior to what can be made by coni;'r!"'^"^^ '^'■^ ■u rio'rtc'/ij!iJi> -:^i:iuo'jiib av£il hum hrtB .3r»J0>l i^j fiotrmJ Thus in the neighbourhood of a great town, thef dd^aind for milk and for forage to horfes, frequently contribute, along with the high price tifbutthet's-mfcat, to raiile the Value o^ grafs above What may be called its natural proportion to that of com. ' tThis 7 U ^ l^jQ ^fm t ^W#4L f Hf Off! y j^,1t^ 0|^f .r ^^ locaLftivaiitagft^rk U^titidi^Vcaiuiot l^.comm&iikfitfd tgh^ia{)^%, ^kf'/'^ a/on wnRl t'flj fii h3kjinJ>6iip hnr, Ix^kjf !t o^ao' fl»?H '^'■iinf!? bn^pfd-jiit i9'Atnv§hotAii iciccamfta^ieea have fometimes i rendered fqiuQ eountiieii fofopuldaty tha^ti tiie wbolc lieivitAry» like the lands in the iioBbbcHidhaodpfmigratttciwa^ihas ootbefa fuffiotcat to produce both the grafs and the corn neceflary ior the fiit^iftence of their inhabitants. Their lands» therefore, have been principally em> ph!>9K|lLin the prodtxflioiDof grafi, the mor^ bulky commodity, and whiofaifiannotrfaeib safily^hc^ught from a: great dift^nce^ . and corn« the (pibd o£ the gre^ bod^ o£ the ptople« has becDn chioBy imported fromfor^^n countries^ Holland is at prefent in this fituation* and a)C9nfidcfabk patt of antient Italy feiems to have been ifo doling thft)pv0ro6i(able thing ia the man£^mei>t of aipdv^tfeieftaiet tiofeod Ipler9bly well^the iecond) and to feed ill, the third. To plough, he ranked only in the fourth pM$«i9f f r/96tiat^dadv^»Hagei Tillage;, (fnije^^ifi that p^ of anticnt Italy which lay m the a^ghbourhood of .Hw»e, wi>ftti|av(e;!hcca very much ^ifcovraged by ^e diftr^^tions of corn which were fre- fPli«lj(^#nwi<^l^ fiWiPftilje,;; • ,px %t a v^y low pjiqp^ Tchlfc^rilf^^bifi^i^.ifrofla t^pcftji^ of i«(^^^.,tb^ |ff«^«ffiAlt ft A|&t9yl»firtpe, fbo^ifiAcp^u^eafsck, tsf ikfi^^^vMfk* TIm rlftw pri^ At whi^rljl^is cprn :|w|i^ dii^ lAidMe people, muft Acceflaclly ihave (unk ithe price of jvi^couiii he hrougl* to $he llpman innarJs^ frpn* L^ti^in, ©r the antienjt territory of Rome, and muft have difcouraged its cultivation^ j^^ that co\?!itry.^^ jj^, . (3fOofftTrorjrf;gi9n srfi ni ?Tm i .1*1 m 9Sm C9«»*.jy ^op, ,flf >yhich tl^e |)>riiii- tHE ^ NArtJRR^ AND CAUSBBf r ©f ttifh until ikitsi^l^ghbottrhodt}. 'tt^ {(r'tfonrrfet^tfTfop/tkeimtinto. l^Ahtdi^ of thtHi^tfU emi^y^t'd ill tiTencdithraticm htfflho MCorhvrAad Iti'liighl^t is; iii thb eafei' notib ^dpcrly paid froBtthid yalUeiof ifs ovrn 'prddttce;'^^>fi o£ the confc'lands^whidirAcfttouki. vated hy means of it. It is likely to fall, if ever the neighbouring Hi^hds'^te' «ompleiatty/ienclclfed| r.Whe prdfantMgh rontoi^ienebfed l^nid in S^btlsuid fte)«i^towiiig( tib thefdircity qf ehdoiUre,) and will |>i*6bably liift nb longer «Kanthatiba>cit^i The advantage of fcm- dodirli^' iisf peivti^ M palhirethanlfbrrconntfT It/fai^ea the hbi^t^f ^iatdirig ' ^t' 'cattk, ;M4A{HrfecnB bet)tior^4]o«t>whQ^^fly^are o»lhttdogo od thuhf .Iwd >o fjHB iir^r^w stfufV ^,h Tot^^niliirlt n-.r/yl-vtrto'-v: .!,iso hRrf ^rf ip.v iR'^b ^if^'Bti^'WKere there is no* local advantage p£i thifj ki»4bithe t«|it ^T^a^^dfiV'bf 6oi-^; 'Or'^f^^faridfe islthe i^oiiim3>iiir6gf}ta)>lfHfipod ^P^tHe^j^i^,' nitfft'Aifturdllf regulaWj iiflORl HhftfUrtdWhi^te^i* fit for producing it, the rent and profili of paftiljJl^ ^lorft toT h'iilnt ■■■u •'^'Tfai^iife'^f thftJ artifiaat graflHal, of tqmit)S,aGfri»f5*j cabtpges, IMtHel^^^«)tpedi0nt^ \(rfaich)faare bttnr£aHtin)|ip$>ikt ft' greater nuknberioffiiattle'tlian v^hen in natural grafs, fhould" foiiiewhat reduce, itinigMt be expe^^; the fuperiority which, in- an improved country, the price of l^tbh^^^^iilte'natuiiUy^ has ^over^tlpat ofn breads ilt^ itmm ac. 'chriRii&/^t(i hiiVe'd6ii«>foi'aif4'lbdiieiii tmmi reafiiti Icftr belisraipg 'iA^, ' kt Idtft'iii the LohddA'mark«l^ tiie price of butdier!s Imat hi livolxilrtidn to the priic of bread is a > good deal lower in /the 'pnkiit times than it wtts iti^'the'l}dgiiinixig iof < the Itift^fccn-. '^fery; /.ulj ivjrj Jill . I i M ■ yx -yi ii-r,,:jill ■'Jill li..biOi U.^iti Vllfcolj; f;;^f> iwo" r flM^'tr- •t:-^»*|ft .»3i. |j^ ^e appendix to the Life of prince Henry, Do^r fikch has given us an account of the prices of butdier'd meat £»> com- monly paid 1^ that prince. It is there £ud, that the four quarters -^TUW-wsrAhwa' WTTif^tFiQi'l^qh. k 3wroxitwoijghmyTftx!ohimdrtd pounds v^f^^^j fiofl? j^ fj>Hap 5?Hl^^' (pfuodsoiea-fhiUingsiior'thereafaouts J thatia,^ thirtyry^efOiUI^}^ .^g^i^e^. and ieighC' pence per hundred pounds weight. Prince He^i^idifd diithiei6tiii of' Nt>veinbcr»^ i6ifl> in:itheramete«nth,y9ar.t yfo>l.'! Hi '( tf > , S ,r- f . -vf ''^-m ■ h^iftmt^lShirdllif iy&i^; ihsn «laKa {larikinentdry enquiry into, the llsauib&'of 'the^bigh fani>e;,{^anpofe, given in eyidenqf l^y ^a Wir^tU^ vherohatit/^ thatrin March, ) 117I61J1; he* h9d;3yi£^aU^(^is flA^si^fotymk(htre^i>, iarthat dear year he had paid twenty-feven (hillings for the fame weight and J dtertP f I rny» high prices in 1 764, is, howeyec» four ihilliij^gR , and 'iflf^Lr^d^tt'ttleflpcr thanithe otdinarypk-iceipajti^hy pHn|i;<},I^ei^i;y i ia«ldlHs{th6)beftbeefrronly^ itinuftbeioihliertfied,^ whiqhijs ^itqjbe fillted for tho&€KAiltitiv6yage9;',^ brre imi arii ,n ^a-ysjUnq tu') l\^ ,2^DfIiii«{> pricepaid by prince Hinry aaiounts tpi^ 4<plece« t^ken toge'> ntfier $: and powod» ^tf.ri fmutfin /r; \7 tr f /- rt«:> -*r rt> vf* '^'^f ]^ eiujpiiry. 01^1,764^1 the >wit9«p0^Jla^ t|»e ^^fnetf tif die choice pisoes of thcifaefttbeef itotiT^jtathe gonfymcK^iL '*mA >4^ili the poond $ and die coarfetpieces in geoecal. to.be irom -, j|,,goft4.de^,fi^ie?i^rfl >ftW^, b«»;?h^ dialing tha* y?*r^3l,niVj /luqrn ..einjTHDtmo ili»i -J am' 3d vllfc-iuiBn In all great coqntrles the greater part of the cultlvatoi Ifuids ate .ei99U>y!9SoK kham^ vppiar i(pti^9«»l(r 10 «f&id» theAn^ a gveati^ rent, tba iotk^fj^ gJi^fim prt^UMP com or paftii^ce. This Aapenoniy, however, wUl M»m b( fM»94 to amount ^ Biore tJun 4 raflfiw^^ 4nte([^ m SQiji^jf^ofifmM In a hojp |;ardcn> a ^it ^garden, a kStchen garden, both % rent of the landlord, and the profit of the farmer, are gqpeniUy greater than in a corn or grafs field. But to bring the ground into . ~ this itiimis d^6 to 't^ laAdlTdfffJ' 'it R^ux^ loo k more aftehtlVfe and Skilful management, ^ence'ii^'^2^ i^rofef'^omes cRie itf tlie ^mer. The crop tod; at leaft in tlie iiop and fruit garden, is miH jft^6ari6iiSi 'fb'i^^Vtitefb^, 'kfidts cbmpehrating all oct^dtiai'a^fflii; Mat'^iS^'M&mis^Mi tKe profit of mfa- rafice. iThe circuiftfl^suices of gardeners, generally mean, and always moderate, may fatisfy us tiiat their great ingenuity is not commonly Mt^^ccBHiptHf^/'HWii Aai^tfui 'atl is jiftttifcd Ijy f6 lAiny naturally be thdr beft cii{lomers» fupply ihemfel^^ w^h^tiheir moft precious jMrodufHons. trtcnts fetms at'no- timti^W Ifef^if Been ^fer ^n wKafi'^Ss (Uft fieient ta compenfate the original expence of making them. In *HtJ ^ti^t hdft^iidiy, aftei^thtf'Whfeirard, ^ ^*«f wMfcVed^Mtchttt ^deh flithis t6 li^e BteA tl!*prirt%f ififcfafM' whlcirv»«rf«< fli^ pofed to yield the mod valuable produiie; But Dehiocritus, wh6 wrote upon hulbandiy about two thoufand years ago, and who> #i^ rligird^ b^y th* *itifertts as ofttf of the fathers of the art, {HdUj^tlfh^ (Sd' n6t "fiiSI^ Wifely Who eHCt6l^ a kitchen gan^n^ lff(^''^h^, A(i l&id, - <«i^Mild^hot eoiftpehi^te the expence of a ^96t«e yi^ilj iand bHeki (he kfifeiiht;; I fappo(^; bricks baked in thefun> kdtddefed with the rdln, ahd the wihter fltormi and requii^d ^tihtial repairs. CoIUfhella, who reports this judgement of Democritus, does not controvert it, but propdTes a Vei^f ftugkl method of enclofing with a hedge of thorns and biiars, which, file fays, he had found by experience to be both: a lalBng.and an impenetrable fence; but which, itfeems, was not commonly known ih the time of Democritus. Falladius. adic^ts tb& opinion of ' Columella^ V'i u II *;?>■« 192 f '}♦ BOOK THE NATURE ^'?? . ?W^ J¥ r^^^C^t' Columella, which had before been recommended by Vyrro. ^ la the judgement of 'ffiofe aniieht' imprdvers, "tlie produce of a kitchen garden had« it leem^/ dmii UVdejnore than fuifiiieht ^i^ pay the extraordinary culture and the expence of watering } foe in countries fo near the fun« it was tliouehk proper, in Uiole'ttmei as b the prefent, to, have the command oi^ a Itream or vv<^er', which could be condiif^^d to^every bed in the garden. Tlirougni the greater part of Europe, a Ici^chen garden is not' at (preieht fuppofed to de/erve a better enclofiire than that reccmmehded i>j Columella. In Creat Britain, a|id Ibme other nonneifn co^^ the finer friiits caniiot be ferbugl^t to'perfeilion but'l^^^^ tance of a wall. THeir price, iKeirefore, m fucti countries mufi befuiEcient to pay the expence of building and maintaining wHat they cannot be had without. The fruit- wall frequdntiy hirMiills the kitchen garden, which thus enjoys the benefit of ik iliHdli^^ which its own produce could fddom pay for. ' -'*' * THAt the vineyard, when i«-opcrly planted and brcHiglif IfiS^ perfection, was the moft vidoaUe part of diie finrn^,'feenii%'lbK^ been an undoid^ed maxim in litt antient agria^on^ «s iti^ iti* the modem through all the wine countries. But whetlver it was advantageous to plant a new vineyard, was a matter of diipute among the antlent Italian hufbandmen, as we learn from Colu- mella. He decides, like a true Ibver of all curioui etiltivitidn, in favour of the vineyard, and endeavours to fhow, by a etMiiw parifon of the profit and expence, that it was a moft advantagebus improvement. Such comparifons, however, between the {H-ofit and expenqe of new projects, are commonly veiy fallsKiousi and' in nothing more fo than in agriculture. Had the gain af^ually made by fuch. plantations been commonly as great as he imagined it might have been, there could have been no difpute about it. The fame point is frequently at this day a matter of controversy ,'1 Tick WKALTB OF KAtlOI^l ijp.- ^ ,|WJ)wi^«».. T^wiitfHtf.«i-iigiki4ttt^ the, l^tjn^v^ pr6m0tpr8 pf ib)^ cu(tiv2|^, ieem generally- dUfjpoSiA to decide with ColumeiU in favour of j:h^ vineyard. In France of l^,ct^^WMl'': ei^ the olil' v}ne¥ardi: tb pttVent li^ |ft^ to hijVt^ their c^ii^c^^ aHd tt^iMucatt aceinfoomler9 in thpfewlvonduf^ have the experience, tMt tUw ^eciesoif^ elevation ^;pi preftfnt i^ thatcoantrj more pv^taile than aft^ ot^: I^ feeim ^ the fame time, howi^, 'tiltti ibb mAcatt anotBtir opiiion, thkt tliit ftperior profK dl^ lail no l^gfr than the lawi which at prefent reftraini the free, cultivation of die me. tn 1.73 1* they ob^ined ,an order of cp^a|icit'PBOi^l^|^i^ both tn^ pltntm^ or nepr* yineyardt* and the reiKwal 6f tho^ oSd ' oi^ of' wtikk the cultxvatioii- J^ been in-' thr nng, to be granteiji only iiY confequence of a^ mf^^rmatioil from the intendant of* the prdvihce, certifying that he had exa- fi^e^,.)^ Jaf^, ajQ^ ^t ,k w^f ii|cap»blc pf any other cu^itqre. T]I^P^^5fe^|^Je;^ jt^^pB^ ^as tlieipjyrcity qf, cprji ai^pafture, ai»4 % i»Bffr#bi»4j!»9».PC WAWri SiB* hadthis fuper-abimdancfi been rei^t ^ wpi)]d» yvUhout any or4er of council^ have e&^hially p^Vi^^d the ^|apta;io» pf Qcy^ yineyards, by reducing the profits of ti^t^c^ o^/f^^^va^ioa bcjlow tlieir natu«;!yiipropgct;ii9>ii tp thgi^ of coi^ti||¥Mi|aftW^ V^jilM^cgju-d, to. the fsif^^ (am:]tj,o( com oc^t^niijd by the multiplication of vineyards, corn is np> where in f<5imce more caiiefuUy ct^tivated tlian in the wine provinces, wh^f^ thif^ lan4 is fit for pro^ueinj^ it i as iri Buip,indy,r Guienne, -aodrth^ yi^pytK* L^guieilcH?* The nuoierpus hands-employed ia the outer fplKies oii cultivation neai^rily encourage the other* by afibrdiog aready market f<)r its pi'oducei To diminiikjthe number of .tho£e who are cajpableof payin^for it, is furely a^mofl ui^u-omifing expedient for encouraging; the cultivation o£ corn* It is like the Vol. U C c . policy 1 1 M ; '4 *iMB| i ,'i. 'i!al! v4 Jijj ■ ;',f jn .11' TiAi \ ■11 ■"!' •' 'Jl Vm '•fL|| %iaM\ iM imM >w£i^i'i 11 ii w B ^?' T^E ) ijfi/VYWim. mvi CAUSED i of ppliqr nirbjch wom]4) pmoiotf Jgiicalttire by idtftotmgihgjmaiiiiii^ The rent and profit of thole productions* therefore, whicb sequira either a greater otiginid'eij^nc^ of iurp^dvemerit in ^bMer to fit the land for theih, or a: greattr annual expence ofctilti. vation, though often much fuperior to thoib of com and paft^re, yet when ,they da no more than tompenlate fiich extraordinary, expence, are in realjsy> itgulated- by the rent and profit of thbfe common frop3..3i)ilriO'> & riau6)'iriJ 23mij|>rno) ixiu .JmiOil^ ihiiru- » Jjiyyouj 3i,3^hi z^t\i)» ihuWo iibncv^ olorfvf vriT .upnlvQuj sjjul It (bmetimes happens, indeed/ that ihe quantity of land which can. be fitted for Ibme' particular produce, & too finail to fupply the «flSs£tuat demand; The whok prodiice c^'bfe^W; poife(^ of to tfaofe-who are willing to give foitiewhat Yilbre'^aii what la ifuflkient to pay the whcAe rent, wages, and profit ne^*^ ceilaty for raifing and. bringing it to market, according to their natural bto^,! or accoiding to th^' rates at ^duch' they are ptid hi the grcarei- 'pttrt cf ott«^ t^kit^W lahd; Th^ A^l^i^rt of the prke which: remaihb aflSer deHfaylhgl Vhe wh^te ei^hce bf knprbtement «id ctiMvation may ccimmonlyi, in thid ca^, if^d^ in' diis cafe oniy.^ bear no regular proportion tb the like furplni. in com tor: paftiire, 'biit may exceed 'it. in) sdmoA any degrees sind- the greater |ort of thi^ excdk naturally £^ to the rent of thdj landlords -jllsort y'l lonofU.'-^-iO tifol 'arb 30fih^Tq c jldsuif.v 61 nl - Tits ofaal and" natnrat proportion, f&r exampte, l^tweeh tfir\ Mxt ind pr<^t of wine and thofe of com and paftorie, muft be^ trtidtrftbod^ti^e place only widi regard to diofe vineyai'ds whitH produce nodiing but good common wine, fuchas can be raifed almoft any where upon any light,, gravelly, or Tandy foil, andf fKlucli' has hbthii^ib^ommend it but its ftrehgth and whofelomr THEHWBALTBA Ol^ Wi^lOl^fel '«f nefiK 11 Ip is ?with ftidi^r^neyiirdH; oftly tlui'th^ conthioii Wiid df the C R A>i country can be brought into competition i for with thole 6f a r' peculiar quality it is evident that it cannot. ci.;>aiw ,3M)iirji|f .fiioiiix/hoifi -JloiK io Jxton^ Lfifi Jnri 3kT •., vjiJcPTri^i*^^ I^Wj^afl^fi^^ l^y ,thU$ than any of^Cir fruit t^, |^r9«i3(^,fon^^ it derives a fl«ypui: which no culture Of ^{^^gciijnep^ can equals \t is fupppftd. uppii any other. This Bif^y;9|i^^^r|Bfl,of i^agii^ary, is ipmetim^ peculiar to therprpduce of ^iJSff j^nt^afds i fonfietime? it extends through the greater part of a fmall di(lri£t, and fometimes through a confiderahie part of ii large province. The whole quantity of fuch wines that is brought t(^ jparjket fj^^^jQiiocit pf the effectual dems^ndr or tha demand of ^^fealf^:)?^?"^.^ wiling t9 pay the whole, rent* prpfit* and M(j^e^ n^j^ary/piipirep^ng ap4 bringing them thither, /nccorcjing |9.j^e.Qi;^^]:y ra|fe> or, accprding to the rate at, which they aie pafdi^),fi^i1^iq[)pii, vineyards. Tl)9 whole qpantity* therefore, can be.((^fp9r»jL,9^^o,thofe yify} .are wiJ[tii^ tP pay.nwcwhich iiecef- f^Uy xj^Qf^^htk pi^ce a,bovetbatof cpmmicH^ wine. The i difference isij;reatft; of,le{^>accoi:)jing as the faAiionablenefs and fcarcity of the ^n^ r^^cr th

i 'i^PT. thpugh fuch vineyai^ are in general more carefully cukivatsd than moft others, the high price of the wine feems to bd« not fo much the eflS(£|, as the caule of this careful cultivation: In fo valuable a produce the lofs occafioned by negligence is (b great as to force even the mod carelcfs to attention. A fmall part of this high price, therefore, is iufficieiit to pay the wages of the extn^ofdinary labour beftowed upon their cultivation, and tlifi profits oX^hfi extraordinary ^pjfc, w^eygh put? ^ that, j^fepurjix^ 0)^9^^' .. ^ ■^'■'j'jto:) Lau^ jytu. ... .td:on asuLotq, %nR'% , . .• . ^^ -!;;fl Yfir; noay -^lar'w.vns jkfak THE fugar colonics poUeffed by the European nations in the Weft inclies, 'may be compared to thofe precious vineyards. Their ' ■' ' C c 2 whole I 'i,*' ^ rm 'VtVP^M'^>A}m waJunsL ler c}|n^4tf^i«lf0f iPth^lb'WbO'fire viUing mguw xtwre'«iMui mte If fufficiciit to pay die wbole nfctit^ pDofit^^ ondwagpea tMoeffiuy iCor preparing and liringing U to market, according to die rate at wUnli they are 'cofnnUNiIy paid 'by 'any other produce, in Cochin»»eh)na die 'fined white ibgartommoflly fells for three piaftrds the quintaT, about thirteen AiHlin^s and fixjpeilce of our mpney, as we are tcrfd' by Mr. Poivre, a very careful obfinnrcr of the agricuhure oftit|(at country. What is there called the quintal weighs from a hundred and fifty to two hundred Paris pcAindt, or a hundred and ftveilty- five Paris poidnds at a medium, wluch reduces the price, df' iht: hundred weight Engliflv to about og^ (hilling fterhnga.'not^it! fourth part of what il commonly paid^ dtc birowte or taxMkas^dzi ib^rs iwport«d fiM»notr eolonie^ and not a fixth parttictf M|at » paid ibr the liaeft #hite fii^r. Thd greater ji^rv of tHe iculd- vated limds in 'CDi:h1n>^hini arc ^mpkydd 'met producing. torn titidl rite, the ibod of the great bddy of the peoj^ Thf^ rs^eftive prices of corn/ rke, andl^^iir;, i^ tfittc pmbaUy iii' thi hatDnOii pibportion, dr in ihiaiVhid^ Wu^aI^ takes place i^ltht t«MW« aM thb: annual eipence of cultiVatioit. Butln odf fUgar ^fcniey.'df»>pri«6 of fugaf biears nd fuch pn^pertioa td ihatf <^ thcf pMddtt 6^ avri«b. dr com field either in Htnt>pe or ih Amenta^ I^i*idomtiKohiyAkl: that a fng^ar planter et[^i that the rum and.the molaflb ihould'. defray the Whole expence of : his cultivation, and- that hls.fi^r. ihoiild be all clKat' prbfit- ' If this be true,, for I pretehd lidt tos sdlirjtti it; it is as If k c6rh farmer expected to defray the iex^ce of his cultivation with the.diaff.and the ftraw, and that the gijuiii Ihduld be all dear pfdfxt. We fee frequently fociet^es of merchants j in Ldnclbn stnd ddief tkding towns, . purchafe waftie . l^tidt . in Li-"' -Jli' '^KU Oi 1:31^:::.. : rj«i (bgar Itm » ^ W« JbL T M ^ O t V » A T t Olftl.r 19^ uaA 'tltiHiwatcttMlini retoms»^ froitt tbe ddioftivt adkntniftfttHHi df jiilUN in riiafe coantrieb« Nobedy wiH altenhpt < t6 bnprore an^ mMvais^ii the 'fame itianaer the ikioft fti^le lands of Sctllandt Bnlind^ et the corn provinlces of North America j though from tfMT flMre exa£t admiffiiftration of jv^iit in thdb countnesi more. l%tfllff rttumi might. bo cxpodiedi iwbuij yi^ri; .^rns/i .it/ vd V f N^ ' Virglnki litid Maryland the ealt^^dh of tobaiceo i^' ptt^ ftnred* >aa more profitable, to that of com. Tobacco might be' onkWated with adventafc through tAie greater part of Eu^ npof Jfeut ill' tImoA every put of Europe it haa become a prinf oi^ ifubjf^ .ofitaxationw -and to ibnnthfitk in the ooKintry where this plant might happen toi b^ eultivaictf»v^'^^M^ "^'^ <^i^^^'* ^ ha»'been fuppof(;d, than to iev9»«MiU{y>ii its inporta^n* atrthe cui^xn^u^. ;itie, oiltiva^ JlioniOf tobaqco has upoa thi3 account. hqcnmqft ah^ifj^dly prphir bited through the greater part <^ Europept which necefTarily gives a ft»%i9f,nii^»o^]^ to t)» (ountries vi^re it is allowed i and as Virr fusa, 4Uid MbiryUindpiDdace thegneateft quantity of it» they ihare jftfgriyi thcmgtk «rith» fome coinpetitOrs«.in the advantage of th^ nK>iH^y»'T)^ci4tWat|bon of tobacco, however, feems not to l)e,f(^advallta|g!M^s 9* that of fugiir. I have never evea. heard of MiyU^bacci^' plantation that was improved and. cultivated, by the ^lapi^ of merchants who reiidpiin Great Britain, and our tobacco > cojionies fend us home no fuch wealthy planters < as we fee fre— quently.arnve from our fugar iflands. Though from the preference g^ven in tjaofe colonies to the cultivation of tobacco above that of qorn* it would appear that the effeAualt demand of Europe, fo^ tojbaf^o is not compleatly fuppUed, it probably is more nearly fo Jthan th?«5 Jar fv^ar : And ijhough the jgrrfent price, of t9^9^^ probably more than fufficient to pay tlie whole rent, wages, and ; ^^ • piofit- ^ ' not be To much more ti the prefent price of Aigar. ^.rvu..^ reckfMir fo^r 9f;m of Indian cofn, To preT«f«t .^he, n^arkct {[^, in tl^e Cuvw manne*, as the,,Uutf;ji, ar^ Jiud to .<^o .of fpice^f ,^ U fuch ylolent mejthoda are neceiljiry.;^^ keep up the prefejit p^ice of tobacco, the fuperior, advantagt: of litf; culture oyer that of corn, if it ftill ha? any, ,j«ill nqtiprojjaUy.bc, It is in this manner that the rent of the cultivated land, of which the produce is human food, regulates this rent of the greater part of other cultivated land. No particular produce .can long afford lefsi because the land wou^d , immediatdy be tMriied tQi another ufe: And if any particular produce commonly 'efibrda^ more, it is becaufc the quantity of land which can be fitted for it is too fmall to fupply the effefhial demand. jori) nl I' :r ' :inii whic^ Lvi¥' . Ih J^urope corn is'tue principal produce of" immediately for. human food!. Except m particular fitiiations/' therefore, the rent of com land regulates in Europe that 6f all' o^i^ <;vi]itjyj|ted land, firitain need envy neither the vuieyar^s bT rn>T:^e, noi tfHe ooliye phintations of Italy. Exapt in partkt^^* ...i^V'.^io ; fituations. .JH. tH . vIjv jd 1. 1 '''II^^HiW<^^%'^^<^^<>^^ fkvourttc yegetatile ibod (4 tfli'^ltf^Madl'^ rodt>ccd \ itiM ^^drtiar ijukndty' tha'h^-A^^ mbft tfnrtile does" of com, the t^ df thfe lilMbird; 6r^1^i fu^lUs quantity of f6od wliich wouJd itMiAd iti MM; ifter ■pikyin^ the labocrr and replacing the ftock o tIi«^i«Mi-tojg;ethfd'#ith'itr ordinary profit*, woiitd n^ceiTaUy be m i ircfe ^ ffeiitet*. Whatever wai'tht rate at Which labour was com- lAditiy tuaihtamed in that country, this greater furplus could alwayi ihdAyiii ii^ grnt^"^an1liijr^ of it, and con%uently enalble the UMdldi^ t6 pikchldb b^ cbnihlanH-flgitater ^lianttty of It. The itol ^lid'oF'hiy reMt, Ui rk\ power anid authority/ his coihmand e^t1^'ii^cdTdi^ aiid cofivenitehties of life with which the labour^ cf ether people could fupply him,, would neceflaiily be roucit greater; A l,.t../<<(rr. -^ii^ t,. )a.-« -'t lift; ill «!>r;:-r.rn arHt"" ^'*A 'iftc^'fiifld t^]^6(f^(fr sFteh gi^Wif'qU^tily o^robd^than the rtWft' ffehilc tbhfi field. tWo crops in the year frpm thirty t^ ftj^y'^flieti e^t'kt6 Md to be the ordinary produce of aik; aiito.'^^'Thbugh Its cultivation, therefore, requires more labour, a nluoh grebttr fatplil^ remams after maintaining all that labour!! In thofe rice countries, therefore, where, rice is the. common ancL. favourite vegetable food of the people, and where the cultivators^ ai^ c|ki^fty maintained with it«. a greater fliare of this greater - flirp^us (hould belong to the landlord, than in com counitriea; fjii Carolina, where the planters;, as in other Britifli colonies, are gene*' rally. f^th farmers and landlords, and where rent oonftqoently ish •oiifound«4.witl^er<>fit, thctultivaticm of 4cel» foohd tahe-ttiori^ iitoiiawiil profitable: 1^1 \^ #»0P THB iNATUR^ A,^© CAUSE'S W of Europe, rice is not there the common and favqwiti^yi^t«blf ifood of the pec^le. .jn'- '.jt. A, oppp. 4c9 fisl4 i$> «^lH>g. at a|l MwA. anHiM^ one Mba a ^g qavepcd wiA wa,tw. I* »* «»&* eitl^w for conn* pr pafVurti ^H* vineyiM^ or* i^doo^^ for any- <*^k yeg^t^lo profpQts^tpcs. is. cultivated with le(s expence than an acre pf wheat ; the irallpw which generally preceeds the fowing of wh^at, mora than cpmpcnfating the hoeing and, other extraordinary c«ltvu38 which is always given to potatoes. Should this root ^vcf become in, any part of Europe, like, ripe in fome ric$ cotintries^ tlie cojnniQO and favourite vqgetj^)!? food, of the p?ople^, fp as, tp occupy thq fam? proportion of the lands in tillage which wheat andvothcr^ form of graii> for.hunxan food4o at.|prel5;nt, i\\Q fatne qi^f«ijit^jQ|^,ciiU^ ' ■ • ' ' ' . ' vated iiiaOi a. .j1;h p.^ ,^ M L;T *k QjBt ;H^.W Ojf ^1^ apf and ijie labourers -(^cipg^ g;?ne^;«d|y ^d^ yrith potatoes, a .greater fviypius would rep[\am ajftei;' repl«iging all the ftock and main- talhinjg all the- labour employed in cultivation. A greater (hare of this furplus too would belong to the landlord. Population wou^d incrcaf^, ^^ r|j|J«,.p^4ji^. jaj^icli h^ alt Vt'^T*- The land which is fit.for potateesi is fit for almoft every mother uieful, y{egetable« If they . occupied the fame prc^ortioh of culti« vated {and whjch corn docs at prjcfent, they would regulate* in the fame manner, the rent of the greater part of other cultivated land. «1k ^ -,,}»■ fome parts of Lancaftiire it is pretended, I hav6 been told, thatrtoead of oatmcisll is^ia ildartier f^>d for* tlibooritig ptoplethan whwtdn^ffcrrad.^ and' If havel fr« and is, perhaps, the chief obftade to thdr ever becoming in any great country, like bread,, the principal vegetable^ food of all the difierent r|in|cy of tjhe people.. T A% T It, €>f the Produce of Land which fometimes does, and' fometimei. d6et> J not, afford Rent, TjUNIAN f^ ieems x.o\» ^e only produ^ of I^tnd wincht always afu) ^eceflarily affords fome rent tp the landlord. Other forts ^f pcojducp fcpfOimes n)ay s^ld fqi^etimes may nqt, «c- cording.tp (ti^rent prcunfil^ai^fxsk ARTCft food* clcAthing and kxiging an thttwo.gceat wants of^ mankind. » Lamd in its original rude flate can afford tJiemateriab of doath*- iQg and lodj^g to a much greater numb^ of people than it cant feed. In its imprPVed ^tc it. can fometimes feed a greater num-- bcr of people tiian it can fupp^y with thoib materials, at leaft. ip ^e way in wlu^h they require them* and are willing to pay. for thein. Iq the one ftate, therefore, there is always a fuper-- abundance of diofe materials, which are frequently upon that; ac^ovint of little or no value. In the other there is often a icarci^, > vthipfa^ i^efliuiljr augipents their value. In the one ftate a great THE WBALtH Of ^ATION^S. v>i part of them i^ thrown away as uleltfe, and the price of whaf is uTed C HA F. is confidered as equsd only to the labour and expence of fitting it for ufe, and can, therefore, afford no rent to the landlord. In the other they are all made ufe of, and there is frequently a demand for more than can be had. Somebody is always willing to give mofe for every part of them than what is fufficient to pay the expence of bringing them to market. Their price, therefore, can always afford fome rent to the landlord. The ikins of the larger animals were the original materials of cloathing. Among nations of hunters and fhepherds, therefor^, whoft food confifts chiefly in the flefhof thofe animals, every man by providing himUHf with food, pro>^des himfelf with the mate- rials ^more cloathing 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 cafe among the hunting nations of North America, before their country v«ras difcovered by the Europeans* with whom they now exchange their furplus paltry, for blankets, fire-arms, and brandy, which gives it fome value. In the prefent commercial ftate of the known world, the moft barbarous nations, I believe, among whom land property is eftablifhed, have fome foreign commerce of this kind, and find among their wealthier neighbours fuch a demand for all the ma- terials of cloathing, which their land produces, and which can neither be wrought up nor confumed at home, as raifes their price above what it cofls to fend them thither. It afibrds, therefore, ibme rent to the landlord. When the greater part of the highland oattle were confumed on their own hills, the exportation of their hides made the moft confideraUe article of the commerce of that country, and what they were exchanged for afforded fome addition to the rent of the highland eftates. The wool of England, which in old times could neither be c. depends partly^ upon its fertility, and partly upon its fltuation.. • • '■ • .■ ■•• 1° A MiNE:of any. kind may be faid to be either fertile Or barreni^ according: as the quantity of mineraL which can be brought froni it Ity a certain : quantity of labour, is greater, or le& than what can bebrought by. an >oqu^ quantity from the greater part of other n|inc8.of.the.£imc kind. Some coal-mines advantageoufTy fituated^' cannot' be wrbughtt an account of their barrennefs. The produce does not pay the. expencr. They can afford neither profit nor rent. There are iomc of- which the produce is barety fufficient ta- gay the labour, and replace, together with its onfinary profits, the: ftock employed in working them; They affiird fome profit to the- undert^er of; the work, but' no rent- to the landlord.. They can > be wrought advantageoufly by nobody but the landlord, who being , himjfelf undertaker of the work, gets the ordinary; piT>fit'of the.- capital which he employs in it. Many coal-amines in Scotland are .^ wrought in this manner, and caff be wrought- in no other.. The^ landlord will allow no body elfe to work.tliem without payings ibmCw rent, , and no body can afford to pay any. . Others if J ■IP I 9o8 THE ^^1^^^ Other coal-minei in the fame country fqiEclently f|;rti|e, c;^- ndt be wrought on account of theip fituation^ A quantity of ii)i|i^ei^^|^ fufficicnt to defray the expence of working, could ,be brpyght^; from the mine by the; ordinary, q^ evei^ Ie|§ than .(he picdii^sg^, ^ quantity of labour : , But in f^n i^iland coui^try, t^u^^y ^f^^b.ite^ji r and without either good roads, or water-carpage, thifj qiu^^^ty could not be fold. . ,., ; v;^j^^,H '>HiM>Jv1«'>«i*w nr>litn^^^^ iv^:ii>f •» i«««t^u VttHviti nit nm^fytii'mUlimii fiiviJwh- liUilftHfil ail' Co^Ls {ire a lefs agi;eeabl^i k^ff^ (hgn wppd : they; arc, faid/ tioo to be lefs^wholefome. The, expence of ipoals, thercfo)^e« at the i^ace^ where they ^^re confumed, muft generally be fomewhat lefs than that of wood. j^(^,j^^0.^ T^^q, ^j L|«„ j»i*.i,iii « r3;fc Soviif r>jrf T .mffl bmtiarj'ioittt m The lowefl price at which coals can be fold for "^ny confiderable time, is like that of all other commodities, die price which is barely fuffident to replace, together with its ordiaary profits,, the ftock which muft be employed in bringing them* ta market. At a. coal-mint ibr winch, the landlord can get. no rent, but whidi he- mufl either work himfelf or let it alone altogether, tiie price p£ coalsimuft^necally be neariy about tliis price., iahm. km «^(^ra fKxn 'id) JR ,«lBl9rrr ?Aim)ym ^i\t ) ^ >i;'ti aroni Uiil bnt .,iliBo> Rent, even where coals a^ord one. Hat generally a fmallir fhare in thdr price than in that of moft other parts of die rude pro« duce of land. The rent of an efbte above ground, commonly.' amounts to what is fuppofed to be a third of the groft producei; and it is generally a rent certain and independent of the i>ceafionid variations in the crop. In coal-mines a fifth of the grofs- produce is a very great rent; a tenth the common rent, and it is feldom a rent certain, but depends upon the occafion^ variations in the ^ produce. Thefe are fo great j that in a country where thir^ yeara purchafe is confidered as a moderate price for the property, of a landed eftate, ten years purchafe is regarded as a good price for. that of a coal-mine. ........ m YhE WEALT^^H 01^ NATIONS. ''••fte ^h^H^'^•^c6il^}Mi^^'^^ frequentty arinW(}h lipon its ntua*tion as upon its fertility. That of a metallick mine depends more upon its fertility, and lefs upon its fituation. The C6arfe/ahd (HU more the precious metals, when feparated from the»6t^, are To valuable that they can generally bear the expence ot aVfery \btig' land, and of the nioft' didant fea-carriage. Their m^^ket is not confined to the countries in the neighbourhood of the minii, but eiitehdsto the whole world. The copper of Japan makes an article in the commerce of Europe j the iron of Spain in that of Chili and Peru. The filver of Peru finds its way, not only to Europe, but from Europe to China. ■.■,,' ^ J,; J Thb. price ^f coals in Weftmoreland or Shropftiire can have little ef!e£lon> their price at Newcaftle; and their price in theX.ionnois can have none at all. The productions of fuch diftant coal-mines can never be brought into competition with one another. But the produ^ons of the moft diftant metallick mines frequently may, and in fa£t commonly are. The priccj, therefore,, of the coarfe, and ftill more that of the precious metals, at the mod fertile mines in the world, mufl: neceiTarily more or leis afFe£t their price at every other in it. The price of copper in Japan muft have fome influence upon its price at the copper mines in Europe. The price of Alver in Peru, or the quantity either of labour or of other goods vrhich it will purchaie there, mult have feme influence on its price, not only at the filver mines of Europe, but at thofe of China. • After the difcoveiy of the mines of Peru, the filver mines of Europe were, the greater part of them, abandoned. The value of filver was fo much reduced that their produce could no longer pay the expence of working them, or replace, with a profit, the fopd, cloaths, lodging, and other necelTaries which were confumed in that operation. This was the cafe too with the mines of Cuba and St. Domingo, and even with the antient mines of Peru, after the difcovery of thofe of Potofi. E e 2 The 2X1 h .■ [1, ' i H7( 'I iJX THE NATURE AND CAUSES OF B P O K The price of every metal at every mine, therefore, bong regulat- ed in fome meafure by its price at the mod fertile mine in the world that is a£^ua]ly wrougiu» it can at the greater part of mines do very little more than pay the expence of working, and can feldom afford a very high rent to the landlord. Rent, accordingly, feems at the greater part of mines to have jut a fmall (hare in the price of the coorfc, and a flill fmaller i|i that of the precious metals. Labour and profit make up the greater part of both. ffffiM- A sixtH part of the grofs produce may be reckoned the average rent of the tin mines of Comwal, the moft fertile that are known in the world,- as we are told by the Reverend Mr. fiorlace, vice-warden of the ftannaries. Some, he fays, afford more, and fome do not afford fo niuch. A fixth pait of the grofs pro- duce is the rent too of feveral very fei^ile lead mines in Scot- Jand. ^ ■ ■ '■ ■ ' ^ ''' '" '\ ', ' ' ' "'■ m' In the filver mines of Peru, we are told by Frezier and Ulloa, the proprietor frequently exa£^s no other acknowledgement from the undertaker of the mine, but that he will grind the ore at hid mill, paying him the ordinary multure or price of grinding. The tax of the king of Spain, indeed, amounts to one-fifth of the ftandard filver, which may be confidered as the real rent of the greater part of the filver mines of Peru, the richefl which are known in the world. If there was no tax, this fifth would naturally belong to the landlord, and many mines might be wrought which cannot be wrought at prefent, becaufe they can- ' not afford this tax. The tax of the duke of Comwal upon tin is fuppofed to amount to more than five per cent, or one twentieth part of the value ; and whatever may be his proportion r it would naturally too be'ci.g to the proprietor of the mine, if tin was duty free. But if you add one-twentieth to one fixth, you wiU # THE WEALTH OP NATIONS. «13 wIM' find that the whole avcraf*c rwit of the tin mines of Corn- ^'L^^* waU is to the whole average rent ot the filver mines of Peru, as thirteen to twelve. The high tax upon filver too, gives much greater temptation to fmuggUng than the low tax upon tin» and fmuggling mud; be much eafier in the precious than in the bulky commodity. The tax of the king of Spain accordingly is faid to be very ill paid* and that of the duke of Comwal very well. Rent, therefore, it is probable, makes a greater part of the price " of tin at the moft fertile tin mines, than it does of filver at the moit fertile f)lvcr mines in the world. After replacing tlie (lock employed la working thoie different mines, together with its ordinary profits, the re^ld^e which remains to the proprietor is greater it feeras in the coaife than in the precious metal, ;,„,^.jj.; o .i>K r;.- I . \. ■' ,'•■'■ NfiiTHER ajie the profits of the undertakers of filver mlne» commonly very great in Peru. The fame moil refpe£lable apd well informed authors acquaint us that when any perfon under- takes tp work a new mine in Peru, he is univerfally looked upon as a man deflined to bankruptcy and ruin, and is, upon tliat ac- count fhunned and avoided by every body. Mining,^ ^^t; feems, is confidered there in the fame light as here, as a lottery in whicli the prizes do not compenfate the blanks, though the greatnefs m of feme tempts many adventurers to throw away their fortunes^ in fuch unprofperous proie6is. . . ^ . ^^ As the fovereign, however, derives a confiderable part of his revenue from the produce of (ilver mines, the law \n Peru gives every poffible encouragement to the difcovery and working of new ones. Whoever difcovers a new mine, is ehtitled to mcafure off two hundred and forty-fix feet in length, according to what ht fUppofes to be the direftion of the vein, and half as much in breadth. He becomes proprietor of thrs portion of the mine, '■•%'. -'^'.-V; ■■■■■--^ and"' •*..,« *^ m •m* H '¥:■ «- a^4t * THE NATURE AND CAlXgES OF ^% 3.0.0'K and can work it ilvidiout payitig any acknowledgement' ttf the- landlord. The interefl of the duke of Cornwal has given oc^ cafion to a regulation nearly ofi the fame kind in^ that antient- vdutchy. In wafte and uninclofed lands any perlbn who dif;> covers a tin mine, may mark out its limits to a certsan extent, ivhich is called bounding a mine. The bounder becomes the reai proprietor of the mine, and may either work it himfelf, or give it. in leafe to another, without the confent of the owner of the* land, to whom, however, a very fmall acknowledgement muft* be paid upon workii^ it. In both regulations the facred rights of pri> vate property are faciifieed ta the fuppoied interefts of publkk jrevenue. io« -pu.; r.'yi.isv i^.^ ...joc/*; 'i-i-a ig i.uii.-up v2 nai :;.f. V3iKt ■*«»• # ^ <-* Thi fame encouragement is given in Peru to the difcovdy tfW ifMR»d^|i beyond wl^lch no fcarcity can ever raife itt. Increafe tke fcarciVf' of gdd to a certain degree, and the fmallefl bit of it may becomffj' more precious than a diamond^ and exjcbange for a greater quantity^ of other goods. •»: •%••*-} # /^UrtsnoL 'i'5ffio. The demand for tHofe metaldarifes partly from tlmr utility,' and > partly from their beauty. If you except iron^-. they are more ufefiili than, perhaps, any other metals As they are lefb liable to rufV an4 impurity, they can m lities of utility; beauty, and fcarcity, are the original foundation of the high price of thofe metals, or of die great quantity of other goods for which they can every where be exchanged. Tliis value was antecedent to and independant of their being employed as coin, and was the quality which fitted them for that employ- ment. T)]At employment, however, by occafioning a new de- mand, and by dim.inifliing the quantity which could be empbyed in any other way, may haye afterwards contributed to keep up or increase their valuy. m ^rfc ^0- 1.* •* The demand for the precious ftones ariles altogether from their beauty. They ai'e of no uie, but as ornaments; and the merit of their beauty is greatly enhanced by their fcarcity, or by the difficulty and expcnce of getting them from the mine. Wages 7 and andprofit ^QcojwUpgljf roakp, upin^ppqfpipft.pccafions, aJndQit the wbple of their high price. Rpnt co^^es ii> but fqr a very finall (hare i fii^quQntly Ipr no fhare ; and the qioftfertilp mines only affovd any coirfiderable rent. When T;^vf|n^ier> aJc^cUer, vifited the dia^ mond mines of Golconda and yiin^po^r, he was informed tliat the fbvereign of the country, for whofe benefit they were wrought, had ordered all of them.to.be fli4t,up except thofe which yielded the largeft and fineft ftones. The othersj* it feems, were to the pifoprifitor not worth the working, pUfo jq tba lo ri/;fj uifcyi^ • ;mo3 Olt'tpyj/i-w atjva iadi tn /biriv/ ,i;3ri'>itJo 3l>fiiijq :i»ilj j^i ..flu ,1- Al the price both of the precious metals and of the precious ftones is regulated all over the world by their price at the moft fertile mine in it, thei*ent which a » ^ne of either can afford to its proprietor b in proportion, not to its abfolnte, but to what m^y be called: its relative f^istility, or to its fuperiorijy over other mines of the fame kind. If new mines were difcovered as much fuperior to ^thoife of PotoQ as they were fuperior to thofe of Europe, the value jDf fjlver; , might bp fo much degraded as to render even the mines of jPotofi not worth the working. Before the difcovery of the Spanilh "^Weft Indies, the moft fertile mines in Europe may have afforded ,39 great a rent to their proprietor as the richefl mines in Peru do f^t prefent. , Though the quantity of filver was much leis, it jnight have es^changed for an equal quantity of other goods, and the proprietor's (hare might have enabled him to purchafe or com- Jmand an equal quantity either of labour or of commodities. The vyaluc both of the produce and of the rent, the real revenue which they afforded both to the publick and to t^e proprietor, might have been the fame. CHAP. -XI. Thk moft abundant mines either of the precious metals or of the precious ftones could add little to the wealth pf the world. A pro- duce of which the value is principally derived from its fcarcity, is Vol. I. Ff ^ neceflarily II If ill :. 1 in 1 r m itiB THE ifJAttJRE AND CAUSES OF neceffaiily degraded by its abundance. A fervice of plate, and the other fiivolous ornaments of drefs and furniture, could be purchafed for a fmailer quantity of labour, or for a fmaller quantity of com- modities ; and in this would confift the fole advantage which the world could derive from that abundance. It is otherwife in eftates above ground. The value both of their produce and of their rent is in proportion to their abfolute, and not to their relative fertility. The land which produces a certain quantity of food, cloaths and lodging, can always feed, cloath and lodge a certain number of people; and whatever may be the proportion of the landlornl, it will always give him a propor- tionable command of the labour of thofe people, and of the com- modities with which that labour can fupply him. The: value of the moft bafren lands is not diminifhed by the neighbourhood of the moft fertile. On the contraiy, it is generally increafed by it. The great number of people maintained by the fertile lands afford a market to many parts of the produce of the barren, which they could never have found among thofe whom their own produce could maintain. 7i Whatever increafes the fertility of !and in producing food, jncreafes not only the value of the lands upon which the improve- ment is beftowed, but contributes likewife to increafe that of many other lands, by creating a new demand for their produce. That abundance of food, of which, in confequence of the improvement of land, many people have the dilpofal beyond what they them- felves can confume, is the great caufe of the demand both for the precious metals and the precious ftones, as well as for every other convenlency and ornament of drefs, lodging, houfhold furniture, aind equipage. Food not only conftitotcs the principal part of the riches of the world, but it is the abundance of food which gives . . the THE WEALTH OF NATIONS. 219 the principal part of their value to many other forts of riches. ^ yA ^* T-he pool* inhabitajnts of Cuba and St. Domingo, when they were \yyrsi iirft difcovered by the Spaniards, ufed to wear little bits of gold a$ ornaments in their hair and other pwts of their drefs. They feemed to value them as we would do any little pebbles of fome- what more than ordinaiy beauty, and to confider them as jud worth the picking up, but not worth the refufmg to any body who alked them. They gave them to thsir new guefts at the firft requeft, without ieeming to think that they had made them any very valu- able prefent. They were aflonifhed to obfcrve the rajge of the Spaniards to obtain them ; and had no notion that there could any where be a country in which many people had the difpofal of fo great a fuperiluity of food, fo fcanty always among themfelves, that for a very fmall quantity of thofe glittering baubles they would willingly give as much as might maintain a whole family for many years. Could they have been made to underftand this, the paflion of the Spaniards would not have furprifed them. Part III. Of the Variations in the Proportion between the rej^e^ive Values of that Sort of Produce which always affords Rent t and of that which fometimes does and fometimes dots not afford Rent. '; , 'TpH E increafing abundance of food, in confequQTiHce of in- Gceafing improvement and cultivation, muft necelTarily increafe the demand for every part of the produce of land which is not food, and whkh can be af^Ued either to ufe or to ornament. In the wliole progrefe of imporovement, it might therefore be expelled, there Ihould be only one variation in the comparative values of thofe two different foets of produce. The value of tliat iiprt which fometimes does and ibmatimes docjs not afford rent, fliouWcon- flantly.rife in prqpornon^to th^t which always aflfords fome rent. F f 2 As 220 THE NATURE AND CAUSES OF B O O K As art and induftry advance, the materials of cloathing and lodg- ing, the ufcful foflils and minerals of the earth, the precious metals and the precious ftones fhould gradually come to be more and more in demand, fhould gradually exchange for a greater and a greater quantity of food, or in other words, fhould gradually be- come dearer and dearer. This accordingly has been the cafe with molt of thefe things upon moil occafions, and would have been the cafe with all of them upon all occafions, if particular accidents had not upon fome occafions increafed the fupply of fome of them in a flill greater proportion than the demand. -v/ ?vn The value of a free-flone quarry, for example, will necefTarily increafe with the increafing improvement and population of the country round about it ; efpecially if it fhould be the only one in the neighbourhood. But the value of a filver mine, even though there fliould not be another within a thoufand miles of it, will not necefTarily increafe with the improvement of the country in which it is fituated. The market for the produce of a free-ftone quarry can feldom txtend more than a few miles round about it, and the demand mufl generally be in proportion to the improvement and population of that fmall diflricl. But the market for the produce of a filver mine may extend over the whole known world. Unlets the world in general, therefore, be advancing in improvement and population, the demand for filver might not be at sdl increafed by the improvement even of a large country in the neighbourhood of the mine. Even though the world in general were improving, yet, if in the courfe of its improvement, new mines fhould be dif- covered, much more fertile than any which had been known before, though the demand for filver would neceffarily increafe, yet the fupply might increafe in fo much a greater proportion, that the real price of that metal might gradually fall ; that is, any given quantity, a pound weight of it, for example, might gradually V 4 purchafe THE WEALTH OF NATIONS. Z2l purchafe or coiuTr.and a fmaller and a fraaller quantity of labour, C HA P. or exchange far a fmaller and a fmaller quantity of corn, the prin^ cipal part of the fubfiilence of the labourer. The great market for filver is the commercial and civilized part of the world. If by the general progrefs of improvement the demand of this market Ihould increafe, while at the fame time the fupply did not increafe in the fame proportion, the value of filver would gradually rife in proportion to that of corn. Any given quantity of filver would exchange for a greater and a greater quantity of corn; or, in other words, the average money price of corn would gradually become cheaper and cheaper.. 1 I'L... ml Ik, on the contrary, the fupply by fome accident fhould inc eafe for many years together in a greater proportion than the demand, that metal would gradually become cheaper and cheaper; or, in other words, the average money price of corn would, in fpite of. all improvements, gradually become dearer and dearer. l-'flii m Bur if, on the other hand, the fupply of that metal fhould in- creafe nearly in tlie fame proportion as the demand, it. would v continue to purchafe or exchange for nearly the fame quantity of. corn, and the average money price of corn would, in fpite. of all; improvements,, continue very nearly the fame,. These three fbem to exhauft all the poflible combinations of events which can happen in the progrefs of improvement; and during the courie of the four centuries preceeding the prefent, if we may judge by what has happened both in France and Great j^ritain, eachof thofe, three different. coipbinations feems to have. taken ; Tlin NATURE AND CAUSES OF BOOK taken place in the European market, and nearly in the fame order w^-y^--^ too in which I have here fet them down. Digrejjhn concerning the Varlattom in the Value of Silver during the Courfe of the Four lajl Centuries. > U First Period. tN 1350, and for fome time before, the average price of the quartei' of wheat in England feems not to have been eftimated lower than four ounces of filver Tower-weight, equal to about twenty (hillings of our prefent money. From this price it feems to have fallen gradually to two ounces of filver, equal to about ten ihillings of our prefent money, the price at which we find it efti- mated in the beginning of the fixteenth century, and at which it feems to have continued to be eftimated till about 1570. In 1350, being the 25th of Edward III, was '•nafbd what is called. The ftatute of labourers. In the preamble it complains much of the infolence of fervants, who endeavoured to raife their wages upon their mafters. It therefore ordains, that all fervants and labourers (hould for the future be contented with the fame wages and liveries (liveries in thofe times Signified, not only cloaths, 'but provifions) which they had been accuftomed to receive in the 20th year of the king, and the four preceeding years j that upon this account their livery wheat fhould no where be eftimated higher - than ten-pence a bufhel, and that it fhould always be in the option of the m^fter to deliver them either the wheat or the money. ' Ten-pence a bufhel, therefore, had in the 2jth of Edward III, 'tteen reckoned a very moderate price of wheat, fince it required a ' iparticular ftatute to oblige fervants to accept of it in exchange for / y their \1 THE WEALTH OF NATIONS. . their ufual livery of provifions ; and it had been reckoned a rea- fonable price fn years before that, or in the i6th year of the king, the term to which the ftatute refers. But in the i6th year of Edward III, ten-pence contained about half an ounce of filver Tower-weight, and was nearly equal to half ^ crown of our prefent money. Four ounces of filver. Tower-weight, therefore, equal to fix (hillings and eight-pence of the money of thofe times, and to near twenty fliillings of that of the prefent, muft have been reckoned a moderate price for the quarter of eight buflicls. 223 CHAP. XI. This ftatute is furely a better evidence of what was reckoned in thofe times a moderate price of grain, than the prices of fome par- ticular years, which have generally been recorded by hiftorians and other writers on account of their extraordinary dearnefs or cheapnefs, and from which, therefore, it is difficult to form any judgement concerning what may have been the ordinary price. There are, befidcs, other reafons for believing that in the begin- ning of the fourteenth century, and for fome time before,, the com- mon price of wheat was not lefs than four ounces of filver the quarter, and that of other grain in proportion. In 1300, Ralph de Born, prior of St. Auguftine's Canterbury, gave a feaft upon his inftallation day, of which William Thorn has preferved, not only the bill of fare, but the prices of many particulars. In that feaft were confumed, ift, fifty-three quarters of wheat, which coft nineteen pounds, or feven fliillings and two- pence a quarter, equal to about one and twenty fliillings and fix- pence of our prefent money: adly. Fifty- eight quarters of malt, which coft feventeen pounds ten fliillings, or fix fliillings a quarter, equal to about eighteen fliillings of our prefent money: 3dly, Twenty quarters of oats, which coft four pounds, or four fliillings a quaiter, equal to about twelve ihillings of our prefent money. 224 THE NATURE AND CAUSES OF B O O K The prices of malt and oota fccm here to be higher than their ordi- nary proportion to the price of wheat. toT^^s"* prices are not recorded on account of their extraordinary ed, that wheat might be exported without a licence when the price was fo low as fix (hillings and eight-pence: And in 1463 it was enabled, that no wheat Hiould be imported if the price was not above fix (hillings and eight-pence the quarter. The legiflature had imagined, that when the price was fo low, there could be no inconveniency in exportation, but that when it rofe higher, it became prudent to allow of impor- tation. Six (hillings and eight-pence, therefore, containing about the fame quantity of filver as thirteen (liillings and four-pence of our prefent money, (one-third part lefs than the fame nominal fum contained in the time of Edward III.), had in thofe times been con- fidered as what is called the moderate and reafonable price of wheat. :1.! II, ' In 1554, by the ift and 2d of Philip and Mary j and in 1558, by the ift of Elizabeth, the exportation of wheat was in the fame manner prohibited, whenever the price of the quarter (hould exceed fix (hillings and eight-pence, which did not then contain two penny worth more filver than the fame nominal fum does at prefent. But it had foon been found that to reftrain the exportation of wheat till the price was (b very low, was, in reality, to prohibit it altoge- ther. In 1 562, therefore, by the 5th of Elizabeth, the exportation of wheat was allowed from certain ports whenever the price of the quarter (hould not exceed ten (hillings, containing nearly the fame quantity of filver as the like nominal fum does at prefent. This price had at this time, therefore, been confidered as what is called the moderate and reafonable price of wheat. It agrees nearly with the eftimation of the Northumberland book in 1512. ""^ ^HAT in France the average price of grain was, in the fame inanner, much lower in the end of the fifteenth and beginning of the fixteenth century, than in the two centuries preceeding, has THE WEALTH OF NATIONS. 127 been obfcrvcd both by Mr. Dupridc St. Maur, and by the elegant C HA P. author of the EiTay on the police of grain. Its price, during the fame period, had probably funk in the fame manner through tlie greater part of Europe. ^ ja ^q^ »'8'^ ODiiq •jrt> u mttc-mtu »d This rife in the value of filver in proportion to that of com, may either have been owing altogether to the incrcafe of the demand for that metal, in confequence of increafmg improvement and cuU tivation, the fupply in the mean time continuing the fame as before : Or, the demand continuing the fame as before, it may have been owing altogether to the gradual diminution of the fupply ; the greater part of the mines which were then known in the world, being much cxhaufted, and confequently the expence of working them much increafed : Or it m?y have been owing partly to the one and partly to the other of thofe two circumftances. In the end of the fifteenth and beginning of the fixteenth centuries, the greater part of Europe was approaching towards a more fettled form of go- vernment than it had enjoyed for feveral ages before. The increafe of fecurity would naturally increafe induftry and improvement ; and the demand for the precious metals, as well as for every other luxury and ornament, would naturally increafe with the hicreafe of riches. A greater annual produce would require a greater quantity of coin to circulate it j and a greater number of rich people would reqjuire a greater quantity of plate and other ornaments of filver. It is natural to fuppofe too, that the greater part of the mines which then fup- I)lied the European market with filver, might be a good deal ex- haufted, and h.ivc become more expenfive in the working. They had been wrought many of them from the time of the Romans. " art* ; ^': .,1 It has been the opinion, however, of the greater part of thoie who have written upon the prices of commodities in antieut times, that, from the Conqueft, perhaps from the invaiion.pf G g 2 Julius ti9 TM£ NATURE AND CAUSES OF B o O It Julius C«for till tile difcoveiy of the min«8 of America, the value of filver was cotttkiually art1y by the obfervntiims which they had occafion to make upon the prices both of corn and (wt)Gin oughttobeobfervedinaUhigheiprices.,^^^^^.^^;, , hj. ^^ 5>,„tj Thub in the aifize of bread and ale, of ihe 5itt>ol' 'Henry IN, the price of bread wat fegjolaicd accovding to tiic4i^rBttt prkei of 7 wheat. i 23^ THE NATURE AND CAUSES OF BOOK wheat, from one fliilling to twenty {hillings the quarter, of the money of thofe timts. But in the manufcripts from which all the ■different editions of the ftatutes, preceeding that of Mr. Ruffhead, fwere printed, the copiers had never tranfcribed this regulation be- yond the price of twelve (hillings. Several writers, therefore, being .mifled by this faulty tranfcription, very natuially concluded that the middle price, or fix ihillings the quarter, equal to about eighteen -fliillings of our prefent money, was the ordinary or average price of wheat at that time. In the ftatute of Tumbrel and Pillory, ena6led nearly about the .fame time, the price of ale is regulated according to every fixpence rife in the price of barley, from two fliillings to four fliillings the quarter. That four fliiUings, however, was not confidered as the -higheft price to which barley, might frequently rife in thofe times, and that thefe prices were only given as an example of the proportion ■which ought to be obferved in all other prices, whether higher or lower, we may infer from the lafl: words of the ftatute; •* et fic *• deinceps crefcetur vel diminuetur per fex denarios." The cx- -preiTion is very flovenly, but the meaning is plain enough; *♦ That the price of ale is in this manner to be increafed or di- '* miniflied according to every flxpence rife or fall in the price of '*• barley." In the compofition of this ftatute the legiflature itfelf Teems to have been as negligent as the copiers were in the tranfcription of the other. #11 In an antient manufcript of the Regiam Majeftatem, an old Scotch law book, there is a ftatute of afllze, in which the price of bread is regulated according to all the different prices of wheat, from ten-pence to three (hillings the Scotch boll, equal to about half an £ngli(h quarter. Three (hillings Scotch, at the time when this \ aflize is fuppofed to have been enaded, were equal to about nine (hillings THE WEALTH OF KATIONS/' ftiilliftgs fterling of our prefent mo^iey. Mr. Rudiman fecms to conclude from this, that three (hillings was the higheft price to which wheat ever rofc in thofe times, and that ten-pence, a fliilling„ or at moft two (hillings, were the ordinary prices. Upon con- fulting the manufcript, however, it appears evidently, that all thefe. prices are only fet down as examples of the proportion which ought to be obferved between the refpeftive prices of wheat and bread* The laft words of the ftatute are, " reliqua jiidicabis fecundum. " praefcripta habendo refpedtum ad pretium bladi." •* You (hall . ** judge of the remaining cafes according to what is above written,- , V having a refpeft to the price of corn." Thirdly, They feem to have been miflcd too by the very low price at which wheat was fometimes fold in very antient ti es;; and to have imagined, that as its lowed price was then n ch lower than in later times, its ordinary price muft likewife h.. e been much lower. They might have found, however, that in thole antient times, its higheft price was fully as much above, as its loweft price was below any thing that had ever been known in later times. Thus in 1 270, Fleetwood gives us two prices of the quarter of wheat. The one is four pounds fixteen (hillings of the money of thofe times^ equal to fourteen pounds eight (hillings of that of the prefent ; the other is fix pounds eight fliillingSj equal to nineteen pounds four (hillings of our prefent money. No price can be found . in the end of the fifteenth, or beginning of the (ixteenth century, . which approaches to the extravagance of thefe.- The price of com, , though at all times liable to variations, varies moft in thofe tur- - bulent and difordcrly focieties, in which the interrupion of all commerce and communication hinders the plenty of one part of the country from relieving the fcarcity of another. In the diforderly (tate of England under the PlantagenetSr who governed it from about the middle of the twelfth, till towards the end of the fifteenth century. 231 CHAP. XI. im m 232 THi NATTJRS: Ai^D CAUSES OP eetttmy, bhe aiftria: might be in plcttty, while attoih^r ^t ilio grtat diftance, by having its crop delboyed either by Cookt accideHt of the ieafons» or by the intiuriloii of fome neighbouring t>aran» might be f filing all the horrors of a famine^ and yet if tlie lands of fotat iioflile lord were interposed between thems the one mi^ not be able to give the leaft afliftance to the other. Under the vigorous ad- miniilratioin of the Tudors, who governed England during the latter part of the fifteenth, and through the whole of the fiy^^eenth century, no baron was po .^rful enough to dare to diftnrb the pubUdc fe^urity. The reader will find at the end of this chapter all tlie prices of wheat which have been colle£led by Fleetwood from' 1202 t& (597, both inclufive, reduced to the money of the prdent times, ^nd digefted according to the order of time, into fevcn divifions of twelve years each. At the end of each divifion too, he wilt find the average price of the twelve yearc of which it confifts. Jn that long period of time, Fleetwood has been able to collefV the pifi^ of no more than eighty yearSj fo t3iat fi^ir yeai^s are wdn^g to make out the laft tw«Wc yeaips. I have tidded, thet^ore, from the accounts of Eton college, the prkes of 159S, 1599, 1600, and l6oi. It is the only addition which I have made. The ree^f will fee that from tlie beginning of the thirteenth till after the middle of the fixteenth contury, th? average price of each twelve yeai's grows gr^dui^ly lower and lower j and that towards the fad of the fixteenth centuiy it begins to riif again. The prices;, indeed, which Fleetwood h^ beoi able to collet, feem to have been thofe chiefly which wei« remarkable for extraoidinary dear- aefs or cheapnefs ; and I do not pretend that any very certain con- clufion can be drawn from them. So £stf» however, as they prove any thing at all, they confirm the accaiimt w^h I have been en- deavouring to give. Fleetwood himieif, however, items, with xncfl other writers, to have believed, that during nil this period the value I THE WEALTH OF NATIONS. *33 value of iilver, in confequence of its increaling abundance, wa$ ^^^^• continually diminifliing. The prices of com which he himfelf has coUeded, certMnly do not agree with this opinion. They agree perfe£lly with that of Mr. Dupr^ de St. Maur, and with that which I have been endeavouruig to explain. Bifhop Fleetwood ^nd Mr. Dupr^ de St. Maur aie^ the two authors who fee"^ to have collefled, with the greateft diligence and fidelity, 'r\if. prices of things in antient times. It is fomewhat curious that, though their opinions are fo veiy different, their fa6ls, fo far as they relate to the price of corn at leaft, Hiould coincide fi> very exactly. It is not, however, fo much from the low price of com, as from that of fome other parts of the rude produce of land, that the mofl judicious writers have inferred the great value of filver in thofe very antient times. Corn, it has been faid, being a fort of manufadlure, was, in thofe rude ages, much dearer in proportion than the greater part of other commodities i it is meant, I fuppofe, than the greater part of unmanufactured commodities, fuch as cattle, poultry, game of all kinds, &c. That in th r^fe tiniCS of poverty and barbarifm thefe were proportionably much cheaper than corn, is undoubtedly true. But this cheapnefs was not the effeCl of the high value of filver, but of the low value of thofe commodities. It was not that filver would in fuch times purchafe or reprefent a greater quantity of labour, but that fuch commodities would purchafe or reprefent a much fmaller quantity than in times of more opulence and im- provement. Silver muft certainly be cheaper in Spariifh America than in Europe ; in the country where it is produced, tV«an in the countiy to which it is brought, at the expence of a long carriage both by land and by fea, of a freight and an infurance. One and twenty pence halfpenny fterling, however, we are told by UUoa, was, not many years ago, at Buenos Ayres, the price of an ox Vol. I. * H h . chofen ■>'' ,'■> i I II i; us 'lip I I nil 234 TH-E NATtJRB AMD QAV^ES OF £ Q&R ehofen fltiiA i ^&A df fitfee 'or fottt liflhdwd. ^iMSHtti 1hl)tkig» ftci'ling, Wc We ttoia Ijy Mr. Byr'bh, Wds tht priiJe 6f a jiitta horfe Jn the cajntal «f GWli. Jn a dtfUMry >fiaturally "ftrtHe, Imt of ♦rhichthc fer greater part is altogiSther Wtictilti\^ated, caitlo; jxmU try game of all kinds, dec. as they can he bcqiAfed with a ve; rir.li iar?; .t'Jt;fif> j/tarjCih ^ikxriiJ 11b a\ Labour, it muft always be remembered, and not any particular commc jity or'iett of conimodities, is theital nieafitfe of the Tdlue both of fUver and df !all other commodities^ .HJUiixin* Y.«!- •But ih cbUntiics almoft wafte, or but thinly Inhabited, cattlfe, poultry, game Of allTdnds, '&c. as they are the fjpontaneotis pro*- du^ions Of nature, fo flie frequeritly produces thiem In ihiich greater quanthies than the coriraraptidn of the inhabitants retJUirei. In flich ia ftate of things the fnpply comlmonly exceccl* the demand. In different ftates of fociety, in different ftages of improvement, therefore, fucli cdmmodities willreprc/ent, or be equivalent to, very dift^isent tjuarif ities 6f Idbour. r t In eVeify ftkte d? fociety, in every ftage of improvement, "corn is the prOduftion of human induftry. But the average produce of every fort of induftry is always (Uited, more or lefs exaftly, to the average confumption J the average fupply to the average demand. In every differCntftage of improvement bcfides, the raifirlg of equal quantities of corn in the fame Toil and climate, will, at an average, require nearly equal quantities of labour; or what comes to the fame thing, the price of nearly equal quantities; tlie continual in- creafe TH^ WBAhfH 0|? N^TiiaiylS. 23s )Ci€Aft of tj^, proUu^iv^. pQWti'8 of tabptv ifl, an i^p^pi^pyjyijg, {^aj^ of C ^A F. u)cii|?(l$ng prV:e 9f cajH;^. the pri|)fip^ ioftfurn^ts, of a^rifral^Uir^. -quantities of coin will, in every ftate of fociety, in every ftage cf toi{>rpv«mBi})t, vapK nearly cepr^i^l:, go; i^ e<]J|?lv4]^nt to« equal quantUies of labour, l^hf^ eq^al (|uaf)jtitie^ of afjjc otb^ p^t pf tjbp cud^ p^'od^cc 9f land. Cotin), accorijia^l)^, i^ li^ already l^eei^ q1^- fetv^df is, jixi !dlxkt ^ii^snX ft^ges <4mp^^ 4n4 unpcQvenpiepl;,. a ufiore accucate oieadue of value thaiji any othei' commodity or |et;t of coomoodttij^s. Iiji ail thoiie different i^Agec^ thei'efore, we ca^ judge better of the real value of filver, by comparing it w cqrn, than by comparing it with any other commodity, or fett of com- inodities. {jaimi^^M •msi'nitcmmo'.i larfao uis b hite lavin In rftiyi ^ CoR.Vt be^.e^. i xvlicktevq* elfe is .^he cospmpn and ^vq^rite ifegstablp food, of the people, copftitn^teji, ifi eyieiy civihze4 cp^^lt^y, tj(^ P^iii^ci^l part ^of th« lUbijftence qf ^e laj^owrei;. Incqn^- i^ueu<;e of tj^exteilfionof agricv^ltLire, the land, of eyejy countj^y produces a much greater quantity of vegetable than of ^ipim^ foo^, and the labourer every where lives chiefly upon tlie wholefome food that i^ qheappft and nfioit abv»m^nt, ^u^cherVfl^e^t. e;^ept in the moft tVivin^ counties, or w^ieyip Is^k^^f i?,i:^\Qft pj^^ rewarded, ^lMces but an ianguific^nt pj^JCt of his ful^jQi^eixce : poultry wakes a ftill fej^ler p^ of it, apd gawp po p^ of it. Ii\ France, and everi, in $cQtl^d, wher^ laibQ^i' is foqi^wl^t better rewarded thau in FriWC"?, tjie labipiwiiig pp9r fej^om est butcher's - njeat, except i^pon holidays;, ^d pth^r jej^tri^l)')'!j: :ft' r-.^' -nrv, r:?) Tut. quantity of the precious metals may increafe in any country from two difiierent caufes : dther, firft, from the increafed abun- dance of the mines which fupply it ; or, fecoiidly, from the increafed wealth of the people, from the increafed produce of their annual labour. The firft of thefe caufes is no doubt neceirarlly cdnnefted with the diminuti(xi of the value of the precious metals j but the fecond is not. 'i:i\ .i.,h i* i')h,- " When more abundant mines are difcovered, a greater quantity of the precious metals is brought to market, and the quantity of the neceflahes and conveniencies of life for which they muft be exchanged being the fame as before, equal quantities of the metals muft be exchanged for fmaller quantities of commodities. So far, therefore, as the increafe of the quantity of the precious metals in, any country arifes from the ihcreaied abundance of. the mine$, it is neceflarily connected with fomediminution of their, value,. !- Whem> on the contrary^ the wealth of any country ihcreafcis,, when the annual produce of its labour becomes gradually greater - 4( ^^^^ THE WBALTM' OF' NATIONS. ^37 and greater! a greater quantity of coin becomes neceflkry in order Chap. to circulate a greater quantity of commodities; and the people, as they can afford it, as they have more commodities to give for it, will naturally purchafe a greater and a greater quantity of plate. The quantity of their coin will increafe from neceffityj the quantity of their plate from vanity and oftentation, or from the fame reafon tiiat the quantity of fme ftatues, piflures, and of every other luxury, and curiofity, is likely to encreafe among them. But as ftatuaries and' painters are not likely to bc> worfe rewarded in times of wealth and prolperity, than in times of poverty and' depreffioni, fo gold and filver are not Ukcly to be worfe paid fori; ii^' ^niino^g;^h The price of gold and filver, when the accidental difcovery of more abundant mines does not keep it down, as it naturally riies with the- wealth of every country, fo, whatever be the ftate of the mines, it is'at' all timesi naturally, higher in a rich than in a poor ' country^ Gold, and iilver« like all other commodities, na-r turally feek the market where the beft price is given for them, and . the heft price is commonly given for every thing in the country which can beft afford it. Labour, it mud be remembered, is the ultimate price which is paid for everr' thing, and in countries where labour is equally well rewarded, the money price of labour will be in proportion to that of the fubliftence of the labourer. But gold.and filver will naturally exchange for a greater quantity of fubfiftence in a rich than in a poor country, in a country which . abounds with fubfiftence, than in one which is but indifferently fup- plied with it. If the two countries are at a great diftance, the dif- ference may be very great; becaufe though the metals naturally Hy from the worfe to the better market, yet it may be difficult to tranfport them in fuch quantities as to bring their price nearly to a level in both. If- the countries are near, the diH^erence will be lmaUer,.and may fometimes be fcarce perceptible; becaufe in this cafe. S5t THE natIjr^ Af^fe cA6sE^ OF BOOK cafe the tranljportation will be ea^. thhui is a much licher coun« try than any part of Europe, and the diiierence between the price of fubfifteiKe in China and in Europe is very great. Rice in China is much cheaper than whcnt is any where in Buropo. England \& a much rkhei' countiy than Scotland j but the difference between the money pritc of corn in thofe two countries is much imaMor, and is but juft perceptible. In proportion to the quantity oi- meafure, Scotch com getserally appears to be a good deal cheaper than Elngliih; but in proportion to its quality* it is certainly fome- what deara*. Scotland receives almoft every year very large fup- plies from Englatid, and every commodtty muft coounonly be fomewhat dearer in the country to which it is brought than in that from which it comes. EngliCh cdrni, tfadrefore, moft be dearer in Scotland than in EnglamU «nd yet in propcotion t6itsli|ua]ity, or to the quantity and goodkiei's of the floor br meal whkh can be made from it, it cannot commonly be Ibid higher diere tb*a the Scotch com wlitdn comes to market in competition whh it. /JThe di^eifi^ce between the monjcy price of labour in Cliina and in Europe, is niU greater than that between the money price of fubfiftence; becaufe the real recompencQ, of labour is higher in Europe than in China, the greater part of Europe being in an improving ftate, while Cluua feems ^o be flandipg ftill. The mo- ney price of labour is lower in Scotland than in England, becauib the real recompence of labour is much lower; Scotland, though advancing to greater wealth, advancing much more flowly than England. The proportion between the real recompence of labour in difierent countries, it muft be remembered, is naturally r^u- lated, not by their actual wealth or poverty, but by their advanc- ing, ^aj^o|^^, oj: 4j5(;Uning. condition. Go L Id and fit W, asithey are naturally of the greateift value among the richeft, fo f hey are naturally of leafl: value among the pooreft 7 nations. \' THE WEALTH OF NATIONS. 239 nations^ Amrni^ i^%% ^ 99^^^^!^ ^^ ^ati^QS* t|»ey are of c h^ap. fcai'ce wy value. ..^ unf.-vf'fflf'Kf'^ff •'Imp i-ij^nW^f '6 t:,^ v^tj*^ .-r*^ In jreat towm aU the other inftruments and means of ioarriage and commerce-: bnt they are poor in corn, which, as hmuft -be brought ito them from diftant countries, muft, by an addition to its price, pay for the carriage from thofe countries. It does not coft Icfs labour to bring filver to Amfterdam than to Dantzick; but it cofts a great deal more to bring corn. The real coft of filver muft be nearly the fame in both places J but that of corn muft be very different. Diminifli the real opulence either of Holland or of the territory of .Genoa, while the number of their inhabitants remains the fame j diminifli their poWer of fupplying themfelves from diftant countries; and the price of com, inftead of finking with that diminution in the quantity of their filver, which. muft. neceflfarily accompany this de- clenfion either as its cauie or as its efSe^, will rife to the price of a famine. When we are in want of ineeeflfaries weimuft part with all fuperfluities, of which the value, as itriies in times of opulence r and profperity,. ib. it . £nks in 4ira^?. of poverty and diftceis. it is otherwife il 140 THE iylATURE AND CAUSES dF B O^O K otherwifc with neceflaries. Their real price, the quantity of labour which they can purchafe or command, rifes in times of poveity and diftrefs, and finks in times of opulence and prof, perity, which are always times of great abundance; for they could not otherwife be times of opulence and profperity. Corn is a neceflary, filver is only a fuperfluity. A' i Whatever, therefore, may have been the increafe in the quan- tity of the precious metals, which, during the period between the middle of the fourteenth and that of the iixteenth century, arofe from the increafe of wealth and improvement, it could have no tendency to diminilh their value either in Great Britain, or in any other part of Europe. If thofe who have colle6led the prices of things in ancient times, therefore, had, during this pe- riod, no reafon to infer the diminution of the value of filver, from any obfervations which they had made upon the prices either of com or of other commodities, they had ftill lefs reafon to infer it from any fuppofed increafe of wealth and improvement* 4 n\ fSi >.• Second Period. 4 •OUT how various fbevcr may have been the opinions of the learned concerning the progrefs of the value of filver during this firft period, they are unanimous concerning it during the "fccond. From about 1570 to about 1646, during a period of about fe- venty years, the variation in the proportion between the value of filver and that of corn, held a quite oppofite courfe. Silver funk in its real value, or would exchange for a fmaller quantity of la- ' of THE WHALTII OF NATIONS. ^4« of being commonly ioUl Tw* about two ounces of filver the quarter, C fi A P. or about ten (hillings of our prefent money, came to be fold for fix and eight ounces of filver the quarter, or about thirty and forty {hillings of our prdent money. The difcovery of the abundant mines of America, feems to have been t!ie fole caufe of this diminution in the value f filver in pro- portion to that of corn. It is accounted for acc.^ dingly in the fame manner by every body; and there never has been any difpute either about the fa£t, or about tl ? caufc of it. The greater part of Europe was, during this period, advancing in induftry and im- provement, and the demand for filver miift confequently have been increafmg. Dut the increafe of die fu^:ply had, it feems, fo far exceeded that of the demand, that the value nf v lat metal funk confiderably. The difcovery of the mines ot America, it is to be obferved, docs not feem to have hid my very fentiUe effeft upon the prices of things in England till after 1570; though even the mines of Potofi had been diicovered more than thirty years before. X From 1595 to 1620, both inclufive, the average price of the quarter of nine bufliels of the befl: wheat at Windfor market, ap- pears, from the accounts of Eton College, to have been 2I. is. 6d. ■^. From which fum, negledting the fraflion, and deducting a ninth, or 4 s. 7 d. 4, tb«> price of the quarter of eight buihcls comes out to have been : V ;i6s. 10 d. 4.. And from this fum, neglecting likewife the fra£^\on, and deducting a ninth, or 4s. id..^, for the difference between the price of the beft wheat, and that of the middle wheat, ttie price of the middle wheat comes out to have been about 1 1. 128. 8 d. |, or about fix ounces and one- third of an ounce of fUvcr. T ....... I" '.>'«'i Vol. I. I i From HI 24^ THE NATURE AND CAUSES OF From 1621 to 1636, both inclufive, the average price of the fame nieafure of the beft wheat at the fame market, appears, from the fame accounts, to have been 2I. 10 s.; from which making the like deductions as in the foregoing cafe, the average price of the quarter of eight bufliels of middle wheat comes out to have been 1 1. 19 s. 6 d. or about feven ounces and two*- thirds of an ounce of filver. \> V. T H I R D Period. "DETWEEN 1630 and 1640, or about 1636, the efFefl of the difcovery of the mines of America in reducing the value of filver,. appears to have been compleatcd, and the value of that metal feems never to have funk lower in proportion to that of corn than it was about that time. It feems to have rifen fomewhat in the courfe of the prefent century, and it had probably begun to do foj even fome time before the end of the li^ft*. From 1637 ta 1700, both inclufive, being the fixty-four laflT years of the laft century, the average price of the quarter of nine, hufhels of the beft wheat at Windfor market, appears, from the iame accounts, to have been 2I. iis. od.4; which is only i s. od. ^ dearer than it had been during the fixteen years before. But in tiie courfe of tr^efe fixty-four years there happened twa evmts which muft have produced a much oreater fearcity of com than: what the courfe of the feafons would otherwife have occafi^iedji. and wbich, therefore/ without fuppofing any further redudionv in the value of filver, will much more thaa account fisr diis very fmall enhancement of price. The firft of thefe events was the civil war, wbidi* by di(cburag<* log tillii^e and interrupting commerce, muft have raifed the price. THE WEALTH OF NATIONS. «43 of com mudi above what the courfe of the feafons would otherwife ^ ^ ^* have occalioned. It muft have had this effeft more or lefs at all ^■■ > ^** t&e difTenent maiicets in the kingdom, but particularly at thofe in -the neighbourhood of London, which require to be fupplied from the greateft diftancc. In 1648, accordingly, the price of the bc^ wheat at Windfor market, appears, from the fame accounts, to have been 4I. 58. and in 1^49 to have been 4 1, the quarter of nine bufliels. The excefs of thofe two years above 2I. los. (the average price of the fixteen years preceding 1^37) is 3 1. 5 s.; which divided among the fixty-four laft years of the laft century, will alone very nearly account for that fmall enhancement of price which feems to have taken place in them. Thefe, howv^er, though the higheft, are by no means the only high prices which feem to have been occafioned by the civil wars. The fecond event was the bounty upon the exportation of com granted in 1688. The bounty, it has been thought by many peojjle, by encouraging tillage, may, in a long courfe of years, have occafioned a greater abundance, and confequently a greater cheapnefs of corn in the home-market than what would otherwife have taken place there. But between 1688 and 1700, it had no time to produce this effedt. During this fhort period its only ef- fect muft have been, by encouraging, the exportation of the furplus produce of every year, and thereby hindeiing the abundance of one year from compenfating the fcarcity of another, to raife the price in the home-market. The fcarcity which prevailed in Eng- land from 1693 to 1699, both inclufive, though no doubt prin- cipally owing to the badnefs of the feaibns, and, therefore, extend-* ing through a confiderable part of Europe, muft have been fome* what enhanced by the bounty. In 1699, accordingly, the further exportation of corn was prohibited for nine months. I i z Thkrr 244 THE NATURE AND CAUSES OF There was a third event which occurred in the courTeof the fame period, and which, though it could not occalion any fcarcity of corn, nor, perhaps, any augmentation in the real quantity of filver which was ufually paid for it, muft necefTarily have occa-i* fioned fonie augmentation in the nominal fum. This event was the great degradation of the filver coin, by clipping and wearing. This evil had begun in the reign of Charles II. and had gone on continually increafing till 1695 ; at which time, as vfc may learn from Mr. Lowndes, the current filver coin was at an average, near five and twenty per cent, below its ftandard value. But the nomi- nal fum which conftitutes the market price of every commodity is necefiarily regulated, not fo much by the quantity of filver, which, according to the ftandard, ought to be contained in it, as by that which, it is found by experience, actually is contained in it. . This nominal fum, therefore, is necelfarily higher when the coin is much degraded by clipping and wearing, than when neai- to its ftandard value. . ; j.',v , ^: In the courie of the prefent century, the filver coin has hot at any time been more below its ftandard weight than it is at prefent. But though very much defaced, its value has been kept up by that of the gold coin lor which it is exchanged. For though before the late re- coinage, the gold coin was a good deal defaced too, it was lefs fo than the filver. In 1695, on the contraiy, the value of the filver coin was not kept up by the gold coin; a guinea then commonly exchanging for thirty (hillings of the worn and dipt filver. Before the late re-coinage of the gold, the price of filver bullion was feldom higher than five fliillings and feven-pence an ounce, which is but five-pence above the mint price. But in 1695, the common price of filver bullion was fix fhillings and five-pence an ounce, which is fifteen-pence above the mint price. Even be- fore the late re-coinage of the gold, therefore, the coin, gold and K,. ' filver THE WEALTH OF NATIONS* a+5 filvcr together, when compared with filver bullion, was not fup- C HA p. pofed to be more than eight per cent, below its ftaiidard value. In 1695, on the contrary, -it had been fuppofed to be near five and twenty per cent, below that value. But in the be- ginning of the prefent' century, that is immediately after the great re-coinage in King W^Uam's time, the greater part of the current filver coin mu(b have been ftili nearer to its ftandard weight than it is at prefent. In the courle of the prefent century too there has been no great publick calamity, fuch as the civil war, which could either difcourage tillage or interrupt the interior commerce of the country. And though the bounty, which has taken place through the greater part of this century, muft always raife the price of com fbmewhat higher than it otherwife would be in the actual ftate of tillage; yet, as in the courfe of this century the bounty has had full time to produce all the good effefls commonly imputed to it, to en- courage tillage, and thereby to increafe the quantity of corn in the home market, it may be fuppofed to have done fomething to lower the price of that commodity the one way, as well as to raife it the other. It is by many people fuppoled to ha,ve done more; a notion which I (hall examine hereafter. In the fixty- four fiift years of the prefent century accordingly, the average price of the quarter of nine bufliels of the beft wheat at Windfor market, appears, by the accounts of Eton College, to have been 2I. OS. 6d. 44* which is about ten (hillings and fixpence, or more than five and twenty per cent, cheaper tlian it had been during the fixty-four lad years of the lad century ; and about nine (hillings and fix-pence cheaper than it had been during the fix- teen years preceeding 1 636, when the difcovery of the abundant mines of America may be fuppofed tc have produced its full efierefen,t, that this rife in the value of filv^r, in proportion to that of corn» has not been peculiar to England. It has been obferved to haye taken pl^ce in France during the fame period, and ^learly in the iame pro- portion to3, by thr«e very faithful, diligent, and laborious col- leftors of the prices of corn, Mr. Dupre de St. Maur, Mr, MefTance, and the author of the EfTay on the police of grain. But in France, till 1764, the exportation of grain was by law prohibited ; and it is fomewhat difficult to fuppofe that nearly the fame diminution of price which took place in one country, not- withflanding this prohibition, fliould in another be owing to the extraordinary encouragement given to exportation. . It would be more proper perhaps to confider this variation jii the average m<;>ney price pf corn as the effedt rather of ibme gradual rife in the real value of filver in the European market, 7 than "-♦a,- THE WEALTH OF NATIONS. 849 than of any fall in the real average value of com. Com, it has ^ HA P. already been ob&rved, is at dift^nt periods of time a more accurate meafure of value than cither fiiver or perhaps any other, commo- dity. When after the difcovery of the abundant mines of America, torn rok to three and four times its former money price, .this change was unlverfally afcribed« not to any rife in the real value f>f corn, but to a fall in the real value of filver. If during the fixty-four firit years of the prefent century, therefore, the average money price of corn has fallen fomewhat below what it had been during the greater part of the lall century, we ihould in the fame manner impute this change, not to any fall in the real value of com, but to fome rife in the real value of filver in the European market. ■ Tme' high price of corn during thcfe ten or twelve years paft, indeed, has occafioned a fufpicion that the real value of filver ftill continues to fall in the European market. This high price of com, however, Teems evidently to have been the effect of the extra- ordinary unfavourableiiefs of the feaibns, and ought therefore to be regarded, not as a permanent, but as a tranfitory and occafional event. The feafons for thefc ten or twelve years part have been unfavourable through the greater part of Europe; and the dil- orders of Poland have very much increafed the fcarcity in all thofe countries, which in dear years ufed to be fupplied from that market. So long a courfe of bad feafons, though not a very common event, is by no means a Angular one ; and whoever has enquired much into the hiftory of the prices of corn in former times, will be at no lofs to recdlefl fcveral other examples of the fame kind. Ten years of extraordinary fcarcity, befides, are not m<»e woBdcrfiil than ten years of extraordinary plenty. The low price of com from 1741 to 1750, both inchiiivc, may viery well be fet in oppbfition to its high price during thefe lafi: eight <^ ten years. Frbm 1741 to 1750, the av^'age price of the quarter of Vol. I, K k nine I m.^ I*! il the; isa.t*^rj5 a^p causes qp ^ine,bufbcU of thp beft iiyhwt M,Win(|ifor wark|et. it.^pR^^if^^/rpn^ the account? of Eton College, wa^ only ^ I 13^. .9 4 d. , vyhicli is nearly 6s, 3d. below, thp average price of th^ fixty-fpur.firft y^ars of the prefent century. The av?r?fge pfjice of the qw^r^er of (c\gf^t bufhels of middlq w^f||t„ cpn^wf 0,ut. according to th,if^^^9jjn|;| to have b§ei^, dwinj; ^. tei^je^8.,on^y fU^ ,rij ,^ Between 1741 and 1759^ however^ the bounty muft bavq hindered the price o^ corn from Wng, fp \Qff in t^e horn? flaaj;l9C)t as it naturally wpuld have done. During thf;fe ten year's th|9 quantity of all forts of grain exported, it appears from the (;u^7 tom-houfe books, amounted to no lefs than eight millions twenty- nine thoufand one hundred and fifty-fix quaiters one bufliel. XhSpbffunl^ paid fof ^his an^ounted to 1,514,9^21. i^s.j|.!^dp In. 1749 accordingly* Mr. I^clliam, a^ that time fjrimc jnihiifter^ obfei ved to thp Hpufe of Con^mons, that for the tfiree years i>rc- ceeding a very extraordinary fum had be|en paid as bounty /°f,*^ exportation of corn. He had goofl reafon to m^ke this obfer- vation, and |n ,^c following year, he might have had ftilil)cti:er/ In that fingie year the bounty paid amounted to no lefs t^aii 324^1761. 10 s. 6d. It is unneceffary to obfervehow much this forced exportation muft have raifed the price of com above what it otherwife would have been in the home market, ^'/f »'"^>J k^ iytb •;/c:)(it k) t!H.^ iiTji'inS'f'l jdi JUodE ''{Inrn. nut vUaiqijaad avail'. At the end of the accounts annexed to this chapter the leader^ ^U find the particular account of thofe ten years leparated from the reft. He will find ther^ too the particular account of th^ proceeding ten years, of which the average is likewife below; thof not fb much below, the general average of the fixty-four firii years of the century. The year 1740, however, was t year of extraordinary fcarcity. Thefe twenty years preceeding 1750* may very well be fet in oppofition to the twenty preceeding 1770. As. A -jk , the THE WEALTH Ot JN'ATIONS; ^s* century, notwithflandin^ ':hb intervention of one or two dear yea«i fo the latter have been a good Aea\ above it, notmthftanding the iiitfcrvention 6^ one or t^6 dMidp' dikk» of 1759, (ot example. If the forffiir Hate not bleen as rrftifeh bifd^ the general average, as the latter have been above k, Wd ought pmixAAj to impute it to the bounty. The change has evidently been too fudden to be afcribedto any change in the v^lne of filver, which is always A6V '^d gradu^. The fbddeuileii' of the ef{bA cati be accouhted f^ diily by a cauli whieh'can operatd fuddenly, the aaid^nttt! Vitriation of the ibfons. ."3^'oq>^3 n^^'J^ io mot Ik ix) yjunjiup .•y;'frjwj isdoilliiu Jtlgi^ nhfii f:bj en o3 baJaiiO*'n^,,'.i;loofi '^iiod-moi 'The money price of labour in Great Britain has, irideed, rifen diirifig tlic courfe of the prei?nt century. This, hovVever, fitmi' ti) be the effect, inU to much of any diiiiihutlon iti the vdiie *bf filvef in the European market, as of ah increafe in the dismand fot labour'in (jrr«it Britain, ari'nngfrom the great, and! almoft uhiverfkl proilpefity of the country, tn France, a coiinti^ Aot^ altOgfethSr fp profperous, the money price of labour has, lince the iniddle of, the laft century, been obferved to fink gradually with the average mwey price of corn. Both in the laft century a^d in the prefent, the day-wagej( of commpn labour are there fai^ to have been pretty uniformly about the twentieth part of die ave- rage price of the feptier of wheat, a meafure which contains a little more than four Winchefter bufhels. In Great Britain the r^^ reco^pence of labour, it has already been (howii, the r^aJl and it feems to be univerfally acknowledged that thefb profits, which were once very high, are now as low as they can well be, confidently with carrying on the wo£ks« The tax of the king of Spain was reduced to ft fifth part of the regiftered filver in 1504, one and thirty years before 1535, the date of the difcovery of the mines of Potofi. In the courfe of a century, or before 1(^36, thefe mines, the moft fertile in all 'America, had time Sufficient to produce their full effeft^ or to reduce th& value of filver in the European market as low as it could TF WBALTH OF NATIONS. *5 could inreU falU while it cootinued to pay this tax to tho kinc; ^ ^.^'^t . of Spain. A hundred years is time fufficient to roduoe any com- modity, of which there is no monopoly, to its natural pnce, or to the lowoft price at which, whale it pays a particular tax, it can The price of iUver in the European market might perhaps have fallen itiU lower,, and it might have become nece(2ary either to lower the tax upon it« in the iame manner as that upon gold, or to give up working the greater pait of the American mines which are now wrought. The gradual increafe of the demand for filver, or the gradual enlargement of the market for the pro- duce of the i .if , ^ \ ft. ( af4 THE NAtURfi A^^b th >SEi OF flO^OK greatf arii c6mmoniy Itnagtiicd. ^ IWtiitf tie^nltig of th^ fikiecmth «entuiy, Spain w*^ a very poor cotintt^, even in comparifon with France, which has been fo much impi^oved ' fince that time. It was the well known remark of thi Emperor Chafes V, who had travelled fo fi-eqnently through both cMntkies, that every thing abounded in France, but that everything was wanting in Spain. The increafmg produce of the agriculture and manufa£hires of Eurape muft neceirarily have required a gradual increafe in the quantity of fihrei* coin to ciiv:ulate it } and tht intrealing nurtiber of wealthy individualtmuft hav« required the Kkt incitalb ui tfte quantity of their plate and other ornaments of filVcr.t^' ^^^^ rnaonii .O], ^kcdNbLv, America is itielf a new market for the^rqduce^ of, it^ oWii'filver rhtnes; and as its advances in agriculture;, induftry^ anS population^ are much more rapid than th9^ of ipe mod thriving countries in Europe, its demand muft increafe much more rapidly. The Engtiih colonies are altogether a heMy'jnarlcet.^ which, partly for cbin'and partly for plate, requires a cohti^uailv atigm^ntihg iujiply of filver through a greai cohtinent where u^ never was any demand betore. The greater part too'of the Spaniih and Pottuguefe colonies are altogether new markets, mw Qra- , nada, the Yucatan, Paraguay, and the Brazils were,, l>efore dif(^Q- , vered by the Europeans, inhabited by favage nations^ wjio had'i ' neither arts nor agriculture. A contiderabfe degree of both.nas now been introduced into all of them. Even Mexico and Peru, though they cannot be confidered as altogether new markets, ^j^e.^ certainly much more extenfive ones than they ever were^ before^ * After all the wonderful tales which have been put)lifhed concern- ing the fplendid'ftate of thbfe countries in antient times, whoever reads with any degree of fober judgement, the hiflory of their firfl, difcovery arfd cbnqufeft, will evidently difcem that, in arts,' agn- cukiure aoid (i6mmerc6> tlieir inhabitants were much more ignorant ^ than nolhri ,THE,, WIS^L.T^f^^ Or^f.'jfATJlOfyjSt. w yiji))i^« the more civilized natictn of the t>y, ajjK) t^e priefhj and were probably their iervants or Haves. AU the ancient arts of Mexico and Peru have never furnifhed one fmglo manufacture to Europe. The Spanifh armies, though they fcarce ever exceeded five hundred men, and frequently d'^d not amount to. half that humber^ found almoft every where great diii^culty i^ piyxiiiring fubfiftence. The famines which they are faid to hayc^ occadoned almoft wherever they went, in countries too which at the fame time are reprcfented as very populfpus- an^ well cultivated^ fu^ciently demonftrate that the (lory of this populoi^fn^fs and high, cuttlyatior^ is in a great meafure fabulous. The Sp^fii(h colonies}: are under a government in many refpefts lefs favourable to agricul- tui^e, improvement, and population, than that of the Englidit colonies. They feem» however, to be advancing in all thefe muchL moi'e rapioly thdn any country in Europe. la a fertile foil and ha|)py :^ ■t t 2 $6 THE NATURE AND CAUSES OF B O O K reafon to doubt of the good information of either, it marks aii increafe which is fcarce inferior to that of the Englilh colonies. America, therefoi-e, is a new market for the produce of its own filver niines, of which the demand muO; increafe much more rapidly than that of the moft thriving country in Euix^e; ■; Thirdlv, The Eaft-Indies is another market for the pro 'ace of the filver mines of America, and a market which, from the timfe of the firft difcovcry of thofe mines, has been continuially tJiking off a greater and a greater quantity of (liver. Since that time, the direft trade between America and the Eaft-Indies, which is carried on by means of the Acapulco Hiips. has been continually augmenting, and the indirect intercourfe by the way of Europe has been augmenting in a ftill greater proportion. During the fixteenth century, the Portuguefe were the only European nation who carried on any regular trade to the Eaft-Indies. In the laft years of that century the Dutch began to encroach upon this monopoly, and in a few years expelled them from their principal fcttlements in India. During the greater part of the laft century thofe two nations divided the moft confiderablc part of the Eaft- India trade between them; the trade of the Dutch continually augmenting in a ftill greater proportion than that of the Portuguefe declined. The Englifli and French carried on fome trade with India in the laft century, but it has been greatly augmented in the courfe of the prefent. The Eaft-India trade of the Swedes and Danes began in the courfe of the prefent century. Even the Muf- covites now trade regularly with China by a fort of caravans which go over land through Siberia and Taitary to Pekin. TIic E«ft- India trade of all thefe nations, if we except that of the French, which the laft war had well nigh annihilated, has been almoft con- tmually augmenting. The increafing confumption of Eaft-India gcods in Europe is, it feems, fo great as to afford a gradual in- t?^ ' -i . ' f' ^i ' ,/ crcafe THE WEACTH OF NATIONS. 257 creafc of eraploymeht to them all. Tea, for example, was a drug ^ HA P. very little ufed in Europe before the middle of the laft century. At preient the value, of the tea annually imported by the Englifh Eaft-India Company^ for the ufe of their own countrymen, amounts to more liian t million and a- half a year ; and even this is not enough ; a great deal more being conftantiy fmuggled into the country from the ports of Holland, from Gottenburg in Sweden, and from the coafl of France too as -long as the French Eafl- India Company was in profperity. The confumption of the porcelain of China, of the fpiceries of the Moluccas, of the piece .goods of Bengal, and of innumerable other articles, has tncreaied very nearly in a like proportion. The tunnage accordingly of all the European (hipping employed hi the Eaft-India trade at any one time during the laft century, was not, perhaps, much greater than that of the Englilh Eaft-India Company before the late reduc- tion of their (hipping. {■ But in the Eafl: Indies, particularly in China and Indoftan, the value of the precious metals, when the Europeans firft began to trade to thofe countries, was much higher than in Europe j and it (tin continues to be fo. In rice countries, which generally yield two, fometimes xhree crops in the year, each of them more plen- tiful than any common crop of corn, the abundance of food muft: "be much greater than in any corn country of equal extent. Such countries are accordingly much more populous. In them too the tich, having a greater fuper-abundance of food to difpofe of beyond what they themfclves can confume, have the means of purchafing a much greater quantity of the labour of other people. The retinue of a grandee in China or Indoftan accordingly is, by all accounts, much more numerous and fplendid than that of the richeft fubje£l!« in Europe. The fame fuper-abundance of food, df which they have the difpofal, enables them to give a greater quantity of it for- all tho(e fingular and rare produ^ions which nature farnifhes ■ni^ Vol. I. L 1 but lAii «c8 THE NAT^RR. A|fD QA>U^ES, OF ppo^ but ii>,vei7 (mall qiwrxtit^Sji fuch a^rthc prewpusimetal;^,4i}d thSj precidus ftones, the great obje6ls o^ the competition of the rich. Though the mines, therefore, whfch fupplied the Indian market had been as abui;idant ^9 thoie which fupplied the European, fuch commodities woid^ naturally e^chartge for a greater quantity of food m India than in Europe. But the mines which fuppUed the Indian market with the precious metals feem to have be?n a good deal lefs abundant, and thoie which fupplied it witli the precious Aones a good deal more fo, than the mines which fupplied tlie European. The precious metals therefore would naturally exchange for fomewhat a greater quantity of the precious ftoncs, and for a much greater quantity of food in India than in Europe. The money price of diamonds, the greateftof all fuperfluities, would be fdmewhat lower, and that of food, the firft of all necefTaries, a great deal lower in the one country than in the other. But the real price of labour, the real quantity of the necefiai'ies of life which is given to the labourer, it has already been obferved, is lower both in China and Indoftan, the twa gteat markets of India, than it is through the ^eater part of Europe. The wages of the labourer wffl there puTchafe a fmaller qiiimtiity of food ; and as the money price of food is much lower iti India than in Europe, the money prict of labour is there lower upon a double account; upon a(^count both of the fmall quantity of food which it will purchaie, . and of the low price of that food. But in countries of equal art. and induAry, the money price of the greater part of manufactures will be in proportion to the money price of labour ; and in matiu- fa£luring art and induftry, China and Indoftan, tho' inferior, feem not to be much inferior to any part of Europe. The money price of the greater part of manufadlures, therefore, will naturally be much lower in thofe great empires than it is any where in Europe. Through the greater part of Europe too the expence of land-cafw page in^reafes ver)' much both the real and nonunai price oi moil .- . manu» THE wEALTTiio^ Nations. i$9 tnaniifaAares. If eoftimot'e labour, and therefore more money, io' C^'ll'AP.' bring firft the materials, ancl afterwards the compleat mahufa^ure to market. In China and Indoftan the extent and variety of inland ria^J^atlons fave 'the greater part of this labour, and confequently of* tfes moiiey,' an^*^ thereby reiduce ftiU lower both the read and the., nbminiii iiyrice of the greater part of their manufa£lures. Upon att thefe accounts, the precioiiis metals area commodity which it always has been, and ftill continues to be, extremely advantagfo \ to carry frona Europe to Wia. There is fcarce any corr.n HJy., which brings a better price there i or which, in proportion ♦ > UiS, qu^i^tity of labour and commodities which it cofts in Europe, will fHirchafe or command a greater (quantity of labour and commodities, in India. , It is more advantageous too to carry filver thither thain^j gp)(d i becaufe \fi China, and the greater part of the other n^rkef^,, of India, the proportion between fine fHver and fine gold is but as^ ten to one J whereas in Europe it is as fourteen or fifteen to one. In China, and the greater part of the other markets of India, ten ounces of (ilver will purchafe an ounce of gold : in Europe it^^ reqjuires from fourteen to fifteen ounces. In the cargoes, there-., fore, of the greater part of European fhips which fail to India, filvcr has generally been one of the moft valuable articles. It is the moil valuable article in ;i)« Acapulco fhips which fail t0|^ Manilla. The filver ot' the new continent feems in this manner to be the principal commodity by which the commerce between the two extremities of the old one is carried on, and it is by means of it chiefly that thofe diftani parts of the world are conne£led with one another. •t» In order to fupply fo /ery widely extended a market, the quan- 'j tky of fifver armoaHy brought firom the mines muft not only be fufficient to fupport that conti aal increafe both of coin and of plate which is required in all thriving countries i but to repair that L 1 2 continual if.y m ■H\ ; ■ t if! a6o THE NATURE AND CAUSES OP BOOK continual waftc and confamption of filver which takes place in att countries where that metal is ufed^ The continual confMmption of the precious metals in coin by- wearing, and in plate both by wearing and cleaning, is very fen- fiblej and in commodities of which the ufe is fo very widely extended, would atone require a very great annual fupply. The confumption of thofe metals in fome particular manufa6lures, though it may not perhaps be greater upon the whole than this gradual confumption, is, however, much more fenfible, as it is much more rapid. In the manufaftures of Birmingham alone, the quantity of gold and filver annually employed in gilding and plating, and thereby difqualificd from ever afterwards appearing in the ihape of thofe metals, is faid to amount to more than fifty thoufand pounds fterling. We may from thence form ftrnie notion how great muft be the annual confumption in all the different parts of the world, either in manufaftures of the fame kind with thofe of Birmingham, or in laces, embrcnderies, gold and fil>:i ftuffs, the gilding of books> furniture, &c. A confiderable quan- tity too muft be annually loft in tianfporting thofe. metals from one place to another both by fea and by land. In the greater part of the governments of'Afia, befides, the almoft univerfal cuftom of concealing trcafures in the bo- ;ls of the earth, of which the knowledge frequently dies with the perfon who makes the conceal*- mcnt, muft oocafion the lofs of a ftill greater quantity. -*t The quantity of gold and filver imported at boih Cadiz and Lifbon (including, not only what comes under regifter, but what may be fuppcfed to be fmug^ed) amounts, according to the beft accounts, to about fix millions fterling a yea*. l,f..;..Uiil / 4, 1 J: According THE WEALTH OF NATIONS. z^% i, Accor'dino to' Mti Meggehs the annual importation, of the C«AP.'? precious metals Into Spain, at aa average of fix years j viz. from 1748 to 1753. both iriciufive; and into Portugal, at an average of feven years ii viz.i from 174.7 to ij52» ^^^ inclufivej amounted in filver to 1,101,107 pounds weiglit; and in gold to 49.940 pounds weiglit. The filyer, at lixty-two (hillings the pound Troy, amounts to 3,413,431!. xos. Iterling. The gold, at forty-four guineas and a half the pound Troy, amounts to 2,333,446!. 14s.. fterling. Bath together amount to 5,746,878!. 4s. fterling. The account of what was imj-rrted under re^fter, he affures us is exadt. He gives us the detail of the particular places from which the gold and filver were brought, and o£ the particular quantity of each metaf, which, according to the regifter, each of them afforded.. He makes an allowance too for the quantity of each metal which he fuppofes may have been fmuggled. The great experience of tliis judicious merchant renders his opinion of confiderable weight. '.i., . . . .... ..^{i ,i According to the eloquent and fometiraes well infcvnied author of the philofophical and political hiftory of the eftabUfii- ment of the Europeans in the two Indies, the annual importation of regiftered gold and fxlver into Spain, at an average of eleven ye?rs ; viz. from 1754 to 1764, both inclufive> amounted to 13,984,1 85 4 piaflxes of ten reals. On account of vvliat may have been fmuggled, however, the whole annual importation, he fup- pofes, may have amounted to fevcnteen millii/ns of piaftres ;, which at 4s. 6d. tlie piailre, is Cvjual to 3,825,000!. fterling. Regives the detail too of the particular places from whicli the gold and-, filver were brought, and of the particular quantities of eacli metal, which, according to the regifter, each of them afforded. He in- forms us too, that if we were to judge of the quantity of gold annually imported from the Brazils into Lifbon by the amount of the tax paid to the king of Portugal, which it feems is one-fifth , fH 2&tf THE NATURE AND CAUSES OF BOOK of the ftandavd metftU we might tiku if at dghfeen miMonft of cruzadoes, or forty ^ve miUions of frenck livres, ecjual to about' two mittiona fterling. On account of what may have beeir fmuggled> however, we may fefely, he fays, add to thia fum an -eighth mcM'e, c^ 250,000!. fterling, fi> that the whole wiH amount to 2,a50va>ooL fterlin^. According to this aecoiuit, therefok-e. the whde annual importation of the precious metals into both Spain and Portugal, amounts to about 6»o75,oool. f(erling^ Several other very weH authenticated accounts, I have been aflured, agree in making this whole annual importation amount at an average to about fix millions fterling ; fbmetimes a little more,' fometimes a little lefs. ..J I'f. The annual importation of the precious metals into Cadiz and X*ifbon, indeed, is not equal to the whole annual produce of the mines of America. Some part is fent annually by the Acapulco ihipa to JVf aoilla ; feme part is employed' in the contniband tt^e wlnshttttSponiih colonies cany on with tho& of other European nations;, and fome part^ no doidit, remains in the country. The manes of America, beiides, are by no means the only gold and fdyermiixs in the world. They are, however, hj far the moft abundant. The prodiKe of kdi the other ttiknm #hich ar6 known, ' is- infigpifican*, 4ti is- adtnowliedged, in comparifbn with theirs ; and the far greater part of their produce, it is Kkewife acknow-' ledged, is annually imported into Cadiz and Lilbon. But the coniumption of Birmingham «done, at the rate of fifty- thoufand poundft^a year, is equal^ to #fe himdred and twentieth part of dris annual importation at the i«ite of fix m^Sons^ a year. The whole xumoal eonHimptaon of gold and filver therefore inr jdl the different countries of the world where iSaiok metals are ufedj may perhaps be* nearly c^sd to the whole annual produce. The remaaoder may^ ':»•< be ^^HE WEALTH OF NATIONS. bip no xc^m thanXuificUntto r«pply> Ihe increafing demand of all trying countries. It may oven have fallen fo far fliort of this demand a^ fcuEQewhat to {aife the price of thofe metals in the Gprppean, n^rlc^tt,,,,, .:>,,,. ,,-, .j- ^^y■. ., .n-. 063 CHAP. XI. •»'i /w ortf! I'l*'. ,' • C\: A.i.h .'Trs quantity of brafs and iron annually brought from the nune to ^e market is out of all proportion greater than that of gold and filver. We do not, however, upon this account, imagine that thofe coarfe metals are likely to mukiply beyond the demand,, or to become gradually cheaper and cheaper. Why ftiouid we imagine that the precious metals are Ukely to do for The coarfe metals indeed, though harder, are put to much harder ufesj and. as they are of lefs value, lefs care is employed in their prefervation. The precious metals, however, are not neceflarily immortal any more than they, but are liable too to be loft, wafted and confumedc in a great variety of ways. > itra^.i .^■ Th£ price of all metali, though liable to How' ttncf gi^adtml variations,, vai'ies Ids from yea;' to year than that of almofl any other part oi the rude produce of land j and the price of the : precious metals is even lefs liable to fudden variations than that of the coarfe ones. The durablenefs of metals is the foundation of this extraordinary fteadinefs of price. The corn which was brought to market laft year, will be all or almoft all confumed long before - the end of this year. But feme part of the iron which was brought . from ihe mine two or tliree hundred years ago, may be flill in ; ufe, and perhaps fome part of the gold which was brought from it two or three thoufand years ago. The different mafles of com 1 wbidi in difFeient years muft fup^'y the confiimption of the world, , will idways be nearly in jM-oportion (o the rdpe£Uve product of > thole ditferen^ years. But the proportion between the different mati&s of icon which may be in ufe in two different year?, vv^ill te* 4- y«rjf m s64 THE 'KATURE AND CAUSES OF BOOK very little affedtcd by any accidental difference in the produce of the iron mines of thofc two years j and the proportion between the mafles of gold will be ftill lefs affected by any fuch difference in the produce of the gold mines. Though the produce of the greater part of metallick mines, therefore, varies, perhaps, ftill more from year to year than that of the greater part of corn fields, thofe vari- ations have not the fame effect upon the price of the one fpecies of commodities, as upon that of the other. • '!• 'V t^._.!\ . ?-. •••v^ • 11 o. -"r^js Variations in the Proportion between the refpcSiive Values of |; ^^ • Gold and Silver. n T> E F O R E the difcovery of the mines of America, the value of fine gold to fine fiiver was regulated in the different mints of Europe, between the proportions of one to ten and one to twelve i that is, an ounce of fine gold was fuppofed to be worth from ten to twelve ounces of fine fiiver. About the middle of the laft century it came to be regulated, between the proportions of one to fourteen and one to fifteen; that is, an ounce of fine gold came to be fup- pofed worth between fourteen and fifteen ounces of fine fiiver. Gold rofe in its nominal value, or in the quantity of fiiver which was given for it. Both metals funk in their real value, or in the quantity of labour which they could purchafe ; but iHistr funk more than gold. Though both the gold and fiiver mines of America exceeded in fertility all thofe which had ever been known before, the fertility of the fiiver mines had, it feems, been proportionably ftill greater than that of the gold ones. j- The great quantities of fiiver carried annually from Europe to India, have, in fome of the Englifh fettlements, gradually reduced the value of that metal in proportion to gold. In the mint of 7 Calcutta, THE WEALTH OF NATIONS. 265 Calcutta, an ounce of fine gold is fuppofed to be worth fifteen C HA P. ounces of fine filver, in the fame manner as in Europe. It is in the mint perhaps rated too high for the value which it bears in the market of Bengal. In China, the proportion of gold to filver ftili continues as one to ten. In Japan it is faid to be as one to eight. The proportion between the quantities of gold and filver annually imported into Europe, according to Mr. Meggens's account, is as one to twenty-two nearly ; that is, for one ounce of gold there are imported a little more than twenty-two ounces of filver. The great quantity of filver fent annually to the Eafi: Indies, reduces, he fuppofes, the quantities of thofe metals which remain in Europe to the proportion of one to fourteen or fifteen, the proportion of their values. The proportion between their values, he feems to think, muft ncceflarily be the fame as that between their quantities, and would therefore be as one to twenty-two, were it not for this greater exportation of filver. But the ordinary proportion between the refpeflive values of two commodities is not necefTarily the fame as that between the quan- tities of them which are commonly in the market. The price of an ox, reckoned at ten guineas, is about threefcore times the price of a lamb, reckoned at 3 s. 6 d. It would be abfurd, however, to infer from thence, that there arc commonly in the market threefcore Iambs for one ox : and it would be juft as abfurd to infer, becaufe an ounce of gold will commonly purchafe from fourteen to fifteen ounces of filver, that there are commonly in the market only fourteen or fifteen ounces of filver for one ounce of gold. i The quantity of filver commonly in the market, it is probable, is much greater in proportion to that of gold, than the value of a Vol. I. Mm, certain THE NATURE AND CAUSES OP certain uantity of gold is to that of an equal quant uy of filver. The whole quantity of a cheap commock}' brought to market, is commonly, not only greater, but c gi cater value, than the whole quantity of a dear one. The whole quantity of bread annually brought to market, is not only greater, but of greater value than the whole quantity of butcher's-meat ; the whole quantity of butcher's-meat, than the whole quantity of poultry ; and the whole quantity of poultiy, than the whole quantity of wild fowl. There are fo many more purchafers for the cheap than for the dear commodity, that, not only a greater quantity of it, but a greatc value can commonly be difpofed of. The whole quantity, therefore, of the cheap commodity muft commonly be greater in proportion to the whole quantity of the dear one, than the value of a certain quantity of the dear one, is to the value of an equal quantity of the cheap one.When we compare theprecious metals with, one another, filver is a cheap, and gold a dear commodity. We ought naturally to expe£t, therefore, that there fhould always be in the market, not only a greater quantity, but a greater value of. iilvcr 'han of gold. Let any man, who has a little of both, com> pare lus own filver with his gold plate, and he will probably find,. that, not only the quantity, but the value of the former greatly exceeds that of the latter. Many people, befides, have a good deal of filver who have no gold plate, which, even with thofe who have it, . is generally confined to watch cafes, fnufF-boxes, and fuch like trinkets, of which the whole amount is feldom of great value. In the Britifii coin, indeed, the value of the gold preponderates greatly, . but it is not fo ir that of all countries. In the coin of fome coun^- tries the value of the two metals is nearly equal. In the Scotch . coin, before the union with England, the gold preponderated very little, though it did fomewhat, as it appears by the. accounts of the mint. In the coin of many countries the filver preponderates. In France, the largeft funis are commonly paid in that metal, - .-.. .-T : ■ - and THE WEALTH OF NATIOJfS, t^7 and it is there difficult to get more gold than what it is necedary to C HA P. carry about in your pocket. The fuperior value, however, of the Alver plate above that of the gold, which takes place in all countries, will much more than compenfate the preponderancy of the gold coin above the ftlver, which takes place only in fome countries. Though, in one ''-nfe of the word, filver always has hee^i, and probably ?H' '11 be, much cheaper than gold; r^ii m another fenfe, ^ perhaps, in the prefent ftate ot the European market; j be fomewhat cheaper than filver. A commodity may be laid to be dear or cheap, not only according to the abfolute grcatnefs or fmallncfs of its ufual price, but according as that price is more or lefs above the loweft for which it is poiTil^Ie to bring it to market for any conftderable time together. This loweft price is that which barely replaces, with a moderate profit, the ftejk which muft be employed in bringing the commodity thither. It is the price which affords nothing to the landlord, of which rent makes not any component part, but which refolves itfelf altogether into wages and profit. But, in the prefent ftate of the European market, gold is certainly fomewhat nearer to this loweft price than filver. The tax of the king of Spain upon gold is only one-twentieth part of the ftandard metal, or five per cent. ; whereas his tax upon filver amounts to one- fifth part of it, or to twenty percent. In tliefe taxes too, it has already been obferved, confifts the whole rent of the greater part of the gold and filver mines of Spaniih America ; and that upon gold is ftill worfe paid than that upon filver. The profits of the undertakers of gold mines too, as they more rarely make a fortune, muft, in general, be ftill more -moderate than thofe of the undertakers of filver mines. The price of Spanifh gold, therefore, as it affords both lefs rent and lefs profit, muft, in the European market, be fomewhat nearer to the loweft M m 2 . price I « ^. ^^^. ^- \^ ^> IMAGE EVALUATION TEST TARGET (MT-3) 4^ ^ 1.0 I.I 11.25 122 Hi 128 US ^ U£ 12.0 ♦I Hiotographic Sciences Corporation ^^ \ •\ <> ■V ^5^ ^\. Wt^ 23 WIST MAIN STMIT WIBSTIR.N.Y. M5S0 (716)I72-4S03 '^ 26^ THE NATURE AND CAUSES OF BOOK price for which it is poflible to bring it thither, than the price of Spanifh filver. Ihe tax of the king of Portugal, indeed, upon the gold of the Brazils, is the fame with that of the king of Spain upon the filver of Mexico and Peru j or one-fifth part of the ftandard metal. It muft ftill be true, however, that the whole mafs of American gold comes to the European market, at a price nearer to the lowefl for which it is poflible to bring it thither, than the whole mafs of American filver. When all expences are computed, it would feem, the whole quantity of the one metal cannot be difpofcd of fo advantageoufly as the whole quantity of the other. The price of diamonds and other precious ftones may, perhaps, be ftill nearer to the loweft price at which it is poflible to bring them, to market, than even the price of goW. Were the king of Spain to give up his tax upon filver, the price of that metal might not, upon that account, fink immediately in the European market. As long as the quantity brought thither continued the fame as before, it would fiill continue to fell at the fame price. The firftand immediate eflfed): of this change, would be to increafe the profits of mining, the undertaker of the mine now gaining all that he had been ufed to pay to the king. Thefe great profits would foon tempt a greater number of people to undertake the working of new mines. Many mines would be wrought which cannot be wrought at prefent, becaufe they cannot afford to pay tliis tax, and the quantity of filver brought to market would, in a few years, be fo much augmented, probably, as to fink its price about one-fifth below its prefent ftandard. This diminuticm in the value of filver would again reduce the profits of mining nearly to their prefent rate» It THE WEALTH OF NATIONS. 269 It is not indeed very probable, that any part of a tax which .^jl^?* affords fo important a revenue, and which is impofe^ too upon one of the moft proper fubjefts of taxation, will ever be given up as long as it is poflible to pay it. The impoflibility of paying it, however, may in time make it neceflary to dimmifh it, in the fame manner as it made it neceflary to diminifli the tax upon gold. That the filver mines of Spanilh America, like all other mines^ become gradually more expenfive in the working, on account of the greater depths at which it is neceflary to carry on the works,, and of the greater expence of drawing out the water and of fupplying them with frefh air at thofe depths, is acknowledged by every body who has enquired into the ftate of thofe mines. These caufes, which are equivalent to a growing Icarcity of filver, (for a commodity may be faid to grow fcarcer when it becomes more difficult and expenfive to coiled): a certain quantity of it), muft, in time, produce one or other of the three following events. The increafe of the expence muft either, firft, be com- penfated altogether by a proportionable increafe in the price of the metal ; or, fecondly, it muft be compenfated altogether by a. proportionable diminution of the tax upon filver ; or, thirdly, it muft be compenfated partly by the one, and partly by the other of thofe two expedients. This third event is very poffible. As gold rofe in its price in proportion to filver, notwithftanding a great diminution of the tax upon gold -, fo filver might rife in its price in proportion to labour and commodities, notwithftanding an equal; diminution of the tax upon filver.. That the firft of thefe three events has ah-eady begun to take place,, or that filver has, during the courfe of the prefent century,, begun to rife fomewhat in its value in the European- market, the fa£ts and arguments which have been alledged above difpofe me tO' believ€» 2^0 iTHfi KAtURE ANl!) CAtJS^ES OF tfeUeve. The ifife, indeed, hais hitherto been fo Very fmall, that, after idl that has been fud, it inay, perhaps, appear to many people uncertain, not only Ivhether this ievent bias a6):ual}y taken place, but whether the cbhtrtiry may not haife taken place, or whether the valtie of filver may not dill cohtinue to fall in the European market. Grounds of the Bujpicion that the Value of Silver Jlill continues to decreafe. 'Tp H E increafe of the wealth of Europe, and the popular notion that, as the quantity of the precious metals naturally increafes with the increafe 6i wealth, fo their value diminifhes as their quan- tity increafes, may, befides,' difpole many people to believe that their value ftill continues to fall in the European market ; and the flill gradually increafing price of many parts of the rude produce of land may, perhaps, confirm them ftill further in this opinion. ^HAT the increafe of the quantity of the precious metals in any country, which arifes from the increafe of wealth, has no tendency to diminifh their value, I have endeavoured to fhow already. Gold and filver naturally refbrt to a rich count? r the fame reafbn that all forts of luxuries and curiofities refort t. . i not becaufe they are cheaper there than in poorer countrjes, but becau& they are dearer, or becaufe a better price is given for them. It is the fuperiority of price which attracts them, and as foon as that fuperiority ceafes, they .neceffarily ceafe to go thither. If you except corn and fuch other vegetables as are raifed' altogetlier by human induflry, that all other forts of rude produce, cattle, poultry, game of aiU kinds, the ufeful fofTils and minerals of # the THE WEALTH Of NATIONS. n^ the earth, &c. naturally grow dearer as the fociety advances in CHAP, wealth and improvement, I have endeavoured to (how already. ^^" Though fuch commodities, therefore, come to exchange for a greater quantity of filver than before, it will not from thence follow that filver has become really cheaper, or will purchafe lefs labour than before, but that iuch commodities have become really dearer, or will purchafe more labour than before. It is rot their nominal price only, but their real price which rifes in the orogrefs of improvement. The rife of their nominal price is the eilcft, not of any degradation of the value of filver, but of the rife in their real price. ? , ) ^ , , : -. . J^jfferent EJ['(&s of the Progrefs of Improvement vpoK three different: Sorts of ri{(ie Procbii;e. • npHESE different foils of rude produce may be divided into three claffes. The tiiii: compichends thofe which it is fcarce in the power of human induiii y vo multiply at all. The fecond, thofe which it can multiply in j/'oportion to the demand. The third, thofe in which the efficacy of induftry is either limited or uncert^n. In the progrefs of wealth and improvement, the real price of the Qrft may rife to any degree of extravagance, and feems not to be limited by any certain boundary. That of the fecond, though it may rife greatly, has, however, a certain boundary beyond which it cannot well pafs for any confiderable time together. That of the third, though its natural tendency is to rife in the progrefs of improve- ment, yet in the fame degree of improvement it may fometimes happen even to fall, fometimes to continue the fame, and fome- times to rife more or lefs, according as different accidents render the efforts of human induftry, in multiplying this fort of rude produce, more or lefs fuccefsful. . > m ft f.;l .f ft". 1 ' , h Firji Tj± THE NATURE AND CAUSES OF BOOK ^i: ^ ' I. v;-. Vtrji Sort. The firft fort of rude produce of which the price rifes in the progrefs of improvement, is that which it is fcarcc in the power of human induftry to multiply at all. It confifts in thofc things which nature produces only in certain quantities, and which being of a very peri(hable nature, it is impoflible to accumulate together the produce of many different feafons. Such are the greater part of rare and Angular birds and fiflies, many different forts of game, almoft all wild-fowl, all birds of paffage in particular, as well as many other things. When wealth, and the luxury which accom- panies it, increafe, the demand for thefe is likely to increafe with them, and no effort of human induftry may be able to increafe the fupply much beyond what it was before this increafe of the demand. The quantity of fuch commodities, therefore, remaining the fame, or nearly the fame, while the competition to purchafe them is con- tinually increafing, their price may rife to any degree of extrava- gance, and feems not to be limited by any certain boundaiy. If woodcocks fliould become fo fafhionable as to fell for twenty guineas a- piece, no effort of human induftry could increafe the number of thofe brought to market, much beyond what it is at prefent. The high price paid by the Romans, in the time of tlieir greateft grandeur, for rare birds and fiflics, may in this manner eafily be accounted for. Thefe prices were not the effeds of the low value offilver in thofe times, but of the high value of fuch rarities and curiofities as human induftry could not multiply at pleafure. The real value of filver was higher at Rome, for fome time before and after the fall of the republic, than it is through the greater part of Europe at prefent. Three feftertii, equal to about ftxpence llerling, was the price which the republic paid for the modius or peck of the tithe wheat of Sicily. This price, however, •V*i? •• : - was THE WEALTH OF NATIONS. ft71 was probably below the average market price, the obligation to C HA p. deliver their wheat at this rate being confidered as a tax upon the Sicilian farmers. When the Romans, therefore, had occafion to order more com than the tithe of wheat amounted to, they were bound by cajxtulation to pay for the furplus at the rate of four feftertii, or eight-pence fterling the peck; and this had probably been reckoned the moderate and realbnable, that is, the ordinary or average contra£t price of thoie times ; it is equal to about one and twenty (hillings the quarter. Eight and twenty {hillings the quarter was, before the late years of fcarcity, the ordinary contract price of Englifli wheat, which in quality is inferior to the Sicilian, and generally fells for a lower price in the Ew'opean market. The value of filver, therefore, in thofe antlent times, muft have been to its value in the prefent, as three to four inverfely, that is, three ounces of filver would then have purchafed the fame quantity of labour and commodities whidi four ounces vrill do at prefent. When we read in Pliny, therefore, that Seius bought a white nightingale, as a prefent for the empi'cfs Agrippina, at the price of fix thoufand feftertii, equal to about fifty pounds of our prefent money j and that Afinius Celer purchafed a furmullet at the price of eight thoufand feftertii, equal to about fixty-fix pounds thirteen ihillings and four-pence of our prefent money, the extravagance of thofe prices, how much foever it may furprife us, is apt, not- withftanding, to appear to us about one-third lefs than it really was. Their real price, the quantity of labour and fubfiftence which was given away for them, was about one-third more than their .nominal price is apt to exprcfs to us in the prefent times. Seius gave for the nightingale the command of a quantity of labour and fubfiftence, equal to what 661. 13 s. 4d. would purchafe in the ■ prefent times ; and Afinius Celer gave for the furmullet the com- mand (rfa quantity equal to what 881. 17 s. 9 ^d. would purchafe. What occafioned the extravagance of thofe high prices was, not fo Vol. J. N u ' much m m THE NATURE AND CAUSES OF B IC much tlie abund^ince of filver, as the abundance of labour and fubfidence, of which ttiofe Romans had the difpofal, beyond what was neceflary for theiif own ufe. The quantity of filver, of which they had the difpofal, was a good deal lefs than what the command of tlie fame quantity bf labour and fuhfiftence would have procured to them in the prefent times.' ' t .- ' tr Hi I l'.i.\l. .jii;,'i.;iUiOiiirf Second Sort. ' The fecond fort of rude produce of which the price rifes in the progrefs of in^}rovement, is that which human induiliy can muU tiply in proportion to the demand. It confifts in thofe ufefiil plants and animals* which,, in uncultivated countries, nature pro- duces vrith fuch profufe abundance, that they are of little or no value, and wbi«h» as cultivation advances, ai'e therefore forced to give place to. fomc more profitable produce. During a long period in the progrefs of improvement, the quantity of thcic is continually diniiuilhing, while at the fame time the demand for them is continu- ally ii^cceafing. Their real value, therefore, the real quantity of la.- bour which they will purchafe or command, gradually rifcs, till at lafl: 4t gets fb high as to render them as profitable a produce as any thing elfe wJiich human induftry can raife upon the moft fertile. , and befl cultivated land. When it has got fo high it cannot well go higher. If it did, more land and more induflry would foon be employed to increafe their quantity. When the price of cattle, for example, rifes fo high that it is as profitable to cultivate land in order to raife food for them, as in order to raife food for man, it cannot well go higher. If it did, more corn land would foon be turned into paflure. The extenfion of tillage, by diminiftiing the quantity of wild pafture, diminifhes tlie 'quantity of butcher's- meat which the country naturally produces without labour or cultivation, and by increafing the number of thofe THE WEALTH OF NATIQJf|9v thofe who have either corn, or, what coqjes to the fame thing, the price of corn, to give in ^xghtnge for it, increafes the demand. The price of butcher's - meat, t^refpre, and confe- qiiently of cattle, muft gradually rife till it igi;ts fo high that it becomes as profitable to employ the moft fertile and beft cultivated lands in raifmg food for them as in raifing corn. But it mud always be late in the progrefs of improvement before tillage can be fo far extended as to raife the price of cattle to this height; and till it has got to this height, if the country is advancing at all, their price muft be continually fifing. There are, perhaps, fome parts oS Europe in which the price of cattle has not yet go^ to thisi height. It had not got to this height in any part of Scotland , before the union. Had the Scotch cattle been always confined to the market of Scotland* in a country in which the quantity of land» which can be applied to no other purpofe but tiie feeding of cattle, is fb great in proportion to what can be applied to other purpoicq, it is fcarce pofiible, perhaps, that their price could ever have, rifen fo high as to render it profitable to cultivate land for the fake of feed- ing them. In England, the price of cattle, it has already been obferved, feems, in the neighbourhood of London, to have got to this height about the beginning of the laft century; but it was much later probably before it got to it through the greater part of the remoter counties; in fome of which, perhaps, it may fcarce yet have got to it. Of all the different fuljftances, however, which compofe this fecond fort of rude produc?. cattle is, perhaps, that of which the price, in the progrefs of improvement, rifps firft to this height. , , . CHAR. XI. m i Till the price of cattle, indeed, has got to this height, it feems fv-arce poffible that the greater part, even of thofe lands which are capable of the higheft cultivation, can be completely cultivated. In all farms too diftant from any town to carry manure frp^n it, N n 3 ' . that a';6 THE NATURE AND CAUSES OP BOOK that is, in the far greater part of thofc of every extcnfrvecounti-y, the quantity of well-cultivated land muH: be in proportion to the quantity of manure which the farm it(elf piKxIuces ; and this again mud be in proportion to the ftock of cattle whicli are maintained upon it. The land is manured either by paduring the cattie upon it, or by feeding them in the ftable, and from thence carrying out their dung to it» But unlefs the piice of the cattle be fuificient to pay both the rent and profit of cultivated land, the farmei' cannot affoid to pafture them upon it| and he can fVill IdCs afFord to feed them in the ftabk. It is with ^e pixjduce of improved and cultivated land only, that catde can be fed m the ftable j be> caufe to colle£t the fcanty and Scattered produce of waifte and un- improved lands would require too much labour and be too ex- penfive. If the price of the cattle, there^M'e, is not fufficient to- pay for the produce of improved and culttvated land, when they are allowed to pafhire it, that price will be iSiH kfs fufficient to. pay for that produce when it muft be coHe6berd with a good deal of additional labour, and brought into the ftable to them. In thefe circumftances, therefore, no more cattle can, with profit, be fed in< the ftable than what are neceflary for tillage. But thefe can never afford manure enough for keeping cohftantly in good condition, an the lands which they are capable of cultivating. What they afford being infufHcient for the whole farm, will naturally be re- fervedforthe lands to which it can be moft advantageoufly or conveniently applied; the moft fertile, or thofe, perhaps, in the neighbourfiood of the farm-yard. Thefe, therefore, will be kept conftantly in good condition and fit for tillage. The reft will, the greater part of them, be allowed to lie wafte, producing fcarce any thing hot fume miferable pafture, juft fufikient to keep alive a few ftraggling, half-ftarved' cattle; thefarm^ though much underftocked in prc^rtion to what would be neceflkry for its com- plete cultivation, being very frequently overftotked in proportion to i its THE WEALTH OF NATIONS^ %77 ks a^ual produce. A portion of this wnftc land, however, after ^ 'Lf ^ having been paftured in this wretdied manner for fix or feven years together, may be ploughed up, when it will yield, perhaps, a poor crop or two of bad oats, or of fome other coarfe grain; and then, being entirely cxhauded, it muft be reded and paftured again as before, and another portion ploughed up to be in the fame manner exhaufted and reeled again in its turn. Such accordingly was the general fyftem of management all over the low country of Scotland before the union. The lands which were kept con- ftantly well mamired and in good condition, fddum exceeded a tiiird or a fourth part of the whole farm, and fometimes did not amount to a fifth or a fixth part of it. The reft were never ma-» nurcd, but a certain portion of thorn was ia its torn, notwlth^ ftanding, regularly cultivated and exhaufted. Under . this fyilem of management, it is evident, even that part of the lands of ScoO land which is capable of good cultivation, could produce but little in comparifon of what it may be capable of producing. But how^ difadvantageous foever this fyilem may appear, yet befcne the union the low price of cattle Teems to have rendered it almoft unavoid-* able. If, notwithftanding a great rife in their piice, it ftill con-^ tinues to prevail through a confiderable pait of the country, it is owing in many places, no doubt, to ignorance and attachment to old cuftoms, but in. mofl places to the unavoidable obftruftions which the natural courfe of things oppofes to the immediate or fpeedy eftablifiiment of a better fyftem : firft, to the poverty of the tenants, to their not having yet had time to acquire a (lock of cattle fuifictent to cultivate their lands more completely, tiie fame rife of price which would render it advantageous for them to mainmewhat fafter than it would otherwife have rifen. As the pooreft family can often maintain a cat or a dog, without any expence, fb the pooreft occupiers of land can commonly maintain a few poultry, or a fow and a few pigs, at very little. The little ofials of their own table, their whey, (klmmed milk, and butter-milk, fupply thofe animals with a part of their food, and they find the reft in the neighbouring fields without doing any fenfible damage to any body. By diminiihing the number of thofe fmall occupiers, therefore, the quantity of this fort of provifions which is thus produced at little or no expence, muft certainly have been a good deal diminifhed, and their price muft confequently have been raifed both fooner and fafter than it would otherwife have rifen. Sooner or later, however, in the progrefs of improvement, it muft at any rate have rifen to the utmoft height to which it ^s capable of rifing 5 or to the price which pays the labour and expence of cultivating the land which furniflies them with food as well as thefe are paid upon the greater part of otlier cultivated land. ■iM.I.;..u n: 4n The bufmefs of the dairy, like the feeding of hogs and poultry, is Originally carried on as a fave-all. The cattle neceffarily kept upon the farm, produce more milk than either the rearing pf thejr own young, or the confumption of tlie farmer's family requires; and diey produce moft at one particular feafon. But of all the productions of land, milk is perhaps the moft perifhable. In the warm feafon, when it is moft abundant, it will fcarce keep O o 2 four » 1 1 ■I ! iM 5^4 THE NATURE AND CAUSES O? B O o K four and twenty hours. The fanner, by making it into frcfh *u — ^-^-^ butter, (lores a fmall part of it for a weelt.^ by making it into fait butter, for a year : and by malung it into chcefe, he ftores a much greater part of it for ieveral years. Part of ali thefe fs referred for the ufe of his own family. The reft goea to market, in order to find the beft price which is to be had, and which can (carce be fo low as to dilcourage him from fending thither what^ ever is over and above the ufe of his own family. If it is very low, indeed, he will be likely to manage lus dairy in a very flovenly and dirty manner, and will fcarce perhaps think it worth while to have a particular room or building on purpofe for it, but will fuffer the bufinefs to be carried on amidft the fmoke, filth, and naftinefs of his own kitchen; as was the cafe of almoft All the farmers daii'ies in Scotland thirty or forty years ago, and as is the cafe of muiy of them flill. The fame cau&a which gradually raife the price of butcher's-meat, the increafe of the demand, and, in confequenee of the improvement of the country, the diminution of the quantity which can be fed at little or no expence, raife, in the fame manner, that of the produce of the dairy, of which the price naturally connects with that of butcherls- ' meat, or with the expence of feecUng cattle. The increafe of price pays for more labour, care, anud cleanlinefs. The dury be«* comes more worthy of the farmer's attention, and the quality of its produce gradually improves. The price at laft gets fi> high that it becomes worth while to employ fbme of the moft fertile and beft cultivated lands in feeding cattle merely for the purpofe of the dairy ; and when it has got to this height, it cannot well go higher. If it did, more land would fomtbr turned to this purpofe. It feems to have got to this height through the greater part of England, where much good land is commonly employed in this manner. If you except the neighbourhood of a few confiderable towns, it feems not yet to have got to tlus height any where in Scotland, where THE WEALTH OF NATIONS. 285 vrhere common farmers feldom employ much good land in railing C HA P. food for cattle merely for the purpoie of the dairy. The price of the produce, though it has rifen very confiderably within thefe few years, is^ probably ftill too low to admit of it. The inferiority of the quality, indeed, compared with that of the produce of Engliih dairies, is fully equal to that of the price. But this inferiority of quality is, perhaps, rather the effect of this lownefs of price than the cauie <^ it. Though the quality was much better, the greater part of what is brought to market could not, I apprehend, in the prefent circumftances of the country, be difpofed of at a much better price) and the prefent price, it is probable, would not pay the expence of the land and labour neceflfary for producing a much better quality. Through the greater part of England, notwithftanding tiie fuperiority of price, the dairy is not reckoned a more profitable tmplc^ment of land than the raifing of corn, or the fattening of cattle, the two great objects of agriculture. Through the greater part of Scotland, therefore, it cannot yet be equally profitable. The lands of no country, it is evident, can ever be compleatly cultivated and improved, rill once the price of every produce, which human induftry is obliged to nuie upon them, has got ib high a» to pay for the expence of com|deat improvement and culdvarion. In order to do this, the price of each particular produce muft be fufficient, firft, to pay the rent of good com land, as it is that which regulates the rent of the greater part of other cultivated land} and, fecondly, to pay the labour and expence (^ the farmer as well as they are commonly paid upon good com land; or, in other words, to replace with the ordinary profits the ftock which he employs about it. This rife in the price of each particular produce, muft evidently be previous to the improventent and culti- vation of the land which is deftined for ruling it. Gain is the end ; i •m aB6 THE :NA.TUFIE> ATJD^ CAUSES OP aoOK £nd of all improvement, and nothing could deferve that name of .which lofs was to be the necefiary xonfequence. But io(s muft be the neceilary confequence of improlviiig land for the (ake of a pro- duce of <4Us?^iqrt^3%)3- 7;^^ ^^^^:?t .h5^it|mi inr f^ii«imtu> , The third and laft fort of rude produce, of which the price jiaturally rifes in the progrefs of improvement, is that in which the efficacy of human induftry, in augmenting the quantity, is either limited or uncertain. Though the real price of this fort of riide produce, therefore, naturally tends to rife in the progrefs of im- |n*ovement, yet, according as different accidents happen to render the efforts of human induftry more or lefs fuccefsful in augment- ing the quantity, it may happen fometimes even to fall, fometimes to continue the £ime in very different periods of improvement, and ibmetimes to rife more or lefs in the fame period. :xx.- lu >^^ij^' *f4»J There THE WEALTH OF NATIONS^ 287 There are fome forts of rude produce which nature has ren- ^^A^* dered a kind of appenclages to other foits ; (6 that the quantity- of the one which any country can afford, is neceflfarily limited by that of the other. The quantity of wool or of raw hides, for example, which any country can afford, is neceflarily limited by the number of great and . fmall cattle that are kept in it. The flate of its improvement and the nature of its. agriculture,, again neceflarily determine this number*, " ,- '',/ ; 1 ', '*?•. The fame caufes, which in the progrels of improvement, gra-*^ dually r^e the price of butcher's^meat, fhould have the fame efie€t) it may be thought, upon the prices of wool and raw tudcs> and raife them too nearly in the fame proportion. It probably would be fo, if iii the rude be^nnings of improvement the market fbr the latter commodities was confined within as narrow bounds as that for the former. But the extent, of their refpedive. markets i»> commonly extreamly different;, jjtj D;n:'; " ,r;,r /t-.v at iiiiii iwjjr- Bii4 i '■i'<>t-. The market for butcher's-meat is alinoft every where confined' to the country which produces it. Ireland, and feme part of ' Britifh America indeed, carry on a confiderable trad^ in fah pro^ vifibns; but they are, I believe, tKe only countries in the com- mercial world which do (6, or which export to other countries anj. eonliderable part of their butcher's-meat. , , >„.... ' -^ The market for wool and raw hides, on the contrary, is in: the rude beginnings of improvement very feldom confined to the- country. which produces thenu They can eafUy be tranfported tO' diftant countries, wool without any preparation, , and raw hide»' with very little; and as they are the materials of many manufac* tures, the induftry of other countries may occafion a demand for A. ' thiem*. Ill «88 THE NATURE AND CAUSES OF B OjO K thein, though that of the country which produces them might not occafion Any, Iir countries iU cultivated, and therefore but thinly tnhabited, the price of Ihe wool and the hide bears always a much greater proportion to that of the whole beaft, than in countries where, ifnprovement and population being further advanced, there is more demand for butcher's-meat. Mr. Hume obferves, that in the Saxon times, the fleece was eftimated at two-fifths of the value of the whole flieep, and that this was much above the proportion of its preient eftimation. In fome provinces of Spain, I have |>een aflured, the flieep b frequently killed merely for the (ake of the fleece and the tallow. The carcafe is often left lo rot upon the ground, or tp be devoured by beafts and birds of prey. If thu fometimes happens even in Spaiii, it happens almoft conftantly in Chili, at Buenos Ayres, and in many other parts of Spanifh America, where the homed cattle are almoft conftantly killed merely for the fake of the hide and the tallow. This too ufed to happen ahnoft conftantly in Hifpaniola, while it was infefted by the Buccaneers, and before the fettlement, improvement and popu- loufiiefs of the French plantations (which now extend round the coaft of almoft the whole weftern half of the ifland) had given ibme value to the cattle of the Spaniards, who ftill continue to poiTefs, not only the eaftem part of the coaft, but the whole inland and mountainous part of the country. '■>•■•'■ Though in the progrefs of improvement and population, the price of the whole beaft neceflarily rifes, yet the price of the carcafe is likely to, be niuch more aftefled by this rife than that of the wool and the hide. The market for the, carcafe, being in the rude ft^ate of fociety confined always to the country which produces it, muft neceflarily be extended in proportion to the improvement f *~ V and THE WEALTH OP NATIONS. and population of that country. But the market for the wool and the hides even of a barbarous country often extending to the whole commercial world, it can very feldom be enlarged in the fame proportion. The ftate of the whole commercial world can (eldom be much aife£ted by the improvement of any particular country { and the market for fuch commodities may remain the fame or very nearly the Came, after fuch improvements, as before. It fliould however in the natural courfe of things rather upon the whole be fomewhat extended in coniequence of them. If the manufafhiret^ elpecially, of which thofe commodities are the materials, (hould ever come to flouiifli in the country, the market, though it might not be much enlarged, would at leaft be brought much nearer to the place of growth than before j and the price of thofe materials might at leaft be increafed by what had ufually been the expence of tranfporting them to diftant countries. Though it might not rife therefore in the fame proportion as that of butcher's-meat. it ought naturally to rife fomewhat, and it ought certainly not to fall. In England, however, notwlthftanding the flourKhing ftate of its woollen manufacture, the price of Englilh wool has fallen very confiderably fince the time of Edward III. There are many authentick records which demonftrate that during the reign of that prince (towards the middle of the fourteenth century, or about 1339) ^^^^ ^^' reckoned the moderate and reafonable price of the tod or twenty-eight pounds of Englilh wool was not lefs than ten (hillings of the money of thofe times *, containing, at the rate of twenty-pence the ounce, fix ounces of filver Tower-weight, equal to about thirty fliillings of our prefent money. In the prefent times, one and twenty (hillings the tod may be reckoned a good Vol. I. P p price * Sec Smith's Memoirs of WooU 809 CHAP. XI. 2^6 rriE NATURE AND CAUSES 0# BOOIi: price for very good Englifli wooU The money-price of woo!, therefore, ii*i the time of Edward III, was to its money-prict id the prefent timte m ten to k^en. The fuperiority of its rciJ price was (till groator. At the rate of itx fhiiiings and e^ht^pence the quar-i. ter, ten {hilliiig:s was in thofe ancient times the price of twelve bnfliels of whbat. At tiie rate of twenty-eight (hillings the quarter, mt and twenty (hiUingB is in the prefent tinws the price df fix Ijuflicb only. The proportion between tlic real prices of ancient And modern times, thei-cfcM'ft, is as twelve to ilx, or as two to one. In thofe ancient thnes a tod of wool would have purchafed twice th« quantity oiffubliftence >A^hich it will pOTchafe at prefent $ and «6nleqttentty tMvite the quantity of labour, if the real recompence 4>f labour htA b«en the fame in both periods. ■ This degradation both in the real and nominal value of wool could never have happened in confequence of the natural courfe of tilings. It has accordingly been the cfFeft of violence and artifice : Firft, of the abfolute prohibition of exporting wool from Eng- land i Secondly, of the permilTion of importing it from all othe^* countries duty free j Thirdly, of the prohibition of exporting it from Ireland to any other country but England. In confequence of thcfe regulations, , the market for Englifh wool, inftead of "being fomewhat extended in confequence of the improvement of England, has been confined to the home market, where the wool of all other countries is allowed to come into competition with it, and where that of Ireland is forced into competition with it. As the woollen tnanufadures too of Ireland are fully as much dis- couraged as is confiftent witli juftice and fair dealing, the Irifli can work up but a fmall part of their own wool at home, and are, therefore, obliged to fend a greater proportion of it to Great Britain, the only market they are allowed. * I HAVE THE WEALTH OF NATIONS. #91 I HAVE not been able to find any fucli authentick records con- cerning tlie |)rice of raw hides in ancient times. Wool was com« monly paid as a fubfidy to the king, and its valuatiui\ in that fubfidy afcertains, at leaft in Tome degree, what was its ordinary price. But this Teems not to have been the cafe with raw hides. Fleet- wood, however, from an account in 1425, between the prigr of Burcefler Oxford and one of his canons, gives us their price, at leafl: as it was dated, upon that paiticular occafion : vi;. five oy hides at twelve (hillings 1 five cow hides at feven fliillings and three-pence j thirty-fix (lieeps (kins of two yeavs pid at nine (hil- lings} fixteen calves (kins at two fliillings. h\ 1435, twelve (hil- lings contained about the fame quantity of filver as four and twenty fliillings of our prefait money. An ox hide, tberpfpre, was in this account valued at the fame quantity q{ fUver as 4s. -^th? of our prefent money. Its nominal price was a good deal lower than at prefent. But at the rate of fix (hillings and eight- pence the quarter, twelve fliillings would in tfeofe tjmes bsve purchsfe^ fourteen bu(hels and four-fifths of a buftiel pf wheat, wliidj, pt three and fix-pence the bulhel, would in the prefent times cofl: 5 IS. 4d. An ox hide, tiierefqre, would in thofe timps Ji^vp purchafed as much corn as ten lluUings and three-pence wo\ild purchafe at prefent. It;B real value was ^qu^l to ten fliillings and three-pence of our prefent money. In thofe ancient tiiT^es, when the cattle were hajf ftarved during the greater p^rt g( tke winter, we cannot fqpjiofj that they were qf a very l^vge f^zie. /^\\ ox liide which ^^•ci^hs foyr (loi^c of fixteen poui>ds av.erdupQis, is not in the preilnj times r^korued a. bad one ; apd in thpfe iancie«t times would probah'y have been reckoned a very §;oo4 one. But at half a crown the (tone, which at this moment (Febri^a^y, 1773) I underftand to be the co^imon price, fugl) fi hide would at prp&Dt cofl: only ten fliillings. Thoy^h its nominj^l price, tlief-jefpre, js higher in ihfi j)fej(si)jt tlj^n \t was in ^hj^fe ^n^ieflt timps, its real P p 2 price. CHAP. XI. if I BOflK Ttft'^NU'T^R^^^AND CAflfSES OF price, the real ^ttthrtty of fobfiftcnte which it wiU purthdb or command, is rather fomcwhat lower. The price of cow hides at ftated in the above account, is nearly in the common proportion to that of ox hidesi That of (heep fltins is a good deal above itj They had probably been fold with the wool. That of calves Ikint j on the contrary, is greatly below it. In countries where the price of cattle is very low, the calves, which are not intended to be reared in order to keep up the ftock, are generally killed very young J as was the cafe in Scotland twenty or thirty years ago* It ftvts the milk, which their price would not pay for. Their (kins, therefore, are commonly good for little. iThE pHcii of raw hides is a good deal lower at prefcht than it was a few years ago > owing probably to the taking off the duty upon Teal Ikins, and to the allowing, for a limited time, the importation of raw hides from Ireland and from the plantations duty free, which was done in 1769. Take the whole of the prefent century at an average, their real price has probably, been fomewhat higher than it was in thofe . ancient times. The nature of th^ commodity renders it not quite Co proper for being tran- Iported to diftant markets as wool. It fuffers more by keeping. A falted hide is reckoned inferior to a frelh one, and fells for a lower price. This circumftance muQ; neceffarily have fome ten- dency to fink the price of raw hides produced in a country which does not manufacture them, but is obliged to export them ; and comparatively to raife that of. thofe produced in a countsy which does ii\anufa£lure them* It.muft have fome tendency to fink their price in a barbarous, and to, raife it in Uii ini^>rcved and manu- fa6luring country. It muft have had fc.v , *-..;v„y therbiure to. fink it in ancient, and to raife it in modern times. Our tanners . befides have not been quite (o fuccefsful as our clothiers in con- vincing the wifilom of the nation that the fafiety of the common- wealth , THE W/aAL«H OF NATIONS. 991 wealth depends upon thcfprofpechy of their partiqular manufafUkm. <^HA?, They have acconl ngly becw m**«h ki'a favoured. The cx|^it»tMn of raw hides has, indeed, baen pijUibitod, and declared a nui- fanee; but tluu* impoitati u from foreign countries has been iiibjeded to a duty; mul though this dury has been t»ken off from Ihofec^ Ireland and thu plantations (Tor ihc limited time of fiva years only) yet Ireland has not been confined to the market oS Gieat Britain for the fale of its furplu^ hides, o; of thofc which arc not manufa£lured at home. The hides of co«nraon cattle hav« but within thefe few years been put. among the enumerated common dities which the plantations can fend nowhere but to the mother country; neither has the commerce of Ireland been in this < afo opprelTcd hitlierto ia ordpr to fupport the oaanufaftures of. deal ,i»mc* l)')tiM''T , .. ■■ ■..' ^'^ •'■ '• 'd f f' '" ... ■ ' * "WHATEVER regulations tend to The wool of Scotland fell very conitderaWy in its price in con- fcquence of the union with England, by which it was excluded from the great market of Europe, and confined to the narrow one &i Great Britain. The value of the greater part of the lands in tiie fouthern counties of Scotland, which are chiefly a flieep country, would have been very deeply affe6ted by this event, had not the rife in the price of butcher's-meat fully compenfated the fall in the price of wool. . . , , ,. - 7 ,. As THE WEALTH OF NATIONS. «95 A* the efficacy of human induftry, in incrcafing the quantity C HA P, either of woo! or of raw hides, is limited, kt far as it depends upon the produce of the country where it is exerted j fo it is uncertain fo far as it d^ends upon the produce of other countries. It fo far depends, not fo much upon the quantity which .they produce, as upon that which they do not manufadlure i and upon the reftraints which they may or may not think pwoper to impofe upon the ex- portation of this fort of rude produce. Thefe circumftances, as they are altogether independent of domeftick induftry, fo they neceffarily render the efficacy of its efforts more or lefs uncertain. In multiplying this fort of rude produce, therefore, the efficacy of human induftry is not only limited, but uncertain. i-i -J'- ... In multiplying another very important fort of nkle produce, the quantity of filh that is brought to market, it is likewife both limited and uncertain. It is fimitcd by the local fituation of the country, by tlie proximity or enfive maddnery of every kind made ufe of. The real price of this commoifity, therefore, naturally rifes in the progrefs of improvement. It has accordingly done fo, I believe, more or Ida id every country. Though the fuccefs of a particular day's fidiing may be a very tincertain matter, yet, the local (ituation of the country being fuppofed, the general efficacy of induftry in bringing a certain quantity of fi(h to market, taking the courfe of a yeai', or of feveral years together, it may perhaps be thought, is certain enough ; and it, no doubt, is fo. As it depends more, however. Upon the local fituation of the country, than upon the ftate of its wealth and induftry ; as upon this account it may in different countries be the fame in very different periods of improvement, and very different in the fame period; its connexion with the ftate of improvement is uncertain, and it is of this fort of uncertainty that I am here fpeaking. , . u m. .:ti In increafingthe quantity of the different minerals and metals which are drawn from the bowels of the earth, that of the more precious ones particularly, the efficacy of human induftry feems not to be limited, but to be altogether uncertain. ■ The quantity of the pivcious metals which is to be found in any country is not limited by any thing in its local fituation, fuch AS the fertility or barrennefs of its own mines. Thofe metals frequently abound in countries which poflefs no mines. Their quantity in every particular country feems to depend upon two dif- ferent circumftancesj firft, upon its power of purchafing, upon the ftate of its induftry, upon the annual produce of its land and la- bour, in confequence of which it can afford to employ a greater or .t^ THE WEALTH OF NATIONS. or a fmaller quantity of labour and fubfiftence in brin^g or ptnrchafing fuch fuperfluities as gold and filver* dther from its owi^ mines or from thoTe of other countries^ and, fecondly, upon the |e^'4ityi^.r w barrennefs of the mines which may happen at any putieular time to fupply the commercial world with thofsmetids. The quantity of thofe metals in the countries mofl: remote from the mines, mufl: be more or lefs affedled by this fertility or barren- nefs, on account of the eafy and cheap tr^fportation of thofe metals,^ of their fmall bulk and great value. Their, quantity in China and Indoftan muft have been more or lefs affei^led by the abundance of the mines of America. ^^-jij^j^i > -^ .^ So far as their quantity in any particular country depends upon ike ibuner of thofe two circumftances (the power of purchafing) thdr real price, fike that of all other luxuries and fuperfluities, is likely to rife with the wealth and improvement of the country, and to fall with its poverty and depreflion. Countries which have a great quantity of labour and fubfiftence to (pare, can afford to purchafe any particular quantity of thofe metals at the expence of a greater quantity of labour and fubfiftence, than countries which have left to (pare. ^s?. ^M,l.; H.', ^ - ' ;;-':'f...f;i. ii;;.:- . - , . .:^-^^.uav'- T So far as their quantity in any particular country depends upon the latter of thofe two circumftances (the fertility or barrennefs of the mines which happen to fupply the commercial world) their real price, the real quantity of labour and fubfiftence which they will purchafe or exchange for, will, no doubt, fink more or lefs ill proportion to the feitility, and rife in proportion to the barreri^ ncfs of thofe mines. v* * «97 'J "^ The fertility or barrennefs of the mines, however, which may happen at any particular time to fupply the commercial world, Vol. I. Q^q i« Tl4^?^ ^ATf^K^W A^t>'eMmtS 'XSfp BOOK is a d«(imftdncc wMch/it Is evk»6nt, may have no ibn^f^ytmi- ne&'ion with the ftate of induftry in a particular, countiy. Itktm^ even to have no very neccffaiy conneftion v(rith that of the world in general. As arts and commerce, indeed, graduaUy fpraad themfclves over a greater and a greater part of the earth, the fdarch for new mines, being extended over a wider furface, may have fomewhat a better chance for being fuccefsful, than when confined within narrower bounds. The difcovery of new mines, however, as the old ones come to be gri^ually exhaufted, is a matter of the greateft uncertainty, and fuch as no human fkiil or induftry can enfure. All indications, it is acknowledged, are doubtful, and. the a£lual difcovery and fuccefsful working of a new mine can alone afcertain the reality of its value, or even of itsexiftence. In this fearch there f^m to be no certain limits either to the poilible fuccefs, or to the poflible dilappointment of human induftry. In the courfe of a century or two, it is poffible that new mines may be difcovered more fertile than any that have ever yet been known; and it is juft equally poflible that the moft fertile mine then known, may be more barren than any that was wrought before the dif- covery of the mines of America. Whether the one or the other of thofe two events may happen to take place, is of very little im- portance to the real wealth and profpeiity of the world, to the real value pf the annual produce of the land and labour, of 9)an- kind. Itfr nominal value, the quantity of goki and filver by .which this annual produce could be expref&d or reprefented, would, no. doubt, be very different ; but its real value, the real quantity of labour which it could purchafe or command, would he prfcife^y the fame. A ftiilling might in the one cafe reprefent no more la- bour than a penny does at prefent; and a penny in the other might reprefent as much as a ftiilling does now. But in the one cafe he who had a ftiilling in his pocket, would be no richer than he who has a penny at prefent; and in the other he who had a penny would ITHB' WJBALarMA OTr, NlA\T10N8r *99 would 'hfriiuft as rich as he whoihais a (hilling now. The-fthe^eik OH A P. and abundance of gold and filver plate« would be the fole advantage which the world could derWe from the one event, and the dear- mfiifind feaority of thofe trifling fuperfiuities the only inconvenif^cy itOQuld ftiffer from the other. ,;ai:e r bffi? i^lssw^ p. d w ?ov)'i>iri)(U .■>■>! rti w'^f '• CoBclufion of the Dtgrejion concermng the Vartattons tn the Value a K . . of Stiver, 3n>io ••.'t)-MBrtV'fc-'t»f,i)'?-TiOjKiix:» v^HRubiJi-u od 01 ami:') 83n<> bk» ariJf flF, IThe greater part of the writers who have coUefted the money prices of things in antient times, feem to have confidered the low money price of corn, and of goods in general, or, in other vifj^rds, the high value of gold and filver, as a proof, not only of tl)^ icp'city of thofe metals, but of the poverty and barbarifm of the country at the time when it took place. This notion is con- ne6ted with the fyflem of political oeconomy which reprefents na- tional wealth as confifting in the abundance, and national poverty in the ifcarcity of gold and filver; a fyftem which I (hall endeavour to explain and examine at great length in the fourth book of this enquiry.. I fhall only obferve at prefent, that the high value of the precious metals can be no proof of the poveity or barbarifm of any particular country at the time when it took place. It is a pi'oof only of tlie barrennefs of the uilnes which happened at that time to fupply the commercial world. A poor country, as it cannot afford to buy more, fo it can as little afford to pay dearer for gold and filver than a rich one j and the value of thofe metals, therefore, is not likely to be liigher in tlie former than in the latter. In China, a country much richer than any part of Eu- rope, the value of the precious metals is much liiglicr than in any part of Europe. As the wealth of Europe, indeed, has increafed greatly fince the difcovery of the mines of America, fb the value ^ .-V •- ;*. '"-■■■'- CLq 2" '- . ^ . .. . of il :M i) m J«e 'rir^tfTAttJiasP Anmi4catzrsEa.Hap #^^ t^ of gd!d' ftn^^fil^ H«a<-^radi!ially dimNiiaibdLT'Thui^ 4&naniitk>ir o^ tlieirvatue^ howtv^r, has not been owing to the. iia«reaieio£ilibe «cwidaiit minnpthan m^y that were known before. The increafe of thequantitijr dfjgold and filver in Europe, and the increafe of its manufaflures and agri- culture» are two events which^ though they have happened nearly about the fame time, yet have arUen from very dijSerent caufes, and have icarce any natural connection with one ano^ier. The one.has arifen from a mere accident, in wliich. neither prudence nor policy either had or could have any fhare ; The other from the fall of the feudal fyAem, and from the eftablilhment of a government which afforded to induftry, the only encouragement which it requires, fome tolerablie fecunty that it fhall enjoy the fruits of its own labour. Poland, where the feudal iyftem ftill continues to take place, is at tiiis day as beggarly a country as it .was before the difcovery of America.. The mcmey price of coin, however, has rifen;, the real vahie of the precious metals h^s fjillbn Ui Poliand, in the fame manner as in other parts of Europe. Their 'quantity, therefore, muft have increafed there as in other plac^;,. ai\d nearly in the fame proportion to the annual produce of its iund ^nd . liabour. This increafe of the quantity of thofe metals, howeve!f,jh^s not, it feems» increafed that annual produce,., has neither improvea the manufa<6tures and agriculture of the coyptry, hbr mended the circumftances of its inhabitants. Spain and Por- tugal, tlie countries which poflefs the mines, are, after Poland; perHaJ)s, tJ^e two moft beggarly countries in Europe. , X^c value of* the precious metals, however, mull be lower in Spain and 'Portugal than iri any Other part of Europe^ as they come from thofe countries to all other parts of Europe, loaded, not only with a freight and an infurance, but with the expence of fmuggling, their exportation being^ either prohibited^ or fubjefted to a duty. In ■ * proportion 'TDnmmE^urxi/^. obi W'ATricwfiSr ^opoiAiairitiititliffrinnUalfj^rodudc vof ;:th« land itiuiklaMj(r>!)t^nr« fouie;' than quantity mufti bagrfftter mihxify counkriea than in my ethdrnpait'Cif Europe: iThofei countries. Jboweyer* Qve poorer than dicijgitatar part «f£un2ipe») Though; the-feudai fyftem has been ftb0liflled^in Spain and Portugal^ it has nbt.been: fucceeded by a much better.- •"'■'''E^i^^'i"'-'!' >■»! >(» 'ilm-.>n)' ■;(b ho?, .:.qoti.r,-.! 'u' tvn'fii ; ■ s^^^Ar the low value of gold artd filver, therefore, \s no proof of the Wealth ^HH^ouHihing ftate of the countiy wherd it takes place j fo itehher W thtSr high value, or the low money price either of gcidds in general or of corn in particular, any proof of its poverty ^d barbarlfih. ''.i.r'H>J tV/:t•//• ^^•J, *X^ •V:.K'. y,a '.\^i.; -,. 3<»l '5/! P. BuT''i?hbitgh ihe low money price either oi^ gobits In geherar, or ^i>t com ih particular, be no proof of the poverty or barbarifm of ihe times, the low money price of fome particular forts of goods, 'iii'ch ais cattle, poultry, game 6t all kinds, in ' proportion to that "^ corii, ' is U moft decifive one. tt cFearly demonftrates, firft, their gi'eat abundance in proportion to that of corn, and corife<^uentIy the gireit exteht of the land which they occupied in proportion to what was occupied by com; and, Secondly, the low value of this fkiid'in proportion to that of corn hind, and coniequehtiy the iin- ' btiltiVsli^ and unimproved ftate of the far greater part of ^e lands of tlie country. It clearly demonftrates that the flock and popu- lation of the country did not bear the fame proportion to the ex- tent of its territory, which they commonly do in civilized countries, and that fociety was at that time, and in that country, biit m its infancy. From the high or low money price duier jb^,goods in general, or of corn in particular, we can infer only that the mines which at that time happened to fupply the commercial world with gold and filver, were fertile or barren, not that the country was rich or poor. But from the high or low money price of fome fbrti 1 i WA |i n ^ THE NATURE AN© CAtTSES 'OV V cr O K fbits df gooil» ill' fO-opoHidn to that 06 otihttv, \9e esrr infbr with a degvecof prdbaHility thAtdlpproachcft dmoft tocMtaifity^ thar it WM rich or poor, that the greater part of its landtw«r& improve orunitnprdwd, and that it vrM^ either in « more or lq& barbarous ilate, or in a more or Icfs civilized one. 1 iWEBinro^' :»d o*>:ilitjairirtlh Any rife in the money price of goods which proceeded altogether from the degradaition of the rakie of filver, would afie£l all ibrts of goods equally* and raiife their price nmverfaUyf a thircU or a /ourth, or a fifth part higher, according as filv«r happened to lofe a tliird, or a fouith, or a fifth part of its fpraiec viduc. But the rife in the price of provifions, which has been the fub)ei6t of fo much reafoning and converfatlon, does not Sifk&. all forts of provifions equally. Taking the course of the preiient century at an average, the price of corn, it is acknowledged, even by thofe who account for this rife by the degradation of the value of (ilver, has rifen much le^ than that of foiHe other forts of provifioof . The rife in the price pf thofe other fprts of provifions, therefore, cannot be owing altogether to the degradation of the value of filver. Some other caufes muft be taken into the account, and thofe which have been above alligned, will, perhaps, without having recourfe to the fuppo.fed degradation of the value qf filver, fufikiently e;cplain this rife in thoie parlxular fort^ of provifions of which thp price has aftually rifen in proportioa to that of As to the price of corn itfelf, it has, during the fixty-four firft years of the prefent century, and before the late extraordinary coaife .of bad fea£b|is, been, fomewhat lower than it was during the fixty- four hft yegfr^ of the preceding century. This faft is attefted, jiot only by the accounts of Windfor market, but by the publick liars of all- the different counties of Scotland, and by tlie accounts of THE WEALTH OP KAT/ION«. S03 •f ifivieptl^ difTcrmt marlMtf in- France, which ' tvc been coUeded C R A F. with- great diligcnoc and fiddky by Mr. Meliafice aod by Mr. Dupr^deSt. Maur. The evidence is more compleat thaii' could well < have been expcftcd in a matter which is naturally fo very difficult to be afcertained. ■ fo lirtV?P?^'iiJ'~*>#%> 9l»rfv r. ni lo Ai««6>i> ' 9 Ab to the high price of corn during thefe laft ten or twelve years, it can be fuificiently accounted for from the badnefs of the feafons, without fuppofing any degradation in the value of lllver.' '-:.'w>o*; fc ^'The opinion, therefore, that filver is continually finking in Its value, fecms not to be founded upon any good obfervations, either upon the prices of corn, or upon thofe of other provi- fions. ht' M1;.ii »«? A' If iin^T "F'u('>^v iJi.vj mi yi en, ;jj. It may be of fome ufe to the puMitk by affording Sin: eafy ptoof of the profperous condition of the country. If the rife in the price of fome forts of provifions be owing altogether to a fall in the value of filver, it is owing to a circumftance from which nothing 4, can: VH THE NATURE AN© CAUSES OF B O'O K can be infierred but the fcrtUtty of the American mutta. The real wealth of the country, the annual produce of its land and labour, may, notwithftanding thitf circumftance, be eidiergni. dually declining, as in Portugal and Poland; or gradually advancing, as in mofl: other parts of Europe. But if this rif^ in the price of fome forts of provifions be owing to a rife in the real value of the land which produces them, to its increafed fertility, or, in confequence of more extended improvement and good culti- vation, to its having been rendered fit for producing com, it is owing to a circumftance which indicates in the cleareft manner the prosperous and advancing ftate of the country. The land conftitutes by far the grcateft, the moft important, and the moft durable part of the wealth of every extenfive country. It may furely be of fome ufe, or, at lead, it may give fome fatisia^on to the publick, to have fo decifive a proof of the increating value of by £ar the greateft, the moft important, and the moft durable part ©fits wealth. ....^.fi^. ..»..; u It may too be of fome ufe to the pubHck in r^ladng the pecuniary reward of fome of its inferior fervants. |f this rife in the price of fome forts of provifions be owing to a fall in the value of filver, their pecuniary reward, provide^ It was not too large before^ ought certainly to be augmenteu in propor- tion to tlie extent of this fall. If it is not au^eixtecj, theif real roco^npence will evidently be fo much diminiftied. But if this rife of price is owing to the increafed value, in confequei^ce of the improved fertility of the land which produces fuch prpvifiops, it becomes a much nicer matter to judge either in what proportion any pecuniaiy reward ought to be augmented, or whether it ought to be augmented at all. The extenfion of improvement and cultivation, as it neceiTarily raifes more or lefs, in proportion to the price of corn, that of every fort of animal food, fo it as necefla- lily THE WEALTH OF NATIONS. f'ily lowcr« that o^ I believe, vmy (brt of y^^getable food. It la ^ ^ pr^oof aiumal foodi becaufe a grea( puct of the l«uid whidi pl^MCiqi ,}(, beiog rendered fit for producing corn, mu|^ ^ocd tp (he jaodlocd and fanner the rent and profit of cori> l^d. It J^cn tjtic iHFice of v<|;etable fpod> becaufe by increafing the fertility of the land, it increafep its abundance. The improve- ments of agriculture too introduce many forts of vegetable food, which» requiring lefs land and not more labour than corn, «orae much chesq^r to market. Such are potatoes and maize, or what is ealled Indian corn, the two mod important improvements which the agriculture of Europe, perhaps which Europe itfelf has received from the great extenfion of its commerce and navi- gation. Maay (orts of vegetable food befides, which in the rude ftaie of agriculture are confined to the kitchen garden, and raifed only by the ipade, come in its improved ftatc to be intro- duced into common fields, and to be railed by the plough : fuch «s jtumips, carrots, cabbages, &;c. If in the progrefs of im- nroveiBipnt, therefore, the real price of one fpecies of food ne- cejOTaiiiy rUes, that of another as neceflarily falls, and it becomes f matter of more nicety to judge how far the rife in the one may l>e comp^fated by the fall in the other. When the real price of butcher's meat has once got to its height, Twhich, with regard to evfry fort, except perhaps that of hogs fiem, {t fciems to Kave done through a great part of England, more than a century ago) any rife which can afterwards happen in that of any other Ibrt of animal food, cannot much afFe£t the circumftances of the infieribr ranks of peojde. The circumftances of the poor through a great part of England cannot furely be To much diftrefled by any rife in the price of poultry, fifti, wild- fowl, or vcnifbn, as they muft be relieved by the fall in that of potatoes. '^'■'^^^ ^ '^^ In the preient feafon of fcarcity the high price of com no doubt diftrefles the poor. But in times of moderate plenty, when Vol. I, R r corn m CHA «% < . w l\ 3©* THE NATURE AWD CAUSES OF B O^O K c6m Is at its ordinary or average price, the natural rife in the pric« of any other fort of rude produce cannot much a£Ec£t thenn They fuffer more, perhaps, by the artificial rife which has been^ occafioned by taxes in the price of ibme roanufa£kur»d com'* modities y as of fait, foap, leadier, candles, malt, beer and- ale, &c. V •■>r^ '••• 3r EJ'eiij of the Progrtfs of Improvemtnt up9H ,tkt f/ifl ^^ffff \sf. ManufaSturttu ... zdi iYjui^f '\c 2:>-ju f.'.t : TT is the natural efFeft^ of improvement, however, to diminifh gradually th« real price of almoft all mamifafhires. 'That ofr the manuf»£hiring>woricmanfhip diminilhes perhaps m all of them without exception. In confequtnce of better machinery, of greater dexterity, and of a more proper divlfion and diftribution of work, ail cf which are the natural effects of iraprovenftnt, a hiuch finallet' quantity of labour becbities requifite fdy 0!»ecuting. any particular jpiece of work ;. and though in confequcnce of the fiourifliihg drcumftances of the ibciety, the real prica Of Ibbour (hbtil^ ril^ vety confiderably^ yet the great diminution of the q'^antity will generally itfiich more than compenfate the grsateft rife Which'cah happen in the price. ' ' ""'■ '^ . uiu;^ jo ■■'-■- '■■■■■■ ' -J'y vwnii'/ T>tssig R lb There are, indeed, a few manufacturer, in Whufh the n^iefj^icy rife in the real price of the rude materials will more than com- p8fil2rtij all the advantages which improvement can intrbdnce itito the execution of the work. In carpenters and joiners work, and in the coarfer fort of cabinet work, the neceflary rife In the real price of barren timber, in confequence of the improviement of land^ will more than compen(kte all the adviuitages which can THE: WEALTH OP/NATIONa' 30f be derived from the beft madiinery» t\ue greateft dexterity* tnd CHAP, themoft proper diviflon and diftribution of wot k.i'i} t./fim xm> '. Bof 4n all eafce in which the real price of the rude materialt either does not rife at all, or does itot rife very much, that of the manufaftured commodity finks very confiderably. ;^ ,'M This diminution of price has, in the courfe of the prefent aiid preceeding century^ been moft remarkable in thofc martiJr failures of which the materials are the coarfcr metils. A better movement of a watch, than about the middle of the laft century could have been bought for twenty pounds, may now perhaps r be hadi Tor twenty flulUngs. la the work of cutlers and lock- fmilhs, in all the toys which are made pf (he cgarler metals, and in all thofe goods which are commonly known by the name of Birmingham and Sheffield ware, there has been, during the fame period, a very great redu^ion of piice, though not alto- gether fi> great m in watch work. It has, . however, , been (ytf^ ficient to aftonilh the workmen of every other part of Ejurope,. who in many cafes acknowledge tliat they can pi:oduce no work> of equal goodnefs for double, or even for triple the price. Thftre) are perhaps no manufa^ures in which,-the divifipix of^ Ijaboyr 9m, be carried further, or in which the machinery eri^p)oye|d,^4i'^^ of a greater variety of improvements, than thdfe of which the maieriaU *r« *^9 ^^o*"^^"* "*^'*'s. . ,,,.,, .„^.,, , , , . > (.11 ' .»,a I -■ -■ ■ .■; I "•' 3f'' /r •'''■ ,• Ifi tjt^^^glotbing maiiufafture there has, di^r^g,jihe,faiftp 1S^9^^^ been no fuch fenfible reduction of price. The.prjce of fuperfinq dothf.I have been affured, on the contrary, has, within thefe ifiveanid twenty or thirty years, rit'en fomewHat in proportion to its quality i owing, it was faid, to a confiderable hie In the price of the material, which confifls ^together of ^^llh'wQbl. That ' . R r 2 of I {'':' m t )'■ nil ^m s«*. THE' N^/VTITRE AMD OAXTfiES: OF BOOK^ of^ the Y hQw^r»ha*thmfii^m^ fiitaj^ improvfiDacntfi in JK>th». >yluGh may have occafionied (ome redu^aajMi pf priee. ^ ^^^ ittun'- The redu^on, however, w^U appear much more fenfible and: undeniable, if we compare the price of this mamifa£tuFe in the prefent times with what it was ia a much remoter period, towards the end of the fifteenth' century, when the la'bour was probably 'much left fiibdivided, and tiie machinery employed much more, impeifed than it is at prefent. r.- l^fl'Mj Im 1487, being the 4th of Henry Vllth, it was enabled, that '* whofbever (hall fell by retail a broad yard of the fineft fcarlet *' grained, or of other grained cloth of the finelt making, above ** fifteen {hillings, (hall forfeit forty (hillings for every yard Co .** fold.", sixteen ihilKnga, therefore, containing about the ^ame quantity of ftlver as four and twenty fhillings of our prefent money, was, at that time, reckoned not an imreafonable pricie for a yard of the fineft cloth ; and as this is a draiptuary law,, fuch cloth, it is probable, had ufually been fold fomewhat dearer. A guinea may be rcfikbned the higheft piice in the pfdent times. Even tjaougii the quality of the cloths, therefore, ^ould be Tup- pofed equal, and that of the prefent times is moft probably much fuperior, yet, even upon this fuppofition, the money price of the fineft doth appears to have been confiderably reduced fince the end of the fifteenth centur/. But Its real price Has been much 1*HE "W»A^L1»H^^ Ort NAfTIOWfi? 3f09 much" fi^'oreredticed. ,^ix fhlffings and eight-pence was then; CHAP; and lon^ afterwards, reckoned the average price df a qtnoter of-yhieni, dixtfeen fKHUngs, thtrefMe, was the price of two- qiSirtiirt* And more than tfcree' bulhds^ of i«*eat. Valuing atjaarter of wheat in the prefent timeir at eight and twenty (hillings, the real price of » yard of fine cloth muft, in thofe times, have been equal to at leaft tfiree pounds fix Ihillings arid fijipcrice of bur pitfiiot liioney. The' man whd bought it muft have pa^ed' With dit comhiandbf -a quantity of labdiir and fubfiftence equal to what that fum would purchafe in th& prefent timcs^:"; , .. • ' '-' ^■'■'■^'''•-•^■- .:i:^:,\.;yr: -r.ix iMough (^onfiderable, has not been (b great asiri that bf the fine. In 1463, being the 34 of Edward I Vth, it was enaftcd, that ** no ^fefvant in hufbandry, nor common labouier, nor fervant ♦''to any artificer inhabiting out of a city or burgh, (hall ufe •♦ 0|r wear in thdr doathing any cloth above two fhilHngs the "^l)road yard." In the 3d of Edward the IVth, two fhillings contained very nearly the fame quantity of filver as iPour of our prefent niorit^i But t^ie Yorklhire doth which is now fotd at four fhillings the yard, is probably much fuperidr to ariy' that W4S tbpn made for the wearing of the very pooreft order of com- mon fervants. Even the money price of their doathing, therefore,. may* t^ propprtion to the quality, be fomewhat cheaper' in the prefei^t ^a^^ was ii^ th<^e antient times. The real price is certainly a, good .deal cheaper. Ten pence was then reckoned what is called the moderate and reafonable price of a bufliel of- wheat. Two rlhiUing-s, therefore, was the pi ice of two bufliJds and' rtear two pecks of wheat, which in the prefent times, at three (hillings and fixpence the bufliel,. would ^be worth eight fhillings and nine- li"?! II 3^0 THE NATURE ANO CAUSES OP nine-pence. For a yard of this doth the poor fervant muft have parted with the power of purchasing a quantity of fubfiftpncd equal to what eight -fliillings,. and nine-pence would purdiafc in the prefent tamqs. This is a fumptuary law too, rtftraining" the luxury and extravagance of the poor. Thdr doatlung, thcr«4. fore, had commonly been much more expenfivc. . ; , . f » ^^"i , • .. 4 .;.>* ■• . ■'•w-^- ■'■''. -^"'"■'♦■ft; -The fam^'brtWr'^ pebble it^, by the fame law; 'proMbited ftdih wearing hofe, of Which the price (hould exceed fourteen- penee the pair, equal to about eight and twenty pence of our prefent money. But fourteen-pence was in thoie times the price of a buftiel and near two pecks of wheat j which in the prefent times, at three and fixpence the bufhel, would C6ft live (hillings and three-pence. We fliould in the prefent times confider this as a very high price for a pair of ftockings to a iervant of the pporeft and loweft order. He muft, however, in thofe times liave paid what was really equivalent to this piice for theiti. "^ In the time of Edward iVtIi, the art of knittifig ftockings was probably not known in aiiy part of Europe. Their hofe were made of common cloth, which may have been one ot the caufcs of their dearnefs. The firft perfon that wore ftockings in EJngland ' >h feid to have 1ie*n Queen Elizabeth', fe^e recJIived them as a prefent from the Spanifti amb^ador.:' t \^ .w'***^ ^^ifS^H^tf '*Ki^^i# ar^ iii|'iy ^'it^ mi^uS^uS'l^ ihicHihidry' employed wa^ much mpre imperfe6lln thojf ,anti|i[^nt^^ tilari ' it is ih the pi^eifenV ti^es. It has fince received ij^re^ very, capital impr6V6nientsi'bcfi(ies, probably, many fmall^r pnc^ .of. which it Way be difficult to afcertain either the number ftr the imp6itait(4.J ^- m ,tf !*•. .f^"-" ;jV';. -*•/-■-»■ B was not in thofe time$ carried on in England, hut in the rich ^nd commercial country of Flanders i 9nd it was prpbably conducted then, in the fame manner ^s now* by people Tjho derived the whde. or the principal part of their ifvibflflence from it. It was befides a foreign manufa^ure, and mu(^ have paid iome duty, the antient cuftom of tunnage and pounda^^e at leaft, to the Jdng. This duty, indeed, would not probably be very great. It wai; nctf then the policy of Europe to reftrain» by high duties, the importation of fordgn manufa£tares, but rather to encourage it, in order that merchants mijj^t he enabled to fupply, at as eafy a rate as poflible, the great men with the con- veniencies and luxuries which they wanted, and which the induftry of their own country could not afford them. ,„jr ,;.ii ..^^ ^^-^: ' " %■ . Thb confidcmtioa of thefe circumftftnees oftay, pediapSa in fome meafure explain to ui why, in thoTe antient timf^a^ t^e re^l {xrice of the coarie manufaSbure vm^m 19 prc^pfortioii to ^mt <^ the fine, fi» much lower than in die prefent ^mcA. ...a. Conclusion of the Chapter. ■'«i 5 i.'i T SHALL conclude this Tery lohg di^kpti^ mtk obftrving that every improvement in the circumftances of i^e (bciety tends ^ther direfUy or indire&Iy to raife the real rent of land, to increafe the real wealth of the lan^ord, his power of pur* chafing the labour, or the produce of the labour of odier peo^e. The extenfion of improvement and cultivation tends to raife it diredly. The landlord's Ihare of the produce neceflarily in- cfta&s with the increa^ of thjB produce '■MP.::z\n ';;J^^ TilAT THE WEALTH OF NATIONS. 3»3 - TsAT rife in the real price of thofe psits of the rude pro- duce of land» which is firft the ?fre£b of extended improvement and cultivation, and afterwards the cau(fc <^ their being ftill further extended, the rife in the price of cattle, for example* tends too to ratfe the rent of land dire£lly, and in a ftiU greater proportion. The real value of the landlord's ihare, his real com- mand of the labour of other people, not only rifes with the rieal value of the produce, but the propordon of his (hare to the whole produce riles with it. That produce, after the rife. in its real price, requires no more labour to colle£t it than before. A finaller pro- portion of it will, therefore, be fuffident to replace, with the .ordinary profit, the ftock which employs that labour. A greater proportion of it muft» confequently, belong to the landlord. All tho(e^nnprovements in the productive powers of labour, which tend dire£tly to reduce the real price of manufactures, tend indirectly to raiie the real rent of land. The landlord exchanges diat p^Ut of his rude produce, which is over and above his own confumption, or what comes to the fame thing, the price of that part of it, for manufactured produce. Whatever reduces the real price of the latter, raifes that of the former. An equal quantity of the former becomes thereby equivalent to a greater quantity of the latter ; and the landlord is enatded to purchafe a greater quantity of th6 conveniencies, ornaments, or lux iries, which he has occafionfor. . ,. ,, . , J. . • ^ _ _ ,^. ..- ._ ^^. .. ■ :, Every increafe in the real wealdi of tfie fociety, every increafe in the quantity of ufeful labour employed within it, t^nds indireCtly to raife the real rent of land. A certain proportion of this labour naturally goes to the land. A greater number of men and cattle are employed in its cultivation, the produce increafes with the increafe of the ftock which is thus employed in raifing it, and the rent increafes with the produce. , Vol. h S f *^ The CHAP. "kt . ■■■?- THIB^INA'njR®'^ A!ND CAUSES OF '" THEcttftttiary'tircwtrlftanceSj the negledliof cultivation and im- proirement, the fell in tlie real price of any part of the rude produce of land, the rife in the real price of raanufaftures from the decay of manufafluring ait and induftry, the declenfion of the real wealth of thefociety, all tend, on the other hand, to lower the real rent of land, to reduce the real wealth of the landlord, to diminiHi his power of purchaflng either the labour, or the produce of the laboui: of other people^ - -> i ^- i ■^.^- - ^ , ; • . , - i- u^.. * The whole annual produce of the land and labour of every country, or what comes to the fame thing, the whole price of that annual produce, naturally divides itfelf, it has. already been obferved^ into three parts ; the rent of land, the wages of labour, and the profits of ftock i and conflitutes a revenue to three different orders of people ; to thofe who live by rent, to thofe who live by wages,, and to thofe who live by profit. Thefe are the three great original and conftituent orders of every civilized fociety, from whole revenue that of evei7 other order is ultimately derived. '^' '*^'^* •*''"* ***i- -tw The ihtereft ^f the firft of thofe three great orders, it appears from what has been juft now faid, is ftrifHy and inffeparably con- ne6ted with thejgeneral intereft of the fociety. Whatever either pro- motes or obftrufts the one, neceflarily promotes orobftrufh the other. When the publick deliberates concerning any regulation of commerce or police, the proprietors of land never can mifiead it, with a view to promote the intereft of their own particular order; at leaft, if they have any tolerable knowledge of th^t intereft . They are, indeed, too often defedive in this tolerable knowledge. They are the only one of the three orders whofe revenue cofts them neither labour nor care,, but comes to them, as it were, of its own accord, and independent of any plan or proje6l of theij- own. That indolence which is the naturaj cffeft of the eafe and fecurity of their fituation, renders them, too 7 of^n. THE WEALTH OF NATIONS. 3»5 often, not only ignorant, but incapable of that application of mind C HA P. which is neceffary in order to forefee and underlland the confe- qucnces of any publick regulation.!: lo r* ■ r?3b-jb :»>>■ rr -•' iuij i?; :. i The interefl of the fecond order, that of thofc who live by wages, is as ftridtly connected with the interefl of the fociety as that of the firft. The wages of the labourer, it has already been (hewn, are never fo high as when the demand for labour is continually rifing, or when the quantity employed is every year increafing confiderably. When this real wealth of the fociety becomes ftationary, his wages are foon reduced to what is barely enough to enable him to bring up a family, or to continue the race of labourers. When the fociety declines, they fall even below this. The order of proprietors may, perhaps, gain more by the profperity of the fociety, than that of labourers : but there is no order that fuffers fo cruelly from its decline. But though the intereft of the labourer is (Iri^ly connected with that of the fociety, he is incapa- ble either of comprehending that intereft, or of underftanding its conne£lion with his own. His condition leaves him no time to receive the neceif^ry information, and his education and habits are commonly fuch as to render him unfit to judge even though he was fully informed. In the publick deliberations, therefore, his voice is little heard and le(s regarded, except upon fome paiticular occafions, when his clamour is animated, fet on, and fup- ported by hb employers, not for his, but their own particular purpofes. r H W»**».r 'wr^w His employers conftitute the third order, that of thofe who live by profit. It is the ftock that is employed for the fake of profit, which puts into motiQn the greater part of the ufeful labour of every fociety. The plans and proje£ts of the employers of flock regulate anddire^all the moft important operatipnf of labour, and S f 2 profit v^ rWEOmi'SMKEOAWT JCNSmES^T^f raceof profiMtbes<]iotv liktiircitt anil < wflgM; rifdwhh the fr'dtpefity'; and fall with the declenfion of the focutf* On tiie irontrafy, it is naturally low in rich, and high in poor countries, and it ifr always higheft in the countries which are going faiVeft to ruin. The ihterdt ' of this third order» therefore, has not the fame c<>nne£tion widi the general intereft of the fociety as that of the other two. Merdtants and mafter manufaflurers are, in this order, the two clafles of people who commonly employ the largeft capitals, and who by their wealth draw to themfdves the greateft ihare of the publick confideration. As during their whole Kves they are enfj;aged in plans and projefVs, they have frequently more acutentfs of under- ftanding than the greater pait of country gentlemen. As thdr thoughts, however, are commonly exercifed ^ather about theintereft of their own particular branch of bufine(s, than about that of the ibciety, th^r ju(%ement, even when ^ven with the g't«Meft dandour» (which it has not been upon every occ^fion), is much more ti> be depended upon with regard to the former of thofttwo objeds, thais with reganl to the ktter. Their fiipttierity over tfui country ^entl^ man is, not fo much in thdr knowledgie give up both his ovm intereft and thstt oi the pubUdi, from a V4H^ fimpk but horteft conviftiouk that their intei^eft, and^nothb, was^ intereft of the publick. The intereft of the dealers, however>4n iMy particular branch of trade or itianufadtures^ is always in' (bme irefpeAs difTerent from, and even oppofite to that of the fMblick. To widen the market and to narrow the coirtpetition, u alvMiys the iniereft o( the dealers. To widen the maiitet nhay fte^jgosiitly be agreeable enough to the intereft of the pulUick; but te nti^dvV ^e competition muft always be againft it« and can icrveeiily t7 bvr;^:l0vy(>>^c their own bene&» an afaftlr(SriaK:iipon!thq idkxiS their ffittow dw" ns. The propof^l of any ne«y law^ or regulation of commerce which comes from this order, ought always to be liftened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the nK^ fcrUpulous, but with the moft fufpicious attention. It comes fnmi an order of men, whole intereft is never exactly the fame with that of the publick, who have generally an mtereft to deceive aiid even to opprefe the publick, and who accordingly have, upon many occafions, both deemed and opprelled it. Ytart XII. Price df the QuArter 6f Wheat caehYea& Avenge of the dif- ferent Prices of the famie Year. The averafc 1 each Year in oftheprefent Price of Money Time*. C X. J. £' *' i^. iC- '• d. 1S02 — 1* — — ^— — I 16 — . { - 13 — 7 iu. — -ii ..;.' ... — ? iao5 1 - »3 4 } — 13 5 2 — t I — IS — J ^•m «.' •— — — — 12*3 1* — M. — t— 1 16 — -"37 — 3 4 — i— •*- — 16 — "43 — ^ 2 — — -^ *-* • — 6 "-" 1*44 .— t — ' M* ^.i^ MOfc — 6 ■■" 1*46 'i^ 16 — • Mb ■ — . «WBfc s 8 — tM7 •^^ 13 4 MHk a_^ dUB ■2- — •~" ^m 1 4 ^ *— — »& 3 12 ■■" c * ■.1^ •«* \ ««b •_;. ■Mi •H. -Mi ■"■ 1*58 ] - '1 ^ \ -" 17 ttMs » *« — ' I — 16 -* J ■K ^~ ^^j^ ' '^iM -mm M^ w® it 16 ^ g — 8 « 1 ,,i.»« f 16 ]6 '— , 1286. b;; \ ■ ( r 1 4 "7 1 — Jh^. iM t''i'' < i< J •> l^AJi> Total, 3f Average Price, m k M 19 3«8 THE NATURE AND CAUSES OF BOOK Yenrs 1 XII. 'rice of the Qnartcr of Wlieat cacliYcar. Average of the dif- ferent Prices of the fame Year. Tlic average Price of each Year in Money ofthc prefent Times. /■' £' s. d. C' S' — — — — — — **■; r 2 4 — 1 — — — » ^^ — 14 — — — — ^_ ... •» X317 1 2 13 — X 19 6 5 18 6 4 — — ^ — p — — . — — — m—. » .. I — 6 8 — _—".—. _ _ • X336 .- . .- 2 !■ 1 — — — — 6 — 1.338 — 3 4 ' — — — — lo ' '—. -rr — * Total, 23 4 u; * Average Price • I 18 8 '.,■■■-■. '■■ 1 * K «^ »f .5- • V t(. * , * ■ f '■ t > ..■:(':h'1 ■•; 2(ri9r^ / Mfl4lw.'>t •%» • »••(» THE WEALTW OV NAriON'Sl Years XII. "339 1349 J3?9 1 36 1 '363 1369 1379 1387 1390 1 401 1407 1416 Price of the Qiarter of Wheat each Vear. £. 9 d. I 2 6 2 8 ( I i 1 M "~" J 4 4 — 1^ 2 »3 4 "» H — • 16 — , Id _ C ~~* 4 4l i 3 4 — 16 — Average of the dif- ferent Prices of the fame Year. Th» average Price of each Year in Money of the prcfent Times. X.'. s. d. iC. I 2 7 5 2 4 »5 9 4 :\ — H — 3 10 Total, Average Price, »7 8 12 '5 1423 1425 1434 H3i 1439 1440 1444 — 8 — 4 I 6 — 5 8 .4 1 - 1 44.5 1447 '44.8. 1449 — 6 4 4 4 4 8 6 5 8 i Ji 1 6 £,' •'• <'• > 3 4 — 42 >c. 2 2 vvn. s. 16 8 '3 >o 6 8 8 9 16 '3 10 16 Total, Average Price, J 2 15 d. 2 a 8 4 8 4 II 5 94- d. 4 8 4 ,: 3W CHAP. XI. w^ r 320 THE NATURE AND CAUSES OF Yrari XII. Price of the Quarter Wheal eacKYear. of Avcraia of the dif- ferent Pricea of the lame Year. £. /. J, £' /. J, 1453 — 5 4 — — — H5S — I a — " — "— "457 — 7 8 — — — 1459 •BM 1 z ^■> ■>M ^o 1460 — — . — — '463 { z 2 — I 8 1 — I 10 1464 — 6 8 _ —. — 14B6 I 4 — — — — 1491 — 14 8 — — — . H94 — 4 — — — . — . «49S — 3 4 — — — ■497 1 — — — — — The average Price of each Year in Money of the prcfcnt Timci. £• '. d. — 10 8 Total, Average Price, a «5 10 t6 3 to »7 2 6 5 4 4 8 I 11 — 8 9 — — «4 I 1499 »S04 1521 I5J» »5S3 «S54 »5S5 1556 »557 1558 "559 1360 { ~ll — 8 — — g — — 8 — ^ 8 — — 8 — — 4 — = J = 1 'I ^' — 8 — — 8 — iC- /. J. £■ '6 d. — — — — — — — — — 8 6 — — — I 10 — . ^- — — — 3 — — — — — 8 — — — — ■ — 8 — — — — — 8 — — — — — 8 — — — — — — — — IS 7 — IS 7 mmm _ _ ». 8 «_ — — — — 8 — — — — — 8 —■ Average Total, Price, — 10 THE WEALTH/ OF NATIONS. Year* XII. 1561 1562 »574 1587 '594 »S95 1596 1597 1598 »599 1600 1601 Price of* the Quarter of Wheat each Year. 1: 2 I 3 2 2 4 5 4 2 I I I J. z ] J. 8 8 16 4 4 16 »3 Avenge of tne dif- ferent Prices of the fame Year. £• t. d. ±z \ 16 8 19 2 17 8 14 ]o 412 — •f Total, Average Price, TIm average Price of each Year in Money of the prefcnt Times. - 8 -^ , — .8 -- • a — — . 2 I I I 28 4 — 16 — 3 2 2 2 ~" 4 12 — 12 16 19 »7 H 4 8 z 8 10 94- v»'. ./•» yii ' I r '5, ,-f i C H A P4 Xt. ;■ ^1 Vol. I. Tt ifi OS »-3 P«IN!» i! 322 THE NATURE AND CAUSES OP I.- ;.*;». 'Ul.if Prices of the Quarter of nine Bujhels of tbe heft or bigheft priced Wheat at Windjor Market, on Lady-day and Michaelmas^ from j^gS to 1764, both inchtfive-t the Price of each Tear being tbe medium between tbe bigheft Prices of tbofe Two Market Days, £' X, d. ,s r,^,, ^y . • • ■ f - ifeai's. \ <• c s. d. Years. 1595* _ ..— 2 1621, 1596, — 2 8 1622, i597» — 3 9 6 1623, 1598, — 2 16 8 1 624, i599» — I »9 2 1625, 1600, — I ^7 8 1626, 1601, — I H 10 1627, 1602, — I 9 4 1628; 1603, — I 15 4 1629, 1604, — — I 10 8 1630, 1605, — — I 15 JO 1631, 1606, — I 13 1632, 1607, — I 16 8 1633' 1608, — 2 16 8 1634, 1609, — — 2 10 ^hs* 16 10, — — I 15 10 1636, 1611, — I 18 8 1612, — 2 2 4 1613, — 2 8 8 • 1614, — 2 I 8^ 1615, — I 18 8 1616, — — 2 4 1617, — 2 8 8 1618, — 2 6 8 1619, — ■ — I »5 4 l620» ' 26] I 10 4 54 6i 2 I 6A I 2 2 2 2 2 I I 2 2 3 2 2 2 2 2 16)40 10 18 za 8 la 9 16 8 2 15 8 13 18 16 16 16 2 10 4 8 o o o 4 o o o 8 o 4 o o o 8 THE WEALTH OF NATIONS. 32 *; Wheat per quarter. | Whea t per quarter. CFTAP Years. £• J. £, X. ^. XI. 1637* -» 2 13 Brought over, 79 14 10 1638. -— «~ 2 17 4 1671, — —2 2 >639» -^ _ 2 4 10 1672, — — 2 I 1640, ^^ 8 4 8 1673, — — 2 6 8 1641, — . S 8 1674, — — 3 8 8 1642/ Wanting in the O ,675, — — 3 4 8 1643. 1644, account. The q year 1646 fup- plied by bifhop O 1676, — — I 1677. — — 2 18 2 16450 Fleetwood. 1678, — — 2 19 1646, — — 2 8 1679, — — 3 1647, — — 3 13 8 1680, — — 2 5 ]64ii. — . — 4 5 i68t, — — 2 6 8 1649, -r- — 4 1682, — — 2 4 1650, -,. — 3 16 8 1683, — — 2 1651, "T" ■"■ 3 13 4 1684, — — 2 4 o- 1652, — — 2 9 6 1685, — — 2 6 8 J653, — .. I IS 6 1686, — — I H 1654, — 1 6 1687, -^ — 1 5 2 1655. "T • " — I 13 4 1688, — — 2 6 1656, — ■ — 2 1 i6«9, — — I 10 i657» -^ — 2 6 8 1690, -*- — I 14 B 1658, — ^ *— «4' S 1691, -^ — I H 1659. — 1699, ^ -— 3 4 1667, 1668, ** f Ir6 4 4 170©, -^ — 2 — ■. — 2 •:* '^ ' '60)153 i 8 ,1670, . ."^' — 2 I 8 i 1 »" j( .w^ . 1 1 ■ • w ^N ' "Carryover, 'Tri 14 10 11 I. t^5 1726, — — 260 1758. - - 2 10 0>t 1727, — — 220 1759. — — 1 19 10 I 1728, — — 2 14 6 1760, — — I 16 6 1729, — — 2 6 10 1761, — — I 10 3 i73o» — — I 16 6 1762, — — I 19 i73i» — — I 12 10 ,763, — — 2- 9V- 1732. — ^ I 6 8 ,764, — — 269 1733. — over. I 8 4 64) 120 13 6 69 8 8 y *9 Carry 2 644 ►, - . i- THE WEALTH OF NATIONS. < Wheat per quarter. | wheat per quarter. Years. jC- ^' ^. Years. ' £• s. d. ^72^* — — I 12 10 1741. — — 2 6 8 1732* — — I 6 8 1742, — — 14 '733» — — I 8 4 1743. — — 4 10 1734. — — I 18 10 1744. — ■— 4 10 '73|» — — B 3 i745» — — 7 6 1736, — — 2 4 1746, — — 19 i737» — ■— I 18 1747. — — 14 10 1738. z z\'A 6 1748, — — 17 1739. 6. >749. — ' — 17 1740, — — 2 10 8 i7So» • 10] 12 6 : 10)18 12 8 il6 I 18 2 „ ' ■ ■ ^ ' X 17 3t 13 9t 325 ill IN'^ •■« BOOK • r y- II. ; ** »^» ....** Of the Nature, Accumulatioii, and Employment of Stock. . *, I -•-.!«. INTRODUCTION. IN that rode ftate of fociety in which there is no divifion of labour, in which exchanges are feldom made, and in which every man provides every thing for himfelf, it is not neceffary that any ftock ihould be accumulated or ftored up beforehand in order to carry on the bufmefs of the fociety. Every man endeavours to fupply by his own induftry his own occafional wants as they occur. When he is hungry, he goes to the forcft to hunt : when his coat is worn out, he cloaths himfclf with the (kin of the fiift large animal he kills : and when his hut begins to go to ruin, he repairs it, as well as he can, with the trees and the turf that are neareft it. 11 But when the divilion of labour has once been thoroughly in- troduced, the produce of " man's own labour can fupply but a very fmall pait of his occafional wants. The fai greater part of them are fupplied by the produce of other mens labour, which he purchafes with the produce, or, what is the fame thing, with the price of the produce of his own. But this purchafe cannot be made till fuch time as the produce of his own labour has not only been compleatcd, but fold. A ftock of goods of different kinds, therefore, 32« THE NATURE AND CAUSES OF BOOK therefore, muft be ftored up fotnewhere fufficient to maintain him> ^^' and to fupply him with the materials and tools of his work till fuch time, at leaft, as both thefe events can be brought about. A weaver cannot apply hinifelf entirely to his peculiar bufmels^ unlefs there is beforehand ftored up fomewhere, cither in his own pofTf m or in that of fome other perfon, a ftock fufficient to mail air. nim, and to fupply him with the materials and tools of his work, till he has not only compleated, but fold his web. This accumulation muft, evidently, be previous to his applying his induftry for fo long a time to (ach a peculiar bufmefs. As the accumulation of ftock muft, in the nature of things, be previous to the divifion of labour, fo labour can be more and more Cub lividcd only in proportion as ftock is previoufly more and more, accumulated. The quantity of mateiials which the fame ni.mber of people can work up, increafes in a great proportion as labour comes to be more and more fubdivided ; and as the operations of each workman are gradually reduced to a greater degree of fimpli- city, a variety of new machines come to be invented for facilitating and abridging thofe operations. As the divifion of labour advances, therefore, in order to give conftant employment to an equal num- ber of workmen,, an equal ftock of provifions, and a greater ftock of materials and tools than what would have been necedary in a ruder ftate of things, muft be accumulated beforehand. But the number of workmen- in. every bianch of bufinefs generally increafes with the divifion of labour in that branch, or rather it is the increafe of their number which enables them to clafs and fubdivide themfelve.s in this manner.. As the accumulation of ftock is previoufly necefTary for carrying on this great improvement in the produftivc powers of labour^ fo that accumulation naturally leads to this improvement. The 7' , perfon THE WEALTH OF NATIONS. 3*? I perfon who employs his ftock in maintaining labour, neceflarily Tntioduaion. wiflies to employ it in fuch a manner as to produce as great a quantity of work as poffible. He endeavours, therefore, both to make among his workmen the moft proper diftribution of employ- ment, and to furnifh them with the beft machines which he can either invent or aflford to purchaie. His abilities in both thefe refpefts are generally in proportion to the extent of his ftock, or to the number of people whom it can employ. The quantity of induftry, therefore, not only increafes in every country with the increafe of the ftock which employs it, but, in confequence of that increafe, the fame quantity of induftry produces a much greater quantity of work. Such are in general the tfk6is of the increafe of ftock upon induftry and its produflive powers. In the following k I have endeavoured to explain the nature of ftock, the efFeds of its accumulation into capitals of different kinds, and the efFefts of the different employments of thofe capi- tals. This book is divided into five chapters. In the firft chapter, I have endeavoured to fhow what are the different parts or branches into which the ftock, cither of an individual, or of a great fociety, naturally divides itfelf. In the fecond, I have endeavoured to explain the nature and operation of money confidered as a particu- lar branch (^ the general ftock of the fociety. The ftock which is accumulated into a capital, may eithet be employed by the perfon to whom it belongs, or it may be lent to fome other perfon. In the third and fourth chapters, I have endeavoured to examine the manner in which it operates in both thefe fituations. The fifth and laft chapter treats of the different efFe6ls which the different employments of capital immediately produce upon the quantity both of national induftry, and of the annual produce of land and labour. Vox. I. U u m m i PI i ;3<^ THE NATURE AND CAUSES OF CHAP. I. ' Of the Divijion of Stock. WHEN the (lock which a man poffeffes is no more than fufficient to maintain him for a few days or a few weeks, he feldom thinks of deriving any revenue from it. He confumes it as fparingly as he can, and endeavours by his labour to acquire fomething which may fupply its place before it be confumed alto- gether. His revenue is, in this cafe, derived from his labour only. This is the ftate of the greater part of the labouring poor in all countries. . . But when he pofTefTes flock fufficient to maintain him for months or years, he naturally endeavours to derive a revenue from the greater part of it j referving only fo much for his immediate confumption as may maintain him till this revenue begins to come in. His whole ftock, therefore, is didinguilhed into two parts. That part which, he ejipedls, is to afford him this revenue is called his capital. The other is that which fupplies his immediate con- fumption } and whicii confifts either, firft, in that portion of his whole ftock which was originally referved for this purpofe; or, fecondly, in his revenue, from whatever fource derived,, as it gra- dually comes in ; or, thirdly, in fuch things as had been purchafed by either of thefe in former years, and which are not yet entirely confumed ; fuch as a ftock of cloaths, houlhold furniture, and the like. In one, or other, or all of thefe three articles, confifts the ftock which men commonly refcrve for their own immediate con- fumption. 7 There THE WEALTH OF NATIONS. E are two different ways in which a capital n: ployed fo as to yield a revenue or profit to its employer. ;> 33» There are two different ways in which a capital may be em- CHAP. First, it may be employed in raifing, manufa£luring, or pur- chafing goods, and felling them again with a profit. The capital employed in this manner yields no revenue or profit to its employer, while it either remains in his pofleflion or continues in the fame (hape. The goods of the merchant yield him no revenue or profit till he fells them for money, and the money yields him as little till it is again exchanged for goods. His capital is continually going from him in one (hape, and returning to him in another, and it is only by means of fuch circulation or fucceflive exchanges that it can yield him any profit. Such capitals, therefore, may very properly be called circulating capitals. Secondly, it may be employed in the improvement of land, in the purchafe of ufeful machines and inflruments of trade, or in fuch-like things as yield a revenue or profit without changing mafters or circulating any further. Such capitals, therefore, may very properly be called fixed capitals. , Different occupations require very difte/^nt proportions be- tween the fixed and circulating capitals employed in them. The capital of a merchant, for example, is altogether a circu- lating capital. He has occafion for no machines or inftruments of trade, unlefs his fliop or warehoufe be confidered as fuch. Some part of the capital of every mailer artificer or manufac- turer muft be fixed in the inftruments of his trade. This part, however, is very fmall in fomc, a^'d veiy great in others. A niafter U u 2 taylor 33* THE NATURE AND CAUSES OF BOOK taylor requires no other infti'umcnts of trade but a parcel of needles. Thofc of tlie matter flioemaker are a little, though but a very little, more expenfive. Thofe of the weaver rife a good deal above thofe of the flioemaker. The far greater part of the capital of all fuch matter artificers, however, is circulated either in the wagea c their workmen, or in the price of their tnatenals, and repaid with a profit by the price of the work, . ,, ^ ^ . In other works a much greater fixed capital is inquired. In a great iron-work, for example, the furnace for melting the ore, the forge, the flitt-mill, are inttruments of trade which cannot be erefled without a veiy gieat expence. In coal-works and mines bf every kind, the machinery neceffary both for drawing out the water and for other purpofes, is frequently ttill more expenfive. That part of the capital of the farmer which is employed in the inttruments of agriculture is a fixed ; that which is employed in the wages and maintenance of his labouring fervants, is a circu- lating capital. He makes a profit of the one by keeping it in his own poneffion, and of the other by parting with it. The price or value of his labouring cattle is a fixed capital in the fame manner as that of the inftrumenis of hufl)andry : Their maintenance is a circulating capital in the fame manner as that of the labouring fervants. The farmer makes his profit by keeping the labouring cattle, and by parting with their maintenance. Both the price and the maintenance of the cattle which are bouglit in and fattened, not for labour, but for fale, are a circulating capital. The farmer makes his profit by parting with them. A flock of ftieep or a herd of cattle tiiat, in a breeding country, is bought in, neither for labour nor for fale, but in order to make a profit by their wool, by their milk, and by their increafe, is a fixed capital. The profit is made by keeping them. Their maintenance is a circulating capital. THE WEALTH OF NATIONS. 331 capital. The profit is made by parting with it j and it comes C HA P. back with both its own profit, and the profit upon the whole price of the cattle, in the price of the wool, the milk, and the increafe. The whole value of the feed too is properly a fixed capital. Tho* it goes backwards and forwards between the ground and the granary. it never changes mafters, and therefore does not properly circulate. The farmer makes his profit, not by its fale, but by its increafe. The general ftock of any country or fociety is the fame with that of all its inhabitants or members, and therefore naturally divides itfelf into the fame three portions, each of which has a dif- tin6l funftion or office. The Firft, is that portion which is referved for Immediate con- fumption, and of which the chaiaderiftick is, that it affords no revenue or profit. It confiflf in the ftock of food, cloaths, houf- hold furniture, &c. which hive been purchafed by their proper confumers, but which are not yet entirely confumed. The whole ftock of mere clvvcUing houfes too fubfifting at any one time in the country, make a part of this firft portion. The ftock that is laid out in a houfe, if it is to be the dwelling houfe of the propiictor, ceafes from that moment to lave in the fun£lion of a capital, or to afford any revenue to its owner. A dwelling houfe, as fuch, con- tributes nothing to the revenue of its inhabitant ; and though it is, no doubt, extremely ufcful to him, it is as his cloaths and houflio'd furniture nre ufct'ul to him, which, however, make a part of his cxpencc, and not of his revenue. If it is to be lect to a tenant for rent, as the houfe itfelf can produce nothing, the tenajit miift always pay the rent out of fome other revenue which he derives cither from labour, or ftock, or land. Though a houfe, therefore, may yield a revenue to its proprietor, and thereby ferve- ki the funftion of a capital to him, it cannot yield any to the i^jmv y . publick,. m 334 THE NATURE AND CAUSES OF J* ^P K pvtblick, nor fervc in the fundlion of a capital to it, and the revenue of the whol« body of the peoi>le can never be in the fmallefl degree incrcafed by Lt. Cloaths, and houHiold furniture, in the fame manner, fometimcs yield a revenue, and thereby fcive in the func- tion of a capital to particular perfona. In countries where maf- querndes are common, it is a trade to lett out mafquerade drefles for a night. Upholftercrs frequently lett furniture by the month or by the year. Undertakers Ictt the furniture of funerals by the day and by the week. Many people lett furniftied houfcs, and get a rent, not only for the ufe of the houfe, but for that of the fur- niture. The revenue, however, which is derived from fuch tilings, nnift always be ultimately drawn from fome other lource of reve- nue. Of all parts of the ftock, either of an individual, or of a focicty, refcrved for immediate confumptlon, what is laid out in lioufcs is moft flovvly confumed. A ftock of cloaths may lad feveral years : a ftock of furniture half a century or a century : but a ftock of houfcs, well built and propcily taken care of, may laft many centuries. Though the period of their total confump- tion, however, is more diftant, they are ftill as really a ftock rc- ferved for iiimicdiatc confumptlon as either cloaths, or houftiold furniture. •irf Thf, Second of the three portions into which the general ftock of the focicty divides itfelf, is the fixed capital; of which the cha- rafteriftick is, that it aftbrdsa revenue or profit without circulating or changing matters. It confifts chiefly of the four following articles : MK' First, of all ufeful machines and inftruments of trade which facilitate and abridge labour : Secondly, of all thofe profitable buildings which are the means of procuring a revenue, not only to their proprietor who letts THE WEALTH OF NATIONS. 335 ktts them for a rent, but io the pcrfon who poflcflcs them and C HA P. pays that rent for them j fuch as Hiops, warehoufes, workhoufes, farmhoufes, with all their necefTary buildings, ftables, granaries, ice, Thcfe are very different from mere dwelling houfcs. They are a fort of inftruments of trade, and may be confidercd in the fame light : Thirdly, of the improvements of land, of v. hat has been profitably laid out in clearing, draining, enclofmg, manuring, and reducing it into the condition m -ft proper for tillage and culture. An improved farm may very juftly be regarded in the fame light as thofo ufeful machines which facilitate an 1 abridge labour, and by means of which, an cqifel circulating capital ca , afford a much greater revenue to its employer. An improved Jurm is equally advantageous and more durable than anv of tliofo machines, fre- quently requiring no other repairs than t.ie Moft profitabl*. applica- tion of the farmer's capital employed in cultivating it : . . ... . M ,,'"■ - Fourthly, of the acquired and ufeful abilities of sill the inha- bitants or members of the lucicty. The acquifition of fuch talents, by the maintenance of the acquirer duiiug- his education, ftudy, or apprenticelhip, always cofts a real expence, which is a capital fixed and realized, as it were, in his perfon. Thofe talents, as they make a part of his fortune, fo do they likewife of that of the focicty to which he belongs. The improved dexterity of a work.- man may be confidercd in the lame light as a machine or indrui- ment of trade which facilitates and abridges labour, and which, though it cofts a certuui expence, repays that expence with a profit. :i ,i'«fVf,. .•'■ -'■1 The Third and laft of the three portions into which the general ftock of the fociety naturally divides, itfelf, is the circulating capital; m 336 THE NATURE AND CAUSES OF B O O K of which the chara6teriftick is, that it affords a revenue only by circulating or changing mafters. It is compofed likewife of four parts: First, of the money by means of which all the other three are circulated and diflributed to their proper ufers and confumers : SecondlV, of the ftock of provilions which are in the pof- feffion of the butcher, the grazier, the farmer, the corn-merchant, the brewer, &c, and from the fale of which they expeft to derive a profit: . » • * ]:.' Vi I Thirdly, of the materials, whether altogether rude, or more or lefs manufactured, of cloaths, furniture, and building, which are not yet made up into any of thofe three fhapes, but which remain in the hands of the growers, the manufacturers, the mercers and drapers, the timber-merchants, the carpenters and joiners, the brickmakers, &c. Fourthly, and laftly, of the work which is made up and ^ompleated, but which is ftill in the hands of the merchant or manufacturer, and not yet difpofed of or diitributed to the proper ufers and confumrrsj fuch as the finirtied work which we fre- quently find ready made in the (hops of the fmith, the caWnet- maker, the goldfmith, the jeweller, the china- meichant, &c. The circulating capital confifts, in this manner, of the provifions, ma- terials, and finished work of all kinds that are in the hands of their refpeCtive dealers, and of the money that is neceflary for circulating and diftributing them to thofe who are finally to ufe or to confumc them. Of THE WEALTH OF NATIONS. 337 Of theffe four parts three, provifions, materials, and finlflicd CHAP, work, are, either annually, or in a longer or Ihorter period, regu- larly withdrawn from it, and placed either in the fixed capital or in the (lock rcferved for immediate confumption. Every fixed capital is both originally derived from, and requires to be continually fupported by a circulating capital. All ufeful machines and inftruments of trade are originally derived from a circulating capital, which furnifhes the materials of which they are made, and the maintenance of the workmen who make them. They require too a capital of the fame kind to keep them in con- ftant repair. No fixed capital can yield any revenue but by means of a circu- lating capital. The moft ufeful machines and inftruments of trade will produce nothing without the circulating capital which affords the materials they are employed upon, and the maintenance of the workmen who employ them. Land, however improved, will yield no revenue without a circulating capital, which maintains tlie labourers who cultivate and colleft its produce. To maintain and augment the (lock which may be referved for immediate confumption, is the fole end and purpofe both of the fixed and circulating capitals. It is this ftock which feeds, cloaths, and lodges the people. Their riches or poverty depends upon the abundant or fparing fupplies which thofe two capitals can afford to the ftock referved for immediate confumption. So great a part of the circulating capital being continually with- drawn from it in order to be placed in the other two branches of the general ftock of the fociety, it muft in its turn require continual -Vol. I, X X fupplies. 338 THE NATURE AND CAUSES OF B O O K fupplies, without which it would foon ceafe to exift. Thele fup- plies are principally drawn from three fources, the produce of land, of mines, and of fiflieriea. Thefe afford continual fupplies of pro- vifions and materials, of which part is afterwards wrought up into finiflied work, and by which are replaced the provifions, mate- rials, and finifhed work continually withdrawn from the circulating capital. From mines too is drawn what is neceflary for maintain- ing and augmenting that part of it which confifts in money. For though, in the ordinary courfe of bufmefs, this part is not, like the other three, neceflarily withdiawn from it, in order to be placed in the other two branches of the general (lock of the fociety, it muft, however, like all other things, be wafted and worn out at laft, and fometimes too be either loft or fent abroad, and muft, therefore, require continual, though, no doubt, much fmaller fupplies. Land, mines, and fiftieries, require all both a fixed and a cir- culating capital to cultivate them j and their produce replaces with a profit, not only thofe capitals, but all the others in the fociety. Thus the farmer annually replaces to the manufa6lurer the provi- fions which he had confumed and the materials which he had wrought up the year before -, and the manufacturer replaces to the farmer the finiftied work which he had wafted and worn out in the fame time. This is the real exchange that is annually made between thofe two orders of people, though it feldom happens that the rude produce of the one and the manufaftured produce of the other, are direiSlly bartered for one another ; becaufe it feldom happens that the farmer fells his corn and his cattle, his flax and his wool, to the very lame perfon of whom he chufes to purchafe the cloaths, furniture, and inftruments of trade which he wants. He fells, therefore, his rude produce for money, with which he can purchafe^ wherever it is to be had, the manufactured produce he has occafion for. THE WEALTH CF NATIONS. 339 for. Land even replaces, in part at leaft, the capitals with which C HA P. fiflieries and mines are cultivated. It is the produce of land which draws the fifti from the waters; and it is the produce of the furface of the earth which extracts the minerals from its bowels. ' ,. ,' ; : '- ' , The produce of land, mines, and fiflieries, when their natural fertility is equal, is in proportion to the extent and proper appli- cation of the capitals employed about them. When the capitals are equal and equally well applied, it is in jnoportion to their natural fertility. : ■ ) » i - v ■, ,.i-WtC" '\i-i':.. In all countries where there is tolerable fecurity, every man of common undcrftanding will endeavour to employ whatever flock he can command in procuring either prefent enjoyment or future profit. If it is employed in procuring prefent enjoyment, it is a ftock refcrved for immediate confumption. If it is employed in procuring future profit, it muft procure this profit either by flaying with him, or by going from him. In the one cafe it is a fixed, in the other it is a circulating capital. A man mufl be perfedlly crazy who, where there is tolerable fecurity, does not employ all the flock which he com- mands, whether it be his own or borrowed of other people, in fome one or other of thofe three ways. : i In thofe unfortunate countries, indeed, where men are continually afraid of the violence of their fuperiors, they frequently bury and conceal a great part of their flock, in order to have it always at hand to carry with thern to fome place of fafety in cafe of their being threatened with any of thofe difaflers to which they confider them- felvqs as at all times expofed. This is faid to be a common praclice in Turky, in Indoflan, and, I believe, in mofl other governments X X 2 of 340 BOOK II. THE NATURE AND CAUSES OP of Afia. It feems to have been a common praftice among our anceC. tors during the violence of the feudal government. Treafure-trove was inthoie times confideredas no contemptible part of the revenue of the greateft fovereigns in Europe. It confided in fuch treafur^ a» was found conceal* d in the earth, and to which no particul; r perfon could prove any right. This was regarded in thofe times as fo im- portant an objevii, tl.at it was always confidered as belonging to the fovereign, and neither to the frnder nor to th*; proprietor of the land, unlefs the right to it had been convey ~d to the latter by an exprefs claufe in his charter. It was put upon the fame footing with gold and niver mines, which, without a ipecial claufe in the charter, were never fuppofed to be comprehended in the general grant of the lands, though mines of lead, copper, tin, and coal were, as things of fmaller confequence. i :. i, (. * ' ^ .. .' r; v.; . ' M.'v f ViU'.-i' ^v\<-i-y^ *■:• ,:^vr .b. J'. ''■ ' THE WEALTH OF NATIONS. ui C H A P. IL Of Money conjidered as a particular Branch of the general Stock . of the Society t or of the Expence of maintaining the National Capital, j IT has been ftieWn in the firft book, that the price of the greater part of commodities refolves itfelf into three part**, of w^ich one pays the wages of the labour, another the profits of the ftock, and a third the rent of the land which had been employed in pro- ducing and bringing them to market : that there are, indeed, fome commodities of which the price is made up of two of thofe parts only, the wages of labour, and the profits of ftock : and a very few in which it confifts altogether in one, the wages of labour : but that the price of every commodity neceffarily refolves itfelf into fome one or other or all of thefe three parts ; every part of it which goes neither to rent nor to wages, being neceffarily profit to fome- body. v*,.,,t,:. . : ■•,■, ... ', ■ ,; •■.]■ Si NCR this is the cafe, it has been obferved, with regard to eveiy particular commodity, taken feparately; it muft be fo with re- gard to all the commodities which compofe the whole annual produce of the land and labour of every country, taken coinplexly. The whole price or exchangeable value of that annual produce, muft refolve itfelf into the fame three parts, and be parcelled out among the different inhabitants of the country, either as the wages of their labour, the profits of their ftock, or the rent of their land. CH But Lm • ,'.A (.^ •* I'4f • BOOK II. THE NATURE AND CAUSES OF But though the whole value of the annual produce of the land and labour of every country, is thus divided among and conftitutes a revenue to its different inhabitants, yet as in the rent of a pri- vate eft:ite we diftin,?jUifli between the grofs rent and tlie neat rent, fo may we likewile in the revenue of all the inhabitants of a great country. The grofs rent of a private eftite cotnpiehenJs whatever is paid by the farmer: the neat rent, what remains free to the landlord, after dedu6ling the exponce of i umagcment, of repairs, and all other neceflary charges; or what, without hurting hi? tlla .;, h-; can afford to place in his fiock refervcd for immediate confuniption, or to (|)cnd upon his table, equipage, tlie ornaments t 'lis houfe and furniture, his private enjoyments and amufen;cnts. His real wealth h in proportion, not to his grofs, but to his neat rent. The ;^fofs revenue of all the inhabitants of a great country, comprehends the whole annual produce of their land and labour : the neat revenue, what remains free to them after dedu(51ing the expence of maintaining; firft, their fixed; and, fecondly, their cii culating capital ; or what, without encroacl ling upon their ca- pital, they can place in their flock referved for immediate con- fumption, or fpend upon their fubfiftence, ronveniencies and amufements. Their real wealth too is in proportion, not to their grofs, but to their neat revenue. The whole expence of maintaining the fixed capital, mufl evi- dently be excluded from the neat revenue of the fociety. Neither the materials neceffaiy for fupporting their uieful machines and inlVmments of trade, their profitable buildings, &c. nor the pro- duce of the labour necefTary for fafhioniiig thofe materials into the proper form, can ever make any part of it. The price of that labour may, indeed, make a part of it ; as the workmen fo employed .♦ THE WEALTH OF NATIONS. 343 employed may place the whole value of their wages in their ftock C HA P. referved for immediate confumption. But in other forts of labour, both the price and the produce go to this ftock, the price to that of the workmen, the produce to that of other people, whofe fubfiftence, conveniencies, and amufements, are augmented by the labour of thofs workmen. The intention of the fixed capital is to increafe the produftive powers of labour, or to enable the fame number of labourers to perform a much greater quantity of work. In a farm where all the neceffary buildings, fences, drains, communications, &c. are in the moft perfeft good order, the fame number of labourers and labouring cattle will raifc a much greater produce, than in one of equal extent and equally good ground, but not furnifhed with equal conveniencies. In manufaftures the fame number of hands allifted with the beft machinery, will work up a much greater quantity of goods than with more imperfeft inftruments of trade. The expence which is properly laid out upon a fixed capital of any kind, is always repaid with great profit, and increafes the an- nual produce by a much. greater value than that of the fupport which fuch impiovemcnts require. This fupport, however, ftill requires a certain portion of that produce. A certain quantity of materials, and the labour of a certain number of workmen, both of which might have been immediately employed to augment the food, cloathing, and lodging, the fubfillence and conveniencies of the fociety, are thus diverted to another employment, highly ad- vantageous indeed, but ftill different from this one. It is upon this account that all fuch improvements in mechanicks, as enable the fame number of workmen to perform an equal quantity of work, with cheaper and ftmpler machinery than had been ufual before, are always regarded as advantageous to every fociety. A certain quantity of materials^ and the labour of a certain number 7 «f' i 344 THE NATURE AND CAUSES OF BOOK of workmen, which had before been employed in fupporting a more complex and expcnfive machinery, can afterwards be ap- plied to augment the quantity of work which that or any other macliinery is ufeful only for performing. The undertaker of feme great manufaftory who employs a thoufand a-ycar in the main- tenance of his machinery, if he can reduce this expence to five hundred, will naturally employ the other five hundred in pur- chafing an additional quantity of materials to be wrought up by an additional number of workmen. Tiie quantity of that work, therefore, which his machinery was ufeful only for performing, will naturally be augmented, and with it all the advantage and conveniency which the fociety can derive from that work. The expence of maintaining the fixed capital in a great country, may very properly be compared to that of repairs in a private eftate. The expence of repairs may frequently be neceflary for fupporting the produce of the cflate, and confequently both the grofs and the neat rent of the landlord. When by a more proper direftion, however, it can be diminiihed without occafioning any diminution of produce, the grofs rent remains at leaft the fame as before, and the neat rent is neceflaiily augmented. But though the whole expence of maintaining the fixed capital is thus neceflarily excluded from the neat revenue of the fociety, it is not the fame cafe with that of maintaining the circulating ca- pital. Of the four parts of which this latter capital is compofed, money, provifions, materials, and finifhed work, the three lafl, it has already been obferved, are regularly withdrawn from it, and placed either in the fixed capital of the fociety, or in their ftock referved for immediate confumption. Whatever portion of thofe confumable goods is not employed in maintaining the former, goes all to the latter, and makes a part of the neat revenue of the ' fociety. \' THE WEALTH OF NATIONS. 345 Ibciety. The maintenance of thofe three parts of the circulating CHAP, capital, therefore, withdraws no portion of the annual produce from the neat revenue of the fociety, befides what is neceflary for maintaining the fixed capital. The circulating cn;>ltal of a fociety is in this refpefl different from that of an individual. That of an individual is totally ex- cluded from making any part of his neat revenue, which mufl con- fift altogether in his profits. But though the circulating capital of every individual, makes a part of that of the fociety to which- he belongs, it is not upon that account totally excluded from making a part likewife of their neat revenue. Though the whole goods in a merchant's fhop mult by no means be placed in his own flock referved for immediate confumption, they may in that of other people, who from a revenue derived from other funds, may regularly replace their value to him together with its profits, without occafioning any diminution either of his capital or of. tlieir's.. MoNEV, therefore, is the only part of the circulating capital of a fociety of which the maintenance can occafion any diminution in their neat revenue. . The fixed capital, and that part of the circulating capital which confifts in money, fo far as they affedl the revenue of the fociety, bear a very great refemblance to one another; First, as thofe machines- and inflruments of trade, &c. re- quire a certain expence fiifl to erc6l them and afterwards to fuppoit them, both which expences, though they nrake a pait of the groCs,. are dedu<5lions from the neat revenue of the fociety j fo the ftock of money, which circulates in any country muft require a certain ■ Vol. I, Y y expence,. •46 THE NATURE AND CAUSES OF BOOK expence, firft to colled it, and afterwards to fupport it, both which expences, though tliey make a |)art ok' the grofs, are, in the fame manner, deductions from the neat revenue of the fociety. A cer- tain quantity of very valuable materials, gold and fUver, and of very curious labour, inftead of augmenting the ftock referved for immediate confumption, the fubfiftcnce, conveniencies, and amufe- ments of individuals, is employed in fupporting that great but «xpenfive inftrumcnt of commerce, by means of which every indi- vidual in the fociety has his fubfiflence, conveniencies, and amufc- ments, regularly diftributcd to him in their proper propoitions. Secondly, as the machines and inftruments of trade, 5cc. which compofe the fixed capital either of an individual or of a fociety, make no part either of the grofs or of tlie neat revenue of citlierj {o money, by means of which the whole revenue of the fociety is regularly diilributed among all its different members, makes itfelf no part of that revenue. The great wheel of circulation is alto- gether different from the goods which arc circulated by means of it. The revenue of the fociety confifls altogether in thofe goods, and not in the wheel which circulates them. In computing either the grofs or the neat revenue of any fociety, we mufV always, from their whole annual circulation of money and goods, dedudt the whole value of the money, of which not a fmgle farthing can ever make any part of either. It is the ambiguity of language only which can make this pro- pofition appear either doubtful or paradoxical. When properly explained and underflood, it is almofl: felf-evident. When we talk of any particular fum of money, we ibmetimes mean nothing but the metal pieces of which it is compofcd; and fometimes we include in our meaning fome obicure reference to the THE EALTH OF NATIONS. 347 the goods which can be had in exchange for it, or to the power of C HA P. purchafing which the pofTeffion of it conveys. Thus when we fay, that the circulating money of England has been computed at eighteen millions, we mean only to exprefs the amount of the metal pieces* which fome writers have computed or rather have fiippofcd to circulate in that country. But when we fay that a man is worth fifty or a hundred pounds a-year, we mean com- monly to exprefs not only the amount of the metal pieces which arc annually pa"d to him, but the value of the goods which he can annually purohafe or confume. We mean commonly to afcertain what is or ought to bu his way of living, or the quantity and quality of the necefTaiies and conveniencics of life in which he can with propriety indulge himfelf. When, by any particular fum of money, we mean not only to cxprck) the j mount of the metal pieces of which it is compofed, but to include in its iigiiification fome obfcure reference to the goods which can be had in exchange for them, the wealth or re- venue which it in this caie denotes, is equal only to one of the two values which are thus intimated fomewhat ambiguoufly by the fame word, and to the latter more properly than to the former,, to the money's-worth more properly than to the money. Thus if a guinea be the weekly pcnfion of a particular perfon,, he can in the courfe of the week puichafe with it a certain quantity ©f fubfiftence, convenicncies, and amufements. In proportion as this quantity is great or frnall, fo are hi? real riches, his real weekly revenue. His weekly revenue is certainly not equal both to the guinea, and to what can be purchaftd v-tU it, but only to one or other of thofe two equal values ; and to the latter more pro- perly than to the former, to the guinea's- worth rather than to the guinea. • i -r. . » ' , , 'D' - ■ Y y 3^ ■ l"" I'l- . '% I 348 BOOK II. THE NATURE AND CAUb:.s ■ r .v c Ik tlic pcnfion of fucli a pcrfon was jiaul to him, not *ii goIJ, but in a weekly bill for a guinea, his revenue fuicly would not I'u properly cunfid: in the piece of paper, as in wliat he could get for it. A guinea may be conlidcrcd as a bill for a certain quantity of neceflaiies and convcnicnd>;s upon all the tiadcfmen in the neighbourhood. The revenue of the peifon to whom it is paid, docs not fo properly conlill in the piece of gold, as in what he can get for it, or in what he can exchange it for. If it could be ex- changed for nothing, it woul.!, like a bill upon a bankrupt, be of X\Q more value than the moil ulclefi piece of paper. Though the weekly, or yearly revenue of all the different in- habitants of any country, in the fame manner, may be, and in .reality frequently is paid to them in money, their real riches, how- ever, the real weekly or yearly revenue of all of them taktn to- gether, muft always be great or fmall in proportion to the quan- tity of confumable goods which they can all of them purchafc with this money. The whole revenue of all of them taken together is evidently not equal to both the money and the confumable goods ; but only to one or other of thofc two values, and to the latter more properly than to the former. Though wc frequently, therefore, exprefs a perfon's revenue by the metal pieces which are annually paid to him, it is becaufc the amount of thofe pieces regulates the extent of his power of purchafing, or the value of the goods which he can annually af- ford to confume. Wc ftill confider his revenue as confilHng in this power of purchafing or confuming, and not in the pieces which convey k. But if this is fufRciently evident even with regard to an indivi- dual, it is ftill more fo with regard to a fociety. The amoimt of . the THE WEALTH OF NATIONS. S49 the metal pieces wlilch arc annually paid to an individual, is often C H Ai>. •precifcly ctpial to his revenue, and is upon that account the Ihoiteft and beft exprcfTion of its value. Hut the amount of the metal j)iccc8 which circulate in a focicty, can never be equal to the re- venue of all its members. As the fame guinea which pays the weekly pcnfion of one man to-day, may pay that of ;inothcr to- morrow, and that of a third the day thereafter, the amount of the metal pieces which annually circulate in any country, muft always •be of much Icfs value than the whole money penfions annually paid •with them. But the power of purchafing, the goods which can fucccfTively be bought with the whole of thofe money penfions as they are fucceflTively paid, muft always be precifcly of the fame •value with thofe penfions; as muft likewifc be the revenue of the different nerfons to whom they are paid. That revenue, there- fore, car^ict confift in thofe metal pieces, of which the amount is •fo much inferior to its value, but in the power of puichafing, in the goods which can fuccefllvely be bought with them as they cir- 'culate from hand to hand. :li! Money, therefore, the great wheel of circulation, the great inftrument of commerce, like all other inftruments of trade, though it makes a part and a very valuable part of the capital, makes no part of the revenue of the fociety to which it belongs; and though the metal pieces of which it is compofed, in the courfe of their annual circulation, diftribute to every man the revenue -which properly belongs to him, they make themfelves no part of that revenue. ■ ' • •• Thirdly, and laftly, the machines and inftruments of trade, &c. which compofe the fixed capital, bear this further rcfcmblance to that part of the circulating capital which confifts in money; that as every faving in the expence of ereding and fupporting thofe machines. 35° BOOK 11. THE NATURE AND CAUSES OF machines, which does not diminifh the produ£Hve powers of labour, is an improvement of the neat revenue of the fociety ; fo every faving in the expence of colle^ing and fupporting that part of the cir- culating capital which coniifts in money, is an improvemmt o£ exactly the fame kind. It is fufficiently obvious, and it has partly too been, explained' already, in what manner every faving in the expence of iUpportir <■ the fixed capital is an improvement of the neat revenue of the fociety. The whole capital of the undertaker of every work is nccef- farily divided between his fixed and his circulating capital. While his whole capital remains the fame, the fmaller the one part, the greater muft necefTarily be the other. It k the circulating coital which furnifhes the materials and wages of labour, oad puts induftry into motion. Every faving, therefore, in the expence of maintaining the fixed capital, which does not diminifli the productive powers of labour, muft increafe the fund wlhich puts tnduftry into motion, and confequently the annual produce of land and labour, the real revenue of every fociety. The fubftitution of paper in the room of gold end filver money, replaces a very expenfive inftrument of commerce with one much lefs coftly, and fomedn>e8 equally convenient. Circidation comes to be carried on by a new wheel, which it cofts lefs both to ere£t and to maintain than the old one. But in ^at manner this opera- tion is performed, and in what manner it tends to increafe either the grofs or the neat revenue of the fociety, is not altogether fo obvious, and may therefore require fome further explication. - , ,,; ^ ., There are feveral different forts of paper money ; but the circu- lating notes of banks and bankers are the fpecies which is beft known, and which feems beft adapted for this purpofe. 35 When THE WEALTH OF NATIONS, 35' When the people of any paiticular country have fuch con- fidence in the fortune, probity, and prudence of a particular baxiker, as to beljeve that he is always ready to pay upon demand fuch of his promifTary notes as are Ukely to be at any time prefented to him ; thofe notes come to have the fame currency as gold and filver money, from the confidence that fuch money can at any time be had for tijyem. A PARTICULAR banker lends among his cuilomers his own promifTary notes, to the extent, we ihall fuppofe, of a hundred thoufand pounds. As thofe notes ferve all the purpo&s of money, fan debtors pay him the iame intereft as if he Kad lent them fo much money. This intereft is the fource of his gain. Though (bme of thofe notes are continually coming back upon him foi' payment, part of them continue to circulate i'or months and years together. Though he has generally in circulation, therefore, notes to the extent of a hundred thouiand pounds, twenty thouland pounds in :gokl and £lver may, frequently, be a fufficient provifion f(x- an- swering occaiional demands. By this operation, therefore, twenty thoufand pounds in gold and filver perform all the funftions which a hundred thoufand could otherwile have performed. The (ame exchanges m'^y be made, the fame quantity of confumable goods nuiy be circidated and diftributed to their proper confumers, by means of his promifTary notes, to the value of a hundred thou- fand pounds, as by an equal value of gold and filver money. Eighty thoufand pounds of gold and filver, therefore, can, in this manner* be fpared from the circulation of the country } and if different operations of the fame kind, fhould, at the fame time, be carried on by many different banks and bankers, the whole circulation may thus be condu6led with a fifth part only of the gold and filver which would otherwifc have been requifite. .\y\. Let 3Sa THE NATURE AND CAUSES Or BOOK II. Let us fuppofe, for example, that the whole circulating moneys of fome particular country amounted, at a particular time, to one million fterling, that fum being then fufficient for circulating the whole annual produce of their land and labour. Let us fuppofe too, that fome time thereafter, different banks and bankers iffued. promiflary notes, payable to the bearer, to the extent of one million, rcferving in their different coffers two hundred- thoufand. pounds for anfwering occafional demands. There would remain,, therefore, in circulation, eight hundred thoufand pounds in gold; and filver, and a million of bank notes, or, eighteen hundred thoufand pounds of paper and money togetlicr. But the annual produce of the land and labour of the country had before required: only one million to circulate and diflribute it to its proper eonfumers, and that annual produce cannot be immediately aug- mented by thofe operations of banking. One million, therefore, , will be fufiicient to circulate it after them. The goods to be bought and fold being precifely the fame as before, the fame quantity of money will be fufficient for buying and felling them. The channel of circulation, if I may be allowed fuch an expreflion, will remain precifely the fame as before. One million we have fuppofed fufficient to fill that channel. Whatever, therefore, is poured into it beyond this fum, cannot run in it, but muft overflow.. One million eight humhed thoufand pounds arc poured into it. Eight hundred thoufand pounds, therefore, mufl overflow, that funi being over and above what can be empjoyed in the circulation of the country. But though this fum cannot be employed at home, it is too valuable to be allovt'ed to lie idle. It will, therefore, be fcnt abroad, in order to feck that jirofitable employment which it cannot find at home. But the paper cannot go abroad ; becaufe at a di (lance from the banks wliich iffue it, and from the country in which payment of it can be exacted by law, it will not be received in common payments. Go^d and iilvcr, therefore, to the. amount THE WEALTH OF NATIONS. 35S 5 mount of eight hundred thoufand pounds will be fent abroad, and C HA P. the channel of home circulation will remain filled with a million of paper, inflead of the million of thofe metals which filled it before, „. ,. , , mi But though fo great a quantity of gold and filver is thus fent abroad, we muft not i nagine that it is fent abroad for nothing, or that its proprietors make a prefect of it to foreign nations. They will exchange it for foreign goods of fome kind or another, in ^rder to iui)ply the confumption either of fome other foreign count'} > ot their own. If thev employ it in purchafing goods in one foreign country in order to fupply the confumption of another, or in what is called the carrying trade, whatever profit they make will be an addition to the neat revenue of their own country. It is like a new fund, created for carrying on a new trade ; domeftick bufinefs being now tranf- aded by paper, and the gold and filver being converted into a fund for this new trade. • I If they employ it in purchafing foreign goods for home con- fumption, they may either, firil, purchafe fuch good; as are likely tobeconfumed by idle people who ' voduce nothing, fuch as foreign wines, foreign filks, &c.; or, Secondly, they may purchafe an additional ftock of materials, tools, and provifions, in order to maintain and employ an adrlitional nuiiiber of induftrious people, who re-produce, with a pioiit, the value of their annual con- flimption. v^j . . ■ - : .; .i^ ■ , So far as it is employed in the firft- way, it promotes prodigality, increales expencc and confumption without inrrcafing produdlion, or eftabii.'hing any permanent fu id for fupporting that expencc, and is in every refpeft hurtful to the fbclety. Vol. I. 2; z So ^ 11 I -1'! '* ,H ii; -1* • ^^^4 THE NATURE AND CAUSES OF BOOK So far as it is employed in the fecond Way, it prcjtfrtbtfes induftry ; and though it increafes the confamption of the fociety, it provides a permanent fund for fupporting that confumplion, the people wh6 confume, re-producing, with a profit, the whole value of theiV annual confumption. The grofs revenue of the fociety, the annual produce of their land and labour, is increafed by the whole value which the labour of thofe woikmen adds to the rtiaterials upon whicli they are employed j and their neat revenue by what remains of this value, after dedu6ling what is neceflary fot fupporting the tools and inftruments of their trade. That the greater part of the gold and filver which, being forced abroad by thofe operations of banking, is employed in purchafmg foreign goods for home confumption, is and muft be employed in purchafing thofe of this fecond kind, feems, not only probable, but almoft unavoidable. Though fome particular men may fome- times increafe their expence very confiderably though their revenue does not increafe at all, we may be afTured that no clafs or ordt* of men ever does fo j becaufe, though the principles of common prudence do not always govern the condudt of every individual, they always influence that of the majority of every clafs or order. But the revenue of idle people, confidered as a clafs or order, cannot, in the frnalleft degree, bf .icreafed by thofe operations of banking. Their expence in general, therefore, cannot be much increafed by them, though that of a few individuals among them axiay, and in reality fometimes is. The demand of idle people, therefore, for foreign goods, being the fame, or verv nearly the fame, as before, a very fmall part of the money, which being forced abroad by thofe operations of banking, is employed in purchafing foreign goods for home confumption, is likely ro be employed in purchafing thofe for their ufe. The greater part of it will naturally be THE WEALTH OP NATIONS. 35^ be deftined for the employment of induftry, and not for the main- C H' A P. tenance of idieaefs, u- When we compute the quantity of induftry which the cir- culating cap'tal of any fociety can employ, we muft always have regard to thofe parts of it only, which confift in provifions, mate- rials, and finifhed work : the other, v/hich confifts in money, and which ferves only to circulate thofe three, muft always be deduced. In order to put induftry into motion, three things are requifite ; materials to work upon, ools to work with, and the wages or recompence for the fake of which the work is done. Money is neither a material to work upon, nor a tool to work with ; and though the wages of the workman are commonly paid to him in money, his real revenue, like that of all other men, confifts, not in the money, but in the money's worth ; not in the metal pieces, but in what can be got for them. The quantity of induftry which any capital can employ, muft, evidently, be equal to the number of workmen whom it can fupply with materials, tools, and a maintenance fuitable to the nature of the work. Money may be requifite for purchafmg the mate- rials and tools of the work, as well as the maintenance of the workmen. But the quantity of induftry which the; vvliole capital can employ, is certainly not equal both to the money which pur- chafes, and to the materials, tools, and maintenance, which are purchafed witli it ; but only to one or other of thofe two values, and to the latter more propcily than to ihe former. m \i' »; When paper is fubftituled in the room of gold and filver money^ the quantity of the materials, tools, and maintenance, which the whole circulating capital can fupply, may be increafed by the whole value of gold and filver which ufed to be employed in purchafmg r , Z z 2 them. t JS« BOOK II. THE NATURE AND CAUSES OF them. The whole value of the great wheel of circulation and diflribution^ is added to the goods which are circulated and diftributed by means of it. The operation, in fome meafure, re- fembles that of the undertaker of fome great work, who, in confe- quence of fome improvement in mechanicks, takes down his old machinery, and adds the difference between its price and that of the new to his circulating capital, to the fimd from which he fur- nifhes materials and wages to his workmen, . ' What is the proportion wliich the circulating money of any country bears to the whole value of the annual produce circulated by means of it, it is, perhaps, impoflible to determine. It has been computed by different authors at a fiftli, at a tenth, at a twentieth, and at a thirtieth part of that value. But how fmall foever the proportion which tjie circulating money may bear to the whole value of the annual produce, as but a part, and fre- quently but a fmall part, of that produce, is ever deftined for the maintenance of induflry, it muft always bear a veiy confiderable proportion to that part. When, therefore, by the fubftitution of paper, the gold and filver necelTary for circulation is reduced to, perhaps, a fifth part of the former quantity, if the value of only the greater part of the otlier four-fifths be added to the funds which are deftined for the maintenance of induftry, it muft make a very confiderable addition to the quantity of that indulhy, and, con- fequently, to the value of the annual produce of land and. labour. An operation of this kmd has, within thefe five and twenty or thiity years, been performed ui Scotland, by the ere6lion of new banking companies in almoft every confiderable town, and even in fome couiftiy villages. The effeds of it have been prccifcly thofe above defcdbed. The bufmefs of the country is almoft entirely , . carried THE WEALTH OF NATIONS. 357 carried! on by means c^ tiie paper of thoie different banking CHAP, companies, vrith which putchaies and payments of all- kinds are commonly made. Silver very feldom appears, except in the change of a twenty fhiTlings bank note, and gold ftill feldomer. But thotigh the condu^ of all thofe different companies has not been unexceptionable, and has accordingly required an a£t of pariiament to regulate it; Ae country, notwithftanding, has evidently derived great benefit from their trade, I have heard it aflbited, that the trade of the city of Glafgow doubled in about fifteen years after the firft ere<^ion of the banks there ; and that the trade of Scotland has more than (quadrupled fmce the ilrit eredlion of the two publick banks at Edinburgh, of which the one, called The Bank of ScoUand, was eftabli(hed by a6t of parliament in 1695, the other, called The Royal Bank, by royal charter in. 17&7. Wihether the >trade, either of Scotland in general, or of the city of Glafgow in particular; has really increafed in fb great a proportion, during fo fliort a period, I do not pretend to know. If either of them has increafed in this proportion, it Teems to be an eflfefl too great to be accounted for by the fole operation of thiscaiife. That the trade and induftry of Scotland, however» kave increafisd very confiderafbly during this period, and that the banks have contributod a good deal to this increase, cannot be doubted. The value of the iSver money which circulated in. Scotlamji l^efore the umon, in 1707, and which immediately after it waj. brought into the bank of Scotland in order to be re-cqirwl,, amounted to 411,1171. los. pd. fterling. No account Ijas been gpt of the gold coin j but it app^rs from the antieot accounts qf tl>e aunt of Scotland,, that the vaiue of the gold annually coined- fome'^hat exceeded that of the filver *. There were a good many, people too upon this occafion, who, from a diffidence of re»^ * See Rudlman's Preface to Anderfon's Diplomata, &c. Scotiz. Vol. I. * Z 3 payment^. ii I ! I I i '«! \m ^■t/:/. Bi¥*K ptygifnt. M »(0«, bring thfjr filver intotlie h^nk of $oollao^i 1914, there wm, bcfidev^ fome £ngli(h coin, which vfu not C9M«i4^ in. The whole value of the gold and filver^ therefoL'e, whidjk circulated in Scotland before the union, cannot be eftimated aci lef» than a million fterling. It fisems tq have coqyl^t ited alofftft-; the whole ciiculation of that country; for though, tl^e circulation, of the bank of Scotland, which had . then no rivi4» W^ cpn« Itderable, it feems to have made but a very fmall part of the, whole. In the prefent times th« whole ciiculation of . Scotland cannot be eftimated at lefs than two millions, of which thaft'part which confifts in gold and filver, mott probably, does not amount to half a million. But though t!ie ciiciilating gold and fllvor, of Scotland have fuffered fo great a diminution during thifi.periQdiq it$ real riches and profperity do not appear to li^ve fufferedtMuiyr. < Its agriculttire, manufadhires, tnC^ tr^e, i ,on the . contrary,'- the annual produce of its land and labour, c {have evideotly beeQij augmented. t <• > I .^iniTiKi. s; it^ail -D't 'iitrffj-);;!;^ .«r-/f*);fei "^bju*'. lr^-;r';if ?r:- fj'MlJ to t'p.'h-:- ii ^ffV ^It is chiefiy ^ difcounting bills of exchange, tKat is, ' fey Sd- v^iCin^ mdney upon them before they are due, that the gt(sitir p^irt bi banks and bankers iflfue 'theii* promiiTory notes. They' deduct aTways, upon whatever fum they advance, th6 legil infereft till the bill (hall become due. The payment of 'l cu ■:€r:;i Let us fuppofe that all the paper of a particular bank, which the chrculation of the country can eafily abforb and employ, amounts exaftly to forty thoufand pounds ; and that for anfwering occafional demands, this bank is obliged to keep at all times in its cof&rs ten thoufand pounds in gold and filver. Should this bank attempt to circulate for^>four thoufand pounds, the four thoufand pounds which are over and above what the circulation can eafily abforb , 3 A 2 and ^«4 THB NATURE AND CAUSES OF B <^Q K 9nd employ, «4U rf(um iipon it alinoft as faft as they iu« iifued; ' 1^ For anfwering Qc<;ftfipi|(kl ^eoAaiMlfu ^oifforc^ this hukk ought to Iceep at ali tioies u;^ its cofiff s. not tkntn thiOO&nd pounds onIy» but fourteen thoufand pounds. It will thus gain nothing by the intereft of the four thoufand pounds exceffive circulation; ai>d it will Ipfe the whole expence of continoaUy coUcfUng, four thojifand pounds in ^old and filver wluch wiU be coniinually;. going put p£ its CQ^s as faft as they are brought into them. Had every particular banking company a^wagrst undorftood and attende4 to its <>vku particular intereft, tihe circulation never could have been overltocked with paper money. But every par- ticular banking company has not always underftood or attended to its own particular inteieft, and the cirealation has frequently beea overf^ked with papev iponaey. By ifliiing tx>o great a quandty of piqper, of which the excels was continually returning, in order to be exchanged for gold and filver, the bank of England was for many years-together obliged to coin gold to the extent of between eight hundred thoufand pounds and a. million a year ; M an exp^nce which was feldom below one and a half or two per cent. This moncfy Was fent down by the waggon, and infured by the carriers at an additional expence of three quarters per cent, or fifteen fhillings on the hundred jpemndtk ThoTe agents were not always able to repleniih the coffers of their employers fo faft as they were emptied. In this cafe the refource of the banks was, to draw upon their correfpon- dents in London bills of exchange to the extent of the fum which th^ wanted. When thofe cori^rpondents afterwards drew upon theffl for the payment of this fum, together with the intcreft,. and ft (^ommiffion, fome of thole banks,, from the diftrefs into- whidi their excefiive circulation had thrown them^ had fometimes no other means of fatisfying this draught but by drawing a feeond fttt of bills either upon the fame, or upon fome other ^(M-refpondents in London; and the fame fum, or rather bills for the fame fum, would in this manner make fometimes more than two or three journies; the debtor, bank, paying always the in- tereft and eommiflion upon the whole accumulated fum. Even-: thofe Scotch banks which never diftinguifhed themfelves by their extream imprudence, were fometimes obliged to employ this ruinous refource. The gold coin which was paid' out either by the bank of England, or by the Scotch banks, in exchange for that part of their paper which was over and above what could be employed hi the circulation of the country, being likewife over and above - what could be employed in that circulation, was fometimes fent abroad in the fhape of coin, fometimes melted down and fent abroad in the fhape of bullion, and fometimes melted down and. fold to the bank of England at the high price of four pounds 7 ^^ 3^6 BOOK IL THE NATURE AND CAUSES OF an ounce. It was the neweft, the heavieA-, and the beft pieces only which were carefully picked out of the whole coin, and either fent abroad or melted down. At home* and while they remained in the Ihape of coin, thofe heavy pieces were of no more value than the light : But they were of more value abroad, or when melted down into.bullion, at home. The bank of England, notwithftanding their great annual coinage, found to their aftonilhment, that there was every year the fame fcarcity of coin as there had been .the year before; and that notwithftanding tlie great quantity • of good and new coin which was every year iffued from the bank, the ftate of the coin, inftead of growing better and better, became every year worfe and worfe. Every year they found themfelves under the neceflity of coining nearly the fame quantity of gold as they had coined the year before, and from the con- tinual rife in the price of gold bullion, in confequence of the continual wearing and clipping of the coin, the expence of this great annual coinage became every year greater and greater. The bank of England, it is to be obferved, by fupplying its own coffers with coin, is indireftly obliged to fupply the whole kingdom, into which coin is continually flowing from thofe coffers in a great variety of ways. Whatever coin therefore was wanted to fupport this exceflive circulation both of Scotch and Englifli paper money, whatever vacuities this exceflive circulation occafioned in the neceflary coin of the kingdom, the bank of England was obliged to fupply them. The Scotch banks, -no doubt, paid all of them very dearly for their own imprudence and inattention. But the bank of England paid very dearly, not only for its own imprudence, but for the much greater imprudence of almoft all the Scotch banks. The over trading of fome bold projedlors in both parts of the united kingdom, was the original caufe of this exceflive cir- culation of paper money, * . What '*. ^ iM*t»'i tH,f^ WEALTH OF N4t:ipif% UH 3«7 . WWA? A bank can mth |>ropriety advance to a mcrchanl or CHAP, wtil^^rtalKr of fny kind, is not, dther the whole caj^tal wA ' ' ' jmkk he t^da* or even any conliderable part of that capitals Itit jH^at part, of it only, which he would otherwife be obliged to keep by him unemployed, and in ready money for apfwering occaiional demands. If the paper money which the bank advances ijfcyer exceeds thia value, it can never exceed the value of the |cjfd an^ filvef, which would neceflarily circulate in: the country Uf ^ere w^ ho paper money ; it can never exceed the quan- tity whi^h the circulactio^ of the country can eafily abforb and ^ When i blink' J^fcbiints toll ftiefchant a real* till of exchange orawti by a real creditor upon a real debtor, and which, as fcon Hf it becomes due, is really paid by that debtor; it only advances- to hiffl a part of the value which he would otherwife be obliged \f> kd^ by him unemployed, and in ready money for anfwer* 1^ ing with fUch tuftomdrs, ought to obferye^MrjA^j^tj^^ail^nt^^^ whethfi" ih the corttfc of Ibme fli^ peri!^ i()^ j^^ fykM%L, or ei|^t mondif, forexample) die iutil otf ihc teJMytUetlt^ i'<^l^^^ it cOmMonljK tveeiveS from them, si, or b not, ft|!ly r'%«^ for dients THE WEALTH OF NATIONS. Oients from all their cttftomers, and did not care to deal with any perfbn» whatever might be his fortune or credit, who did not mike, what they called, frequent and regular operations with them. By this attention, befides faving almoft entirely the extraordinary expence of replcnifliing their coffers, they gained two other very confiderable advantages. FfRsT, by this attention they were enaUed to make fome tolerable judgement nceming the thriving or declining cir- cumftances of their debtors, without being obliged to look out for any other evidence befides what their ovm books afforded themi men being for the mofl: part either regular or irregular in their repayments, according as their circuRvftances are either thriving or declining. A private man who lends out his money to perhaps half a dozen or a doaen of debtors, may, either by himfelf or his agents, obierve and enqmre both conftantly and carefully into die conduct and fitoation of each of them. But a banking company, which lends money to perhaps five hundred different people, and of which the attention is continually occu* pied by obje£ts of a very different kind, can have no regular information concerning the condufi: and circumftances of the greater part of its debtors beyond what its own books afford it. In requiring frequent and regular re^paymdms from all their cuftomers, the banking companies of Scotland i^id probdbly this advantage in view. Secon»lt, by this attention they ffecured thcmfelves from the poflibility of iflfuing more paper money than what the cir- culation of the country couM eafily abforb and employ. When they obferved that within moderate periods of time the re-pay- ntents of a particular cuflomer were upon moft occafiofts fully equal to the advances which Ihey had made to him, they might Vol. I. 3 B b« 3*9 370 THE NATURE AND CAUSES OF B O O K be aflurcd that the paper money which they had advanced to him, had not at any time exceeded the quantity of gold and filver which he would otherwife have been obliged to keep by him for anfwering occaflonal demands ; and that confequently the paper money which they had circulated by his means had not at any time exceeded the quantity of gold and filver which would have circulated in the country, had there been no paper money. The frequency, regularity and amount of his re-payments would fufHciently demonftrate that the amount of their advances had at no time exceeded that pait of his capital which he would otherwife have been obliged to keep by him unemployed, and in ready money for anfwering occafional demands; that is, for the purpofe of keeping the reft of his capital in conftant employment. It is this part of his capital only which, vnthin moderate periods of time, is continually returning to every dealer in the fliape of money, whether paper or coin, and continually going from him in the fame (hape. If the advances of die bank had commonly exceeded this part of hi» capital, the ordinary amount of his re-payments could not, within moderate periods of time, have equalled the ordinary amount of its advances^ The ftream which, by means of his dealings, was continually running into the coffers of the bank, could not have been equal ' to the ftream which, by means of the fame dealing?/ wa»con<« tinually running out. The advances of the bank paper, by exceed-^ ing the quantity of gold and filver which^ had there* been no fuch advances, he would have been obliged to keep by him for anfwering occafional demands, might foon come to exceed the whole quantity of gold and filver which (the commerce being fuppofed the fame) would have circulated in the.cov atiy had there been no paper money i and confequently. to exceed would, no doubt, be a very convenient creditor to fuch traders and undertakers. But fuch traders and undertakers would, furely* be moft inconvenient debtors to fuch a bank. It is now more than five and twenty years ftnce the paper money iflued by tlie different banking companies of Scotland was fully equal, or rather waA fomewhat more than fuUy equal to what the circulation of the country could eafily abfoil) and employ. Thofe companies, therefore, had (o long ago given, all the afliftance to the traders and other undertakers of Scotland. which Yhb wealth or nations/ m Whkh it is pofnble for iMnks and bankers, conftftently with CHAP, their own intereft, to give. They had even done fomewhat more. They had over-traded a little, and had br>i?ght upon them- felves that lofs, or at leaft that diminution of profit, which in this particular bufinefs never fails to attend the fmalleft degree •f ovor-tmding. Thofii traders and other undertakers, having got f^ much flinftance from banks and bankers, wished to get ftill more. The banks, they f«m to have thought, could extend their credits to whatever fum miglit be wanted, without incurring any other expence belides that of a few reams of paper. They complained of the contracted views and daftardly fpirit of thd directors of thofe banks, which did not, they faid, extend thelf credits in proportion to the extenfion of the trade of the coun- try; meaning, no doubt, by the extenfion of that trade, the extenfion of their own projects beyond what they could carry on, either with their own capital, or with what they had credit to borrow of private people in the udtal way of bond or mort« gage. The banks, they feem to have thought, were in honour bound to fupply the deficiency, and to provide them with all the capital which they wanted to trade with. The banks, how- enrer, were of a different opinion, and upon their rcfufing to* «(tend their credits, ibme of tlicfe traders had reooanfe to an rapedient which, for a time, ferved their purpoie, though at » much greater expence, yet as effectually as the utmoft extenfiorv of bank credits could have done. This expedient wa« no other than the well-known fliift of di-awing and re-drawing } the fliifc to which unfortunate tradcors have rometimes recourfc when the^ are upric« of the iCommiiTtoia happfufdoto nSs, w.ffrh^ he md9 obliged £0 pay cQiii{)ojiin{ Hock In the greater part of mercantiU projoAs are Aippoiid to sun ^weevi ftx and ten per cent.j it muft have be«n a veiy formate l|)o^ culation of which the returns could not only repay the enoTr mous expence at which the money was thus borrowed for car- rying it on; but a0bni» belides, a gciod furpLus profit to the {no. )e£lor. Many vaft and exteniivc pro)e£h, however, were under- taken, and for feveral ye^s carried on w^hout aoy ^her fm)4 ^ fupport them befides what was jaifcd at this enormous «x|>siice. The proje^ors, no doubt, had in thor .golden dfvains t^c aooft diftinfl vifion of this great faofit. Upon thehr twAking, however* either at the end of their projeAs, or when they were jno.jp^i^^r able to carry them on, they veryieldom, I believe, had tbc good fortune to find it. i; hwc bfo^ \ • •• ' ^ ' . •• • -.^mH o-trJHf' T^B bills wMch A in Edinburgh drew upon B in L^dd^^ he regularly diibounted two months befori^ tiky were -due with jome bank or banker in Edinburghj \infd the bills which B in London re-drew upon A in Edinburgh, he as regularfy difcounted either with the bank of England, or with ibme other bankers in Lon- don. Whatever was advanced upon fuch circulating bills was,, in Edinburgh, advanced in the paper of the Scotch banks, and in London, when they wei% difcounted at the bank of England, in the paper of that bank. Though the bills upon which this paper had been advanced, were all of them repaid in their turn as foon tis they became due; yet the nAViQ which hod been really ad* ■^^^ , .^^'' ' ' vanccd # THE WEALTH OF NATIONS. 377 vanced upon th« it bill, was never really returned to the banks C HA p. which advanced ki, becaufe before each bill became due, another hill was always drawn to fomewhat a greater amount than the bill which was foon to be pdd; and the difcounting of this other bill was ellentially necei&ry towards the payment of that which was 'ibon to be due. This payment, therefore, was altogether fictiti- ous. The ftream, which by means of thofe circulating bills of exchange, had once been made to.run out from the. coffers of the banks, was never replaced l^y ar>y ftream which really run into them. The paper which was iflfued upon thofe circulating bills Qf (exchange, amounted, upon many occalions, to the whole fund deflined for carrying on fome vaft) and exteniive.projedl, of agri- culture, commerce, or manilfa£lures; «nd not merely to that (part of it which, had there been no ! paper money, the pr^je£tqr ) woi^^ave been obliged to keep by * him , '. unemployed and; in ready 'inonty, foranfwering occafional demands. The greater .part of account, immediaitely f returned upon .the banks in oikler to be exdiangod^fbr gold and filver, -which they •were to find as they coukl. It 'was .a coital which ilhofe ^pi^jjcftors had very artfully Contrived to At&vr from thofe banks, not only without' their 'knowledge * or- deliberate ooafent,' but ffor and ico cka% that they are trading, not with any capital of fihdr owAj but with the capital which he advances to them. But this difcovery is notaA-- together fo eafy when they difcount their bills fomeitimeBi with lone banker, and fometimes with another, and when the fame two pen* fons do not conftantly draw and re>draw upon one another,; but occaiionally run the round of a great circle of projeflors, who find it for their intereft to aflift one another in this method of i^ifing money, and to render it, upon that account, as di^ult sva pof- fible to diftinguifh between a real and a fictitious bill of exchange; between a bill drawn by a real creditor upon a real debtor, and a bill for which there was properly no real creditor but, tliej^k which difcounted it ; nor any real debtor but the proje(5lor who made ufe of the money. When a banker had eve^ m^e ihis difcovery, he might fometimes make it too late, and might,^d that he had already difcounted the bills of thofe projectors jtp.i^ great an extent, that by refufing to difcount any more, bf^w^uM neceflarily make them all bankrupts, and thus, by ruining tj^pm, might perhaps ruin^himielf. For his. own intereft- and ,fafet^, therefore, he might find it nece(&ry, in this very perilpus fituat^n, to go on for fome time, endeavouring, however, to withdraw gradually, and upon that account making every day greater, and greater difficulties about difcounting, in order to force, tl^ofe |)jroj|^- tors by degrees to have recourfe, ather to other bankers, or to other methods of raifing money j (b as that he himfelf might, as foon as poflible, get out of the cirde. The difficulties^ accordingly, which the bank of En^and, which the principal bankers in London, and which even the more prudent Scotch banl^s l>egan, after a certain time, and when all of them had. already gpnp too far, to make about difcounting, not only alarmed, but enraged in the hig^eft degree thofe projectors.. Their own diflref^j,. of which this prudent and neceilary referveof the banks, was, ho doubt. TWE ft Wi: A L inV aO R ijN a T 10 N 6w 37* doubty the immediate' occafKMif tbey calkd the diArefs of the coun- c H A p. .tiy^'' dMd this diftre& of the country* they faid, was altogether o#ing[ita the^horancei. :t>ufiUMumity< and bad condudl of the banldj whidi did not give a, iufficiratly liberal aid to the fpirited undertakings! of thofe' who exerted themfelves in order to beautify, improve, and enrich the country. It was the, duty of the banks* tiwy ieeined to think, to lend for as long a time* and to as great an (extent as dieynught wiih to borrow. The banks, however, tiyrefufiftg ifi this manner to give more ci'edit to thofe to whom they had steady given a great deal too much, took the only method by whichit was now poffible to fave either their own credit, or the piiblickcre^t of the country. . i h *M i<^...-;,f- , ori/v iOJj:, (....; .; : . , JKy* v(U< 'ion ; u imauailih ii„u\ y '"^iN'te'nfld(iroif'M^m\)iir ^Hfci^ftreisi'i' tfe^^ 'baiik Was efta- '^iifli^d in Scotland for the exprefs purpofe of relieving the diftrefs iif thd cduntry. The delign Wds generous; but the execution *^a^ iili|)rud6ht, and th6 nature and caufes of the diftrefs which it •iiiiefitirto relieve, were nbt, perhaps, well underftood. This bank *^ii m6tt liberal than any other had ever been, both in granting 'ca(h accounts, and in dilcounting bills of ej^ehange. With regard "ib the latter, it feems to have made fcarce'any diftindtion between %al and circulating bills, but to have difcounted all equally. It "w4stilc'aVbv^^^' principlebf this bank to advance., upon any rea- sonable fec^iirity, the whole capital which was to be employed in 'improvements of which the returns are the moft flow and diftant, ' fucli as the improvements of land. To promote fuch improvements -was even faid to be the chief of the publick fpirited purpofes for ' which if was inflitiited. By its liberality in granting cafli accounts, ■ and in difcounting bills of exchange, it, no doubt, iflued great ' quantities of its bank-notes. But thofe bank-notes being* the greater part of them, over and above what the circulation of the country could eafily abforb and employ, returned upon it, in 3 C 2 order 1 m ^id TJFIE NAtURE ANb fcAWSES' OP B^6^K oWer to be iicfchanged for gold and filver, ai Itift at they Mrene C3$G> irtlied. Its Ccffers ^efe nerer wcM fiHed. The Icapital which had httti fabfcfibcfd to this bank at two difftrtnt fiibfbriptlons, amovinted to orie hotidt'ed and fixty thonfand pounds, ©f which eighty per cent, only was paid np. This fam ought to have been paid in at feveral difftrcnt inftalfments. A great part of the ppoprietorti when they paid in their firft inftallment, opened a cafh account Witti the bank i and the direftors, thinking themfdvc* obliged to treat their own proprietors with the fame liberality with whkh they treated all bther men, allowed many of them to borrow upon this . ca(h accotint wh^ they paid in wpon all their (tibfequent infbll- ments. Such payments, therefore, only put into one eoffibr, wkafhad the moment before been taken out of another. But had the coffers of this bank been filled e^^r fo Well, its exceflive 'cireolatioit ibuft' have emptied them fafter iJnn tkey«ould hafve been replenifhied by any c^her exipedient but the ruinoue one of drawing- upon. Loiv» don, and when the bill -bocaiae due, payii^ it, together wit)i intereft and commiffion, by anolhn^ draught upon the iaooe place. Its coffers httmg been fiUed fbvery iU» it is faid to h9w been driven to this jrefoorce within a very few months ^fter it began to •do -baiinefs. The eftates of the proprietors of this bank wei% 'Wordi ^eral milHons, and by their fubfcuiption 'to the original -bend or c<»itra6): of the bank, were really pledged for anfweriog rail its engagements. By means of the great credit which fb great a pledge ^neceffinily gave it, it was, notwithftanding its too liberal conduA, enabled to carry on bufmefe for more than two years. When tt was ol^ed 'to fl^, it had in the circulation about two 'hundred thoufclnd' pounds in bank-notes. In order to fqp. '-port ifaedrcuIati(Hi of thofenotes, which were continually retufh- ing upon (it as hft as^tliey were iiTued, it had been conftantly in the pinCfciee >of /drawing bills of exchange upon London, of >%irhkh'thie number aixl vsdue were continually incfeafii>g, ain^, ' ■ - 4 when THE- WEALTH OF NATIONS. 38* lilien It (tQf>t, ampunted to upwards of fix hundred thoufand C^jA^r {KMinda* Thi9 bank, therefore, had, in little more than ,t|>e CQurie of two years, advaqped to diiScrent people upwards o^ faght l^uodred thoufand poinds at iive per cent. Upon tlie twq liundred thoufand pounds >yhich it circulated in bank-notes, this five per cent, might, perhaps, be confidered as clear gain, withou|: Any (^er deduction befides the expence of management. But iiippQ ifp^mr^d^ of fix hundred thoufand pounds, for which it was fc^tixmalliy drawing bijls of exchange upon London, it was paying, in the way of intereft and commiHlon, upwards of eight per Gent, and was confequently lofing more than three per cent, upon ^j;B^n.|^ee-^vu:t|iso^^4Ut3 dealings. k» {|<,7^H. operations of this hank feem to have produced eSe£ls quit9^ oppofite to thofe which were intended by the particular perfons who planned and directed it. They feem to have intended to fap- ^oit t];ie fpirited undertakings, for as fueh they confidered them^, jnrhiqh yreue at that tin\e carrying on in different parts of the coun« .try) and at tlie iame t^e, by drawing the whole banking bufinefs ^o tliemfelves, to fupplant all the other Scotch banks; particularly jtlitofe e/Ubliihed at Edinburgh, whofe backwardnefs in difcounting .]M^9.of exchange had, given fome ofifence. Tliis bank, no doubt, ^ve iwe ten^poraiy relief to thofe projectors, and enabled them Jig carry on thqir proje£i;s for about two years longer than they ^j^pvjjd pt^erwife hf^ve dpne. But it thereby only enabled them to _g,et fo mpch deeper into det>t, fo that when ruui came, it fell fo ,n^e heavier both upQn them ^nd upon ^heu- creditors. The ,pperatiQn8 of .this bankt therefore, inftead of relieving, in reality '^g^vated in the long-rnn tlie di|trefs \yhich thofe projectors ha^ .biTPPght both upon th?n»felyes^ upon their country. It wpv^l^ have .been much better for thcinfelves, their cre4itprs ,an4 their country, .h^d the^ greater part pf theni,t>cen obliged tp ilpp two years fponer i^'i' than ' fhis bank afforded to ttiofe proje£lors, proved a real arid perihaneht XiMcf to the other Scotch banks. All the dealers in cii-culatinibJfls of exchange, which thofe other banks had become fo l)adtwar^'iii dilcounting, had recourfe to this new bank, where they were it-. ceived with open arms. Thofe other banks, therefore, were enabled to get very eaflly out of that fatal circle, from which they coald not otherwife have difengaged themfelves without in^irring a confiderable lofs, and perhaps too even fome degree o^'dij- ■m.ii.,;/ ./ J&rfj.ol _sij5.u6qai03 yd v •. •." - ' •> ibib gfli It* the long-run, therefore, the operations of this bank increaled. the real diftrefs of the country which it meant to relieve; an^ effectually relieved from a very great diftrefs thofe rivals whbniit meant to fupplant,- , ' ' \'., ' At the firft fetting out of this bank, it was the opinion of fi>me people, that how fafl foever its cofiers might be emptkd* :it fugbt eafily replenifh them by raifing money upon the fecnrities of ' thole to whorti it had advanced its paper. Experience, I believe, ibon -convinced them that this method of raifing money was by much too flow to aiifwer their purpofe; and that coffers which ori^natty Mtrt fo infilled, and which emptied themfelves fo very faft* could out^ is not likely to be mote judicions in the choice of its (debtors, than a piivate perfon who knds out his mohey among a few people whom he knows, and in whofe fober and friijgal condu6l he thinks he has good reafon to confident The debtors of fuch a /batik, aa that: whofe conduct: I have been jgivinfg fonte account. 2h THE NATUR'e ANb CAUSES oV B OOK account olf, were likely, tHe grektcr pirt'bf IfikiA.'to Ife dilwfe- rical proje^ors, the drawers and re-drawers of circulktiAg bihs of exchange, who would erhploy the money in extrav»|;aEnt under- takings, which* with all the afltftance that could be givAt t^ettit they would probably never he able to cohiplete, ianU Which, if they Hiould be compleat^^ would Heifer repay the exp^ce Whieh they had really coft, would never 'af!brd a fund capable' df 'rnHn- taining a quantity of labour equal to that which had b6en em- ployed about them. The fober and frugal debtors 6f ptiv^te perlbns, on the contrary, would be more likely *to eriipWy the money borrowed in fober undertakings which were proportioned to their capitals, at^d whi^h, though they might have lefs 6f the grand atid the marvellous, woiild h^ve more 6f fhe fbUd and the profitable, which wduld repay with a liaJrge^itofitvf hat- ever had been laid out updn'thehl, ahd whi^h V^obfd thus dffbrd a fund capable of mainiftinirtg'a^fnuch^gf^^er '^ififcHVy^'^f lib^ th^t> that which had been employed about them. The fuccsfs .pf this operation, therefore, without enicreafing m the fmalleft degree the capital of the country, would only have trilhslej'red a great part of it frpm prudent and profitable, to imprudent and unpro^table un4ertakings. '■ 'That tfie'JncIuftry^ of Scotla'Ad kngdifHed for 'wirtt 6f ttidWey to employ it, was the opinion of the famous Mr. hitw. By isftjl- blirtiiiig a bihk of a pirticWlar kind. Which, he fcertls to have ' iniagined, ' Alight iflue pkper to ' the aWo^t 6f the '^Whdle value of airthe lands iii the country, he prbpttfed to reAiedy tJris want of ' money. The' parliartjehf of Scotland, whea' he firft prbpofed his prc^eft, did riot think pybper to addptit. It v^as aftervfai*ds adopted, with forae variati6ns, by thcdake of Oricahs, -at^-fliat ' time r^ht df Ffknte. The idea of the poffibility of* mnltiplying 'paper riicJriey td'klhidft'afn^fextfefit, was the reklfdttridatibrf^bf what IS called the Mldifiippi fchenie, the liioff ejftiavagWit'projiea^bbfh ...i-' -. r . of THE WEALTH OF NATiaNS. of banking snd ftiock- jobbing that, perhaps, the workl ever faw. CHAP. The different operations of this fcheme are explained fo fUlIy, fo clearly, and with (6 much order and diftin^tnefs, by Mr. Du yerney, in his Examination of the Political Reflections upon ^Commerce and Finances of Mr. Du Tot, that I (hall not give any account of them. The principles upon which it was founded are explained by Mr. Law himfclf, in a difcourfe concerning money and trade, which he publiihed in Scotland when he firft propofed iiis project. The fplendid, but vilionary ideas which are fet forth in that and fome other works upon the fame principles, {till con- tinue to make an imprefHon upon many people, and have, perhaps* in part, contributed lo that excefs of banking, which has of late 1 been complained of both in Scotland and in other places. ^, Thu bank of England is the greateft bank of circulation in t3w:ope. It was incorporatecl, in purfuance of an a£t of parlia- iinent, by a chaiter under the great feal, dated the 27th July, 1694. ^,1t at that time advanced to government the fum of one million two fi^VP^dred thoufand pounds, for an annuity of one hundred thou- eiand pounds; or for 96,000 1. a year intereft, at the rate of eight t per cent.« and 4000 1. a year for the £xpence of management. The credit of tbe new government, eftablilhed by the revolution, we may believe, muft have been very Jow, when it was obliged to \ "borrow at fo high an intereft. I tU 1697 the bank was allowed to enlarge its capital ftock by an cngraftment of 1,001,1711. los. Its whole capital ftock, there- ^'JTore, amounted at this time to 2,201,171 1. los. This engraft- ^Vient is faid to have been for the fupport of publick credit. I n 1 69 6 jtallies had been at forty, and fifty, and fixty per cent, difcount, and bank notes at twenty per cent.*. During the great recoinage of the filver, which was going on at this time, the bank had thought proper to difcontinue the payment of its not^s, which neceffarily voccafioned their difcredit. , ,(, ^..^ .-.^/-;|.^ ■ ai .><, * James Poftlethwaite's Hiftory of the Publick Rcv*miey*p^ s^Jt; ) Vox. L D IM 3«6 TIW3 WAfltiJRE AtHfl) CAtJSES TPJF B O O K Im .purTuAncc of the ych Aime^ e* nrii. the bank -sdMMcod ^mI. paid into the cxchequei', the iUm of ^oo»oool.i auiumg m all the Aim of 1,600,000 1. which it had advanced up^n kt original annuity of 961O00I. intercft and 4000I* for rcxpanee <«f nuinagement. In 1708, therofore> the credit of goveranmt was aa good as that of private perfons, iince it could borrow at ftx |)er cent, intereft, the common legal and market rate of thofe times. In purfuance of the fame a6l, the bank cancelled exchequer bills to the amount of 1,775,0271. 17 s. 10 |d. at fix per cent, intereft, and was at the fame time albwed to take in ilibicriptions for doubling its capital. In 1708, therefore, the capital of the bank tunounted to 4,402,3431.1 and it had advanced to governmenk the fum of 3,375,0271. 178. xo|d. Br a call of fifteen per cent, in 1709, there was paid in W made (lock 656,204 1. i s. 9 d. ; and by another of ten per 'c^ht; ,in 1710, 501,4481. 12 a. I id. In confequence of thofe two calls, therefore, the bank capital amounted to 5,559,995.1. 14.S. 8d.. * In purfuaiice of the Sth George I. c. Ttxi. 1^ batik purchdred' of the South Sea Company, flock to the amount of 4,060,000 1, u and in 1722, in confequence of the fubfcriptions which it had: taken in for enabling it to make this purchafe, its capital flbck was; increafed by 3,400,000!. At diis time,, therefore, the bank hadl advanced to the publick 9,375,027!. 17 s. lo^d. j and its cajiital'. flock amounted only to 8,959,995!. 148. 8d. It was upon this occafiori diat the fum which the bank had advanced to the publick,. and for which it received intereft,l>eganfirfl to exceed its capital flock, or the jfumifor livhich it paid a dividend to the propiietoi^ of Lmlc: flock J or, in other words, that the bank began to hav f\n \n.ni' vided capital, over and above its divided one. It has continued to> have an uriolrldcd capital of the fame kind ever fmce. In 1746- the bank had, upon different occafions, advanced to the pub-i^ ■*!'■■•• /•. • •; lick.' THE WEALTH OF NATIONS. 3«7 ^ tut96i9oQt\. and its divuied oflpital hadbeen raUbd by different C ha P( eallg miAi Aibftriptions to io,79«»ooo1- The (Vate of thofe two fsmsi hm continued to be the lamt evei fitace. In puiToance of the 4lh ai Oeorgt III. e. 25. tHe bank ..^1 eed to pay to government for Iks renewal of its charter, 1 10,000 1. without interel^ or i*epaytneiYt. Thif ftiin, therefore, dnd not increafc either of thofe two c«ther Anns. The dividend of the bank hat varied according t'> the vai'iafions in tt".*. sate of the intereft which it has, at different times, received fou tic money it had advanced to the publick, as well an Sfecordkng to other circomftances. This rate of intereft has gradually been reduced from eight to three per cent. For fom« years paft the bank dividend has been at five and a half pa* ceat. The Aability of the bank of England is equal to that of the Britifh government. All that it has advanced to the pi ^lick mufl: he loft before its creditors can fuftain any lofs. No other banking company in England can be eilabliihed by a£l of parlia- ment, or can coniift of more than fix members. It a£ls, lot only &s an ordinary bank, but as a great engine of ftate. It receives and pays the greater part of the annuities which are due to the creditors of the publick, it circulates exchequer bills, and it advances to government the annual amount of the land and malt taxes, which 4ire frequently not paid up till fome years thereafter. In thoiedif*. ferent operations, its duty to the publick may fometimes have obliged it, without any fault of its directors, to overftock the cir- culation with paper money. It likewife difcounts merchants bills» and has, upon feveral different occations, fupported the credit of the principal houfes, not only of England, but of Hamburgh and HoHand. Upon one occafion it is faid to have advanced for this purt^ pofct in one week, about 1,600,000 1. j a great part of it in bullion. I do not, however, pretend to warrant either the greatnefs of die (urn, or the ihortnefs of the time. Upon other occafions, this grejet ^company has been reduced to the neceflfity of paying in iixpences. 3 D a It i 3^8 BOOK II. Joli^ llj iinot! %y «iugtnet^l5rig'th«'44^lf«l«o^HkP^c«^*fl^ fey rendering a greater pii^t of thaticapitid a€live'^his of banking by providing, if I may be allowed to violent a metaphor, a fort of >vaggon-way through t^e air; "enable the country to convert, as it were, a great part of its highways into good paftures and corn fields, and thereby to in- creafe very confiderably the annual produce of its land and labour. *rhe commerce and induftry of the country, however, it muft be acknowledged, though they may be fomcwhat augmented, caimot be H'^H^ ^yfgn^ him, Q\m tt at^i cmi% 3% vpoiit ttl^jDfWfJalian wing^ ; ,pf; paper money,, as, wljien they tyfav^ abQVi^^Hpon the foUd ground of , gold andjlver. Over ap4 ahpM« th^^^j;jdfnts tp wt^ich^Uiey^ar^ qcpofed irojpi (be, unikUfubefs of the ipQndiiiiSbors^of ^is paper mp^ey, they are liaise to rqveral,other^« from which no prudence or fjkill of thofe condudtora can g^a|:4 *. An ijmiiccefsful war, for example, in which the enemy got pofleflion of the capital, and confequently of that treafure which fupported the credit of the paper money, would occafion a much greater confufion in a country where the whole circulation waj canned oiji, by paper^ tjian in one where the greater part of it was car,!fi^fo circttia(tedf bbttveen the dfealeri and the confumerar whatever is bought by tfe efealewi being ultimately deftined to be fold to the conAnnera. T*« cU:©** ktion between the dealers, as it is carried on by wholefale, requires generally a pretty large fum for every particular tranfa£tion. That between the dealers and the confumers, on the contrary* as it is gene^ly carrlttl on by retail, freqAiently requires b>it very fn(iaU ones, a ihilling, or even a halfpenny, being often fufficient. But final! hitis circulate nluch fafter than large ones. A Shilling changes mdfters more frequently than a guinea, and a halfpomy mote ^equentty than a (hilling. Though the annual purehaf^ of aH tht conlumers, therefore, are at leaft equal in value to thofe of afl, thediesders, they can generally be franfa^ed with a much ibiaKer q;iianttty (^ money ; the fame pieces, by a more rapid cii$\iltnicm» ferving as the inflirument of many more purcha(b3 of the one kind than of the other. , ,, ,,. ,,, riM-^naDw ri S , . i .. .:.( ...J. "i., * ..... Paper money may be fo regulated, as either to confine it(elf very much to the drcuiation between the difiorent' dealers, pr to extend itfelf likewife to a great part of that between the dealers and the confumers. Where no bank notes are circulated under ten pounds valuei, as in London, paper money confines itfblf Very much to the circulation between t Ae dealers. When a ten pound bank note comes into the hands of a confumer* he is generally obliged to change it at the firft fliop where he has occafion to purchafe five Ihillings worth of goods, fo that it often retumsr ln«o the hatids of « dealer, before the confumer has fpent the fortieth part of the jfnoney. Where bank notes are iflfued for fo fmatl dims asr twenty ihillings, as in Scotland^ paper money extends if felf to a eonfiderable {MTt of the circulation between dealers and cor^umers. Before the mSt of parliament, which put a fVop t& the circulafion of ten and i' 4 r five T H E ^WB ALTM O P'^ N Jit t O N^ J 3^« ^veiihiUing) dotes, it filled i iM grd^r ^ dF liha^ du^tltliitibh; C HA p. ia tthisxiinfeixcics of Nortii America> ipaper was commonly iillied for foihaall a fum ^s a {hilling, and filled alm6ft the whole of that ciDsuktdoi^^ fa fome paper currencies of Yorkfhire, it was «fi«ed evejpi for ^ fiz^l 11 A;im as a fixpence. Where theiifiiing of bank notes for fuch very fmall Aims is allowed and commonly praflifed, many mean people are both «neMed and encouraged to become bankers. A perfon whofe pro- miflbry note for five pounds, or even for twenty (hillings, would be rejefted by every body, will get it to be received without fcruple- •whnft it is iffued for fo fmall a fum as a fixpence. But the frequent itankrapCeies to whieh fuch beggarly bankers muft be liable, may^ cccafion a vety confideratde inconveniency, and fometimes even a very^ greitfr^wtamity to many poor people who had received their notes in^pi^mtnt. ^*^''^« '' ^' -^-— 'i '^-^' ''^' ' v- ■'■■'- Y- ' '••" It were better, perhaps,^ that no bank notes were iflued in any I>art of the kingdom for a finaller fum than five pounds. Paper money would then, probacy, confine itfelf, in every part of the- kingdom, to the circulation between the different dealers, as mucb as it does at prefent in London, where no bank notes are inTueeb under ten pounds value ; five pounds being, in moft pasts of the kingdom, a fum which, though it will purchafe^ peidiaps, little- more than half the quantity of goods, is as much confidered, and is as feldom (pent dit at once, as ten pounds ^e amidft the profule: cxpence of London* , ^ , .^ .. u-.j .,,1 .;^-- Where paper money, it is to be obferved, is pretty much con- fined to the circulation between dealers and dealers, as at Londonr there is always plenty of gold and filver. Where it extends itfelf t» a confiderable part of the circulation between dealers and confumers^ :^l 392 THE NATURE AND CAUSES OF B op K as in Scotland, and ftill more in North America, it baniflies gold and filver almoft entirely fix>m the country ; almoft all the ordinary tranfa^llons of its interior commerce being thus carried on by paper. The Aippreilion of ten and five fhilling bank notes, fome* what relieved the fcarcity of gold and filver in Scotland } and the fupprefllon of twenty ftiilling notes, would probably relieve it ftill more. Thofe metals are faid to liave become more abundant in America, fince the fuppreffion of fome of their paper currencies. They are faid, likewife, to have been more abundant before the inftltutjon of thofe currencies. Though paper money fhould be pretty much confined to the ■circulation between dealers and dealers, yet banks and bankers might ftill be able to give nearly the fame afiiftance to the induftry iuid commerce of the country, as they had done when paper money filled almoft the whole circulation. The ready money which a dealer is obliged to keep by him, for anfwering occafional demands, is deftined altogether for the circulation between himfelf and other dealers, of whom he buys goods. He has no occafion to keep any by him for the circulation between himfelf and the confumers, who are his cuftomers, and who bring ready money to him, inftead of taking any from him. Though no paper money, therefore, was allowed to be ifiued, but for fuch fums as would confine it pretty much to the circulation between dealers and dealers ; yet partly by .difcounting real bills of exchange, and partly by lending upon cafti accounts, banks and bankers might ftill be able to relieve the greater part of thofe dealers from' the neceifity of keeping any confiderable part of their ftock by them, unemployed and in ready money, for anfwering occafional demands. They might ftill be able to give the utmoft affiftance which banks and bankers can, with propriety, give to traders of every kind. jn- «»» To to w pr< THE WEALTH OF NATIONS. 393 l> To,, ffiftr^'ui. private peqple^^it may b? faid, from receiving in CMAP. payi^jat theprpnuQary notes of a banker, for any fum whether ^(-ej^ or AQall, when they themfelves are willing to receive them j Or, tf> ^eftrain a bs^nkq- from iflliing fach notes, when all his neighbours af^ willing tQ accept of theiti, is a manifeft violation of that natural ;ii^.erty which it is the proper buiinefs of law, not to infringe, but to iupport. Such rjzgulations may, no doubt, hi confiderod as in fQme refpe£t a violation of natural liberty. But thofe exertions of l^e natural liberty of a few individuals, which might ehdangf^* die fecurity of tji$ vfhole fociety, are, and ought to be, reftrained by the laws of all governments; of the moft free, as weU^a^ of the moH defpotical. The obligation of building party walls, ia order to prevent the communication of fire, is a violation of natural Jji^t^« e)ca£lly of th^ feme kind with the !regulation$ bf thelsanking 'tradg which k«; here prppoI^dJ''^ ^' '''^« ^'"'^ ''-^ ^'^^^ 3^< »^li i^^f^t t- A PAPER money confiding in bank notes, ilTued by people of ■ «mdou|)tedcr^d^t, payable upon demand without any condition, and {u^\U.&. 44iyays readily, paid as foon as preiented, is, in every .fefpeft* e<)ual,iaTalu^ to gold and filver money; fince gdld and . filver ruoncy ran at any time bo had for it. Whatever is either bought, or f9ld iox fuch paper, mud necefiarily be bought or fold as cheapasit could h^vebeen for gold and filver.._ \ ' % '.' * The increafe of paper money, it has been faid, by aiigmehtihg the quantity, and conlequeatly diminifliing the value of the y^hole . current y« i^celTarily augments the money pri(fe of, commodities. But as the quantity of gold and filver, which is taken from the currency, is always equal to the quantity of paper vyhieh b added , to it, paper mfjneydojes not necefliarily increafe the quantity of tlie whole currency. From the beginning of the laft century to the prefent times^ provifionjSi never were cheaper in Scotland than in , Vol. I. 3 E 17591 \i \ J94 *rHE NATURE AND CAUSES OF B op K i7j;9, though, from tht circulation of ten and five fliilling bank notes, there was then more paper money in the country than at prefent. The proportion between the price of provifions in Scot- land and that in England, is the fame now as before the great multiplication of banking -companies in Scotland. Com is, upon: moft occafionf , fully as cheap in England as in France; though there is a great deal of paper money in England, and fcarce any in France. In 1751 and in 1752, when Mr. Hume publiihed his Political difcourfes, and foon atur the great multiplication of paper money in Scotland, there was a very fenfible rife in the price of provifions, owing, probably, to the badnefs of the fea( together with the legal iiitereft for the faid fix months. The direftors of. ^me of thofe banks fometimes took advantage of tliis optional ; '44 " • cteufe, , THE WEALTH OF NATIONS. 395 claufe, and fometimes threatened thofe who demanded gold and C HA P, lilver in exchange for a confiderable number of their notes> that ^ey would take advantage of it, unlefs fuch demanders would content themfelves with a part of what they demanded. The promiflfary notes of thofe banking companies conflituted at that time the far greater part of the currency of Scotland, which this uncertainty of payment neceflfarily degraded below the value of gold and filver money. During the continuance of this abufe, (which prevjuled chiefly in lySz, 1763, and 1764), while the ex- change between London and Carlifle was at par, that between London and Dumfries would fometimes be four per cent, againfl: Dumfries, though this town is not thirty miles diftant from Carlide. But at Carlifle, bills were paid in gold and fllver ; whereas at Dumfries they were paid in Scotch bank notes, and the uncer- tunty of getting thofe bank notes exchanged for gold and filver coin had thus degraded them four per cent, below the value of that coin. The fame a£t of parliament which fupprefled ten and five ihilling bank notes, fupprefled likewife this optional claufe, and thereby reftored the exchange between England and Scotland to its natural rate, or to what the courfe of trade and remittances might happen to make it. In the paper currencies of Yorkfliiire, the payment of (6 fmall a fum as a flxpence fometimes depended upon the condition that the holder of the note fliould bring the change of a guinea to the perfon who ifllied it ; a condition, which the holders of fuch notes might frequently find it very difficult to fulfil, and which mufl: have degraded this currency below the value of gold and filver money. An a6t of parliament, accordingly, declared all fuch claufes unlawful, and fupprefled, in the fame manner as in Scotland, all promiflTary notes, payable to the bearer, under twenty ftiillings value. ' ' , , 3 E 2 • The 39^ BOOK II. THE NATURE AND CAUSES OF The paper curi%nci€S of North America confined, not in bank notes payable to the bearer on demand, bot in a government paper, of which the payment was not exigible till feveral years after it was ifliied : And thouf^ the colony governments paid no intereft to the holders of this paper, they declared it to be, and in fa£t rendered it, a legal tender of payment for the full value for which it was ifliied. Bat allowing the cdony fecority to be perfefVly good, a hundred poimds payable fifteen years hence, for example, in a country where intereft is at fix per cent., is worth Ktde more than forty pomidfi ready money. To oblige a creditor, therefore, to accept of this as full pigment for a debt of a hundred pounds a^ually paid down in ready money, was an aA of fuch violent injuftice, as has fcarce^ perhaps> been attempted by the government of any' other country which pretended to be free. It bears the evident marks of having originally been, what the honeft and downright Dodtcr DouglaTs aflures us it was, a Icheme of ftaudulent debtors to cheat their creditors. The gjovemraent of Penfylvania, indeed, pretended* upon their firft emiflion of paper mon^ in 1722, td render their paper of equal value with gold and filver, by enadii^ penalties againft all thole who made any difference in the price of their goods when they fold them for a colony paper, and when they fold them for gold and filver; a regulation equally tyrannical, but much lefs efie^ual than that which it was meant to fupport. A pofitive law ntay render a fhilUng a legal tender for a guinea ', becaufe it may dire£l the courts of juftice to difcharge the debtor who has made that tender. But no pofitive law can oblige a perfon who fells goods, and who is at liberty to fell or not to fell, as he pleafes, to accept of a fhilling as equivalent to a guinea in the price of them. Not- withftanding any regulation of this kind> it appeared by the courfe of exchange with Great Britain, that a hundred pounds flerling was occafionally confidered as equivalent, in fome of the colonics^ to a hundred and thirty pounds, and in others to fo great a fum as eleven THE WEALTH OF NATIONS.* eleven hundred pounds currency; this difference in tb value flrifing from the difference in the quantity of paper emitted in. the different colonies, and in the difliance and probability of the term of its final difS:harge and redemption. 397 No law, therefore, could be more equitable than the a£t of par- liament, id unjuftly complained of in the colonies, which declared that no paper currency to be emitted there in time coming, (hould be a legal tender of payment. >.; > «.• { Pbnsylvania was always more moderate in its emidions of paper money than any other of our colonies. Its paper currency accordingly is faid never to have funk below the value of the gold and filver which was current in the colony before the firft emifllon of its paper money. Before that emiflion, the colony had raifed the de- nomination of its coin, and had, by a6t (^ affembly, ordered five {hillings fterling to pafs in the colony for fix and three- pence, and afterwards for fix and eight-pence. A pound colony currency, therefore, even when th^ currency was gold and filver, was more than thirty per cent, below the value of a pound fterling; and when that currency was tuined into paper, it was feidom much more than thirty per cent, below that value. The pretence for raifmg the denomination of the coin, was to prevent the exportation of gold and filver, by making equal quantities of thofe metals pafs for greater fums in the colony than they did in the mother country. It was found, however, that the price of all goods fron* the mother country rofe exactly in proportion as they raifed the denomination of their coin, fo that their gold and filver were exported as faft as ever. The paper of each colony being received in the payment of the provincial taxes, for the full value for wliich it had been iffued, ■ f ■ ■ ■ ■ i» :l 398 THE NATURE AND CAUSES OP BOOIC it neceflTarily derived from this ufe fome additional value, over and above what it would have had, from the real or fuppofed diftance of the term of its final difcharge and redemption. This additional value was greater or lefs, according as the quantity of paper ifllied -was more or lefs above what could be employed in the payment of the taxes of the particular colony which iifued it. It was in all the colonies very much above what could be employed in this manner. ^ A PRINCE, who (hould ena6l that a certain proportion of his taxes ihould be paid in a paper money of a certain kind, might thereby give a certain value to this paper money ; even though the term of its final difcharge and redemption (hould depend altogether upon the will of the prince. If the bank which iffued this paper was careful to keep the quantity of it always fomewhat below what could eafily be employed in this manner, the demand for it might be fuch as to make it even bear a premium, or fell for fomewhat more in the market than the quantity of gold or filver currency for which it was iflTued. Some people account in this manner for what is called the Agio of the bank of Amfterdam, or for the fuperior^t/ of bank money over current money ; though this bank money, as they pretend, cannot be taken out of the bank at the will of the owner. The greater part of foreign bills of exchange muft be paid in bank money, that is, by a transfer in the books of the bank ; and the direflors of the bank, they alledge, are careful to keep the whole quantity of bank money always below what this u(e occafions a demand for. It is upon this account, they fay, that bank money, fells for a premium, or bears an agio of four or five per cent, above the fame nominal fum of the gold and filver currency of the country. This account of the bank of Amfterdam, however, I jhave reafon to believe, is altogether chimerical. -Vrim'-Tti C ^,.^ ■*} I "tLJ^' s . A PAPKR THE WEALTH OF NATIONS. g| * A PAPER currency which falls below the value of gold and CIIAP filver coin, does not thereby fink the vaUus of gold and filver, or occafion equal quantities of tlioie ir\rfa\s to exchange for a fmaller quantity of goods of any other kind. The propor- tion between the value of gold and filver and that of goods of any other kind, depends in all cafes, not upon the nature or quantity of any particular paper money, which may be current in any particular country, but upon the rlchncfs or poverty of the mines, which happen at any particular time to fupply the great market of the commercial world with thofc metals. It depends upon the propoition between the quantity of labour which is necefiary in order, to bring a certain quantity of gold and filver to market, and that which is< neceflary in; order to bring thither a certun quantity of any other fort of^ goods. If bankers are reftraihed from iiTiiing any circulating bank: notes, or notes payable to the bearer, for lefs than a certain: fum; and if they arc fubje£ted to the obligation of an im- mediate and unconditional payment of fuch bank notes as foon as prefented, their trade may, with fafety to the publick, be rendered in all' other refpeds perf«£lly free. The late- multiplication of banking companies in both parts of the: united kingdom, an event by which many people have been? much farmed, inftead of diminifhing, increafes the' fecurity-' of the publick. It obliges alt of' them to be more circum- fpeft in th«r condufl:, and, by not extending their currency- beyond its due proportion to their cafh, to guard themfelves againftr thofe malicious runs, which the rivallhip of fo many competitors is always ready to bring upon- them. Itreftrains: the circulation of each particular company within a narrower circle, and reduces their circulating notes to a fmaller number. . By; 400 BOOK THE NATURE AND CAUSES OP By dividing the whole circulation into a grieater number of parts, the failure of any one company* an accident which, in the courfe of things, muft fometimes happen, becomes of leis confequence to the publick. This frw competition too obliges all bankers to be more liberal in their dealings with tlieir cuftomers^ left their rivals fhould carry them away. In general, if any branch of trade, or any divifion of h. iur, be advantageous tp the publick, the freer and more general t\\e competition, it will always be the more fo. •. -a., .:»; CHAP. III. Of the Accumulation of Capitalt or of produSiive and unpro" duSiive Labour, THERE is one foit of labour which adds to the value of the fub}e£t upon which »t is beftowed : There is an* -ther which has no fuch effe6l. The former, as it produces a value, may be called prod^divei the latter unprodu£live * labour. Thus the labour of a manufadurer adds generally to the value of the materials which he works upon, that of his own maintenance, and of his xnafler's profit. 1 he labour of a menial fervant, on the contrary, adds to tlie value of nothing. Though the manufacturer has his . wages advanced to him by his mailer, he, in reality, coAs him no expence, the value of thofe wages bei|^ generally reftored, together with a profit, in the improved value of the fubje6l upon which his labour is beftowed. But the maintenance of a menial fervant never is reftored. A man grows rich by employing a multitude of ma> nufa6turer^ : He grows poor, by maintaining a multitude of menial fervants. The labour of the latter, however, has its value, * Some French authors of great learning and ingenuity have mSbA thofe words in a different fenfe. In the lad chapter of the fourth boolc, I (hall endeavour to fliow that their fenfe is an hnproper one. \. - and THE WEALTH OF NATIONS. and deferves its reward as well as that of the former. But the labour of the manufadlurer fixes and realizes itfclf in fomc paiticular fubjc^l or vendible commodity, which lads for fome time at leail after that labour is pail. It is, as it were, a certain quantity of labour flocked and (loied up to be employed, if neceflary, upon fome other occafioni That fubjeiSl, or what is the fame thing, the price of that fubjefl, can afterwards, if neceffary, put into motion a quan- tity of labour equal to that which had originally produced it. The labour of the menial fervant, on the contrary, does not fix or realize itfelf in any particular fubje£l or vendible commodity. His fervices generally perifh in the very inflant of their performance, and feldom leave any trace or value behind them, for which an equal quantity of fervice could afterwards be procured. The labour of fome of the mod rcfpedlable orders in the fcciety is, like that of menial fervants, unproductive of any value, and does not fix or realize itfelf in any permanent fubjeft, or vendible commodity, which endures after that labour is pall, and for which an equal quantity of labour could afterwards be procured. The fovereign, for example, with all the officers both of juflice and war who ferve under him, the whole army and navy, are unproduftive labourers. They are the fervants of the publick, and are maintained by a part of the annual produce of the induflry of other people. Their fervice, how honourable, how ufeful, or how ncceflary foever, produces nothing for which an equal quantity of fervice can afterwards be procured. The protection, fecurity, .ind defence of the commonwealth, the efFefl of their labour this year, will not purchafe its protection, fecurity, and defence, for the year to come. In the fame clafs mull be ranked, fome both of the gravefl and moft important, and fome of the mofl frivolous profeflions : churchmen, lawyers, phyficians, men of letters of all kinds j players, buffoons, muficians, opera- VoL. I. 3 F fingers* 401 CHAP, III. M m !|i III i 'I I 402 THE NATURE AND CAUSES OF B O O K fingers, opera- dancers, &c. The labour of the meaneft of thefe |u<-v-« has a certain value, regulated by the very fame principles which regulate that of every other fort of labour; and that of the nobleft and mod ufeful, produces nothing which could afterwards pur- chafe or procure an equal quantity of labour. Like the decla- mation of the a^or, the harangue of the orator, or the tune of the mufician, the work of all of them perifhes in the veiy inftant of its production. Both productive and unproductive labourers, and thofe who do not labour at all, are all equally maintained by the annual pro* duce of the land and labour of the country. This produce, how great fbever, can never be infinite, but muft have certain limits. According, therefore, as a fmaller or greater proportion of it is in any one year employed in maintaining unproductive hands, the more in the one cafe and the lefs in the other will remain for the productive, and the next year's produce will be greater or fmaller accordingly J the whole annual produce, if we except the fponta- neous productions of the earth, being the efFeCt of productive la- bour. •iUiiii-i' 't'libuGH thfe whole annual produce of the land and labour of every country, is, no doubt, ultimately deitined for fupplying the confumption of its inhabitants, and for procuring a revenue to them j yet when it firft comes either from the ground, or from the hands 6f the productive labourers, it naturally divides itfelf into two parts. One of them, and frequently the largeft, is, in the firft place, deftined for replacing a capital, or for renewing the pro- vifions, materials, and finifhed work, which had been withdrawn from a capital; the other for conftituting a revenue either to the owner of this capital, as the profit of his ftock ; or to fonie other perfon, as the rent of his land. Thus, c^ the produce of land, one THE WEALTH OF NATIONS. 403 one part replaces the capital of the farmer; the other pays his CHAP, profit and tlie rent of the landlord; and thus conftitutes a revenue both to the owner of this capital, as the profits of his flock j and to fome other perfon, as the rent of his land. Of the produce of a great manufefture, in the fame manner, one part, and that always the largeft, replaces the capital of the undertaker of the work; the other pays his profit, and thus conftitutes a revenue to the owner of this capital. That part of the annual produce of the land and labour of any country which replaces a capital, never is immediately employed to maintain any but produiftive hands. It pays the wages of pro- ductive labour only. That which is immediately deftined for con- ftituting a revenue either as profit or as rent, may maintain in- differently either produ6tive or unproductive hands. JiTC^ v >SV".» J;i(ri Whatever part of his ftock a man employs as a capital, he always expefts is to be replaced to him with a profit. He employs it, therefore, in maintaining produftive hands o»ly; and after having ferved in the funClion of a capital to him, it conftitutes a revenue to them. Whenever he employs any part of it in main- taining unproductive hands of any kind, that part is, from that moment, withdrawn from his capital, and placed in his ftock re- ferved for immediate confumption. Unproductive labourers, and thofe who do not labour at all, are all maintained by revenue; elthei*, firft, by that part of the annual produce which.is originally deftined for conftituting a re- venue to fome particular pcrfons, either as the rent of land or as the profits of ftock; or, fecondly, by that part which, thoiigli originally deftined for replacing a capital and for maintaining pro- ductive labouicrs only, yet when it comes into their hands, \vhat- 2 F 2 ever 404 THE NATURE AND dKVSES OF BOOK ever part of it is over and above their neccffary fubfiftence, may be employed in maintaining indifferently either produdlive or un- produdive hands. Thus, not only the great landlord or the rich merchant, but even the common workman, if his wages are con- fiderable, may maintain a menial fervantj or he may fometimes go to a play or a puppet-ftiow, and fo contribute his fhare towards maintaining one fet of unproduflive labourers; or he may pay fome taxes, and thus help to maintain another fet, more honour- able and ufeful, liideed, but equally unproductive. No part of the annual produce, however, which had been originally dcftined to replace a capital, is ever dire£ted towards maintdning unpro- ductive hands, till after it has put into motion its full comple- ment of productive labour, or all that it could put into motion in the way in which it was employed. The workman muft have earned his wages by work done, before he can employ any part of them in this manner. That part too is generally but a fmall one. It is his (pare revenue only, of which productive labourers- have feldom a great deal. They generally have fome, however; and in the payment of taxes the greatnefs.of their number may com- penfate, in fome meafure, the. fhiallnefs of their contribution. The rent of land and the profits of flock are every where, there- fore, the principal fources from which improduCtive. hands derive their fubfiftence. Xhefe are the two forts of revenue of which the owners have generally mod to (pare. They might both maintain indifferently either productive or unproductive hands. They feem, . however, to have fome predilection for the latter. The expence of; a great lord feeds generally more idle than induftrious people. The rich merchant, though with his capital he maintains indu-. firious people only, yet. by his expence, that is, by the employ- ment of his revenue, he feeds commonly the very fame fort as the great lord. 1/ ThR; THE WEALTH OF NATIONS; 4<>5 The proportion-, therefore, between the produftive and unpro- 9 ^ A P. du6live hands, depends very much in every country upon the pro- portion between that part of the annual produce, which, as foon as it comes either from the ground or from the hands of the pro- du6live labourers, is deftined for replacing a capital, and that which is deftined for conftituting a revenue, either as rent, or as profit. This proportion is very different in rich from what it is in poor countries, -,,-•.,.... :-■■■: :— -■■--■- •-•/i -j// .• ^ iCm- Thus, at prelent, in the opulent countries of Europe, a very large, flequently the largeft portion of the produce of the land, is deftined for replacing the capital of the rich and indepcndant farmer; the other for paying his profits, and the rent of the landlord. But antiently, during the prevalency of the feudal government, a very fmall portion of the produce was fuificient to replace the capital employed in cul- tivation. It confifted commonly in a few wretched cattle, main- tained altogether by the fpontaneous produce of uncultivated land, and which might, therefore, be confidered as a part of that fponta- neous produce. It generally too belonged to the landlord, and was by him advanced to the occupiers of the land. All the reft of the produce properly belonged to him too, either as rent for his land> or as profit upon this paultry capital. The occupiers of land were generally bondmen, whofe perfons and effefts were equally his pro- perty. Thofe who were not bondmen were tenants at will, , and tliough the rent which they paid was often nominally little more than a quit- rent, it really amounted to the whole produce of the land. Their lord could at all times command their labour in ■ peace, and their fervice in war. Though they lived at a diftance from his houfe, they were equally dependant upon him as his re^ tainers who lived in it. But the whole produce of the land un- doubtedly belongs to him, who can difpofe of the labour and fer- vice of all thofe whom it maintains. In the prefent ftate of Europe, the 4o6 THE NATURE AND CAUSES OF B O o K the fliare of the landlord feldom exceeds a third, fometimes not a fourth part of the whole produce of the land. The rent of land, however, in all the improved parts of the country, has been tripled and quadrupled fmce thofe antient times; and this third or fourth part of the annual produce is, it feems, three or four times greater than the whole had been before. In the progrefs of improvement, lent, though it increafes in proportion to the extent, diminiflies in proportion to the produce of the land. In the opulent countries of Europe, great capitals are at prefent •employed in trade and manufa6lures. In the ancient ftate, the little trade that was (lirring, and the few homely and coarfe manufadures that were carried on, required but very fmall ca- pitals. Thefe, however, muft have yielded very large profits. The rate of intercft was no where lefs than ten per cent, and their profits muft have been fufficient to afford this great intereft. At .prefent the rate of intereft, in the improved parts of Europe, is no where higher than fix per cent, and in fome of the moft im- proved it is fo low as four, three, and two jwr cent. Though that part of the revenue of the inhabitants which is derived from the profits of ftock is always much greater in rich than in poor coun- 4ri<», it is bec^ufe the ftock is much greater: in proportion to the ilock the profits are generally much lefs. That part of the annual produce, therefore, which, as foon Qs it comes either from the ground or from the hands of the pro- ^u6live labourer, is deftined for replacing a capital, is not only much greater in rich than in poor countries, but bears a much ^reat^r proportion to that which is immediately deftined for con- •ftituting a revenue either as rent or as profit. The funds deftined for the maintenance of productive labour, are not only much igreater in me former than in the latter, but bear a much greater ■ Z - proportion the THE WEALTH OF NATIONS, 407 proportion to thofe which, though they may be employed to main- CHAP, tain either produ6live or unprodu^ive hands, have generally a predile6tion for the latter. - The proportion between thofe different funds neceffarily deter- mines in every country the general character of tlie inhabitants as to induftry or idlenefs. We are more induftrious than our fore- fathers; becaufe in the prefent times the funds deftined for the maintenance of induftry, are much greater in proportion to thofe which are likely to be employed in the maintenance of idlenefs, than they were two oi' three centuries ago. Our an- ceftors were idle for want of a fufficient encouragement to 'in- duftiy. It is better, fays the proverb, to play for nothing, than to work for nothing. In mercantile and manufa«5lurlng towns, where the inferior ranks of people are chiefly maintained by the employ- ment of capital, they are in general induftrious, fober, and thriv- ing; as in many Englifh, and in moft Dutch towns. In thofe towns which are principally fupported by the conftant oroccafional refidence of a court, and in which the inferior ranks of people are chiefly maintained by the fj^jending of revenue, they are in general idle, diffolute, and poor; as at Rome, Verfailles, Compiegne, and Fontainbleau. If you except Rouen and Bourdeaux, there is little trade or induftry in any of the parliament towns of France; and the inft rior ranks of people being chiefly maintained by the expence of the members of tlie courts of juftice, and of thofe who come to plead before them, are in general idle and poor., The great trade of Rouen and Bourdeaux feems to be altogether the eScCt of their fituation. Rouen is neceffarily the entrepot of al- moft all the goods which are brought either from foreign coun- tries, or from the maritime provinces of France, for the confump- tion of the great city of Paris. Bourdeaux is in the fame manner the entrep6t of the wines which grow upon the banks of the Ga- ronne, and of the rivers which run into it, one of the richeft wine countries 4q£. THE NATURE AND CAUSES OF BOOK countries in the world, and which feems to produce the wine fitteft for exportation, or bcft (uited to the tafte of foreign nations. Such advantageous fituations r jceflarily attradl a great capital by the great employment which they afford it; and the employment of this capital is the caufe of the induftry of thofe two cities. In the other parliament towns of France, very little more capital feems to be employed than what is neceflary for fupplying their own confumption; that is, little more than the fmalK-ft capital which can be employed in them. The fame thing may be faid of Paris, Madrid, and Vienna. Of thofe three cities, Paris is by far the moft induftriousi but Paris itfelf is the principal market of all the manufaftures eftabliftied at Paris, and its own confumption is the principal objefl of all the trade which it carries on. Londoh, Lifbon, and Copenhagen, are, perhaps, the only three cities in Europe, which are both the conftant relidence of a court, and can at the fame time be,confidered as trading cities, or as cities which trade not only for their own confumption, but for that of other cities and countries. The iituation of all the three is extremely advantageous, and naturally fits them to be the entrepots of a great part of the goods deflined for the confumption of diflant places. In a city where a great revenue is fpent, to employ with advantage a capital for any other purpofe than for fupplying the confumption of that city, is probably more difficult than in one in which tiie inferior ranks of people have no other maintenance but what they derive from the employment of fuch a capital. The idlenefs of the greater pait of the people who are maintained by the cxpence of revenue, corrupts, it is probable, the induflry of thofe who ought to be maintained by the employment of capital, and renders it lefs advantageous to employ a capital there than in other places. There was little trade or induftry in Edinburgh before the union. When the Scotch parliament was no longer to be afTembled in it, «vhen it ceafed to be the neceffary refidence of the principal nobility .4 and \^ ' * THE WEALTH OF NATIONS. 409 and gentry of Scotland, it became a city of feme trade and induftry. C HA P. It ftill continues, however, to be tho refidence of the principal courts of juftice in Scotland, of the boards of cuftoms and excife. Sec. A conliderable revenue, therefore, flill continues to be fpent in it. In trade and induftry it is much inferior to Glafgow, of which the inhabitants are chiefly maintained by the employment of capital. The inhabitants of a large village, it has fometimes been obferved, after having made confiderable progrefs in manufaftures, have become 'die and poor, in confequence of a great lord's having taken up his refidence in their neighbourhood. .^> The proportion between capital and revenue, therefore, feems every where to regulate the proportion between induftry and idlenefs. Wherever capital predominates, induftry prevails : Where- ever revenue, idlenefs. Every increafe or diminution of capital, therefore, naturally tends to increafe or diminidi the real quantity of induftry, the number of produdlive hands, and confequently the exchangeable value of the annual produce of the land and labour of the country, the real wealth and revenue of all its inhabi- tants. ^' .. . ', ,^ , . Capitals a-e increrfed by parfimony, and diminiflied by pro- digality and mifconduft, rvr f«i i2 -:^ i.\i THE WEALTH OF NATIONS. 4»3 immediate produce of the land and labour of the country itfelf, C HA l»; or in fomething which had been purchafed with fome part of that produce. Their value, therefore, muft diminifli as the value of that produce diminifhes, and along with it the quantity of money which can be employed in circulating them. But the money which by this annual diminution of produce is annually thrown out of domeftick circulation will not be allowed to lie idle. The intereft of whoever poflefles it, requires that it fhould be employed. But having no employment at home, it will, in fpite of all laws and prohibitions, be fent abroad, and employed in purchafing confumable goods which may be of fome ufe at home. Its annual exportation will in this manner continue for feme time to add fomething to the annual confumption of the country beyond the value of its own annual produce. What in the days of its prof- perity had been faved from that annual produce, and employed in purchafing gold and filver, ;vill contribute for fome little time to fupport its, confumption in adverfity. The exportation of gold and filvci is, in this cafe, not the caufe, but the effect of its declen- fion, and may even for fome little time alleviate the mifery of that declenfion. The quantity of money, on the contrary, muft in every country naturally increafe as the value of the annual produce incrcafes. The value of the confumable goods annually circulated w'.thin the fociety being greater, will require a greater quantity of money to circulate them. A part of the increafed produce, therefore, will naturally be ernployed in purchafing, wherever it js to be had, the additional quantity of gold and filver neceflary for circulating the reft. The increafe of thofe metals will in this cafe be the efte£t, not the caufe, of the publick profperity. Gold and filver are purchafed every where in the fame manner. The food, cloathing, and lodging, the revenue and maintenance of aU 4H THE NATURE AND CAUSES OF BOOK all thofc whofc labour or ftock is employed in bringing them from the mine to the market, is the price paid for them in Peru as well as in England. The country which has this price to pay, will never be long without the quantity of thofe metals which it has occafion for; and no country will ever long retain a quantity which it has no occafion for. Whatever, therefore, we may imagine the real wealth and revenue of a country to confift in, whether in the value of the annual produce of its land and labour, as plain reafon feems to dictate ; or in the quantity of the precious metals which circulate within it, as vulgar prejudices fuppoie; in eitlicr view of the matter, every prodigal appears to be a publick enemy, and every frugal man a publick benefa£\or. The effedts of mifcondu£l are often the ftme as thofc of pro-i digality. Every injudicious and unfuccefsful projcdfc in agricul- ture, mines, filheries, trade, or n»anufa£tures, tends in the fame manner to diminifli the funds defined for the maintenance of productive labour. In every fuch project, though the capital is confumed by produ6live hands only, yet, as by the injudicious manner in which they are employed, they do not reproduce the full value of their confumpdon, there muft always be fome dimi- nution in what wguld othei'wife have been the produdive funds of thefociety. «•:'* It can feldom happen, indeed, that the circumftances of a great nation can be much affedcd either by the prodigality or mifconduil of individuals ; the profufion or impiTidcnce of fome being always more than compenfated by the frugality and good conduct of odiers. With THE WEALTH OF NATIONS. 4'5 With regard to profufnn, the principle, which prompts to ^Pji^*** expence, is the paflion for prefent enjoyment i which, though fome- times violent and very difficult to be retrained, is in general only momentary and occafional. But the principle which prompts to Ave, is the deftre of bettering our condition, a dcfire which, though generally calm and diipaflionate, comes with us from the womb, and never leaves us till we go into the grave. In the whole interval which feparates thofe two moments, there is fcarce perhaps a Angle inftant in which any man is To perfe6tly and compleatly (atisfied with his fituation, as to be without any wiih of alteration or improvement of any kind. An augmen- tation of fortune is the means by which the greater part of men propole and wifh to better their condition. It is the means the mofl vulgar and the moll obvious f and the moil liJcely way of augmenting their fortune, is to fave and accumulate fomc part of what they acquire, either regularly and annually, or upon fome extraordinary occafions. Though the principle of expence, there- fore, prevails in almoft all men upon fome occafions, and in fome men upon almuft all occafions, yet in the greater part of men, taking the whole courfe of their life at an average, the principle of frugality feems not only to predominate,, but to pre- dominate vci*y greatly. With regard to mifconduft, the number of prudent and fuc- cefsful undertakings is every where much greater than that of injudicious and unfucccfsful ones. After all our complaints of the frequency of bankruptcies, the unhappy men who fall into this misfortune make but a very fmall part of the whole number engaged in trade, ami all other forts ot bufinefsj not much more perhaps than one m a thoufnd. Bankrintcy is perhaps the greateft and moil humiliating calamity which can befal an innocent man. The gfeatcr part ©f men, theiefoie, are fufficiently care- ' h V vv • fill ^ 4i6 BOOK II. THE NATURE AND CAUSES OF fill to avoid it. Some, indeed, do not avoid it ; as fome do not avoid the gallows, . Great nations are never impoveriflied by private, though they fometimes are by publick prodigality and mifconduft. The whole, or almoft the whole publick revenue, is in moft countries employed in maintaining unprodu£tive hands. Such are the people who •compofe a numerous and fplendid court, a great ecclefiaftical eftab- lifhment, great fleets and armies, who in time of peace produce nothing, and in time of war acquire nothing which can compenfate the expence of maintaining them, even while the war lails. Such people, as they themfclves produce nothing, are all m^untained by the produce of other men's labour. When multiplied, there- fore, to an unneceflary number, they may in a particular year confume fo great a (hare of this produce, as not to leave a fuf- ficiency for maintaining the productive labourers, who fhould re- produce it next year. The next year's produce, therefore, will be lefs than that of the foregoing, and if the fame diforder fhould continue, that of the third year will be ftill lefs than that of the fecond. Thofe unproductive hands, who fhould be main- tained by a part only of the fpare revenue of the people, may confume fo great a fhare of their whole revenue, and thereby oblige fo great a number to encroach upon their capitals, upon the func. deftined for the maintenance of productive labour, that all the frugality and good conduCl of individuals may not be able to compenfate the wafte and degradation of produce occafioned by this violent and forced encroachment. -^ •1 ' . ,. -? This frugality and good conduft, however, is upon mofl oc- cafions, it appears from experience, fufHcient to compenfate, not only the private prodigality and mifconduCt of individuals, but the publick extravagance of government. The uniform, conftant. THE WEALTH OF NATIONS. V7 and uninterrupted efFoit of eveiy man to better his condition, CHAP, the principle from which publick and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progrefs of things towards improvement, in {giix both of the extravagance of government, and of the greateil trvort of fldnuniftration. Like the unknown principle of animal life. It frequently reftcves health and vigour to the conftitutioiY, in fpte, not only of the difeafe, but of the al^urd preferipdonfr of the do£Voc. " The annual produce of the land and labour of any nation can be increafed-nn its value by no other mean^, but by incrcaiing either the number of its produftive labourers, or the produftive powers of thofe labourers who had before been employed. The number of its productive labourers, it is evident, can never be much increafed, but in confequence of an ina-eafe of capital, or of the funds deftined for m£untaining them. The productive poivers of the fame number of labourers cannot be increafed, but in con- fequence either of fome addition and improvement to thofe machines and inftruments which facilitate and abridge labour ; or of a more proper divifiori and diftribution of employment. In either cafe an additional capital' is alfnoft always r^qtiired^ It is by means of an additional capital only that the undertaker of any woVk can either provide his workmen witfi better machinery, or maktf a ntore proper diftribution of employment among them. When the work to be done con(ifts of a nunber of parts,, to keep every man con- ftantly employed in one way,, requires a much greater capital than where every man is occafionally employed in every different part of the work. When we compare, therefore, the ftatfe of- a' nation at two different periods, and find, that the annual produce of its land and labour is evidently greater at the latter than at the former, that its lands are better cultivated, its manufactures more nume- VoL. L 3 H - rous 11 i| 4I& THE NATURE AND CAUSES OF' B op K rous and more flourilhing, and its trade more extenfive, we may be affured that its capital muft have increafed during the inteival between tliofe two periods, and that more muft have been added to it by the gpod condu£l of fome, than had been taken from it either by the private mifcondu£t of others, or by the publick extravagance of government. But we fhall find this to have been the cafe of almoft all nations, in all tolerably quiet and peaceable timesy even of thofe who have not enjoyed the moft prudent and. parfimonious governments. To form a right judgement of Lt, indeed, we muft compaie the ftate of the country at periods fomewhat diftant from one another. The progrefs is frequently fo gradual, that, at near periods, the improvement is not only not fenfible, but from the decleniion either of certain branches of induftry, or of ceitain diftri£ls of the country, things which fometimes happen though the country in general is in great profperity, there frequently arifes a fufpicion, that the riches and induftry of the whole are decaying.^ The annual produce of the land and labour of England, foe example, is certainly much greater than it was, a little more than a century ago, at the reftoration of Charles II. Though at prefent, few people, I believe, doubt of this, yet during this period, five years have feldom palled away in which Ibme book or pamphlet has not been publiihed, written too with fuch abilities as lo gain fome authority with the publick, and pretending to demonftrate that the wealth of the nation was faft declining, that the country was depopulated, agriculture negle£led, manufa£l;ures decaying, and trade undone. Nor have theie publications been all party pamphlets,, the wretched offspring of falfhood and venality. Many of them have been written by very candid and very intelligent people; who wrote nothing but what they believed, and for no other reafon but becaufe they believed it.^ The THE WEALTH OF NATIONS. 41^ The annual produce of the land and labour of England again, C HA P. was certainly much greater at the reftoration, than we can fuppofe it to have been about an hundred years before, at the accefTion cf Elizabeth. At this period too, we have all realbn to believe, the country was much more advanced in improvement, than it had been, about a century before, towards the clofe of the dilTenlions between the houfes of York and Lancafter. Even then it was, probably, in a better condition than it had been at the Norman conqueft, and at the Norman conqueft, than during the confuHon of the Saxon- Heptarchy. Even at this early period, it was certainly a more improved country than at the invafion of Julius Caefar, when its inhabitants were nearly in. the fame ftate with the favages in North America. .. .t»/j .ji-:i..-;.i >>i.j.hj , .3.; In each of thofe periods, however, there was not only much private anH! mib]ick profufion, many expenfive and unnecefTary wars, great pei :i of the annual produce from maintaining productive to mai riU.ii unproductive hands ; but fometimes, in the confufion of cwil difcord, fuch abfolute wafte and deftrudtion of ftock, as might be fuppofed, not only to retard, as it certainly did, the natural accumulation of riches, but to have left the country, at the , end of the period, poorer than at the beginning. Thus, in the happieft and moft fortunate period of them all, that which has pafled fmce the reftoration, how many diforders and misfortunes have occurred, which, could they have been forefeen, not only the impoverilhment, but the total ruin of the country would have been expeded from them ? The fire and the plague of London, the two Dutch wars, the diforders of the revolution, the war in Ireland, tlie four expenfive French wars of 1688. 1701, 1742, and 1756, together with the two rebellions of 171 5 and 1745. In the courfe of the four French wars, the nation has contracted more than a hundred and forty five millions of debtj over and above all tiie 3 n 2 other 4*0 BOOK II. THE NATURE AND CAUSES OF other extraordinary annual expencc ^hi(^ tAwy oocafionerl, fe that the whok cannot be eomputed at k(s than two hundred milKons. So great a iKare of (^ annual produce of the land and laboinr of the country, laas, fince the revolution, been employed upon different occaAoilis^ in maintaining an extraordinary number of un- produ^ive handi But had not thoie wars ^ven this particular dire^ion to (6 large a capital, the greater part of it would naturally have been employed in maintaining productive hands, whole labour would have r^laced, with a profit, the inliole value of their canfumpttoQ. The value of the annual produce t£ the land and labour of the country, would have been ccmfiderably increafcd by it ^very year, and every year's increafe would have augmented ftill more that of the next year. More houfes would hare been built, more lands would have been improved, and thofe which had been improved before would have been better cultivated, more xianufaftures would have been eftablifhed, and thoie which had been eilabliihed before would have been more extended ; and to what height die real wealth and revenue of the country might, by tiiis time, have been raifed, it is not perhaps very eafy e/en to imagine. BvT though the profufion of government muft, undoubtedly, have retarded the natural progrefs of England towards wealth and ^provement, it has not been able to ftop it. The annual produce of its land and labour is, undoubtedly, much greater at prefent than it was either at the reftoration or at the revolution. The capital, therefore, annually employed in cultivating this land, and in maintaining tlus labour, mufl likewife be much greater. In the midft of all the exa£tions of government, this capital has been filently and gradually accumulated by the private frugality and good conduct of individuals, by their univcrfal, continual, and uninterrupted effort to better their own condition. It is this effort, .V ' 7 protedled \: THE WEALTH OF NATIONS. 4*t protc£ted by law and allowed by liberty to exeii itfelf in the ^^rf- ^* manner that is m<^ advantageous^ which has midntained the progrefs of England towards opulence and improvement in almoft all former times, and which, it is to be hoped, will do fo in alt future times. England, howfver, as it has never been blefled with a very parfimonious government, fo parfimony has at no time been the chara^nftical virtue of its inhalntants. It is the highefl im- pertinence and pr^umption, therefore, in kings and minifters, to pretend to watch over the oeconomy of private people, and to reftr^n their expence either by fumptuary laws, or by prohibiting the importation of fordgn luxuries. They are themfelves always, and without any exception, the greateft fpendthrifts in the fociety. Let them look well after their own expence, an^ they may fafely truft private people with theirs. If their own extrav^ance does not ruin the ftate, that <^ their fubje£ls never will. As frugality increases, and prodigality diminlflies the publick capital, fo theconduA of thofe, whofe expence jufl equals their revenue, without either accumulating or encroaching, neither increafes nor diminifhes it. Some modes of expence, however* feem to contribute more to the growth of publick opulence than others. The revenue of an individual may be /pent, either in things which are confumed immediately, and in which one day's expence can neither alleviate nor fuj^rt that of another j or it may be fpent in things mwe durable, which ^an therefore be accumulated, and in which every day's expence may, as he chufes, either alleviate, or fupport and heighten the effeft of that of the following day. A man of fortune, for example, may either fpend his revenue in a profufe and fumptuous table, and in maintaining a great number of menial fervants, and a multitude of dogs and horfes ; or con- tcntinj; 422 THE NATURE AND CAUSES OF B O O K tenting himielf with a frugal table and few attendants, he may lay out the greater part of it in adorning his houfe or his country villa, in ufeful or ornamental buildings, in ufeful or ornamental furniture, m ccMefling books, flatues, pictures; or in things more frivolous, jewels, baubles, ingenious trinkets of different kinds; or, what is moil trifling of all, in amafling a great wardrobe of fine clothes, like the favourite ; 1 minifler of a great prince who died a few years ago. Were ' j r..en of equal fortune to fpend their revenue, the one chiefly in the one way, the other in the other, the magni- ficence of the perfon whofe expence had been chiefly in durable commodities, would be continually increafing, every day's expence contributing fomething to fupport and heighten the effedt of that of the following day : That of the other, on the contrary, would be no greater at the end of the period than at the beginning. The foiinertoo would, at tl..; end of the period, be the richer man of the two. He would have a flock of goods of fome kind or other, which, though it might not be worth all that it cofl, would always be worth fomething. No trace or veftige of the expence of the latter would remain, and the efFe£ls of ten or twenty years pro- fufion would be as compleatly annihilated as if they had never cxifled. As the one mode of expence is more favourable than the other to the opulence of an individual, fo is it likewife to that of a nation^ The houfes, the furniture, the cloathing of the rich, in a little time, become ufeful to the inferior and middling ranks of people. They are able to purchafe tliem when their fuperiors grow weary of them, and the general accommodation of the whole people is thus gradually improved, when this mode of expence becomes univerfal , among men of fortune. In countries which have long been rich, you will frequently find the inferior ranks of people in pofleflion both of houfes and furniture perfe6lly good and entire, but of which THE WEALTH OF NATIONS. which neither the one could have been buih, nor the other have been made for their ufe. What was formerly a feat of the family of Seymour, is now an inn upon the Bath road. The marriage bed of James the Ift of Great Britain, which his Queen brought* with her from Denmark, as a prefent fit for a fovereign to make to a fovereign, was, a few years ago, the ornament of an alehoufe at Dunfermline. In fome ancient cities, which either have been long ftationary, or have gone fomevvhat to decay, you will fometimes fcarce find a fingle houfe which could have been built for its prefent inhabitants. If you go into thofe houfes too, you will frequently find many excellent, though antiquated pieces of furniture, which are ftill very fit for ufe, and which could as little have been made for them. Noblv- palaces, magnificent villas, great collections of books, .0:atues, pictures, and other curiofities, are frequently both an ornament and an honour, not only to the neighbourhood, but to the whole country to which they belong. Verfailles is an ornament and an honour to France, Stowe ana "ilton to England. Italy ftill continues to command fome fort of veneration by the number of monuments of this kind which it poffefies, though the wealth winch produced them has decayed, and the genius which planned them feems to be extinguifhed, perhaps from not having the fame employment. ' '^ The expence too, which is laid out in durable commodities^ is favourable, not only to accumulation, but to frugality. If a perfon fhould at any time exceed in it, he can eafily reform without expofing himfelf to the cenfure of the publick. To reduce very much the number of h»j fervants, to reform his table from great profufion to great frugality, to lay down his equipage after he has once fet it up, are changes which cannot efcape the obfervation of his neighbours, and which are fuppofed to imply fome ac- knowledgement of preceding bad conduct. Few, therefore, of thofe ♦ , who 423 CHAP. Hi. !M 424 THE IfA-niR^B^ AKlt)' feAt^SES>' ferred from his chan^ng his condu^. TheTe are things' in wlwch further expence is frequently rendered unneceiTary ^y former expencei and when a perfon ftops fhort^ he appears to do fo, not becaufe he Iws exceeded his iWtuiw, but becauie he has fatisficd his fancy. vftwts u > '-^fix?; J« jt not,, however, by alt this' be underftoed to mean, that the oixe %ecie8 of expence alvrays bet^ens a mere liberal or generous i|Mrit than tlie other. When a man o£ fortune i^ ipends THE WEALTH OF NATIONS. 4*5 ipends his revenue chiefly in hofpitality, he ihares the greater ^'i.^^* part of it with his friends and companions; but ..when he employs it in purchafing fuch durable commodities, he often ipends the whole up. ^JX> ■ d »^i'-^rtl '^O' ribffi 3iJf/*, CHAP. IV. ^■rilif^ !fituatin i'lf/ •/'3hu hiiif'^im 'h _ *tA'fi i j' I'iV.r.'fr) ; •■- UF'f aril As the quantity of ftock to be lent at intereft increafes, the in*< tereft, or the price which muft be psdd for the ufe of that ftock^ necellarily diminiflies, not only from thofe general caufes whidi> make the market price of things commonly diminish as their quan- tity increafes, but from other caufes which are peculiar to this particular cafe. As capitals increafe in any country, the profits which can be made by employing them neceflarily dimini(h. It becomes gradually more and more difficult to find within the coun- try a profitable method of employing any new capital. There: aiifes inconfequence a competition between different capitals, the owner of one endeavouring to get pofieifion of that employment which is occupied by another. But upon moft occafiohs he can' hope to juftle that other out of this employment, by no other, means but by dealing upon more reafonable terms. He muft ||ot only fell what he deals in fomewhat cheaper, but in order to get it. to fellj he muft fometimes too buy it dearer. The demand for pi;o- duftive labour, by the increafe of the funds, which are de^edt for maintsuning it, grows every day greater and greater. Labourer9> eafily find employment, but the owners of capitals find it difficulty to get labourers to employ. Their competition raifes the wag^ of labour, and finks the profits of ftock. , But when the profits^, which can be madq by the ufe of a capital are in thiis manner. 4i7^v, minilhed as: it were at both ends, the. price which can be paid foi^ . theufeof itt that is the rate of intereft, mud; necei&rUy bjs (U-*- miniOied, with. them,. ,;,j y^^,, ^M^.j^dW .imi :m^^ ^hnuoq mA Mk. Locke, Mr. Law, and Mr. Montclquiou, as well as mvxp\ other writers,, feem to have imagined that the increafe of tho quantity of gold and fUveri^in^confequence of the. difcovety'o^ 4v .. . ^ ^^ THE WEALtii O^ NATIONS. 43» the «|«ni(h' Weft Irtdte^'M*^^ c hap. the rate of intereft through the greater part of Europe. ' Thofe metals, they fay, having become of lefs value themfelves, the ufe of< any particular pdrtibn of theih fteceflarily became of lefs Value to6j(eihd cdnfequently the prite which could be paid for it. 't'his notioi^, which ^t firfl: fight feems fo plaufible, has been fo fully expofed by Mr. Hume^ that it is, perhaps, unneceflary to fay any thihg more about it. The following very fhort and plain argu- ment, however, may ferve to explain more diftinftly the fallacy which feems to have miOedthofe gentlemen. ''>^*^ ^^ "^^ "^'"" BEFORE the difcovery of the Spanifh Weft Indies, ten percent. feeAis to hatve been the common rate of intereft through the greater part of Europe. It has fince that time in different countries funk td lix, five, four, and three per cent. Let us fuppofe that in every ^ particular country the value of filver has funk precifely in the fame pro^rtfon as the rate of intereft j and that in thofe countries, for exattiple, where intereft has been reduced from ten to five per certt. the fame quantity of filver can now purchafe juft half the, qudiittty of' goods which it could have purchafed before. This fuppbfition wilt not, I believe, be foUnd any where agreeable to the truth, buf it% the moft favourable to the opinion which we are gloing to examine; and even upon this fUppofition it is utterly impoflible that the lowei'ing of the value of filver could have the fmalleft tendency to lower the rate of intereft. If a hundred^ pdunds are in thofe countries now of no more value than fifty, ^ pounds were then, ten pounds muft now be of no more value than five pounds were then. Whatever were the caufes which lowered the value of the capital, the fame muft necefTarily have lowered that of the intereft, and exaftly in the fame proportion. The pro- portion between the value of the capital and ihdX of the intereft, ' muft have remained the fame, though the rate had never been' .**" altered. na ■4« 43* BO O K THE NATURE AND CAUSES OF " altei<«d. By akeiring the rate, cm the cotitrarjr, 'the proportion between t\v>& two values is neceflarily altered. If a hundred pounds now are worth no more than fifty were then, five pounds now can be worth no more than two .pounds ten (hillings were then. By f«dacing the rate of intereft, therefore, from ten to fire per cent. 'we give for the ufe of a capital, which is fiippofed to be equal to -one-half of its former value, an intereft which is equi^ to one-fourth only of the value of the former intereft. Any increafe in the quantity of filver, while that of the com- modities circulated by means of it remained the fame, could have no other effc6t tlian to diminilh the value oi that metsd* The no- minal value of all forts of goods would be greater, but their real value would be precifely the fame as before. They would be ex- changed for a greater number of pieces <^ filicert but the quantity of labour which they Could command, the number of pec^ whom they could maintain and employ, would be precifely die fame. The cafMtal of the country would be the &me, though a greater number of pieces might be requifite for c(mveying any equal fknlion of it from one hand to another. The deeds of afligmnent» like- the conveyances of a verbofe attorney, would foe more cum-* berfbme, but the thing afhgned would be priciftly the fame as before, and could produce only the fame efiiefls. The funds for maintjuning productive labour bang the fame, the demand for it would be the fame* Its price or wages, therefore, thoi^h no* ■ minally greater, would realty be the fame. Thef would be paid in a greater number of pieces of filver j but they would purdiaie only the £ime quantity of goods. The profits of flock would bft the fame both nominally and really. The wages of labour are commonly computed by the quantity of filver which is paid to the lahourer. When that is increa&d, therefore, his wages appear tabe increa&d, thoqgh they may fometimes be no greater than ^ '^ , before. . ■:.k T H E ^ W E A L T H OF NjAT I O N S* b«|S9i]««. Qut the fvpfits <^ ftock aro not computed by the num- ber of pieces, of fUver with which they are paid, but by the pro- pottion which thof^ piec^ft b«ar to the whole capital employed. Thus v(i a particular country five fhillings a week are faid to be the common wages, of labour, and ten pei' cent, the common .profits of ftock. But the whole capital of the country being the fame as before, the competition between the different capitals of individuals into which it was divided would likewife be the fame. They would all trade with the fame advantages and difad vantages. The common proportion between capital and profit, therefore, would be the fame, and confequently the common intereft of mo- ney; what can commonly be given for the ufe of money being neceflarily regulated by what can commonly be made by the ufe ; Any increafe, in the quantity of commodities annually circulated within the country, while that of the money . which circulated thein, remained the fame, would, on the contrary, produce many qflyfit important eiFe6ls, beiides that of raifing the value of the money* The capital of the country, though it might nominally be the iamc, would really be augmented. It nught continue to be CXf^fied by tho fivne quantity of money, but it would cominaiDd a greater quantity of labour. The quantity of productive labour whicli, it could maintain and emj^oy would be increafed, and con-> ^^u^ntly the demand for that labour. Its wages would naturally >^iiJb with the demand, and yet might appear to fink. They might be p(ud wijtli a fmatkr quantity of money, but that fmallcr quantity >Biighl purchafe a gfeater quantity of goods than a greater had ^ne, before. The profits of ftock would be diminifhtd both really .«»d irv appearance. The whole capital of the country being aug- ,mented» the competition between the different capitals of which It was coropoftd^ woukf naturaHy be augmented aloTig wlth^ it. Vol. I. 3 K • . The 43i QHAP. IV. '11 in 434 BOOK II. THE NATURE AND CAUSES OF The owners of thoie particular capitals would be obliged to content themfelves with a fmaller propoition of the produce of that labour which their refpe6tive capitals employed. The intereft of money^. keeping pace always with the profits of ftock, might, in this man< ner, be greatly diminiihed, t! jugh the value of money, or the quantity of goods which any particular fum could purchafe, was greatly augmented. In fome countries the intereil of money has been prohibited by law. But as fomething can every where be made by the ufe of money, (bmething ought every where tobtt paid for the ufe of it; This regulation, inflead of preventing^ has been found from expe- rience to increafe the evil of ufury; the debtor being obliged ta, pay, not only for the ufe of the money,, but for the rilk which^hi*^ creditor runs by accepting a compenfation for that ufe. He is- obliged, if on** may fay fo, to infuce hJs creditor from the penalties of ufury* In coimtries where ihtereft is permitted; the law, in order to prevent the extortion of ufury, generally fixes the higheft rate which can be taken without incurring a penalty. This, rate ought, always to be fbmewhat above the lowed market {H-ice^ or- the price which is commonly paid for the ufe ofrmoney^^ by thofe who can*, give the moft undoubted . feeurity. If this legal rate (houki be fixed below the loweft market. rate» theeffcftsiof this. fixation muftbc nearly the fame as thofe (^, a- total prohibition of interefl;. Thee creditor will not lend his money , foe lefs than the ufe of it is worth* . and the debtor muft pay him for the ri(k which- he runs by' ac-^ cqpting the full value of that ufe. If it is £xed precisely at th& loweft market price, it ruins with honed: people, who relpe£l the. laws of thdr country, the credit of alL thoie who cannot give the veiybeft feeurity, and obliges them to. have recourfe to exorbitant , . . ufurers, . THE WEALTH OF NATIONS. 431 In a country, fuch as Great Britain, where money is C HA P. J V • lifurers. lent to government at three per cent, and to private people upon good fecurity at four and four and a half; the prefent legal rate, five per cent, is, perhaps, as proper as any. The legal rate, it is to be obferved, though it ought to be ibme- vrhat above, ought not to be much above the lowefl; market rate. If the legal rate of intereft in Great Britain, for example, was fixed fo high as eight or ten per cent, the greater part of the money which was to be lent, would be lent to prodigals and proje«5tor8, who alone would be willing to give this high intereft. Sober people, who will give for the ufe of money nc more than a part of what they are likely to make by the ufe of it, would not venture into the competition. A great part of the capital of the country would thus be kept out of the hands which were moft likely to make a profitable and advantageous ufe of it, and thrown into thofe which were moft likely to wafte and deftroy it. Where the legal rate of intereft, on the contrary, is fixed but a very little above the loweft market rate, fober people are univerfally preferred, as bor- rowers, to prodigals and projectors. The perfon who lends money gets nearly as riuch intereft from the former as he dares to take from, the latter, and his money is much fafer in the hands of the cue fett of people than in thofe of the other. A great part of the capital of the country is thus thrown into the hands in which it is moft likely to be employed with advantage. No law can reduce the common rate of intereft below the loweft ordinary market rate at the time when that law is made. Not- withftanding the edid of 1766, by which the French king attempted to reduce the rate of intereft from five to four per cent, money continued to be lent in France at five per cent.; the law being evaded in (everal difierent ways. 3 K 2 The «v. 436 BOOS II. THE NATURE AND CAUSES OF « Thb ordinary market price of land, it is to be obferved, depends every where upon the ordinary market rate of intereft. The pcr- fon who has a capital from wliich he wifhes to derive a revenue, without taking the trouble to employ it himfelf, deliberates whct^^er he ftiould buy land with it,, or lend it out at intereft. The fupencr fecurity of land, together with .fome other advantages w!ut.h ul- inoft every where attend upon this fpeciesof property, will ger.crally difpofe him to content himfelf with a fmalkr revenue from land, than wbat he might have by lending out hiat money at intereft. Thefe advantages are fufficient to compenfate a ceitniii differ- ence oi revenuei but they will compenfate a ceiiain difference only J and if the icnt of land (houM fall (hoit of the intereft of money by a gre.v.-T dJIFerjince, Miobody would buy land, which would foon reduce 'its oidjnaiy price. On the contrary, if the advantages fhould n'.urh more than compenfate the difference, every body would buy land, which again would foon raife its ordi- nary price. When intereft was at ten per cent, land was com- monly fold for ten and twelve years purchale. As intereft funk to fix, five, and four per cent, the price of land rofe to rwenty, five and twenty, and thirty years purchale. The market rate of intereft is higher in France than in England i and the common prici' of land is lower. In England it commonly fells at thirty 1 in France at twenty years purchafe. \(, -)••'■■ ^t g TH^ WEALTH OF NATIONS. 437 i- » ,'.!'. CHAP. V. 0/ the different Employment of Capitals, T HOUGH gH capitals are dcftined for the maintenance of CHAP, produftive labour only, yet the quantity of that labour. which equal capitals arc capable of putting into motion, varies extreamly according to the diverfity of their employment; as does likewife the value which that employment adds to the annual pro- duce of the land and labour of the country. A CAPITAL may be employed in four different ways : either, firft, in procuring the rude produce annually required for the ufe and confumption of the focietyj or, fecondly, in manufafturmg and preparing that rude produce for immediate ufe and confump- tion j or, thirdly, in tranfporting either the rude or manufaftured produce from the places where they abound to thofe where they are wanted; or, laftly, in dividing particular portions of either into fuch fmall parcels as fuit the occafional demands of thofe wha want them. In the firfl way are employed the capitals of all thofe who undertake the improvement or cultivation of lands, mines, or fifheriesj in the fecond, thofe of all mafler manufafturers > in the third, thofe of all vvliolefale merchants; and in the fourth, thofe of all retailers. It is difficult to conceive that a capital fhould be employed in any way which may not be clafled under fome one or other of thofe four. • Each of thofe four methods of employing a capital is efTentially necelTary cither to the exiflence or extenfion of the other three* or to the general conveniency of the fociety. n Unless 43^ BOOK II. THE NATUR"E AND CAUSES OT Unless a capital was employed in furniihing rude produce to a certain degree of abundance, neither mai /a£lures nor trade of any kind could eidft. "Unless a capital was employed in manufafturing that part of the rude produce which requires a good deal of preparation before it can be fit for ufe and confumption, it cither would never be produced, becaufe there could be no demand for it i or if it was produced fpontaneoufly, it would be of no value in exchangei and could add nothing to the wealth of the fociety. ;<■*. Unless a capital was employed in tranfporting either the rude; or manufa£lured produce from the places where it abounds to thofe where it is wanted, no more of either could be produced than was necefTary for the confumptipn of the neighbourhood. The ''ipital of the merchant exchanges the furplus produce of one ace for that of another, and thus encourages the induftry and increalbs the enjoyments of both. Unless a capital was employed in brealdng and dividing certsun portions either of the rude or manufa£lured produce, into fuch. fmall parcels as fuit the occafional demands of thofe who want them, every man would be obliged to purchafe a greater quantity of the goods he wanted, than his immediate occalions required. If there was no fuch trade as a butcher, for example, every man would be obliged to purchafe a whole ox or a whole fheep at a time. This would generally be inconvenient to the rich, and much more fo to the poor. If a poor workman was obligr-l tQ purchafe a month's or fix months provificxis at a time, a great part of the flock which he employs as a capital, in the inftruments of his trade, or in the furniture of his fhop, and which yields him a revenue, he would be forced to place in that part of his flock which is referved for '" * "4 immediate THE WEALTH OF NATIONS. 439 immediate confumption, and which yields him no revenue. Nothing can be more convenient for Tuch a pei'fon than to be able to purchafe his fubfiftence from day to day, or even from hour to hour as he wants it. He is thereby enabled to employ almofl his whole ftock as a capital. He is thus enabled to furnifh work to a greater value, and the profit wlach he makes by it in tins way much more than compenfates the additional price which tha profU of the retailer impofes upon the goods. The prejudices of ibme {K>Utical writers i^^inft fhopkeepers and tradefmen, are altogether without foundation. So far is it from being neceflary either to tax them or to reftrifl their numbers, that they can never be multiplied fo ; as to hurt the publick, though they may fo as to hurt. one another. The quantity of grocery goods, for example, which can be fold in a particular town, is limited by the demand of that town and ndghbourhood. The capital, therefore, which can be employed in the grocery trade cannot exceed what is fuf- ficient lO purchafe that quantity. If. this capital is divided between two different grocers, their competition will tend ta make both of them fell cheaper, tlian if it were in the hands of one only; and if it. were divided among twenty, their competition would be juft fo much the greater, and the chance of thdr combining to* ^ther, in order to raife the price;, juft fb much the lefs. Their competition, might perhaps ruin ibme of themielves j but to take care of this is the bu(inef& of the parties concerned, and it may ifdfely be trufted to their dilcretion. It can never hurt dther the confumer, or the producer; on the contrary, it muft tend to make the retailers both fell cheaper and buy dearer, than if the whole trade was monopolized .by one or two perlbns. Some of them, perhaps, may (bmetimes decoy a weak cqftomer to buy what he has no occafion for. This evil, however, is of too little impor- tance to defenre the publick attention, nor would it neceffarily be prevented by reftri£ting their numbers. It is not the multitude * of. ''IF 440 THE NATURE AND CAUSES OF B O O K^ of alp-houfcf, to give the moft fulpicious example, that occaflons a general dirpofition to drunkennefs among the common people ; but that difpodtion aiifing from other caufes necefiarily givei em» ployment to a multitude of ale-houfes. The perfons whofe capitals are employed in any of thofe four ways are themfelves produftlve labourers. Their labour, when properly directed, fixes and realizes itfelf in the fubjcft or vendible commodity upon which it is beftowcil, and generally adds to its price the value at leaft of their own maintenance andconfumption. The profits of the farmer, of the manufacturer, of the merchant, and i-etailer, are all drawn from the price of the goods which the two firft produce, and the two laft buy and fi'll. Equal capitals however, employed in each of thofe four different ways, will put into motion very different quantities of productive labour, and aug- ment too in very different proportions the value of the annual produce of the land and labour of the fociety to which they belong. The capital of the retailer replaces, together with its profits, that of the merchant of whom he purchafes goods, and thereby en- ables liim to continue his bufincfs. The retailer himfelf is the only produftive labourer whom it employs. In his profits, confifts the whole value which its employment adds to the annual produce of the land and labour of the fociety. The capital of the wholefale merchant replaces, together with their profits, the capitals of the farmers and manufai^urers of whom he purchafes the rude and manufadured produce which he deals in, and thereby enables them to continue their re(pe£live trades. It is by this fervice chiefly that he contributes indiredtly to fupport the productive labour of the fociety, and to increafe the value of . V, ■■■ Its THE WEALTH OF NATIONS. Its annual produce. His capital employs too the Tailors and earners who tranfport his goods from one place to another, and it augments the price of thofe goods by the value, not only of his profits, but of their wages. This is all the produ£live labour which it immediately puts into motion, and all the value which it immediately adds to the annual produce. Its operation in both thefe refpe£ls is a good deal fuperior to that of the capital of the retailer. 441 Part of the capital of the njafter manufacturer is employed as a fixed capital in the inftruments of his trade, and replaces, together with its profits, that of fome other artificer of whom he purchafes diem. Part of his circula ting capital is employed in purchafmg materials, and replaces, with their profits,, the capitals of the farmers and miners of whom he purchafes them. But a great part of it is always, either annually,, or in a much fhorter period, diftributed among the different woricmen whom he employs. It augments the value of thofe materials by their wages, and by their mailers profits upon the whole flock of wages, materials, and inftruments of trade employed in the bufinefs. It puts into motion, there-* fore, a much greater quantity of productive labour, and adds a much greater value to the annual produce of the land and labour of the fociety, than an equal capital in the handsi of any wholes fale merchant. No equal capital puts into motion a greater quantity of jproduClive ; labour than that of the fanner. Not only his labouring fervants, but his labouring cattle, are productive labburer&. In agriculture, too nature labours along with man ; and though H^a labour cofls no expence, its produce has its value, as well as that of the mofl expen- five workmen. The mofl important operations of agriculture feem intended, not fo much to increafe, though they do that too, as to Vol. I. 3 L. direClt THE NAtURfe AND CAlJSES t>P aired the fct^iiity of liAttire towftfds tlie proda^lOh of the (^lahfi moft profitable to man. A field overgrown with briars and bramblei may frequently produce as great a quantity of vegetables as the bell cultivated vineyard Or corn field. t*lanting and tillage fre« quently rcguhte more thin they animate the aftive fertility of hature ; and after all their labour, a great part: of the work always remairis to be dbne by her. The labouvcrt and labouring cattle, therefore, employed in agriculture, not only occaAon, like the workmen in manufadtures, the reproduction of a value equal to their own confuthption, or to the capital which employs them, together with its owners profits j but of a rtiuch greater value. Over and above thie capital of the farmer ai^ all its profits, they negu*- larly occafion the reproduaion of the i«nt Of the landlord. This rent may be confidercd as the produce of thofe powen of nature, the ufe of which the landloitl lertds to the former. It Is g^reater or fhialler according to the fuppoftd eittttit of thofe powers, or, in other words, according to the fuppofed natural or improved fertility of the land. It is the work of nature which i*emaifis after deducting or comptnfating -every thing which can be rognrded a« the Work of mart. It is leldom lefs than a fourth, and ffequenfty tnore than a third of the whole produce. No equal quantity of produdlive labour employed in manufactures can ever occafion fo great a reproduction. In them nature does nothing ; man does all; and the reproduction muft always be in proportion to the flrength of the agents that occafion it. The cajjital employed in agricultuiie, therefore, not Ohly puts into motion a greater quantity of productive labour than any equal capital employed ia manu* * aiftures, but in proportion too to the quantity of productive labour which it employs, it adds a much greater value to the annual pro- duce of the land and labour of the country, to the redl wealth and revenue of its inhabitants. Of all tke w«ys in Which a 7 capital THE WEAtTH OF NATI0N5I* 443 fapiUl ca» U wnplpyedi it is by far the mo(^ ^dvam^geous to the c h^a p. fcp«ty, Thv Cipit%ls ontployc^ in th9 agriculture ind in the retail trade «f finy fo«Mity« muA tlwdys reftda within that ibcicty. Their em- j^loyment i* confined almoft to a precife fpot, to the farm, and tP Ihe fliop pf th« reftaikr. They muft generally too, though Iber* afQ Smm nx^^nftms to thi9» belong to refidenit nvembers 9^ ^A)icicfcy» t I. ■ ■ ■ . .. The capital of a wholefale merchant, on the contrary, (eems to have no fixed or necelTary refidence any-where, but may wander flbout from place to fiicp, according as it can mtlicr buy dieap or IbUdcar.. ■ >e ! i'.9 ,*! « The ci^ital of the manufa6^urer muff no doubt refide where the manufiifture is carried on } but where this Ihall be, is not always ■eceflartly determined. It may frequently be at a great diftance both from the place where the materials grow, and from that where the compleat manufacture is confumed. Lyons is very dif- *ant both from the places which afford die materials of its manu- 4k&ures, and from thofe which confume them. The people of fafhion in Sicily aie cloathed in filks made in other countries, from, the materials which their own produces. Part of the wool of Spain is manufafhired in Great Britain, and fome part of that cloth ia^ afterwards fent back to Spain. -ft Whether the merchant whofe capital exports the furplus pro^- 4luce of any fociety be a native or a foreigner, is of very little im- povtance. If he is a foreigr\er, the number of theif produflive labourers >is neceifapily lefs than if he had been a native by one •map only; and lite yalue of their annual . produce, by the pro- ^ V 3 L 2 fits^ it |l!i ii't 'ill 444 BOOK II. THE NATURE AND CAUSES OF fits of that one man. The (ailors or carriers whom he employs may ftill belong indifFercntly either to his country, or to their coimtry, or to fome third country, in the fame manner as if he had been a native. The capital of a foreigner gives a value to their -furplus produce equally virith that of a native, by exchanging it for fomething for which there is a demand at home. It as effeftually j-eplaces the capital of the perfon who produces that furplus, and as i ef&dually enables him to continue his bufinefs j the fervice by which the capital of a wholefale merchant chiefly contributes to fupport the productive labour, and to augment the value of the annual produce of the fociety to which he belongs. fjL, It is of more confequence that the capital of the manufai'^..ur^ fhould refide within the country. It neceflarily puts into motion a greater quantity of productive labour, and adds a greater value to . the annual produce of the land and labour of the fociety. It may, however, be very ufeful to the country, though it fhould not relids within it. The capitals of the Britifh manufacturers who work up the flax and hemp annually imported from the coafts of the Baltick, are furely very ufeful to the countries which produce them. Thofe materials are a part of the furplus produce of thofe countries which, unlefs it was annually exchanged for fomething which i$ in demand there, would be of no value, and would foon ceafe to be produced. ' The merchants who export it, replace the capitals of the people who produce it, and thereby encourage them to continue the production ; and the Britifh manufacturers replace the capitals of thofe merchants. .•(i-<" A PARTICULAR couutry, in the fame manner as a particular perfon, may frequently not have capital fufKcient both to improve and cultivate all its lands, to manufacture and prepare their whole rude produce for immediate ufe and confumption, and to tranfport mi 4. t^c THE WEALTH OF NATIONS. the furplus part either of the rude or manufa6lured produce to thofe diftant markets where it can be exchanged for fomething fo<^ 'which there is a demand at home. The inhabitants of many different parts of Great Britain have not capital fufficient to im- prove and cultivate all their lands. The wool of the fouthern counties of Scotland is, a great part of it, after a long land car- riage through very bad roads, manufa£lured in Yorkfhire, for want of a capital to manufa6lure it at home. There are many little manufacturing towns in Great Britain, of which the inhabitants have not capital fufficient to tranfport the produce of their own induflry to thofe diflant markets where there is demand and con- fumption for it. If there are any merchants among them, they are properly only the agents of wealthier merchants who refide in fome of the greater commercial cities. f . 445 When the capital of any counti7 is not fufficient for all thofe thre£ purpofes, in proportion as a greater (hare of it is employed in agriculture, the greater will be the quantity of produftive labour which it puts into motion within the country i as will Ukewife be the value which its employment adds to the annual produce of the land and labour of the fociety. After agriculture, the capital employed in manufactures put into motion the greatelt quantity of productive ■labour, and addG the greateft value to the annual produce. That which is employed in the trade of exportation, has the lead efTed of any of the three. iu {/■]-// " The country, indeed, which has not capital fufficient for all thofe three purpofes, has not arrived at that degree of opulence for which it fcems naturally deftined. To attempt, however, pre- maturely and with an infufficient capital, to do all the three, is certainly not the fhorteft way for a fociety, no more than it would be for an individual, to acquire a fufficient one. The capital of i| . $ aaB •IT** THE NATURE AND CAUSES OF B o o ic all the indi\idaals of a nation, has its limits in the fiwe manner as that of a iingle individual, and is capable of executing only cer^- tain purpo&s. The capital of all the individuals of a station is iiKreafed in the fame manner as that of a iingle ii94ividuaU by thdir continually accumulating and adding to it whatever they fave out of their r-eveaue. It is likely to increafe the fail:e(V, therefore* wb«n it is employed in the way that affords the greateft revenue to all the inhabitants of the country, as they will thvis he enabled to make Che greateft favings. But tlie revenue of all the inhabi- tants of the country is neceflkrily in proportion to the value of the annual produce of th^r land and labour. :\irx\\\ It has Ixsen the principal caule of die rapid progreis of our American colonies towards wealth and greatneis, that almoA their whole capitals have hitherto been employed in agriculture. They have no manu£a6tures, thofe houfhold and coarfer manufadures cxcqited w^h nocdfarily accompany the progrefs o^ agiriculture, and which ai>e the work of the women and children in ^every pri- vate family. The greater part both of the exportation andcoafting trade of America, is carried on by the capitals oi merchants who refide in Great Britain. Even the ftojes and warehovUes from which goods are retailed in fome pixwinces, particularly in Vir- ginia and Maryland, belong many of them to merchants who rcfide in the mother country, and afford one of the few inftances of the retail trade of a /ociety being carried on by the capitals of thofe who are not refident members of it. Were the Americans, either 'by combination or by any other fort of violence, to flop the im- portation of European manufa<^tures, and, by thus giving a mo» nopoly to fiich of their own countrymen as could mauufat^ure the like goods, divert any confiderable part of their cajutal into this employment, they would retard inflead of accelerating the fuiither increafe in the value of their annual produce, and would (jbflrudt . inflead It THE WEALTH OF NATIONS. 447 in(l«ftd of pitowioting th« progiiefs of their country towards real C ha p. wealth and greatnefs. This would be ftill more the cafe^ were they to attempt, in the fame manner, to monopolize to themfelves th«r whole ejiportafion trade. Thb courie of human {uofperity, indeed, feems icarce ever to have been of fo long continuance as to enable any great country to acquire capital fufficient for all thofe three purpofes; unlefs, perhaps, we give credit to the wonderful accounts of the wealth and cultivation of China, of thofe of antient Egypt, and of the antient ftate of Indoflan. Even thofe three countries, the w«althieft, according to all accounts> that ever were in the world, are chiefly renowned for their fuperiority in agriculture and maaufadures. They do not appear to have been eminent for foreign trade. The antient Egyptians had a fuperftitious antipathy to the fea ; a fuper> ilition nearly of the fame kind preva'tls among the Indians ; and the Chinefe have never excelled in foreign commerce. The greater part of the furplus produce of all thofe three countiies feems to have been always exported by foreigners, who gave in exchange for it fomethir^ elfe for wli^ch they fouud a demand there, frequently gold andfilver. i ' .• i4»tr.r - \i4* it--. ( **l-%*i -tiv. It is thus that the fame capital will vy ny country put into motion a greater or fmaller quantity of produ6live labour, and add a greater or fmaller value to the annual produce of its land and labour, according to the different proportions in which it is em- ployed in agriculture, manufaiSturcs, and wholefale trade. The difference too is very great, according to the difterent forts of whole- fale trade in which any part of it is employed. Alt. wholefule trade, all buying in order ^o fell again by wholo- fale, may be reduced to three different forts. The hor^e trade, the foreign trade pf confuraption, and the carrying trade. The liome trade 448 BOOK THE NATURE A,]^p , CAUSES JOi^ trade is employed in purchafing in one part pf the fame country, and felling in another, the produce of the induftry of that country. Jt comprehends both the inland and the coafting trade. The foreign trade of confumption is employed in purchafing foreign goods for home confumption. The carrying trade is employed in tranf- afting the commerce of foreign countries, or in carrying the fur- plus produce of one to another. The capital which is employed in purchafing in one part of the country in order to fell in another the produce of the induftry of taat country, generally replaces by every fuch operation two dif "mft capitals that had both been employed in the agriculture or manufaftures of that country, and thereby enables them to con- tinue that employment. When it fends out from the refidence of the merchant a certain value of commodities, it generally brings bv^ck in return at leaft an equal value of other commodities. When both are the produce of domeftick induftry, it neceflarily replaces by every fuch operation two diftin^l capitals, which had both beert employed in fupporting productive labour, and thereby enables them to continue that fupport. The capital which fends Scotch inanufa£hires to London, and brings back Englilh corn and manufactures to Edinburgh, neceffarily replaces, by every fuch operation, two Britifh capitals which had both been employed in. the agriculture or manufactures of Great Britain. . ,| The capital* employed in purchafing foreign goods f ade generally come in before the end of the year, and ibmetimes three or four times in the year. The returns of the foreign trade of confumption feldom co.ie in before the end of the ye^', and ibmetimes not till after tvtro or three years. A capital, therefore, employed in the home-trade will fometimes make twelve operations, or be fent out and returned twelve times, before a capi- tal employed in the foreign trade of confumption has made one. If the capitals are equal, therefore, the one will give four and twenty times more encouragement and fupport to the indiudry of the country than the other. .. . v- . ti The foreign goods for home-confumption may fometimes be purchafed, not with the produce of domeflick induftry, but with fome other foreign goods. Thefe laft, however, muft have been purchafed either immediately with the produce of domeftick induftry, or with fomething elfe that had been purchafed with it ; for the cafe of war and conqueft excepted, foreign j^oods can never be acquired, but in exchange for fomething that had been produced at home, either immediately, or after two or more different ex- changes. The effedls, therefore, of a capital employed in fuch a round about foreign trade of confumption, are, in every reipeft, the fame as thofe of one employed in the moft direft trade of the fame kind, except that the final returns are likely to be ftill more diftant, as they muft depend upon the returns of two or three diftinft foreign trades. If the flax and hemp of Riga are pur- chafed with the tobacco of Virginia, which had been purchafed Vol. I. 3 M • with MHflt0i, ^% BOOK II. THE , ^fv^TJLJR^ , AWD.I CAUSES r0F >ylth Brltiib inanufa^ur^s^r the metth^ntmnuft wait forlhevett^n^ of two dUtin£l foreign trades li>elbre he can employ the fame ca^i pital u> re-rpvurchafinga like quantity of firitifli mant]fa«?uresU If the tobacco of Virginia had been purchafed; not with Britilh manufa£tures, but with the fugar and rum of Jamaica wluch had been purchafed with thofe manufa£tures> he muft wait for the returns of three. If thofe two or three diftin^t foreign trades fhould happen to be carried on by two or three diftinA mertihantsy of whom the fecond buys the goods imported by the firft> and ihtf third buys thofe imported by the fecond, in order to export' dieAt again, each merchant indeed will in this cafe receive the retumst' of h;$ own capital more quickly; but the final returns cftbt whol^ capital employed in the trade will be juft as flow as ev^r.' " Whs- tiier the whole capital employed in fuch a round about trad^ belrnr^ to one merchant or to three, can make no difference Witlt^ regard to the country, though it may with regard to the particti-i^ lar merchants. Three times a greater capital muft in both caies- be employed, in order to exchange a certain value of Bnti(h< ma- nufactures for a certain qutahtity of flax and hemp, than woUld have been necefTary, had the manufactures and the ftit 3tnd hetti^ been direftly exchanged for one another. The whole calpital eihi' ployed, therefore, in fuch a round about foreign trade Gf corfi^ fumption, will generally give lefs encouragement andfupjpbrt td'thfr produftiVe labour of the country, than an eqnal capital Employed! in a more direft trade of the fame kind* liX " WiiATEyxR be the foreign commodity with which the foreign ; goods fov home-confumpti '1 are purchafed, it can occa(ion,,iiiq;( eflential difference either in the nature of t' ;; trade, or in tlie en-»:' couragement and fupport which it can give to the produ(5tive labour of t^e country from which it is carried on. If they are pur- ' chafed with the gold of Brazil, for example, or v/ith the lilver (rfrpeoii,' ithiB gold arid filvcrjilitectht tob&ccd of Vhgmia,' rti^ft have 'been pUrchdfed with fomething that either was the product of thi' rinduftry of the country, or that had been purchafM with'i^fometfaing elfe that was fo. So far, therefore, as the I}it)du6)[ive laboor of the cowntry is concerned, the foreign trade of confutttption which is ie^rried on by means of gold and fUver, has aM the advantages and all the inconveniencies of anyother equally round about foreign trade of confumption, and will rei>lace juft as faft or juft as flow the capital which is imm^iately employed in fupporting that produftive labour. It feems even to have one advantage over any other equally round about foreign trade. The tranfportation of thofe metals from ono* place to another, on* account of their fmall bulk and great vMu^i 19 lefs expendve than that of almoft any other foreign goods o|;equal value. Their freight is much lefs, and their infurance not ^'eater. An equal quantity of foreign goods, therefore, may freiquently be purchafed with a fnialler quantity of the produce of (donleftick induftry, by the intervention of gold and filver, than by? that of any other foreign goods. The demand of the country may frequently, in this manner, be fuppHed more compieatly and at a fmaller expence than in any other. Whether, by the con- tinual exportation of thofe metals, a trade of this kind is likely to impoverifli the country from which it is carried on, in any other way, I fliall have occafion to examine at great length here-» after. 4st That part of the capital of any country which is employed in the caiTying trade, is altogether withdrawn from fupporting the productive labour of that particular country, to fupport that of fome foreign countries. Though it may repliwc ^/y every operation two diftrn(^ capitals', yet neither of them belong tu ihat particular country. The capital of t!ie Dutch merchant, which carries the com of Poland to Portugal, and brings back the fruits and wines 3 M 2 of 45^ Tm oNiTW^i r)Al!r© and partly/ upon the diftance of the ports between which they are to be car.> ri^; chiefly upon the former of tho(e two circumft^ices. Tlie coal-trade frojXLNewcaftle'ioXfOndon, for example, empk^s mor^'^ * ^ n (hipping *?*■' illlpping thtti) «H the^oaivyin;^ trdcb' of finglaiWl/ thougH «Hi p<^ ^ti,A. ^} are at no great diftanee. To force; th«( :»''J*>^» "^ io mo umf^nt ?(li!iwii3->3f» ^'The capital, therefore^ eniplbyed'in the home-tradeof any country will generally give encouragement and Aipport to a greater quantity of productive labour in that country, and increafe the value of itr annual produce more than an equal capital employed in the foreign tradie of confumption : and the capital employed in this latter trade has in both theft refpedts a ftill greater advantage over an equal capital employed in the carrying trade. The riches, and, fofaras power depends upon riches, the power of every country, muft al- ways be in proportion to the value of its annual produce, the fund from wWch all taxes muft ultimately be paid. But the great objeft of the political ceconomy of every country, is to encreafe the riches and power of that country. It ought, therefore, to give no preference nor fuperior encouragement to the foreign trade of cbttfiimption above the home- trade, nor to the carrying trade s^ve dther of the other two. It ought ndther to force nor to allQlre into dther of thole two channels, a greater (hare of the ca* pital of the country than what would naturally flow into them of. Each of thofe different branches of trade, however, is ; not oiiTy advantageous, but neceflary and unavoidable,, when the oourft of things without any conftraint or violence naturally in«>^ tr^xluces. it. . ' ^ ;...., oii{ ^ m --W)^ Sf't lo ,}iiu.il .axis When th;i produce of any particular branch of induftry exceedSN what the. dtmand of the country reqmres, the furplus muft be 4^ BOOK X^^OW^X^^^ AND CAUSES OT •\ fcnt abrqad, ,9nd CKcl^nged for fomething lot vrhidt there ifc^ii clenfund at , hotpe. Without fuclj exportation, a part of the pro«t duifbive labour of the countiy muft ccafc, and the value of its ?,v n«iaL. produce diminifli. The land and labour of Great Britain ■ io«!uce generally more corn, woollens, and hard ware, than the demand of the home-market requires. The furplus part of them, there-, fore, muft be fent abioad, and exchai^ged for fomethi^g for which r there is a demand at home. It is.pnly by means of fuch ex*,t portation, that this furplus can acquire a value fufficient to,^ compenfate the labour and expence of prod^cing it. The neigh- ,j bourhood of the fea-coal\, and the banks of all navigable rivers,, are advantageous fituatlons for induflry, only becaufe they facilitate ^ the exportation and exchange of luch furplus produce for fomc- • thing elfe which is more in demand there. ^ > .. ^ . ♦44 When the foreign goods which are thus purchafcd with the (^i'-!b plus produce of domeftick induftry exceed the demand of thehome-^y market, the furplus part of them muft be fcnt abroad again,,,^ and exchanged for foruclhlng more in demand at home. Abou,t,ji ninety-fix tboufand hrgHjeads of tobacco are annually purchaftd^^ in Virginia and M ayJarid, with a pait of the furplus producloyed in one or other of thofe ^*4iU^ # -* 'J '■ ,;> ?v ..i'? '■•',' 'i Jtf» i^t^^ijjii ^x^^fjfi^, • ;l^) ■• ■• '■■■■■•'■ iWt Vol. I, 'u*A*;»i^i >^^4iw jtiV; <^h \ 'v^« left *••*"»•••»* III 1 • ■ ■ "i pWi • .j ( , ■■ ■ * '#V*^*/i f,E''^- . o i n rt *i/i ' { 459 ) ^I'iThA tili'V BOOK III. ?!"' '^ WLbi iv »>*'<»»<«'•' .J'«v'*i V •■* J . Of the different Progr*efs df dpulieftce in different Nations. ,j :.:-..:mh G H A P. I. h.:i". Of the natural Progrefs of Opulence, THE great commerce of every civilized fociety, is that carried CHAP, on between the inhabitants of the town and thofe of the ,_,./-./ country. It conflfts in the exchange ctf rude for nianufaftured pro- duce, either immediately, or by the intervention <5f money, or of fome fort of paper which reprefents money. The country fupplies the town with the means of fubfiftence, and the materials of ma- nufafture. The town repays this fupply by fending back a part of the manufaftured produce to the inhabitants of the country. The town, in which there neither is nor can be any reproduftion of fubftances, may very properly be faid to gain its whole wealth and fubfiftence from the country. We muft not, however, upon this account, imagine that the gain of the town is the lofs of the country. The gains of both are mutual and reciprocal, and the ' divifion of labour is in this, as in all other cafes, advantageous to 4ill the different perfbns employed in the various occupations into ^hich it is fubdivided. Tiie inhabitants of the country purchafe of fhe town a greater quantity of manufadured goods, with the pro- . 461 That order of things which neceflity impofes in general, thougtv not in every particular country, is, in every particular country, promoted by the natural inclinations of man. If human inftitu- tions had never thwarted thufe natural inclinations, the towns could no where have incrcafed beyond what the improvement and cultivation of the territory in which they were fituated could fup- poi'ti till fuch time, at leaft, as the whole of that territory was completely cultivated and improved. Upon equal, or nearly equal profits, moft men will chufe to employ their capitals rather in the improvement and cultivation of land, than either in manufactures or in foreign trade. The man who employs his capital in land,, has it more under his view and command, and his foitune is much lefs liable to accidents than that of the trader, who is obliged fre- quently to commit it, not only to the winds and the waves, but to tlie more uncertain elements of human folly and injuftice, by- giving great credits in diilant countries to men, with whofe cha- rafter and fituatioa he can feldom be. thoroughly acquainted. The capital of the landlord, on the eontraiy, which is fixed in the improvement of his land. Teems to be as well fecured as the nature €>f human affairs can admit of. The beauty of the country be (ides, the pleafures of a country life, the tranquillity of mind which it promifes, and wherever the injuftice of human laws does not difturb it, the independency which it. really affords, have charms t that 462 THE NATURE AND CAUSES OF BOOK that more or lefs attract every body j and as to cultivate the ground ; ^"* was the original deftination of man, fo in every ftage of his exigence he feems to retain a predile£lion for this primitive jemployment. Without the afliftance of fome artificers, indeed, the cul- tivation of land cannot be carried on, but with great incon- venicncy and continual interruption. Smiths, carpenters, wheel-. Wrights, and plough-wrights, mafons, and bricklayers, tanners, ihoemakers, and taylors, are people, whole fervice the farmer has frequent occafion for. Such artificers too ftand, occafionally, in need of the afliftance of one another j and as their refidence is not, like that of the farmer, neceflarily tied down to a precife fpot, they naturally fettle in the neighbourhood of one another, and thus form a fmall town or village. The butcher, the brewer, and the baker, foon join them, together with many other artificers and retailers, neceflary or ufeful for fupplyiiig \:heir occafional wants, and who contribute ftill further to augment the town. The inhabitants of the town and thofe of the country are, mutually, the fervants of one another. The town is a continual. fair or market, to which the inhabitants of the country refort in order to exchange their rude for manufa6lured produce. It 15 this commerce wliich fupplles the inhabitants of the town both with the materials of their woric, and the means of their ftibfiftence. The quantity of the finifhed work which they fell to the in- habitants of the country, neceflarily regulates the quantity of tht materials and provifions which they buy. Neither their employ- ment nor fubfiftence, therefore, can augment, l^ut in proportion to the augmentation of the demand from the countiy for finiflied V ork J and this ^demand can augment only in proportion to the extenfion of improvement and cultivation. Had human inftitu-. tions, therefore^ never difturbed the natural courfe of things, the 7 progreflive /' THE WEALTH OF NATIONS* 4^3 progreifive wealth and increafe of the towns would, in every CHAP, political fociety, be confequential* and in proportion to the im« ' — — * provcment and cultivation of the territory or country. In our North American colonies, where uncultivated land i« ftill to be had upon eafy terms, no manufaflures for difVant fale have ever yet been e(labli(hed in any of their towns. W . , In countries, on the contrary, where there is dther no un». euhivated land, or none that can be had upon eafy terms, every artificer who has acquired more fhxk than he can employ in the occafional }obs of the neighbci^chood, endeavours to prepare work for more diflant fale. The fmith erefts fomc fort of iron, the vreaver fome fort <^ linen or woollen manufaftory. Thofe different manufaf^ures come, in procef^ of time, to be gradually fiibdivided, and thereby improved and refined in a: great variety of ways, which may eafily be conceived, and which- it is therefore umwceffiiry to explain any further. .. ■ j,:ii:iiii «t 464. THE NATURE AND CAUSES OF 2 9,9 ^ ^N feeling for employment to a capital, manufaftures arc, upon equal or nearly equal profits, naturally preferred to foreign commerce, for the fame reafon that agriculture it naturally preferred to manufa6lures. As the capital of the landlord or farmer is more fecure than that of the manufacturer, fo the capital of the manufacturer, being at all times more within his view and command, is more fecure than that of the foreign merchant. In every period, indeed, of every fociety, the furplus part both of the rude and manufactured produce, or that for which there is no demand at home, muft be lent abroad in order to be exchanged for fbmething for which there is fome demand at home. But whether the capital, which carries this furplus produce abroad, be a foreign or a domeltick one, is of very little importance. If the fociety has not acquired fuffictent capital both to cultivate all its lands, and to manufacture in the com- pleateft manner the whole of their rude produce, there is even a confiderable advantage that it (hould be exported by a foreign capital, in order that the whole ftock of the fociety may be employed in more ufeful purpofes. The wealth of ancient Egypt, that of China and Indoftan, fufficiently demonftrate that a nation may attain a very high degree of opulence, though the greater part of its exportation trade be carried on by foreigners. The progrefs of our North American and Wed: Indian colonies would have been much lefs rapid, had no capital but what belonged to themfelves been employed in exporting their furplus produce. According to the natural courfe of things, therefore, the greater part of the capital of every growing fociety is, firft, directed to agriculture, afterwards to manufactures, and laft of all to foreign pommerce. This order of things is {o very., natural, that in every (bciety that had any territory, it has i THE WEALTH OP NAtlONS. 4h always, I believe, been in fome degree obfervec^ Some of their CHAP, lands mufl have been cultivated before any confiderable towns could be eftabliihed, and fome fort of coarfe indudry of the manufacturing kind muft have been carried on in thofe towns, before they could well think of employing themfelves in foreign commerce. But though this natural order of things muft have taken place in fome degree in every fuch fociety, it has, in all the modern ftates of Europe, been, in many refpedls, intirely inverted. The foreign commerce of fome of their cities has introduced all their finer manufactures, or fuch as were 0t for diftant falei and manufactures and fordgn commerce together, have given birth to the principal improvements of agriculture. The manners and cultoms which the nature of their original government in- troduced, and which remained after that government was greatly altered, neceflarily forced them into this unnatural and retro- grade order. • '■• ■! i; Vol. I. 30 466 THE NATURE AND CAUSES OP • •! II ^ '*, I f , f CHAP. n. BOOK III. 0/ tbt Difcouragtment of Agriculture in the antient State of Europe after the Fall of tU Roman EtrPire. m WHEN the German and Scythian nations over- ran the wedern provinces of the Roman empire, the confufions which followed fo great a revolution laded for feveral centuries. The rapine and violence which the barbarians exercifed againft the antient inhabitants* interrupted the commerce between the towns and the country. The towns were deferted, and the country was left uncultivated, and the weftern provinces of Europe, which had enjoyed a confiderable degree of opulence under the Roman empire, funk into the lowed ftate of poverty and barbarifm. During the continuance of thofe confufions, the chiefs and princi- pal leaders of thofe nations, acquired or ufurped to themfelves the greater part of the lands of thofe countries. A great part of them was uncultivated } but no part of them, whether cultivated or uncultivated, was left without a proprietor. All of them were engroITed, and the greater part by a few great proprietors. This original engrofllng of uncultivated lands, though a great, might have been but a tranfitoiy evil. They might foon have been divided again, and broke into fmall parcels either by fuc- ceflion or by alienation. The law of primogeniture hindered them from being divided by fucceffion : the introdudlion of entails pre- vented their being broke into fmall parcels by alienation. /IS**' When land, like moveables, is confidered as the mjcans only of fubfiftence and enjoyment, the natural law of fucceilion divides \. THE WEALTH OF NATIONS. 4^7 it, like them, among all the children of the family j of all of CHAP, whom the fubfiftence and enjoyment may be fuppofed equally dear to the father. This natur.^.! law of fuccefllon accordingly took place among the Romans, who made no more difl:in6t:on between elder and younger, between male and female, in the inheritance of lands, than we do in the diftribution of moveables. But when land was confldercd as the means, not of fubfidence merely, but of power and prote£lion, it was thought better that it fliould dcfcend undivided to one. In thofe diforderly times, every great landlord was a fort of petty prince. His tenants were his fubjefts. He was their judge, and in fome refpefls their legiilator in peace, and their leader in war. He made war according to his own difcrction, frequently againft his neighbours, and fometimes againft his fovc- reign. The fecurity of a landed eflate, therefore, the protection which its owner could afford to thofe who dwelt on it, depended upon its greatnefs. To divide it was to ruin it, and to expofe every part of it to be oppreffed and fwallowed up by the incurfions of its neighbours. The law of primogeniture, therefore, came to take place, not immediately, indeed, but in procefs of time, in the fuccefllon of landed eftates, for the fame reafon that it has generally taken place in that of monarchies, though not always at their firft inftitution. That the power, and confequently the fecu- rity of the monarchy, may not be weakened by divifion, it muft dcfcend entire to one of the children. To which of them fo im- portant a preference fliall be given, muft be determined by fome general rule, .founded not upon the doubtful diftin6tions of per- fonal merit, but upon fome plain and evident difference which can admit of no difpute. Among the children of the fame family, there can be no indifputable difference but that of fcx, and that of age. The male fex is univerfally preferred to the female ; and ivJicn all other things are equal, the elder every where takes place 3 O 2 of 468 THE NATURE ^ND CAUSES OF B O O K of the younger. Hence the origin of the right of primogeniture. and of what is called lineal fucceflion. Laws frequently continue in force long after the circumftances, which firft gave occafion to them, and which could alone render them reafonabk, are no more. In the prefent ftate of Europe* the proprietor of a fingle acre of land is as perfe6tly fecure of his poifeflion as the proprietor of a hundred thouiand. The right of primogeniture, however, ftill continues to be refpe£ted, and as of all inftitutions it is the fitteft to fupport the pride of family diftin£tions, it is ftill likely to endure for many centuries. In every other refpe£);, nothing can be more contrary to the real in- tereft of a numerous family, than a right which, in order to enrich one, beggars all the reft of the children^ Entails are the natural confequences of the law of primo-> geniture. They were introduced to preferve a certain lineal fuc- ceilion, of wluch the law of primogeniture firft gave the idea, and to hinder any part of the original eftate from being carried out of the propofed line either by gift, or devife, or alienation; either by the folly, or by the misfortune of any of its fucceflive owners. They were altogether unknown to the Romans. Neither their fubftitutions nor fideicommifles bear any refemblance to entails,, though feme French lawyers have thought proper to drefs the modern inftitution in the language and form of thofe antient ones. When great landed eftates were a fort of principarities^ entailJs might not beunreafonable. Like what are called the fundamental laws of fome monarchies, they might frequently hinder the fecurity of thoufands from being endangered by the caprice or extravagance of one man. But in the prefent ftate of Europe, when fmall as f well THE WEALTH OF NATIONS* 469 well as great eftates derive their fecurity from the laws of their CHAP, country, nothing can be more compleatly abfurd. They are founded upon the moft abfurd of all fuppofitions, the fuppofition that every fucceilive generation of men have not an equal right to the earth, and to all that it polTelTes ; but fhat the property of the prefent generation ihould be reftrained and regulated according to the fancy of thofe who died perhaps five hundred years ago. Entails, however, are ftiU relpefted through the greater part of Europe, in thofe countries particularly in which noble birth is a neceffary qualification for the enjoyment either of civil or military honours. Entails are tliought neceffary for maintaining this ex- clufive privilege of the nobility to the great offices and honours of their countiy; and that order having ufurped one unjufl: ad- vantage over the reft of their fellow citizens, left their poverty Ihould render it ridiculous, it is thought reafonable that they fliould have another. The common law of England, indeed, is faid to abhor perpetuities, and they are accordingly more reftrided there than in any other European monarchy ; though even England is not altogether without them. In Scotland more than one-fifth,, perhaps more than one-third part of the whole lands of the country,, are at prelent under ftrift entail. j. , , ; i Great trafts of uncultivated land were, in this manner, not only engrofled by particular families, but the poflibility of their being divided again was as much as poffible precluded forever. It feldom happens, however, that a great proprietor is a great improver. In the diforderly times which gave birth to thofe bar- barous inftitutions, the great proprietor was fufficiently employed in defending his own territories, or in extending his jurifdiction and authority over thofe of his neighbours. He had no leifure to v.ttend to the cultivation and improvement of land. When tlie^ eftablilhment of law and order affoided him this leifure, he often wanted the inclination, and almoft always the requifite abilities. If . . the^ i:„ft,i*4 ,.V?- vM" 470 THE NATURE AND CAUSES OP COOK the expence of his houfe and perfon either equalled or exceeded his revenue, as it did very frequently, he had no ftock to employ in this manner. If he was an ceconomift, he generally found it more profitable to employ his annual favings in new purchafes, than in the improvement of his old eftate. To im- prove land with profit, like all other commercial projefls, re- quires an exa6l attention to fmall favings and fmall gains, of which a man born to a great fortune, even though naturally frugal, is very feldom capable. The fituation of fuch a perfon naturally difpofes him to attend rather to ornament which pleafes his fancy, than to profit for which he has fo little occafion. The elegance of his drefs, of his equipage, of his houfe, and houfhold furniture* arc objedts which from his infancy he has been accuftomed to have fome anxiety about. The turn of mind which this habit natu- rally forms, follows him when he comes to think of the improve- ment of land. He embellifhes perhaps four or five hundred acres in the neighbourhood of his houfe, at ten times the expence which the land is worth after all his improvements; and finds that if he was to improve his whole eftate in the fame manner, and he has little tafte for any other^ he would be a bankrupt before he had finiflied the tenth part of it. There ftill remain in both parts of the united kingdom fome great eftates which have continued without interruption in the hands of the fame family fince the times of feudal anarchy. Compare the prefent condition of thofe eftates with the pofleflions of the fmall proprietors in their neigh- bourhood, and you will require no other argument to convince you how unfavourable fuch extenfive property is to improve- ment. If little improvement was to be expelled from fuch great pro- prietors, ftill lefs was to be hoped for from thofe who occupied the land under them. In the antient ftate of Europe, the occupiers of land were all tenants at will. They were all or almoft all flaves;' '■•- * , }^ . but THE WEALTH OF NATIONS^ 4r« Init thdr flav€iy wras of a milder kind than that known among; CHAP, the antient Greeks and Romans, or even in our Weft Indian colo- nies. They were fuppofed to belong more diredly to the land than to their mafter. They could, therefore, be fold with it, but not feparately. They could marry, provided it was with the confent of their mafter; and he could not afterwards diftblve the marriage by (elling the man and wife to different perfons. If he maimed or murdered any of them, he was liable to fome penalty, though generally but to a fmall one. They were not, howevert capable of acquiring property. Whatever they acquired was ac- jquired to their mafter, and he could take it from them at pleafure. Whatever cultivation and improvement could be carried on by means «f fuch flaves, was properly carried on by their mafter. It was at his expence. The feed, the cattle, and the inftruments of hufbandry were all his. It was for his benefit. Such (laves could acquire nothing but their daily maintenance. It was properly the |)roprietor himifelf, therefore, that, in this cafe, occupied his own lands, and cultivated them by his own bondmen. Thii fpecies of (lavery ftill fubfifts in Ruftia, Poland, Hungary, Bohemia, Mo« ravia, and other parts of Germany. It is only in the weftern and fouih-wcftern provinces of Europe, that it has gradually been aboliftied altogether. But if great improvements are feldom to be expefked from great proprietors, they are leaft of all to be expefled when they employ flaves for their woikmen. The experience of all ages and nations, 1 believe, demonftrates that the work done by flaves, though it appears to coft only their maintenance, is in the end the deareft of any. A perfon who can acquire no property, can have no other intereft but to eat as much, and to labour as little as pof- fiblc. Whatever work he does beyond what is fufficient to pur- chafe his own maintenance, can be fqueezed out of him by vio- lence only, and not by any intereft of his own. In antient Italy, Vol. I. 3 O Iti ^ow 47* THE NATURE AND CAUSES OF BOOK bow much the cultivation of com degenerated, how unprofitable '^ ' it became to the mailer when it fell under the management of flaves, is remarked by both Pliny and Columella. In the time of Aiiftotle it had not been much better in anttent Greece. Speak- ing of the ideal republic defcribed in the laws of Plato, to main- tain five thousand idle men (the number of warriors fuppofed neceflary for its defence) together with thrir women and fervants* vrould require, he fays, a territory of boundlefs extent and fertility, like the plains of Babylon. '"^ ♦• ' '^ •' v^ "^^t t-g -^-^ The pride of man makes him love to domineer, and nothing mortifies him (b much as to be obliged to condescend to p^fiiade hia inferiors. Wherever the law allows, it, and the nature of the work can afford it, tlierefco-e, he will generally prefer the fervice of (lavea to that of irecmen. The planting of fugar and tobacco can afford the cKpcnce of flare-cultivation. The raifii^ of com. it ieems. in the prefent times, cannot. In the Engliih coionies;, of whkJi the piioctpal produce i& oom» the far grater part of the work ia done by freemen. The late refi>lution of the quakers in PmfyU vania to let at liberty all their negro* (laves, may fatisfy us that their number canjiot he very great. Had they made any confiderablQ part of their property, fuch a refolution could never have beeia agreed to. In our fugar colonies, on the contrary, the whole work is done by flaves, and in oar tobacco colonies a very great part of it. The profits of a fugar-piantation in any of our Weft Indian colonies are genecally much greater than tboie of any other cul- tivation that is knowA either in Europe or America : And the profits of a tobaoco piantatia«« though inferior to thoie of fugar, are iiipeiior to thole «f «Qra» tt hai already beoa obftrved. Both caa aiord the espence of flavc-ctiltivxticBv but iiigar can afford it Aiil better than tabBfico. The number of negroes accordingly is much greater, in praportioB to that of whkes, in our fug»r than in cor tohapc9 colonies. THE WEALTH OF NATIONS. 473 ^ To the flave cwltivators of antient times, gradually fucceeded C HA P. a fpecies of fanners known at prefent in France by the name of J^etayers. They are called in Latin Coloni PartiariL They have been fo long in cUfufe in England that at prefent I know no Englifh name for them. The proprietor fumifhed them with the feed* 4:attle, and inftruments of hufbandry, the whole dock, in fliort, neceflfary for cultivating the farm. The produce was divided equally between the proprietor and the farmer, after fetting afide what was judged neceflary for keeping up the flock, which was re- ftored to the proprietor when the farmer either quitted or was turned out of the farm. , . , i Land occupied by fuch tenants is properly cultivated at the ^xpence of the proprietor, as much as liiat occupied by flaves. There is, however, one very eflential difference between them. Such tenants, being freemen, are capable of acquiring property, and hslving a certain proportion of the produce of the land, they have a plam intereft that the whole produce fhould be as great as poflible, in order that their own proportion may be fb. A flave, on the contrary, who can acquire nothing but his maintenance, confults his own eafe by making the land produce as little as pof- fible, over and above that maintenance. It is probable that it was partly upon account of this advantage, and partly upon account of the encroachments which the fovereign, always jealous of the great lords, gradually encouraged their villains to make upon their authority, and which feem at kft to have been fuch as rendered this fpecies of fervitude altogether inconvenient, that tenure in villanage gradually wore out through the greater part of Europe. The time and maruier, however, in which fo important a revo- lution was brought about, is one of the mofl obfcure points in modern hifVory. The church of Rome claims great merit in it; and it is certain that fo early as the twelfth century, Alexander III. Vol. L 3 P publiilied V 9 '4^4 THE NATURE AND CAUSES OP BOOK publifhed a bull for the general emancipation of flaves. Itfeems, howevei*, to have been rather a pious e5chdrtation, than a law to which exa£l obedience was required from the faithful. Slavery continued to take place almoft univetfally foir feverd centuries after'> wards, till it was gradually abolifhed by the joint opersltion of the two interefts above mentioned, that of the proprietor on the onfc hand, and that of the fovereign on the other. A villain enfran^k chifed, tmd at the fame time allowed to continue in pofteflion of the land, having no ftock of his own, could cultivate it only by means of what the landlord advanced to him, and muft, therefore, have been what the French call a Metayer. It cbuld never, however, be the intereft even of this laft fpecies of cuMviators to lay out in the further improvement of the landv any p^t of the little ftock which they might fave frohi their own fhare of the produce, becaufe the lord, who laid out nothing, was to get one*hatf of whatever it produced. The tithe, which is but a tenth of the produce, is found to be a very great hinderance to improvement. A tax, therefore, which amounted to one half, muft have been an effeAual bar to it. It might be the intereft of a metayer to make the land produce as much as could be brought out of it by meahs of the ftock fumiftied by the proprietor : but it could never be his intereft to mix any part of his own with it. In France, where five parts out of fix of the whole kingdom are faid to be ftill occupied by this fpecies of cultivators, the pro- prietors complain that their metayers take every <^ortunity of employing the mafters cattle rather in carriage than in cultivation ; becaufe in the one cafe they get the whole profits to themfelves, in the other they fhare them with their landlord. This fpecies of tenants ftili fubfifts in fome parts of Scotland. They are called fteel-bow tenants. Thole antient Englifh tenants, who -are faid by chief Baion Gilbert and Doctor Blackftone to have been rather bailiff. H ^fl^ VfEALfH OF NATION?. '^7S bailiffs of the landlord than farmers properly fo called| were pro* chap. bably of the fame kind. * ? eM.:' , :,, / .> ' tr' . ti i; I'.iilki >' k . :,V To this fpecies of tenancy fucceeded, though by very flow degrees, farmers properly fo called, who cultivated the land with their own flock, paying a rent certain to the landlord. When fuch farmers have a leafe for a term of years, they may fometimes find it for their intereft to lay out part of their capital in the further improvement of the farm ; becaufe they may fometimes expeft to recover it, with a large profit, before the expiration of the leafe. The pofleffion even of fuch farmers, however, was long extreamly precarious, and flill is fo in many parts of Europe. They could before the expiration of their term be legally outed of their leafe, by a new purchafer ; in England, even by the fiftitious aflion of a •common recovery. If they were turned out illegally by the violence -of their maftcr, the a6tion by which they obtained redrefs was ex- treamly imperfeft. It did not always re-inflate them in the pof- feflion of the -land, but gave them damages which never amounted to the real lofs. Even in England, t^e countiy perhaps of Europe where the yeomanry has always been mofl refpefted, it was not till about "the 14th of Henry the Vllth that the a£tion of cje£lment was invented, by which the tenant recovers, not damages only but polfeflion, and in which his claim is not neceflarily concluded by the uncertain decifion of a fingle affize. This aflion has been found fo effeftual a remedy that, in the modern praftice, when the landlord has occafion to fue for the pofTeffion of the land, he feldom makes ule of the a£lions which properly belong to him as- landlord, the writ of right or the writ of entry, but fues in the name of his tenant, by the writ of ejeflment. In England, therefore, the fecurity of the tejiant is equal to thnt of the proprietor. In England befidcs. a l^afe for life of forty Shillings a year value is a freehold, and eiititjes ,the lefiee to vote ifpr a member of parliament ; i . . 3 P 2 Jin^ ;■ 476 THE NATURE AND CAUSES OF BOOK and as a great part of the yeomanry have freeholds of this kind; the whole order becomes refpe£lable to their landlords on account of the political confideration which this gives them. There is, I believe, nowhere in Europe, except in England, any inftance of the tenant building upon the land of which he had no leaTe, and trufting that the honour of his landlord would take no advantage of fo important an improvement. Thofe laws and cufloms fb favourable to the yeomanry, have perhaps contributed more to the prefent grandeur of England than all their boafted regulations of commerce taken together. . The law which feaires the'longeft leafes againft fucceilbrs of every kind is, fo far as I know, peculiar to Great Britain. It was.; introduced into Scotlandib early as 1449, ^y a.law of James the lid.. Its benefici^ influence, however, has been much obftcu^ted by entails; the heirs of ent^l being. generally reftrained from letting leafes for any long term of years, frequently for more than one year. A late a£t of parliament has, in this leipeft, fomewhat llackened their fetters, though they are dill by much too ftrait.. In Scotland, befides, as no leafehold ^ves a vote for a member of parliament, the yeomanry are upon this account le& re^£table to* their landlords than. in England. 'r ■ ^ In other parts of Europe, after it was found convenient to (ecure tenants both againft heirs and purchaiers, the term of their fecurity was ftill limited to a very fhort period ; in France, for example, to nine years from the conmiencement of the leafe. It has in.. that, country, indeed, been lately extended to twenty feven, a period, ftill too fhort to encourage the tenant to make the moft important, improvements. The proprietors, of land were antiently the leg^^ lators of every part of Europe. The laws relating to land, there- fore, were all calculated for what they fuppofed the intereft of the proprietor. It was for his interefl;, they had imagined, that na 4 leafe THE WEALTH OF NATIONS. 477 ftafe granted by any of his prcdeceflbrs (hould hinder him from C HA P. enjoying, during a long term of years, the full value of his land. Avarice and injuftice are always (hort-fighted, and they did not forefee how much this regulation muft obftrufl improvement, and tiiereby hurt in the long run. the real intereft of the landlord. *> , • .'.'-. t-„-\ii),< The farmers too, befides paying the rent, were antiently, it was fuppoied, bound to perform a great number of fervices to the landlord, which were feldom either fpecified in the leafe, or regulated by any precife rule, but by the ufe and wont of the manor or barony. Thefe fervices, therefore, being almoft en- tirely arbitrary, fubjefted the tenant to many vexations. In Scot- land the abolition of all fervices, not precifely ftipulated in the leafe, has in the courfe of a few years very much altered for the better the condition of the yeomanry of that country. The publick fervices to which the yeomamy were bound, were not lefs arbitrary than the private ones. To make and maintain the high road?, a fervitude which (till fubfifts, I believe, . every where, though with different degrees of opprefHon in different countries, was not the only one. When the king's troops^ when his houfhold or his officers of any kind pafled through any part of tiie country, the yeomanry were bound to provide them with horfes* carriages, and provifions^ at a price regulated by the purveyor. Great Britain is, I believe, the only monarchy in Europe where the opprefficm of purveyance has been entirely abolifhed. . It ftiU < fubfifls in France and Germany. . ^ '«i, The publick taxes to which they were fubjefl: were as irregular and oppreflive as the fervices. The antient lords, though extreamly unwilling to grant thcmfelves any pecuniary aid to their fbvereign, eafily allowed him to taUage, as they called it, their tenants, and had: 45^8 THE NATURE AND CAUSES OF fi O O K had not knowledge enough to forcfee how much thii muft in the end affe6l their own revenue. The taillc, as it ftill fubfifts in France, may ferve as an example of thofe antient tallages. It is a tax upon the fuppofed profits of the farmer, which they eftimate by the ftock that he has upon the farm. It is his intereft, therefore, to appear to have as little as pofTible, and confequently to employ as little as pofTible in its cultivation, and none in its improvement. Should any (Vock happen to accumulate in the hands of a French farmer, the taille is almoft equal to a prohibition of its ever being employed upon the land. This tax befides is fuppofed to dishonour whoever is fubjeft to it, and to degrade' him below, not only the rank of a gentleman, but that of a burgher, and whoever I'ents the lands of another becomes fubjefl: to it. No gentleman nor even any burgher that has flock will fubmit to this degradation. This tax, therefore, not only hinders the flock which accumulates upon the land from being employed in its improvement, but drives away all other (lock from it. The antient tenths and fifteenths, fo ufual in England in former times, feem, fo far as they afTedled the land, to have been taxes of the fame nature with the taille. ' Under all l^k discouragements, little improvement could be txpefled from t4raore 'flcmly than thofe cultivated by the proprietor; on account of the ikiifge fliare THE WEALTH OF NATIONS. 479 (hare of the produce which is confumed in the rent, and which, had C HA p, tfie farmer been pi-oprietor, he might have employM in the further improvement of the land. The ftation of a farmer befides is, from the nature of things, inferior to that of a proprietor. Through the greater part of Europe the yeomaniy are regarded as an infe« rior rank of people, even to the better fort of tradefmen and mechanics, and in all parts of Europe to the great merchants and mafter manofadurers. It can feldom happen, therefore, that a man of any confiderable (lock (hould quit the fuperior in order to place himfelf in an inferior ftation. Even in the prefeiit ftate of Europe, therefore, little ftock is likely to go from any other pro- fellion to the imi)rovement of land in the way of farming. More does perhaps in Great Britain than in any other" country, though even there the great flocks which are, in fome places, employed in farming, have generally been acquired by farming, the trade, perhaps, in which of all others ftock is commonly acquired moft flowly. After fmall proprietors, however, rich and great fai- mers are, in every country, the principal improvers. There arc more fuch perhaps in England than in any other European monarchy. In the republican governments of Holland and of Berne in Switzerland, the farmers are faid to be not inferior to thofe of England.. The antient policy of Europe was, over and above all this,. unfavourable to the improvement and cultivation of land, whether carried on by the proprietor or by the farmer j firft, by the general- prohibition of the exportation of corn without a fpecial licence, which feems to have been a very univerfal regulation ; and feconuly, , by the retrain ts which were laid upon the inland commerce, not only of corn but of almoft every other part of the produce of the farm, by the abfurd laws againfl engroHTcrs, regrators, and fore- flallerSf and by the privileges of fairs and markets. It has already been 480 THE NATURE AND CAUSES OF B 00 K been obfcrved In what manner the prohibition of the exportation of com, together with fome encouragement given to the importation of foreign corn, ob(lru£led the cultivation of antient Italy, naturally the moft fertile country in Europe, and at that time the kat oi the greateft empire in the world. To what degree fuch reftrainti upon the inland commerce of this commodity, joined to the gene« ral prohibition of exportation, mud have difcouraged the cul- tivation of countries lefs fertile, and lefs favourably circumftance4y ■it is not perhaps very eafy to imagine. .. r ■ t CHAP. IIL €>/ "the Rife and Progrefs of Cities and Towns, after the Fall of the Raman Empire, THE inhabitants of cities and towns were, after the fall of the Roman empire, not more favoured than thofe of the country. They confided, indeed, of a very different order of people from the fird inhabitants of the antient republicks of Greece and Italy. Thefe laft were compofed chiefly of the proprietors of lands, among whom the piiblick territory was originally divided, and who found it convenient to build their houfes in the neigh- bourhood of one another, and to furround them with a wall, for the fake of common defence. After the fnll of the Roman empire, on the contrary, the proprietors of lands ft em generally to have lived in fortified caftles on their own citatc;;, ana in the uiUlft of their own tenants and dependants. The towns were chiefly inha- bited by tradefmen and mechanicks, who feem in thofe days to Jiave been of fervile, or very nearly of fervile condition. The pri- . . _. vileges THE WEALTH OF NATIONS. ♦«« vilcges which wc find granted by anticnt charters to the inhabitants C HA P. of Ibme of the pnncipal towns in Europe, fufRci«iM*y (how what they were befoi^ thofe grants. The people to whom It is granted as a privilege, tfett they might give away their own daughters in marriage without the canlcnt of their lord, that upon their death their own children, and not theu" lord, fhould fuccced to their goods, and that they might difpofc of their own cffe(5t' '?<* will, muft, before thofe grants, have been cither altogether, or vci aearly in the fame ftate of villanagc wi*h the occupiers of \and tl% country. . , They feem, indeed, to have been a very poor mca. fctt <# people, who ufed to travel about with their goods from i ■m" ^ place, and from fair to fair, like the h»wkers and pedlars of tlK re- fent times. In all the different coi itries of Europe then, in th*^ \« manner as in feveral of the Tartar governments of Afia at p ;nt, taxes ufed to be levied upon the perfons and goods of travk. ars, when they pafTed through certain manors, when they went t^er certain bridges, when they carried about their goods from plac to place in a fair, when they ere£led in it a booth or ftall to fell tt in. Thefe different taxe» were known in England by the names t paflage, pontage, laftage, and (tallage. Sometimes the kin^ fometimes a great lord, who had, it eems, upon fome occafiom* authority to do this, would grant to particular traders, to fuch particularly as lived in their own demefnes, a general exemption from fuch taxes. Such traders, though in other reipe£ls of fer- vile, or very nearly of fervile condition, were upon this account called Free-traders. They in return ufually paid to their pro- te£tor a fort of annual poll-tax. In thofe days protection was leldom granted without a valuable coniideration, and this tax might, perhaps, be confidered as compenfation for what their patrons might lofe by their exemption from other taxes. At firft* Vol. I. 3 0^ both 482 THE NATURE AND CAUSES OF BOOK both thofe poll-taxes and thofe exemptions feem to have beeii altogether perfonal, and to have afFefted only particular indivi- duals, during either their lives, or the pleafure of their proteftors. In the very imperfedl accounts which have been publilhed from Domefday-book, of feveral of the towns of England, mention is frequently made, fometimes of the tax which particular burghers paid, each of them, either to the king, or to fome other great lord, for this fort of prote^ion, and fometimes of the general ampunt only of all thofe ♦axes. . ', But how fervile foever may have been originally the condition of the inhabitants of towns, it appears evidently, that they arrived at liberty and independency much earlier than the occupiers of land in the country. That part of the king's revenue which arofe from fuch poll-taxes in any particular town, ufed commonly to be lett in farm, during a term of years for a rent certain, fome- times to the flieriff of the county, and fometimes to other perfbns. The burghers themfelves frequently got credit enough to be admitted to farm the revenues of this fort which arofe out of their own town, they becoming jointly and feverally iin- fwerable for the whole rent. To lett a farm irt this manner was quite agreeable to the ufiial oeconomy of, I believe, the fovereigns of all the different countries of Europe; who ufed frequently to lett whole manors to all the tenants of thofe manors, they be- coming jointly and feverally anfwerable for the whole rentj but in return being allowed to colledl it in their own way, and to pay it into the king's exchequer by the hands of their own bailiff, and being thus altogether freed from the infolence of the king's officers,; a circumflance in thofe days regarded as of the greateft impor- tance. =: Hi. 'U ft*'' 1 .^oT- t^ At THE WEALTH OF NATIONS. 4Si - At firll:, the farm of the town was probably lett to the burgliers, C HA Pj in the fame manner as it had been to other farmers, , for a term of years only. In procefs of time, however, it feems to have be- come the general practice to grant it to them in fee, that is forever, refcrving a rent certain never afterwards to be augmented. The payment having thus become perpetual, the exemptions, in return for which it was 'made, naturally became perpetual too. Thofe exemptions, therefore, ceafed to be perfonal, and could not after- wards be confidered as belonging to individuals as individuals, but as burghers of a particular burgh, which, upon this account, was called a Free-burgh, for the fame reafon that they had been called Free-burghers or Free-traders, > .1 ; -fi \: ^ . ;. v:; :- "'^s .^,;fHj;{i:i/-ifi:<: ^^ --..in-rxt yM«iJj l./ jj'"i ^u.i ,^>;'., .-, ij,i,.,_ ^, I j. 1] «^ Along with this grant, the important privileges above men- tioned, that they might give away their own daughters in marriage, that their children (hould fucceed to them, and that they might difpofe of their own effefts by will, were generally beftowed upon the burghers of the town to whom it was given. Whether fuch privileges had before been uilially granted along with the freedom of ti*ade, to particular burghers, as individuals, I know not. I rec^'on it not improbable that they were, though I cannot produce any direft evidence of it. But however this may have been, the principal attributes of villanage and (lavery being thus taken away from them, they now, at leaft, became really free in our prefent fenfc of the word Freedom. . i?AO ?!:; ^f ^di n^i'-u^i'' J'-i-iPu '\^':t ir>tt<'Jii— •'.»■'?*> ''•> - -f^iv .v-V^ Nor was this all. They were generally at the fame time erefted into a commonality or corporation, with the privilege of having magiftrates and a town council of their own, of making bye laws for their own government, of building walls for their own defence, and of reducing all their inhabitants under a fort of military difcijpline, by obliging them to watch and ward, that is, * 3 0^2 as 4^4 THE NATURE AND CAUSES OF BOO K as antiently underftood, to guard ana defend thofe walls againft all attacks and furprifes by night as well ds by day. In England they were generally exempted from fuit to the hundred and county courts ; and all fuch pleas as (hould arife among them» the pleas of the crown excepted, were left to the decifion of their own magiftrates. In other countries much greater and more extenfive jurifdidtions were frequently granted to them. It might, probably, be neceflary to grant to fuch towns as were admitted to farm their own revenues, fome fort of compulfive jurifdiflion to oblige their own citizens to make payment. In thofe diforderly times it might have been extremely inconvenient to have left them to feek this fort of juftice from any other tribunal. But it muft feem extraordinary that the fovereigns of all the different coimtries of Europe, fhould have exchanged in tins manner for a rent certain, never more to be augmented, that branch of their revenue, which was, perhaps, of all others the mofl likely to be improved, by the natural courfe of things, without either ex- pence or attention of their own : and that they (hould, befldes, have in this manner voluntarily ere£led a fort of independent republicks in the heart of thek own dominions. In order to underftand this it mufl: be remembered, that in thofe days the fovereign of perhaps no country in Europe, was able to prote£l, through the whole extent of his dominions, the weaker part of his fubje6ls from the oppreflion of the great lords. Thofe whom the law could not protef):, and who were not flrong enough to defend themfelves, were obliged either to have recourfe to the prote6iion of fome great lord, and in order to obtain it to become either his (laves or va(rals ; or to enter into a league of mutual defence for the common prote6tion of one another. The inhabitants of cities and burghs, conlidered as (ingle indi- viduals. I THE WEALTH OF NATIONS, 485 ^duals, had no- power to defend thetnfelves : but by entering into C HA P. a league of mutual defence with their neighbours, they were capable of making no contemptible refiftance. The lords defpifed the burghers, whom they confidered not only as of a different order, but as a parcel of emancipated flaves, almoft of a dijfferent ^)ecies from themfelves. The wealth of the burghers never failed to provoke their envy and indignation, and they plundered them upon every occafion without mercy or remorfe. The burghers naturally hated and feared the lords. The king hated and feared them too ; but though perhaps he might defpife, he had no reafon either to hate or fear the burghers. Mutual intereft, therefore, difpofedthem to fupport the king, and the king to fupport them againft the lords. They were the enemies of his enemies, and it was his intereft to render them as fecure and independent of thofe enemies as he could^ By granting them magiftrates of their own,- the privilege of making bye-laws for their own government, that of building walls for their own defence, and that of reducing all their inhabitants under a fort of military difcipline, he gave them all the means of fecurity and independency of the barons which it was in his power to beftow. Without the eftablilhment of fome regular government of this kind, without feme authority to compel their inhabitants to aft according to fome certain plan or fyftem, no voluntary league of mutual defence could either have afforded them any permanent fecurity, or have enabled them to give the king any confiderable fupport. By granting them the farm of their town in fee, he took away from thofe whom he wiflied to have for his friends, and, if one may fay fo, for his allies, all ground of jea- loufy and fufpieion that he was ever afterwards to opprefs them, either by raifing the farm rent of their town, or by granting it to fome other farmer. The princes who lived upon the worft terms with their barons, feem accordingly to have been the moft liberal in grants of this kind 486 THE NATURE AND CAUSES OF S O O K kind to their burghs. King John of England, for example, appears to have been a moft munificent benefaftor to his towns. Philip the firft of France loft all authority over his barons. Towards the end of his reign, his fon Lewis, known afterwards by the name ■of Lewis the Fat, confultedi according to father Daniel, with the biftiops of the royal demefnes, concerning the moft proper means of reftraining the violence of the great lords. Their advice con- lifted of two different propofals. One was to ered; a new order of jurifdiftion, by eftablifliing magiftrates and a town council in every confiderable town of his demefnes. The other was to form a new militia, by making the inhabitants of thofe towns, under the com- mand of their own magiftrates, march out upon proper occafions to the afliftance of the king. It is from this period, according to the French a»itiquarians, that we are to date the inftitution of the magiftrates and councils of cities in France. It was during the unprofperous reigns of the princes of the houfe of Suabia that the greater part of the free towns of Germany received the firft grants of their privileges, and that the famous Hanfeatic league firft became formidable. ,. ,., , „:^ . ^., The militia of the cities feems, in thofe times, not to have been inferior to that of the country, and as they could be more readily affembled upon any fudden occafion, they frequently had the ad- vantage in their difputes with the neighbouring lords. In coun- tries, fuch as Italy and Switzerland, in which, on account either of their diftance from the principal feat of government, of the natural ftrength of the country itfelf, or of fome other reafon, the fovereign came to lofe the whole of his authority, the cities generally became independent republicks, and conquered all the nobility in their neighbourhood ; obliging them to pull down their caftles in the country, and to live, like other peaceable inhabitants, in the city. This is the ftiort hiftory of the republick of Berne, as well as THE WEALTH OF NATIONS. 487 of feveral other cities in Switzerland. If you except Venice, for of CHAP: that city the hiftoi7 is fomewhat different, it is the hiftory of all the <;onflderable Italian rei>ubhcks, of which fo great a number arofe and periflied, between the end of the twelfth and the beginning of the fixteenth century. In countries fuch as France or England, where the authority of the fovereign, though frequently very low, never was deftroyed altogether, the cities had no opj;ortunity of becoming entirely in- dependent. They became, however, fo confiderable that the fove- reign could impofe no tax upon them, befides the ftated farm rent of the town, without their own confent. 1 hey were, therefore, called upon to fend deputies to the general aflembly of the ftates of the kingdom, where they might join with the clergy and the barons in granting, upon urgent occafions, fome extraordhiary aid to the king. Being generally too more favourable to his power, their deputies feem, fometimes, to have been employed by him as ia counter-balance to the authority of the great lords in thofe affem- blies. Hence the origin of the rejirefentation of burghs in the ftates general of all the great monarchies in Europe. Order and good government, and along with tliem the liberty and fecurity of individuals, were, in this manner, eftabliflied in cities at a time when the occupiers of land in the country were ex- pofed to every fort of violence But men in this defencelefs ftat« naturally content themfelves with their neceflary fubfiftence i be- caufe to acquire more might only tempt the injuftice of their op- preffors. On the contrary, when they are fecure of enjoying the fruits of their induftry, they naturally exert it to better their con- dition, and to acquire not only the neceflaries, but the conveniencies and elegancies oi- life. That induftry, therefore, which aims at fomething more than neceflary ilibfiftence, was eftabliflied in cities long before it yvas commonly pradifed by the occupiers of land 4^8, THE NATURE AND CAUSES (DF B Qp K in the country. If in the hands of a poor cultivatoi*, oj^rcffed with the fervitude of villanage, fome little flock fliould acGumulatei he would naturally conceal it with great care from his matter, to whom it would otherwife have belonged, and take the fii'ft op- portunity of running away to a town. The law was at that time fo indulgent to the inhabitants of towns, and fo defirous of di- minifhing the authority of the lords over thofe of the country, that if he could conceal himfelf there from the purfuit of his lord for a year, • he was free for ever. Whatever flock, therefore, accumulated in the hands of the induflrious part of the inhabitants of the country, naturally took refuge in cities, as the only fan£luaries in wliich it could be fecure to the perfon that ac- quired it. The inhabitants of a city, it is true, mufl always ultimately derive their fubfiflence, and the whole materials and means of their induflry from the country. But thofe of a city, fituated near either the fea-coaft or the banks of a navigable river, are not neceffarily confined to derive them from the country in their neighbourhood. They have a much wider range, and may draw them from the mofl remote corners of the world, either in exchange for the ma- nufadlured produce of their own induflry, or by performing the ofHce of carriers between diflant countries, and exchanging the produce of one for that of another. A city might in this manner grow up to great wealth and fplendor, while not only the country in its neighbourhood, but all thofe to which it traded, were in poverty and wretchednefs. Each of thofe countries, perhaps, taken fingly, could afford it but a fmall part, either of its fubfiflence, or of its employment; but all of them taken together could afford it both a great fubfiflence and a great employment. There were, how- ever, within the narrow circle of the commerce of thofe times, fbme countries that were opulent and induflrious. . Such was the 7 Greek THE WEALTH OF NATIONS. Greek empire as long as it fublifted, and that of the Saracens during the reigns of the Abaflides. Such too was Egypt till it was con- quered by the Turks, fome part of the coafl: of Barbary, and all thofe provinces of Spain which were under the government of the Moors. :n.^ , . * . . The cities of Italy feem to have been the firft in Europe which were railed by commerce to any confiderable degree of opulence. Italy lay in the center of what was at that time the improved and civilized part of the world. The Cruzades too, though by the great wafte of flock and deftru£lion of inhabitants which they occalioned, they muft neceflarily have retarded the progrefs of the greater part of Europe, were extreamly favourable to that of fome Italian cities. The great armies which marched from all parts to the conqueft of the holy land, gave extraordinary encouragement to the (hipping of Venice, Genoa, and Pifa, fometimes in tranfport- ing them thither, and always in fupplying them with provifions. They were the commiflaries, if one may iay fo, of thofe armies; and the moft de(lru6>ive frenzy that ever befel the European nations, was a iburce of opulence to thofe republics, i = . 4t> CHAP. III. The inhabitants of trading cities, by importing the improved manufadlures and expenlive luxuries of richer countries, afforded fome food to the vanity of the great proprietors, who eagerly pur- chafed them with great quantities of the rude produce of their own lands. The commerce of a great part of Europe in thofe times accordingly, confifted chiefly in the exchange of their own rude, for the manufactured produce of more civili;e;ed nations. Thus the wool of England ufed to be exchanged for the wines of France and the fine cloths of Flanders, in the fame manner as the com of Poland is at this day exchanged for the wines and brandies of France, and for the filks and velvets of France and Italy. Vol. I. 3 R A taste 490 . BOOK III. THE NATURE AND CAU/8E& OP A TA»T» for the finer and more improved manufa£hiresj was ki this manner intpodMf ed' by foreign commerce into- countries wheiv no Such wcorks were carried on. BvMi when this taAe hecame To general aft to occsifion a confideraUe demandv the merchants, in order to fave the expence of carriage, naturally endeavoured to eftabliih Tome manufactures of the fame kind in their own country. Hence the origin of the fir A manufactures for diftant fale that feem to have been eftabliOied ia the weftem provinces o£ Europe^ after rfie fajl of thft Roman empire*, , ,, . . , . No large counlzy, it muA be obfbrved', ever did or could AibiU^ without (bme: fort of manufia6tures.bdng carried on in it; and;w4ien it is faid of any fuch countrythat it has. no mtmufaClures, it muik alwxiys be underftood of the finer and more impnwed, or ofi fuch as are nt for diAant (ale. In every l&rge country, both the cloath<* ing and houihold furniture of the far greater part of the people* ace the produce of their own induftry. This- is even more univcr-* ially the cafe in thofe poor countrie» wluch ar« commonly^ faid i both in the cloaths and houfhold furniture of the loweft rank of people, a much greater proportion of foreign productions than in the former^ . , ,^j^t;nmi* '^. »*•» i- '■*» m.OI-94tf0: Those, manufactures whidi are fit for diffiant fale, feem to Have been introduced ii>to different comitries in two different ways. Sometimes they have been introduced, in the manner above mentioned, by the- violent operation^ if one may fay fb, of the ftocks of particular merchants and undertakers, who eftablifhed them in imitation of fbme foreign manufactures of the fame kind. Such manufactures, therefore, are the offspring of foreign ., , conunerce. THE WEALTH OF NATIONS, 49t commerce, and fuch feem t6 hav jcen the antlent manufaiSlures of filks, vdvets, and brocades that were introduced into Venice in the beginning of the thirteenth century. Such too feem to have been the manufa£lures of fine cloths that antiently flouriihed in Flandersi and which were intix)duced into England in the banning of the reign of Elizabeth ; and fuch are the prefent (Ilk manu- factures of Lyons and Spital-fields. Manufactures introduced in this manner are generally employed upon foreign materials, being in imitations of foreign manufactures. When the Venetian manufacture flourished, there was not a mulberry tree, nor confe- quently a filkworm in all Lombardy. They brought the materials from Sicily and from the Levant, the manufacture itfelf being in imitation of thofe carried on in the Greek empire. Mulberry trees were firft planted in Lombardy in the beginning of the fix- teenth century, by the encouragement of Ludovico Sforza duke of Milan. The manufactures of Flanders were carried on chiefly with Spanifh arnd Englifh wool. Spanifh wool was the material, not of the firft woollen manufacture of England, but of the firft that was fit for diftant fale. More than one half the materials of the Lyons manufacture is at this day foreign filk j when it vras firft eftablifhed, the whok or very nearly the whole was fo. No part of the materials of the Spital-fields manufaCttire is e^tv likely to be the produce of England. The feat Of fuch mamrfaCttfres, as tlicy are generally introduced by the fcheme and projeCt of ^ few individuals, is fometimes eftablifhed in » maritime city, and fome- times in an inland town, according as their intereft, judgment or caprice happen to determine. ..n -• \^ CHAP. 111. ni^r- •ut At other times manufactures for diftant fale gi'ow Up natiivallyi and as it were of Aeir own accord, by tlAe gradual refinement of thoffe houfkold and eoarfer manufactures Which mtift at all times be carried oni even" in' the pooitflf and rudeft couhtries. Sucli ....'. ^.u-, 3 R 2 manufactures 49t TWE NATURE AfrfD CAUSES OF BOOK III. manufa£hires are gentrally employed upon the materials Mrhlch the country produces, and they feem frequently to have been firft refined and improved in fuch inland countries as were, not indeed at a very great, but at a confiderable diftance from the fea coaft, and fometimes even from all water carriage. An inland country naturally fertile and eafily cultivated, produces a great furplus of provifions beyond what is neceflfary for maintaining the cultivators, and on account of the expence of land carriage, and inconveniency of river navigation, it may fitquently be difficult to iend this fur- plus abroad. Abundance, therefore, renders provifions cheap* and encourages a great number of workmen to fettle in the neigh- bourhood, who find that their induftry can theic procure them more of the neceflfaries and convemencies of Hfe than in other places. They work up the materials of manufacture which the land produces, and exchange their finifhed work, or what is the fame thing the price of it, for more materials and proxdfions. They give a new value to the furplus part of the rude produce by faving the expence of carrying it to the water fide or to fonte dUffamA market ;^ and they fumilh the cultivators viiii fomething in exchange fov it that is either ufeful or agreeable to them, upon eafier terms thar» they could have obtained it before.^ The cultivators get a better price for their furplus produce, and can^ purchafc cheaper other conveniencies which they have occafion: for. They are thus botib encouraged and enabled to increafe this furplus produce by a further improvement and better cultivation of the land ; and as the fer* tility of the land had given birth ta the manufaflure, fo the pro^ grefs of the manufacture re-a£ts upon- the land, and increaies (till further its fertility. The manufacturers firft fupply the neigh-^ bourhood, and afterwards, as their work improves and refines, more diftant markets. For though ndther the rude produce, nor even the coarfe manufacture could, without the greateft difficulty, fup. port the expence of a confiderable land, carriage, the refined and 4 ... improved. THE WEALTH OF NAT IfS. 493 aUt it fix ^viently CHAP. improved manufa£lure eafily may. In afmall contains the price of a great quantity of rude pio^'uce. A piece of fine cloth, for example, which weighs only eighty pounds, con- tains in it, the price, not only of eighty pounds weight of wool, but fometimes of feveral thoufand weight of corn, the maintenance of the different working people, and of their immediate employers. The corn which could with difficulty have been carried abroad in its own ihape, is in this manner virtually exported in that of the complete manufacture, and may eafily be fent to the remotefl corners of the world. In this manner have grown up naturally, and as it were of their own accord, the manufactures of Leeds, Halifax* Sheffield, Birmingham,, and Wolverhampton. Such manufactures are the ofTspring of agriculture. In the modem hiftory of Europe, their extenfion and unprovement have generally been pofterior to thofe which were the offspring of foreign com- merce. England was noted for the manufacture of fine cloths made of Spanilh wool, more than a century before any of thofe which now flouriih in the pl^es above mentioned were fit for foreign fale. The extenfion and improvement of thefe lait could not take place but in confequence of the extenfion and improvement of agriculture,, the laft and greateft effisCt of foreign commerce, and of the manu-^ faCtures immediately introduced by it, and which I fliall now pra-^ ceed to explain*. > -h;; wK' a Yi-" '- ■ ••• >'f? -*?i'?- •?f; i' ^•■■"n. li^* *«■ • «. ■ —u.f^ w' • V**-* 494 THE NATURE AND CAUSES OF :,?j 'rfi- ^ '- ■ « ' '"-n^. , -.^v^c- , ■ ' •.. ' ^-.-J ^ C H A P. IV. Hoiv the Commerce of the Towns contributed to the Improvement of tbe Country, Jif: BOOK 'i'^HE inereafe and riches of commercial and manufa6luring III. J. towns, contributed to the improvement and cultivation of the countries to which they belonged, in three different ways. \ \ -' First, by affording a great and ready market for the rude produce of the country, they gave encouragement to its cultivation and further improvement. This benefit was not even confined to the countries i(i which tliey were fituated, but extended more or lefs to all thofe with which they had any dealings. To all of them they afforded a market for fome part either of their rude or manu- fa^ured produce, and confbquently gave fome encouragement to the induftry and improvement of all. Their own country, how- ever, on account of its neighbourhood, neceflarily derived the greatefl benefit from this market. Its rude produce being charged with lefs carriage, the traders could pay the gjrowers a better price for it, and yet afford it as cheap to the confumers as that of more didant countries. •«'■» > Secondly, the wealth acquired by the inhabitants of cities was frequently employed in purchafing fuch lands as were to be fold, of which a great part would frequently be uncultivated. Mer- chants are commonly ambitious of becoming country gentlemen* and when they do, they are generally the beft of all improvers. A merchant is accuflomed to employ his money chiefly in profitable projects j whereas a mere country gentleman is accuflomed to ^ employ THE WEALTH OF NATIONS. employ it chiefly ra cxpenc«. Tlie one o^ fcc» his rtoHey go from him anel< refurn to him again with a profit : Th« other when once he parta with it, very feldom experts to fee any more of it. Thofe different habits naturally aflk£V their temper and difpofition in every fort of bufmcft. A merchant is commonly a bold ; a country gentbnnin, a timid un^rtaker. The one is not afraid' to lay out at once a large capital' upon the improvement of his knd, when* he has a probable profpeft of raiflng the valiic of it in proportion to- the expence. The other, if he has any capital, which is^ not always the cafe, fddom ventures to employ it in tb*« manner. Jf he improves at all, it is commonly not with a c ' • but with what he can fave out of his annual revenue. W> • -^ has had the-ft>rtune to live in a mercantile town fituated in an un- improved country, mufV have frequently obfcrved how much more fpirited the operations of merchants were in this way, thanthofe of mere country gentlemen. The habits, befides, of order, (economy and attention, to which mercantile bufinefs naturally fbrms a merchant, render him much^ fitter to execute, with profit and iiiccefs, any pn^cft' of improvement. Thirdly, and laftly, commerce and manufa£hires gradually introduced oi'der and good government, and with them, tlie liberty and fecurity of individuals, among the inhabitants of the country,, who had before lived almoft in a continual flate of war with their neighbours, and of femle dependency upon their fuperiors. I'his,. though it has been the leaft obferved, is by far the mofl impoitant of all their effeds. Mr. Hume is the only writer who, fo far as I know, has hitherto taken notice of it. , f,,., ^, ,( f,, ^.f In a country which has neither foreign commerce, nor any of the fiher manufa6lures, a great proprietor; 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,, confumes the '^'7 . ] whole 49^ CHAP. IV. 496 THE NATURE AND CAUSES OF III. B o o K whole in ruftick hofpitality at home. If this furplus produce is fuf- ficient to maintain a hundred or ^ thpufand men, he can make ufe of it in no other way than by maintaining a hundred or a thoufand men. He is at all times, therefore, furrounded with a multitude of retainers and dependants, who having no equivalent to give in return for their maintenance, but being fed entirely by his bounty, muft obey him, for the fame reafon that foldiers muft obey the prince who pays them. Before the extenfion of commerce and manufadtures in Europe, the hofpitality of the rich and the great* from the fovereign down to the fmalleft baron, exceeded every thing which in the prefent times we can eafily form a notion of. Weft- minfter hall was the dining room of William Rufus, and might frequently, perhaps, not be too large for his company. It was reckoned a piece of magnificence in Thomas Becket, that he ftrowed the floor of his hall with clean hay or ruflies in the feafbn, in order that the knights and fquires, who could not get feats, might not fpoil their fine cloaths when they fat down on the floor to eat their dinner. The great earl of Warwick is faid to have entertained every day at his different manors, thirty thoufand people; and though the number here may have been exaggerated, it muft, how- ever, have been very great to admit of fuch exaggeration. A hof- pitality nearly of the fame kind was exercifed not many yeoi's ago in many different parts of the highlands of Scotland. It feems to be common in all nations to whom commerce and manufactures are little known. I have feen, fays Do6lor Pocock, an Arabian chief dine in the flreets of a town where he had come to fell his cattle, and invite all pafTengers, even common beggars, to fit down with him and partake of his banquet. -"Xf. ' The occupiers of land were in every refpeCt as dependent upon the great proprietor as his retainers. Even fuch of them as were not in a ftate of villanage, were tenants at will, who paid a rent THE WEAI^TH OF NATION?. 497 #- ia jiQ refp^ft ?(julv^?j;t tp the fufefiilejiee which the l^n4 ^flE«r4ed C HA p. them. A Ci'QWH, half a crpwn, g (heep, a lanib, wa? fome years ago in the highlands pf Scotland a common rent for lands which maintained a family. In fpme pUces it is fp at this day -, nor wiU money at prefent pureh^fe a, greafef quantity of commpdities there (hw in other places. In ^ country where the furplus produce of "^"^ a ^rge eftate muft te cpnfume4 upon the eft^te itftlf, it will fre- quently be more convenient for the proprietor, that part of it be confumed at a diftance from his own houfe, provided they who confume it are as dependant upon him as either his retainers or his menial fervants. He is thereby faved from the cmbarraffment of either too large a company or tPo large a family. A tenant at will, who poffeffes land fufficient to maintain his family for little more than a quit- rent, is as dependant upon the proprietor as any fervant or retainer whatever, and muft obey him with as little referve. Such a proprietor, as he feeds his fervants and retainers at lus own houfe, fo he feeds his tenants at tlieir houfes. The fubfiftence pf both is derived from liis bounty, and its continuance . depends upon l^s good pleafure. ^ ' ** Upom the authofity whicli the great proprietors nec?fl(arily had in fuch a ftate of things over their tenants and i:etainers, was .^ founded the power of the antient barons. They necefGirily became the judges in peace, and dlis, leaders in war, of all who dwelt f upon their eftates. fhey could maintain order and execute the law within their refpe^livedemefnes, becaufe each of them could there turn the whole foree of all the inhabitants againfl the In^uftice of any one. No other perfon had fufficient authoiity to do this. The king in particular had not. In tlipfe antient times he was litde more than the greateA proprietor in Iiis dominipns, to whom for the fake of common defence aga»nfl their coounon ene- mies, the otiier great proprietors paid certain rcfpe(5ts. To have enforced payment of a finall debt within the lancis of a great pro- » Vol. I. "^ » , 3 S piietor, o 498 THE NATURE AND CAUSES OP BOOK in. %: "te. ^ •^ ^ prletor, where all the inhabitants were armed and accuftomed to fland by one another, would have coft the king, had he attempted it by his own authority, almoft the fame effort as to extinguiOi a civil war. He was, therefore, obliged to abandon the adminif- tration of juftice through the greater part of the country, to thofe who were capable of adminiftering it; and for the fame reafon to leave the command of the country tnilitia to thofe whom that raUitia would obey* '^' 5*6 j^^t? '' ^ ..^-^ - ^ . - '^ ^ ^.. •■■- •• It is a miftake to imagine that thofe territorial jurifdi^tions took their origin from the feudal law. Not only the higheft jurifdi6lions both civil and criminal, but the power of levymg troops, of coin- ing money, and even that of making bye-laws for the government of their own people, «^e all rights pofTelied allodially by the great proprietors of land feveral centuries before even the name of the feudal law was known in Europe. The authority and jurifdi£iion of the Saxon lords in England, appears to have been as great before the conqueft, as that of any of the Norman lords after it. But the feudal law is not fuppo^d to have become the common law of England till after die conqueft. That the moft extenlive au- thority and jufifdidlior^ wei3g. poflefled by the great lords in France allodially long before the feudal hw was introduced into that country, is a matter of fa£l that admits of no doubt. That au- thority and thdfe jurifdidions all neceflfarily flowed from the ftate of property and manners juft now defcribed. Without remount- ing to the remote antiquities of eidier the French or English ^ monarchies, we may find in much later times many proofs tbab fuch effeds muft always flow from fuch caufes. It is not thirty years ago mjj^ ftnce Mr. Cameron of Lochiel, a gentleman of Lochabar in Scot- land, without any legal warrant whatever, not b^ing what was then called a lord of regality, nor even a tenant in chief, but a vafTal of the duke of Argylle, and without being fo much as a j.u£tice of "^m^. F •*•■ ^ <• ■' . Face* ■■f^ ^■ ■'*j% Hf^ riP' ">. ff # •fj ♦* -m- THE WEALTH OF NATIONS. 499 ■^ 4'4 .tj -**4r #r -f # #**»(■, f?'- peace, ufed, notwithftanding, to exercife the higheft criminal jurif- didion over his own people. He is fald to have done fo with great equity, though without any of the formalities of juilice j and it is not improbable that the flate of that part of the country at that time made it neceffary for him to afTume this authority in order to maintain the publick peace. That gentleman, whole rent never exceeded five hundred pounds a year, carried, in 1745, eight hundred of his own people into the rebellion with him. v5 The introduction of the feud^ law, (o far from extending, may be regarded as an attempt Jto moderate the authority of the great allodial lords. It eHiiibliflied a regular fubordination, accompanied with a long train of fervices and duties, from the king down to the fmalleft proprietor. During the , minority of the proprietor, the rent, together with the management of his lairds, fell into the hands of his immediate fuperior, and, confequently, thofe of all great proprietors into the hands of the kin||, Vho was charged with the maintenance and education' of the pupil, and who, from his authority as guardian, was fuppofed to have a right of dif- pofing of him in r.iarriage, provided it was in a manner not un^ fuitable to his rank. But though this inftitution neceflarily tended to ftrengthen the authority of the king, and to w^ken that of the great proprietors, it could not do dther fufficiently for eflablifh- ing order aqid good government ani6i|||^ th^ ii\|)jibitants of the country ; becaufe it could* not altjar fufficiently that ftate of property and manners from which tlie diforders arofe. The authority of governrpept ftill cc^tinucd to be, as before, too weak in^the head and too (Irong vfi the inferior members, and the exc^flive ftrength of the inferior members was the caufe of the weaknefs oiF the head, After the inftitution of feudal fubordi- nation, the king was as incapable of reftraining the violence of the great lords as before. Tlicy^^U continued to make war ac- 3 S 2 ^ ^' cording ••••ill ♦* P 0' \*^'- *^?^:-: #^ .^■ CHAP. IV. ■^*^ - %P 1^ 5G0 THE NATURE AK& ^AD^ES 01? '.iS BOOK cbrding to thtir oWn difcretidn, almoft ci^ntirraally upott one aho%her> artd very frequently upon the king; aftd the eptSn co^try ftill (Tdrttinued t6 be a fcene of vitolente, rapiWCi iind di&rdet'. BOT What all the violence of the feudal inftitutlons could never have effected, the filent and mfenfible <^ration of fordgn commerce and manufa£hires ^gradually brought About. TheTe gradually fur- nifhed the great prq)rietor% with fomething for Vtrhich they could exchange the whole furplus produce of their lands, and which they could confume themielves without fliaring it either with tenants or retainers. AU for ourfelves, and nothing for other people, Teems, in every £^e of the world, to have been the vile maxim of the mafters of mankind. As foon, therefore, as they could find a method of con- fuming the whole value of their rents themfelves, they had no dif- politi^i to fhare them with any other peribns. For a.pair of diamond buckles perfaapS) or for fomething as frivolous and ufelefs, they exclvanlged the m^teneivce, or what is the fame thing, the price of the itoaintenimce ;". ■4^. ^1^*. «r •4&" i^v 'U # Si. -ri ■'¥ THE WEALTH OF NATIONS. 6ut direftly maintaining twenty people, ov being able to command C more than ten footmen nc^t worth the commanding. Indiredly, perhaps, he maintains as great or even a greater number of people than he could have done by the antient method of expence. For though the quantity of precious productions for which he ex- changes his whole revenue be vuy fmall, the number of workmen employed in colleftmg and preparing it, mnft neceflarily have been very great. Its great price generally aiife^ from the wages of their labour, and the profits of all their immediate employers. By paying that price he indireClly pays all thofe wages and profits, and thos indire£tly contributes to the maintenance of all the work- men and their employers. He generally contributes, however, but a very fmall proportion to that of each, to very few perhaps a tenth, to many not a hundredth, and to fome not a thoufandth nor even a ten thoufandth part of their whole annual maintenance. Though he contributes, therefore, to the maintenance of them aH, they are all more or lefs independant of him, becaufe generally they can all be maintained without him. ^ 4 h#- N' %)ki .ii*/*? i.-rf- * When the great proprietors of land Ipend their rents in main- tjfining their tenants and retainers, each of them maintains entirely all his own tenants and all his own retainers. But when they fpend them in maintaining tradefmen and artificers, they may, all of them taken together, perhaps, maintain as great, or, on account of the wafte which attends ruftidk ^hofpitality, a greater number of people than bdibre Bach of Ihem, however, taken iingly, contributes often but a very Anall (bare 'ttf'the maintenance of any individual of tbis greater number. Each trodefman or artificer derives his^ fubfiftence from the employment, not of one, but of a hundred or a thoul'and diffei^nt cuflomers. Though in fome meafure obliged to them all, therefore, •wfV- ,|^ 1^ *>*/-'*>-' ,t; ■■;«rv >,.%. >,»=:•- # Even a tenant at will, who pays the full value of ^ the land, is not altogether dependent upon the landlord. TJhe pecvmiary ad- % vantages which they receive from one imothei^ are mvttnal and equal, and fuch a tenant will expa^fe neitbor.his life nof'liis fortune in the fervice of the proprietor. But if ho has a leaie for a long if term of years, he is altogether independent; and hu landlord mufl not exped from him even the moft trifling fervice beyond what is ^ either expreflly ftipulated in the leafe,t or impofed upon him by the common and known law of i^e country, ,.'^^ The 'tm ar It'. A- -*ii •.^. •'^ '-^^'l^; *% h *'■ ^ fl '^>: ■m. *•»*»: 1^ ,:«^^ '■^ $t 1)0'^ &f % « THE WEALTH OF N^ATIONS.' 503 4»-' % : ■ * 1 «». > 1 ■> 1 ..^ Thf tenants having in this -manner become independent, ' and CHAP, the ret linors being difmifled, the gi^eat proprietors were no iongei: capable of interrupting the regular e .ecution of juftice, or of dif- turbin^ the peace of the country. Having fold their birth-right, not like Efau for a mefs of pottage in time of hunger and neceflity, but in the wantonnefs of plenty, for trinkets and baubles fitter to be the play-things of children, than the ferious purfuits of men, they became as infignificant as any fubftantial burgher or tradefman in a city. A regular government vtras eftablifhed in the country as well as in the city, nobody having fufficient power to difturb its operations in the one, any more than in the other. ,:> ; "fi; •' i4 . " -■■■ v:*'i\ ,;-;;iv io "*• : '■'■.? It does not, perhaps, relate to the prcfent fubjeft, but I cannot help remarking it, tiiat very old families, fuch as have poflefled fome confiderable eftate from father to fon for many fucceffive generations, are very rare in commercial countrier. In countries which have little commerce, on the contrary, fuch as Wales or the highlands of Scotland, they are very common. The Arabian hiftories feem to be all full of genealogies, and there is a hifloty ^' written by a Tartar Khan which has been tranflated into feveral European languages, and which contains fcarce any thing elfe; a proof that antient families are very common among thofe nations. In countries where a rich man can fpend his revenue in no other way tha,a by maintaining as many people as it can main- tain, he is not apt to run out, and his benevolence it feems is feldooAvick.yioknt ai^^to atten^it to maintain more than he caa afford. But^ where he ow fpend the greateil revenue upon hi& own perfon, he frec^iiently has no bounds to his expence, becaufe he frequently has no bounds to his vanity, or to his affeflion for his own perlbrt. In commercial countries, therefore, riches, in fpite of the moft violent regulations of law to prevent their diill- it|t pation, very feldom remain kmg in the fame family. Among #" ^ ^j ■^ •a <=. v- "ti ' ..s; 504 TPIE NATURE AND CAUSES OF K fimple nations, on the conti'au7» they frequently do without any regulations of law ; for among nations of (hopherda, £iich aa the Tartars and Arabs, the confumabk nature of that property^' necef- iaiily renders all fuch regulations impoffible. !*■•■ A REVOLUTION of tiie greateft importance to the publick hap^ pinefs, was in this manner brought about by two different orders of people, who had not the leaft intention to fervethe public. To gratify the moft childifh vanity was the foie motive of the great proprietors. The merchants and artificers, mtidi left ridi- culous, afted merely from a view to their own interefl;, fOiH in purfuit of their own pedlar principle of turning a penny wheitrver a penny was to be got. Neither of them had either knowtedge or fbrelight of that great revblution which the folly o£ the one, and the induftry of the other was gradually bringing about '>. It is thus that through the greater part of Europe the commerce and manufa^ures of cities, inftead of being the efk&, have been the caufe and occalion of the improvement and cultivation of tha countiy. v •^' .*<-. This order, however, being contrary to the natural courfe of things, is necellarily both flow and uncert^. Compare the flow progreis of thofe European countries of whicH' the wealth depends very much upon their commerce i^d manufa6tares, with the rapid advances of our North Aii'^ricari ' do! onies, of which the wealth is founded altogether in ag;riculture. Through the greater part of Europe, the number of timabitants h not fop- pofed to double in lefs than five hundred years, "fk ftveral of our . North American colonies, '.t is found to double in "twenty or five and twenty years. In Europe, the law of primogeniture; and per- petuities of different kinds, prewttt the divifion of great eftatcs, 7 *fr. ' ',■ ^'j.'" ■ " .#¥■ and .f^ ^!S J*. W ^^^^^ ' .^ A THE WEALTH OF NATIONS. knd thereby hinder the multiplication of fmall proprietors. A ftiall pspprietor, however, who knows every part of his little f'Ttory, who views it all with the afFe£tion which property, dpedally finall property, naturally infpires, and who upon that account takes pleafure not only in cultivating but in adorning it, is generally of all improvers the moft induftrious, the moft inv^lli- geot, and the moft fuccefsful. The fame regulations, befides, keep fo much land out of the market, that there are always more capitals to buy than there is land to fell, fo that what is fold always fells at a monopoly price. The rent never pays the intereft of the purchafe moneys and is befides burdened with rep^urs and qther occafional charges, to which the intereft of money is not liable. To purchaft land is every where in Europe a moft unprofitable employment of a fmall capital. For the fake of the fuperior fecu- rity, indeed, a man of moderate circumftances, when he retires from bufmefs, mW fometimes chufe to lay out his little capital in hnd, A man of profeifion too, whofe revenue is derived from another fource, often loves to fecure his favings in the fame way. But a young man, who, inftead of applying to trade or to feme profeifion; (hould employ a capital of two or three thoufand pounds in the purchafe and <;}iltivation of a fmall piece of lamU might indeed expeft to live very happily, and very independently, .but muft bid adieu, forever, to all hope of either great fortune or great illuftration, which by a different employment of his ftock hn might have had the fame chance of acquiring with other people. Such a perfon tooj though he cannot aJpire at being a proprietor, will often difdain to be a farmer. The fmnll quantity of laiid, therefore, which is brought to market, and the high 'price of v/hat is brought, prevents a great number of capitals from being -employed in its cultivation and improvement which would otherwife have taken that direction. In North America, on the contrary, fifty or fixty pounds is often found a fufficieu ftock Vol. I. 3 T to 505 CHAP. IV. !! 5o6 rnU NATVRJS WP CAW'SEfl Cff fiOOK to begin a plantation with*. Thft fWehiJs anA impMnmnnt of "^' uncuUlvatcd laud, i« tlvBri»i 4i9 mof\ ^ftoiiiM^ nt^ji^^ th« AnaUeft a9 weU as o£ thft gr^nCeft ctipitdsk aiid diferinioA: cfinft ix>acl tQ) all the fortune and iUuBntkn yvhiok^m \m acqi&wdi.bi that coua>ryi Such landw kidficd^ is in Narfeb itoetiai to^ite had almoft for nothing, or at a prioeniuck ldo«»tb«-iad«i of the natural produce ;. a thing impoffible in Europe^ my inteidl in any country where all landa haue long beta pilvite pfopMfefi. If landed eftates, howoiei;, wcce dhrided e^uallDP imong idl^ tke chilcben» upon tiie death of any pr^rietoci wb» kft *• oUBKrotas ^uniJy» the eibte would generally bt) ibldi 8i» iiiM^lu«iwOoiA come to market, diat it could no koger fell at a ino ii o p eiy yiice'. The free rent of the land would go neacer to pay^ fke iiMseiBflr of the purchaie money, and a finall capital mighC/bt smplofcdiin^yijw^ chaTuig land as profitably as iaiaiiy otbor way. ^ ;>r , oi England, on account of the naturalfenifity ofilwibU* o#'^ great extent of fea coaft in proportion tothat o£ the whok HtnhHtfp. ard of the many navigable rivers which run throi^ it, aad'affelrd the conveniency of water carriage to fi>me df the oaoft inlandi partr of it, is perhaps as weU fitted by oaftufie ts any large countt^' im Europe, to be the feat of fordgn commerc<^ of maauftfifaiMt fior diilant fale, and of all the improvemenCa whi<;h thefecanioccafiodk. From the beginning of the- rdgn of Elizabeth too, dtefisigliih. Jegiflature has- been peculiarly attentive to this intereAi of commflUB^ and manufactures, and in reality there ia nacoiuitry in E§in3ipe» HoUand itfeif not excepted, of which the law is upon the whole more favourable to this fort of induflry. Comj^ai^e. ,an4< naan|]|*' fa6tures have accordingly been continually adyanciog during ^U this period. The cultivation and improvement of the coijintcy has, no doubt, been gradually advancing too: But ^t Isf ma to have followed flowly, and at a diftance,, the more rapid progrefs of commerce YUE WEALTH OF NATIONS. comfnerce «in4 AiffMife^urM. 507 Tlie greater part of the country C HA p. tnnft {H-obaMy have iMen cMltivated before the reign 6f EHtabeth ) ffiMl a tttty great part of it ftiU i^mains uncuhi^^at«d, and the cultivfltion of t^ far greater part much ifvferidr to what it might be. The tavr of SitgtatuI, however, favours agricultare not only indireftly by «be protection of oommeFCC, but by feveral dired «nc«uragenMnt>. Except in times of fcarcity, the exportation of corn is not only free, but encouraged by a bounty. In times of moderate plenty, the importation of foreign corn is loaded with duties tb-^t amount to a prohibition. The importation of live cattle, except from Ireland, is prohibited at all timesr and it is but ot late that it was permitted from thence. Thofe who cultivate the land, therefore, have a monopoly againft their countrymen for the two greateft and mod important articles of land-prpduce, bread and tmtcher's meat. Theft encouragements, though at bottom, perhaps, 2^ I (hall endeavour to (how hereafter, altogether illufory, fufHciently demonftrate at leaft the good intention of the legillature to favour agriculture. But what is of much more importance than all of them, the yeomanry of England are rendered as fecure, as independent, and as refpe£table as law can make them. No country, therefore, in which the right of primogeniture talces place, which pays tithes, and where perpetuities, though contrary to the fpirit of the law, are admitted in fome cafes, can give more encouragement to agriculture than England. Such, however, notwithllanding, is the (late of its Cultivation. What would it have been, had the law given no dire6l encouragement to agriculture befides what arifes indireftly from the progrefs of commerce, and had left the yeomaniy in the fame condition as in moft other countries of Europe ? It is now more than two hundred years (ince the beginning of the reign of Elizabeth, a period as long as the courfe of human profperity nfiially endures. 3 T 2 France So8 BOOK III. THE NATURE AND CAUSES OP France feems to have had a conflderable (hare of foreign com- merce near a century before England was diftinguiihed as a com- mercial country. The marine of France was conflderable* according to the notions of the times, before the expedition of Charles the Vlllth to Naples. The cultivation and improvement pf France, however, is, upon the whole, inferior to that of England. The law of the country has never given tho fame dire£l encouragement to agriculture. ^ ,kc, , ii fijc? .^^ The foreign commerce of Spain and Portugal to the other parts of Europe, though chiefly carried on in foreign (hips, it very conflderable. That to their colonies is carried on in their own, and is much greater, on account of the great riches and extent of thofe colonic?. But it has never introduced any conflderable manufa£tures for diftant fale into either of thofe countries, and the greater part of both ftill remains uncultivated. The foreign commerce of Portugal is of older (landing than that of any great country in Europe, except Italy. Italy is the only great country of Europe which feems t» have been cultivated and improved in every part, by means of foreign commerce and manufa^ures for diflant fale. Before i.!ie invaflon of Charles the VII 1th, Italy, according to Guicciardiu, . was cultivated not lefs in the moil mountainous and barren parts • of the country, than in the plained and mod fertile. J he ad- vantageous frtuation of the country, and the great number of inde})endent (latcs which at that time fubfided in it, probably contributed not a little to this general cultivation. It is not impoflible too, notwithflanding this general expreffion of one of the mod judicious and referved of modem hidorians, that THE WEALTH OF NATIONS. 5^9 IV. Italy was not at that time better cultivated than England is at C H^A P, prefent* ^ThB capital, however, that is acquired to any country by com- merce an'd tnanufadhires, is all a very precarious and uncertain pOflTefllon, till fome part of it has been fecured and realized in the "I cuttivatlon and improvement of its lands. A merchant, it has been faid very properly, is not neceflkrily the citizen of an/ par- ticular country. It is in a great meafure indifferent to him from What place he carries on his trade ; and a very trifling difgud will xhake him remove his capital, and together with it ail the induftry which it fupports, from one country to another. No part of it can be faid to belong to any particular country, till it has been Ipread as it were over the face of that country, either in buildings, or in the Lifting improvement of lands. No veftige now remains of the great wealth, faid to have been pofleffcd by the greater pait of the Hans towns, except in the obfcure hiftories of the thirteenth and fourteenth centuries. It is even uncertain where fome of them were fituatcd, oi* to> what towns in Europe the Latin names given to fome of them belong. But though the misfortunes of Italy in the end of the fifteenth and beginning of the lixteenth cen- turies greatly diminiflied the commerce and manufactures of the cities of Lombardy and Tufcany, thole countries flill continue to be' among the vmAx populous and beil cultivated in Europe. The civil wais of Flamlers, and the Spanifli government which fuccecdcd them, cliafed away the great commerce of Antwerp, Ghent, and Bruges. But Flanders (lill continues to be one of the richert, befl cultivated,, and molt populous provinces of Europe, The ordinary revolutions of war and government eafdy dry : up the fourccs of that wealth which arises from commerce oujjfj, That which aiifes from the more foUd improvements of ' 5p * agriculture,, 510 THE NATUkE AND CAUSES, &c. III. B Qp K. agricultuit, is much more dm-abie, and canntM: be deftroyed iut by thofe more violent convulfions occafloned by the deprediUacttn of hoftile and barbarous nations continued for a century or two together I foch fts-thofe that bs^peacd for tome time itefore and after the fall of the Roman entire u the weftern ^ovioces of Europe. ;.,,„ . ^ ^;.. ♦ Ejtd of die TiKST Volume. ,>. *■ >f-i.- ijfi-v'." IT' finr iq r .'?iJ/s*<*''