UNIVERSITY OF CALIFORNIA 
 AT LOS ANGELES
 
 THE 
 
 WORKS 
 
 OF 
 
 ADAM SMITH, LL.D. 
 
 AND F.R.S. OF LONDON AND EDINBURGH: 
 
 ONE OF THE COMMISSIONERS OF HIS MAJESTY 's CUSTOMS 
 
 IN SCOTLAND ; 
 
 AND FORMERLY PROFESSOR OF xMORAL PHILOSOPHY 
 
 IN THE UNIVERSITY OF GLASGOW. 
 
 WITH AN ACCOUNT OF 
 
 HIS LIFE AND WRITINGS 
 BY DUGALD STEWART, 
 
 PROFESSOR OF MORAL PHILOSOPHY IN THE UNIVERSITY, AND 
 
 ffELLOW OF TilE ROYAL SOCIETY, OF EDINBURGH, 
 
 &C. &C. &C. 
 
 IN FIFE FOLUMES. 
 $ d VOL. II. 
 
 LONDON: 
 
 F HINTED FOR T. CADELL AND W. DAVIES ; F. C. AND J. RIVINOTON J OTRIDGE 
 AND SON; F. WTNGRAVE ; LONGMAN, HURST, REES, ORME, AND BROWN; 
 JOHN RICHARDSON; J.BOOKER; B.CROSBY; E. JEFFERY ; W.STEWART; 
 BLACK, PARRY, AND KINGSBURY; S. BAGSTER ; J. MAWMAN; J. ASPERNE J 
 AND R. SCHOLEV! AND W.CREECH, AND BEI.L AND BRADFUTE, AT 
 EDINBURGH, 
 
 1812.
 
 • 0,1 
 
 ISM 
 
 CONTENTS 
 
 OF 
 
 THE SECOND VOLUME. 
 
 THE NATURE AND CAUSES OF THE 
 WEALTH OF NATIONS. 
 
 I 
 
 NTRODUCTION and plan of the work 
 
 Page i 
 
 BOOKI. 
 
 QF THE CAUSES OF IMPROVEMENT IN THE PROr 
 DUCTIVE POWERS OF LABOUR, AND OF THE 
 ORDER ACCORDING TO WHICH ITS PRODUCE IS 
 NATURALLY DISTRIBUTED AMONG THE DIFFE-r 
 RENT RANKS OF THE PEOPLE - 6 
 
 CHAP. I, 
 
 Of the Divijion of Labour -. - ibid. 
 
 CHAP. II. 
 
 Of the Principle 'which gives Occajion to the 
 Divijion of Labour ■* ■» 19 
 
 CHAP. Ill, 
 
 That the Divijion of Labour is limited by the 
 Extent of the Market - 26
 
 VI CONTENTS. 
 
 CHAP. IV. 
 
 Of the Origin and Ufe of Money Page 33 
 
 CHAP. V. 
 
 Of the real and nominal Price of Commodities, or 
 of their Price in Labour, and their Price in 
 Money - - ..• 43 
 
 CHAP. VI. 
 
 Of the component Parts of the Price of Commo- 
 dities 70 
 
 CHAP. VII. 
 
 Of the natural and market Price of Commo- 
 dities 82 
 
 CHAP. VIII. 
 
 Of the Wages of Labour - - - 96 
 
 CHAP. IX. 
 
 Of the Profits of Stock - - - 133 
 
 CHAP. X. 
 
 Of Wages and Profit in the different Employ- 
 ments of 'Labour and Stock ■ - - 151 
 
 Pari - I. Inequalities arifmg from the Nature of the 
 Employments the mf elves - - - 152 
 
 Part II. Inequalities cccafioned by the Policy of 
 Europe - - - - -183 
 
 chap. xi. 
 
 Of the Rent of Land - 223 
 
 PART I. Of the' Produce cf Land which always 
 
 aj'ords Rent - - - - 12 7 
 
 a Part
 
 CONTENTS. VI 1 
 
 PART II. Of the Produce of Land which fometitnes 
 does, and fometitnes does not, afford Rent Page 252 
 
 Part III. Of the Variations in the Proportion be- 
 tween the refpeclive Values of that Sort of Produce 
 which always affords Rent, and of that which fome- 
 titnes does and fometimes does not afford Rent 273 
 
 Digreffion concerning the Variations in the Value of Silver 
 during the Courfe of the Four lafl Centuries : 
 
 Firfl Period - - . - - - - 276 
 
 Second Period ------ 299 
 
 Third Period - - - - - - 30* 
 
 Variations in the Proportions between the refpeclive 
 
 Values of Gold and Silver - - - 330 
 
 Grounds of the Sufpicion that the Value of Silver 
 fill continues to decreafe - - - 338 
 
 Different Effects of the Progrefs of Improvement 
 upon the real Price of three different Sorts of rude 
 Produce - - - - "339 
 
 Firfl Sort ----- 340 
 
 Second Sort - - - - 343 
 
 Third Sort - - - - "359 
 
 Conclufon of the Digreffion concerning the Variations 
 
 in the Value of Silver - - - 373 
 
 Effects of the Progrefs of Improvement upon the real 
 Price of Manufactures - - 384 
 
 Conclufon of the Chapter - - - 393
 
 VUX CONTENTS. 
 
 BOOK II. 
 
 OP THE NATURE, ACCUMULATION, AND EMPLOY- 
 MENT OF STOCK. 
 
 Introduction - Page 407 
 
 CHAP. I. 
 
 Of the Divijion of Stock - - - 410 
 
 CHAP. II. 
 
 Of Money confidered as a particular Branch 
 of the general Stock of the Society, or of 
 the Expence of maintaining the National 
 Capital 423
 
 ADVERTISEMENT 
 
 TO 
 
 THE THIRD EDITION. 
 
 npHE Firft Edition of the following Work 
 -*■ was printed in the end of the year 
 1775, and in the beginning of the year 1776. 
 Through the greater part of the Book, there- 
 fore, whenever the prefent Hate of things is 
 mentioned, it is to be underftood of the ftate 
 -they were in, either about that time, or at 
 fome earlier period, during the time I was 
 employed in writing the Book. To the Third 
 Edition, however, I have made feveral addi- 
 tions, particularly to the chapter upon Draw- 
 backs, and to that upon Bounties ; likewife a 
 new chapter entitled, The Conclufion of the 
 Mercantile Syftem ; and a new article to the 
 chapter upon the expences of the Sovereign. 
 In all thefe additions, the prefent Jiate of things 
 means always the ftate in which they were 
 during the year 1783 and the beginning of 
 the year 1784.
 
 ADVERTISEMENT 
 
 TO 
 
 THE FOURTH EDITION. 
 
 TN this Fourth Edition I have made no al- 
 -** terations of any kind. I now, however, 
 find myfelf at liberty to acknowledge my very 
 great obligations to Mr. Henry Hope of Am- 
 fterdam. To that Gentleman I owe the moft 
 diftin6t, as well as liberal information, con- 
 cerning a very interefting and important fub- 
 je6t, the Bank of Amfterdam; of which no 
 printed account had ever appeared to me 
 fatisfactory, or even intelligible. The name of 
 that Gentleman is fo well known in Europe, 
 the information which comes from him mud do 
 fo much honour to whoever has been favoured 
 with it, and my vanity is fo much interefted 
 in making this acknowledgement, that I can 
 no longer refufe myfelf the pleafure of pre- 
 fixing this Advertifement to this new Edition 
 of my Book. 
 
 AN
 
 AN 
 
 INQUIRY 
 
 INTO THE 
 
 NATURE and CAUSES , 
 
 OF THE 
 
 WEALTH OF NATIONS. 
 
 INTRODUCTION AND PLAN OF THE WORK. 
 
 THE annual labour of every nation is the lntrodu<9. 
 fund which originally fupplies it with all '— ' »~ 
 the neceffaries and conveniences 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. 
 
 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 conve- 
 niences for which it has occafion. 
 
 But this proportion mull in every nation be 
 regulated by two different circumftances ; firft, 
 by the (kill, dexterity, and judgment with which 
 
 vol. ii. b its
 
 2 INTRODUCTION*. 
 
 introdna. its labour is generally applied ; and, fecondly, 
 by the proportion between the number of thole 
 who are employed in ufeful labour, and that of 
 thofe who are not fo employed. Whatever be 
 the foil, climate, or extent of territory of any 
 particular nation, the abundance or fcantinefs 
 of its annual fupply mull, in that particular 
 fituation, depend upon thofe two circumftances. 
 The abundance or fcantinefs of this fupply too 
 feems to depend more upon the former of thofe 
 two circumftances than upon the latter. Among 
 tlie favage nations of hunters and timers, 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 neceffaries and 
 conveniences of life, for himfelf, or 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 re- 
 duced, or, at leaft„ think themfelves reduced, to 
 the neceftity fometimes of directly deftroying, 
 and fometimes of abandoning their infants, their 
 old people, and thofe afflicted with lingering 
 difeafcs, to periih with hunger, or to be devoured 
 by wild beads. 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 tkofikwho work ; yet the produce of the 
 whole labour of the fociety is fo great, that all 
 are often abundantly fupplied, and a workman, 
 
 even
 
 INTRODUCTION. 3 
 
 even of the lowefl and pooreft order, if he is introduft. 
 frugal and induftrious, may enjoy a greater lhare 
 of the neceflaries and conveniences of life than 
 it is poffible for any favage to acquire. 
 
 The caufes of this improvement, in the pro- 
 ductive powers of labour, and the order, accord- 
 ing to which its produce is naturally diflributed 
 among the different ranks and conditions of men 
 in the fociety, make the fubjeet of the Firfl Book 
 of this Inquiry. 
 
 Whatever be the actual ftate of the fkill, 
 dexterity, and judgment with which labour is 
 applied in any nation, the abundance or fcanti- 
 nefs of its annual fupply mull depend, during the 
 continuance 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 
 productive labourers, it will hereafter appear, is 
 every where in proportion to the quantity of 
 capital flock 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 flock, 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 judgment, in the application of 
 labour, have followed very different plans in the 
 general conduct or direction of it ; and thofe 
 plans have not all been equally favourable to the 
 
 b 2 greatnefs
 
 INTRODUCTION. 
 
 intn>du£. greatnefs of its produce. The policy of fome 
 nations has given extraordinary encouragement 
 to the induflry of the country ; that of others to 
 the induflry of towns. Scarce any nation has 
 dealt equally and impartially with every fort of 
 induflry. Since the downfal of the Roman em- 
 pire, the policy of Europe has been more favour- 
 able to arts, manufactures, and commerce, the 
 induflry of towns ; than to agriculture, the in- 
 duflry of the country. The circumflances which 
 feem to have introduced and eflablifhed this 
 policy are explained in the Third Book. 
 
 Though thofe different plans were, perhaps, 
 firfl introduced by the private interefls and pre- 
 judices of particular orders of men, without 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 ceconomy ; of which fome magnify 
 the importance of that induflry which is carried 
 on in towns, others of that which is carried on in 
 the country. Thofe theories have had a con- 
 siderable influence, not only upon the opinions 
 of men of learning, but upon the public conduct 
 of princes and fovereign flates. I have endea- 
 voured in the Fourth Book, to explain, as fully 
 and diflinctly as I can, thofe different theories, 
 and the principal effects which they have pro- 
 duced in different ages and nations. 
 
 To explain in what has confided the revenue 
 of the great body of the people, or what has 
 been the nature of thofe funds, which, in dif- 
 ferent ages and nations, have fupplied their an- 
 nual
 
 INTRODUCTION. 5 
 
 nual confumption, is the object of thefe Four introduft. 
 firfl Books. The Fifth and laft Book treats of <— v~» 
 the revenue of the fovereign, or commonwealth. 
 In this book I have endeavoured to fhow ; firft, 
 what are the neceffary expences of the fovereign, 
 or commonwealth ; which of thofe expences 
 ought to be defrayed by the general contribu- 
 tion of the whole fociety ; and which of them, 
 by that of fome particular part only, or of fome 
 particular members of it : 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 in- 
 conveniences of each of thofe methods : and, 
 thirdly and laftly, what are the reafons and 
 caufes which have induced almofl all modern 
 governments to mortgage fome part of this 
 revenue, or to contract debts, and what have 
 been the effects of thofe debts upon the real 
 wealth, the annual produce of the land and la- 
 bour of the fociety. 
 
 b 3 BOOK
 
 C o ) 
 
 BOOK I. 
 
 OF THE CAUSES OF IMPROVEMENT IN THE PRODUC- 
 TIVE POWERS OF LABOUR, AND OF THE ORDER 
 ACCORDING TO WHICH ITS PRODUCE IS NATU- 
 RALLY DISTRIBUTED AMONG THE DIFFERENT 
 RANKS OF THE PEOPLE. 
 
 CHAP. I. 
 
 Of the Divijion of Labour. 
 
 book rr^HE greateft improvement in the produc- 
 -* tive powers of labour, and the greater part 
 of the (kill, dexterity, and judgment w r ith 
 which it is any where directed, or applied, feem 
 to have been the effects of the divifion of la- 
 bour. 
 
 The effects of the divifion of labour, in the 
 general bufinefs of fociety, will be more eafily 
 underflood, by confidering in what manner it 
 operates in fome particular manufactures. It is 
 commonly fuppofed to be carried furthefl in 
 fome very trifling ones; not perhaps that it 
 really is carried further in them than in others 
 of more importance: but in thofe trifling manu- 
 factures which are deflined to fupply the fmall 
 wants of but a fmall number of people, the whole 
 number of workmen mufl necefiarily be fmall ; 
 and thofe employed in every different branch 
 of the work can often be coUected into the fame 
 
 workhoufe,
 
 OF THE DIVISION OF LABOUR. J 
 
 workhoufe, and placed at once under the view of c H A P. 
 the fpectator. In thofe great manufactures, on L , 
 the contrary, which are deflined 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, that it is impoffible 
 to collect them all into the fame workhoufe. We 
 can feldom fee more, at one time, than thofe em- 
 ployed in one fingle branch. Though in fuch 
 manufactures, therefore, the work may really be 
 divided into a much greater number of parts, 
 than in thofe of a more trifling nature, the divi- 
 fion is not near fo obvious, and has accordingly 
 been much lefs obferved. 
 
 To take an example, therefore, from a very 
 trifling manufacture ; but one in which the divi- 
 fion of labour has been very often taken notice 
 of, the trade of the pin-maker ; a workman not 
 educated to this bufinefs (which the divifion of 
 labour has rendered a diftincl; trade), nor ac- 
 quainted with the ufe of the machinery employed 
 in it (to the invention of which the lame divi- 
 lion of labour has probably given occafion), 
 could fcarce, perhaps, with his utmofl 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 flraights it, a third cuts it, 
 a fourth points it, a fifth grinds it at the top for 
 receiving the head ; to make the head requires 
 b 4 two
 
 OF THE DIVISION OF LABOUR. 
 
 book two or three diflinc~t operations ; to put it on, is 
 i 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, divided into about eigh- 
 teen diftinct operations, which, in fome manu- 
 factories, are all performed by diftincl; hands, 
 though in others the lame 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 diftincl; 
 operations. But though they were very poor, 
 and therefore but indifferently accommodated 
 with the neceffary machinery, they could, when 
 they exerted themfelves, make among them 
 about twelve pounds of pins in a day. There 
 are in a pound upwards of four thoufand pins of 
 a middling fize. Thofe ten perfons, therefore, 
 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 considered as making four thou-r 
 land eight hundred pins in a day. But if they 
 had all wrought feparately 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, perhaps not the four thou- 
 fand eight hundredth part of what they are at 
 prefent capable of performing, in confequence of 
 
 a proper
 
 OF THE DIVISION OF LABOUR. 9 
 
 a proper divifion and combination of their chap. 
 different operations. 
 
 In every other art and manufacture, the effects 
 of the divifion of labour are fimilar to what they 
 are in this very trifling one ; though, in many of 
 them, the labour can neither be fo much fub- 
 divided, nor reduced to fo great a fimplicity of 
 operation. The divifion of labour, however, fo 
 far as it can be introduced, occafions, in every 
 art, a proportionable increafe of the productive 
 powers of labour. The feparation of different 
 trades and employments from one another, 
 feems to have taken place, in confequence of this 
 advantage. This feparation too is generally 
 carried furthefl in thofe countries which enjoy the 
 higheft degree of induflry and improvement ; what 
 is the work of one man in a rude ftate of fociety, 
 being generally that of feyeral in an improved 
 one. In every improved fociety, the farmer is 
 generally nothing but a farmer ; the manufac- 
 turer, nothing but a manufacturer. The labour 
 too which is neceffary to produce any one com- 
 plete manufacture, is almoft always divided among 
 a great number of hands. How many different 
 trades are employed in each branch of the linen 
 and woollen manufactures, from the growers of 
 the flax and the wool, to the bleachers and 
 fmoothers of the linen, or to the dyers and 
 dreffers of the cloth ! The nature of agriculture, 
 indeed, does not admit of fo many fubdiyifions 
 of labour, nor of fo complete a feparation of one 
 bufinefs from another, as manufactures. It is 
 impoffible to feparate fo entirely, the bufinefs of 
 
 the
 
 IO OP THE DIVISION OF LABOUR. 
 
 BOOK the grazier from that of the corn-farmer, as the 
 
 ^ t trade of the carpenter is commonly feparated 
 
 from that of the fmith. The fpinner is almofl 
 always a diflinct 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 thofe different forts of 
 labour returning with the different feafons of the 
 year, it is impoffible that one man fhould be con- 
 ftantly employed in any one of them. This 
 impoffibility of making fo complete and entire a 
 feparation of all the different branches of labour 
 employed in agriculture, is perhaps the reafon 
 why the improvement of the productive powers of 
 labour in this art, does not always keep pace with 
 their improvement in manufactures. The mod 
 opulent nations, indeed, generally excel all their 
 neighbours in agriculture as well as in manufac- 
 tures ; but they are commonly more diftin- 
 guilhed by their fuperiority in the latter than in 
 the former. Their lands are in general better 
 cultivated, and having more labour and expence 
 beftowed upon them, produce more in propor- 
 tion to the extent and natural fertility of the 
 ground. But this fuperiority of produce is i'eU 
 dom much more than in proportion to the fupe- 
 riority 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 lead, it is never fo much more productive, as 
 it commonly is in manufactures. The corn of 
 the rich country, therefore, will not always, in 
 the fame degree of goodnefs, come cheaper to 
 
 market
 
 OF THE DIVISION OF LABOUR. ft 
 
 market than that of the poor. The corn of c H A P. 
 
 Poland, in the fame degree of goodnefs, is as ( ^ 
 
 cheap as that of France, notwithflanding the 
 fuperior opulence and improvement of the latter 
 country. The corn of France is, in the corn 
 provinces, fully as good, and in mod years nearly 
 about the fame price with the corn of England, 
 though, in opulence and improvement, France is 
 perhaps inferior to England. The corn-lands of 
 England, however, are better cultivated than 
 thofe of France, and the corn-lands of France 
 are faid to be much better cultivated than thofe of 
 Poland. But though the poor country, notwith- 
 flanding the inferiority of its cultivation, can, in 
 fome meafure, rival the rich in the cheapnefs and 
 goodnefs of its corn, it can pretend to no fuch 
 competition in its manufactures ; at leaft 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, at leaft under the 
 prefent high duties upon the importation of raw 
 filk, does not fo well fuit the climate of England 
 as that of France. But the hard-ware and the 
 coarfe woollens of England are beyond all com- 
 parifon fuperior to thofe of France, and much 
 cheaper too in the fame degree of goodnefs. In 
 Poland there are faid to be fcarce any manufac- 
 tures of any kind, a few of thofe coarfer houfe- 
 hold manufactures excepted, without which no 
 country can well fubfifl. 
 
 This great increafe of the quantity of work, 
 
 which, in confequence of the divifion of labour, 
 
 2 the
 
 J 2 OF THE DIVISION OF LABOUR. 
 
 book the fame number of people are capable of per- 
 t L forming, is owing to three different circum- 
 flances; firft, to the increafe of dexterity in every 
 particular workman ; fecondly, to the faving of 
 the time which is commonly lofl in pafTing from 
 one fpecies of work to another ; and laftly, to 
 the invention of a great number of machines 
 which facilitate and abridge labour, and enable 
 one man to do the work of many. 
 
 Firft, the improvement of the dexterity of 
 the workman neceflarily increafes the quantity of 
 the work he can perform ; and the divifion of 
 labour, by reducing every man's bufinefs to 
 fome one fimple operation, and by making this 
 operation the fole employment of his life, necef- 
 larily increafes very much the dexterity of the 
 workman. A common fmith, who, though 
 accuflomed to handle the hammer, has never 
 been ufed to make nails, if upon fome particular 
 occafion he is obliged to attempt it, will fcarce, I 
 am allured, be able to make above two or three 
 hundred nails in a day, and thofe too very bad 
 ones. A fmith who has been accuflomed to 
 make nails, but whofe fole or principal bufinefs 
 has not been that of a nailer, can feldom with 
 his utmofl diligence make more than eight 
 hundred or a thoufand nails in a day. I have feen 
 feveral boys under twenty years of age who had 
 never exercifed any other trade but that of 
 making nails, and who, when they exerted them- 
 felves, could make, each of them, upwards of 
 two thoufand three hundred nails in a day. The 
 making of a nail, however, is by no means one 
 
 of
 
 OF THE DIVISION OF LABOUR. *$ 
 
 of the fimplefl operations. The fame perfon 
 blows the bellows, ftirs or mends the fire as 
 there is occafion, heats the iron, and forges every 
 part of the nail : In forging the head too he is 
 obliged to change his tools. The different ope- 
 rations into which the making of a pin, or of 
 a metal button, is fubdivided, are all of them 
 much more fimple, and the dexterity of the 
 perfon, of whofe life it bas been the fole bufinefs 
 to perform them, is ufually much greater. The 
 rapidity with which fome of the operations of 
 thofe manufactures are performed, exceeds what 
 the human hand could, by thofe who had never 
 feen them, be fuppofed capable of acquiring. 
 
 Secondly, the advantage which is gained by 
 faving the time commonly loft in paffing from 
 one fort of w T ork to another, is much greater 
 than we fhould at firfl view be apt to imagine 
 it. It is impoffible to pafs very quickly from 
 one kind of work to another, that is carried on 
 in a different place, and with quite different tools. 
 A country weaver, who cultivates a finall farm, 
 muft lofe a good deal of time in paffing from his 
 loom to the field, and from the field to his loom. 
 When the two trades can be carried on in the 
 fame workhoufe, the lofs of time is no doubt 
 much lefs. It is even in this cafe, however, 
 very confiderable. A man commonly faunters 
 a little in turning his hand from one fort of em- 
 ployment to another. When he firfl begins the 
 new work he is feldom very keen and hearty ; 
 his mind, as they fay, does not go to it, and for 
 fome time he rather trifles than applies to good 
 
 purpofe.
 
 *4 OF THE DIVISION OF LABOUR. 
 
 BOOK purpofe. The habit of feuntering and of indolent 
 carelefs application, which is naturally, or rather 
 neceflarily acquired by every country workman 
 who is obliged to change his work and his tools 
 every half hour, and to apply his hand in twenty 
 different ways almofl every day of his life ; ren- 
 ders him almofl always flothful and lazy, and 
 incapable of any vigorous application even on 
 the mofl preffing occafions. Independent, there- 
 fore, of his deficiency in point of dexterity, this 
 caufe alone mufl always reduce confiderably 
 the quantity of work which he is capable of 
 performing. 
 
 Thirdly, and laflly, every body mufl be fen- 
 fible how much labour is facilitated and abridged 
 by the application of proper machinery. It is 
 unneceffary to give any example. I fhall only 
 obferve, therefore, that the invention of allthofe 
 machines by which labour is fo much facilitated 
 and abridged, feems to have been originally 
 owing to the divifion of labour. Men are much 
 more likely to difcover eafier and readier me- 
 thods of attaining any object, when the whole 
 attention of their minds is directed towards that 
 fingle object, than when it is difftpated among a 
 great variety of things. But in confequence of 
 the divifion of labour, the whole of every man's 
 attention comes naturally to be directed towards 
 ibmc one very fimple object. It is naturally to 
 be expected, therefore, that fome one or other 
 of thole who are employed in each particular 
 branch of labour lhould foou find out eafier and 
 readier methods of performing their own particu- 
 lar
 
 OF THE DIVISION OF LABOUR. 1 5 
 
 lar work, wherever the nature of it admits of fuch 
 improvement. A great part of the machines 
 made ufe of in thofe manufactures in which 
 labour is moll fubdivided, were originally the 
 inventions of common workmen, who being each 
 of them employed in fome very limple operation, 
 naturally turned their thoughts towards finding 
 out ealier and readier methods of performing it. 
 Whoever has been much accuftomed to vifit fuch 
 manufactures, mull frequently have been lhewn 
 very pretty machines, which were the inven- 
 tions of fuch workmen, in order to facilitate and 
 quicken their own particular part of the work. 
 In the firft fire-engines, a boy was conflantly 
 employed to open and fliut alternately the com- 
 munication between the boiler and the cylinder, 
 according as the piflon either afcended or de- 
 fcended. 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 ma- 
 chine, the valve would open and ihut without 
 his affiftance, and leave him at liberty to divert 
 himfelf with his play-fellows. One of the greater! 
 improvements that has been made upon this 
 machine, fince it was firft. invented, was in this 
 manner the difcovery of a boy who wanted to 
 fave his own labour. 
 
 All the improvements in machinery, how- 
 ever, have by no means been the inventions of 
 thofe who had occafion to ufe the machines. 
 Many improvements have been made by the 
 ingenuity of the makers of the machines, when 
 
 to
 
 •» 
 
 *6 OF THE DIVISION OF lABOUR. 
 
 B o o K 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 obferve every 
 thing ; and who, upon that account, are often 
 capable of combining together the powers of 
 the moll diftant and diflimilar objects. In the 
 progrefs of fociety, philofophy or fpeculation 
 becomes, like every other employment* the prin- 
 cipal or fole trade and occupation of a particular 
 clafs of citizens. Like every other employment 
 too, it is fubdivided into a great number of dif- 
 ferent branches, each of which affords occupa- 
 tion to a peculiar tribe or clafs of philofophers •, 
 and this fubdivifion of employment in philo- 
 fophy, as well as in every other bufinefs, im- 
 proves dexterity, and faves time. Each indi- 
 vidual becomes more expert in his own pecu- 
 liar branch, more work is done upon the whole, 
 and the quantity of fcience is confiderably 
 increafed by it. 
 
 It is the great multiplication of the produc- 
 tions of all the different arts, in confequence 
 of the divifion of labour, which occafions, in a 
 well-governed fociety, that univerfal opulence 
 which extends itfelf 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 work- 
 man being exactly in the fame fituation, he is 
 enabled to exchange a great quantity of his 
 own goods for a great quantity, or, what cornea 
 to the fame thing, for the price of a great quan- 
 4 tity
 
 OF THE DIVISION OF LABOUR. 1 7 
 
 tity of theirs. He fupplies them abundantly chap. 
 with what they have oecafion for, and they 
 accommodate him as amply with what he has 
 oecafion for, and a general plenty diffufes itfelf 
 through all the different ranks of the fociety. 
 
 Obferve the accommodation of* the moft com- 
 mon artificer or day-labourer in a civilized and 
 thriving country, and you will perceive that the 
 number of people of whofe induflry a part, 
 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 fhepherd, the forter of the wool, the wool- 
 comber or carder, the dyer, the fcribbler, the 
 fpinner, the weaver, the fuller, the drefTer, with 
 many others, mufl all join their different art* 
 in order to complete even this homely produc- 
 tion. How many merchants and carriers, befides, 
 mult have been employed in tranfporting the 
 materials from fome of thofe workmen to others 
 who often live in a very diilant part of the coun- 
 try ! how much commerce and navigation in 
 particular, how many fhip-builders, failors, fail- 
 makers, rope-makers, mufl have been employed 
 in order to bring together the different drugs 
 made ufe of by the dyer, which often come from 
 the remotefl corners of the world ! What a 
 variety of labour too is neceffary in order to 
 produce the tools of the meaneft of thofe work- 
 men ! To fay nothing of fuch complicated 
 
 vol. ir. c machines
 
 l8 OF THE DIVISION OF LABOUR. 
 
 book machines as the fhip of the failor, the mill of 
 _•_ J the fuller, or even the loom of the weaver, let 
 us confider only what a variety of labour is 
 requisite in order to form that very fimple 
 machine, the fliears with which the ihepherd 
 clips the wool. The miner, the builder of the 
 furnace for fmelting the ore, the feller of the tim- 
 ber, the burner of the charcoal to be made ufe 
 of in the finelting-houfe, the brick-maker, the 
 bricklayer, the workmen who attend the furnace, 
 the mill-wright, the forger, the fmith, mull all 
 of them join their different arts in order to pro- 
 duce them. Were we to examine, in the fame 
 manner, all the different parts of his drefs and 
 houfehold furniture, the coarfe linen fhirt which 
 he wears next his fkin, the fhoes which cover his 
 feet, the bed which he lies on, and all the dif- 
 ferent parts which compofe it, the kitchen-grate 
 at which he prepares his victuals, the coals 
 which he makes ufe of for that purpofe, dug 
 from the bowels of the earth, and brought to 
 him perhaps by a long fea and a long land 
 carriage, all the other utenfils of hi-s kitchen, 
 all the furniture of his table, the knives and 
 forks, the earthen or pewter plates upon which 
 he ferves up and divides his victuals, the dif- 
 ferent hands employed in preparing his bread 
 and his beer, the glafs window which lets in the 
 heat and the light, and keeps out the wind and 
 the rain, with all the knowledge and art requi- 
 fite for preparing that beautiful and happy in- 
 vention, without which thefe northern parts of 
 the world could fcarce have afforded a very 
 
 comfort-
 
 OF THE DIVISION OF LABOUR. 1 9 
 
 comfortable habitation, together with the tools CHAP, 
 of all the different workmen employed in pro- 
 ducing thofe different conveniences ; if we ex- 
 amine, I fay, all thefe things, and confider what 
 a variety of labour is employed about each of 
 them, we lhall be fenfible that without the affift- 
 ance and co-operation of many thoufands, the 
 very meaneft perfon in a civilized country could 
 not be provided, even according to, what we 
 very falfely imagine, the eafy and fimple manner 
 in which he is commonly accommodated. Com- 
 pared, indeed, with the more extravagant luxury 
 of the great, his accommodation mull no doubt 
 appear extremely fimple and eafy ; and yet it 
 may be true, perhaps, that the accommodation 
 of an European prince does not always fo much 
 exceed that of an induftrious and frugal peafant, 
 as the accommodation of the latter exceeds that 
 of many an African king, the abfolute mafler 
 of the lives and liberties of ten thoufand naked 
 lavages. 
 
 CHAP. II. 
 
 Of the Principle which gives occajion to the D'vvU 
 fion of Labour. 
 
 THIS divifion of labour, from which fo c H A p. 
 many advantages are derived, is not ori- 
 ginally the effect of any human wifdom, which 
 forefees and intends that general opulence to 
 c i which
 
 20 OP THE PRINCIPLE WHICH OCCASIONS 
 
 BOOK which it gives occafion. It is the neceffary, 
 though very flow and gradual, confequence of 
 a certain propenfity in human nature which has 
 in view no fuch extenfive utility ; the propen- 
 fity to truck, barter, and exchange one thing 
 for another. 
 
 Whether this propenfity be one of thofe ori- 
 ginal principles in human nature, of which no 
 further account can be given ; or whether, as 
 feems more probable, it be the necefiary con- 
 fequence of the faculties of reafon and fpeech, 
 it belongs not to our prefent fubjecl; to enquire. 
 It is common to all men, and to be found in 
 no other race of animals, which feem to know 
 neither this nor any other fpecies of contracts. 
 Two greyhounds, in running down the fame 
 hare, have fometimes the appearance of acting 
 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 effect of any contract, 
 but of the accidental concurrence of their paf- 
 fions in the fame object at that particular time. 
 Nobody ever faw a dog make a fair and deli- 
 berate exchange of one bone for another with 
 another dog. Nobody ever faw one animal by 
 its geftures 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 thole whole lervice it requires. A 
 puppy fawns upon its dam, and a fpaniel endea- 
 vours
 
 THE DIVISION OP LABOUR. 21 
 
 vours by a thoufand attra6lions to engage the chap. 
 attention of its mailer who is at dinner, when ,__ 
 it wants to be fed by him. Man fometimes ufes 
 the fame arts with his brethren, and when he 
 has no other means of engaging them to a6t 
 according to his inclinations, endeavours by 
 every ferviie and fawning attention to obtain 
 their good will. He has not time, however, 
 to do this upon every occafion. In civilized 
 fbciety he (lands at all times in need of the 
 co-operation and affiflance of great multitudes, 
 while his whole life is fcarce fufficient to gain 
 the friendlhip of a few perfons. In almofl 
 every other race of animals each individual, 
 when it is^grown up to maturity, is intirely 
 independent, and in its natural Hate has occa- 
 fion for the affiflance of no other living crea- 
 ture. But man has almofl conflant occafion <-' 
 for the help of his brethren, and it is in vain 
 for him to expe6l 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 what he requires of them. Who- 
 ever offers to another a bargain of any kind, 
 propofes to do this : Give me that which I 
 want, and you fhall have this which you want, 
 is the meaning of every fuch offer ; and it is 
 in this manner that we obtain from one another 
 the far greater part of thofe good offices which 
 we fland in need of. It is not from the bene- u ' 
 volence of the butcher, the brewer, or the 
 baker, that we expe6l our dinner, but from their 
 c 3 regard
 
 22 OF THE PRINCIPLE WHICH OCCASIONS 
 
 BOOK regard to their own interefl. We addrefs our- 
 L felves, not to their humanity but to their felf- 
 love, and never talk to them of our own necef- 
 fities but of their advantages. Nobody but a 
 beggar chufes to depend chiefly upon the bene- 
 volence of his fellow-citizens. Even a beggar 
 does not depend upon it entirely. The charity 
 of well-difpofed people, indeed, fupplies him 
 with the whole fund of his fubfiftence. But 
 though this principle ultimately provides him 
 with all the neceflaries of life which he has 
 occafion for, it neither does nor can provide 
 him with them as he has occafion for them. 
 The greater part of his occafional wants are 
 fupplied in the fame manner as thofe of other 
 people, by treaty, by barter, and by purchafe. 
 With the money which one man gives him he 
 purchafes food. The old cloaths which another 
 beftows upon him he exchanges for other old 
 cloaths which fuit him better, or for lodging, 
 or for food, or for money, with which he 
 can buy either food, cloaths, or lodging, as he 
 has occafion. 
 
 As it is by treaty, by barter, and by purchafe, 
 that we obtain from one another the greater part 
 of thofe mutual good offices which we (land in 
 need of, fo it is this fame trucking difpofition 
 which originally gives occafion to the divifion 
 of labour. In a tribe of hunters or fhepherds 
 a particular perlbn makes bows and arrows, for 
 example, with more readinefs and dexterity 
 than any other. He frequently exchanges them 
 for cattle or for venifon with his companions ; 
 
 and
 
 THE DIVISION OF LABOUR. 23 
 
 and he finds at lad that he can in this manner get chap. 
 more cattle andvenifon, than if he himfelfwent 
 to the field to catch them. From a regard to 
 his own intereft, therefore, the making of bows 
 and arrows grows to be his chief bufmefs, and 
 he becomes a fort of armourer. Another excels 
 in making- the frames and covers of their little 
 huts or moveable houfes. He is accuftomed to 
 be of ufe in this way to his neighbours, who 
 reward him in the fame manner with cattle and 
 with venifon, till at laft he finds it his intereft 
 to dedicate himfelf entirely to this employment, 
 and to become a fort of houfe-carpenter. In 
 the fame manner a third becomes a fmith or a 
 brazier ; a fourth a tanner or dreffer of hides 
 or (kins, the principal part of the clothing of 
 favages. And thus the certainty of being able 
 to exchange all that furplus part of the pro- 
 duce of his own labour, which is over and above 
 his own confumption, for fuch parts of the 
 produce of other men's labour as he may have 
 occafion for, encourages every man to apply 
 himfelf to a particular occupation, and to culti- 
 vate and bring to perfection whatever talent or 
 genius he may poffefs for that particular fpecies 
 of bufmefs. 
 
 The difference of natural talents in different 
 men is, in reality, much lefs than we are aware x* 
 of; and the very different genius which appears 
 to diftinguifh men of different profeffions, when 
 grown up to maturity, is not upon many occa- 
 sions fo much the caufe, as the effect of the 
 divifion of labour. The difference between the 
 c 4 moft
 
 2 4 OF THE PRINCIPLE WHICH OCCASIONS 
 
 BOOK moft diflimilar characters, between a philofopher 
 and a common ftreet porter, for example, feems 
 to arife not fo much from nature, as from habit, 
 cuftom, and education. When they came into 
 the world, and for the firfl fix or eight years of 
 their exifience, they were, perhaps, very much 
 alike, and neither their parents nor playfel- 
 lows could perceive any remarkable difference. 
 About that age, or foon after, they come to be 
 employed in very different occupations. The 
 difference of talents comes then to be taken no^ 
 tice of, and widens by degrees, till at lafl the 
 vanity of the philofopher is willing to acknow- 
 ledge fcarce any refemblance. But without the 
 difpofition to truck, barter, and exchange, every 
 man mufl have procured to himfelf every necef- 
 fary 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 
 talent. 
 
 As it is this difpofition which forms that dif. 
 ference of talents, fo remarkable among men of 
 different profeffions, fo it is this fame difpofition 
 which renders that difference ufeful. Many 
 tribes of animals acknowledged to be all of the 
 fame fpecies, derive from nature a much more 
 remarkable diftinclion of genius, than what, 
 antecedent to cuftom and education, appears to 
 take place among men. By nature a philofo- 
 pher is not in genius and difpofition half fb differ- 
 ent from a ftreet porter, as a maftiff is from a 
 
 grey-
 
 THE DIVISION OP LABOUR. 25 
 
 greyhound, or a greyhound from a fpaniel, or c H A P. 
 this lad from a fhepherd's dog. Thofe different IL 
 tribes of animals, however, though all of the 
 fame fpecies, are of fcarce any ufe to one 
 another. The flrength of the mafliff is not in 
 the lead fupported either by the fwiftnefs of 
 the greyhound, or by the fagacity of the fpaniel, 
 or by the docility of the fliepherd's dog. The 
 effects of thofe different geniufes and talents, 
 for want of the power or difpofition to barter 
 and exchange, cannot be brought into a com- 
 mon flock, and do not in the leafl contribute 
 to the better accommodation and conveniency 
 of the fpecies. JEach animal is flill obliged to 
 fupport and defend itfelf, feparately and inde- 
 pendently, and derives no fort of advantage 
 from that variety of talents with which nature 
 has diflinguifhed its fellows. Among men, on k^ 
 the contrary, the mofl dilfimilar geniufes are of 
 ufe to one another ; the different produces of 
 their refpeetive talents, by the general difpofi- 
 tion to truck, barter, and exchange, being 
 brought, as it were, into a common flock, 
 where every man may purchafe whatever part 
 of the produce of other men's talents he has 
 occafion for. 
 
 CHAP.
 
 THE DIVISION OF LABOUR LIMITED 
 
 CHAP. III. 
 
 That tlie Divifion of. Labour is" limited by the 
 Extent of the Market. 
 
 AS it is the power of exchanging that gives 
 occafion to the diviiion of labour, fo the 
 extent of this divifion mud 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 any encourage- 
 ment to dedicate himfelf entirely to one employ- 
 ment, for want of the power to exchange all that 
 furplus part of the produce of his own labour, 
 which is over and above his own coniumption, 
 for fuch part of the produce of other men's la- 
 bour as he has occalion for. 
 
 There are fome forts of indudry, even of the 
 lowed kind, which can be carried on no where 
 but in a great town. A porter, 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 conftant 
 occupation. In the lone houfes and very fmall 
 villages which are fcattered about in fo defert 
 a country as the Highlands of Scotland, every 
 farmer mud be butcher, baker and brewer for 
 his own family. In fuch fituations we can fcarce 
 expect to find even a fmith, a carpenter, or a 
 mafon, within lets than twenty miles of another 
 of the fame trade. The fcattered families that 
 
 live
 
 BY THE EXTENT OF THE MARKET. 27 
 
 live at eight or ten miles diftance from the CHAP, 
 neareft of them, mull learn to perform them- 
 felves a great number of little pieces of work, 
 for which, in more populous countries, they 
 would call in the affiftance of thofe workmen. 
 Country workmen are almoft every where obliged 
 to apply themfelves to all the different branches 
 of induftry that have fo much affinity to one 
 another as to be employed about the fame fort 
 of materials. A country carpenter deals in every 
 fort of work that is made of wood : a country 
 fmith in every fort of work that is made of iron. 
 The former is not only a carpenter, but a joiner, 
 a cabinet maker, and even a carver in wood, as 
 well as a wheelwright, a plough-wright, a cart 
 and waggon maker. The employments of the 
 latter are ftill more various. It is impoffible 
 there mould be fuch a trade as even that of a 
 nailer in the remote and inland parts of the 
 Highlands of Scotland. Such a workman at 
 the rate of a thoufand nails a day, and three 
 hundred working days in the year, will make 
 three hundred thoufand nails in the year. But 
 in fuch a fituation it would be impoffible to dil- 
 pofe of one thoufand, that is, of one day's work 
 in the year. 
 
 As by means of water-carriage a more exten- 
 iive market is open to every fort of induftry 
 than what land-carriage alone can afford it, fo it 
 is upon the fea-coaft, and along the banks of 
 navigable rivers, that induftry of every kind 
 naturally begins to fubdivide and improve itfelf, 
 and it is frequently not till a long time after that 
 
 thofe
 
 a 8 THE DIVISION OF LABOUR LIMITED x 
 
 book thofe improvements extend themfelves to the in- 
 land parts of the country. A broad-wheeled 
 waggon, attended by two men, and drawn by 
 eight horfes, in about fix weeks time carries and 
 brings back between London and Edinburgh 
 near four ton weight of goods. In about the 
 fame time a ihip navigated by fix or eight men, 
 and failing between the ports of London and 
 Leith, frequently carries and brings back two 
 hundred ton weight of goods. 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, at- 
 tended by a hundred men, and drawn by four 
 hundred horfes. Upon two hundred tons of 
 goods, therefore, carried by the cheapeft land- 
 carriage from London to Edinburgh, there mult 
 be charged the maintenance of a hundred men 
 for three weeks, and both the maintenance, and, 
 what is nearly equal to the maintenance, the 
 wear and tear of four hundred horfes as well as 
 of fifty great waggons. Whereas, upon the fame 
 quantity of goods carried by water, there is to 
 be charged only the maintenance of fix or eight 
 men, and the wear and tear of a Ihip of two 
 hundred tons burthen, together with the value 
 of the fuperior ri(k, or the difference of the in- 
 furance between land and water-carriage. Were 
 there no other communication between thofe 
 two places, therefore, but by land carriage, as no 
 goods could be tranfported from the one to the 
 other, except fuch whole price was very confi- 
 
 dcrable
 
 BY THE EXTENT OF THE MARKET, 29 
 
 derable in proportion to their weight, they could chap. 
 carry on but a fmall part of that commerce 
 which at prefent fubfifls between them, and con- 
 fequently could give but a fmall part of that en- 
 couragement which they at prefent mutually 
 afford to each other's induflry. There could be 
 little or no commerce of any kind between the 
 diftant parts of the world. What goods could 
 bear the expence of land-carriage between Lon- 
 don and Calcutta ? Or if there were any fo pre- 
 cious as to be able to firpport this expence, with 
 what fafety could they be tranfported through 
 the territories of fo many barbarous nations ? 
 Thofe two cities, however, at prefent carry on a 
 very confiderable commerce with each other, 
 and by mutually affording a market, give a good 
 deal of encouragement to each other's induflry. 
 Since fuch, therefore, are the advantages of 
 water-carriage, it is natural that the firft im- 
 provements of art and induflry fhould be made 
 where this conveniency opens the whole world 
 for a market to the produce of every fort of la- 
 bour, and that they fhould always be much later 
 in extending themfelves into the inland parts of 
 the country. The inland parts of the country 
 can for a long time have no other market for 
 the greater part of their goods, but the country 
 which lies round about them, and feparates them 
 from the fea-coafl, and the great navigable rivers. 
 The extent of their market, therefore, mufl for 
 a long time be in proportion to the riches and 
 populoufnefs of that country, and confequently 
 their improvement mufl always be poflerior to 
 
 the
 
 S° THE DIVISION OF LABOUR LIMITED 
 
 book, the improvement of that country. In our North 
 L t American colonies the plantations have con- 
 flan tly followed either the fea-coafl or the banks 
 of the navigable rivers, and have fcarce any 
 where extended themfelves to any confiderable 
 diflance from both. 
 
 The nations that, according to the beft au- 
 thenticated hiftory, appear to have been firft 
 civilized, were thofe that dwelt round the coaft 
 of the Mediterranean fea. That fea, by far the 
 greatefl inlet that is known in the world, having 
 no tides, nor confequently any waves except 
 fuch as are caufed by the wind only, was, by the 
 fmoothnefs of its furface, as well as by the mul- 
 titude of its iilands, and the proximity of its 
 neighbouring fhores, extremely favourable to the 
 infant navigation of the world ; when, from their 
 ignorance of the compafs, men were afraid to 
 quit the view of the coalt, and from the imper- 
 fection of the art of fhip-building, to abandon 
 themlelves to the boifterous waves of the ocean. 
 To pais beyond the pillars of Hercules, that is, 
 to fail out of the Streights of Gibraltar, was, in 
 the antient world, long confidered as a moll 
 wonderful and dangerous exploit of navigation. 
 It was late before even the Phenicians and Car- 
 thaginians, the moll ikilful navigators and fliip- 
 builders of thole old times, attempted it, and 
 they were for a long time the only nations that 
 did attempt it. 
 
 Of all the countries on the coafl of the Medi- 
 terranean fea, Egypt feems to have been the firfl 
 in which either agriculture or manufactures were 
 
 cultivated
 
 BY THE EXTENT OF THE MARKET. 3 1 
 
 cultivated and improved to any confiderable chap. 
 degree. Upper Egypt extends itfelf nowhere 
 above a few miles from the Nile, and in Lower 
 Egypt that great river breaks itfelf into many 
 different canals, which, with the affiftance of a 
 little art, feem to have afforded a communica- 
 tion by water-carriage, not only between all the 
 great towns, but between all the confiderable 
 villages, and even to many farm-houfes in the 
 country; nearly in the fame manner as the 
 Rhine and the Maefe 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. 
 
 The improvements in agriculture and manu- 
 factures feem likewife to have been of very great 
 antiquity in the provinces of Bengal in the Eaft 
 Indies, and in fome of the eaflern provinces of 
 China ; though the great extent of this antiquity 
 is not authenticated by any hiftories of whofe 
 authority we, in this part of the world, are well 
 alfured. In Bengal the Ganges and feveral other 
 great rivers form a great number of navigable 
 canals in the fame manner as the Nile does in 
 Egypt. In the Eaflern provinces of China too, 
 feveral great rivers form, by their different 
 branches, a multitude of canals, and by commu- 
 nicating with one another afford an inland navi- 
 gation much more extenfive than that either of 
 the Nile or the Ganges, or perhaps than both of 
 them put together. It is remarkable that neither 
 the antient Egyptians, nor the Indians, nor the 
 Chinefe, encouraged foreign commerce, but 
 
 feem
 
 32 THE DIVISION OF LABOUR LIMITED 
 
 BOOK 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 antient 
 Scythia, the modern Tartary and Siberia, feem 
 in all ages of the world to have been in the fame 
 barbarous and uncivilized (late in which we find 
 them at prefent. The fea of 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 diflance 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 Euxine feas in 
 both Europe and Afia, and the gulphs of Arabia, 
 Perfia, India, Bengal, and Siam, in Afia, to carry 
 maritime commerce into the interior parts of 
 that great continent : and the great rivers of 
 Africa areat too great a diftancefrom oneanothei' 
 to give oecafion to any confiderable inland navi- 
 gation. The commerce befides which any 
 nation can carry on by means of a river which 
 does not break itfclf into any great number of 
 branches or canals, and which runs into another 
 territory before it reaches the fea, can never be 
 very confiderable; becaufe it is always in the 
 power of the nations who poflefs that other terri- 
 tory to obflniei the communication between the 
 upper country and the Tea. The navigation of 
 the Danube is of very little ui'e to the different 
 4 itates
 
 BY THE EXTENT OF THE MARKET. 33 
 
 dates of Bavaria, Auftria and Hungary, in com- chap. 
 parifon of what it would be if any of them pof- ™ j ^ 
 feffed the whole of its courfe till it falls into the 
 Black Sea. 
 
 CHAP. IV. 
 Of the Origin and Ufe of Money. 
 
 WHEN the divifion of labour has been once chap. 
 thoroughly 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 confumption, £-. 
 for fuch parts of the produce of other men's la- 
 bour as he has occafion for. Every man thus 
 lives by exchanging, or becomes in fome mea- 
 fure a merchant, and the fociety itfelf grows to 
 be what is properly a commercial fociety. 
 
 But when the divifion of labour firft began to 
 take place, this power of exchanging mull fre- 
 quently have been very much clogged and em- 
 barrafl'ed in its operations. One man, we ihali 
 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 fuperfiuity. But if this latter mould chance 
 to have nothing that the former Hands in need 
 of, no exchange can be made between them. 
 
 vol. 11. d The
 
 
 34 OF THE ORIGIN AND USE OF MONEY. 
 
 BOOK The butcher has more meat in his (hop than he 
 ;", _, himfelf 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 productions of 
 their refpective 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 cuftomers ; and 
 they are all of them thus mutually lefs fervice- 
 able to one another. In order to avoid the in- 
 con veniency of fuch fituations, every prudent 
 man in every period of fociety, after the firft 
 eftablifhment of the division of labour, mult na- 
 turally have endeavoured to manage his affairs 
 in fuch a manner, as to have at all times by him, 
 befides the peculiar produce of his own induftry, 
 a certain quantity of fome one commodity or 
 other, fuch as he imagined few people would be 
 likely to refufe in exchange for the produce of 
 their induftry. 
 
 Many different commodities, it is probable, 
 were fuccefli vely both thought of and employed 
 for this purpofe. In the rude ages of fociety, 
 cattle are faid to have been the common inftru- 
 ment of commerce ; and, though they muft have 
 been a molt inconvenient one, yet in old times 
 we find things were frequently valued according 
 to the number of cattle which had been given in 
 exchange for them. The armour of Diomede, 
 lavs Homer, coil only nine oxen ; but that of 
 Glaucus coll an hundred oxen. Salt is faid to 
 
 be
 
 OF THE ORIGIN AND USE OF MONEY. 35 
 
 be the common inftrument of commerce and ex- c H A P. 
 changes in Abyflinia ; afpecies of fhells in fome ^ 1V ' f 
 parts of the coaft of India ; dried cod at New- 
 foundland; tobacco in Virginia ; fugar in fome 
 of our Weft 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, I am told, for a workman to carry 
 nails inftead of money to the baker's ihop or the 
 ale houfe. 
 
 In all countries, however, men feem at laft to 
 have been determined by irrefiftible reafons to 
 give the preference, for this employment, to 
 metals above every other commodity. Metals 
 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 likewife, 
 without any lofs, be divided into any number of 
 parts, as by fufion thofe parts can eafily be re- 
 united again ; a quality which no other equally 
 durable commodities poffefs, and which more 
 than any other quality renders them fit to be the 
 inftruments of commerce and circulation. The 
 man who wanted to buy fait, for example, and 
 had nothing but cattle to give in exchange for 
 it, mufl have been obliged to buy fait to the 
 value of a whole ox, or a whole fheep, at a time. 
 He could feldom buy lefs than this, becaufe 
 what he was to give for it could feldom be 
 divided without lofs ; and if he had a mind to 
 buy more, he mult, for the fame reafons, have 
 been obliged to buy double or triple the quan- 
 tity, the value, to wit, of two or three oxen, or 
 d 2 of
 
 36 OF THE ORIGIN AND USE OF MONEY. 
 
 B O O K of two or three fheep. If, on the contrary, in- 
 ftead of fheep or oxen, he had metals to give in 
 exchange for it, he could eafily proportion the 
 quantity of the metal to the precife quantity of 
 the commodity which he had immediate occa- 
 fion for. 
 
 Different metals have been made ufe of by 
 different nations for this purpofe. Iron was the 
 common inflrument of commerce among the an- 
 tient Spartans ; copper among the antient Ro- 
 mans ; and gold and filver among all rich and 
 commercial nations. 
 
 Thofe metals feem originally to have been 
 made ufe of for this purpofe in rude bars, without 
 any (lamp or coinage. Thus we are told by 
 Pliny *, upon the authority of Timaeus, an an- 
 tient hiflorian, that, till the time of Servius Tul- 
 lius, the Romans had no coined money, but 
 made ufe of unftamped bars of copper, to pur- 
 chafe whatever they had occafion for. Thefe 
 rude bars, therefore, performed at this time the 
 function of money. 
 
 The ufe of metals in this rude ftate was at- 
 tended with two very confidcrable inconvenien- 
 cies ; firft, with the trouble of weighing ; and, 
 fecondly, with that of allaying them. In the 
 precious metals, where a fmall difference in the 
 quantity makes a great difference in the value, 
 even the bufinefs of weighing, with proper exa6t- 
 nefs, requires at leaft very accurate weights and 
 fcales. The weighing of gold in particular is an 
 
 * Plin. Hill. Nat. lib. 33. cap. 3. 
 
 operation
 
 OF THE ORIGIN AND USE OF MONEY. 37 
 
 operation of fome nicety. In the coarfer metals, chap. 
 indeed, where a fmall error would be of little 
 confequence, lefs accuracy would, no doubt, be 
 neceffary. Yet we mould find it exceffively 
 troublefome, if every time a poor man had oc- 
 cafion either to buy or fell a farthing's worth 
 of goods, he was obliged to weigh the farthing. 
 The operation of aflaying is Hill more difficult, 
 ftill 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 extremely uncertain. Before 
 the inilitution of coined money, however, unlefs 
 they went through this tedious and difficult 
 operation, people mull always have been liable^ 
 to the groffefl frauds and impositions, and in- 
 stead of a pound weight of pure lilver, or pure 
 copper, might receive in exchange for their 
 goods, an adulterated compofition of the coarfeft 
 and cheapeft materials, which had, however, 
 in their outward appearance, been made to 
 refemble thofe metals. To prevent fuch abufes, 
 to facilitate exchanges, and thereby to en- 
 courage all forts of induftry and commerce, it 
 lias been found neceffary, in all countries that 
 have made any confiderable advances towards 
 improvement, to affix a public (tamp upon cer- 
 tain quantities of fuch particular metals, as were 
 in thofe countries commonly made ufe of to 
 purchafe goods. Hence the origin of coined 
 money, and of thofe public offices called mints ; 
 institutions exactly of the fame nature with thofe 
 of the aulnagers and ftampmafters of woollen 
 
 D 3 and
 
 38 OF THE ORIGIN AND USE OF MONEY. 
 
 BOOK and linen cloth. All of them are equally meant 
 to afcertain, by means of a public flamp, the 
 quantity and uniform goodnefs of thofe different 
 commodities when brought to market. 
 
 The firft public (lamps of this kind that were 
 affixed to the current metals, feem in many cafes 
 to have been intended to afcertain, what it was 
 both mofl difficult and mofl important to afcer- 
 tain, 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 Spanifh mark which is fomctimes affixed to 
 ingots of gold, and which being ftruck only 
 upon one fide of the piece, and not covering 
 the whole furface, afcertains the finenefs, 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 re- 
 venues of the antient Saxon kings of England 
 are faid to have been paid, not in money but in 
 kind, that is, in victuals 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 
 exchequer, by weight and not by tale. 
 
 The inconveniency and difficulty of weighing 
 thofe metals with exactnefs gave occafion to the 
 inftitution of coins, of which the flamp, covering 
 entirely both fides of the piece and fometimes 
 
 the
 
 OF THE ORIGIN AND USE OF MONEY. 39 
 
 the edges too, was fuppofed to afcertain not CHAP, 
 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 ori- 
 ginally to have expreffed 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 Troyes pound, into 
 twelve ounces, each of which contained a real 
 ounce of good copper. The Englifh pound 
 fterling in the time of Edward I. contained a 
 pound, Tower weight, of filver of a known 
 finenefs. 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 England 
 till the 1 8th of Henry VIII. The French livre 
 contained in the time of Charlemagne a pound, 
 Troyes weight, of filver of a known finenefs. 
 The fair of Troyes in Champaign was at that 
 time frequented by 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 Firft to that of Robert 
 Bruce, a pound of filver of the fame weight 
 and finenefs with the Englifh pound fterling. 
 Englifh, French, and Scots pennies too, con- 
 tained all of them originally a real pennyweight 
 of filver, the twentieth part of an ounce, and 
 
 o 4 the
 
 4° OF THE ORIGIN AND USE OF MONEY. 
 
 BOOK the two-hundred-and-fortieth part of a pound. 
 The fhilling too feems originally to have been 
 the denomination of a weight. When wheat is at 
 twelve JJiillings the quarter, fays an antient ftatute 
 of Henry III. then waftel bread of a farthing 
 Jliall weigh eleven Jhillmgs and jour pence. The 
 proportion, however, between the milling 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 firfl race of the kings of 
 France, the French fou or fhilling appears 
 upon different occafions to have contained five, 
 twelve, twenty, and forty pennies. Among the 
 antient Saxons a milling appears at one time to 
 have contained only five pennies, and it is not 
 improbable that it may have been 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 Englifh, the proportion 
 between the pound, the milling, and the penny, 
 feems to have been uniformly the fame as at 
 prefent, though the value of each has been very 
 different. For in every country of the world, I 
 believe, the avarice and injuftice of princes and 
 fovereign flates, abufing the confidence of their 
 fubjecls, have by degrees diminifhed the real 
 quantity of metal, which had been originally 
 contained in their coins. The Roman As, in the 
 latter ages of the Republic, was reduced to the 
 twenty-fourth part of its original value, and, 
 inflead of weighing a pound, came to weigh only 
 
 half
 
 OF THE ORIGIN AND USE OF MONEY. 4 1 
 
 half an ounce. The Englifh pound and penny chap. 
 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 
 operations the princes and fovereign ftates which 
 performed them were enabled, in appearance, to 
 pay their debts and to fulfil their engagements 
 with a fmaller quantity, of fllver than would 
 otherwife have been requisite. 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 tlie Hate were allowed the v 
 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, therefore, have always proved favour- 
 able to the debtor, and ruinous to the creditor, , 
 and have fometimes produced a greater and 
 more univerfal revolution in the fortunes of 
 private perfons, than could have been occafioned 
 by a very great public calamity. 
 
 It is hi this manner that money has become 
 in all civilized nations the univerfal inflrument 
 of commerce, by the intervention of which 
 goods of all kinds are bought and fold, or 
 exchanged for one another. 
 
 What are the rules which men naturally ^ 
 obferve in exchanging them either for money 
 or for one another, I mall now proceed to 
 examine. Thefe rules determine what may 
 be called the relative or exchangeable value &" 
 
 of goods. 
 
 The
 
 42 OF THE ORIGIN AND USE OF MONEY. 
 
 The word value, it is to be obferved, has 
 two different meanings, and fometimes exprefies 
 the utility of fome particular object, and fome- 
 times the power of purchafing other goods which 
 the poffeflion of that object conveys. The one 
 may be called "value in ufe;" the other, " value 
 " in exchange." The things which have the 
 greateft value in ufe have frequently little or no 
 value in exchange ; and on the contrary, thofe 
 which have the greateft value in exchange have 
 frequently little or no value in ufe. Nothing is 
 more ufeful than water : but it will purchafe 
 fcarce any thing ; fcarce any thing can be had 
 in exchange for it. A diamond, on the con- 
 trary, has fcarce any value in ufe ; but a very 
 great quantity of other goods may frequently be 
 had in exchange for it. 
 
 In order to inveftigate the principles which 
 regulate the exchangeable value of commo- 
 dities, I fhall endeavour to fhew, 
 *5" Firft, what is the real meafure of this ex- 
 changeable value ; or, wherein confifts the real 
 price of all commodities. 
 
 Secondly, what are the different parts of 
 which this real price is compofed or made up. 
 
 And, laflly, what are the different circum- 
 ftances which fometimes raife fome or all of 
 thefe different parts of price above, and fome- 
 times fink them below their natural or ordinary 
 rate ; or, what are the caufes which fometimes 
 hinder the market price, that is, the actual price 
 of commodities, from coinciding exactly with 
 what may be called their natural price. 
 
 4 I fhail
 
 OF THE ORIGIN AND USE OF MONEY. 43 
 
 I (hall endeavour to explain, as fully and c H A P. 
 didin6tly as I can, thofe three fubje&s in the t IV * 
 three following chapters, for which I mud very 
 earnedly entreat both the patience and attention 
 of the reader : his patience in order to examine 
 a detail which may perhaps in fome places 
 appear unnecemirily tedious ; and his attention 
 in order to underdand what may, perhaps, after 
 the fulled explication which I am capable of 
 giving of it, appear dill in fome degree obfcure. 
 1 am always willing to run fome hazard of being 
 tedious in order to be fure that I am perfpicuous ; 
 and after taking the utmod pains that I can to 
 be perfpicuous, fome obfcurity may dill appear 
 to remain upon a fubjecT; in its own nature 
 extremely abdra6ted. 
 
 CHAP. V. 
 
 Of the real and nominal Price of Commodities, or 
 of their Price in Labour, and their Price in 
 Money. 
 
 EVERY man is rich or poor according to c H A P. 
 the degree in which he can afford to enjoy v - 
 the neceflaries, conveniencies, and amufements ' 
 of human life. But after the divifion of labour 
 has once thoroughly taken place, it is but a very 
 fmall part of thefe with which a man's own 
 labour can fupply him. The far greater part of 
 tbem he mud derive from the labour* of other 
 
 people.
 
 44 OF THE REAL AND NOMINAL 
 
 BOOK people, and he mud be rich or poor according 
 to the quantity of that labour which he can 
 command^ or which he can afford to purchafe. 
 The value of any commodity, therefore, to the 
 perfon who poflenes it, and who means not to 
 ufe or confume it himfelf, but to exchange it for 
 other commodities, is equal to the quantity of 
 labour which it enables him to purchafe or com- 
 mand. Labour, therefore, is the real meafure 
 ~^ of the exchangeable value of all commodities. 
 The real price of every thing, what every 
 thing really colls to the man who wants to 
 acquire it, is the toil and trouble of acquiring it. 
 What every tiling 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 himfelf, and which 
 it can impofe upon other people. What is bought 
 with money or with goods is purchafed by labour, 
 as much as 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 is 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 iilver, 
 but by labour, that all the wealth of the world 
 was originally purchafed; and its value, to thofe 
 who ponefs it, and who want to exchange it 
 for fome new productions, is precifcly equal to 
 the quantity of labour which it can enable them 
 to purchafe or command. 
 
 Wealth
 
 PRICE OF COMMODITIES. 45 
 
 Wealth, as Mr. Hobbes fays, is power. But c H A P. 
 the perfon who either acquires, or fucceeds to Jj\ 
 a great fortune, does not neceffarily acquire or 
 fucceed to any political power, either civil or 
 military. His fortune may, perhaps, afford him 
 the means of acquiring both, but the mere pof- 
 feffion of that fortune does not neceffarily con- 
 vey to him either. The power which that pof- 
 feffion immediately and directly conveys to him, 
 is the power of purchafmg ; a certain command 
 over all the labour, or over all the produce of 
 labour which is then in the market. His for- 
 tune is greater or lefs, precifely in proportion 
 to the extent of this power ; or to the quantity 
 either of other men's labour, or, what is the 
 fame thing, of the produce of other men's 
 labour, which it enables him to purchafe or 
 command. The exchangeable value of every 
 thing mult always be precifely equal to the ex- 
 tent of this power which it conveys to its owner. 
 
 But though labour be the real meafure of the 
 exchangeable value of all commodities, it is not 
 that by which their value is commonly efti- 
 mated. It is often difficult to afcertain the 
 proportion 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 of ingenuity exercifed, mufl like- 
 wife be taken into account. There may be 
 more labour in an hour's hard work than in two 
 hours eafy bufinefs ; or in an hour's application 
 to a trade which it coft ten years labour to learn, 
 
 than.
 
 46 OF THE REAL AND NOMINAL 
 
 book than in a month's induftry at an ordinary and 
 ** obvious employment* But it is not eafy to 
 find any accurate meafure either of hardihip or 
 ingenuity. In exchanging indeed the different 
 productions of different forts of labour for one 
 another, fome allowance is commonly made for 
 both. It is adj ufled, however, not by any accu- 
 rate meafure, but by the higgling and bargaining 
 of the market, according to that fort of rough 
 equality which, though not exa6t, is fufficient 
 for carrying on the bufinefs of common life. 
 
 Every commodity befides, is more frequently 
 exchanged for, andthereby compared with, other 
 commodities than with labour. It is more natu- 
 ral 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 understand bet- 
 ter what is meant by a quantity of a particular 
 commodity, than by a quantity of labour. The 
 one is a plain palpable objecl; ; the other an 
 abftracl; notion, which, though it can be made 
 fufficiently intelligible, is not altogether fo natu- 
 ral and obvious. 
 
 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 com- 
 modity. The 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 lie exchanges 
 them for money, and afterwards exchanges that 
 
 money
 
 PRICE OF COMMODITIES. 4/ 
 
 money for bread and for beer. The quantity CHAP. 
 
 of money which lie gets for them regulates too 
 
 the quantity of bread and beer which he can 
 afterwards purchafe. It is more natural and 
 obvious to him, therefore, to eflimate 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 inter- 
 vention 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 exchangeable value of every commodity 
 is more frequently ellimated by the quantity of 
 money, than by the quantity either of labour or 
 of any other commodity which can be had in 
 exchange for it. 
 
 Gold and filver, however, like every other 
 commodity, vary in their value, are fometimes 
 cheaper and fometimes dearer, fometimes of 
 eafier and fometimes of more difficult purchafe. 
 The quantity of 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 barren- 
 nefs of the mines which happen to be known 
 about the time when fuch exchanges are made. 
 The difcovery of the abundant mines of America 
 reduced, in the fixteenth century, the value of 
 gold and filver in Europe to about a third of 
 what it had been before. As it cofts lefs labour 
 
 to
 
 48 OF THE REAL AND NOMINAL 
 
 BOOK to bring thofe metals from the mine to the 
 L market, fo when they were brought thither 
 they could purchafe or command lefs labour ; 
 and this revolution in their value, though per- 
 haps the greateft, is by no means the only one 
 of which hiftory gives fome account. But as a 
 meafure of quantity, fuch as the natural foot, 
 fathom, or handful, which is continually varying 
 in its own quantity, can never be an accurate 
 meafure of the quantity of other things ; 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, at all times and 
 places, may be faid to be of equal value to 
 the labourer. In his ordinary flate of health, 
 ftrength and fpirits ; in the ordinary degree 
 of his ikill and dexterity, he mull always lay 
 down the lame portion of his eafe, his liberty, and 
 his happinefs. The price which he pays mult 
 always be the fame, whatever maybe the quantity 
 of goods which he receives in return for it. Of 
 thefe indeed it may fometimes purchafe a greater 
 and fometimes a finaller quantity ; but it is their 
 value which varies, not that of the labour which 
 purchafes them. At all times and places that 
 is dear which it is difficult to come at, or which 
 it colts much labour to acquire ; and that cheap 
 which is to be had ealily, or with very little 
 labour. Labour alone, therefore, never varying 
 in its own value, is alone the ultimate and real 
 ltandard by which the value of all commodities 
 can at all times and places be eftimated and 
 
 compared.
 
 PRICE OF COMMODITIES 49 
 
 Compared. It is their real price ; money is their chap. 
 nominal price only. 
 
 But though equal quantities of labour are 
 always of equal value to the labourer, yet to the 
 perfon who employs him they appear fometimes 
 to be of greater and fometimes of fmaller value. 
 He purchafes them fometimes with a greater and 
 fometimes with a fmaller quantity of goods, and 
 to him the price of labour feems to vary like that 
 of all other things. It appears to him dear in 
 the one cafe, and cheap in the other. In reality, 
 however, it is the goods which are cheap in the 
 one cafe, and dear in the other. 
 
 In this popular fenfe, therefore, labour, like 
 commodities, may be faid to have a real and a 
 nominal price. Its real price may be faid to 
 confift in the quantity of the neceflaries and con- 
 veniences of life which are given for it ; its no- 
 minal price, in the quantity of money. The 
 labourer is rich or poor, is well or ill rewarded, 
 in proportion to the real, not to the nominal 
 price of his labour. i 
 
 The diftinction between the real and the 
 nominal price of commodities and labour, is not 
 a matter of mere {peculation, but may fometimes 
 be of confiderable ufe in practice. The fame 
 real price is always of the fame value ; but on 
 account of the variations in the value of gold 
 and lilver, the fame nominal price is fometimes 
 of very different values. When a landed eflate, 
 therefore, is fold with a refervation of a perpe- 
 tual rent, if it is intended that this rent fhould 
 always be of the fame value, it is of importance 
 * VOL. II. e to
 
 5© OF THE REAL AND NOMINAL 
 
 B O o K to the family in whofe favour it is referred, that 
 L it mould not confift in a particular fum of money. 
 Its value would in this cafe be liable to varia- 
 tions of two different kinds ; firfl, to thofe which 
 arife from the different quantities of gold and 
 filver which are contained at different times in 
 coin of the fame denomination ; and, fecondly, 
 to thofe which arife from the different values of 
 equal quantities of gold and filver at different 
 times. 
 
 Princes and fovereign flates have frequently 
 fancied that they had a temporary intereli to 
 diminifh the quantity of pure metal contained in 
 their coins j 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 almoft continu* 
 ally diminifliing, and hardly ever augmenting. 
 Such variations therefore tend almoft always to 
 diminifh the value of a money rent. 
 
 The difcovery of the mines of America dimi- 
 nifhed the value of gold and filver in Europe. 
 This diminution, it is commonly fuppofed, though 
 I apprehend without any certain proof, is ftill 
 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 dimi- 
 nifh, than to augment the value of a money rent, 
 even though it fhould be ftipulated to be paid, 
 not in fuch a quantity of coined money of fuch 
 a denomination (in fo many pounds fterling, for 
 example), but in fo many ounces either of pure 
 filver, or of filver of a certain ftandard. 
 
 The
 
 TRICE OF COMMODITIES. 5 1 
 
 The rents which have been referved in corn 
 have preferred 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 18th of Elizabeth it was enacted, That 
 a third of the rent of all college leafes mould be 
 referved in corn, to be paid, either in kind, or 
 according to the current prices at the nearefl 
 public market. The money arifing from this 
 corn rent, though originally but a third of the 
 whole, is in the prefent times, according to 
 Doctor Blackftone, commonly near double of 
 what arifes from the other two-thirds. The old 
 money rents of colleges mull, according to this 
 account, have funk almoft to a fourth part of 
 their ancient value ; or are worth little more 
 than a fourth part of the corn which they were 
 formerly worth. But lince the reign of Philip 
 and Mary the denomination of the Englifh coin 
 has undergone little or no alteration, and the 
 fame number of pounds, millings and pence have 
 contained very nearly the fame quantity of pure 
 iilver. This degradation, therefore, in the value 
 of the money rents of colleges, has arifen alto- 
 gether from the degradation in the value of 
 lllver. 
 
 j^When the degradation in the value of lllver 
 is combined with the diminution of the quantity 
 of it contained in the coin of the fame denomi- 
 nation, the lofs is frequently ftill greater. In 
 Scotland, where the denomination of the coin 
 has undergone much greater alterations than it 
 ever did in England, and in France, where it has 
 
 e 2 under-
 
 $2 OF THE REAL AND NOMINAL 
 
 BOOK undergone Hill greater than it ever did in Scot- 
 land, fome ancient refits, originally of confider- 
 able value, have in this manner been reduced 
 almofl to nothing. 
 
 Equal quantities of labour will at diftant times 
 be purchafed more nearly with equal quantities 
 of corn, the fubfiitence of the labourer, than 
 with equal quantities of gold and filver, or per- 
 haps of any other commodity. Equal quan- 
 tities of corn, therefore, will, at diftant times, 
 be more nearly of the fame real value, or enable 
 the poffefTor 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 com- 
 modity ; for even equal quantities of corn wilL 
 not do it exactly. The fubfiitence of the la- 
 bourer, or the real price of labour, as I (hall 
 endeavour to mow hereafter, is very different 
 upon different occaiions ; more liberal in a fo- 
 ciety advancing to opulence, than in one that is 
 ftanding ftill ; and in one that is Handing ftill, 
 than in one that is going backwards. Every 
 other commodity, however, will at any particular 
 time purchafe a greater or fmallcr quantity of 
 labour in proportion to the quantity of fubiift- 
 ence which it can purchafe at that time. A 
 rent therefore referved in corn is liable only to 
 the variations 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 the quantity of la- 
 bour which any particular quantity of corn can 
 4 purchafe,
 
 PRICE OF COMMODITIES. 53 
 
 purchafe, but to the variations in the quantity of CHAP. 
 corn which can be purchased by any particular 
 quantity of that commodity. 
 
 Though the real value of a corn rent, it is to 
 be obferved however, varies much lefs from cen- 
 tury to century than that of a money rent, it 
 varies much more from year to year. The 
 money price of labour, as I lhall endeavour to 
 fhow hereafter, does not fluctuate from year to 
 year with the money price of corn, but feems to 
 be every where accommodated, not to the tem- 
 porary or occafional, but to the average or ordi- 
 nary price of that neceffary of life. The average 
 or ordinary price of corn again is regulated, as 
 I fhall likewife endeavour to Ihow hereafter, by 
 the value of lilver, by the richnefs or barrennefs 
 of the mines which fupply the market with that 
 metal, or by the quantity of labour which mull 
 be employed, and confequently of corn which 
 mull be confumed, in order to bring any parti- 
 cular quantity of lilver from the mine to the 
 market. But the value of lilver, though it fome- 
 times varies greatly from century to century, 
 feldom varies much from year to year, but fre- 
 quently 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, con- 
 tinue the fame or very nearly the fame too, and 
 along with it the money price of labour, pro- 
 vided, at lead, the fociety continues, in other 
 refpects, in the fame or nearly in the fame con- 
 dition. In the mean time the temporary and 
 
 E 3 occa-
 
 54 OF THE REAL AND NOMINAL 
 
 BOOK occafional price of corn may frequently be dou- 
 ble, one year, of what it had been the year be- 
 fore, or fluctuate, for example, from five and 
 twenty to fifty ihillings the quarter. But when 
 corn is at the latter price, not only the nominal, 
 but the real value of a corn rent will be double 
 of what it is when at the former, or will com- 
 mand 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 mod 
 other things, continuing the fame during all thefe 
 fluctuations. 
 
 Labour, therefore, it appears evidently, is 
 the only univerfal, as well as the only accurate 
 meafure of value, or the only ftandard by which 
 we can compare the values of different commo- 
 dities at all times and at all places. We cannot 
 eftimate, it is allowed, the real value of different 
 commodities from century to century by the 
 quantities of filver which were given for them. 
 We cannot eftimate it from year to year by the 
 quantities of corn. By the quantities of labour 
 we can, with the greater! accuracy, eftimate it 
 both from century to century and from year to 
 year. From century to century, corn is a better 
 meafure than filver, becaufe, from century to 
 century, equal quantities of corn will command 
 the fame quantity of labour more nearly than 
 equal quantities of filver. From year to year, 
 on the contrary, filver is a better meafure than 
 corn, becaufe equal quantities of it will more 
 nearly command the fame quantity of labour, 
 
 * But
 
 PRICE OF COMMODITIES. 55 
 
 But though in eftablifhing perpetual rents, CHAP. 
 or even in letting very ldng leafes, it may be of, 
 ufe to diftinguifh between the real and nominal 
 price ; it is of none in buying and felling, the 
 more common and ordinary tranfaclions of hu- 
 man life. 
 
 At the fame time and place the real and the 
 nominal price of all commodities are exactly in 
 proportion to one another. The more or lefs 
 money you get for any commodity, in the Lon- 
 don market, for example, the more or lefs la- 
 bour it will at that time and place enable you to 
 purchafe or command. At the fame time and 
 ])lace, therefore, money is the exael meafure of 
 the real exchangeable value of all commodities. 
 It is fo, however, at the fame time and place 
 onlv. 
 
 Though at diflant places, there is no regular 
 proportion between the real and the money price 
 of commodities, yet the merchant w T ho carries 
 goods from the one to the other has nothing to 
 confider but their money price, or the difference 
 between the quantity of filver for which he buys 
 them, and that for which he is likely to fell 
 them, Half an ounce of filver at Canton in 
 China may command a greater quantity both of 
 labour and of the neceffaries and conveniences of 
 life, than an ounce at London. A commodity, 
 therefore, which fells for half an ounce of filver 
 at Canton may there be really dearer, of more 
 real importance to the man who poffeffes it there, 
 than a commodity which fells for an ounce at 
 London is to the man who poffeffes it at Lon- 
 
 E 4 don.
 
 $6 OF THE REAL AND NOMINAL 
 
 BOOK don. If a London merchant, however, can buy 
 at Canton for half an ounce of filver, a commo- 
 dity which he can afterwards fell at London for 
 an ounce, he gains a hundred per cent, by the 
 bargain, jufl as much as if an ounce of filver 
 was at London exactly of the fame value as at 
 Canton. It is of no importance to him that half 
 an ounce of iilver at Canton would have given 
 him the command of more labour and of a 
 greater quantity of the neceffaries and conve^ 
 niences of life than an ounce can do at London. 
 An ounce at London will always give him the 
 command of double the quantity of all thefe, 
 which half an ounce could have done there, and 
 this is precifely what he wants. 
 
 As it is the nominal or money price of goods, 
 therefore, which finally determines the prudence 
 or imprudence of all purchafes and fales, and 
 thereby regulates almoft the whole bufinefs of 
 common life in which price is concerned, we 
 cannot wonder that it mould have been fo much 
 more attended to than the real price. 
 
 In fuch a work as this, however, it may fome- 
 times 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 people which it 
 may, upon different occafions, have given to 
 thole who poffefTed it. We mufl in this cafe 
 compare, not fo much the different quantities of 
 filver for which it was commonly fold, as the 
 different quantities of labour which thofe dif- 
 ferent quantities of filver could have purchafed. 
 
 But
 
 PRICE OF COMMODITIES. $J 
 
 But the current prices of labour at diftant times CHAP, 
 and places can fcarce ever be known with any 
 degree of exa6lnefs. Thofe of corn, though 
 they have in few places been regularly re- 
 corded, are in general better known and have 
 been more frequently taken notice of by hifto- 
 rians and other writers. We mult generally:, 
 therefore, content ourfelves with them, not as 
 being always exactly in the fame proportion as 
 the current prices of labour, but as being the 
 nearelt approximation which can commonly be 
 had to that proportion. I fhall hereafter have 
 occafion to make feveral comparifons of this 
 kind. 
 
 In the progrefs of induftry, commercial na- 
 tions have found it convenient to coin feveral 
 different metals into money ; gold for larger pay- 
 ments, iilver for purchafes of moderate value, 
 and copper, or, fome other coarfe metal, for 
 thofe of Hill fmaller consideration. They have 
 always, however, conlidered one of thofe metals 
 as more peculiarly the meafure of value than 
 any of the other two ; and this preference feems 
 generally to have been given to the metal which 
 they happened nrft to make ufe of as the in- 
 itrument of commerce. Having once began to 
 ufe it as their flandard, which they muft have 
 done when they had no other money, they have 
 generally continued to do fo even when the ne- 
 ceffity was not the fame. 
 
 The Romans are faid to have had nothing but 
 copper money till within five, years before the 
 
 Erlt
 
 58 OF THE REAL AND NOMINAL 
 
 BOOK firft Punic war *, when they firfl began to coin 
 *• filver. Copper, therefore, appears to have con- 
 tinued always the meafure of value in that re- 
 public. At Rome all accounts appear to have 
 been kept, and the value of all eftates to have 
 been computed, either in AJJes or in Sejlerlii. 
 The As was always the denomination of a copper 
 coin. The word Seftertius fignifies two AJJes and 
 a half. Though the Sejlertius, therefore, was 
 originally a filver coin, its value was eftimated in 
 copper. At Rome, one who owed a great deal 
 of money, was faid to have a great deal of other 
 people's copper. 
 
 The northern nations who eftablifhed them- 
 felves upon the ruins of the Roman empire, feem 
 to have had filver money from the firft. beginning 
 of their fettlements, and not to have known 
 either gold or copper coins for feveral ages there- 
 after. There were filver coins in England in the 
 time of the Saxons ; but there was little gold 
 coined till the time of Edward III. nor any cop- 
 per 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 
 of guineas, but the number of pounds fterling 
 which we fuppofe would be given for it, 
 
 * Pliny, lib. xxxiii. c. 3. 
 
 Ori.
 
 PRICE OF COMMODITIES. 59 
 
 Originally, in all countries, I believe, a legal CHAP* 
 tender of payment could be made only in the 
 coin of that metal, which was peculiarly con- 
 fidered as the flandard or meafure of value. In 
 England, gold was not confidered as a legal ten- 
 der for a long time after it was coined into 
 money. The proportion between the values of 
 gold and filver money was not fixed by any public 
 law or proclamation ; but was left to be fettled 
 by the market. If a debtor offered payment in 
 gold, the creditor might either reje6t fuch pay- 
 ment altogether, or accept of it at fuch a valu- 
 ation of the gold as he and his debtor could agree 
 upon. Copper is not at prefent a legal tender, 
 except in the change of the fmaller filver coins. 
 In this flate of things the diftinction between the 
 metal which was the flandard, and that which 
 was not the flandard, was fomething more than 
 a nominal diflinc~lion. 
 
 In procefs of time, and as people became 
 gradually more familiar with the ufe of the dif- 
 ferent metals in coin, and confequently better 
 acquainted with the proportion between their 
 refpective values, it has in mofl countries, I be- 
 lieve, been found convenient to afcertain this 
 proportion, and to declare by a public law that 
 a guinea, for example, of fuch a weight and 
 fmenefs, fhould exchange for one-and-twenty 
 {hillings, or be a legal tender for a debt of that 
 amount. In this flate of things, and during the 
 continuance of any one regulated proportion of 
 this kind, the diflinc~lion between the metal 
 which is the flandard, and that which is not the 
 
 flandard^
 
 60 OF THE REAL AND NOMINAL 
 
 BOOK ftandard, becomes little more than a nominal 
 L . diflin&ion. 
 
 In confequence of any change, however, in 
 this regulated proportion, this diftin&ion be- 
 comes, or at leafl feems to become, fomething 
 more than nominal again. If the regulated 
 value of a guinea, for example, was either re- 
 duced to twenty, or raifed to two-and-twenty 
 fhillings, all accounts being kept and almofl all 
 obligations for debt being expreffed in filver 
 money, the greater part of payments could in 
 either cafe be made with the fame quantity of 
 filver money as before ; but would require very 
 different quantities of gold money ; a greater in 
 the one cafe, and a fmaller in 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 for ; and the value of 
 filver would not feem to depend upon the quan- 
 tity of gold which it would exchange for. 
 This difference, however, would be altogether 
 owing to the cuftom of keeping accounts, and of 
 exprefh'ng the amount of all great and fmallfums 
 rather in filver than in gold money. One of 
 Mr. Drummond's notes for five-and-twenty or 
 fifty guineas would, after an alteration of this 
 kind, he flill payable with five-aml-twenty or 
 fifty guineas in the fame manner as before. It 
 would, after fuch an alteration, bo payable with 
 the fame quantity of gold as before, but with 
 
 very
 
 PRICE OF COMMODITIES. 6 1 
 
 very different quantities of filver. In the pay- chap. 
 ment of fuch a note, gold would appear to be 
 more invariable in its value than filver. Gold 
 would appear to meafure the value of filver, and 
 filver would not appear to meafure the value of 
 gold. If the cuflom of keeping accounts, and of 
 expreffingpromhTory notes and other obligations 
 for money in this manner, fhould ever become 
 general, gold, and not filver, would be con- 
 fidered as the metal which was peculiarly the 
 flandard or meafure of value. 
 
 In reality, during the continuance of any 
 one regulated proportion between the refpective 
 values of the different metals in coin, the value 
 of the moft precious metal regulates the value 
 of the whole coin. Twelve copper pence con- 
 tain half a pound, avoirdupois, of copper, of 
 not the befl quality, which, before it is coined, 
 is feldom worth feven-pence in filver. But as by 
 the regulation twelve fuch pence are ordered to 
 exchange for a milling, they are in the market 
 confidered as worth a milling, and a fliilling can 
 at any time be had for them. Even before the 
 late reformation of the gold coin of Great Bri- 
 tain, the gold, that part of it at leaft which cir- 
 culated in London and its neighbourhood, was 
 in general lefs degraded below its flandard weight 
 than the greater part] of the filver. One and 
 twenty worn and defaced millings, however, 
 were confidered as equivalent to a guinea, which 
 perhaps, indeed, was worn and defaced too, but 
 feldom fo much fo. The late regulations have 
 brought the gold coin as near perhaps to its 
 flandard weight as it is pollible to bring the cur- 
 rent
 
 6*2 OF THE REAL AND NOMINAL 
 
 BOOK rent coin of any nation ; and the order, to receive 
 . _ L no gold at the public offices but by weight, is 
 likely to preferve it fo, as long as that order is 
 enforced. The (ilver coin (till continues in the 
 fame worn and degraded ftate as before the re- 
 formation of the gold coin. In the market, how- 
 ever, one-and-twenty millings of this degraded 
 filver coin are flill confidered as worth a guinea 
 of this excellent gold coin. 
 
 The reformation of the gold coin has evidently 
 raifed the value of the filver coin which can be 
 exchanged for it. 
 
 In the Engliih mint a pound weight of gold is 
 coined into forty-four guineas and a half, which, 
 at one-and-twenty millings the guinea, is equal 
 to forty-fix pounds fourteen (hillings and fix- 
 pence. An ounce of fuch gold coin, therefore, 
 is worth 3/. 17s. \o{d. in filver. In England no 
 duty or feignorage is paid upon the coinage, and 
 he who carries a pound weight or an ounce 
 weight of ftandard gold bullion to the mint, gets 
 back a pound weight or an ounce weight of gold 
 in coin, without any deduction. 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 return for ftandard gold 
 bullion. 
 
 Before the reformation of the gold coin, the 
 price of ftandard gold bullion in the market had 
 for many years been upwards of 3/. 185. fome- 
 times 3/. 19s. and very frequently 4/. an ounce ; 
 that fum, it is probable, in the worn and de- 
 
 gra4e4
 
 PRICE OF COMMODITIES. 63 
 
 graded gold coin, feldom containing more than chap. 
 
 an ounce of ftandard gold. Since the reforma- , ^ 
 
 tion of the gold coin, the market price of ftan- 
 dard gold bullion feldom exceeds 3/. lys.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 mar- 
 ket price has been conflantly below the mint 
 price. But that market price is the fame whe- 
 ther it is paid in gold or in filver coin. The 
 late reformation of the gold coin, therefore, has 
 raifed not only the value of the gold coin, but 
 likewife that of the filver coin in proportion to 
 gold bullion, and probably too in proportion to 
 all other commodities ; though the price of the 
 greater part of other commodities being influ- 
 enced by fo many other caufes, the rife in the 
 value either of gold or filver coin in proportion 
 to them, may not be fo diftin6t and fenfible.- 
 
 In the Englifh mint a pound weight of ftan- 
 dard filver bullion is coined into fixty-two fliil- 
 lings, containing, in the fame manner, a pound 
 weight of ftandard filver. Five fhillings and 
 two-pence an ounce, therefore, is faid to be the 
 mint price of filver 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 different occafions, five 
 fhillings and four-pence, five fhillings and five- 
 pence, five fhillings and fix-pence, five fhillings 
 and feven-pence, and very often five fhillings and 
 eight-pence an ounce. Five fhillings and feven- 
 pence,
 
 64 OF THE REAL AND NOMINAL 
 
 BOOK pence, however, feems to have been the moft 
 
 ^ ( common price. Since the reformation of the 
 
 gold coin, the market price of ftandard filver 
 bullion has fallen occafionally to five fhillings 
 and three-pence, five fhillings and four-pence, 
 and five fhillings and five-pence an ounce, which 
 laft price it has fcarce ever exceeded. Though 
 the market price of filver bullion has fallen con- 
 fiderably fince the reformation of the gold coin, 
 it has not fallen fo low as the mint price. 
 
 In the proportion between the different metals 
 in the Englifh coin, as copper is rated very much 
 above its real value, fo filver is rated fome- 
 what below it. In the market of Europe, in the 
 French coin and in the Dutch coin, an ounce of 
 fine gold exchanges for about fourteen ounces of 
 fine filver. In the Englifh coin, it exchanges for 
 about fifteen ounces, that is, for more filver than 
 it is worth according to the common eftimation 
 of Europe. But as the price of copper in bars 
 is not, even in England, raifed by the high price 
 of copper in Englifh coin, fo the price of filver 
 in bullion is not funk by the low rate of filver in 
 Englilh coin. Silver in bullion Hill prefervesits 
 proper proportion to gold ; for the fame reafon 
 that copper in bars preferves its proper propor- 
 tion to filver. 
 
 Upon the reformation of the filver coin in the 
 reign of William III. the price of filver bullion 
 ftill continued to be fomewhat above the mint 
 price. Mr. Locke imputed this high price to 
 the permiflion of exporting filver bullion, and to 
 the prohibition of exporting filver coin. This 
 
 permiflion
 
 PRICE OF COMMODITIES. €$ 
 
 p e rmiflion of exporting, he faid, rendered the CHAP, 
 demand for filver bullion greater than the de- 
 mand for filver coin. But the number of people 
 who want filver coin for the common ufes of 
 buying and felling at home, is furely much 
 greater than that of thofe who want filver bullion 
 either for the ufe of exportation or for any other 
 ufe. There fubfifls at prefent a like permifhon 
 of exporting gold bullion, and a like prohibition 
 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 man- 
 ner as now, under-rated in proportion to gold ; 
 and the gold coin (which at that time too was not 
 fuppofed 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 re- 
 formation will do fo now. 
 
 Were the filver coin brought back as near to 
 its flandard weight as the gold, a guinea, it is 
 probable, would, according to the prefent pro- 
 portion, exchange for more filver in coin than 
 it would purchafe in bullion. The filver con- 
 taining its full flandard weight, there would in 
 this cafe be a profit in melting it down, in order, 
 firft, to fell the bullion for gold coin, and after- 
 wards to exchange this gold coin for filver coin 
 to be melted down in the fame manner. Some 
 alteration in the prefent proportion feems to be 
 the only method of preventing this inconve- 
 niency. 
 
 vol. ii. f The
 
 66 OF THE REAL AND NOMINAL 
 
 K 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 
 enacted that lilver mould not be a legal tender 
 for more than the change of a guinea j in the 
 fame manner as copper is not a legal tender for 
 more than the change of a milling. No creditor 
 could in this cafe be cheated in confequence of 
 the high valuation of lilver in coin ; as no credi- 
 tor can at prefent be cheated in confequence of 
 the high valuation of copper. The bankers only 
 would fuffer by this regulation. When a run 
 comes upon them they fometimes endeavour to 
 gain time by paying in fixpences, and they would 
 be precluded by this regulation from this difcre- 
 ditable method of evading immediate payment. 
 They would be obliged in confequence to keep 
 at all times in their coffers a greater quantity of 
 cafh than at prefent ; and though this might no 
 doubt be a considerable inconveniency to them, 
 it would at the fame time be a confiderable fecu- 
 rity to their creditors. 
 
 Three pounds feventeen millings and ten- 
 pence halfpenny (the mint price of gold) cer- 
 tainly does not contain, even in our prefent 
 excellent gold coin, more than an ounce of 
 flan dard gold, and it may be thought, therefore, 
 fhould not purchafe more ftandard bullion. But 
 gold in coin is more convenient 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
 
 PRICE OF COMMODITIES. 6j 
 
 owner till after a delay of feveral weeks. In the c H A P. 
 prefent hurry of the mint, it could not be re- 
 turned 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 
 Englifh coin filver was rated according to its 
 proper proportion to gold* the price of filver 
 bullion would probably fall below the mint price 
 even without any reformation of the filver coin ; 
 the value even of the prefent worn and defaced 
 filver coin being regulated by the value of 
 the excellent gold coin for which it can be 
 changed. 
 
 A fmall feignorage or duty upon the coinage 
 of both gold and filver would probably increafe 
 Itill more the fuperiority of thofe metals in coin 
 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 rea- 
 fon that the fafhion increafes the value of plate 
 in proportion to the price of that fafhion. The 
 fuperiority of coin above bullion would prevent 
 the melting down of the coin, and would difcou- 
 rage its exportation. If upon any public exi- 
 gency it fhould become neceffary 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 
 f 2 impofed
 
 68 Or THE REAL AXD NOMINAL 
 
 BOOK impofed upon the coinage, and the French coin, 
 when exported, is faid to return home again of 
 its own accord. 
 
 The occafional fluctuations in the market 
 price of gold and filver bullion arife from the 
 fame caufes as the like fluctuations in that of all 
 other commodities. The frequent lofs of thofe 
 metals from, various accidents by fea and by 
 land, the continual waft e of them in gilding and 
 plating, in lace and embroidery, in the wear and 
 tear of com, and in that of plate ; require, in all 
 countries which poflefs no mines of their own, a 
 continual importation, in order to repair this lofs 
 and this wafte. The merchant importers, like 
 all other merchants, we may believe, endeavour, 
 as well as they can, to fuit their occafional im- 
 portations 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 rilk and trouble of exporting it again, they 
 are fometimes willing to fell a part of it for 
 fomething lefs than the ordinary or average 
 price. When, on the other hand, they import 
 lefs than is wanted, they get fomething more 
 than this price. But when, under all thofe oc- 
 cafional fluctuations, the market price either of 
 gold or filver bullion continues forfeveral years 
 together fteadily and conftantly, either more or 
 lefs above, or more or lefs below the mint price : 
 we may be afliircd that this Heady and conftant, 
 either fuperiority or inferiority of price, is the 
 
 effect
 
 PRICE OF COMMODITIES. 69 
 
 effect of fomething in the Hate 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 conltancy and fteadinefs of the 
 effect, fuppofes a proportionable constancy 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 cur- 
 rent coin is more or lefs exactly agreeable to its 
 ftandard, or contains more or lefs exactly the 
 precife quantity of pure gold or pure filver which 
 it ought to contain. If in England, for exam- 
 ple, forty-four guineas and a half contained ex- 
 actly 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 par- 
 ticular 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 fome 
 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 com- 
 monly expofed. As it rarely happens that thefe 
 are exactly agreeable to their ftandard, the mer- 
 chant 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 confe- 
 
 F 3 quencQ
 
 JO OF THE REAL AND NOMINAL PRICE, &C. 
 
 BOOK quence of a like diforder in the coin, the price of 
 goods comes, in the fame manner, to be ad- 
 jufted, not to the quantity of pure gold or filver 
 which the coin ought to contain, but to that 
 which, upon an average, it is found by expe- 
 rience it actually does* contain. 
 
 By the money-price of goods, it is to be ob- 
 ferved, I underfland 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 mo- 
 ney-price with a pound flerling in the prefent 
 times ; becaufe it contained, as nearly as we can 
 judge, the fame quantity of pure filver. 
 
 CHAP. VI. 
 
 Of the component Parts of the Price of Commodities. 
 
 chap. TN that early and rude ftate of fociety which 
 V1, A precedes both the accumulation of flock and 
 the appropriation of land, the proportion be- 
 tween the quantities of labour neceflary for ac- 
 quiring different objects feems to be the only 
 circumftance which can afford any rule for ex- 
 chang-inu; them for one another. If among a 
 nation of hunters, for example, it ufually con's 
 twice the labour to kill a beaver which it does 
 to kill a deer, one beaver fliould naturally ex- 
 change
 
 OF THE COMPONENT PARTS, &C. J I 
 
 change for or be worth two deer. It is natural CHAP, 
 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. 
 
 If the one fpecies,of labour fhould be more 
 fevere than the other, fome allowance will natu- 
 rally be made for this fuperior hardship ; and the 
 produce of one hour's labour in the one way 
 may frequently exchange for 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 reafonable compenfation for 
 the time and labour which muft be fpent in ac- 
 quiring them. In the advanced flate of fociety, 
 allowances of this kind, for fuperior hardihip and 
 fuperior {kill, are commonly made in the wages 
 of labour ; and fomethingof the fame kind muft 
 probably have taken place in its earliefland rudefl 
 period. 
 
 In this flate of things, the whole produce of 
 labour belongs to the labourer ; and the quantity 
 of labour commonly employed in acquiring or 
 producing any commodity, is the only circum- 
 flance which can regulate the quantity of la- 
 
 f 4 bour
 
 72 OF THE COMPONENT PARTS OP 
 
 BOOK bour which it ought commonly to purchafe, com- 
 mand, or exchange for. 
 
 As foon as (lock has accumulated in the hands 
 of particular perfons, fome of them will naturally 
 employ it in letting to work induflrious people, 
 whom they will fupply with materials and fub- 
 liftence, 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 exchanging the com- 
 plete manufacture either for money , f 'for labour, 
 or for other goods, over and above what may be 
 fufficient to pay the price of the materials, and 
 the wages of the workmen, fomething mud be 
 given for the profits of the undertaker of the 
 work who hazards his flock in this adventure. 
 The value which the workmen add to the mate- 
 rials, therefore, refolves itfelf in this cafe into 
 two parts, of which the one pays their wages, the 
 other the profits of their employer upon the 
 whole flock of materials and wages which he 
 advanced. He could have no interefl to employ 
 them, unlefs he expelled from the fale of their 
 work fomethrng more than what was fufficient to 
 replace his flock to him ; and he could have no 
 interefl to employ a great flock rather than a 
 finall one, unlefs his profits were to bear fome 
 proportion to the extent of his flock. 
 
 The profits of flock, it may perhaps be 
 thought, are only a different name for the wages 
 of a particular fort of labour, the labour of in- 
 spection and direction. They are, however, al- 
 together different, are regulated by quite differ- 
 ent
 
 THE PRICE OF COMMODITIES. 7£ 
 
 ent principles, and bear no proportion to the CHAP, 
 quantity, the hardfhip, or the ingenuity of this 
 fuppofed labour of infpection and direction. 
 They are regulated altogether by the value of 
 the flock employed, and are greater or fmaller 
 in proportion to the extent of this flock. Let us 
 ilvppofe, for example, that in fome particular 
 place, where the common annual profits of 
 manufacturing flock are ten per cent, there are 
 two different manufactures, in each of which 
 twenty workmen are employed at the rate of 
 fifteen pounds a year each, or at the expence of 
 three hundred a year in each manufactory. Let 
 us fuppofe too, that the coarfe materials an- 
 nually wrought up in the one cofl only feven 
 hundred pounds, while the finer materials in the 
 other cofl feven thoufand. The capital annually 
 employed in the one will in this cafe amount only 
 to one thoufand pounds ; whereas that employed 
 in the other will amount to feven thoufand three 
 hundred pounds. At the rate of ten per cent, 
 therefore, the undertaker of the one will expect 
 an yearly profit of about one hundred pounds 
 only ; while that of the other will expect about 
 feven hundred and thirty pounds. But though 
 their profits are fo very different, their labour of 
 inflection and direction may be either altogether 
 or very nearly the fame. In many great works, 
 almofl the whole labour of this kind is committed 
 to fome principal clerk. His wages properly 
 exprefs the value of this labour of infpection 
 and direction. Though in fettling them fome 
 regard is had commonly, not only to his labour 
 
 and
 
 74 OF THE COMPONENT PARTS OF 
 
 3 O o K and fkill, but to the trufl which is repofed in 
 him, yet they never bear any regular propor- 
 tion to the capital of which he overfees the 
 management; and the owner of this capital, 
 though he is thus difcharged of almofl all 
 labour, ftill expects that his profits mould bear 
 a regular proportion to his capital. In the price 
 of commodities, therefore, the profits of (lock 
 conflitute a component part altogether different 
 from the wages of labour, and regulated by 
 quite different principles. 
 
 In this ftate of things, the whole produce of 
 labour does not always belong to the labourer. 
 He mull in moft cafes fhare it with the owner of 
 the flock which employs him. Neither is the 
 quantity of labour commonly employed in 
 acquiring or producing any commodity, the 
 only circumflance which can regulate the 
 quantity which it ought commonly to purchafe, 
 command, or exchange for. An additional 
 quantity, it is evident, muft be due for the 
 profits of the flock which advanced the wages 
 and furnifhed the materials of that labour. 
 
 As foon as the land of any country has all 
 become private property, the landlords, like all 
 other men, love to reap where they never fowed, 
 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, cofl the labourer 
 only the trouble of gathering them, come, even 
 to him, to have an additional price fixed upon 
 them. He mufl then pay for the licence to 
 
 gather
 
 THE TRICE OF COMMODITIES, 75 
 
 gather them ; and mull give up to the landlord chap. 
 a portion of what his labour either collects or 
 produces. This portion, or, what comes to the 
 fame thing, the price of this portion, conflitutes 
 the rent of land, and in the price of the greater 
 part of commodities makes a third component 
 part. 
 
 The real value of all the different component 
 parts of price, it muft be obferved, is meafured 
 by the quantity of labour which they can, each 
 of them, purchafe or command. Labour mea- 
 fures the value not only of that part of price 
 which refolves itfelf into labour, but of that 
 which refolves itfelf into rent, and of that which 
 refolves itfelf into profit. 
 
 In every fociety the price of every commodity 
 finally refolves itfelf into fome one or other, or 
 all of thofe three parts ; and in every improved 
 fociety, all the three enter more or lefs, as 
 component parts, into the price of the far 
 greater part of commodities. 
 
 In the price of corn, for example, one part 
 pays the rent of the landlord, another pays the 
 wages or maintenance of the labourers and 
 labouring cattle employed in producing it, and 
 the third pays the profit of the farmer. Thefe 
 three parts feem either immediately or ultimately 
 to make up the whole price of corn. A fourth 
 part, it may perhaps be thought, is neceffary 
 for replacing the flock of the farmer, or for 
 compenfating the wear and tear of his labouring 
 cattle, and other inftruments of hufbandry. 
 But it muft be confidered that the price of any 
 
 inftru-
 
 j6 0F THE COMPONENT PARTS OF 
 
 BOOK inftrument of hufbandry, fuch as a labouring 
 horfe, is itfelf made up of the fame three parts ; 
 the rent of the' land upon which he is reared, the 
 labour of tending and rearing him, and the profits 
 of the farmer who advances both the rent of 
 this land, and the wages of this labour. Though 
 the price of the corn, therefore, may pay the 
 price as well as the maintenance of the horfe, 
 the whole price (till refolves itfelf either imme- 
 diately or ultimately into the fame three parts 
 of rent, labour, and profit. 
 
 In the price of flour or meal, we mult add to 
 the price of the corn, the profits of the miller, 
 and the wages of his fervants ; in the price of 
 bread, the profits of the baker, and the wages 
 of his fervants ; and in the price of both, the 
 labour of tranfporting the corn from the houfe 
 of the farmer to that of the miller, and from 
 that of the miller to that of the baker, together 
 with the profits of thofe who advance the wages 
 of that labour. 
 
 The price of flax refolves itfelf into the fame 
 three parts as that of corn. In the price of 
 linen we mufl add to this price the wages of the 
 flax-drefTer, of the fpinner, of the weaver, of 
 the bleacher, &c. together with the profits of 
 their refpective employers. 
 
 As any particular commodity comes to be 
 more manufactured, that part of the price which 
 refolves itfelf into wages and profit, comes to be 
 greater in proportion to that which refolves 
 itfelf into rent. In the progrefs of the manu- 
 facture, not only the number of profits increafe, 
 
 but
 
 THE PRICE OF COMMODITIES. 77 
 
 but every fubfequent profit is greater than the CHAP, 
 foregoing ; becaufe the capital from which it is 
 derived mufl always be greater. The capital 
 which employs the weavers, for example, mull 
 be greater than that which employs the fpinners ; 
 becaufe it not only replaces that capital with 
 its profits, but pays, befides, the wages of the 
 weavers ; and the profits mufl always bear fome 
 proportion to the capital. 
 
 In the mofl improved focieties, however, 
 there are always a few commodities of which 
 the price refolves itfelf into two parts only, the 
 wages of labour, and the profits of flock ; and a 
 flill fmaller number, in which it confifls alto- 
 gether in the wages of labour. In the price of 
 fea-filh, for example, one part pays the labour 
 of the fifhermen, and the other the profits of the 
 capital employed in the fifhery. Rent very 
 feldom makes any part of it, though it does 
 fometimes, as I fhall fliew hereafter. It is 
 otherwife, at leafl through the greater part of 
 Europe, in river rifheries. A falmon fifhery 
 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 parts of Scotland a few poor people 
 make a trade of gathering, along the fea-fhore, 
 thofe little variegated flones 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. 
 
 z But
 
 78 OF THE COMPONENT PARTS OF 
 
 But the whole price of any commodity muft 
 flill finally refolve itfelf into fome one or other^ 
 or all of thofe three parts ; as whatever part of 
 it remains after paying the rent of the land, and 
 the price of the whole labour employed in railing, 
 manufacturing, and bringing it to market, mult 
 neceHarily be profit to fomebody. 
 
 As the priee or exchangeable Value of every 
 particular commodity, taken feparately, refolves 
 itfelf into fome one or other, or all of thofe three 
 parts ; fo that of all the commodities which com* 
 pofe the whole annual produce of the labour of 
 every country, taken complexly, mull relblve 
 itfelf into the lame three parts, and be parcelled 
 out among different inhabitants of the country, 
 either as the wages of their labour, the profits of 
 their flock, or the rent of their land. The whole 
 of what is annually either collected or produced 
 by the labour of every fociety, or what comes to 
 the fame thing, the whole price of it, is in this 
 manner originally diflributed among fome of its 
 different members. Wages, profit, and rent, 
 are the three original fources of all revenue as 
 well as of all exchangeable value. All other 
 revenue is ultimately derived from fome one or 
 other of thefo. 
 
 Whoever derives his revenue from a fund 
 which is his own, muft draw it cither from his 
 labour, from his flock, or from his land. The 
 revenue derived from labour is called wages. 
 That derived from flock, by the perfon who 
 manages or employs it, is called profit. That 
 derived from it by the perfon who does not em- 
 ploy
 
 THE PRICE OF COMMODITIES. 79 
 
 ploy it himfelf, but lends it to another, is called chap. 
 the interefl or the ufe of money. It is the com- y^ 
 penfation which the borrower pays to the lender, 
 for the profit which he has an opportunity of 
 making by the ufe of the money. Part of that 
 profit naturally belongs to the borrower, who 
 runs the rifk and takes the trouble of employing 
 it ; and part to the lender, who affords him the 
 opportunity of making this profit. The interefl 
 of money is always a derivative revenue, which, 
 if it is not paid from the profit which is made by 
 the ufe of the money, mufl be paid from fome 
 other fource of revenue, unlefs perhaps the bor- 
 rower is a fpendthrift, who contracts a fecond 
 debt in order to pay the interefl of the hrfl. The 
 revenue which proceeds altogether from land, is 
 called rent, and belongs to the landlord. The 
 revenue of the farmer is derived partly from his 
 labour, and partly from his flock. To him, 
 land is only the inflrument which enables him to 
 earn the wages of this labour, and to make the 
 profits of this flock. All taxes, and all the re- 
 venue which is founded upon them, all falaries, 
 penfions, and annuities of every kind, are ulti- 
 mately derived from fome one or other of thofe 
 three original fources of revenue, and are paid 
 either immediately or mediately from the wages 
 -of labour, the profits of flock, or the rent of 
 land. 
 
 When thofe three different forts of revenue 
 
 Jbelong to different perfons, they are readily cli£- 
 
 tinguifhed } but when they belong to the fame 
 
 i they
 
 8o OF THE COMPONENT PARTS OF 
 
 book they are fometimes confounded with one another, 
 at lead in common language. 
 
 A gentleman who farms a part of his own 
 eftate, after paying the expence of cultivation, 
 mould gain both the rent of the landlord and 
 the profit of the farmer. He is apt to denomi- 
 nate, however, his whole gain, profit, and thus 
 confounds rent with profit, at leafl in common 
 language. The greater part of our North Ame- 
 rican and Weft. Indian planters are in this fitua- 
 tion. They farm, the greater part of them, their 
 own eflates, and accordingly we feldom hear of 
 the rent of a plantation, but frequently of its 
 profit. 
 
 Common farmers feldom employ any overfeer 
 to direct the general operations of the farm. 
 They generally too work a good deal with their 
 own hands, as ploughmen, harrowers, &c. What 
 remains of the crop after paying the rent, there- 
 fore, mould not only replace to them their itock 
 employed in cultivation, together with its ordi- 
 nary profits, but pay them the wages which are 
 due to them, both as labourers and overfeers. 
 Whatever remains, however, after paying the 
 rent and keeping up the flock, is called profit. 
 But wages evidently make a part of it. The 
 farmer, by faving thefe wages, mufl neceffarily 
 gain them. Wages, therefore, are in this cafe 
 confounded with profit. 
 
 An independent manufacturer, who has flock 
 enough both to purchafe materials, and to main- 
 tain himfelf till he can carry his work to market, 
 
 mould
 
 THE PRICE OF COMMODITIES. 8 1 
 
 fhould gain both the wages of a journeyman who chap. 
 works under a mafter, and the profit which that ( J 1, 
 mailer makes by the fale of the journeyman's 
 work. His whole gains, however, are com- 
 monly called profit, and wages are, in this cafe 
 too, confounded with profit. 
 
 A gardener who cultivates his own garden 
 with his own hands, unites in his own perfon the 
 three different characters, of landlord, farmer, 
 and labourer. His produce, therefore, fhould 
 pay him the rent of the firfl, the profit .of the 
 fecond, and the wages of the third. The whole, 
 however, is commonly confidered as the earnings 
 of his labour. Both rent and profit are, in this 
 cafe, confounded with wages. 
 
 As in a civilized country there are but few 
 commodities of which the exchangeable value 
 arifes from labour only, rent and profit contri- 
 buting largely to that of the far greater part of 
 them, fo the annual produce of its labour will 
 always be fufficient to purchafe or command a 
 much greater quantity of labour than what was 
 employed in railing, preparing, and bringing 
 that produce to market. If the fociety were an- 
 nually to employ all the labour which it can 
 -annually purchafe, as the quantity of labour 
 would encreafe greatly every year, fo the produce 
 of every fucceeding year would be of vaftly 
 greater value than that of the foregoing. But 
 there is no country in which the whole annual 
 produce is employed in maintaining the induflri- 
 ous. The idle every where confume a great part 
 of it ; and according to the different proportions 
 vol. ii. g in
 
 82 OF THE COMPONENT PARTS, &C. 
 
 B o o K in which it is annually divided between thofe two 
 different orders of people, its ordinary or average 
 value mud either annually increafe, or diminifh, 
 or continue the fame from one year to another. 
 
 CHAP. VII. 
 
 Of the Natural and Market Price of Commodities. 
 
 c HA P. r I ^HERE is in every fociety or neighbour* 
 ^ IL -*- hood an ordinary or average rate both of 
 wages and profit in every different employment 
 of labour and ftock. This rate is naturally re- 
 gulated, as I fhall mow hereafter, partly by the 
 general circumftances of the fociety, their riches 
 or poverty, their advancing, ftationary, or de- 
 clining condition ; and partly by the particular 
 nature of each employment. 
 
 There is likewife in every fociety or neigh- 
 bourhood an ordinary or average rate of rent, 
 which is regulated too, as I fliall ihow hereafter, 
 partly by the general circumftances of the fociety 
 or neighbourhood in which the land is h'tuated, 
 and partly by the natural or improved fertility 
 of the land. 
 
 Thefe ordinary or average rates may be called 
 the natural rates of wages, profit, and rent, at 
 the time and place in which they commonly pre- 
 vail. 
 
 Wlicn the price of any commodity is neither 
 more nor lcfs than what is fufficient to j>ay the 
 
 rent
 
 OF THE NATURAL AND MARKET PRICE, &C. 83 
 
 rent of the land, the wages of the labour, and chap. 
 
 • VIT 
 
 the profits of the flock employed in raifing, pre- 
 paring, and bringing it to market, according to 
 their natural rates, the commodity is then fold 
 for what may be called its natural price. 
 
 The commodity is then fold precifely for what 
 it is worth, or for what it really cofls the perfon 
 who brings it to market ; for though in common 
 language what is called the prime cofl of any 
 commodity does not comprehend the profit of 
 the perfon who is to fell it again, yet if he fells 
 it at a price which does not allow him the ordi- 
 nary rate of profit in his neighbourhood, he is 
 evidently a lofer by the trade ; fince by employ- 
 ing his flock in fome other way he might have 
 made that profit. His profit, befides, is his re- 
 venue, the proper fund of his fubfiflence. As, 
 while he is preparing and bringing the goods to 
 market, he advances to his workmen their wages, 
 or their fubfiflence ; fo he advances to himfelf, 
 in the fame manner, his own fubfiflence, which 
 is generally fuitable to the profit which he may 
 reafonably expect from the fale of his goods. 
 Unlefs they yield him this profit, therefore, they 
 do not repay him what they may very properly 
 be faid to have really cofl him. 
 
 Though the price, therefore, which leaves him 
 this profit, is not always the lowefl at which a 
 dealer may fometimes fell his goods, it is the 
 lowefl at which he is likely to fell them for any 
 confiderable time ; at leafl where there is perfect 
 liberty, or where he may change his trade as often 
 as he pleafes. 
 
 g 2 The
 
 84 OF THE NATURAL AND 
 
 The actual price at which any commodity is 
 commonly fold is called its market price. It may 
 either be above, or below, or exactly the fame 
 with its natural price. 
 
 The market price of every particular commo- 
 dity is regulated by the proportion between the 
 quantity which is actually 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 mufl 
 be paid in order to bring it thither. Such 
 people may be called the effectual demanders, 
 and their demand the effectual demand ; fince it 
 may be fufficient to 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; he might like to have it; but his demand 
 is not an effectual 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 effectual 
 demand, all thofe who are willing to pay the whole 
 value of the rent, wages, and profit, which mull 
 be paid in order to bring it thither, cannot be fup- 
 plied with the quantity which they want. Rather 
 than want it altogether, fome of them will be will- 
 ing to give more. A competition will immedi- 
 ately begin among them, and the market price 
 will rife more or lefs above the natural price, ac- 
 cording as either the greatnefs of the deficiency, 
 or the wealth and wanton luxury of the competi- 
 tors, happen to animate more or lefs the eagernefs 
 
 of
 
 MARKET PRICE OF COMMODITIES. 85 
 
 of the competition. Among competitors of equal CHAP, 
 wealth and luxury the fame deficiency will gene- 
 rally occafion a more or lefs eager competition, 
 according as the acquifition of the commodity 
 happens to be of more or lefs importance to 
 them. Hence the exorbitant price of the ne- 
 ceffaries of life during the blockade of a town or 
 in a famine. 
 
 When the quantity brought to market exceeds 
 the effectual demand, it cannot be all fold to 
 thofe who are willing to pay the whole value of 
 the rent, wages and profit, which mufl be paid 
 in order to bring it thither. Some part mufl be 
 fold to thofe who are willing to pay lefs, and the 
 low price which they give for it mufl reduce the 
 price of the whole. The market price will fink 
 more or lefs below the natural price, according 
 as the greatnefs of the excefs 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 commo- 
 dity. The fame excefs in the importation of 
 perifhable, will occafion a much greater com- 
 petition than in that of durable commodities; 
 in the importation of oranges, for example, than 
 in that of old iron. 
 
 When the quantity brought to market is juft 
 fufficient to fupply the effectual demand and no 
 more, the market price naturally comes to be 
 either exactly, or as nearly as can be judged of, 
 the fame with the natural price. The whole 
 quantity upon hand can be difpofed of for this 
 price, and cannot be difpofed of for more. The 
 
 o 3 compe-
 
 86 OP THE NATURAL AND 
 
 book competition of the different dealers obliges them 
 
 lm ; all to accept of this price, but does not oblige 
 
 them to accept of lefs. 
 
 The quantity of every commodity brought to 
 market naturally fuits itfelf to the effectual de- 
 mand. It is the intereft of all thofe who employ 
 their land, labour, or flock, in bringing any 
 commodity to market, that the quantity never 
 fhould exceed the effectual demand ; and it is 
 the intereft of all other people that it never 
 mould fall fhort of that demand. 
 
 If at any time it exceeds the effectual demand, 
 fome of the component parts of its price mufl 
 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 of their employers 
 in the other, w T ill prompt them to withdraw a 
 part of their labour or flock from this employ- 
 ment. The quantity brought to market will 
 foon be no more than fnfficient to fupply the 
 effectual demand. All the different parts of its 
 price will rife to their natural rate, and the whole 
 price to its natural price. 
 
 If, on the contrary, the quantity brought to 
 market fhould at any time fall fhort of the effec- 
 tual demand, fome of the component parts of its 
 price mufl rife above their natural rate. If it is 
 rent, the intereft of all other landlords will na- 
 turally prompt them to prepare more land for 
 the raifin » of this commodity ; if it is wages or 
 profit, the intereft of all other labourers and 
 
 dealers
 
 MARKET PRICE OF COMMODITIES. 87 
 
 dealers will foon prompt them to employ more chap. 
 labour and flock in preparing and bringing it to ,_y"' _, 
 market. The quantity brought thither will foon 
 be fufficient to fupply the effectual 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. Dif- 
 ferent accidents may fometimes keep them fuf- 
 pended a good deal above it, and fometimes 
 force them down even fomewhat below it. But 
 whatever may be the obfiacles which hinder them 
 from fettling in this center of repofe and conti- 
 nuance, they are constantly tending towards it. 
 
 The whole quantity of induftry annually em- 
 ployed in order to bring any commodity to mar- 
 ket, naturally fuits itfelf in this manner to the 
 effectual demand. It naturally aims at bringing 
 always that precife quantity thither which may 
 be fufficient to fupply, and no more than fup- 
 ply, that demand. 
 
 But in fome employments the fame quantity 
 of induftry will in different years produce very 
 different quantities of commodities ; while in 
 others it will produce always the fame, or very 
 nearly the fame. The fame number of labourers 
 in hufbandry will, in different years, produce 
 very different quantities of corn, wine, oil, 
 hops, &c. But the fame number of fpinners and 
 weavers will every year produce the fame or very 
 nearly the fame quantity of linen and woollen 
 
 g 4 cloth.
 
 88 OF THE NATURAL AND 
 
 BOOK cloth. It is only the average produce of the 
 t L one fpecies of induftry which can be fuited in 
 any refpect to the effectual demand ; and as its 
 actual produce is frequently much greater and 
 frequently much lefs than its average produce, 
 ' the quantity of the commodities brought to mar- 
 ket will fometimes exceed a good deal, and fome- 
 times fall fhort a good deal, of the effectual 
 demand. Even though that demand therefore 
 fliould continue always the fame, their market 
 price will be liable to great fluctuations, will 
 fometimes fall a good deal below, and fometimes 
 life a good deal above, their natural price. In. 
 the other fpecies of induftry, the produce of 
 equal quantities of labour being always the fame, 
 or very nearly the fame, it can be more exactly 
 fuited to the effectual demand. While that 
 demand continues the fame, therefore, the mar- 
 ket price of the commodities is likely to do fo 
 too, and to be either altogether, or as nearly as 
 can be judged of, the fame 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 
 experience will inform him. The price of the one 
 fpecies of commodities varies only with the vari- 
 ations in the demand : That of the other varies 
 not only with the variations in the demand, but 
 with the much greater and more frequent varia- 
 tions in the quantity of what is brought to mar- 
 ket in order to fupply that demand. 
 
 The occafional and temporary fluctuations in 
 the market price of any commodity fall chiefly 
 
 upon
 
 MARKET PRICE OF COMMODITIES. 89 
 
 upon thofe parts of its price which refolve them- chap. 
 felves into wages and profit. That part which VIL 
 refolves itfelf into rent is left affected hy them. 
 A rent certain in money is not in the leaft 
 affected by them either in its rate or in its 
 value. A rent which confifls either in a cer- 
 tain proportion or in a certain quantity of 
 the rude produce, is no doubt affected in its 
 yearly value by all the occafional and tempo- 
 rary fluctuations in the market price of that 
 rude produce ; but it is feldom affected by 
 them in its yearly rate. In fettling the terms 
 of the leafe, the landlord and farmer endeavour, 
 according to their bell judgment, to adjufl that 
 rate, not to the temporary and occafional, but to 
 the average and ordinary price of the produce. 
 
 Such fluctuations affect both the value and 
 the rate either of wages or of profit, according 
 as the market happens to be either over-flocked 
 or under-flocked with commodities or with la- 
 bour ; with work done, or with work to be done. 
 A public mourning raifes the price of black cloth 
 (with which the market is almofl always under- 
 flocked upon fuch occafions), and augments 
 the profits of the merchants who poffefs any 
 confiderable quantity of it. It has no effect upon 
 the wages of the weavers. The market is under- 
 flocked with commodities, not with labour ; 
 with work done, not with work to be done. It 
 raifes the wages of journeymen taylors. The 
 market is here under-flocked with labour. There 
 is an effectual demand for more labour, for more 
 work to be done than can be had. It finks the 
 
 1 price
 
 90 OF THE NATURAL AND 
 
 book price of coloured filks and cloths, and thereby 
 , *• reduces the profits of the merchants who have 
 any confiderable quantity of them upon hand. 
 It finks too the wages of the workmen employed 
 in preparing fuch commodities, for which all 
 demand is flopped for fix months, perhaps for a 
 twelvemonth. The market is here over-ftocked 
 both with commodities and with labour. 
 
 But though the market price of every par- 
 ticular commodity is in this manner continually 
 gravitating, if one may fay fo, towards the 
 natural price, yet fometimes particular acci- 
 dents, fometimes natural caufes, and fometimes 
 particular regulations of police, may, in many 
 commodities, keep up the market price, for 
 a long time together, a good deal above the 
 natural price. 
 
 When by an increafe in the effectual demand, 
 the market price of fome particular commodity 
 happens to rife a good deal above the natural 
 price, thofe who employ their flocks in fuppiy- 
 ing that market arc generally careful to conceal 
 this change. If it was commonly known, their 
 great profit would tempt fo many new rivals to 
 employ their flocks in the fame way, that, the 
 effectual demand being fully fupplicd, the market 
 price would foon be reduced to the natural price, 
 and perhaps for fome time even below it. If'the 
 market is at a great diftance from the refidence 
 of thofe who fupply it, they may fometimes be 
 able to keep the fecret for feveral years together, 
 and may fo long enjoy their extraordinary profits 
 without any new rivals. Secrets of this kind, 
 3 however,
 
 MARKET PRICE OF COMMODITIES. 9 1 
 
 however, it mufl be acknowledged, can feldom chap. 
 be long kept ; and the extraordinary profit can 
 laft very little longer than they are kept. 
 
 Secrets in manufactures are capable of being 
 longer kept than fecrets in trade. A dyer who 
 has found the means of producing a particular 
 colour with materials which coll only half the 
 price of thofe commonly made ufe of, may, with 
 good management, enjoy the advantage of his 
 difcovery as long as he lives, and even leave it 
 as a legacy to his polterity. His extraordinary 
 gains arife from the high price which is paid 
 for his private labour. They properly confift in 
 the high wages of that labour. But as they are 
 repeated upon every part of his flock, and as 
 their whole amount bears, upon that account, 
 a regular proportion to it, they are commonly 
 conhdered as extraordinary profits of flock. 
 
 Such enhancements of the market price are 
 evidently the effects of particular accidents, of 
 which, however, the operation may fometimes 
 laft for many years together. 
 
 Some natural productions require fuch a An- 
 gularity of foil and fituation, that all the land in 
 a great country, which is fit for producing them, 
 may not be fufficient to fupply the effectual de- 
 mand. The whole quantity brought to market, 
 therefore, may be difpofed 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 the wages of the labour, and the 
 profits of the flock which were employed in 
 preparing and bringing them to market, accord- 
 ing
 
 92 OF THE NATURAL AND 
 
 book ing to their natural rates. Such commodities 
 may continue for whole centuries together to be 
 fold at this high price ; 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 and efleemed productions, like the rent 
 of fome vineyards in France of a peculiarly 
 happy foil and fituation, bears no regular pro- 
 portion to the rent of other equally fertile and 
 equally well-cultivated land in its neighbour- 
 hood. The wages of the labour and the pro- 
 fits of the flock employed in bringing fuch com- 
 modities to market, on the contrary, are feldom 
 out of their natural proportion to thofe of the 
 other employments of labour and flock in their 
 neighbourhood. 
 
 Such enhancements of the market price are 
 evidently the effe6t of natural caufes which may 
 hinder the effectual demand from ever being 
 fully fupplied, and which may continue, there- 
 fore, to operate for ever. 
 
 A monopoly granted either to an individual 
 or to a trading company has the fame effect as 
 a feeret in trade or manufactures. The mono- 
 polies, by keeping the market conflantly under- 
 flocked, by never fully fupplying the effectual 
 demand, fell their commodities much above the 
 natural price, and raife their emoluments, whe- 
 ther they confifl in wages or profit, greatly 
 above their natural rate. 
 
 The price of monopoly is upon every occafion 
 the highcfl which can be got. The natural price, 
 
 or
 
 MARKET PRICE OF COMMODITIES. 93 
 
 or the price of free competition, on the contrary, c 
 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 which 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 bufinefs. 
 
 The exclufive privileges of corporations, fta- 
 tutes of apprenticeship, and all thofe laws which 
 reftrain, in particular employments, the compe- 
 tition to a fmaller number than might otherwife 
 go into them, have the fame tendency, though 
 in a lefs degree. They are a fort of enlarged 
 monopolies, and may frequently, for ages toge- 
 ther, and in whole claffes of employments, keep 
 up the market price of particular commodities 
 above the natural price, and maintain both the 
 wages of the labour and the profits of the flock 
 employed about them fomewhat above their na* 
 tural rate. 
 
 Such enhancements of the market price may 
 laft as long as the regulations of police which 
 give occafion to them. 
 
 The market price of any particular commo- 
 dity, 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 interefl it affected would 
 immediately feel the lofs, and would immediately 
 withdraw either fo muph land, or fo much la- 
 bour, or fo much ftoofc, from being employed 
 
 about
 
 94 OF THE NATURAL AND 
 
 book a'lout it, that the quantity brought to market 
 would ibon be no more than fufficient to fupply 
 the effectual demand. Its market price, there- 
 fore, would foon rife to the natural price. This 
 at lead would be the cafe where there was per- 
 fect liberty. 
 
 The fame flatutes of apprenticefhip and other 
 corporation laws indeed, which, when a manu- 
 facture is in profperity, enable the workman to 
 raife his wages a good deal above their natural 
 rate, fometimes oblige him, when it decays, to 
 let them down a good deal below it. As in the 
 one cafe they exclude many people from his em- 
 ployment, fo in the other they exclude him from 
 many employments. The ene6t of fuch regula- 
 tions, however, is not near fo durable in finkinjr 
 the workman's wages below, as in railing them 
 above, their natural rate. Their operation in the 
 one way may endure for many centuries, but in 
 the other it can lad no longer than the lives of 
 fome of the workmen who were bred to thebufi- 
 nefs in the time of its profperity. When they 
 are gone, the number of thole who are after- 
 wards educated to the trade will naturally fuit 
 itfelf to the effectual demand. The police mult 
 be as violent as that of Indoftan or antient Egypt 
 (where every man was bound by a principle of 
 religion to follow the occupation of his father, 
 and was fuppofed to commit the molt horrid 
 facrilegeif he changed it for another), which can 
 in any particular employment, and for feveral 
 generations together, link either the wages of 
 
 * labour
 
 MARKET PRICE OF COMMODITIES. 95 
 
 labour or the profits of flock below their natural chap. 
 rate. 
 
 This is all that I think necefTary to be obferved 
 at prefent concerning 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 ; and in every fociety this 
 rate varies according to their circumflances, 
 according to their riches or poverty, their 
 advancing, flationary, or declining condition. 
 I fhall, in the four following chapters, endeavour 
 to explain, as fully and diflin6lly as I can, the 
 caufes of thofe different variations. 
 
 Firfl, I fhall endeavour to explain what are 
 the circumflances which naturally determine the 
 rate of wages, and in what manner thofe cir- 
 cumflances are affected by the riches or poverty, 
 by the advancing, flationary, or declining flate 
 of the fociety. 
 
 Secondly, I fhall endeavour to fhow what are 
 the circumflances which naturally determine the 
 rate of profit, and in what manner too thofe 
 circumflances -are affected by the like variations 
 in the flate of the fociety. 
 
 Though pecuniary wages and profit are very 
 different in the different employments of labour 
 and flock ; yet a certain proportion feems com- 
 monly to take place between both the pecuniary 
 wages in all the different employments of labour, 
 and the pecuniary profits in all the different 
 employments of flock. This proportion, it will 
 
 appear
 
 96 OF THE NATURAL, &C. 
 
 book 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 
 refpecls dependent upon the laws and policy, 
 this proportion feems to be little affected by the 
 riches or poverty of that fociety j by its ad- 
 vancing, ftationary, or declining condition ; but 
 to remain the fame or very nearly the fame in all 
 thofe different Hates. I (hall, in the third place, 
 endeavour to explain all the different circum- 
 ftances which regulate this proportion. 
 
 In the fourth and lafl place, I fhall endeavour 
 to (how what are the circumftances which 
 regulate the rent of land, and which either raife 
 or lower the real price of all the different fub- 
 ftances which it produces. 
 
 CHAP. VIII. 
 
 Of the Wages of Labour, 
 
 CHAP. r TPHE produce of labour conftitutes the natural 
 A recompence or wages of labour. 
 In that original date of things, which precedes 
 both the appropriation of land and the accumu- 
 lation of Rock, the whole produce of labonr 
 belongs to the labourer. He lias neither land- 
 lord nor mailer to fhare with him. 
 
 Had this Kate continued, the wages of labour 
 would have augmented with all thofe improve- 
 ments
 
 OF THE WAGES OF LABOUR. 97 
 
 ments in its productive powers, to which the CHAP, 
 divifion of labour gives occafion. All things 
 would gradually have become cheaper. They 
 would have been produced by a fmaller quan- 
 tity of labour; and as the commodities pro- 
 duced by equal quantities of labour would 
 naturally in this ilate of things be exchanged 
 for one another, they would have been pur- 
 chafed likewife with the produce of a fmaller 
 quantity. 
 
 But though all things would have become 
 cheaper in reality, in appearance many things 
 might have become dearer than before, or have 
 been exchanged for a greater quantity of other 
 goods. Let us fuppofe, for example, that in 
 the greater part of employments the productive 
 powers of labour had been improved to tenfold* 
 or that a day's labour could produce ten times 
 the quantity of work which it had done origi- 
 nally ; but that in a particular employment 
 they had been improved only to double, or that 
 a day's labour could produce only twice the 
 quantity of work which it had done before. In 
 exchanging the produce of a day's labour in 
 the greater part of employments, for that of a 
 day's labour in this particular one, ten times the 
 original quantity of work in them would purchafe 
 only twice the original quantity in it. Any 
 particular quantity 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 the quantity of other goods to pur- 
 
 voi* ii. ii chafe
 
 98 OP THE WAGES OF LABOUR. 
 
 BOOK chafe it, it would require only half the quantity 
 t _ * _ r of labour either to purchafe or to produce it. 
 The acquisition, therefore, would be twice as 
 eafy as before 
 
 But this original (late of things, in which the 
 labourer enjoyed the whole produce of his own 
 labour, could not lad beyond the firft introduc- 
 tion of the appropriation of land and the accu- 
 mulation of (lock. It was at an end, therefore, 
 long before the mod confiderable improvements 
 were made in the productive powers of labour, 
 and it would be to no purpofe to trace further 
 what might have been its effects upon the 
 recompence or wages of labour. 
 
 As foon as land becomes private property, 
 the landlord demands a fliare of almofl all the 
 produce which the labourer can either raife, or 
 collect from it. His rent makes the firft deduc- 
 tion from the produce of the labour which is 
 employed upon land. 
 
 Jt feldom happens that the perfon who tills 
 the ground has wherewithal to maintain himfelf 
 till he reaps the harveft. His maintenance is 
 generally advanced to him from the flock of a 
 mailer, the farmer who employs him, and who 
 would have no intereft to employ him, unlefs 
 he was to (hare in the produce of his labour, or 
 unlels his flock was to be replaced to him with 
 a profit. This profit makes a fecond deduction 
 from the produce of the labour which is em- 
 ployed upon land. 
 
 The produce of almofl all other labour is 
 liable to the like deduction of profit. In all arts 
 
 and
 
 OF THE WAGES OF LABOUR. 59 
 
 and manufactures the greater part of the work- C 
 men Hand in need of a mafter to advance them 
 the materials of their work, and their wages and 
 maintenance till it be completed. He iliares 
 in the produce of their labour, or in the value 
 which it adds to the materials upon w T hich it is 
 bellowed ; and in this fhare confifts his profit. 
 
 It fometimes happens, indeed, that a lingle 
 independent workman has flock fufficient both 
 to purchafe the materials of his work, and to 
 maintain himfelf till it be completed. He is 
 both mafter and workman, and enjoys the 
 whole produce of his own labour, or the whole 
 value which it adds to the materials upon which 
 it is bellowed. It includes what are ufually 
 two diftinct revenues, belonging to two diftinct 
 perfons, the profits of flock, and the wages o£ 
 labour. 
 
 Such cafes, however, are not very frequent, 
 and in every part of Europe, twenty workmen 
 ferve under a mafter for one that is inde- 
 pendent ; and the wages of labour are every 
 where underftood to be, what they ufually are, 
 when the labourer is one perfon, and the owner 
 of the flock which employs him another. 
 
 What are the common wages of labour, 
 depends every where upon the contract ufually 
 made between thofe two parties, whofe interefts 
 are by no means the fame. The workmen defire 
 to get as much, the mailers to give as little as 
 pofiible. The former are difpofed to combine in 
 order to raife, the latter in order to lower the 
 Wages of labour. 
 
 H 2 It
 
 lOO OF THE WAGES OF LABOUR. 
 
 It is not, however, difficult to forefee which 
 of the two parties mult, upon all ordinary occa- 
 fions, have the advantage in the difpute, and 
 force the other into a compliance with their 
 terms. The mailers, being fewer in number, 
 can combine much more eafily ; and the law, 
 betides, authorifes, or at leait does not prohibit 
 their combinations, while it prohibits thofe of 
 the workmen. We have no acts of parliament 
 againft combining to lower the price of work ; 
 but many againft combining to raife it. In all 
 fuch difputes the mafters can hold out much 
 longer. A landlord, a farmer, a matter manu- 
 facturer, or merchant, though they did not em- 
 ploy a tingle workman, could generally live a 
 year or two upon the flocks which they have 
 already acquired. Many workmen could not 
 fubfift a week, few could fubfift a month, and 
 fcarce any a year without employment. In the 
 long-run the workman may be as neceftary to 
 his mailer as his mafter is* to him ; but the 
 neceffity is not fo immediate. 
 
 We rarely hear, it has been faid, of the com- 
 binations of mafters ; though frequently of thofe 
 of workmen. But whoever imagines, upon this 
 account, that mafters rarely combine, is as igno- 
 rant of the world as of the fubje6l. Mafters are 
 always and every where in a fort of tacit, but 
 conftant and uniform, combination, not to raife 
 the wages of labour above their actual rate. To 
 violate this combination is every where a moft 
 unpopular action, and a fort of reproach to a 
 matter among his neighbours and equals. We 
 
 feldom,
 
 OF THE WAGES OF LABOUR. 1 01 
 
 feldom, indeed, hear of this combination, be- c t^A p. 
 
 u 
 
 caufe it is the ufual, and one may fay, the natu- 
 
 ral flate of things which nobody ever hears of. 
 Matters too fometimes enter into particular com- 
 binations to link the wages of labour even below 
 this rate. Thefe are always conducted with the 
 utmoft filence and fecrecy, till the moment of 
 execution, and when the workmen yield, as they 
 fometimes do, without refiflance, though fe- 
 verely felt by them, they are never heard of by 
 other people. Such combinations, however, are 
 frequently refilled by a contrary defenfive com- 
 bination of the workmen ; who fometimes too, 
 without any provocation of this kind, combine 
 of their own accord to raife the price of their 
 labour. Their ufual pretences are, fometimes 
 the high price of provilions ; fometimes the great 
 profit which their mailers make by their work. 
 But whether their combinations be offenfive or 
 defenfive, they are always abundantly heard of. 
 In order to bring the point to a fpeedy decifion, 
 they have always recourfe to the loudefl cla- 
 mour, and fometimes to the mofl fhocking vio- 
 lence and outrage. They are defperate, and act 
 with the folly and extravagance of defperate men, 
 who mufl either flarve, or frighten their maflers 
 into an immediate compliance with their de- 
 mands. The mailers upon thefe occaiions are 
 juil as clamorous upon the other iide, and never 
 ceafe to call aloud for the affiflance of the civil 
 magiflrate, and the rigorous execution of thofe 
 laws which have been enacted with fo much 
 feverity againfl the combinations of fervants, la- 
 
 h 3 bourers,
 
 102 OF THE WAGES OF LABOUR. 
 
 B O o k bourers, and journeymen. The workmen, ac- 
 cordingly, very feldom derive any advantage from 
 the violence of thofe tumultuous combinations, 
 which, partly from the interpolition of the civil 
 magiflrate, partly from the fuperior deadinefs of 
 the mailers, partly from the neceflity which the 
 greater part of the workmen are under of fob* 
 mitting for the fake of prefent fublidence, gene- 
 rally end in nothing, but the punifhment or ruin 
 of the ringleaders. 
 
 But though in difputes with their workmen, 
 mailers mud generally have the advantage, there 
 is however a certain rate, below which it feems 
 impoflible to reduce, for any considerable time, 
 the ordinary wages even of the lowed fpecies of 
 labour. 
 
 A man mull always live by his work, and his 
 wages mull at lead be fufricient to maintain 
 him. They mud even upon mod occafions be 
 fomewhat more ; otherwife it would be impoflible 
 for him to bring up a family, and the race of 
 fuch workmen could not lad beyond the firfl 
 generation. Mr. Cantillon feems, upon this ac- 
 count, to fuppofe that the lowed lpecies of com- 
 mon labourers mud every where earn at lead 
 double their own maintenance, in order that 
 one with another they may be enabled to bring 
 up two children ; the labour of the wife, on ac- 
 count of her ncceflary attendance on the chil- 
 dren, being fuppofed no more than fufficient to 
 provide for herfelf. But one-half the children 
 born, it is computed, die before the age of man- 
 hood. The poored labourers, therefore, ac- 
 cording
 
 OF THE WAGES OF LABOUR. 103 
 
 cording to this account, muft, one with another, chap. 
 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 
 Have, the fame author adds, is computed to be 
 worth double his maintenance ; and that of the 
 meaneft labourer, he thinks, cannot be worth 
 lefs than that of an able-bodied Have, 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 com- 
 mon labour, be able to earn fom'ething more 
 than what is precifely neceffary for their own 
 maintenance ; but in what proportion, whether 
 in that above mentioned, or in any other, I f]iall 
 not take upon me to determine. 
 
 There are certain circumftances, however, 
 which fometimes give the labourers an advan- 
 tage, and enable them to raife their wages con-, 
 liderably above this rate ; evidently the loweft 
 which is confiftent with common humanity. 
 
 When in any country the demand for thofe 
 who live by wages ; labourers, journeymen, fer- 
 vants of every kind, is continually increasing ; 
 when every year furnifhes employment for a 
 greater number than had been employed the 
 year before, the workmen have no occasion to 
 combine in order to raife their wages. The 
 icarcity of hands occafions a competition among 
 mailers, who bid againft one another, in order 
 to get workmen, and thus voluntarily break 
 11 4 through.
 
 104 'OP THE WAGES OF LABOUR. 
 
 BOOK through the natural combination of mailers not 
 to raife wages. 
 
 The demand for thofe who live by wages, it is 
 evident, cannot increafe but in proportion to the 
 increafe of the funds which are deflined for the 
 payment of wages. Thefe funds are of two 
 kinds: firft, the revenue which is over and 
 ■-6 above what is neceflary for the maintenance ; 
 and, fecondly, the flock which is over and above 
 what is neceflary for the employment of their 
 mailers. 
 
 When the landlord, annuitant, or monied man, 
 has a greater revenue than what he judges fuffi- 
 cient to maintain his own family, he employ* 
 either the whole or a part of the furplus in main- 
 taining one or more menial fervants. Increafe 
 this furplns, and he will naturally increafe the 
 number of thofe fervants. 
 
 When an independent workman, fuch as a 
 weaver or fhoe-maker, has got more flock than 
 what is fufficient to purchafe the materials of his 
 own work, and to maintain himlelf till he can 
 difpofe of it, he naturally employs one or more 
 journeymen with the furplus, in order to make 
 a profit by their work. Increafe this furplus, 
 and he will naturally increafe the number of his 
 journeymen. 
 
 The demand for thofe who live by wages, 
 therefore, necefTarily increafes with the increafe 
 ^o of the revenue and flock of every country, and 
 cannot poffibly increafe without it. The increafe 
 of revenue and flock is the increafe of national 
 wealth. The demand for thofe who live by 
 
 wages,
 
 OF THE WAGES OF LABOUR. IO5 
 
 wages, therefore, naturally increafes with the chap. 
 increafe of national wealth, and cannot poffibly , YP; 
 increafe without it. 
 
 It is not the actual greatnefs of national 
 wealth, but its continual increafe, which occa- 
 fions a rife in the wages of labour. It is not, 
 accordingly, in the richeft countries, but in the 
 molt thriving, or in thofe which are growing 
 rich the fafteft, that the wages of labour are 
 higheft. England is certainly, in the prefent 
 times, a much richer country than any part of 
 North America. The wages of labour, how- 
 ever, are much higher in North America than 
 in any part of England. In the province of 
 New York, common labourers earn * three mil- 
 lings and fixpence currency, equal to two mil- 
 lings fterling, a day ; Ihip carpenters, ten mil- 
 lings and fixpence currency, with a pint of rum 
 worth fixpence fterling, equal in all to fix mil- 
 lings and fixpence fterling ; houfe carpenters and 
 bricklayers, eight millings currency, equal to 
 four (hillings and fixpence fterling ; journeymen 
 taylors, five millings currency, equal to about 
 two {hillings and ten pence fterling. Thefe 
 prices are all above the London price ; and 
 wages are faid to be as high in the other colonies 
 as in New York. The price of provifions is every 
 where in North America much lower than in 
 England. A dearth has never been known there. 
 In the worft feafons, they have always had a fuf- 
 
 * This was written In 1773) before the commencement of the late 
 difturbances. 
 
 ficiency
 
 106 OF THE WAGES OP LABOUR. 
 
 BOOK ficiency for themfelves, though lefs for exporta- 
 tion. If the money price of labour, therefore, 
 be higher than it is any where in the mother 
 country, its real price, the real command of the 
 neceffaries and conveniences of life which it 
 conveys to the labourer, mull be higher in a ilill 
 greater proportion. 
 
 But though North America is not yet lb rich 
 as England, it is much more thriving, and ad- 
 vancing with much greater rapidity to the fur- 
 ther acquifition of riches. The moll decilivc 
 mark of the profperity of any country is the in- 
 creafe of the number of its inhabitants. In 
 Great Britain, and moll other European coun- 
 tries, they are not fuppofed to double in lefs than 
 five hundred years. In the Britilh colonies in 
 North America, it has been found, that they 
 double in twenty or five-and-twenty years. Nor 
 in the prefent times is this increafe principally 
 owing to the continual importation of new inha- 
 bitants, but to the great multiplication of the 
 fpecies. Thofe who live to old age, it is laid, 
 frequently fee there from fifty to a hundred, and 
 fometimes many more, defcendants from their 
 own body. Labour is there fo well rewarded, 
 that a numerous family of children, in Head of 
 being a burthen, is a fource of opulence and 
 profperity to the parents. The labour of each 
 child, before it can leave their huufe, is computed 
 to be worth a hundred pounds clear gain to them. 
 A young widow with four or five young children, 
 who, among the middling or inferior ranks of 
 people in Europe, wonld have fo little chance for 
 
 a fccoml
 
 OF THE WAGES OF LABOUR. IOJ 
 
 a fecond hufband, is there frequently courted asacHAP. 
 fort of fortune. The value of children is the . vra# 
 greateft of all encouragements to marriage. We 
 cannot, therefore, wonder that the people in 
 North America mould generally marry very 
 young. Notwithstanding the great increafe oc- 
 cafioned by fuch early marriages, there is a con- 
 tinual complaint of the fcarcity of hands in 
 North America. The demand for labourers, the 
 funds deftined for maintaining them, increafe, it 
 feems, ftill fafter than they can find labourers to 
 employ. 
 
 Though the wealth of a country mould be 
 very great, yet if it has been long flationary, we 
 muft not expect to find the wages of labour very 
 high in it. The funds deftined for the payment 
 of wages, the revenue and llock of its inhabit- 
 ants, may be of the greateft extent ; but if they 
 have continued for feveral centuries 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, the number 
 wanted the following year. There could feldom 
 be any fcarcity of hands, nor could the mafters 
 be obliged to bid aarainft one another in order to 
 get them. The hands, on the contrary, would, 
 in this cafe, naturally multiply beyond their em- 
 ployment. There would be a conftant fcarcity 
 of employment, and the labourers would be 
 obliged to bid againft 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,
 
 Io8 OF THE WAGES OP LABOUR. 
 
 BOOK family, the competition of the labourers and the 
 L interefl of the mailers would foon reduce them to 
 this loweft rate which is confiftent with com- 
 mon humanity. China has been long one of the 
 richefl, that is, one of the moll fertile, beft cul- 
 tivated, mofl induftrious, and mofl populous 
 countries in the world. It feems, however, to 
 have been long flationary. Marco Polo, who 
 vifited it more than five hundred years ago, de- 
 fcribes its cultivation, induflry, and populouf- 
 nefs, almofl in the fame terms in which they 
 are defcribed by travellers in the prefent times. 
 It had perhaps, even long before his time, ac- 
 quired that full complement of riches which the 
 nature of its laws and inflitutions permits it to 
 acquire. The accounts of all travellers, incon- 
 fiftent in many other refpecls, agree in the low 
 wages of labour, and in the difficulty which a 
 labourer finds in bringing up a family in China. 
 If by digging the ground a 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 poflible, Hill worfe. Inflead of 
 waiting indolently in their work-houfes, for the 
 calls of their cuflomers, as in Europe, they are 
 continually running about the flreets with the 
 tools of their respective trades, offering their 
 fervice, and as it were begging employment. 
 The poverty of the lower ranks of people in 
 China far furpafles that of the mofl beggarly 
 nations in Europe. In the neighbourhood of 
 Canton many hundred, it is commonly laid, 
 
 many thoufand families have no habitation on 
 
 the
 
 OF THE' WAGES OF LABOUR. 1 09 
 
 the land, but live conftantly in little fifliing boats chap. 
 upon the rivers and canals. The fubliftence ym ' j 
 which they find there is fo fcanty that they are 
 eager to fifh up the naftieft garbage thrown over- 
 board from any European (hip. Any carrion, 
 the carcafe of a dead dog or cat, for example, 
 though half putrid and (linking, is as welcome 
 to them as the moil wholefome food to the 
 people of other countries. Marriage is encou- 
 raged in China, not by the proritablenefs of chil- 
 dren, but by the liberty of deftroying 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 fome 
 people earn their fubliftence. 
 
 China, however, though it may perhaps Hand 
 flill, does not feem to go backwards. Its towns 
 are no-where deferted by their inhabitants. The 
 lands which had once been cultivated, are no- 
 where neglected. The fame, or very nearly the 
 fame, annual labourmuft therefore continue to be 
 performed, and the funds deftined for maintain- 
 ing it mull not, confequently, be fenfibly di- 
 minifhed. The loweft clafs of labourers, there- 
 fore, notwithstanding their fcanty fubfiftence, 
 mull fome way or another make fliift to continue 
 their race fo far as to keep up their ufual num- 
 bers. 
 
 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 dif- 
 
 4 ferent
 
 110 OF THE WAGES OF LABOUR. 
 
 BOOK ferent clafles of employments, be lefs than it 
 L had been the year before. 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 lowelt. The lowed clafs 
 being not only overitocked with its own work- 
 men, but with the overflowings of all the other 
 clafles, the competition for employment would 
 be fo great in it, as to reduce the wages of la- 
 bour to the mod miferable and fcanty fubfiflence 
 of the labourer. Many would not be able to 
 Hud employment even upon thefe hard terms, 
 but would either flarve, or be driven to feek a 
 fubfillcnce either by begging, or by the per- 
 petration perhaps of the greatefl 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 re- 
 duced to what could eafily be maintained by the 
 revenue and flock which remained in it, and 
 which had efcaped either the tyranny or calamity 
 which had deflroyed the reft. This perhaps is 
 nearly the prefent flate of Bengal, and of fome 
 other of the Englifh fettlements in the Eafl 
 Indies. In a fertile country which had before 
 been much depopulated, where fubfiftence, con- 
 fequently, fhould not be very difficult, and 
 where, notwithflanding, three or four hundred 
 thoufand people die of hunger in one year, we 
 may be aflured that the funds deflined for the 
 maintenance of the labouring poor are fafl de- 
 caying. The difference between the genius of 
 
 the
 
 OP THE WAGES OE LABOUR. Ill 
 
 the Britifli conditution which protects and go- C 
 verns North America, and that of the mercantile 
 company which oppredes and domineers in the 
 Kail Indies, cannot perhaps be better illuftrated 
 than by the different date of thofe countries. 
 
 The liberal reward of labour, therefore, as it 
 is the neceffary effeel;, fo it is the natural fymp- 
 tom of increaling national wealth. The fcanty 
 maintenance of the labouring poor, on the other 
 hand, is the natural fymptom that things are at a 
 Hand, and their ftarving condition that they are 
 going fail backwards. 
 
 In Great Britain the wages of labour feem, in 
 the prefent times, to be evidently more than 
 what is preciiely neceflary to enable the labourer 
 to bring up a family. In order to fatisfy our- 
 felves upon this point it will not be necedary to 
 enter into any tedious or doubtful calculation of 
 what may be the lowed fum upon which it is 
 podible to do this. There are many plain fymp- 
 toms that the wages of labour are no-where in 
 this country regulated by this lowed rate which 
 is confident with common humanity. 
 
 Firft, in aimod every part of Great Britain 
 there is a didinction, even in the lowed fpecies 
 of labour, between dimmer and winter wages. 
 Summer wages are always highed. But on ac- 
 count of the extraordinary expence of fewel, the 
 maintenance of a family is mod expendve in 
 winter. Wages, therefore, being highed when 
 this expence is lowed, it feems evident that they 
 are not regulated by what is necedary for this 
 expence j but by the quantity and fuppofed 
 
 value
 
 112 OF THE WAGES OF LABOUR. 
 
 BOOK value of the work. A labourer, it may be faid 
 '• t indeed, ought to fave part of his fuinmer wage9 
 iu order to defray his winter expence; and that 
 through the whole year they do not exceed what 
 is necelTary to maintain his family through 
 the whole year. A flave, however, or one abfo- 
 lutely dependent on us for immediate fubfift- 
 ence, would not be treated in this manner. His 
 daily fubfiflence would be proportioned to his 
 daily neceflities. 
 
 Secondly, the wages of labour do not in 
 Great Britain fluctuate with the price of provi- 
 fions. Thefe vary every-where from year to 
 year, frequently from month to month. But in 
 many places the money price of labour remains 
 uniformly the fame fometimes for half a century 
 together. If in thefe places, therefore, the la- 
 bouring poor can maintain their families in dear 
 years, they mull be at their eafe in times of mo- 
 derate plenty, and in affluence in thole of extra- 
 ordinary cheapnefs. The higli price of provi- 
 fions during thefe ten years pad has not in many 
 parts of the kingdom been accompanied with 
 any fenfible rife in the money price of labour. 
 It has, indeed, in fome ; owing probably more 
 to the increafe of the demand for labour, than to 
 that of the price of provifions. 
 
 Thirdly, 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. The prices of bread and butcher's meat 
 are generally the fame, or very nearly the fame, 
 
 through
 
 OP THE WAGES OF LABOUR. 
 
 through the greater part of the united kingdom. 
 Thefe and moll 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 reafons which I mall have occafion 
 to explain hereafter. But the wages of labour 
 in a great town and its neighbourhood are fre* 
 quently a fourth or a fifth part, twenty or five* 
 and-twenty per cent, higher than at a few miles 
 diftance. Eighteen pence a day may be reckoned 
 the common price of labour in London and its 
 neighbourhood. At a few miles diftance it falls 
 to fourteen and fifteen pence. Ten-pence may 
 be reckoned its price in Edinburgh and its neigh- 
 bourhood. At a few miles diftance it falls to 
 eight pence, the ufual price of common labour 
 through the greater part of the low country of 
 Scotland, where it varies a good deal lefs than 
 in England. Such a difference of prices, which 
 it feems is not always fufficient to tranfport a 
 man from one parifh to another, would necefta- 
 rily occafion fo great a tranfportation of the moft 
 bulky commodities, not only from one parifh to 
 another, but from one end of the kingdom, al- 
 moft 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 in- 
 conftancy of human nature, it appears evidently 
 from experience that a man is of all forts of lug- 
 gage the moft difficult to be tranfported. If the 
 labouring poor, therefore, can maintain their 
 families in thofe parts of the kingdom where the 
 vol. ii. i price
 
 114 OF THE WAGES OF LABOUR. 
 
 book price of labour is lowed, they mufl be in affluence 
 where it is higheil. 
 
 Fourthly, the variations in the price of labour 
 not only do not correfpond either in place or 
 time with thofe in the price of provifions, but 
 they are frequently quite oppofite. 
 
 Grain, the food of the common people, is 
 dearer in Scotland than in England, whence 
 Scotland receives almoft every year very large 
 fupplies. But Englilh corn mult be fold dearer 
 in Scotland, the country to which it is brought, 
 than in England, the country from which it 
 comes ; and in proportion to its quality it can- 
 not be fold dearer in Scotland than the Scotch 
 corn that comes to the fame market in compe- 
 tition with it. The quality of grain depends 
 chiefly upon the quantity of flour or meal which 
 it yields at the mill, and in this refpeet Englifh 
 grain is fo much fuperior to the Scotch, that, 
 though often dearer in appearance, or in propor- 
 tion to the meafure of its bulk, it is generally 
 cheaper in reality, or in proportion to its quality, 
 or even to the meafure of its weight. The price 
 of labour, on the contrary, is dearer in England 
 than in Scotland. If the labouring poor, there- 
 fore, can maintain their families in the one part of 
 the united kingdom, they mud be in affluence in 
 the other. Oatmeal indeed fupplies the common 
 people in Scotland with the greateft and the bed 
 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 fubfidence is not the caufe, 
 
 but
 
 OP THE WAGES OF LABOUR. H5 
 
 but the effect, of the difference in their wages ; 
 though, by a flrange mifapprehenfion, I have 
 frequently heard it reprefented as the caufe. It 
 is not becaufe one man keeps a coach while his 
 neighbour walks a-foot, that the one is rich and 
 the other poor : but becaufe the one is rich he 
 keeps a coach, and becaufe the other is poor he 
 walks a-foot. 
 
 During the courfe of the laft century* taking 
 one year with another, grain was dearer in both 
 parts of the united kingdom than during that of 
 the prefent. This is a matter of fact which can- 
 not now admit of any reafonable doubt ; and the 
 proof of it is, if poffible, Hill more decifive with 
 regard to Scotland than with regard to England- 
 It is in Scotland fupported by the evidence of 
 the public fiars, annual valuations made upon 
 oath, according to the actual flate of the mar- 
 kets, of all the different forts of grain in every 
 different county of Scotland. If fuch dire6t proof 
 could require any collateral evidence to confirm 
 it, I would obferve that this has likewife been 
 the cafe in France, and probably in mofl 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 was 
 much cheaper. If the labouring poor, there- 
 fore, could bring up their families then, they 
 muft be much more at their eafe now. In the 
 laft century, the moft ufual day-wages of com- 
 mon labour through the greater part of Scotland 
 
 1 2 were
 
 Il6 OP THE WAGES OF LABOUR. 
 
 book were fixpence in fummer and five-pence in win- 
 ter. Three fhillings a week, the fame price very 
 nearly, dill continues to be paid in fome parts 
 of the Highlands and Weflern Iflands. Through 
 the greater part of the low country the moll 
 ufual wages of common labour are now eight- 
 pence a day ; ten-pence, fometimes a milling 
 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-fhire, &c. In England the improvements 
 of agriculture, manufactures and commerce 
 began much earlier than in Scotland. The de- 
 mand for labour, and confequently its price, 
 mud necefTarily have increased with thofe im- 
 provements. In the laft century, accordingly, 
 as well as in the prefent, the wages of labour 
 were higher in England than in Scotland. They 
 have rifen too confiderably fince that time, 
 though, on 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 foldier was the lame as in the pre- 
 fent times, eight pence a day. When it was fird 
 edablifhed it would naturally be regulated by 
 the ufual wages of common labourers, the rank 
 of people from which footfoldiers are commonly 
 drawn. Lord Chief Juftice Hales, who wrote 
 in the time of Charles II, computes the neceflary 
 cxpence of a labourer's family, confiding of fix 
 perlbns, the father and mother, two cluldren able 
 
 to
 
 OF THE WAGES OF LABOUR. 
 
 to do fomething, and two not able, at ten (hil- 
 lings a week, or twenty-fix pounds a year. If 
 they cannot earn this by their labour, they mud 
 make it up, he fuppofes, either by begging or 
 flealing. He appears to have enquired very 
 carefully into this fubje6t # . In 1688, Mr. Gre- 
 gory King, whofe (kill in political arithmetic is 
 fo much extolled by Doctor Davenant, computed 
 the ordinary income of labourers and out-fervants 
 to be fifteen pounds a year to a family, which he 
 fuppofed to confift, one with another, of three 
 and a half perfons. His calculation, 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 pecu- 
 niary income and expence of fuch families have 
 increafed confiderably lince that time through 
 the greater part of the kingdom ; in fome places 
 more, and in fome lefs ; though perhaps fcarce 
 any where fo much as fome exaggerated accounts 
 of the prefent wages of labour have lately 
 reprefented them to the public. The price of 
 labour, it mufl be obferved, cannot be afcer- 
 tained very accurately any where, different prices 
 being often paid at the fame place and for the 
 fame fort of labour, not only according to the 
 different abilities of the workmen, but according 
 to the eafinefs or hardnefs of the mailers. Where 
 wages are not regulated by law, all that we can 
 
 * See his fcheme for the maintenance of the Poor, in Burn's 
 Hiflory of the Poor-laws. 
 
 I 3 pretend
 
 Il8 OF THE WAGES OF LABOUR. 
 
 book pretend to determine is what are the mod ufuat ; 
 and experience feems to fliow that law can never 
 regulate them properly, though it has often pre- 
 tended to do fo. 
 
 The real recompence of labour, the real quan- 
 tity of the necefiaries and conveniences of life 
 which it can procure to the labourer, has, during 
 the courfe of the prefent century, increafed per- 
 haps in a ftill greater proportion than its money 
 price. Not only grain has become fomewhat 
 cheaper, but many other things, from which the 
 induflrious poor derive an agreeable and whole- 
 fome variety of food, have become a great deal 
 cheaper. Potatoes, for example, do not at pre- 
 fent, through the greater part of the kingdom, 
 coll half the price whicli they ufed to do thirty 
 or forty years ago. The fame thing may be faid 
 of turnips, carrots, cabbages ; things which were 
 formerly never raifed but by the fpade, but which 
 are now commonly raifed by the plough. All 
 fort of garden fluff too has become cheaper. 
 The greater part of the apples and even of the 
 onions confumed in Great Britain were in the lafl 
 century imported from Flanders. The great im- 
 provements in the coarfer manufactures of both 
 linen and woollen cloth furnifh the labourers with 
 cheaper and better cloathing; and. thofe in the 
 manufactures of the coarfer metals, with cheaper 
 and better inftruments of trade, as well as with 
 many agreeable and convenient pieces of houfhold 
 furniture. Soap, fait, candles, leather, and fer- 
 mented liquors, have, indeed, become a good 
 deal dearer j chiefly from the taxes which have 
 
 been
 
 OF THE WAGES OF LABOUR. 1 1 9 
 
 been laid upon them. The quantity of thefe, CHAP, 
 however, which the labouring poor are under 
 any neceflity of confuming, is fo very fmall, that 
 the increafe in their price does not compenfate 
 the diminution in that of fo many other things. 
 The common complaint that luxury extends itfelf 
 even to the lowefl ranks of the people, and that 
 the labouring poor will not now be contented 
 with the fame food, cloathing and lodging which 
 fatislied them in former times, may convince 
 us that it is not the money price of labour 
 only, but its real recompence, which has aug- 
 mented. 
 
 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 fo- 
 ciety ? The anfwer feems at firft light abundantly 
 plain. Servants, labourers and workmen of dif- 
 ferent kinds, make up the far greater part of 
 every great political fociety. But what improves 
 the circumftances of the greater part can never 
 be regarded as an inconveniency to the whole. 
 No fociety can furely be flourifliing and happy, 
 of which the far greater part of the members 
 are poor and miferable. It is but equity, be- 
 sides, that they who feed, cloath and lodge the 
 whole body of the people, mould have fuch a 
 fhare of the produce of their own labour as to 
 be themfelves tolerably well fed, cloathed and 
 lodged. 
 
 Poverty, though it no doubt difcourages, does 
 not always prevent marriage. It feems even 
 to be favourable to generation. A half-ilarved 
 
 i 4 Highland
 
 12© OF THE WAGES OF LABOUR. 
 
 BOOK Highland woman frequently bears more than 
 twenty children, while a pampered fine lady is 
 often incapable of bearing any, and is generally 
 exhaufted by two or three. Barrennefs, fo fre- 
 quent among women of fafhion, is very rare 
 among thofe of inferior flation. Luxury in the 
 fair fex, while it inflames perhaps the paflion for 
 enjoyment, feems always to weaken, and fre- 
 quently to deltroy altogether, the powers of ge- 
 neration. 
 
 But poverty, though it does not prevent the 
 generation, is extremely unfavourable to the rear- 
 ing of children. The tender plant is produced, 
 but in fo cold a foil, and fo fevere a climate, foon 
 withers and dies. It is not uncommon, I have 
 been frequently told, in the Highlands of Scot- 
 land for a mother who has borne twenty children 
 not to have two alive. Several officers of great 
 experience have affured me, that fo far from re- 
 cruiting their regiment, they have never been 
 able to fupply it with drums and fifes from all 
 the foldiers children that were born in it. A 
 greater number of fine children, however, is 
 feldom feen any where than about a barrack of 
 foldiers, Very few of them, it feems, arrive at 
 the age of thirteen or fourteen. In fome places 
 one half the children born die before they are 
 four years of age ; in many places before they 
 are feven •, and in almoft all places before they 
 are nine or ten. This great mortality, however, 
 will every where be found chiefly among the 
 children of the common people, who cannot 
 afford to tend them with the fame care as thofe 
 
 of
 
 OF THE WAGES OF LABOUR. 121 
 
 of better Ration. Though their marriages are c H A p. 
 generally more fruitful than thofe of people of VI 11 ' ^ 
 falhion, a fmaller proportion of their children 
 arrive at maturity. In foundling hofpitals, and 
 among the children brought up by parifh cha- 
 rities, the mortality is Hill greater than among 
 thofe of the common people. 
 
 Every fpecies of animals naturally multiplies 
 in proportion to the means of their fubfiftence, 
 and no fpecies can ever multiply beyond it. But 
 in civilized fociety it is only among the inferior 
 ranks of people that the fcantinefs of fubfiftence 
 can fet limits to the further multiplication of the 
 human fpecies ; and it can do fo in no other way 
 than by deftroying a great part of the children 
 which their fruitful marriages produce. 
 
 The liberal reward of labour, by enabling 
 them to provide better for their children, and 
 confequently to bring up a greater number, na- 
 turally tends to widen and extend thofe limits. 
 It deferves to be remarked too, that it neceffarily 
 does this as nearly as poffible in the proportion 
 which the demand for labour requires. If this 
 demand is continually increafing, the reward of 
 labour mult neceffarily encourage in fuch a 
 manner the marriage and multiplication of la- 
 bourers, as may enable them to fupply that con- 
 tinually increaling demand by a continually in- 
 creating population. If the reward ihould at any 
 time be lefs than what was requifite for this pur- 
 pofe, the deficiency of hands would foon raife 
 it ; and if it ihould at any time be more, their 
 exceffive multiplication would foon lower it to 
 
 this
 
 121 OF THE WAGES OP LABOUR. 
 
 BOOK this necefiary rate. The market would be (6 
 much under-flocked with labour in the one cafe, 
 and fo much over-flocked in the other, as would 
 foon force back its price to that proper rate which 
 the circumflances of the fociety required. It is 
 in this manner that the demand for men, like 
 that for any other commodity, neceffarily regu- 
 lates the production of men ; quickens it when 
 it goes on too flowly, and flops it when it ad- 
 vances too fafl. It is this demand which regu- 
 lates and determines the flate of propagation in 
 all the different countries of the world, in North 
 America, in Europe, and in China; which ren- 
 ders it rapidly progreflive in the nrft, flow and 
 gradual in the fecond, and altogether ftationary 
 in the lafl. 
 
 The wear and tear of a flave, it has been faid, 
 is at the expence of his mafter; but that of a 
 free fervant is at his own expence. The wear 
 and tear 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 mufl be fuch as may 
 enable them y one with another, to continue the 
 race of journeymen and fervants, according as 
 the increafing, diniinilhing, or ftationary demand 
 of the fociety may happen to require. But 
 though the wear and tear of a free fervant be 
 equally at the expence of his mafler, it generally 
 colls him much lefs than that of a flave. The 
 fund defllned for replacing or repairing, if I may 
 fay fo, the wear and tear of the flave, is com- 
 monly managed by a negligent mafler or carelefs 
 overfeer. That deflined for performing the 
 
 fame
 
 OF THE WAGES OF LABOUR. 1 23 
 
 fame office with regard to the free man, is ma- 
 naged by the free man himfelf. The diforders 
 which generally prevail in the oeconomy of the 
 rich, naturally introduce themfelves into the 
 management of the former : The Uriel: frugality 
 and parfimonious attention of the poor as natu- 
 rally eftablifh themfelves in that of the latter. 
 Under fuch different management, the fame 
 purpofe muff require very different degrees of 
 expence to execute it. It appears, accordingly, 
 from the experience of all ages and nations, I 
 believe, that the work done by freemen comes 
 cheaper in the end than that performed by flaves. 
 It is found to do fo even at Bofton, New York, 
 and Philadelphia, where the wages of common 
 labour are fo very high. 
 
 The liberal reward of labour, therefore, as it 
 is the effect of increafing wealth, fo it is the caufe 
 of increafing population. To complain of it, is 
 to lament over the neceffary effect and caufe of 
 the greateft public profperity. 
 
 It deferves to be remarked, perhaps, that it is 
 in the prdgreffive ftate, while the fociety is ad- 
 vancing to the further acquisition, rather than 
 when it has acquired its full complement of 
 riches, that the condition of the labouring poor, 
 of the great body of the people, feems to be the 
 happieft and the mod comfortable. It is hard 
 in the ftationary, and miferable in the declining 
 ltate. The progreflive ftate is in reality the 
 cheerful and the hearty ftate to all the different 
 orders of the fociety. The ftationary is dull 3 
 the declining melancholy. 
 
 The
 
 ■v— 
 
 124 OF THE WAGES OF LABOUR. 
 
 book The liberal reward of labour, as it encourages 
 L the propagation, fo it increafes the induflry of the 
 common people. The wages of labour are the 
 encouragement of induflry, which, like every 
 other human quality, improves in proportion to 
 the encouragement it receives. A plentiful fub- 
 fiftence increafes the bodily ftrength of the la- 
 bourer, and the comfortable hope of bettering 
 his condition, and of ending his days perhaps in 
 eafe and plenty, animates him to exert that 
 ftrength to the utmoft. Where wages are high, 
 accordingly, we {hall always find the workmen 
 more a6tive, diligent, and expeditious, than 
 where they are low ; in England, for example, 
 than in Scotland ; in the neighbourhood of great 
 towns, 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 liber- 
 ally 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 fup- 
 pofed to lafl in his utmoft vigour above eight 
 years. Something 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, where- 
 ever wages are higher than ordinary. Almofl 
 every clafs of artificers is fubje6t to fome pecu- 
 liar infirmity occafioncdby excefTive application 
 
 to
 
 OF THE WAGES OF LABOUR. 1 25 
 
 to their peculiar fpecies of work. Ramuzzini, CHAP, 
 an eminent Italian phyfician, has written a par- 
 ticular book concerning fuch difeafes. We do 
 not reckon our foldiers the moll induftrious fet 
 of people among us. Yet when foldiers have 
 been employed in fome particular forts of work, 
 and liberally paid by the piece, their officers 
 have frequently been obliged to flipulate with 
 the undertaker, that they mould not be allowed 
 to earn above a certain fum every day, according; 
 to the rate at which they were paid. Till this fli- 
 pulation was made, mutual emulation and the 
 defire of greater gain, frequently prompted them 
 to over-work themfelves, and to hurt their health 
 by exceffive labour. Exceffive application dur- 
 ing four days of the week, is frequently the real 
 caufe of the idlenefs of the other three, fo 
 much and fo loudly complained of. Great la- 
 bour, either of mind or body, continued for 
 feveral days together, is in moll men naturally 
 followed by a great defire of relaxation, which, 
 if not reflrained by force or by fome ftrong ne- 
 ceffity, is almofl irrefiflible. It is the call of na- 
 ture, which requires to be relieved by fome in- 
 dulgence, fometimes of eafe only, but fometimes 
 too of diflipation and diverfion. If it is not 
 complied with, the confequences are often dan- 
 gerous, and fometimes fatal, and fuch as almofl 
 always, fooner or later, bring on the peculiar 
 infirmity of the trade. If maflers would always 
 liflen to the dictates of reafon and humanity, 
 they have frequently occafion rather to mode- 
 rate, than to animate the application of many of 
 
 their
 
 126 OF THE WAGES OF LABOUR* 
 
 book their workmen. It will be found, I believe, ill 
 every fort of trade, that the man who works fo 
 moderately, as to be able to work constantly, not 
 only preferves his health the longeft, but, in the 
 courfe of the year, executes the greatefl quantity 
 of work. 
 
 In cheap years, it is pretended, workmen are 
 generally more idle, and in dear ones more in- 
 duftrious than ordinary. A plentiful fubfift- 
 ence therefore, it has been concluded, relaxes, 
 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 mould have this effect upon the greater 
 part, or that men in general mould work better 
 when they are ill fed than when they are well 
 fed, when they are difheartened than when they 
 are in good fpirits, when they are frequently lick 
 than when they are generally in good health, 
 feems not very probable. Years of dearth, it is 
 to be obferved, are generally among the common 
 people years of ficknefs and mortality, which 
 cannot fail to diminifh the produce of their in- 
 duftry. 
 
 In years of plenty, fervants frequently leave 
 their mailers, and truft their fubfiflence to what 
 they can make by their own induftry. But the 
 fame cheapnels of provifions, by increasing the 
 fund which is deflined for the maintenance of 
 fervants, encourages mailers, farmers efpecially, 
 to employ a greater number. Farmers upon fuch 
 occaiions expect more profit from their corn by 
 maintaining a few more labouring fervants, than 
 
 by
 
 OF THE WAGES OF LABOUR. 12J 
 
 by felling it at a low price in the market. The c H A p. 
 demand for fervants increafes, while the number . VIIL 
 of thofe who offer to fupply that demand di- 
 ininifhes. The price of labour, therefore, fre- 
 quently rifes in cheap years. 
 
 In years of fcarcity, the difficulty and uncer- 
 tainty of fubfiftence make all fuch people eager 
 to return to fervice. But the high price of pro- 
 visions, by diminifhing the funds deflined for the 
 maintenance of fervants, difpofes mailers rather 
 to diminifh than to increafe the number of thofe 
 they have. In dear years too, poor independ- 
 ent workmen frequently confume the little flocks 
 with w r hich they had ufed to fupply themfelves 
 with the materials of their work, and are ob- 
 liged to become journeymen for fubfiftence. 
 More people want employment that can eafily 
 get it ; many are willing to take it upon lower 
 terms than ordinary, and the wages of both fer- 
 vants and journeymen frequently fink in dear 
 years. 
 
 Maflers of all forts, therefore, frequently 
 make better bargains with their fervants in dear 
 than in cheap years, and rind them more humble 
 and dependent in the former than in the latter. 
 They naturally, therefore, commend the former 
 as more favourable to induflry. Landlords and 
 farmers, befides, two of the largefl claffes of 
 maflers, have another reafon for being pleafed 
 with dear years. The rents of the one and the 
 profits of the other depend very much upon the 
 price of provifions. Nothing can be more ab- 
 furd, however, than to imagine that men in ge- 
 4 neraf
 
 128 OF THE WAGES OF LABOUR. 
 
 BOOK neral (hould work lefs when they work for them- 
 l - t felves, than when they work for other people. 
 A poor independent workman will generally be 
 more induflrious than even a journeyman who 
 works by the piece. The one enjoys the whole 
 produce of his own induftry ; the other fhares it 
 with his matter. The one, in his feparate inde- 
 pendent (late, is lefs liable to the temptations of 
 bad company, which in large manufactories fo 
 frequently ruin the morals of the other. The 
 fuperiority of the independent workman over 
 thofe fervants who are hired by the month or by 
 the year, and whofe wages and maintenance are 
 the fame whether they do much or do little, is 
 likely to be (till greater. Cheap years tend to 
 increafe the proportion of independent workmen 
 to journeymen and fervants of all kinds, and 
 dear years to diminifh it. 
 
 A French author of great knowledge and in- 
 genuity, Mr. MefTance, receiver of the taillies 
 in the election of St. Etienne, endeavours to 
 (how that the poor do more work in cheap than 
 in dear years, by comparing the quantity and 
 value of the goods made upon thofe different 
 occafions in three different manufactures ; one 
 of coarfe woollens carried on at Elbeuf ; one of 
 linen, and another of filk, both which extend 
 through the whole generality of Rouen. It ap- 
 pears from his account, which is copied from 
 the regifters of the public offices, that the quan- 
 tity and value of the goods made in all thofe 
 three manufactures has generally been greater in 
 cheap than in dear years ; and that it has alwaya 
 
 3 been
 
 OF THE WAGES OF LABOUR. 1 29 
 
 been greateft in the cheaper!, and leafl in the chap. 
 deareft years. All the three feem to be flation- t Y I IL ^ 
 ary manufactures, or which, though their pro- 
 duce may vary fomewhat from year to year, are 
 upon the whole neither going backwards nor 
 forwards. 
 
 The manufacture of linen in Scotland, and 
 that of coarfe woollens in the weft riding of 
 Yorkfhire, are growing manufactures, of which 
 the produce is generally, though with fome va- 
 riations, increafing both in quantity and value. 
 Upon examining, however, the accounts which 
 have been publilhed of their annual produce, I 
 have not been able to obferve that its variations 
 have had any fenfible connection with the dear- 
 nefs or cheapnefs of the feafons. In 1 740, a year 
 of great fcarcity, both manufactures, indeed, ap- 
 pear to have declined very confiderably. But in 
 1756, another year of great fcarcity, the Scotch 
 manufacture made more than ordinary advances. 
 The Yorkfhire manufacture, indeed, declined, 
 and its produce did not rife to what it had been 
 in 1755 till 1766, after the repeal of the Ameri- 
 can ftamp act. In that and the following year it 
 greatly exceeded what it had ever been before, 
 and it has continued to advance ever fince. 
 
 The produce of all great manufactures for di£ 
 tant fale mull neceflarily depend, not fo much 
 upon the dearnefs or cheapnefs of the feafons in 
 the countries where they are carried on, as upon 
 the circumflances which affect the demand in the 
 countries where they are confumed ; upon peace 
 or war, upon the profperity or declenfiun of 
 
 vol. 11. k othef
 
 130 OF THE WAGES OF LABOUR 
 
 BOOK other rival manufactures, and upon the good or* 
 bad humour of their principal cuftomers. A 
 great part of the extraordinary work, befides, 
 which is probably done in cheap years, never 
 enters the public regifters of manufactures. 
 The men fervants who leave their mailers be- 
 come independent labourers. The women re- 
 turn to their parents, and commonly fpin in 
 order to make cloaths for themfelves and their 
 families. Even the independent workmen do* 
 not always work for public fale, but are employed 
 by fome of their neighbours in manufactures for 
 family ufe. The produce of their labour, there- 
 fore, frequently makes no figure in thofe public 
 regifters of which the records are fometimes 
 publilhed with fo much parade, and from which 
 our merchants and manufacturers would often 
 vainly pretend to announce the profperity or de- 
 clenfion of the greateft empires. 
 
 Though the variations in the price of labour, 
 not only do not always correfpond with thofe in 
 the price of provifions, but are frequently quite 
 oppofite, we muft not, upon this account, ima- 
 gine that the price of provifions has no influ- 
 ence upon that of labour. The money price of 
 labour is necefTarily regulated by two circum- 
 ftances ; the demand for labour, and the price of 
 the neceflaries and conveniences of life. The 
 demand for labour, according as it happens to 
 be increafing, ftationary, or declining, or to re- 
 quire an increafing, ftationary, or declining po- 
 pulation, determines the quantity of the necerla- 
 ries and conveniences of life which muft be 
 1 given
 
 OF THE WAGES OF LABOUR* 131 
 
 given to the labourer ; and the money price ofCHAP. 
 labour is determined by what is requisite for pur- 
 chafing this quantity. Though the money price 
 of labour, therefore, is fometimes high where 
 the price of proviiions is low, it would be Hill 
 higher, the demand continuing the fame, if the 
 price of proviiions was high. 
 
 It is becaufe the demand for labour increafes 
 in years of hidden and extraordinary plenty, and 
 diminifhes in thofe of hidden and extraordinary 
 fcarcity, that the money price of labour fome- 
 times rifes in the one, and links in the other* 
 
 In a year of hidden and extraordinary plenty, 
 there are funds in the hands of many of the em- 
 ployers of induftry, fufficient to maintain and 
 employ a greater number of induilrious people 
 than had been employed the year before ; and 
 this extraordinary number cannot always be had. 
 Thofe mailers, therefore, who want more work- 
 men, bid againil one another, in order to get 
 them, which fometimes raifes both the real and 
 the money price of their labour. 
 
 The contrary of this happens in a year of fud- 
 den and extraordinary fcarcity. The funds def- 
 tined for employing induftry are lefs than they 
 had been the year before. A coniiderable num- 
 ber of people are thrown out of employment, 
 who bid againil one another, in order to get it, 
 which fometimes lowers both the real and the 
 money price of labour. In 1740, a year of ex- 
 traordinary fcarcity, many people were willing 
 to work for bare iubfiilence. In the fucceedino; 
 
 k 2 years
 
 1$2 OF THE WAGES OF LABOUR. 
 
 BOOK years of plenty, it was more difficult to get 
 , labourers and fervants. 
 
 The fcarcity of a dear year, by diminifhing 
 the demand for labour, 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 
 increafing the demand, tends to raife the price 
 of labour, as the cheapnefs of provifions tends to 
 lower it. In the ordinary variations of the price 
 of provifions, thofe two oppofite caufes feem to 
 counterbalance one another ; which is probably 
 in part the reafon why the wages of labour are 
 every-where fo much more Heady and perma- 
 nent than the price of provifions. 
 
 The increafe in the wages of labour neceffarily 
 fncreafes the price of many commodities, by in- 
 creafing 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 pro- 
 ductive 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, neceffarily endeavours for 
 his own advantage, to make fuch a proper divi- 
 fion and diflribution of employment, that they 
 may be enabled to produce the greatefl quantity 
 of work pofiible. For the fame reafon he en- 
 deavours to fupply them with the befl machinery 
 which either he or they can think of. What 
 takes place among the labourers in a particular 
 
 workhoufe.
 
 VIII. 
 
 / OF THE WAGES OF LABOUR. 133 
 
 workhoufe, takes place, for the fame rcafon, chap 
 among thofe of a great fociety. The greater 
 their number, the more they naturally divide 
 themfelves into different claffes and fubdivifions 
 of employment. More heads are occupied in 
 inventing the mofl proper machinery for execut- 
 ing the work of each, and it is, therefore, more 
 likely to be invented. There are many commo- 
 dities, therefore, which, in confequence of thefe 
 improvements, come to be produced by fo much 
 lefs labour than before, that the increafe of its 
 price is more than compenfated by the diminu- 
 tion of its quantity. 
 
 CHAP. IX. 
 
 Of the Profits of Stock. 
 
 T 
 
 HE rife and fall in the profits of flock chap, 
 
 depend upon the fame caufes with the rife 
 and fall in the wages of labour, the increafing or 
 declining flate of the wealth of the fociety ; but 
 thofe caufes affect the one and the other very 
 differently. 
 
 The increafe of flock, which raifes wages, 
 tends to lower profit. When the flocks of many 
 rich merchants are turned into the fame trade, 
 their mutual competition naturally tends to 
 lower its profit ; and when there is a like in- 
 creafe of flock in all the different trades carried 
 
 k 3 on 
 
 IX.
 
 134 OF THE PROFITS OF STOCK. 
 
 BOOK on in the fame fociety, the fame competition 
 mud produce the fame effect in them all. 
 
 It is not eafy, it has already been obferved, to 
 afccrtain what are the average wages of labour 
 even in a particular place, and at a particular 
 time. We can, even in this cafe, feldom deter- 
 mine more than what are the moll ufual wages. 
 But even this can feldom be done with regard to 
 the profits of flock. Profit is fo very fluctuat- 
 ing, that the perfon who carries on a particular 
 trade cannot always tell you himfelf what is the 
 average of his annual profit. It is affected, not 
 only by every variation of price in the commo- 
 dities which he deals in, but by the good or bad 
 fortune both of his rivals and of his cuflomers, 
 and by a thoufand other accidents to which 
 goods when carried either by fea or by land, or 
 even when flored in a warehoufe, are liable. It 
 varies, therefore, not only from year to year, but 
 from day to day, and almofl from hour to hour. 
 To afcertain what is the average profit of all the 
 different trades carried on in a great kingdom, 
 mu ft be much more difficult ; and to judge of 
 what it may have been formerly, or in remote 
 periods of time, with any degree of precifion, 
 mufl be altogether impofliblc. 
 
 But though it may be impoffible to deter- 
 mine with any degree of precifion, what are or 
 were the average profits of flock, either in the 
 prefent, or in ancient times, fome notion may 
 be formed of them from the interefl 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
 
 OP THE PROFITS OF STOCK. 1 35 
 
 a great deal will commonly be given for the ufe CHAP, 
 of it ; and that wherever little can be made by it, 
 left will commonly be given for it. According, 
 therefore, as the ufual market rate of intereft va- 
 ries in any country, we may be allured that the 
 ordinary profits of flock mufl vary with it, muft 
 fink as it finks, and rife as it rifes. The progrefs 
 of intereft, therefore, may lead us to form fome 
 notion of the progrefs of profit. 
 
 By the 37th of Henry VIII. all intereft above 
 ten per cent, was declared unlawful. More, it 
 feems, had fometimes been taken before that. 
 In the reign of Edward VI. religious zeal pro- 
 hibited all intereft. This prohibition, however, 
 like all others of the fame kind, is faid to have 
 produced no effect, and probably rather increafed 
 than diminifhed the evil of ufury. The ftatute 
 of Henry VIII., was revived by the 13th of 
 Elizabeth, cap. 8. and ten per cent continued 
 to be the legal rate of intereft till the 21ft of 
 James I. when it was reftricted to eight per 
 cent. It was reduced to fix per cent, foon after 
 the reftoration, and by the 12th of Queen Anne, 
 to five per cent. All thefe different ftatutory 
 regulations 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. ; and 
 people of good credit in the capital, and in 
 
 K 4 many
 
 }lfi OF THE PROFITS OF STOCK. 
 
 BOOK 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 
 accelerated than retarded. They feem, not only 
 to have been going on, but to have been going 
 on falter and falter. The wages of labour have 
 been continually increaiing during the fame pe- 
 riod, and in the greater part of the different 
 branches of trade and manufactures the profits of 
 flock 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 
 competitors, 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 cannot get the number of 
 workmen they want, and therefore 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 to get employment, 
 which lowers the wages of labour, and raifes 
 the profits of flock. 
 
 In
 
 OF THE PROFITS OF STOCK. 1 37 
 
 In Scotland, though the legal rate of intereft c HA p. 
 
 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 pri- 
 vate bankers in Edinburgh give four per cent, 
 upon their promiffory notes, of which payment 
 either in whole or in part may be demanded at 
 pleafure. Private 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 flock in Scotland than 
 in England. The common rate of profit, there- 
 fore, mufl 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 evi- 
 dently 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 31 per cent. In 1725 it was again raifed to 
 the twentieth penny, or to five per cent. In 
 1766, during the adminiftration of Mr. Laverdy, 
 it was reduced to the twenty-fifth penny, or to 
 four per cent. The Abbe Terray raifed it after- 
 wards to the old rate of five per cent. The fup- 
 
 * See Denifart, Article Taux des Interets, torn. Hi. p. 18. 
 
 pofed
 
 138 OF THE PROFITS OF STOCK. 
 
 BOOK pofed purpofe ofmanyof thofe violent reductions 
 of intereit was to prepare the way for reducing 
 that of the public debts ; a purpofe which has 
 fometimesbeen executed. France is perhaps in 
 the prefent times not fo rich a country as Eng- 
 land ; and though the legal rate of interell has in 
 France frequently been lower than in England, 
 the market rate has generally been higher ; for 
 there, as in other countries, they have feveral 
 very fafe and ealy methods of evading the law. 
 The profits of trade, I have been allured by 
 Britifh merchants who have traded in both coun- 
 tries, are higher in France than in England; and 
 it is no doubt upon this account that many Britifh 
 fubje6ls chufe rather to employ their capitals in 
 a country where trade is in difgrace, than in one 
 where it is highly refpe6ted. The wages of 
 labour are lower in France than in England, 
 ^lien you go from Scotland to England, the dif- 
 ference which you may remark between the drefs 
 and countenance of the common people in the 
 one country and in the other, fufficiently indi- 
 cates the difference in their condition. The 
 contrafl is ftill greater when you return from 
 France. France, though no doubt a richer 
 country than Scotland, fecms not to be going 
 forward fo fad. It is a common and even a po- 
 pular 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 poffibly entertain with regard 
 to Scotland, who fees the country now, and who 
 faw it twenty or thirty years ago. 
 
 The
 
 OF THE PROFITS OF STOCK. 1 39 
 
 The province of Holland, on the other hand, chap. 
 in proportion to the extent of its territory and 
 the number of its people, is a richer country 
 than England. The government there borrow 
 at two per cent., and private people of good 
 credit at three. The wages of labour are laid 
 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 pretended by fome peo- 
 ple, is decaying, and it may perhaps be true 
 that fome particular branches of it are fo. But 
 thefe fymptoms feem to indicate fufficiently that 
 there is no general decay. When profit dimi- 
 niflies, merchants are very apt to complain that 
 trade decays ; though the diminution of profit is 
 the natural effect of its profperity, or of a greater 
 flock being employed in it than before. During 
 the late war the Dutch gained the whole carry- 
 ing trade of France, of which they flill retain a 
 very large fhare. The great property which 
 they polfefs both in the French and Englifh 
 funds, about forty millions, it is faid, in the 
 latter (in which I fufpeel, however, there is a 
 confiderable exaggeration) ; the great fums which 
 they lend to private people in countries where 
 the rate of interefl is higher than in their own, 
 are circumflances which no doubt demonflrate 
 the redundancy of their flock, or that it has in- 
 creafed beyond what they can employ with tole- 
 rable profit in the proper bufinefs of their own 
 country : but they do not demonflrate that that 
 bufinefs has decreafed. As the capital of a 
 
 private
 
 14© OF THE PROFITS OF STOCK. 
 
 BOOK private man, though acquired by a particular 
 trade, may increafe beyond what he can employ 
 in it, and yet that trade continue to increafe too; 
 fo may likewife the capital of a great nation. 
 
 In our North American and Weft Indian co- 
 lonies, not only the wages of labour, but the 
 intereft of money, and confequently the profits 
 of flock, are higher than in England. In the 
 different colonies both the legal and the market 
 rate of intereft run from fix to eight per cent. 
 High wages of labour and high profits of flock, 
 however, are things, perhaps, which fcarce ever 
 go together, except in the peculiar circumflances 
 of new colonies. A new colony mull always 
 for fome time be more under-flocked in propor- 
 tion to the extent of its territory, and more un- 
 der-peopled in proportion to the extent of its 
 flock, than the greater part of other countries. 
 They have more land than they have flock to 
 cultivate. What they have, therefore, is ap- 
 plied to the cultivation only of what is mofl fer- 
 tile and mofl favourably fituated, the land near 
 the fea fhore, and along the banks of navigable 
 rivers. Such land too is frequently purchafed 
 at a price below the value even of its natural 
 produce. Stock employed in the purchafc and 
 improvement of fuch lands mufl yield a very 
 large profit, and confequently afford to pay a very 
 large mterefl. Its rapid accumulation in fo pro- 
 fitable an employment enables the planter to in- 
 creafe the number of his hands fafler than he can 
 find them in a new fettlement. Thofe whom he 
 can find, therefore, are very liberally rewarded. 
 
 3 As
 
 OP THE PROFITS OF STOCK. I4I 
 
 As the colony increafes, the profits of Hock gra- chap. 
 dually diminilh. When the moft fertile and bell IX ; 
 fituated lands have been all occupied, lefs profit 
 can be made by the cultivation of what is infe- 
 rior both in foil and fituation, and lefs interefl 
 can be afforded for the flock which is fo employ- 
 ed. In the greater part of our colonies, accord- 
 ingly, both the legal and the market rate of in- 
 terefl have been confiderably reduced during the 
 courfe of the prefent century. As riches, im- 
 provement, and population have increafed, in- 
 terefl has declined. The wages of labour do not 
 fink with the profits of flock. The demand for 
 labour increafes with the increafe of flock what- 
 ever be its profits ; and after thefe are dimi- 
 nifhed, flock may not only continue to increafe, 
 but to increafe much fafter than before. It is 
 with induflrious nations who are advancing in 
 the acquifition of riches, as with induflrious 
 individuals. A great flock, though with fmall 
 profits, generally increafes fafler than a fmall 
 flock with great profits. Money, fays the pro- 
 verb, makes money. When you have got a 
 little, it is often eafy to get more. The great 
 difficulty is to get that little. The connection 
 between the increafe of flock and that of in- 
 duflry, or of the demand for ufeful labour, has 
 partly been explained already, but will be ex- 
 plained more fully hereafter in treating of the 
 accumulation of flock. 
 
 The acquifition of new territory, or of new 
 branches of trade, may fometimes raife the pro- 
 fits of flock, and with them the interefl of money, 
 
 even
 
 142 OF THE PROFITS OF STOCK. 
 
 BOOK even in a country whicli is faft advancing in the 
 
 L , acquifition of riches. The flock of the country 
 
 not being fufficient for the whole acceflion of 
 bufinefs, which fuch acquifitions prefent to the 
 different people among whom it is divided, is 
 applied to thofe particular branches only which 
 afford the greatefl profit. Part of what had be- 
 fore been employed in other trades, is neceffarily 
 withdrawn from them, and turned into fome of 
 the new and more profitable ones. In all thofe 
 old trades, therefore, the competition comes to 
 be lefs than before. The market comes to be 
 lefs fully lupplied with many different forts of 
 goods. Their price neceflarily riles more or 
 lefs, and yields a greater profit to thofe who deal 
 in them, who can, therefore, afford to borrow at 
 a higher interefl. For fome time after the con- 
 dition of the late war, not only private people 
 of the belt credit, but fome of the greatefl com- 
 panies in London, commonly borrowed at five 
 per cent, who before that had not been nfed to 
 pay more than four, and four and a half per cent. 
 The great acceflion botli of territory and trade, 
 by our acquifitions in North America and the 
 Weft Indies, will fufficiently account for this, 
 without fuppofingany diminution in the capital 
 flock of the fociety. 80 great an acceflion of 
 new bufinefs to be carried on by the old flock, 
 inu ft ncceffarily 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 fhall here- 
 after have occafion to mention the reaibns which 
 
 difpofe
 
 OF THE PROFITS OF STOCK^ 1 43 
 
 difpofe me to believe that the capital flock of chap. 
 Great Britain was not diminifhed even by the 
 enormous expence of the late war. 
 
 The diminution of the capital flock of the fo- 
 ciety, or of the funds deflined for the main-, 
 tenance of induflry, however, as it lowers the 
 wages of labour, fo it raifes the profits of flock, 
 and confequently the intereft of money. By the 
 wages of labour being lowered, the owners of 
 what flock remains in the fociety can bring 
 their goods at lefs expence to market than 
 before, and lefs flock being employed in fupply- 
 ing the market than before, they can fell them 
 dearer. Their goods cofl them lefs, and they 
 get more for them. Their profits, therefore, 
 being augmented at both ends, can well afford a 
 large intereft. The great fortunes fo fuddenly 
 and fo eafily acquired in Bengal and the other 
 Britifh fettlements in the Eafl Indies, may fatisfy 
 us that, as the wages of labour are very low, fo 
 the profits of flock are very high in thofe ruined 
 countries. The intereft of money is proportion- 
 ably fo. In Bengal, money is frequently lent to 
 the farmers at forty, fifty, and fixty per cent, and 
 the fucceeding crop is mortgaged for the pay- 
 ment. As the profits which can afford fuch an 
 intereft mufl eat up almoft the whole rent of the 
 landlord, fo fuch enormous ufury mufl in its 
 turn eat up the greater part of thofe profits. 
 Before the fall of the Roman republic, a ufury 
 of the fame kind feems to have been common in 
 the provinces, under the ruinous administration 
 of their proconfuls. The virtuous Brutus lent 
 
 money
 
 144 OF THE PROFITS OP STOCK. 
 
 BOOK money in Cyprus at eight-and-forty per cent, as 
 we learn from the letters of Cicero. 
 
 In a country which had acquired that full 
 complement of riches which the nature of its foil 
 and climate, and its fituation with refpeit to 
 other countries, allowed it to acquire ; which 
 could, therefore, advance no further, and which 
 was not going backwards, both the wages of la- 
 bour and the profits of flock would probably be 
 very low. In a country fully peopled in propor- 
 tion to what either its territory could maintain 
 or its flock employ, the competition for employ- 
 ment would necefTarily be fo great as to reduce 
 the wages of labour to what was barely fufficient 
 to keep up the number of labourers, and, the 
 country being already fully peopled, that num- 
 ber could never be augmented. In a country 
 fully flocked in proportion to all the bufinefs it 
 had to tranfact, as great a quantity of flock 
 would be employed in every particular branch 
 as the nature and extent of the trade would admit. 
 The competition, therefore, would every-where 
 be as great, and confequently the ordinary profit 
 as low as poffible. 
 
 But perhaps no country has ever yet arrived 
 at this degree of opulence. China feems to have 
 been long ftationary, and had probably long ago 
 acquired that full complement of riches which 
 is confiflent with the nature of its laws and infli- 
 tutions. But this complement may be much 
 inferior to what, with other laws and inflitu- 
 tions, the nature of its foil, climate, and fitua- 
 tion might admit of. A country which neglects 
 
 or
 
 OF THE PROFITS OF STOCK. 1 45 
 
 or defpifes foreign commerce, and which admit s chap. 
 the veffels of foreign nations into one or two of 
 its ports only, cannot tranlact the fame quantity ' 
 of bufinefs which it might do with different laws 
 and institutions. 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 manda- 
 rines, the quantity of flock employed in all the 
 different branches of bufinefs tranfaeled w T ithin 
 it, can never be equal to what the nature and 
 extent of that bufinefs might admit. In every 
 different branch, the opprellion of the poor mull 
 eflablifh the monopoly of the rich, who, by en- 
 grofling the whole trade to themfelves, will be 
 able to make very large profits. Twelve per 
 cent, accordingly is faid to be the common in- 
 terefl of money in China, and the ordinary pro- 
 fits of flock mufl be fufficient to afford this large 
 interefl. 
 
 A defect in the law may fometimes raife the 
 rate of interefl confiderably above what the con- 
 dition of the country, as to wealth or poverty, 
 would require. When the law does not enforce 
 the performance of contracts, it puts all bor- 
 rowers nearly upon the fame footing with bank- 
 rupts or people of doubtful credit in better regu- 
 lated countries. The uncertainty of recovering 
 his money makes the lender exact the fame ufu- 
 rious interefl which is ufually required from 
 bankrupts. Among the barbarous nations who 
 vol. ii. i- over-
 
 146 OF THE mOFITS OF STOCK. 
 
 book over-run the weltern provinces of the Roman 
 ^f* g empire, the performance of contracts was left 
 for many ages to the faith of the contracting 
 parties. The courts of juftice of their kings 
 feldom intermeddled in it. The high rate of 
 interefl which took place in thole ancient times 
 may perhaps be partly accounted for from this 
 caufe. 
 
 When the law prohibits intereit altogether, 
 it does not prevent it. Many people mud bor- 
 row> and nobody will lend without fuch a con- 
 fideration for the ufe of their money as is fuit- 
 able, 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 interefl among all 
 Mahometan nations is accounted for by Mr. 
 Montefquieu, not from their poverty, but partly 
 from this, and partly from the difficulty of re- 
 covering the money. 
 
 The lowefl ordinary rate of profit mufl always 
 be fomething more than what is fufficient to 
 compenfate the occafional lofies to which every 
 employment of flock is expofed. It is this fur- 
 plus only which is neat or clear profit. What is 
 called grofs profit comprehends frequently, not 
 only this furplus, but what is retained for com- 
 penfating fuch extraordinary lofles. The interefl 
 which the borrower can afford to pay is in pro- 
 portion to the clear profit only. 
 
 The lowefl ordinary rate of interefl mufl, in 
 the fame manner, be fomething more than fuffu 
 cient to compenfate the occafional lofles to which 
 lending, even with tolerable prudence, is ex- 
 pofed.
 
 OF THE PROFITS OF STOCK. 147 
 
 pofed. Were it not more, charity or friendfhip chap. 
 could be the only motives for lending. 
 
 In a country which had acquired its full com- 
 plement of riches, where in every particular 
 branch Of bufinefs there was the greater! quantity 
 of flock that could be employed in it, as the 
 ordinary rate of clear profit would be very fmall, 
 fo the ufual market rate of intereft which could 
 be afforded out of it, would be fo low as to ren- 
 der it impoffible for any but the very wealthier! 
 people to live upon the intereft of their money. 
 All people of fmall or middling fortunes would 
 be obliged to fuperintend therrifelves the em- 
 ployment of their own flocks. It would be 
 neceffary that almoft every man fhould be a man 
 of bufinefs, or engage in fome fort of trade. 
 The province of Holland feems to be approach- 
 ing near to this flate. It is there unfafhionable 
 not to be a man of bufinefs. Neceffity makes 
 it ufual for almoft every man to be fo, and 
 cuftom every where regulates fafhion. As it is 
 ridiculous not to drefs, fo is it, in fome meafure, 
 not to be employed, like other people. As a man 
 of a civil profeffion feems awkward in a camp 
 or a garrifbn, and is even in fome danger of 
 being defpifed there, fo does an idle man among 
 men of bufinefs. 
 
 The higheft ordinary rate of profit may be 
 fuch as, in the price of the greater part of com- 
 modities, eats up the whole of what Ihouldgoto 
 the rent of the land, and leaves only what is fuf- 
 ficient to pay the labour of preparing and bring- 
 
 i. 2 ing
 
 I48 OP THE PROFITS OP STOCK. 
 
 book ing thcin to market, according to the loweft rate 
 at which labour can any- where be paid, the bare 
 fubfiilence of the labourer. The workman mull 
 always have been fed in fome way or other while 
 he was about the work ; but the landlord may 
 not always have been paid. The profits of the 
 trade which the fervants of the Ealt India Com- 
 pany carry on in Bengal may not perhaps be very 
 far from this rate. 
 
 The proportion which the ufual market rate 
 of interefl ought to bear to the ordinary rate of 
 clear profit, neceffarily varies as profit rifes or 
 falls. Double interefl is in Great Britain 
 reckoned, what the merchants call, a good, mo- 
 derate, reafonable profit ; terms which I ap- 
 prehend mean no more than a common and 
 ufual profit. In a country where the ordinary 
 rate of clear profit is eight or ten per cent, it 
 may be reafonable that one half of it ihould go 
 to interefl, wherever bufinefs is carried on with 
 borrowed money. The flock is at the rifk of 
 the borrower, who, as it were, infures it to the 
 lender ; and four or five per cent, may, in the 
 greater part of trades, be both a fufficient pro- 
 fit upon the rifk of this infurance, and a fuf- 
 ficient recompencc for the trouble of employing 
 the flock. But the proportion between interefl 
 and clear profit might not be the fame in 
 countries where the ordinary rate of profit was 
 either a good deal lower, or a good deal higher. 
 }{ it were a good deal lower, one half of it 
 perhaps could not be afforded for interefl ; and 
 
 more
 
 OF THE PROFITS OF STOCK. I49 
 
 more might be afforded if it were a good deal chap. 
 higher. IX# 
 
 In countries which are faft advancing to 
 riches, the low rate of profit may, in the price 
 of many commodities, compenfate the high 
 wages of labour, and enable thofe countries to 
 fell as cheap as their lefs thriving neighbours, 
 among whom the wages of labour may be lower. 
 
 In reality high profits tend much more to raife 
 the price of work than high wages. If in the 
 linen manufacture, for example, the wages of 
 the different working people, the flax-dreflers, 
 the fpinncrs, the weavers, &c. fhould, all of 
 them, be advanced two pence a day ; it would be 
 neceffary to heighten the price of apiece of linen 
 only by a number of two pences equal to the 
 number of people that had been employed about 
 it, multiplied by the number of days during 
 which they had been fo employed. That part of 
 the price of the commodity which refolved itfelf 
 into wages would, through all the different 
 flages of the manufacture, rife only in arith- 
 metical proportion to this rife of wages. But if 
 the profits of all the different employers of thole 
 working people fhould be railed five per cent. 
 that part of the price of the commodity which 
 refolved itfelf into profit, would, through all 
 the different flages of the manufacture, rife in 
 geometrical proportion to this rife of profit. The 
 employer of the flax-dreffers would in felling his 
 flax require an additional five per cent, upon the 
 whole value of the materials and waives which 
 he advanced to his workmen. The employer of 
 l 3 the
 
 150 OF THE PROFITS OF STOCK. 
 
 BOOK the fpinners would require an additional five per 
 c ^_ t cent, both upon the advanced price of the flax 
 and upon the wages of the fpinners. And the 
 employer of the weavers would require a like 
 five per cent, both upon the advanced price of 
 the linen yarn and upon the wages of the weavers. 
 In raifing the price of commodities the rife of 
 wages operates in the fame manner as fimple 
 interefl does in the accumulation of debt. The 
 rife of profit operates like compound interefl. 
 Our merchants and mafter-manufacturers com- 
 plain much of the bad effects of high wages in 
 raifing the price, and thereby leffening the fale 
 of their goods both at home and abroad. They 
 fay nothing concerning the bad effects of high 
 profits. They are filent with regard to the 
 pernicious effects of their own gains. They 
 complain only of thofe of other people. 
 
 CHAP.
 
 OF WAGES AND PROFIT, &C. 15 1 
 
 CHAP. X. 
 
 Of Wages and Profit in the different Employments 
 of Labour and Stock, 
 
 T 
 
 IE whole of the advantages and difad- CHAP. 
 
 vantages of the different employments of 
 labour and Hock mull, in the fame neighbour- 
 hood, be either perfectly equal or continually 
 tending to equality. If in the fame neighbour- 
 hood, there was any employment evidently 
 either more or lefs advantageous than the reft, 
 fo many people would crowd into it in the one 
 cafe, and fo many would defert it in the other, 
 that its advantages would foon return to the 
 level of other employments. This at leaft would 
 be the cafe in a fociety where things were left to 
 follow their natural courfe, where there was 
 perfect liberty, and where every man was per- 
 fectly free both to chufe what occupation he 
 thought proper, and to change it as often as 
 he thought proper. £very man's interefl would 
 prompt him to feek the advantageous, and to 
 fhun the difadvantageous employment. 
 
 Pecuniary wages and profit, indeed, are every- 
 where in Europe extremely different according 
 to the different employments of labour and 
 flock. But this difference arifes partly from 
 certain circumflances in the employments them- 
 felves, which, either really, or at leaft in the 
 imaginations of men, make up for a fmall pecu- 
 l 4 niary 
 
 x.
 
 I52 OF WAGES AND TROFIT IN THE 
 
 BOOK niary gain in fome, and counter-balance a great 
 L one in others; and partly from the policy of 
 Europe, which no-where leaves things at perfect 
 liberty. 
 
 The particular confideration of thofe circum- 
 ftances and of that policy will divide this chapter 
 into two parts. 
 
 PART I. 
 
 Inequalities arijing from the Nature of the Employments 
 them/elves. 
 
 THE five following are the principal circum- 
 ilances which, fo far as I have been able to 
 obferve, make up for a fmall pecuniary gain in 
 fome employments, and counter-balance a great 
 one in others: firft, the agreeablenefs or dif- 
 agreeablenefs of the employments themfelves ; 
 fecondly, the eafinefs and cheapnefs, or the dif- 
 ficulty and expence of learning them ; thirdly, 
 the conllancy or inconflancy of employment in 
 them ; fourthly, the fmall or great truft which 
 muft be repofed in thofe who exercife them ; 
 and fifthly, the probability or improbability of 
 fuccefs in them. 
 
 Firft, The wages of labour vary with the 
 eafe or hardfliip, the cleanlinefs or dirtinefs, 
 the honourablenefs or difhonourablenefs of the 
 employment. Thus in mod places, take the 
 year round, a journeyman taylor earns lefs than 
 a journeyman weaver. His work is much eafier. 
 A journeyman weaver earns lefs than a journey- 
 man fmith. His work is not always ealier, but 
 
 it
 
 EMPLOYMENTS OF LABOUR AND STOCK. 
 
 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 eight. 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 profeffions. In 
 point of pecuniary gain, all things confidered, 
 they are generally under-recompenfed, as I ihall 
 endeavour to fhow by and by. Difgrace has the 
 contrary effecT;. The trade of a butcher is a 
 brutal and an odious bufinefs ; but it is in moil 
 places more profitable than the greater part of 
 common trades. The mofl deteftable of all 
 employments, that of public executioner, is, in 
 proportion to the quantity of work done, better 
 paid than any common trade whatever. 
 
 Hunting and fifhing, the mofl important 
 employments of mankind in the rude flate of 
 fociety, become in its advanced flate their mofl 
 agreeable amufements, and they purfue for 
 pleafure what they once followed from neceffity. 
 In the advanced flate of fociety, therefore, they 
 are all very poor people who follow as a trade, 
 what other people purfue as a paflime. Fifhermen 
 have beenfo fince the time of* Theocritus. A 
 poacher is every- where a very poor man in Great 
 Britain. In countries where the rigour of the 
 law furfers no poachers, the licenfed hunter is 
 not in a much better condition. The natural 
 tafle for thofe employments makes more people 
 follow them than can live comfortably by them, 
 
 * See Idyllium xxi. 
 
 3 and 
 
 *S3
 
 154 °F WAGES AND TROFIT IN THE 
 
 book and the produce of their labour, in proportion 
 to its quantity, comes always too cheap to 
 market to afford any thing but the mod fcanty 
 fubfiflence to the labourers. 
 
 Difagreeablenefs and difgrace affect the profits 
 of Hock in the fame manner as the wages of 
 labour. The keeper of an inn or tavern, who 
 is never mafler of his own houfe, and who is 
 expofed to the brutality of every drunkard, 
 exercifes neither a very agreeable nor a very 
 creditable bufinefs. But there is fcarce any 
 common trade in which a fmall (lock yields fo 
 great a profit. 
 
 Secondly, The w r ages of labour vary with the 
 eafinefs and cheapnefs, or the difficulty and 
 expence of learning the bulinefs. 
 
 When any expenfive machine is erected, the 
 extraordinary work to be performed by it before 
 it is worn out, it mull be expected, will replace 
 the capital laid out upon it, with at leaft the 
 ordinary profits. A man educated at the expence 
 of much labour and time to any of thofe em- 
 ployments which require extraordinary dexterity 
 and (kill, may be compared to one of thofe 
 expenfive machines. The work which he learns 
 to perform, it mufl be expected, over and above 
 the ufual wages of common labour, will replace 
 to him the whole expence of his education, with 
 at leaft the ordinary profits of an equally valuable 
 capital. It muft do this too in a reafonable time, 
 regard being had to the very uncertain duration 
 of human life, in the fame manner as to the 
 more certain duration of the machine. 
 
 The
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 55 
 
 The difference between the wages of Ikilled c 
 labour and thofe of common labour, is founded 
 upon this principle. 
 
 The policy of Europe confiders the labour of 
 all mechanics, artificers, and manufacturers, as 
 f 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 ; but in the greater part it is quite 
 otherwife, as I mall endeavour to fhew by and 
 by. The laws and cufloms of Europe, there- 
 fore, in order to qualify any perfon for exercil- 
 ing the one fpecies of labour, impofe the necef- 
 fity of an apprenticefhip, though with differ- 
 ent 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 the apprentice belongs to 
 his mafier. In the mean time he mufl, in many 
 cafes, be maintained by his parents or relations, 
 and in almoft all cafes mufl be cloathed by 
 them. Some money too is commonly given to 
 the mafier for teaching him his trade. They who 
 cannot give money, give time, or become bound 
 for more than the ufual number of years ; a con- 
 iideration which, though it is not always advan- 
 tageous to the mafier, on account of the ufual 
 idlenefs of apprentices, is always dif advantageous 
 to the apprentice. In country labour, on the 
 contrary, the labourer, while he is employed 
 about the eafier, learns the more difficult parts of 
 his bufinefs, and his own labour maintains him 
 
 through
 
 *S& OF WAGES AND PROFIT IN' TUB 
 
 book through all the different ftages of his employ, 
 ment. It is reafonable, therefore, that in Eu- 
 rope the wages of mechanics, artificers, and 
 manufacturers, mould be fomewhat higher than 
 thofe of common labourers. They are fo ac- 
 cordingly, and their fuperior gains make them 
 in mod places be confidered as a fuperior rank 
 of people. This fuperiority, however, is gene- 
 rally very imall ; the daily or weekly earnings of 
 journeymen in the more common forts of manu- 
 factures, fuch as thofe of plain linen and woollen 
 cloth, computed at an average, are, in mofl 
 places, very little more than the day wages of 
 common labourers. Their employment, indeed, 
 is more fleady and uniform, and the fuperiority 
 of their earnings, taking the whole year toge- 
 ther, may be fomewhat greater. It feems evi- 
 dently, however, to be no greater than what is 
 fufficient to compenfate the fuperior expence of 
 their education. 
 
 Education in the ingenious arts and in the 
 liberal profeflions, is flill more tedious and ex- 
 penfive. The pecuniary recompence, therefore, 
 of painters and fculptors, of lawyers and phvfi- 
 cians, ought to be much more liberal : and it is 
 fo accordingly. 
 
 The profits of flock feem to be very little 
 affected by the eafinefs or difficulty of learning 
 the trade in which it is employed. All the dif- 
 ferent ways in which flock is commonly em- 
 ployed in great towns feem, in reality, to be 
 ahnofl equally eafv and equally difficult to learn. 
 One branch either of foreign or domeflic trade, 
 
 cannot
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 57 
 
 cannot well be a much more intricate bulinefs c H A P. 
 than another. . 
 
 Thirdly, The wages of labour in different 
 occupations vary with the conftancy or incon- 
 flancy of employment. 
 
 Employment is much more conflant in fome 
 trades than in others. In the greater part of ma- 
 nufactures, a journeyman may be pretty fure of 
 employment almofl every day in the year that he 
 is able to work. A mafon or bricklayer, on 
 the contrary, can work neither in hard frofl nor 
 in foul weather, and his employment at all other 
 times depends upon the occafional calls of his 
 cuflomers. He is liable, in confequence, to be 
 frequently without any. What he earns, there- 
 fore, while he is employed, muft not only main- 
 tain him while he is idle, but make him fome 
 compenfation for thofe anxious and defponding 
 moments which the thought of fo precarious a 
 iituation muft fometimes occafion. Where the 
 computed earnings of the greater part of manu- 
 facturers, accordingly, are nearly upon a level 
 with the day wages of common labourers, thofe 
 of mafons and bricklayers are generally from 
 one half more to double thofe wages. Where 
 common labourers earn four and five millings a 
 week, mafons and bricklayers frequently earn 
 feven 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 hit- 
 ter commonly earn fifteen and eighteen. No 
 fpecies of fkilled labour, however, feems more 
 eafv to learn than that of mafons and bricklayers. 
 
 Chairmen
 
 l 5* OF WAGES AND PROFIT IN THE 
 
 book Chairmen in London, during the fumraer feafon, 
 are (aid fometimes to be employed as brick- 
 layers. The high wages of thofe workmen, 
 therefore, are not fo much the recompence of 
 their (kill, as the compenfation for the incon- 
 ftancy of their employment, i 
 
 A houfe carpenter feems to exercife rather a 
 nicer and more ingenious trade than a mafon. 
 In mod places, however, for it is not univerfally 
 lb, his day-wages are fomewhat lower. His em- 
 ployment, though it depends much, does not 
 depend ib entirely upon the occafional calls of his 
 cuftomers ; and it is not liable to be interrupted 
 by the weather. 
 
 When the trades which generally afford con- 
 flant employment, happen in a particular place 
 not to do fo, the wages of the workmen always 
 rife a good deal above their ordinary proportion 
 to thofe of common labour. In London almofl 
 all journeymen artificers arc liable to be called 
 upon and difmifTed by their mailers from day to 
 day, and from week to week, in the fame man-* 
 ner as day-labourers in other places. The lowefl 
 order of artificers, journeymen taylors, accord- 
 ingly, earn there half a crown a day, though 
 eighteen pence may be reckoned the wages of 
 common labour. In fmall towns and country 
 villages, the wages of journeymen taylors fre- 
 quently fcarcc equal thofe of common labour ; 
 but in London they are often many weeks 
 without employment, particularly during the 
 fu miner. 
 
 When
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 59 
 
 When the inconflancy of employment is com- c IJ A P. 
 bined with the hardihip, difagreeablenefs, and x - 
 dirtinefs of the work, it fometimes raifes the 
 wages of the .mofl common labour above thofe 
 of the mofl fkilful artificers. A collier working 
 by the piece is fuppofed, at Newcaflle, to earn 
 commonly about double, and in many parts of 
 Scotland about three times the wages of com- 
 mon labour. His high wages arife altogether 
 from the hardfhip, difagreeablenefs, and dirti- 
 nefs of his work. His employment may, upon 
 mofl occafions, be as conflant as he pleafes. 
 The coal-heavers in London exercife a trade 
 which in hardihip, dirtineis, and difagreeable- 
 nefs, almofl equals that of colliers ; and from the 
 unavoidable irregularity in the arrivals of coal- 
 lhips, the employment of the greater part of 
 them is neceffarily very inconflant. If colliers, 
 therefore, commonly earn double and triple the 
 wages of common labour, it ought not to feem 
 unreafonable that coal-heavers fhould 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 
 millings a day. Six millings are about four 
 times the wages of common labour in London, 
 and in every particular trade, the lowefl com- 
 mon earnings may always be confidered as thofe 
 of the far greater number. How extravagant 
 foever thofe earnings may appear, if they were 
 more than fufficient to compenfate all the dif- 
 agreeable circumflances of the bufineis, there 
 1 would
 
 l&O OF WAGES AND TltOFIT IN THE 
 
 BOOK would fbon be lb great a number of competitors 
 h _ . as, in a trade which has no exclufive privilege, 
 would quickly reduce them to a lower rate. 
 
 The conflancy or inconflancy of employment 
 cannot affect the ordinary profits of flock in any 
 particular trade. Whether the flock is or is not 
 conflantly employed depends, not upon the 
 trade, but the trader. 
 
 Fourthly, The wages of labour vary accord- 
 ing to the fmall or great trufl which mud be re- 
 pofed in the workmen. 
 
 The wages of goldfmiths and jewellers are 
 every-where fuperior to thofe of many other 
 workmen, not only of equal, but of much fupe- 
 rior ingenuity ; on account of the precious ma- 
 terials with which they are intruded. 
 
 We trull our health to the phyfician ; our for- 
 tune and fometimes our life and reputation to the 
 lawyer and attorney. Such confidence could not 
 fafely be repofed in people of a very mean or 
 low condition. Their reward muft be fuch, 
 therefore, as may give them that rank in the 
 fociety which fo important a trull requires. The 
 long time and the great expence which mufl be 
 laid out in their education, when combined with 
 this circumftance, necefTarily enhance flill fur- 
 ther the price of their labour. 
 
 When a perfon employs only his own flock in 
 trade, there is no trufl ; and the credit which he 
 may get from other people, depends, not upon 
 the nature of his trade, but upon their opinion 
 of his fortune, probity, and prudence. The dif- 
 ferent
 
 EMPLOYMENTS OF LABOUR AND STOCK. l6l 
 
 ferent rates of profit, therefore, in the different CHAP, 
 branches of trade, cannot arife from the different 
 degrees of truft repofed in the traders. 
 
 Fifthly, The wages of labour in different em- 
 ployments vary according to the probability or 
 improbability of fuccefs in them. 
 
 The probability that any particular perfon fhall 
 ever be qualified for the employment to which 
 he is educated, is very different in different oc- 
 cupations. In the greater part of mechanic 
 trades, fuccefs is almoft certain; but very uncer- 
 tain in the liberal profeffions. Put your fon ap-' 
 prentice to a fhoemaker, there is little doubt of 
 his learning to make a pair of ihoes : But fend 
 him to Itudy the law, it is at leaft twenty to one 
 if ever he makes fuch a proficiency as will enable 
 him to live by the bufinefs. In a perfectly fair 
 lottery, thofe who draw the prizes ought to gain 
 all that is loll by thofe who draw the blanks. 
 In a profeffion where twenty fail for one that fuc- 
 ceeds, that one ought to gain all that fhould have 
 been gained by the unfuccefsful twenty. The 
 counfellor at law, who, perhaps, at near forty 
 years of age, begins to make fomething by his 
 profeffion, ought to receive the retribution, not 
 only of his own fo tedious and expenfive educa- 
 tion, but of that of more than twenty others 
 who are never likely to make any thing by it. 
 How extravagant foever the fees of counfellors 
 at law may fometimes appear, their real retribu- 
 tion 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, 
 
 VOL. ii. m bv
 
 I 62 0F WAGES AND PROFIT IN THE 
 
 book all the different workmen in any common trade, 
 fuch as that of flioemakers or weavers, and you 
 will find that the former fum will generally ex- 
 ceed the latter. But make the fame computa- 
 tion with regard to all the counfellors and flu- 
 dents of law, in all the different inns of court, 
 and you will find that their annual gains bear 
 but a very fmall proportion to their annual ex- 
 pence, even 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 profeffions, 
 is, in point of pecuniary gain, evidently under- 
 recompenced. 
 
 Thofe profeffions keep their level, however, 
 with other occupations, and, notwithflanding 
 thefe difcouragements, all the mod generous and 
 liberal fpirits are eager to crowd into them. 
 Two different caufes contribute to recommend 
 them. Firft, the dcfire of the reputation 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 abili- 
 ties, but in his own good fortune. 
 
 To excel in any profeflion, in which but few 
 arrive at mediocrity, is the moft decifive mark of 
 what is called genius or fuperior talents. The 
 public admiration which attends upon fuch dif- 
 tinguifhed abilities, makes always a part of their 
 reward ; a greater or fmaller in proportion as it 
 is higher or lower in degree. It makes a con- 
 fiderable part of that reward in the profeflion of 
 
 phyfic ;
 
 EMPLOYMENTS OF LABOUR AND STOCK. 163 
 
 phyfic j a ftill greater perhaps in that of law ; c H A P. 
 in poetry and philofophy it makes almoft the 
 whole. 
 
 There are fome very agreeable and beautiful 
 talents of which the poffeffion commands a cer- 
 tain fort of admiration ; but of which the exer- 
 cife for the fake of gain is confidered, whether 
 from reafon or prejudice, as a fort of public pro- 
 ftitution. The pecuniary recompence, there- 
 fore, of thofe who exercife them in this manner, 
 muft be fufficient, not only to pay for the time, 
 labour, and expence of acquiring the talents, but 
 for the difcredit which attends the employment 
 of them as the means of fubfiftence. The ex- 
 orbitant rewards of players, opera-fingers, opera- 
 dancers, &c. are founded upon thofe two prin- 
 ciples ; the rarity and beauty of the talents, 
 and the difcredit of employing them in this 
 manner. It feems abfurd at firfl fight that we 
 fhould defpife their perfons, and yet reward their 
 talents with the mofl profufe liberality. While 
 we do the one^ however, we muft of neceflity do 
 the other. Should the public opinion or pre- 
 judice ever alter with regard to fuch occupa- 
 tions, their pecuniary recompence would quickly 
 diminifh. More people would apply to them, 
 and the competition would quickly reduce the 
 price of their labour. Such talents, though far 
 from being common, are by no means fo rare as 
 is imagined. Many people poffefs them in great 
 perfection, who difdain to make this ufe of 
 them ; and many more are capable of acquiring 
 m 2 them,
 
 164 OF WAGES AND PROFIT IN THE 
 
 BOOK them, if any thing could be made honourably by 
 L . them. 
 
 The over-weening conceit which the greater 
 part of men have of their own abilities, is an 
 ancient evil remarked by the philofophers and 
 moralifts of all ages. Their abfurd prefumption 
 in their own good fortune, has been lefs taken 
 notice of. It is, however, if pofiible, Hill more 
 univerfal. There is no man living who, when 
 in tolerable health and fpirits, has not fome (hare 
 of it. The chance of gain is by every man more 
 or lefs over-valued, and the chance of lofs is by 
 moll men undervalued, and by fcarce any man, 
 who is in tolerable health and fpirits, valued 
 more than it is worth. 
 
 That the chance of gain is naturally over- 
 valued, we may learn from the univerfal fuccefs 
 of lotteries. The world neither ever law, nor 
 ever will fee, a perfectly fair lottery ; or one in 
 which the whole gain compenfated the whole 
 lofs ; becaufe the undertaker could make nothing 
 by it. In the Hate lotteries the tickets are really 
 not worth the price which is paid by the original 
 fubfcribers, and yet commonly fell in the market 
 for twenty, thirty, and fometimes forty per cent, 
 advance. The vain hope of gaining fome of the 
 great prizes is the fole caufe of this demand. 
 The fobereft people fcarce look upon it as a folly 
 to pay a fmall fum for the chance of gaining ten 
 or twenty thoufand pounds ; though they know 
 that even that fmall fum is perhaps twenty or 
 thirty per cent, more than the chance is worth. 
 In a lottery in which no prize exceeded twenty 
 
 pounds,
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 65 
 
 pounds, though in other refpeets it approached CHAP, 
 much nearer to a perfectly fair one than the 
 common Hate lotteries, there would not be the 
 fame demand for tickets. In order to have a 
 better chance for fome of the great prizes, fome 
 people purchafe feveral tickets, and others, fmall 
 mares in a Hill greater number. There is not y 
 however, a more certain proportion in mathe- 
 matics, than that the more tickets you adventure 
 upon, the more likely you are to be a lofer. Ad- 
 venture upon all the tickets in the lottery, and 
 you lofe for certain ; and the greater the number 
 of your tickets the nearer you approach to this 
 certainty. 
 
 That the chance of lofs is frequently under- 
 valued, and fcarce ever valued more than it is 
 worth, we may learn from the very moderate 
 profit of infurers. In order to make infurance, 
 either from fire or fea-rifk, a trade at all, the 
 common premium mull be fufficient to compen- 
 fate the common loffes, to pay the expence of 
 management, and to afford fucli a profit as 
 might have been drawn from an equal capital 
 employed in any common trade. The perfon 
 who pays no more than this, evidently pays no 
 more than the real value of the rifk, or the lowefl 
 price at which he can reafonably expect to 
 infure it. But though many people have made 
 a little money by infurance, very few have made 
 a great fortune ; and from this confideration 
 alone, it feems evident enough, that the ordinary 
 balance of profit and lofs is not more advanta- 
 geous in this, than in other common trades by 
 
 m 3 which
 
 1 66 OF WAGES AND PROFIT IN THE 
 
 book which fo many people make fortunes. Moderate, 
 however, as the premium of infurance commonly 
 is, many people defpife the rilk too much to 
 care to pay it. Taking the whole kingdom at 
 an average, nineteen houfes in twenty, or rather, 
 perhaps, ninety-nine in a hundred, are not in- 
 fured from fire. Sea riik is more alarming to 
 the greater part of people, and the proportion 
 of fhips infured to thofe not infured is much 
 greater. Many fail, however, at all feafons, and 
 even in time of war, without any infurance. 
 This may fometimes perhaps be done without 
 any imprudence. When a great company, or 
 even a great merchant, has twenty or thirty fhips 
 at fea, they may, as it were, infure one another. 
 The premium faved upon them all, may more 
 than compenfate fuch lofles as they are likely to 
 meet with in the common courfe of chances. 
 The neglect of infurance upon (hipping, how-, 
 ever, in the fame manner as upon houfes, is, in 
 moll cafes, the effe6l of no fuch nice calculation, 
 but of mere thoughtlefs rafhnefs and prefump- 
 tuous contempt of the rifk. 
 
 The contempt of rifk and the prefumptuous 
 hope of fuccefs, are in no period of life more 
 active than at the age at which young people 
 chufe their profeffions. How little the fear of 
 misfortune is then capable of balancing the hope 
 of good luck, appears itill more evidently in the 
 readinefs of the common people to enlift as 
 foldiers, or to go to fea, than in the eagernefs of 
 thofe of better fafhion to enter into what are 
 called the liberal profcfTions. 
 
 What
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 67 
 
 What a common foldier may lofe is obvious CHAP, 
 enough. Without regarding the danger, how- , ^* , 
 ever, young volunteers never enlifl fo readily as 
 at the beginning of a new war ; and though they 
 have fcarce any chance of preferment, they figure 
 to themfelves, in their youthful fancies, a thou- 
 fand occasions of acquiring honour and diflinc- 
 tion which never occur. Thefe romantic hopes 
 make the whole price of their blood. Their pay 
 is lefs than that of common labourers, and in 
 actual fervice their fatigues are much greater. 
 
 The lottery of the fea is not altogether fo dif- 
 advantageous as that of the army. The fon of 
 a creditable labourer or artificer may frequently 
 go to fea with his father's confent ; but if he 
 enlifts as a foldier it is always without it. Other 
 people fee fome chance of his making fomething 
 by the one trade ; nobody but himfelf fees any of 
 his making any thing by the other. The great 
 admiral is lefs the object of public admiration 
 than the great general, and the highefl fuccefs 
 in the fea fervice promifes a lefs brilliant for- 
 tune and reputation than equal fuccefs in the 
 land. The fame difference runs through all the 
 inferior degrees of preferment in both. By the 
 rules of precedency a captain in the navy ranks 
 with a colonel in the army : but he does not 
 rank with him in the common eflimation. As 
 the great prizes in the lottery are lefs, the 
 fmaller ones mufl be more numerous. Common 
 failors, therefore, more frequently get fome for- 
 tune and preferment than common foldiers; and 
 the hope of thofe prizes is what principally re- 
 m 4 commends
 
 1 68 
 
 OF WAGES AND PROFIT IN THE 
 
 book commends the trade. Though their fkill and 
 m ^ mJ dexterity are much fuperior to that of almoft 
 any artificers, and though their whole life is one 
 continual fcene of hardfhip and danger, yet for 
 all this dexterity and (kill, for all thofe hardfhips 
 and dangers, while they remain in the condition 
 of common failors, they receive fcarce any other 
 recompence but the pleafure of exercifmg the 
 one and of furmounting the other. Their wages 
 are not greater than thofe of common labourers 
 at the port which regulates the rate of feamen's 
 wages. As they are continually going from 
 port to port, the monthly pay of thofe who fail 
 from all the different ports of Great Britain, is 
 more nearly upon a level that that of any other 
 workmen in thofe different places ; and the rate 
 of the port to and from w r hich the greatefl num- 
 ber fail, that is the port of London, regulates 
 that of all the reft. At London the wages of 
 the greater part of the different claffes of work- 
 men are about double thofe of the fame claffes at 
 Edinburgh. But the. failors who fail from the 
 port of London feldom earn above three or four 
 {hillings a month more than thofe who fail from 
 the port of Leith, and the difference is fre- 
 quently not fo great. In time of peace, and in 
 the merchant fervice, the London price is from 
 a guinea to about feven-and-twenty millings the 
 calendar month. A common labourer in Lon- 
 don, at the rate of nine or ten millings a week, 
 mav earn in the calendar month from forty to 
 five-and-forty fhiilings. The failor, indeed, 
 over and above his pay, is fupplied witli provi- 
 
 fions.
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 69 
 
 lions. Their value, however, may not perhaps chap. 
 always exceed the difference between his pay and 
 that of the common labourer ; and though it 
 fometimes mould, the excefs will not be clear 
 gain to the failor, becaufe he cannot lhare it 
 with his wife and family, whom he rauft main- 
 tain out of his wages at home. 
 
 The dangers and hair-breadth efcapes of a life 
 of adventures, inftead of difheartening young 
 people, feem frequently to recommend a trade 
 to them. A tender mother, among the inferior 
 ranks of people, is often afraid to fend her fon to 
 fchool at a fea-port town, left the fight of the 
 fhips and the converfation and adventures of the 
 failors Ihould entice him to go to fea. The dis- 
 tant profpeel of hazards, from which we can hope 
 to extricate ourfelves by courage and addrefs, is 
 not difagreeable to us, and does not raife the 
 wages of labour in any employment. It is other- 
 wife with thofe in which courage and addrefs 
 can be of no avail. In trades which are known 
 to be very unwholefome, the wages of labour are 
 always remarkably high. Unwholefomenefs is 
 a fpecies of difagreeablenefs, and its effects upon 
 the wages of labour are to be ranked under that 
 general head. 
 
 In all the different employments of flock, the 
 ordinary rate of profit varies more or lefs with 
 the certainty or uncertainty of the returns. 
 Thefe are in general lefs uncertain in the inland 
 than in the foreign trade, and in fome branches 
 of foreign trade than in others ; in the trade to 
 North America, for example, than in that to 
 1 Jamaica.
 
 170 OF WAGES AND PROFIT IN THE 
 
 BOOK Jamaica. The ordinary rate of profit always 
 rifes more or lefs with the rifk. It does not, how- 
 ever, feem to rife in proportion to it, or fo as to 
 compenfate it completely. Bankruptcies are 
 mod frequent in the mod hazardous trades. The 
 mod hazardous of all trades, that of a fmuggler, 
 though when the adventure fucceeds it is like- 
 wife the molt profitable, is the infallible road to 
 bankruptcy. The prefumptuous hope of fuccefs 
 feems to ae"l here as upon all other occafions, and 
 to entice fo many adventurers into thofe hazard- 
 ous trades, that Jtheir competition reduces their 
 profit below what is fufficient to compenfate the 
 rifk. To compenfate it completely, the com- 
 mon returns ought, over and above the ordinary 
 profits of flock, not only to make up for all oc- 
 cafional loffes, but to afford a furplus profit to the 
 adventurers of the fame nature with the profit of 
 infurers. But if the common returns were fuf- 
 ficient for all this, bankruptcies would not be 
 more frequent in thefe than in other trades. 
 
 Of the five circumftances, therefore, which 
 vary the wages of labour, two only affect the 
 profits of flock ; the agreeablenefs or difagree- 
 ablenefs of the bufinefs, and the rifk or fecurity 
 with which it is attended. In point of agree- 
 ablenefs or difagreeablenefs, there is little or no 
 difference in the far greater part of the different 
 employments of flock ; but a great deal in thofe 
 of labour ; and the ordinary profit of flock, 
 though it rifes witli the rifk, does not always 
 feem to rife in proportion to it. It fhould fol- 
 low from all this, that, in the fame fociety or 
 
 neigh-
 
 EMPLOYMENTS OF LABOUR AND STOCK. 17I 
 
 neighbourhood, the average and ordinary rates CHAP, 
 of profit in the different employments of flock J^ 
 mould be more nearly upon a level than the 
 pecuniary wages of the different forts of labour. 
 They are fo accordingly. The difference 
 between the earnings of a common labourer 
 and thofe of a well employed lawyer or phyfician, 
 is evidently much greater than that between the 
 ordinary profits in any two different branches of 
 trade. The apparent difference, befides, in 
 the profits of different trades, is generally a 
 deception arifing from our not always diflin- 
 guifhing what ought to be confidered as wages, 
 from what ought to be confidered as profit. 
 
 Apothecaries profit is become a bye-word, 
 denoting fomething uncommonly extravagant. 
 This great apparent profit, however, is fre- 
 quently no more than the reafonable wages of 
 labour. The fkill of an apothecary is a much 
 nicer and more delicate matter than that of any 
 artificer whatever ; and the trufl which is repofed 
 in him is of much greater importance. He is 
 the phyfician of the poor in all cafes, and of the 
 rich when the diflrefs or danger is not very great. 
 His reward, therefore, ought to be fuitable to 
 his fkill and his trufl, and it arifes generally 
 from the price at which he fells his drugs. But 
 the whole drugs which the bell employed apo- 
 thecary, in a large market town, will fell in a 
 year, may not perhaps cofl him above thirty or 
 forty pounds. Though he fhould fell them, 
 therefore, for three or four hundred, or at a 
 thoufand per cent, profit, this may frequently be 
 
 no
 
 172 OF WAGES AND PROFIT IN THE 
 
 B o o K no more than the reafonable wages of his labour 
 charged, in the only way in which he can charge 
 them, upon the price of his drugs. The greater 
 part of the apparent profit is real wages difguifed 
 in the garb of profit. 
 
 In a fmall fea-porlf town, a little grocer will 
 make forty or fifty per cent, upon a flock of a 
 fmgle hundred pounds, while a confiderable 
 wholefale merchant in the fame place will fcarce 
 make eight or ten per cent, upon a flock of ten 
 thoufand. The trade of the grocer may be 
 neceflary for the conveniency of the inhabitants, 
 and the narrownefs of the market may not admit 
 the employment of a larger capital in the bufi- 
 nefs. The man, however, mufl not only live 
 by his trade, but live by it fuitably to the quali- 
 fications which it requires. Befides pofTefTing a 
 little capital, he mufl be able to read, write, and 
 account, and mufl be a tolerable judge too of, 
 perhaps, fifty or fixty different forts of goods, 
 their prices, qualities, and the markets where 
 they are to be had cheapefl. He mufl have all 
 the knowledge, in fhort, that is neceffary for a 
 great merchant, which nothing hinders him 
 from becoming but the want of a fufficient 
 capital. Thirty or forty pounds a year cannot 
 be confidered as too great a recompence for 
 the labour of a perfon fo accompli (lied. Dedu6l 
 this from the feemingly great profits of his 
 capital, and little more will remain, perhaps, 
 than the ordinary profits of flock. The greater 
 part of the apparent profit is, in this cafe too, 
 real wages. 
 
 The
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 73 
 
 The difference between the apparent profit of chap. 
 the retail and that of the wholefale trade, is much 
 lefs in the capital than in finall towns and country 
 villages. Where ten thoufand pounds can be 
 employed in the grocery trade, the wages of 
 the grocer's labour make but a very trifling 
 addition to the real profits of fo great a flock. 
 The apparent profits of the wealthy retailer, 
 therefore, are there more nearly upon a level with 
 thofe of the wholefale merchant. It is upon this 
 account that goods fold by retail are generally 
 as cheap and frequently much cheaper in the 
 capital than in fmall towns and country villages. 
 Grocery goods, for example, are generally much 
 cheaper ; bread and butcher's meat frequently 
 as cheap. It cofls no more to bring grocery 
 goods to the great town than to the country 
 village ; but it cofls a great deal more to bring 
 corn and cattle, as the greater part of them 
 mull be brought from a much greater diflance. 
 The prime cofl of grocery goods, therefore, 
 being the fame in both places, they are cheapefl 
 where the leafl profit is charged upon them. 
 The prime cofl of bread and butcher's meat i§> 
 greater in the great town than in the country 
 village ; and though the profit is lefs, therefore 
 they are not always cheaper there, but often 
 equally cheap. In fuch articles as bread and 
 butcher's meat, the fame caufe, which dimi- 
 niflies apparent profit, increafes prime cofl. The 
 extent of the market, by giving employment to 
 greater flocks, diminifhes apparent profit j but 
 by requiring fupplies from a greater diflance, it 
 
 increafes
 
 174 OF WAGES AND PROFIT IN THE 
 
 BOOK increafes prime coft. This diminution of the 
 . L „ one and increafe of the other feem, in mofl cafes, 
 nearly to counter-balance one another ; which is 
 probably the reafon that, though the prices of 
 corn and cattle are commonly very different in 
 different parts of the kingdom, thofe of bread 
 and butcher's meat are generally very nearly 
 the fame through the greater part of it. 
 
 Though the profits of Hock both in the whole- 
 fale and retail trade are generally lefs in the 
 capital than in fmall towns and country villages, 
 yet great fortunes are frequently acquired 
 from fmall beginnings in the former, and fcarce 
 ever in the latter. In fmall towns and country 
 villages, on account of the narrownefs of the 
 market, trade cannot always be extended as 
 flock extends. In fuch places, therefore, though 
 the rate of a particular perfon's profits may be 
 very high, the fum or amount of them can never 
 be very great, nor confequently that of his annual 
 accumulation. In great towns, on the contrary, 
 trade can be extended as flock increafes, and the 
 credit of a frugal and thriving man increafes much 
 Rafter than his flock. His trade is extended in 
 proportion to the amount of both, and the fum or 
 amount of his profits is in proportion to the extent 
 of his trade, and his annual accumulation in pro- 
 portion to the amount of his profits. It feldom 
 happens, however, that great fortunes are made 
 even in great towns by any one regular, efla- 
 blifhed, and well-known branch of bufinefs, but 
 in confequence of a long life of induftry, 
 frugality, and attention. Sudden fortunes, 
 4 indeed,
 
 EMPLOYMENTS OF LABOUR AND STOCK, 1 75 
 
 indeed, are fometimes made in fuch places by 
 what is called the trade of fpeculation. The fpe- 
 culative merchant exercifes no one regular, 
 eftablifhed, or well-known branch of bufinefs. 
 He is a corn merchant this year, and a wine mer- 
 chant the next, and a fugar, tobacco, or tea 
 merchant the year after. He enters into every 
 trade when he forefees that it is likely to be more 
 than commonly profitable, and he quits it when 
 he forefees that its profits are likely to return to 
 the level of other trades. His profits and loffes, 
 therefore, can bear no regular proportion to thofe 
 of any one eftablifhed and well-known branch of 
 bufinefs. A bold adventurer may fometimes 
 acquire a confiderable fortune by two or three 
 fuccefsful fpeculations ; but is juft as likely to lofe 
 one by two or three unfuccefsful ones. This 
 trade can be carried on no where but in great 
 towns. It is only in places of the moft extenfive 
 commerce and correfpondence that the intelli- 
 gence requifite for it can be had. 
 
 The five circumflances above mentioned, 
 though they occafion confiderable inequalities 
 in the wages of labour and profits of flock, 
 occafion none in the whole of the advantages 
 and difadvantages, real or imaginary, of the 
 different employments of either. The nature 
 of thofe circumflances is fuch, that 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, three things are requifite even 
 
 where
 
 Ij6 OF WAGES AND PROFIT IN THE 
 
 book where there is the mofl perfect freedom. Firfl, 
 t L the employments mud be well known and 
 long eftablifhed in the neighbourhood ; fecondly, 
 they mult be in their ordinary, or what may be 
 called their natural ftate ; and, thirdly, they 
 mud be thefole or principal employments of 
 thole who occupy them. 
 
 Fird, this equality can take place only in 
 thofe employments which are well known, and 
 have been long eftablifhed in the neighbour- 
 hood. 
 
 Where all other circumftances are equal, 
 wages are generally higher in new than in old 
 trades. When a projector attempts to eftablifh* 
 a new manufacture, he muft at firft entice his 
 workmen from other employments by higher 
 wages than they can either earn in their own 
 trades, or than the nature of his work would 
 other wife require, and a confiderable time muft 
 pals away before he can venture to reduce them 
 to the common level. Manufactures for which 
 the demand arifes altogether from fafhion and 
 fancy, are continually changing, and feldom laft 
 long enough to be confidered as old eftablifhed 
 manufactures. Thofe, on the contrary, for 
 which the demand arifes chiefly from ufe or 
 necefiity, arc lefs liable to change, and the fame 
 form or fabric may continue in demand for 
 whole centuries together. The wages of labour, 
 therefore, are likely to be higher in manufactures 
 of the former, than in thofe of the latter kind. 
 Birmingham deals chiefly in manufactures of the 
 former kind j Sheffield in thofe of the latter ; 
 
 and
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 77 
 
 and the wages of labour in thofe two different CHAP, 
 places, are faid to be fuitable to this difference ^_ x !_ 
 in the nature of their manufactures. 
 
 The eflablifhment of any new manufacture, 
 of any new branch of commerce, or of any new 
 practice in agriculture, is always a (peculation, 
 from which the projector promifes himf elf extra- 
 ordinary profits. Thefe profits fometimes are 
 very great, and fometimes, more frequently, 
 perhaps, they are quite otherwife; but in general 
 they bear no regular proportion to thofe of other 
 old trades in the neighbourhood. If the project 
 fucceeds, they are commonly at firft very high. 
 When the trade or practice becomes thoroughly 
 eflablifhed and well known, the competition re- 
 duces them to the level of other trades. 
 
 Secondly, This equality in the whole of the 
 advantages and difadvantages of the different 
 employments of labour and flock, can take place 
 only in the ordinary, or what may be called the 
 natural flate of thofe employments. 
 
 The demand for almoft every different fyecies 
 of labour is fometimes greater and fometimes 
 lefs than ufual. In the one cafe the advantages 
 of the employment rife above, in the other they 
 fall below the common level. The demand for 
 country labour is greater at hay-time and harveft, 
 than during the greater part of the year ; and 
 wages rife with the demand. In time of war, 
 when forty or fifty thoufand failors are forced 
 from the merchant fervice into that of the king, 
 the demand for failors to merchant fhips nece£ 
 farily rifes with their fcarcity, and their wages 
 
 vol. 11. n upon
 
 l ff OF WAGES AND PROFIT IN THE 
 
 BOOK upon fhoh occafions commonly rife from a guinea 
 and feven-ancUtwenty (hillings, to forty millings 
 and three pounds a month. In a decaying ma- 
 nufacture, on the contrary, many workmen, ra- 
 ther than quit their old trade, are contented with 
 fmaller wages than would otherwife be fuitable 
 to the nature of their employment. 
 
 The profits of Hock vary with the price of 
 the commodities in which it is employed. As 
 the price of any commodity rifes above the ordi- 
 nary or average rate, the profits of at leaft fome 
 part of the flock that is employed in bringing it 
 to market, rife above their proper level, and as 
 it falls they fink below it* All commodities are 
 more or lefs liable to variations of price, but 
 fome are much more fo than others. In all 
 commodities which are produced by human in- 
 duflry, the quantity of induftry annually em- 
 ployed is necelfarily regulated by the annual de- 
 mand, in fuch a manner that the average annual 
 produce may, as nearly as pofiible, be equal to 
 the average annual confumption. In fome em- 
 ployments, it has already been obferved, the 
 fame quantity of induftry will always produce 
 the fame, or very nearly the fame quantity of 
 commodities. In the linen or woollen manu- 
 factures, for example, the fame number of hands 
 will annually work up very nearly the fame 
 quantity of linen and woollen cloth. The varia- 
 tions in the market' price of fuch commodities, 
 therefore, can arife only from fome accidental 
 variation in the demand. A public mourning 
 raifes the price of black cloth. But as the de- 
 mand
 
 Employments of labour and stock. 179 
 
 Hiand for mod forts of plain linen and woollen CHAP. 
 
 ... . x 
 
 cloth is pretty uniform, fo is likewife the price. 
 
 But there are other employments in which the 
 fame quantity of induftry will not always pro- 
 duce the fame quantity of commodities* The 
 fame quantity of induftry, for example* will, in 
 different years, produce very different quantities 
 of corn, wine, hops, fugar, tobacco, &c. The 
 price of fuch commodities, therefore, varies not 
 only with the variations of demand, but with the 
 much greater and more frequent variations of 
 quantity, and is confequently extremely fluctuat- 
 ing. But the profit of fome of the dealers muft 
 neceffarily fluctuate with the price of the commo- 
 dities. The operations of the fpeculative mer- 
 chant are principally employed about fuch com- 
 modities. He endeavours to buy them up when 
 he forefees that their price is likely to rife, and 
 to fell them when it is likely to fall. 
 
 Thirdly, This equality in the whole of the ad- 
 vantages and difadvantages of the different em- 
 ployments of labour and flock, can take place 
 only in fuch as are the fole or principal employ- 
 ments of thofe who occupy them. 
 
 When a perfon derives his fubftence from 
 one employment, which does not occupy the 
 greater part of his time ; in the intervals of his 
 leifure he is often willing to work at another for 
 lefs wages than would otherwife fuit the nature 
 of the employment. 
 
 There flill fubfifts in many parts of Scotland 
 a fet of people called Cotters or Cottagers, 
 though they were more frequent fome years ago 
 
 n 2 than
 
 l8o OF WAGES AND PROFIT IN THE 
 
 B O O K than they are now. They are a fort of out- 
 , fervants of the landlords and farmers. The 
 ufual reward which they receive from their 
 mafters is a houfe, a fmall garden for pot herbs, 
 as much grafs as will feed a cow, and, perhaps, 
 an acre or two of bad arable land. When their 
 mafter has occafion for their labour, he gives 
 them, befides, two pecks of oatmeal a week, 
 worth about iixteen pence fterling. During a 
 great part of the year he has little or no occafion 
 for their labour, and the cultivation of their own 
 little pofTefTion is not fufficient to occupy the 
 time which is left at their own difpofal. When 
 fiich occupiers were more numerous than they 
 are at prefent, they are faid to have been willing 
 to give their fpare time for a very fmall recom- 
 pencc to any body, and to have wrought for lefs 
 wages than other labourers. In ancient times 
 they feem to have been common all over Eu- 
 rope. In countries ill cultivated and worfe in- 
 habited, the greater part of landlords and farm- 
 ers could not otherwife provide themfelves with 
 the extraordinary number of hands, which coun- 
 try labour requires at certain feafbns. The daily 
 or weekly recompence which fuch labourers oc- 
 casionally received from their mafters, was evi- 
 dently not the whole price of their labour. Their 
 fmall tenement made a confiderable part of it. This 
 daily or weekly recompence, however, feems to 
 have been considered as the whole of it, by many 
 \i Titers who have collected the prices of labour and 
 provifions in ancient times, and who have taken 
 pleafure in reprefenting both as wonderfully low. 
 
 The
 
 EMPLOYMENTS OF LABOUR AND STOCK. l8l 
 
 The produce of fuch labour comes frequently c H A p. 
 
 cheaper to market than would othenvife be fuit- L ^ 
 
 able to its nature. Stockings in many parts of 
 Scotland are knit much cheaper than they can 
 any-where be wrought upon the loom. They are 
 the work of fervants and labourers, who derive 
 the principal part of their fubfiflence from fome 
 other employment. More than a thoufand pair 
 of Shetland flockings are annually imported into 
 Leith, of which the price is from five pence to 
 feven pence a pair. At Learwick, the fmall ca- 
 pital of the Shetland iflands, ten pence a day, I 
 have been affured, is a common price of com- 
 mon labour. In the fame iflands they knit 
 worfled flockings to the value of a guinea a pair 
 and upwards. 
 
 The fpinning of linen yarn is carried on in 
 Scotland nearly in the fame way as the knitting 
 of flockings by fervants who are chiefly hired 
 for other purpofes. They earn but a very fcanty 
 fubfiflence, who endeavour to get their whole 
 livelihood by either of thofe trades. In rnofl 
 parts of Scotland fhe is a good fpinner who can 
 earn twenty pence a week. 
 
 In opulent countries the market is generally 
 fo extenfive, that any one trade is fufficient to 
 employ the whole labour and flock of thofe who 
 occupy it. Inflances of people's living by one 
 employment, and at the fame time deriving fome 
 little advantage from another, occur chiefly in 
 poor countries. The following inftance, how- 
 ever, of fomething of the fame kind is to be 
 found in the capital of a very rich one. There 
 
 N 3 is
 
 1 82 OF WAGES AND PROFIT IN THE 
 
 B o o K is no city in Europe, I believe, in which houfe- 
 rent is dearer than in London, and yet I know 
 no capital in which a furnilhed apartment can be 
 hired fo cheap. Lodging is not only much 
 cheaper in London than in Paris ; it is much 
 cheaper than in Edinburgh of the fame degree 
 of goodnefs ; and what may feem extraordinary, 
 the dearnefs of houfe-rent is the caufe of the 
 cheapnefs of lodging. The dearnefs of houfe- 
 rent in London arifes, not only from thofe caufes 
 which render it dear in all great capitals, the 
 dearnefs of labour, the dearnefs of all the ma- 
 terials of building, which mud generally be 
 brought from a great diftance, and above all the 
 dearnefs of ground-rent, every landlord acting 
 the part of a monopolill, and frequently exacting 
 a higher rent for a fingle acre of bad land in 
 a town, than can be had for a hundred of the 
 befl in the country ; but it arifes in part from 
 the peculiar manners and cufloms of the people, 
 which oblige every mailer of a family to hire a 
 whole houfe from top to bottom. A dwelling- 
 houfe in England means every thing that is con- 
 tained under the fame roof. In France, Scot- 
 land, and many other parts of Europe, it fre- 
 quently means no more than a (ingle ftory. A 
 tradefman in London is obliged to hire a whole 
 houfe in that part of the town where his cuftom- 
 ers live. His (hop is upon the ground-floor, 
 and he and his family fleep in the garret; and 
 he endeavours to pay a part of his houfe-rent by 
 letting the two middle (lories to lodffcrs. He 
 expects to maintain his family by his trade, and 
 
 not
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 83 
 
 not by his lodgers. Whereas, at Paris and CHAP. 
 Edinburgh, the people who let lodgings have 
 commonly no other means of fubfiftence ; and 
 the price of the lodging mull pay, not only the 
 rent of the houfe, but the whole expence of the 
 family, 
 
 PART II. 
 
 Inequalities occaftoned by the Policy of Europe. 
 
 SUCH are the inequalities in the whole of 
 the advantages and difadvantages of the dif- 
 ferent employments of labour and ilock, which 
 the defect of any of the three requifites above- 
 mentioned muft occasion, even where there is 
 the moft perfect liberty. But the policy of Eu- 
 rope, by not leaving things at perfect liberty, 
 occafions other inequalities of much greater im- 
 portance. 
 
 It does this chiefly in the three following 
 ways. Firft, by reftraining the competition in 
 fome employments to a fmaller number than 
 would otherwife be difpofed to enter into them ; 
 fecondly, by increasing it in others beyond what 
 it naturally would be ; and, thirdly, by obftruct- 
 ing the free circulation of labour and flock, both 
 from employment to employment and from place 
 to place. 
 
 Firft, The policy of Europe occafions a very 
 important inequality in the whole of the advan- 
 tages and difadvantages of the different employ- 
 ments of labour and flock, by reftraining the 
 
 n 4 competition
 
 >84 OF WAGES AND PROFIT JN THE 
 
 BOOK competition in fome employments to a fmaller 
 number than might otherwife be diipofed to 
 enter into them. 
 
 The exclufive privileges of corporations are 
 the principal means it makes ufe of for this pur. 
 pofe. 
 
 The exclufive privilege of an incorporated 
 trade necefiarily reftrains the competition, in the 
 town where it is eftablifhed, to thofe who are 
 free of the trade. To have ferved an appren- 
 ticefhip in the town, under a mailer properly 
 qualified, is commonly the neceffary requifite for 
 obtaining this freedom. The bye-laws of the 
 corporation regulate fometimes the number of 
 apprentices which any matter is allowed to have, 
 and almoft always the number of years which 
 each apprentice is obliged to ferve. The inten- 
 tion of both regulations is to reftrain the compe- 
 tition to a much fmaller number than might 
 otherwife be difpofed to enter into the trade. 
 The limitation of the number of apprentices re- 
 ftrains it directly, A long term of apprentice- 
 fhip reftrains it more indirectly, but as effectu- 
 ally, by increaling the expence of education. 
 
 In Sheffield no mafter cutler can have more 
 than one apprentice at a time, by a bye-law of 
 the corporation. In Norfolk and Norwich no 
 mafter weaver can have more than two appren- 
 tices, under pain of forfeiting five pounds a 
 month to the king. No mafter hatter can have 
 mere than two apprentices any-where in Eng- 
 land, or in the Englifh plantations, under pain 
 of forfeiting five pounds a month, half to the 
 
 king,
 
 EMPLOYMENTS OF LABOUR AND STOCK. 185 
 
 king, and half to him who fhall fue in any court chap. 
 of record. Both thefe regulations, though they x * 
 have been confirmed by a public law of the 
 kingdom, are evidently dictated by the fame 
 corporation fpirit which enacted the bye-law of 
 Sheffield. The filk weavers in London had 
 fcarce been incorporated a year, when they en- 
 acted a bye-law, reflraining any mailer from 
 having more than two apprentices at a time. It 
 required a particular act of parliament to refcind 
 this bye-law. 
 
 Seven years feem anciently to have been, all 
 over Europe, the ufual term eftablifhed for the 
 duration of apprenticeships in the greater part of 
 incorporated trades. All fuch incorporations 
 were anciently called univerfities ; which indeed 
 is the proper Latin name for any incorporation 
 whatever. The univerfity of fmiths, the uni* 
 verfity of taylors, &c. are expreffions which we 
 commonly meet with in the old charters of an- 
 cient towns. When thofe particular incorpora- 
 tions which are now peculiarly called univer- 
 fities were firft eftablifhed, the term of years 
 which it was necefTary to fludy, in order to 
 obtain the degree of mafler of arts, appears evi- 
 dently to have been copied from the term of 
 apprenticefhip in common trades, of which the 
 incorporations were much more ancient. As to 
 have wrought feven years under a mafler pro* 
 perly qualified, was necefTary, in order to entitle 
 any perfon to become a mafler, and to have him- 
 felf apprentices in a common trade ; fo to have 
 fludied feven years under a mafler properly qua- 
 lified,
 
 l86 OF WAGES AND PROFIT IN THE 
 
 book lined was neceflary to entitle him to become a 
 L matter, teacher, or doctor (words anciently fyno- 
 nimous) in the liberal arts, and to have fcholars 
 or apprentices (words likewife originally fyno- 
 nimous) to ftudy under him. 
 
 By the 5th of Elizabeth, commonly called the 
 Statute of Apprenticefhip, it was enacted, that 
 no perfon mould for the future exercife any trade, 
 craft, or myflery at that time exercifed in Eng- 
 land, unlefe he had previoufly ferved to it an 
 apprenticefhip of feven years at lead ; and what 
 before had been the bye-law of many particular 
 corporations, became in England the general 
 and public law of all trades carried on in mar- 
 ket towns. For though the words of the ftatute 
 are very general, and feem plainly to include the 
 whole kingdom, by interpretation its operation 
 has been limited to market towns, it having 
 been held that in country villages a perfon may 
 exercife feveral different trades, though he has 
 not ferved a feven years apprentice Ihip to each, 
 they being neceflary for the conveniency of the 
 inhabitants, and the number of people fre- 
 quently not being fufficient to fupply each with 
 a particular fet of hands. 
 
 By a ftricl interpretation of the words too the 
 operation of this ftatute has been limited to thofe 
 trades which were eflablifhed in England before 
 the 5th of Elizabeth, and has never been ex- 
 tended to fuch as have been introduced fince 
 that time. This limitation has given occafion 
 to feveral diflinclions which, confidered as rules 
 of police, appear as foolifh as can well be ima- 
 gined.
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 87 
 
 gined. It has been adjudged, for example, that chap, 
 
 a coach-maker can neither himfelf make nor x « 
 
 * ■■ — v ■ < 
 
 employ journeymen to make his coach-wheels ; 
 but mull buy them of a mailer wheel-wright ; 
 this latter trade having been exercifed in Eng- 
 land before the 5th of Elizabeth. But a wheel- 
 wright, though he has never ferved an appren- 
 ticelhip to a coach-maker, may either himfelf 
 make or employ journeymen to make coaches ; 
 the trade of a coach-maker not being within the 
 flatute, becaufe not exercifed in England at the 
 time when it was made. The manufactures of 
 Manchefler, Birmingham, and Wolverhampton, 
 are many of them, upon this account, not within 
 the llatute ; not having been exercifed in Eng- 
 land before the 5th of Elizabeth. 
 
 In France, the duration of apprenticefhips is 
 different in different towns and in different 
 trades. In Paris, five years is the term required 
 in a great number ; but before any perfon can be 
 qualified to exercife the trade as a mailer, he 
 mull, in many of them, ferve five years more as 
 a journeyman. During this latter term he is 
 called the companion of his mailer, and the term 
 itfelf is called his companionlhip. 
 
 In Scotland there is no general law which re- 
 gulates univerfally the duration of apprentice- 
 fhips. The term is different in different corpo- 
 rations. Where it is long, a part of it may 
 generally be redeemed by paying a fmall fine. 
 In moll towns too a very fmall fine is fufficient 
 to purchafe the freedom of any corporation. The 
 weavers of linen and hempen cloth, the principal 
 
 manu-
 
 l88 OF WAGES AND PROFIT IN THE 
 
 book manufa6lures of the country, as well as all other 
 ^ artificers fubfervient to them, wheel-makers, reel- 
 makers, &c. may exercife their trades in any town 
 corporate without paying any fine. In all towns 
 corporate all perfons are free to fell butcher's 
 meat upon any lawful day of the week. Three 
 years is in Scotland a common term of appren- 
 ticefhip, even in fome very nice trades ; and in 
 general I know of no country in Europe in 
 which corporation laws are fo little oppreffive. 
 
 The property which every man has in his own 
 labour, as it is the original foundation of all 
 other property, fo it is the mod facred and in- 
 violable. The patrimony of a poor man lies in 
 the ftrength and dexterity of his hands ; and to 
 hinder him from employing this ftrength and 
 dexterity in what manner he thinks proper with- 
 out injury to his neighbour, is a plain violation 
 of this moil facred property. It is a manifefl 
 encroachment upon the juft liberty both of the 
 workman, and of thofe who might be difpofed 
 to employ him. As it hinders the one from 
 working at what he thinks proper, fo it hinders 
 the others from employing whom they think 
 proper. To judge whether he is fit to be em- 
 ployed, may furcly be trufted to the difcretion of 
 the employers whofe intereft it fo much concerns. 
 The affected anxiety of the law-giver left they 
 mould employ an improper perfon, is evidently 
 as impertinent as it is oppreffive. 
 
 Theinftitution of long apprenticefhips can give 
 no fecurity that infufficient workmanfhipfhall not 
 frequently be expofed to public fale. When this 
 
 is
 
 EMPLOYMENTS OF LABOUR AND STOCK* 1 89 
 
 is done it is generally the effect of fraud) and chap. 
 not of inability ; and the longed apprenticeship 
 can give no fecurity againll fraud. Quite dif- 
 ferent regulations are neceffary to prevent this 
 abufe. The flerling mark upon plate, and the 
 itamps upon linen and woollen cloth, give the 
 purchafer much greater fecurity than any flatute 
 of apprenticefhip. He generally looks at thefe, 
 but never thinks it worth while to enquire whe- 
 ther the workmen had ferved a feven years ap- 
 prenticefhip. 
 
 The inflitution of long apprenticefhips has 
 no tendency to form young people to induftry. 
 A journeyman who works by the piece is likely 
 to be induflrious, becaufe he derives a benefit 
 from every exertion of his induflry. An ap- 
 prentice is likely to be idle, and almofl always 
 is fo, becaufe he has no immediate interefl to be 
 otherwife. In the inferior employments, the 
 fweets of labour confifl altogether in the recom- 
 pence of labour. They who are foonefl in a 
 condition to enjoy the fweets of it, are likely 
 foonefl to conceive arelifh for it, and to acquire 
 the early habit of induftry. A young man na- 
 turally conceives an averfion to labour, when 
 for a long time he receives no benefit from it. 
 The boys who are put out apprentices from 
 public charities are generally bound for more 
 than the ufual number of years, and they gene- 
 rally turn out very idle and worthlefs. 
 
 Apprenticefhips were altogether unknown to 
 the ancients. The reciprocal duties of mailer 
 and apprentice make a confiderable article in> 
 
 every
 
 190 OF WAGE8 AND PROFIT IN THIS 
 
 book every modern code. The Roman law is per* 
 fe&ly filent with regard to them. I know no 
 Greek or Latin word (I might venture, I be- 
 lieve, to aflert that there is none) which ex- 
 prefles the idea we now annex to the word Ap- 
 prentice, a fervant bound to work at a particular 
 trade for the benefit of a mafter, during a term 
 of years, upon condition that the mafter fhall 
 teach him that trade. 
 
 Long apprenticeships are altogether unne- 
 cefTary. The arts, which are much fuperior to 
 common trades, fuch as thofe of making clocks 
 and watches, contain no fuch myftery as to re- 
 quire a long courfe of inftruclion. The firft 
 invention of fuch beautiful machines, indeed, 
 and even that of fome of the inflruments em- 
 ployed in making them, mud, no doubt, have 
 been the work of deep thought and long time, 
 and may juftly be conlidered as among the hap- 
 piefl efforts of human ingenuity. But when 
 both have been fairly invented and are well un- 
 derltood, to explain to any young man, in the 
 completed manner, how to apply the inflru- 
 ments and how to conftru6l the machines, can- 
 not well require more than the leflbns of a few 
 weeks : perhaps thofe of a few days might be 
 furlicient. In the common mechanic trades, 
 thofe of a few days might certainly be fufricient. 
 The dexterity of hand, indeed, even in common 
 trades, cannot be acquired without much prac- 
 tice and experience. But a young man would 
 practife with much more diligence and attention, 
 if from the beginning he wrought as a journey- 
 man.
 
 EMPLOYMENTS OF LABOUR AND STOCK. I9I 
 
 man, being paid in proportion to the little work chap. 
 which he could execute, and paying in his turn 
 for the materials which he might fometimes fpoil 
 through awkwardnefs and inexperience. His 
 education would generally in this way be more 
 effectual, and always lefs tedious and expenfive. 
 The matter, indeed, would be a lofer. He 
 would lofe all the wages of the apprentice, which 
 he now faves for feven years together. In the 
 end, perhaps, the apprentice himfelf would be a 
 lofer. In a trade fo eafily learnt he would have 
 more competitors, and his w r ages, when he came 
 to be a complete workman, would be much 
 lefs than at prefent. The fame increafe of com- 
 petition would reduce the profits of the matters 
 as well as the wages of the workmen. The 
 trades, the crafts, the myfteries, would all be 
 lofers. But the public would be a gainer, the 
 w r ork of all artificers coming in this w r ay much 
 cheaper to market. 
 
 It is to prevent this reduction of price, and 
 confequently of wages and profit, by reftraining 
 that free competition which w T ould molt cer- 
 tainly occafion it, that all corporations, and the 
 greater part of corporation laws, have been eftab- 
 liflied. In order to erect a corporation, no other 
 authority in ancient times was requifite in many 
 parts of Europe, but that of the town corporate 
 in which it was eftablifhed. In England, indeed, 
 a charter from the king was likewife neceffary. 
 But this prerogative of the crown feems to have 
 been referved rather for extorting money from 
 the fubject, than for the defence of the common 
 1 liberty
 
 ig2 OF WAGES AND PROFIT IN THE 
 
 BOOK liberty againft fuch oppreffive monopolies. Upon 
 paying a fine to the king, the charter feems ge- 
 nerally to have been readily granted ; and when 
 any particular clafs of artificers or traders 
 thought proper to act as a corporation without 
 a charter, fuch adulterine guilds, as they were 
 called, were not always disfranchifed upon that 
 account, but obliged to fine annually to the 
 king for permiflion to exercife their ufurped pri- 
 vileges *. The immediate infpeclion of all cor- 
 porations, and of the bye-laws which they might 
 think proper to ena6l for their own government, 
 belonged to the town corporate in which they 
 were eftablifhed; and whatever difcipline was 
 exercifed over them, proceeded commonly, not 
 from the king, but from that greater incorpora- 
 tion of which thofe fubordinate ones were only 
 parts or members. 
 
 The government of towns corporate was alto- 
 gether in the hands of traders and artificers; and 
 it was the manifeft interefl of every particular 
 clafs of them, to prevent the market from being 
 overflockcd, as they commonly exprefs it, with 
 their own particular fpecies of induflry ; which 
 is in reality to keep it always under-flocked. 
 Each clafs was eager to eflablifh regulations 
 proper for this purpofe, and, provided it was 
 allowed to do fo, was willing to confent that every 
 other clafs mould do the fame. In confequence 
 of fuch regulations, indeed, each clafs was 
 obliged to buy the goods they had occafion for 
 
 * See Madox Firnu Burgi, p. 16, &c. 
 
 3 from
 
 EMPLOYMENTS OF LABOUR AND STOCK. I93 
 
 from every other within the town, fomewhat chap. 
 dearer than they otherwife might have done. 
 But in recompence, they were enabled to fell 
 their own jufl as much dearer ; fo that fo far it 
 was as broad as long, as they fay ; and in the 
 dealings of the different claffes within the town 
 with one another, none of them were lofers by 
 thefe regulations. But in their dealings with 
 the country they were all great gainers; and in 
 thefe latter dealings confifts the whole trade 
 which fupports and enriches every town. 
 
 Every town draws its whole fubfiltence, and 
 all the materials of its induftry, from the country. 
 It pays for thefe chiefly in two ways : firft, by 
 fending back to the country a part of thofe ma- 
 terials wrought up and manufactured ; in which 
 cafe their price is augmented by the wages of 
 the workmen, and the profits of their mafters or 
 immediate employers : fecondly, by fending to 
 it a part both of the rude and manufactured pro- 
 duce, either of other countries, or of diftant 
 parts of the fame country, imported into the 
 town: in which cafe too the original price of 
 thofe goods is augmented by the wages of the 
 carriers or failors, and by the profits of the mer- 
 chants who employ them. In what is gained 
 upon the firft of thofe two branches of com- 
 merce, confifts the advantage which the town 
 makes by its manufactures ; 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 employers, make up 
 the whole of what is gained upon both. What- 
 
 vol. ir. o ever
 
 194 OF WAGES AND PROFIT IN THE 
 
 BOOK ever regulations, therefore, tend to increafe thole 
 wages and profits beyond what they otherwife 
 would be, tend to enable the town to purchafe, 
 with a fmaller quantity of its labour, the produce 
 of a greater quantity of the labour of the country. 
 They give the traders and artificers in the town 
 an advantage over the landlords, farmers, and 
 labourers in the country, and break down that 
 natural equality which would otherwife take 
 place in the commerce which is carried on be- 
 tween them. The whole annual produce of the 
 labour of the fociety is annually divided between 
 thofe two different fets of people. By means of 
 thofe regulations a greater lhare of it is given to 
 the inhabitants of the town than would other- 
 wife fall to them; and a lefs to thofe of the 
 country. 
 
 The price which the town really pays for the 
 proviiions and materials annually imported into 
 it, is the quantity of manufactures and other 
 goods annually exported from it. The dearer 
 the latter are fold, the cheaper the former are 
 bought. The induftry of the town becomes 
 more, and that of the country lefs advanta- 
 geous. 
 
 That the induftry which is carried on in 
 towns is, every-where in Europe, more advanta- 
 geous than that which is carried on in the coun- 
 try, without entering into any very nice com- 
 putations, we may fatisfy ourfelves by one very 
 fimple and obvious obfervation. In every coun- 
 try of Europe we find, at leaft, a hundred people 
 who have acquired great fortunes from fin all 
 
 begiiu
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 95 
 
 beginnings by trade and manufactures, the in- C H A p. 
 duflry which properly belongs to towns, for 
 one who has done fo by that which properly be- 
 longs to the country, the raifing of rude pro- 
 duce by the improvement and cultivation of land. 
 Induflry, therefore, mult be better rewarded, the 
 wages of labour and the profits of flock muft 
 evidently be greater in the one fituation than in 
 the other. But flock and labour naturally feek 
 the mofl advantageous employment. They na- 
 turally, therefore, refort as much as they can 
 to the town, and defert the country. 
 
 The inhabitants of a town, being collected 
 into one place, can eafily combine together. 
 The mofl infignificant trades carried on in towns 
 have accordingly, in fome place or other, been 
 incorporated; and even where they have never 
 been incorporated, yet the corporation fpirit, the 
 jealoufy of h 1 rangers, the averfion to take appren- 
 tices, or to communicate the fecret of their trade, 
 generally prevail in them, and often teach them, 
 by voluntary affociations and agreements, to 
 prevent that free competition which they can- 
 not prohibit, 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 weavers at work. By 
 combining not to take apprentices they can not 
 only engrofs the employment, but reduce the 
 whole manufacture into a fort of flavery to them- 
 felves, and raife the price of their labour much 
 above what is due to the nature of their work. 
 o 2 The
 
 I96 OF WAGES AND PROFIT IN THE 
 
 BOOK The inhabitants of the country, difperfed in 
 L diftant places, cannot eafily combine together. 
 They have not only never been incorporated, 
 but the corporation fpirit never has prevailed 
 among them. No apprenticefhip has ever been 
 thought neceflary to qualify for husbandry, the 
 great trade of the country. After what are called 
 the fine arts, and the liberal profeffions, how-' 
 ever, there is perhaps no trade which requires fo 
 great a variety of knowledge and experience. 
 The innumerable volumes which have been writ- 
 ten upon it in all languages, may fatisfy us, that 
 among the wifeft and mod learned nations, it 
 has never been regarded as a matter very eafily 
 underflood. And from all thofe volumes we 
 (hall in vain attempt to collect that knowledge 
 of its various and complicated operations, which 
 is commonly poflefTed even by the common 
 farmer; how contemptuously foever the very 
 contemptible authors of fome of them may fome- 
 times affect to fpeak of him. There is fcarce 
 any common mechanic trade, on the contrary, 
 of which all the operations may not be as com- 
 pletely and diflinclly explained in a pamphlet of 
 a very few pages, as it is poflible for words il- 
 luflrated by figures to explain them. In the 
 hiflory of the arts, now publifhing by the French 
 academy of fciences, feveral of them are ac- 
 tually explained in this manner. The direction 
 of operations, belides, which muft be varied with 
 every change of the weather, as well as with 
 many other accidents, requires much more 
 judgment and difcretion, than that of thofe 
 
 which
 
 EMPLOYMENTS OF LABOUR AND STOCK. 197 
 
 which are always the fame or very nearly the c H A P. 
 fame. x - 
 
 Not only the art of the farmer, the general 
 direction of the operations of hufbandry, but 
 many inferior branches of country labour, re- 
 quire much more fkill and experience than the 
 greater part of mechanic trades. The man who 
 works upon brafs and iron, works with inftru- 
 ments and upon materials of which the temper 
 is always the fame, or very nearly the fame. But 
 the man who ploughs the ground with a team of 
 horfes or oxen, works with inftruments vf which 
 the health, ftrength, and temper, are very dif- 
 ferent upon different occasions. The condition 
 of the materials which he works upon too is as 
 variable as that of the inftruments which he 
 works with, and both require to be managed with 
 much judgment and difcretion. The common 
 ploughman, though generally regarded as the 
 pattern of ftupidity and ignorance, is feldom de- 
 fe6tive in this judgment and difcretion. He is 
 lefs accuftomed, indeed, to focial intercourfe 
 than the mechanic who lives in a town. His 
 voice and language are more uncouth and more 
 difficult to be underftood by thofe who are not 
 ufed to them. His understanding, however, 
 being accuftomed to confider a greater variety of 
 objects, is generally much fuperior to that of the 
 other, whofe whole attention from morning till 
 night is commonly occupied in performing one 
 or two very fimple operations. How much the 
 lower ranks of people in the country are really 
 fuperior to thofe of the town, is well known to 
 every man whom either bufinefs or curiofity has 
 
 3 led
 
 I98 OP WAGES AND PROFIT IN THE 
 
 BOOK led to converfe much with both. In China and 
 Indoftan accordingly both the rank and the 
 wages of country labourers are faid to be fuperior 
 to thofe of the greater part of artificers and 
 manufacturers. They would probably be lb 
 every-where, if corporation laws and the corpo- 
 ration fpirit did not prevent it. 
 
 The fuperiority which the induflry of the 
 towns has every-where in Europe over that of 
 the country, is not altogether owing to corpora- 
 tions, and corporation laws. It is fupported by 
 many other regulations. The high duties upon 
 foreign manufactures and upon all goods im- 
 ported by alien merchants, all tend to the fame 
 purpofe. Corporation laws enable the inhabit- 
 ants of towns to raife their prices, without fear- 
 ing to be under- fold by the free competition of 
 their own countrymen. Thofe other regulations 
 fecure them equally againfl that of foreigners. 
 The enhancement of price occafioned by botli is 
 every-where finally paid by the landlords, farm- 
 ers, and labourers of the country, who have 
 fcldom oppofed the eftablifhment of fuch mono- 
 polies. They have commonly neither inclina- 
 tion nor fitnefs to enter into combinations; and 
 the clamour and fophiflry of merchants and 
 manufacturers eafily perfuadc them that the 
 private intereft of a part, and of a fubordinate 
 part of the fociety, is the general intereft of the 
 whole. 
 
 In Great Britain the fuperiority of the induflry 
 of the towns over that of the country feems to 
 have been greater formerly than in the prefent 
 times. The wages of country labour approach 
 
 nearer
 
 EMPLOYMENTS OF LABOUR AND STOCK. 1 99 
 
 nearer to thofe of manufacturing labour, and the chap* 
 profits of flock employed in agriculture to thofe 
 of trading and manufacturing flock, 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 flock 
 accumulated in them comes in time to be fo 
 great, that it can no longer be employed with 
 the ancient profit in that fpecies of induftry 
 which is peculiar to them. That induftry has 
 its limits like every other ; and the increafe of 
 flock, by increafing the competition, necefla- 
 rily reduces the profit. The lowering of profit 
 in the town forces out flock to the country, 
 where, by creating a new demand for country 
 labour, it necefTarily raifes its wages. It then 
 ipreads itfelf, if I may fay fo, over the face of 
 the land, and by being employed in agriculture 
 is in part refloredto the country, at the expence 
 of which, in a great meafure, it had originally 
 been accumulated in the town. That every- 
 where in Europe the greatefl improvements of 
 the country have been owing to fuch overflow- 
 ings of the flock originally accumulated in the 
 towns, I fhall endeavour to fhow hereafter ; and 
 at the fame time to demonstrate, that though 
 fome countries have by this courfe attained to 
 a confiderable degree of opulence, it is in itfelf 
 necefTarily flow, uncertain, liable to be difturbed 
 and interrupted by innumerable accidents, and 
 in every refpect contrary to the order of nature 
 o 4 and
 
 V 
 
 200 OF WAGES AND PROFIT IN THE 
 
 Book and of reafon. The interefls, prejudices, laws 
 . L and cuftoms which have given occafion to it, I 
 fhall endeavour to explain as fully and diftinctly 
 as I can in the third and fourth books of this 
 inquiry. 
 
 People of the fame trade feldom meet toge- 
 ther, even for merriment and diverfion, but the 
 conversation ends in a confpiracy againil the 
 public, or in fome contrivance to raife prices. 
 It is impoffible indeed to prevent fuch meetings, 
 by any law which either could be executed, or 
 would be coniiltent with liberty and juftice. 
 But though the law cannot hinder people of the 
 fame trade from fometimes alTembling together, 
 it ought to do nothing to facilitate fuch alTem- 
 blies ; much lefs to render them necelTary. 
 
 A regulation which obliges all thofe of the 
 fame trade in a particular town to enter their 
 names and places of abode in a public regiller, 
 facilitates fuch affemblies. It connects indivi- 
 duals who might never otherwife be known to 
 one another, and gives every man of the trade a 
 direction where to find every other man of it. 
 
 A regulation which enables thofe of the fame 
 trade to tax themfelves in order to provide for 
 their poor, their lick, their widows and orphans, 
 by giving them a common intereft to manage, 
 renders fuch alTemblies neceilary. 
 
 An incorporation not only renders them ne- 
 celTary, but makes the act of the majority bind- 
 ing upon the whole. In a free trade an effectual 
 combination cannot be eftablifhed but by the 
 unanimous confent of every fingle trader, and it 
 
 cannot
 
 EMPLOYMENTS OF LABOUR AND STOCK. 201 
 
 cannot laft . longer than every fingle trader c H A p. 
 continues of the fame mind. The majority of a x - 
 corporation can enact a bye-law with proper 
 penalties, which will limit the competition more 
 effectually and more durably than any voluntary 
 combination whatever. 
 
 The pretence that corporations are neceffary 
 for the better government of the trade, is with- 
 out any foundation. The real and effectual 
 difcipline which is exercifed over a workman, is 
 not that of his corporation, but that of his 
 cuftomers. It is the fear of lofing their employ- 
 ment which reflrains his frauds and corrects his 
 negligence. An exclufive corporation necef- 
 farily weakens the force of this difcipline. A 
 particular fet of workmen muft then be em- 
 ployed, 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 moll neceflary trades. If 
 you would have your work tolerably executed, 
 it mufl be done in the fuburbs, where the work- 
 men, having no exclufive privilege, have nothing 
 but their character to depend upon, and you 
 mufl then fmuggle it into the town as well as 
 you can. 
 
 It is in this manner that the policy of Europe, 
 by reflraining the competition in fome employ- 
 ments to a fmaller number than would otherwife 
 be difpofed to enter into them, occafions a very 
 important inequality in the whole of the advan- 
 tages and difadvantages of the different employ- 
 ments of labour and flock. 
 
 Secondly,
 
 OF WAGES AND PROFIT IN THE 
 
 Secondly, The policy of Europe, by in creating' 
 the competition in fome employments beyond 
 what it naturally would be, occafions another 
 inequality of an oppotite kind in the whole of 
 the advantages and difadvantages of the different 
 employments of labour and Hock. 
 
 It has been coufidered as of fo much import- 
 ance that a proper number of young people 
 fhould be educated for certain profeffions, that, 
 fometimes the public, and fometimes the piety 
 of private founders have eftablifhed many pen- 
 fions, fcholarfhips, exhibitions, burfaries, &c. 
 for this purpofe, which draw many more people 
 into thofe trades than could otherwife pretend to 
 follow them. In all chriftian countries, I believe, 
 the education of the greater part of churchmen 
 is paid for in this manner. Very few of them 
 are educated altogether at their own expence. 
 The long, tedious and expend ve education, 
 therefore, of thoie who are, will not always 
 procure them a fuitable reward, the church being 
 crowded with people who, in order to get em- 
 ployment, are willing to accept of a much fmaller 
 recompence than what inch an education would 
 otherwife have entitled them to ; and in this 
 manner the competition of the poor takes away 
 the reward of the rich. It would be indecent, 
 no doubt, to compare either a curate or a chap- 
 lain with a journeyman in any common trade. 
 The pay of a curate or chaplain, however, may 
 very properly be confidered as of the fame nature 
 with the wages of a journeyman. They are, all 
 three, paid for their work according to the con* 
 
 2 tracT;
 
 EMPLOYMENTS OF LABOUR AXD STOCK. 20t 
 
 tra& which they may happen to make with their chap. 
 refpe&ive fuperiors. Till after the middle of 
 the fourteentli century, five merks, containing 
 about as much filver as ten pounds of our pre- 
 fent money, was in England the ufual pay of a 
 curate or a ftipendiary parilh prielt, as we find it 
 regulated by the decrees of feveral different 
 national councils. At the fame period four pence 
 a day, containing the fame quantity of filver as 
 a milling of our prefent money, was declared to 
 be the pay of a mailer mafon, and three pence 
 a day, equal to nine pence of our prefent money, 
 that of a journeyman mafon # . The wages of 
 both thefe labourers, therefore, fuppofing them 
 to have been conflantly employed, were much 
 fuperior to thofe of the curate. The wages of 
 the mailer mafon, fuppofing him to have been 
 without employment one third of the year, would 
 have fully equalled them. By the 1 2th of Queen 
 Anne, c. 12, it is declared, " That whereas for 
 " want of fufncient maintenance and encourage- 
 " ment to curates, the cures have in feveral 
 " places been meanly fupplied, the bifhop is, 
 " therefore, empowered to appoint by writing 
 " under his hand and feal a fufficient certain 
 " ftipend or allowance, not exceeding fifty and 
 " not lefs than twenty pounds a year." Forty 
 pounds a year is reckoned at prefent very 
 good pay for a curate, and notwithflanding 
 this acl of parliament, there are many cura- 
 cies under twenty pounds a year. There are 
 
 * See the Statute of labourers, t$ Ed. III. 
 
 journeymen
 
 «04 OF WAGES AND PROFIT IN THE 
 
 book journeymen fhoe-makers in London who earn 
 t_ L . forty pounds a year, and there is fcarce an 
 induftrious workman of any kind in that metro- 
 polis who does not earn more than twenty. 
 This laft Aim indeed does not exceed what is 
 frequently earned by common labourers in many 
 country parifhes. Whenever the law has 
 attempted to regulate the wages of workmen, it 
 has always been rather to lower them than to 
 raife them. But the law has upon many occa- 
 fions attempted to raife the wages of curates, 
 and for the dignity of the church, to oblige the 
 rectors of parifhes to give them more than the 
 wretched maintenance which they themfelves 
 might be willing to accept of. And in both 
 cafes the law feems to have been equally ineffec- 
 tual, and has never either been able to raife the 
 wages of curates, or to fink thofe of labourers to 
 the degree that was intended ; becaufe it has 
 never been able to hinder either the one from 
 being willing to accept of lefs than the legal 
 allowance, on accoifnt of the indigence of their 
 fituation and the multitude of their competitors ; 
 or the other from receiving more, on account of 
 the contrary competition of thofe who expected 
 to derive either profit or pleafure from employing 
 them. 
 
 The great benefices and other ecclefiaftical 
 dignities fupport the honour of the church, 
 notwithflanding the mean circumflances of fome 
 of its inferior members. The refpecl; paid to 
 the profefiion too makes fome compenfation even 
 to them for the meannefs of their pecuniary 
 
 recom-
 
 EMPLOYMENTS OF LABOUR AND STOCK. 205 
 
 recompence. In England, and in all Roman CHAP. 
 Catholic countries, the lottery of the church is 
 in reality much more advantageous than is necef- 
 fary. The example of the churches of Scotland, 
 of Geneva, and of feveral other proteftant 
 churches, may fatisfy us, that in fo creditable a 
 profeffion, in which education is fo eaiily pro- 
 cured, the hopes of much more moderate be- 
 nefices will draw a fufficient number of learned, 
 decent, and refpeclable men into holy orders. 
 
 In profeffions in which there are no benefices, 
 fuch as law and phyfic, if an equal proportion 
 of people were educated at the public expence, 
 the competition would foon be fo great, as to 
 link very much their pecuniary reward. It 
 might then not be worth any man's while to 
 educate his fon to either of thofe profeffions 
 at his own expence. They would be entirely 
 abandoned to fuch as had been educated by thofe 
 public charities, whofe numbers and neceffities 
 would oblige them in general to content them- 
 felves with a very miferable recompence, to the 
 entire degradation of the now refpe6lable pro- 
 feffions of law and phyfic. 
 
 That unprofperous race of men commonly 
 called men of letters, are pretty much in the 
 fituation which lawyers and phyficians probably 
 would be in upon the foregoing fuppofition. In 
 every part of Europe the greater part of them 
 have been educated for the church, but have 
 been hindered by different reafons from entering 
 into holy orders. They have generally, there- 
 fore, been educated at the public expence, and 
 
 their
 
 ao6 OF WAGES AND PROFIT IN THE 
 
 BOOK their numbers are every- where fo great as com- 
 t L , monly to reduce the price of their labour to a 
 very paultry recompence. 
 
 Before the invention of the art of printing, 
 the only employment by which a man of letters 
 could make any thing by his talents, was that of 
 a public or private teacher, or by communicating 
 to other people the curious and ufeful know- 
 ledge which he had acquired himfelf : And this 
 is ftill furely a more honourable, a more ufeful, 
 and in general even a more profitable employ- 
 ment than that other of writing for a bookfeller, 
 to which the art of 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 necefiary for the greateft practitioners in 
 law and phylic. But the ufual reward of the 
 eminent teacher bears no proportion to that of 
 the lawyer or phyfician ; becaufe the trade of the 
 one is crowded with indigent people who have 
 been brought up to it at the public expence ; 
 whereas thole of the other two are incumbered 
 with very few who have not bet.i educated at 
 their own. The ufual recompence, however, of 
 public and private teachers, fmall as it may 
 appear, would undoubtedly be lefs than it is, if 
 the competition of thofe yet more indigent men 
 of letters who write for bread was not taken out 
 of the market. Before the invention of the art 
 of printing, a fcholar and a beggar feem to have 
 been terms very nearly Anonymous. The dif- 
 ferent governors of the univerfities before that 
 
 tinia
 
 EMPLOYMENTS OF LABOUR AND STOCK. 10J 
 
 time appear to have often granted licences to c H A p. 
 their fcholars to heg. 
 
 In ancient times, before any charities of this 
 kind had been eftabliihed for the education of 
 indigent people to the learned profeffions, the 
 rewards of eminent teachers appear to have been 
 much more confiderable. Ifocrates, in what is 
 called his difcourfe againft the fophilts, re- 
 proaches the teachers of his own times with 
 inconfiftency. " They make the moft magnifi- 
 cent promifes to their fcholars, fays he, and 
 undertake to teach them to be wife, to be happy, 
 and to be juft, and in return for fo important a 
 fervice they ftipulate the paultry reward of four 
 or five minae. They who teach wifdom, con- 
 tinues he, ought certainly to be wife themfelves ; 
 but if any man were to fell fuch a bargain for 
 fuch a price, he would be convicted of the moll 
 evident folly." He certainly does not mean 
 here to exaggerate the reward, and we may be 
 alfured that it was not lefs than he reprefents it. 
 Four minae were equal to thirteen pounds fix 
 (hillings and eight pence : five minae to fixteen 
 pounds thirteen fhillings and four pence. Some- 
 thing not lefs than the largeft of thofe two fums, 
 therefore, muft at that time have been ufually 
 paid to the moll eminent teachers at Athens. 
 Ifocrates himfelf demanded ten minae, or thirty- 
 three pounds fix fhillings and eight pence, from 
 each fcholar. When he taught at Athens, he is 
 faid to have had an hundred fcholars. I under- 
 stand this to be the number whom he taught at 
 one time, or who attended what we would call 
 
 one
 
 208 OF WAGES AND PROFIT IN THE 
 
 BOOK one courfe of lectures, a number which will not 
 c *1 appear extraordinary from fo great a city to fo 
 famous a teacher, who taught too what was at 
 that time the mod fafhionable of all fciences, 
 rhetoric. He mufl have made, therefore, by 
 each courfe of lectures, a thoufand minae, or 
 3,333/. 6s. $d. A thoufand minae, accordingly, 
 is faid by Plutarch in another place, to have 
 been his Didactron, or ufual price of teaching. 
 Many other eminent teachers in thofe times 
 appear to have acquired great fortunes. Gorgias 
 made a prefent to the temple of Delphi of 
 his own ftatue in folid gold. We mult not, I 
 prefume, fuppofe that it was as large as the life. 
 His way of living, as well as that of Hippias 
 and Protagoras, two other eminent teachers of 
 thofe times, is reprefented by Plato as fplendid 
 even to oftentation. Plato himfelf is faid to 
 have lived with a good deal of magnificence. 
 Ariftotle, after having been tutor to Alexander, 
 and molt munificently rewarded, as it is univer- 
 fally agreed, both by him and his father Philip, 
 thought it worth while, notwithstanding, to 
 return to Athens, in order to refume the teaching 
 of his fchool. 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 the price of their labour and the admiration 
 for their perfbns. The mod eminent of them, 
 however, appear always to have enjoyed a degree 
 of confideration much fuperior to any of the like 
 profeilion in the prefent times. The Athenians 
 4 fent
 
 EMPLOYMENTS OF LABOUR AND STOCK. 209 
 
 fent Carneades the academic, and Diogenes the chap. 
 ftoic, upon a folemn embafly to Rome ; and 
 though their city had then declined from its 
 former grandeur, it was flill an independent and 
 confiderable republic. Carneades too was a 
 Babylonian by birth, and as there never was a 
 people more jealous of admitting foreigners to 
 public offices than the Athenians, their confide- 
 ration for him muft have been very great. 
 
 This inequality is upon the whole, perhaps, 
 rather advantageous than hurtful to the public, 
 It may fomewhat degrade the profeffion of a 
 public teacher ; but the cheapnefs of literary 
 education is furely an advantage which greatly 
 over-balances this trifling inconveniency. The 
 public too might derive ftill greater benefit from 
 it, if the conflitution of thofe fchools and col- 
 leges, in which education is carried on, was 
 more reafonable than it is at prefent through 
 the greater part of Europe. 
 
 Thirdly, The policy of Europe, by obftru6t- 
 ins: the free circulation of labour and Hock 
 both from employment to employment, and 
 from place to place, occafions in fome cafes a 
 very inconvenient inequality in the whole of the 
 advantages and difadvantages of their different 
 employments. 
 
 The flatute of apprenticeihip obftrucls the 
 free circulation of labour from one employment 
 to another, even in the fame place. The ex* 
 clufive privileges of corporations obftruct it 
 from one place to another, even in the fame 
 employment. 
 
 vol. 11. p It
 
 310 OF WAGES AND PROFIT IS THE 
 
 It frequently happens that while high wages 
 are given to the workmen in one manufacture, 
 thofe in another are obliged to content them" 
 felves with bare fubfiftence. The one is in an 
 advancing (late, and has therefore a continual 
 demand for new hands : the other is in a declin- 
 ing flate, and the fuperabundance of hands is 
 continually increasing. Thofe two manufactures 
 may fometimes be in the fame town, and fome- 
 times in the fame neighbourhood, without being 
 able to lend the lead afliftance to one another* 
 The ftatute of apprenticefliip may oppofe it in 
 the one cafe, and both that and an exclusive 
 corporation in the other. In many different 
 manufactures, however, the operations are fb 
 much alike, that the workmen could eafily 
 change trades with one another, if thofe abfurd 
 laws did not hinder them. The arts of weav- 
 ing plain linen and plain filk, for example, are 
 almoft entirely the fame. That of weaving 
 plain woollen is fomewhat different ; but the dif- 
 ference is fo infignificant, that either a linen or a 
 filk weaver might become a tolerable workman 
 in a very few days. If any of thofe three capital 
 manufactures, therefore, were decaying, the 
 workmen might find a refource in one of the 
 other two which was in a more proiperous con- 
 dition ; and their wages would neither rife too 
 high in the thriving, nor fink too low in the 
 decaying manufacture. The linen manufacture 
 indeed is, in England, by a particular ftatute, 
 open to every body; but as it is not much cul- 
 tivated through the greater part of the country, 
 
 i it
 
 EMPLOYMENTS OP LABOUR AND STOCK. 211 
 
 it can afford no general refource to the work- 
 men of other decaying manufactures, who> 
 wherever the ftatute of apprenticefhip takes 
 place, have no other choice but either to come 
 upon the parifh, or to work as common labour- 
 ers, for which, by their habits, they are much 
 worfe qualified than for any fort of manufac* 
 ture that bears any refemblance to their own; 
 They generally, therefore, ehufe to come upon, 
 the pariih; 
 
 Whatever obflruels the free circulation of la- 
 bour from one employment to another, obflru6ls 
 that of flock likewife ; the quantity of flock 
 which can be employed in any branch of bufinefs 
 depending very much upon that of the labour 
 which can be employed in it* Corporation laws, 
 however, give lefs obftruction to the free circu- 
 lation of flock from one place to another than 
 to that of labour. It is every where much eafier 
 for a wealthy merchant to obtain the privilege 
 of trading in a town corporate, than for a poor 
 artificer to obtain that of working in it. 
 
 The obflrudlion which corporation laws give 
 to the free circulation of labour is common, I 
 believe, to every part of Europe. That which 
 is given to it by the poor laws is, fo far as I 
 know, peculiar to England; It confifls in the 
 difficulty which a poor man finds in obtaining a 
 fettlement, or even in being allowed to exercife 
 his induflry in any parifh but that to which 
 he belongs. It is the labour of artificers and 
 manufacturers only of which the free circulation 
 is obftructed by corporation laws. The difficulty 
 p a of
 
 SI 2 OF WAGES AND PROFIT IN THE 
 
 B O O K of obtaining fettlements obflru&s even that of 
 *• , common labour. It may be worth while to 
 give fome account of the rife, progrefs, and 
 prefent Hate of this diforder, the greatefl per- 
 haps of any in the police of England. 
 
 When by the deflruction of monafleries the 
 poor had been deprived of the charity of thofe 
 religious houfes, after fome other ineffectual 
 attempts for their relief, it was enacted by the 
 43d of Elizabeth, c. 2. that every parilli Ihould 
 be bound to provide for its own poor ; and 
 that overfeers of the poor mould be annually 
 appointed, who, with the churchwardens, fhould 
 raife, by a parifh rate, competent fums for this 
 purpofe. 
 
 By this ftatute the neceffity of providing for 
 their own poor was indifpenfably impofed upon 
 every parilli. Who were to be confidered as 
 the poor of each parifh, became, therefore, a 
 queflion of fome importance. This queflion, 
 after fome variation, was at lafl determined by 
 the 13th and 14th of Charles II. when it was 
 enacted, that forty days undiflurbed refidence 
 fhould gain any perfon a iettlement in any parifh ; 
 but that within that time it fhould be lawful for 
 two juflices of the peace, upon complaint made 
 by the churchwardens or overfeers of the poor, 
 to remove any new inhabitant to the parifh 
 where he was laft legally fettled ; unlefs he either 
 rented a tenement often pounds a year, or could 
 give fuch fecurity for the difcharge of the parifh 
 where he was then living, as thofe juflices fhould 
 judge fufficient. 
 
 Some
 
 EMPLOYMENTS OF LABOUR AND STOCK. 213 
 
 Some frauds, it is faid, were committed in C H A p. 
 confequence of this ftatute ; parifli officers fome- , x > 
 times bribing their own poor to go clandeflinely 
 to another parifh, and by keeping themfelves 
 concealed for forty days to gain a fettlement 
 there, to the difcharge of that to which they 
 properly belonged. It was enacted, therefore, 
 by the ift of James II. that the forty days un- 
 diflurbed relidence of any perfon neceffary to 
 gain a fettlement, fhould 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 churchwardens or overfeers 
 of the parifh where he came to dwell. 
 
 But parifli officers, it feems, were not always 
 more honeft with 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 fleps in confe- 
 quence of it. As every perfon in a parifli, there- 
 fore, was fuppofed to have an interefl to pre- 
 vent as much as poffible their being burdened 
 by fuch intruders, it was further enacted by the 
 3d William III. that the forty days refidence 
 fliould be accounted only from the publication 
 of fuch notice in writing on Sunday in the 
 church, immediately after divine fervice. 
 
 " After all," fays Doftor Burn, " this kind 
 " of fettlement, by continuing forty days after 
 *' publication of notice in writing, is very feU 
 w dom obtained ; and the defign of the acts is 
 " not fo much for gaining of fettle ments, as for 
 << the avoiding of them by perfons coming into 
 r 3 "a parifli
 
 114 OF WAGES AND PROFIT IN THE 
 
 BOOK" a parifh clandeflinely: for the giving of no? 
 
 tice is only putting a force upon the parifh 
 
 to remove. But if a perfon's fituation is 
 " fuch, that it is doubtful whether he is actu- 
 *' ally removable or not, he fhall by giving of 
 " notice compel the parifh either to allow him 
 " a fettlement uncontefled, by fuffering him to 
 " continue forty days ; or, by removing him, 
 « to try the right." 
 
 This flatute, therefore, rendered it almofl 
 impracticable for a poor man to gain a new 
 fettlement in the old way, by forty days inha- 
 bitancy. But that it might not appear to pre- 
 clude altogether the common people of one 
 parifh from ever eflablifhing themfelves with 
 fecurity in another, it appointed four other ways 
 by which a fettlement might be gained without 
 any notice delivered or publifhed. The firfl was, 
 by being taxed to parifh rates and paying them ; 
 the fecond, by being elected into an annual 
 parifh office, and ferving in it a year ; the third, 
 by ferving an apprenticeship in the parifh ; the 
 fourth, by being hired into fervice there for a 
 year, and continuing in the fame fervice during 
 the whole of it. 
 
 Nobody can gain a fettlement by either of the 
 two firfl ways, but by the public deed of the 
 whole parifh, who are too well aware of the 
 confequences to adopt any new-comer who has 
 nothing but his labour to fupport liim, either 
 by taxing him to parifh rates, or by electing 
 him into a parifh oflice. 
 
 No
 
 EMPLOYMENTS OF LABOUR AND STOCK. 215 
 
 No married man can well gain any fettlement chap. 
 in either of the two lait ways. An apprentice is 
 fearce ever married ; and it is exprefsly enacted, 
 that no married fervant mall gain any fettlement 
 by being hired for a year. The principal effect 
 of introducing fettlement by fervice, has been 
 to put out in a great meafure the old fafhion 
 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 in- 
 tends that every fervant is hired for a year. 
 But matters are not always willing to give their 
 fervants a fettlement by hiring them in this man- 
 ner ; and fervants are not always willing to be fo 
 hired, becaufe, as every laft fettlement difcharges 
 all the foregoing, they might thereby lofe their 
 original fettlement in the places of their nativity, 
 the habitation of their parents and relations. 
 
 No independent workman, it is evident, whe- 
 ther labourer or artificer, is likely to gain any 
 new fettlement either by apprenticelhip or by 
 fervice. When fuch a perfon, therefore, carried, 
 his induftry to a new parifh, he was liable to be 
 removed, how healthy and induflrious foever, 
 at the caprice of any churchwarden or overfeer, 
 unlefs he either rented a tenement of ten pounds 
 a year, a thing impoffible for one who has nor 
 thing but his labour to live by ; or could give 
 fuch fecurity for the difcharge of the parilb as 
 two juftices of the peace mould judge fufficient. 
 What fecurity they mail require, indeed, is left 
 altogether to their difcretion ; but they cannot 
 well require lefs than thirty pounds, it having 
 p 4 been
 
 2l6 OF WAGES AND PROFIT IN THE 
 
 BOOK been enacted, that the purchafe even of a free- 
 hold eflate of lefs than thirty pounds value, fliall 
 not gain any perfon a fettlement, as not being 
 fufficient for the difcharge of the parifh. But 
 this is a fecurity which fcarce any man who lives 
 by labour can give ; and much greater fecurity 
 is frequently demanded. 
 
 In order to reftore in fome meafure that free 
 circulation of labour which thofe different fla- 
 tutes had almofl entirely taken away, the inven- 
 tion of certificates was fallen upon. By the 8th 
 and 9th of William III. it was enacted, that if 
 any perfon fhould bring a certificate from the 
 parifh where he was lafl legally fettled, fubfcribed 
 by the churchwardens and overfeers of the poor, 
 and allowed by two juftices of , the peace, that 
 every other parifh fhould be obliged to receive 
 him ; that he fhould not be removeable merely 
 upon account of his being likely to become 
 chargeable, but only upon his becoming a6tually 
 chargeable, and that then the parifh which 
 granted the certificate fhould be obliged to pay 
 the expence both of his maintenance and of his 
 removal. And in order to give the mofl perfect 
 fecurity to the parifh where fuch certificated man 
 fhould come to refide, it was further enacted by 
 the fame flatute, that he fhould gain no fettle- 
 ment there by any means whatever, except either 
 by renting a tenement of ten pounds a year, or 
 by ferving upon his own account in an annual 
 parifh olrice for one whole year ; and confe- 
 quently neither by notice, nor by fervice, nor by 
 apprenticefhip, nor by paying parifh rates. By 
 
 4 the
 
 EMPLOYMENTS OF LABOUR AND STOCK. 217 
 
 the 1 2th of Queen Anne too, flat. i. c. 18. it was c H A P. 
 
 x. 
 
 further enaeled, that neither the fervants nor ap- 
 prentices of fuch certificated man mould gain 
 any fettlement in the parilh where he refided 
 under fuch certificate. 
 
 How far this invention has reflored that free 
 circulation of labour which the preceding ftatutes 
 had almoft entirely taken away, we may learn 
 from the following very judicious obfervation of 
 Do6tor Burn. " It is obvious," fays he, " that 
 " there are divers good reafons for requiring 
 " certificates with perfons coming to fettle in 
 <c any place; namely, that perfons refiding un- 
 " der them can gain no fettlement, neither by 
 " apprenticefhip, nor by fervice, nor by giving 
 " notice, nor by paying parifli rates ; that they 
 " can fettle neither apprentices nor fervants ; 
 " that if they become chargeable, it is certainly 
 " known whither to remove them, and the 
 " parifli fhall be paid for the removal, and for 
 " their maintenance in the mean time ; and 
 " that if they fall tick, and cannot be removed, 
 " the parifli which gave the certificate mufl 
 " maintain them: none of all which can be 
 " without a certificate. Which reafons will 
 <c hold proportionably for pariflies not granting 
 " certificates in ordinary cafes ; for it is far 
 " more than an equal chance, but that they will 
 " have the certificated perfons again, and in a 
 " worfe condition." The moral of this obfer- 
 vation feems to be, that certificates ought always 
 to be required by the parifli where any poor man 
 comes to refide, and that they ought very feldom 
 
 to
 
 Cl8 OF WAGES AND PROFIT IN THE 
 
 BOOK to be granted by that which he propofes to leave. 
 " There is fomewhat of hardfhip in this matter 
 " of certificates," fays the fame very intelligent 
 Author, in his Hiftory of the Poor Laws, " by 
 " putting it in the power of a parifh officer, to 
 " imprifon a man as it were for life ; however 
 " inconvenient it may be for him to continue at 
 " that place where he has had the misfortune to 
 " acquire what is called a fettleme'nt, or what- 
 M ever advantage he may propofe to himfelf by 
 " living elfewhere." 
 
 Though a certificate carries along with it no 
 teflimonial of good behaviour, and certifies no- 
 thing but that the perfon belongs to the parifh 
 to which he really does belong, it is altogether 
 difcretionary in the parifli officers either to grant 
 or to refufe it. A mandamus was once moved 
 for, fays Doctor Burn, to compel the church- 
 wardens and overfeers to fign a, certificate ; but 
 the court of King's Bench rejected the motion 
 as a very ftrange attempt. 
 
 The very unequal price of labour which we 
 frequently find in England in places at no great 
 diftance from one another, is probably owing to 
 the obftruction which the law of fettlements gives 
 to a poor man who would carry his induftry 
 from one parifh to another without a certificate. 
 A fingle man, indeed, who is healthy and induf- 
 trious, may fometimes refide by fuflerance with- 
 out one; but a man with a wife and family who 
 fhould attempt to do fo, would in moft parifhes 
 be fure of being removed, and if the fingle man 
 mould afterwards marry, he would generally be 
 
 removed
 
 EMPLOYMENTS OF LABOUR AND STOCK. 
 
 219 
 
 removed likewife. The fcarcity of hands in one chap, 
 parifh, therefore, cannot always be relieved by 
 their fuper-abundance in another, as it is con- 
 itantly in Scotland, and, I believe, in all other 
 countries where there is no difficulty of fettle- 
 ment. In fuch counti'ies, though wages may 
 fometimes rife a little in the neighbourhood of a 
 great town, or wherever elfe there is an extra- 
 ordinary demand for labour, and link gradually 
 as the diflance from fuch places increafes, till 
 they fall back to the common rate of the coun- 
 try ; yet we never 'meet with thofe fudden and 
 unaccountable differences in the wages of neigh- 
 bouring places which we fometimes find in Eng- 
 land, where it is often more difficult for a poor 
 man to pafs the artificial boundary of a parifh, 
 than an arm of the fea or a ridge of high moun- 
 tains, natural boundaries which fometimes fepa* 
 rate very diftinctly different rates of wages in 
 other countries. 
 
 To remove a man who has committed no mif- 
 demeanour from the parifh where he chufes to 
 refide, is an evident violation of natural liberty 
 and juftice. The common people of England, 
 however, fo jealous of their liberty, but like the 
 common people of mofl other countries never 
 rightly underflanding wherein it confifls, have 
 now for more than a century together fuffered 
 themfelves to be expofed to this oppreffion with- 
 out a remedy. Though men of reflexion too 
 have fometimes complained of the law of fettle- 
 ments as a public grievance ; yet it has never 
 been the object of any general popular clamour, 
 
 fuch
 
 2 tO OF WAGES AND PROFIT IN THE 
 
 BOOK fach as tnat againft general warrants, an abufive 
 *• practice undoubtedly, but fuch a one as was not 
 likely to occafion any general oppreflion. There 
 is fcarce a poor man in England of forty years of 
 age, I will venture to fay, who has not in fome 
 part of his life felt himfelf mofl cruelly opprefied 
 by this ill-contrived law of fettlements. 
 
 I fhall conclude this long chapter with ob- 
 ferving, that though anciently it was ufual to 
 rate wages, firft by general laws extending over 
 the whole kingdom, and afterwards by particular 
 orders of the juftices of peace in every particular 
 county, both thefe practices have now gone en- 
 tirely into difufe. " By the experience of above 
 " four hundred years," fays Doctor Burn, " it 
 " feems time to lay afide all endeavours to bring 
 " under Uriel; regulations, what in its own na- 
 " ture feems incapable of minute limitation : for 
 " if all perfons in the fame kind of work were 
 " to receive equal wages, there would be no 
 " emulation, and no room left for induftry or 
 " ingenuity." 
 
 Particular a&s of parliament, however, flill 
 attempt fometimes to regulate wages in particu- 
 lar trades and in particular places. Thus the 
 8th of George III. prohibits under heavy penal- 
 ties all mailer taylors in London, and five miles 
 round it, from giving, and their workmen from 
 accepting, more than two (hillings and feven- 
 pence halfpenny a day, except in the cafe of a 
 general mourning. Whenever the legiflature 
 attempts to regulate the differences between 
 matters and their workmen, its counfellors are 
 
 always
 
 EMPLOYMENTS OF LABOUR AND STOCK. 221 
 
 always the mailers. When the regulation, there- C 
 fore, is in favour of the workmen, it is always 
 jufl and equitable ; but it is fometimes other- 
 wife when in favour of the mafters. Thus the 
 law which obliges the mafters in feveral different 
 trades to pay their workmen in money and not 
 in goods, is quite jufl and equitable. It im- 
 pofes no real hardfhip upon the mafters. It only 
 obliges them to pay that value in money, which 
 they pretended to pay, but did not always really 
 pay, in goods. This law is in favour of the 
 workmen ; but the 8th of George III. is in fa- 
 vour of the mafters. When mafters combine 
 together in order to reduce the wages of their 
 workmen, they commonly enter into a private 
 bond or agreement, not to give more than a 
 certain wage under a certain penalty. W'ere the 
 workmen to enter into a contrary combination of 
 the fame kind, not to accept of a certain wage 
 under a certain penalty, the law would punifh 
 them very feverely; and if it dealt impartially, 
 it would treat the mafters in the fame manner. 
 But the 8th of George III. enforces by law that 
 very regulation which mafters fometimes attempt 
 to eftablifti by fuch combinations. The com- 
 plaint of the workmen, that it puts the ableft 
 and moft induftrious upon the fame footing with 
 an ordinary workman, feems perfectly well 
 founded. 
 
 In ancient times too it was ufual to attempt 
 to regulate the profits of merchants and other 
 dealers, by rating the price both of provifions 
 and other goods. The aflize of bread is, fo far 
 
 as
 
 ill OF WAGES AND PROFIT, &C. 
 
 B o O K as I know, the only remnant of this ancient 
 ufage. Where there is an exclufive corporation } 
 it may perhaps be proper to regulate the price of 
 the mil neceffary of 'life. But where there is none, 
 the competition will regulate it much better than 
 any affize. The method of fixing the affize of 
 bread eftablifhed by the 31ft of George II. could 
 not be put in practice in Scotland, on account 
 of a defect in the law ; its execution depending 
 upon the office of clerk of the market, which does 
 not exifl there. This defect was not remedied 
 till the third of George III. The want of an 
 affize occafioned no fenfible inconveniency, and 
 the eftablifhment of one in the few places where 
 it has yet taken place, has produced no fenfible 
 advantage. In the greater part of the towns of 
 Scotland, however, there is an incorporation of 
 bakers who claim exclufive privileges, though 
 they are not very ftrietly guarded. 
 
 The proportion between the different rates 
 both of wages and profit in the different employ- 
 ments of labour and flock, feems not to be much 
 affected, as has already been obferved, by the 
 riches or poverty, the advancing, flationary, or 
 declining ltate of the fociety. Such revolutions 
 in the public welfare, though they affect the 
 general rates both of wages and profit, muff in 
 the end affect them equally in all different em- 
 ployments. The proportion between them, there- 
 fore, mull remain the fame, and cannot well [be 
 altered, at lead for any confiderable time, by any 
 iiich revolutions. 
 
 CHAP.
 
 OF THE RENT OF LAND. «2>3 
 
 CHAP. XI. 
 
 Of the Rent of Land, 
 
 RENT, confidered as the price paid for the c HA P. 
 ufe of land, is naturally the highefl which XL 
 the tenant can afford to pay in the actual cir- 
 cumftances of the land. In adjufting the terms 
 of the leafe, the landlord endeavours to leave 
 him no greater fhare of the produce than what is 
 fufficient to keep up the flock from which he 
 furnifhes the feed, pays the labour, and purchafes 
 and maintains the cattle and other inftruments 
 of husbandry, together with the ordinary profits 
 of farming flock in the neighbourhood. This is 
 evidently the fmallefl ihare with which the tenant 
 can content himfelf without being a lofer, and 
 the landlord feldom means to leave him any 
 more. Whatever part of the produce, or, what 
 is the fame thing, whatever part of its price, is 
 over and above this fliare, he naturally endea- 
 vours to referve to himfelf as the rent of his 
 land, which is evidently the highefl the tenant 
 can afford to pay in the aelual circumflances of 
 the land. Sometimes, indeed, the liberality, 
 more frequently the ignorance, of the landlord, 
 makes him accept of fomewhat lefs than this por- 
 tion; 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 flock in the neighbourhood. This por- 
 tion,
 
 224 °* THE RENT OF LAND. 
 
 BOOK tion, however, may flill be confidered as the na- 
 }' , tural rent of land, or the rent for which it is na- 
 turally meant that land mould for the mod part 
 be let. 
 
 The rent of land, it may be thought, is fre- 
 quently no more than a reafonable profit or in- 
 terelt for the flock laid out by the landlord upon 
 its improvement. This, no doubt, may be partly 
 the cafe upon fome occafions ; for it can fcarce 
 ever be more than partly the cafe. The land- 
 lord demands a rent even for unimproved land, 
 and the fuppofed interefl or profit upon the ex- 
 pence of improvement is generally an addition to 
 this original rent. Thofe improvements, befides, 
 are not always made by the flock of the landlord, 
 but fometimes by that of the tenant. When the 
 leafe comes to be renewed, however, the landlord 
 commonly demands the fame augmentation of 
 rent, as if they had been all made by his own. 
 
 He fometimes demands rent for what is alto- 
 gether incapable of human improvement. Kelp 
 is a fpeciesof fea-weed, which, when burnt, yields 
 an alkaline fait, ufeful for making glafs, foap, 
 and for feveral other purpofes. It grows in feve- 
 ral parts of Great Britain, particularly in Scot- 
 land, upon fitch rocks only as lie within the high 
 water-mark, which are twice every day covered 
 with the lea, and of which the produce, there- 
 fore, was never augmented by human induflry. 
 The landlord, however, whofe eflate is bounded 
 by a kelp fhore of this kind, demands a rent for 
 it as much as for his corn fields. 
 
 The fea in the neighbourhood of the iflands 
 of Sbetland is more than commonly abundant in 
 
 fifh,
 
 OF THE RENT OF LAND. 2I5 
 
 fifh, which make a great part of the fubfiftence chap. 
 of their inhabitants. But in order to profit by X1 - 
 the produce of the water* they mull have a habi- 
 tation upon the neighbouring land. The rent 
 of the landlord is in proportion, not to what the 
 farmer can make by the land, but to what he can 
 make both by the land and I y the water. It is 
 partly paid in fea-fifh ; and one of the very few 
 inftances in which rent makes apart of the price 
 of that commodity, is to be found in that 
 country* 
 
 The rent of land, therefore, confidered as the 
 price paid for the ufe of the land, is naturally a 
 monopoly price. It is not at all proportioned to 
 what the landlord may have laid out upon the 
 improvement of the land, or to what he can 
 afford to take j but to what the farmer can afford 
 
 to give. 
 
 Such parts only of the produce of land can 
 commonly be brought to market of which the 
 ordinary price is fufficient to replace the flock 
 which mufl be employed inbringingthem thither, 
 together with its ordinary profits. If the ordi- 
 nary price is more than this, the furplus part of 
 it will naturally go to the rent of the land. If it 
 is not more, though the commodity may be 
 brought to market, it can afford no rent to the 
 landlord. Whether the price is, or is not more, 
 depends upon the demand. 
 
 There are fome parts of the produce of land 
 for which the demand mufl always be fuch as to 
 afford a greater price than what is fufficient to 
 bring them to market \ and there are others for 
 
 vol. 11. q which
 
 226 or THE RENT OF LAND. 
 
 BOOK which it either may or may not be fuch as to 
 
 ^ , afford this greater price. The former muft 
 
 always afford a rent to the landlord. The latter 
 fometimes may, and fometimes may not, accord- 
 ing to different circumflances. 
 
 Rent, it is to be obferved, therefore, enters 
 into the compofition of the price of commodi- 
 ties in a different way from wages and profit. 
 High or low wages and profit are the caufes of 
 high or low price ; high or low rent is the effect 
 of it. It is becaufe high or low wages and profit 
 muft be paid, in order to bring a particular com- 
 modity to market, that its price is high or low. 
 But it is becaufe its price is high or low ; a great 
 deal more, or very little more, or no more, than 
 what is fufficient to pay thofe wages and profit, 
 that it affords a high rent, or a low rent, or no 
 rent at all. 
 
 The particular confideration, firft, of thofe 
 parts of the produce of land which always afford 
 fome rent ; fecondly, of thofe which fometimes 
 may and fometimes may not afford rent ; and, 
 thirdly, of the variations which, in the different 
 periods of improvement, naturally take place, in 
 the relative value of thofe two different forts of 
 rude produce, when compared both with one 
 another and with manufactured commodities, 
 will 'divide this chapter into three parts. 
 
 PART
 
 OF THE RENT OF LAND. 227 
 
 CHAP. 
 XL 
 
 PART I. 
 
 Of the Produce of Land which always affords Rent. 
 
 AS men, like all other animals, naturally mul- 
 tiply in proportion to the means of their 
 fubfiflence, food is always, more or lefs, in de- 
 mand. It can always purchafe or command a 
 greater or fmaller quantity of labour, and fome- 
 body can always be found who is willing to do 
 fomething in order to obtain it. The quantity 
 of labour, indeed, which it can purchafe, is not 
 always equal to what it could maintain, if ma- 
 naged in the molt ceconomical manner, on ac- 
 count of the high wages which are fometimes 
 given to labour. But it can always purchafe fuch 
 a quantity of labour as it can maintain, accord- 
 ing to the rate at which that fort of labour is 
 commonly maintained in the neighbourhood. 
 
 But land, in almoft any iituation, produces a 
 greater quantity of food than what is fufficient to 
 maintain all the labour neceflary for bringing it 
 to market, in the moll liberal way in which that 
 labour is ever maintained. The furplus too is 
 always more than fufficient to replace the flock 
 which employed that labour, together with its 
 profits. Something, therefore, always remains 
 for a rent to the landlord. 
 
 The mofl defart moors in Norway and Scot- 
 land produce fome fort of paflure for cattle, of 
 which the milk and the increafe are always more 
 q 2 than
 
 228 OF THE RENT OP LAND. 
 
 book than fufficient, not only to maintain all the la- 
 
 ^ t bour necefTary for tending them, and to pay the 
 
 ordinary profit to the farmer or owner of the 
 herd or flock j but to afford fome {mail rent to 
 the landlord. The rent increafes in proportion 
 to the goodnefs of the paflure. The fame ex- 
 tent of ground not only maintains a greater 
 number of cattle, but as they are brought within 
 a fmaller compafs, lefs labour becomes requifite 
 to tend them, and to colleel their produce. The 
 landlord gains both ways ; by the increafe of the 
 produce, and by the diminution of the labour 
 which mufl be maintained out of it. 
 
 The rent of land not only varies with its 
 fertility, whatever be its produce, but with its 
 fituation, whatever be its fertility. Land in the 
 neighbourhood of a town gives a greater rent 
 than land equally fertile in a diflant part of the 
 country. Though it may cofl no more labour 
 to cultivate the one than the other, it mufl 
 always coft more to bring the produce of the 
 diflant land to market. A greater quantity of 
 labour, therefore, mufl be maintained out of it ; 
 and the furplus^ from which are drawn both the 
 profit of the farmer and the rent of the landlord, 
 mufl be diminifhed. But in remote parts of the 
 country the rate of profits, as has already been 
 fhown, is generally higher than in the neigh- 
 bourhood of a large town. A fmaller proportion 
 of this diminifhed furplus, therefore, mufl belong 
 to the landlord. 
 
 Good roads, canals, and navigable rivers, by 
 diminifhing the expence of carriage, put the 
 
 remote
 
 OP THE RENT OF LAND. 229 
 
 remote parts of the country more nearly upon a chap. 
 level with thofe in the neighbourhood of the 
 town. They are upon that account the greatefl 
 of all improvements. They encourage the cul- 
 tivation of the remote, which mult always be the 
 moll extenlive circle of the country. They are 
 advantageous to the town, by breaking down the 
 .monopoly of the country in its neighbourhood. 
 They are advantageous even to that part of the 
 country. Though they introduce fbme rival 
 commodities into the old market, they open 
 many new markets to its produce. Monopoly, 
 befides, is a great enemy to good management, 
 which can never be univerfally eftablifhed but in 
 confequence of that free and univerfal competi- 
 tion which forces every body to have recourfe to 
 it for the fake of felf-defence. It is not more 
 than fifty years ago, that fome of the counties in 
 the neighbourhood of London petitioned the 
 parliament againft the extenfion of the turnpike 
 roads into the remoter counties. Thofe remoter 
 counties, they pretended, from the cheapnefs of 
 labour, would be able to fell their grafs and corn 
 cheaper in the London market than themfelves, 
 and would thereby reduce their rents, and ruin 
 their cultivation. Their rents, however, have 
 rifen, and their cultivation has been improved 
 fince that time. 
 
 A corn field of moderate fertility produces a 
 much greater quantity of food for man, than the 
 bell pallure of equal extent. Though its culti- 
 vation requires much more labour, yet the fur- 
 plus which remains after replacing the feed and 
 q 3 maintaining
 
 230 OF THE RENT OF LAND. 
 
 BOOK maintaining all that labour, is likewife much 
 *• greater. If a pound of butcher's-meat, there- 
 fore, was never fuppofed to be worth more than 
 a pound of bread, this greater furplus would 
 every-where be of greater value, and conflitute 
 a greater fund both for the profit of the farmer 
 and the rent of the landlord. It feems to have 
 done fo univerfally in the rude beginnings of 
 agriculture. 
 
 But the relative values of thofe two different 
 fpecies of food, bread, and butcher's-meat, are 
 very different in the different periods of agricul- 
 ture. In its rude beginnings, the unimproved 
 wilds, which then occupy the far greater part of 
 the country, are all abandoned to cattle. There 
 is more butcher's-meat than bread, and bread, 
 therefore, is the food for which there is the 
 grcatefl competition, and which confequently 
 brings the greateft price. At Buenos Ayres, we 
 are told by Ulloa, four reals, one-and-twenty 
 pence halfpenny fterling, was, forty or fifty years 
 ago, the ordinary price of an ox, chofen from a 
 herd of two or three hundred. He fays nothing 
 of the price of bread, probably becaufe he found 
 nothing remarkable about it. An ox there, he 
 fays, cofts little more than the labour of catching 
 him. But corn can no-where be raifed without 
 a great deal of labour, and in a country which 
 lies upon the river Plate, at that time the direct 
 road from Europe to the filver mines of Potofi, 
 the money price of labour could not be very 
 cheap. It is otherwife when cultivation is ex- 
 tended over the greater part of the country. 
 
 There
 
 OF THE RENT OF LAND. 1$ I 
 
 There is then more bread than butcher's-meat. chap. 
 The competition changes its direction, and the 
 price of butcher's-meat becomes greater than the 
 price of bread. 
 
 By the extenfion befides of cultivation, the 
 unimproved wilds become infufficient to fupply 
 the demand for butcher's-meat. A great part 
 of the cultivated lands mud be employed in 
 rearing and fattening cattle, of which the price, 
 therefore, mull be fufficient to pay, not only the 
 labour neceflary for tending them, but the rent 
 which the landlord and the profit which the 
 farmer could have drawn from fuch land em- 
 ployed in tillage. The cattle bred upon the 
 moll uncultivated moors, when brought to the 
 fame market, are, in proportion to their weight 
 or goodnefs, fold at the fame price as thofe 
 which are reared upon the moll improved land. 
 The proprietors of thofe moors profit by it, and 
 raife the rent of their land in proportion to the 
 price of their cattle. It is not more than a cen- 
 tury ago that in many parts of the Highlands of 
 Scotland, butcher's-meat was as cheap or cheaper 
 than even bread made- of oat-meal. The union 
 opened the market of England to the Highland 
 cattle. Their ordinary price is at prefent about 
 three times greater than at the beginning of 
 the century, and the rents of many Highland 
 eflates have been tripled and quadrupled in 
 the fame time. In almofl every part of Great 
 Britain a pound of the bell butcher's-meat, is in 
 the prefent times, generally worth more than 
 two pounds of the bell white bread; and in 
 q 4 plentiful
 
 232 OF THE RENT OF LAND; 
 
 book plentiful years it is fometimes worth three or four 
 pounds. 
 
 It is thus that in the progrefs of improvement 
 the rent and profit of unimproved pafture come 
 to be regulated in fome meafure by the rent and 
 profit of what is improved, and thefe again by 
 the rent and profit of corn. Corn is an annual 
 crop. Butcher's-meat, a crop which requires 
 four or five years to grow. As an acre of land, 
 therefore, will produce a much fmaller quantity 
 of the one fpecies of food than of the other, the 
 inferiority of the quantity mufl be compenfated 
 by the fuperiority of the price. If it was more 
 than compenfated, more corn land would be 
 turned into pafture ; and if it was not compen- 
 fated, part of what was in pafture would be 
 brought back into corn. 
 
 This equality, however, between the rent and 
 profit of grafs and thofe of corn ; of the land of 
 which the immediate produce is food for cattle, 
 and of that of which the immediate produce is 
 food for men ; muft be underftood to take place 
 only through the greater part of the improved 
 lands of a great country. In fome particular 
 local fituations it is quite otherwife, and the rent 
 and profit of grafs are much fuperior to what can 
 be made by corn. 
 
 Thus in the neighbourhood of a great town, 
 the demand for milk and for forage to horfes, 
 frequently contribute, together with the high 
 price of butcher's meat, to raife the value of 
 grafs above what may be called its natural pro- 
 portion to that of corn. This local advantage, 
 
 it
 
 OF THE RENT OF LAND. 233 
 
 it is evident, cannot be communicated to the chap. 
 lands at a diflance. . XI * 
 
 Particular circumftances have fometimes ren- 
 dered fome countries fo populous, that the whole 
 territory, like the lands in the neighbourhood of 
 a great town, has not been fufficient to produce 
 both the grafs and the corn neceflary for the 
 fubfiflence of their inhabitants. Their lands, 
 therefore, have been principally employed in the 
 production of grafs, the more bulky commodity, 
 and which cannot be fo eafily brought from a 
 great diflance ; and corn, the food of the great 
 body of the people, has been chiefly imported 
 from foreign countries. Holland is at prefent 
 in this fituation, and a confiderable part of 
 ancient Italy feems to have been fo during the 
 prosperity of the Romans. To feed well, old 
 Cato faid, as we are told by Cicero, was the firft 
 and mofl profitable thing in the management 
 of a private eflate ; to feed tolerably well, the 
 fecond ; and to feed ill, the third. To plough, 
 he ranked only in the fourth place of profit 
 and advantage. Tillage, indeed,' in that part 
 of ancient Italy which lay in the neighbour- 
 hood of Rome, mufl have been very much 
 difcouraged by the diflributions of corn which 
 were frequently made to the people, either 
 gratuitoufly, or at a very low price. This corn 
 was brought from the conquered provinces, of 
 which feveral, inflead of taxes, were obliged to 
 furnifh a tenth part of their produce at a ftated 
 price, about fixpence a peck, to the republic. 
 The low price at which this corn was diflri- 
 
 buted
 
 J 34 OF THE RENT OF LAND. 
 
 BOOK buted to the people, muft neceflarily have funk 
 
 ^ L the price of what could be brought to the Roman 
 
 market from Latium, or the ancient territory of 
 
 Rome, and mull have difcouraged its cultivation 
 
 in that country. 
 
 In an open country too, of which the prin- 
 cipal produce is corn, a well-enclofed piece of 
 grafs will frequently rent higher than any corn- 
 field in its neighbourhood. It is convenient for 
 the maintenance of the cattle employed in the 
 cultivation of the corn, and its high rent is, in 
 this cafe, not fo properly paid from the value of 
 its own produce, as from that of the corn lands 
 which are cultivated by means of it. It is likely 
 to fall, if ever the neighbouring lands are com- 
 pletely enclofed. The prefent high rent of 
 enclofed land in Scotland feems owing to the 
 fear city of enclofure, and will probably laft no 
 longer than that fcarcity. The advantage of 
 enclofure is greater for pafture than for corn. 
 It faves the labour of guarding the cattle, which 
 feed better too when they are not liable to be 
 difturbed by their keeper or his dog. 
 
 But where there is no local advantage of 
 this kind, the rent and profit of corn, or what- 
 ever elfe is the common vegetable food of the 
 people, muft naturally regulate, upon the land 
 which is fit for producing it, the rent and profit 
 of pafture. 
 
 The ufe of the artificial grafies, of turnips, 
 carrots, cabbages, and the other expedients 
 which have been fallen upon to make an equal 
 quantity of land feed a greater number of 
 
 cattle
 
 OF THE RENT OF LAND. 
 
 cattle than when in natural grafs, ihould fome- c 
 what reduce, it might be expected, the fupe- 
 riority which, in an improved country, the price 
 of butcher's meat naturally has over that of 
 bread. It feems accordingly to have done fo ; 
 and there is fome reafon for believing that, 
 at leaft in the London market, the price of 
 butcher's meat in proportion to the price of 
 bread, is a good deal lower in the prefent 
 times than it was in the beginning of the laft 
 century. 
 
 In the appendix to the Life of Prince Henry, 
 Doctor Birch has given us an account of the 
 prices of butcher's meat as commonly paid by 
 that prince. It is there faid, that the four 
 quarters of an ox weighing fix hundred pounds 
 ufually cofl him nine pounds ten millings or 
 thereabouts ; that is, thirty-one millings and 
 eight-pence per hundred pounds weight. Prince 
 Henry died on the 6th of November 1612, in 
 the nineteenth year of his age. 
 
 In March 1764, there was a parliamentary 
 inquiry into the caufes of the high price of pro- 
 vifions at that time. It was then, among other 
 proof to the fame purpofe, given in evidence 
 by a Virginia merchant, that in March 1763, 
 he had victualled his fhips for twenty-four or 
 twenty-five ihillings the hundred weight of beef,, 
 which he confidered as the ordinary price 5 
 whereas, in that dear year, he had paid twenty- 
 feven millings for the fame weight and fort. 
 This high price in 1764 is, however, four lliik 
 lings and eight-pence cheaper than the ordinary 
 
 pries 
 
 2 3S
 
 236 OF THE RENT OF LAND. 
 
 BOOK price paid by Prince Henry ; and it is the beft 
 beef only, it rauft be obferved, which is fit to 
 be falted for thofe diftant voyages. 
 
 The price paid by Prince Henry amounts to 
 34c?. per pound weight of the whole carcafe, 
 coarfe and choice pieces taken together ; and at 
 that rate the choice pieces could not have been 
 fold by retail for lefs than 4 jrf. or $d. the pound. 
 
 In the parliamentary inquiry in 1 764, the wit- 
 neffes dated the price of the choice pieces of 
 the beft beef to be to the confumer ^d. and 4$d. 
 the pound ; and the coarfe pieces in general to 
 be from feven farthings to 2^d. and i±d. ; and 
 this they faid was in general one half-penny 
 dearer than the fame fort of pieces had ufually 
 been fold in the month of March. But even 
 this high price is ftill a good deal cheaper than 
 what we can well fuppofe the ordinary retail 
 price to have been in the time of Prince Henry. 
 
 During the twelve firft years of the laft cen- 
 tury, the average price of the beft wheat at the 
 Windfor market was 1/. 18s. $^d. the quarter of 
 nine Winchefter bufhels. 
 
 But in the twelve years preceding 1764, 
 including that year, the average price of the 
 fame meafure of the beft wheat at the fame 
 market was il. is. yid. 
 
 In the twelve firft years of the laft century, 
 therefore, wheat appears to have been a good 
 deal cheaper, and butcher's meat a good deal 
 dearer, than in the twelve years preceding 1764, 
 including that year. 
 
 -* In
 
 OF THE RENT OP LAND. lyj 
 
 In all great countries the greater part of the chap. 
 cultivated lands are employed in producing 
 either food for men or food for cattle. The 
 rent and profit of thefe regulate the rent and 
 profit of all other cultivated land. If any par- 
 ticular produce afforded lefs, the land would 
 ibon be turned into corn or pafture ; and if any 
 afforded more, fome part of the lands in corn 
 or pafture would foon be turned to that produce. 
 
 Thofe productions, indeed, which require 
 either a greater original expence of improve- 
 ment, or a greater annual expence of cultiva- 
 tion, in order to fit the land for them, appear 
 commonly to afford, the one a greater rent, the 
 other a greater profit than corn or pafture. This 
 fuperiority, however, will feldom be found to 
 amount to more than a reafonable intereft or 
 compenfation for this fuperior expence. 
 
 In a hop garden, a fruit garden, a kitchen 
 garden, both the rent of the landlord, and the 
 profit of the farmer, are generally greater than 
 in a corn or grafs field. But to bring the 
 ground into this condition requires more ex- 
 pence. Hence a greater rent becomes due to 
 the landlord. It requires too a more attentive 
 and Ikilful management. Hence a greater profit 
 becomes due to the farmer. The crop too, at 
 leaft in the hop and fruit garden, is more pre- 
 carious. Its price, therefore, befides compen- 
 fating all occafional loffes, muft afford fomething 
 like the profit of infurance. The circumftances 
 of gardeners, generally mean, and always mode- 
 rate, may fatisfy us that their great ingenuity is 
 
 not
 
 238 OF THE RENT OP LAND. 
 
 book not commonly over-recompenced. Their de- 
 lightful art is pra&ifed by fo many rich people 
 for amufement, that dittle advantage is to be 
 made by thofe who pradtife it for profit ; becaufe 
 the perfons who mould naturally be their belt 
 customers, fupply themfelves with all their mod 
 precious productions. 
 
 The advantage which the landlord derives 
 from fuch improvements feems at no time to 
 have been greater than what was fufficient to 
 compenfate the original expence of making 
 them. In the ancient hufbandry, after the vine- 
 yard, a well-watered kitchen garden feems to 
 have been the part of the farm which was fup- 
 pofed to yield the mod valuable produce. But 
 Democritus, who wrote upon hufbandry about 
 two thoufand years ago, and who was regarded 
 by the ancients as one of the fathers of the art, 
 thought they did not ac~l wifely who enclofed a 
 kitchen garden. The profit, he faid, would not 
 compenfate the expence of a flone wall ; and 
 bricks (he meant, I fuppofe, bricks baked in the 
 fun) mouldered with the rain, and the winter 
 florm, and required continual repairs. Colu- 
 mella, who reports this judgment of Demo- 
 critus, does not controvert it, but propofes a 
 very frugal method of enclofing with a hedge of 
 brambles and briars, which, he fays, he had 
 found by experience to be both a lafling and 
 an impenetrable fence; but which, it feems, was 
 not commonly known in the time of Demo- 
 critus. Palladius adopts the opinion of Colu- 
 mella, which had before been recommended by 
 4 Varro.
 
 OF THE RENT OF LAND. 
 
 Varro. In the judgment of thofe undent im- 
 provers, the produce of a kitchen garden had, it 
 feems, been little more than fufficient to pay the 
 extraordinary culture and the expence of water- 
 ing; for in countries fo near the fun, it was 
 thought proper, in thofe times as in the prefent, 
 to have the command of a ftream of water, which 
 could be conducted to every bed in the garden. 
 Through the greater part of Europe, a kitchen 
 garden is not at prefent fuppofed to deferve a 
 better enclofure than that recommended by 
 Columella. In Great Britain, and fome other 
 northern countries, the finer fruits cannot be 
 brought to perfection but by the affiftance of a 
 wall. Their price, therefore, in fuch countries 
 muft be fufficient to pay the expence of building 
 and maintaining what they cannot be had with- 
 out. The fruit-wall frequently furrounds the 
 kitchen garden, which thus enjoys the benefit of 
 an enclofure which its own produce could feldom 
 pay for. 
 
 That the vineyard, when properly planted 
 and brought to perfection, was the moft valuable 
 part of the farm, feems to have been an un- 
 doubted maxim in the ancient agriculture, as it 
 is in the modern through all the wine countries. 
 But whether it was advantageous to plant a new 
 vineyard, was a matter of difpute among the 
 ancient Italian hufbandmen, as we learn from 
 Columella. He decides, like a true lover of all 
 curious cultivation, in favour of the vineyard, 
 and endeavours to fhow, by a companion of the 
 profit and expence, that it was a molt advan- 
 tageous 
 
 239
 
 340 OP THE RENT OF LAND* 
 
 BOOK tageous improvement. Such companions, how* 
 *• ever, between the profit and expence of new 
 projects, are commonly very fallacious ; and in 
 nothing more fo than in agriculture. Had the 
 gain actually made by fuch plantations been com- 
 monly 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 mat- 
 ter of controverfy in the wine countries. Their 
 writers on agriculture, indeed, the lovers and 
 promoters of high cultivation, feem generally 
 difpofed to decide with Columella in favour of 
 the vineyard. In France the anxiety of the pro- 
 prietors of the old vineyards to prevent the 
 planting of any new ones, feems to favour their 
 . opinion, and to indicate a confcioufnefs in thofe 
 who mud have the experience, that this fpecies 
 of cultivation is at prefent in that country more 
 profitable than any other. It feems at the fame 
 time, however, to indicate another opinion, that 
 this fuperior profit can lafl no longer than the 
 laws which at prefent reflrain the free culti- 
 vation of the vine. In 1731, they obtained an 
 order of council, prohibiting both the planting 
 of new vineyards, and the renewal of thofe old 
 ones, of which the cultivation had been inter- 
 rupted for two ye^rs, without a particular per- 
 miffion from the king, to be granted only in 
 confequence of an information from the intend- 
 ant of the province, certifying that he had ex- 
 amined the land, and that it was incapable of 
 any other culture. The pretence of this order 
 was the fcarcity of corn and pail tire, and the 
 
 fu per-
 
 OF THE RENT OF LAND. 24 1 
 
 fuper-abiin dance of wine. But had this fuper- chap. 
 
 XI. 
 
 abundance been real, it would, without any 
 
 order of council, have effectually prevented the 
 plantation of new vineyards, by reducing the 
 profits of this fpecies of cultivation below their 
 natural proportion to thofe of corn and pafture. 
 With regard to the fuppofed fcarcity of corn oc- 
 'cafioned bv the multiplication of vineyards, corn 
 is nowhere in France more carefully cultivated 
 than in the wine provinces, where the land is fit 
 for producing it; as in Burgundy, Guienne, and 
 the Upper Languedoc. The numerous hands 
 employed in the one fpecies of cultivation necef- 
 farily encourage the other, by affording a ready 
 market for its produce. To diminifh the num- 
 ber of thofe who are capable of paying for it, is 
 furely a molt unpromifing expedient for encou- 
 raging the cultivation of corn. It is like the 
 policy which would promote agriculture by dif- 
 couraging manufactures. 
 
 The rent and profit of thofe productions, 
 therefore, which require either a greater original 
 expence of improvement in order to fit the land 
 for them, or a greater annual expence of culti- 
 vation, though often much fuperior to thofe of 
 corn and pafture, yet when they do no more than 
 compenfate fuch extraordinary expence, are in 
 reality regulated by the rent and profit of thofe . 
 common crops. 
 
 It fometimes happens, indeed, that the quan- 
 tity of land which can be fitted for fome parti- 
 cular produce, is too fmall to fupply the effectual 
 demand. The whole produce can be difpofed 
 
 vol. 11. R of
 
 242 OF THE RENT OF LAND* 
 
 B o o K of to thofe who are willing to give fomewhat 
 
 , more than what is fufficient to pay the whole 
 
 rent, wages and profit neceffary for raifing and 
 bringing it to market, according to their natural 
 rates, or according to the rates at which they are 
 paid in the greater part of other cultivated land. 
 The furplus part of the price which remains after 
 defraying the whole expence of improvement 
 and cultivation may commonly, in this cafe, and 
 in this cafe only, bear no regular proportion to 
 the like furplus in corn or pafture, but may ex- 
 ceed it in almoft any degree; and the greater 
 part of this excefs naturally goes to the rent of 
 the landlord. 
 
 The ufual and natural proportion, for example, 
 between the rent and profit of wine and thofe of 
 corn and pafture, muft be underftood to take 
 place only with regard to thofe vineyards which 
 produce nothing but good common wine, fuch 
 as can be raifed almoft any-where, upon any 
 light, gravelly, or fandy foil, and which has 
 nothing to recommend it but its ftrength and 
 wholefomenefs. It is with fuch vineyards only 
 that the common land of the country can be 
 brought into competition ; for with thofe of a 
 peculiar quality it is evident that it cannot. 
 
 The vine is more affected by the difference of 
 Toils than any other fruit tree. From fome it 
 derives a flavour which no culture or manage- 
 ment can equal, it is fuppofed, upon any other. 
 This flavour, real or imaginary, is fometimes 
 peculiar to the produce of a few vineyards ; 
 fometimes it extends through the greater part of 
 
 a fmall
 
 OF THE RENT OF LANO. 1\$ 
 
 a fmall diflrict, and fometimes through a con- CHAP, 
 liderable part of a large province. The whole , 
 
 quantity of fuch wines that is brought to market 
 falls fhort of the effectual demand* or the de- 
 mand of thofe who would be willing to pay the 
 whole rent, profit and wages neceffary for pre- 
 paring and bringing them thither, according to 
 the ordinary rate, or according to the rate at 
 which they are paid in common vineyards. The 
 whole quantity, therefore, can be difpofed of to 
 thofe who are willing to pay more, which necef- 
 farily raifes the price above that of common wine. 
 The difference is greater or lefs, according as 
 the fafhionablenefs and fcarcity of the wine ren* 
 der the competition of the buyers more or lefs 
 eager. Whatever it be, the greater part of it 
 goes to the rent of the landlord. For though 
 fuch vineyards are in general more carefully cul- 
 tivated than moll others, the high price of the 
 wine feems to be, not fo much the effect, as the 
 caufe of this careful cultivation. In fo valuable 
 a produce the lofs occafioned by negligence is 
 fo great as to force even the mofl carelefs to at- 
 tention. A fmall part of this high price, there- 
 fore, is fufficient to pay the wages of the extraor- 
 dinary labour beftowed upon their cultivation, 
 and the profits of the extraordinary flock which 
 puts that labour into motion. 
 
 The fugar colonies poffeffed by the European 
 nations in the Wefl Indies, may be compared to 
 thofe precious vineyards. Their whole produce 
 falls fhort of the effectual demand of Europe, and 
 can be difpofed of to thofe who are willing to 
 
 it 2 give
 
 244 OF THE RENT OF LAND. 
 
 BOOK give more than what is fufficient to pay the 
 * , whole rent, profit and wages neceflary for pre- 
 paring and bringing it to market, according to 
 the rate at which they are commonly paid by 
 any other produce. In Cochin-china the fined 
 white fugar commonly fells for three piaftres the 
 quintal, about thirteen millings and fixpence of 
 our money, as we are told by Mr. Poivre*, a 
 Very careful obferver of the agriculture of that 
 country. What is there called the quintal weighs 
 from a hundred and fifty to two hundred Paris 
 pounds, or a hundred and feventy-five Paris 
 pounds at a medium, which reduces the price of 
 the hundred weight Englifli to about eight mil- 
 lings derling, not a fourth part of what is com- 
 monly paid for the brown or mufkavada fugars 
 imported from our colonies, and not a fixth part 
 of what is paid for the fined -white fugar. The 
 greater part of the cultivated lands in Cochin- 
 china are employed in producing corn and rice, 
 the food of the great body of the people. The 
 refpeclive prices of corn, rice, and fugar, are 
 there probably in the natural proportion, or in 
 that which naturally takes place in the different 
 crops of the greater part of cultivated land, and 
 and which recompences the landlord and farmer, 
 as nearly as can be computed, according to what 
 is ufually the original expence of improvement 
 and the annual expence of cultivation. But in 
 our fugar colonies the price of fugar bears no 
 fuch proportion to that of the produce of a rice 
 or corn field either in Europe or in America. It 
 
 * Voyages d'un Philofophe. 
 
 is
 
 OF THE RENT OF LAND. 
 
 is commonly faid, that a fugar planter expects 
 that the rum and the molaffes fhould defray the 
 whole expence of his cultivation, and that his 
 fugar ihould be all clear profit. If this be true, 
 for I pretend not to affirm it, it is as if a corn 
 farmer expected to defray the expence of his cul- 
 tivation with the chaff and the flraw, and that 
 the grain mould be all clear profit. We fee fre- 
 quently focieties of merchants in London and 
 other trading towns, purchafe wafle lands in our 
 fugar colonies, which they expect to improve 
 and cultivate with profit by means of factors and 
 agents; notwithstanding the great diflance and 
 the uncertain returns, from the defective admi- 
 niflration of juftice in thofe countries. Nobody 
 will attempt to improve and cultivate in the fame 
 manner the mofl fertile lands of Scotland, Ire- 
 land, or the corn provinces of North America, 
 though from the more exact adminiflration of 
 juftice in thefe countries, more regular returns 
 might be expected. 
 
 In Virginia and Maryland the cultivation of 
 tobacco is preferred, as more profitable, to that 
 of corn. Tobacco might be cultivated with 
 advantage through the greater part of Europe ; 
 but in almoft every part of Europe it has become 
 a principal fubject of taxation, and to collect a 
 tax from every different farm in the country 
 where this plant might happen to be cultivated, 
 would be more difficult, it has been fuppofed, 
 than to levy one upon its importation at the 
 cuflom-houfe. The cultivation of tobacco has 
 upon this account been mofl abfurdly prohibited 
 r 3 through 
 
 245
 
 24*> OP THE RENT OF LAND. 
 
 BOOK through the greater part of Europe, which necef. 
 farily gives a fort of monopoly to the countries 
 where it is allowed ; and as Virginia and Mary- 
 land produce the greateft quantity of it, they 
 fhare largely, though with fome competitors, in 
 the advantage of this monopoly. The cultiva- 
 tion of tobacco, however, feems not to be fo 
 advantageous as that of fugar, I have never 
 even heard of any tobacco plantation that was 
 improved and cultivated by the capital of mer- 
 chants who refided in Great Britain, and our 
 tobacco colonies fend us home no fuch wealthy 
 planters as we fee frequently arrive from our 
 fugar iflands. Though from the preference 
 given in thofe colonies to the cultivation of to T 
 bacco above that of corn, it would appear that 
 the effectual demand of Europe for tobacco is 
 not completely fupplied, it probably is more 
 nearly fo than that for fugar : And though the 
 prefent price of tobacco is probably more than 
 fufficient to pay the whole rent, wages and profit 
 necefTaryfor preparing and bringing it to market, 
 according to the rate at which they are com- 
 monly paid in corn land ; it muft not be fo much 
 more as the prefent price of fugar. Our tobacco 
 planters, accordingly, have fhewn the fame fear 
 of the fuper-abundance of tobacco, which the 
 proprietors of the old vineyards in France have 
 of the fuper-abundance of wine. By acl; of 
 affembly they have reftrained its cultivation to 
 fix thoufand plants, fuppofed to yield a thoufand 
 weight of tobacco, for every negro between fix- 
 teen and iixty years of age. Such a negro, over 
 
 and
 
 OF THE RENT OF LAND. 247 
 
 above this quantity of tobacco, can manage, they chap. 
 reckon, four acres of Indian corn. To prevent 
 the market from being overftocked too, they 
 have fometimes, in plentiful years, we are told 
 by Dr. Douglas *, (I fufpect he has been ill in- 
 formed) burnt a certain quantity of tobacco for 
 every negro, in the fame manner as the Dutch 
 are faid to do of fpices. If fuch violent methods 
 are neceffary to keep up the prefent price of to- 
 bacco, the fuperior advantage of its culture over 
 that of corn, if it Hill has any, will not probably 
 be of long continuance. 
 
 It is in this manner that the rent of the culti- 
 vated land, of which the produce is human food, 
 regulates the rent of the greater part of other 
 cultivated land. No particular produce can long 
 afford lefs ; becaufe the land would immediately 
 be turned to another ufe : And if any particular 
 produce commonly affords more, it is becaufe the 
 quantity of land which can be fitted for it is too 
 fmall to fupply the effectual demand. 
 
 In Europe corn is the principal produce of 
 land which ferves immediately for human food. 
 Except in particular fituations, therefore, the rent 
 of corn land regulates in Europe that of all other 
 cultivated land. Britain need envy neither the 
 vineyards of France nor the olive plantations of 
 Italy. Except in particular fituations, the value 
 of thefe is regulated by that of corn, in which 
 the fertility of Britain is not much inferior to 
 that of either of thofe two countries. 
 
 *, Douglas's Summary, vol.11, p. 372, 373. 
 
 R 4 If
 
 248 OF THE RENT OF LAND. 
 
 If in any country the common and favourite 
 vegetable food of the people ftiould be drawn 
 from a plant of which the mod common land, 
 with the fame or nearly the fame culture, pro- 
 duced a much greater quantity than the molt 
 fertile does of corn,- the rent of the landlord, or 
 the furplus quantity of food which would remain 
 to him, after paying the labour and replacing 
 the flock of the farmer together with its ordi- 
 nary profits, would necefTarily be much greater. 
 Whatever was the rate at which labour was com- 
 monly maintained in that country, this greater 
 furplus could always maintain a greater quantity 
 of it, and confequently enable the landlord to 
 purchafe or command a greater quantity of it. 
 The real value of his rent, his real power and 
 authority, his command of the neceffaries and 
 conveniencies of life with which the labour of 
 other people could fupply him, would necefi'arily 
 be much greater. 
 
 A rice field produces a much greater quan- 
 tity of food than the mod fertile corn field. 
 Two crops in the year from thirty to fixty bufhels 
 each, are faid to be the ordinary produce of an 
 acre. Though its cultivation, therefore, re- 
 quires more labour, a much greater furplus re- 
 mains after maintaining all that labour. In 
 thofe rice countries, therefore, where rice is the 
 common and favourite vegetable food of the 
 people, and where the cultivators are chiefly 
 maintained with it, a greater fhare of this greater 
 furplus fliould belong to the landlord than 
 in corn countries. In Carolina, where the 
 
 planters,
 
 OF THE RENT OF LAND. 249 
 
 planters, as in other Britifh colonies, are gene- chap. 
 rally both farmers and landlords, and where rent 
 confequently is confounded with profit, the cul- 
 tivation of rice is found to be more profitable 
 than that of corn, though their fields produce 
 only one crop in the year, and though, from the 
 prevalence of the cuftoms of Europe, rice is not 
 there the common and favourite vegetable food 
 of the people. 
 
 A good rice field is a bog at all feafons, and 
 at one feafon a bog covered with water. It is 
 unfit either for corn, orpaflure, or vineyard, or, 
 indeed, for any other vegetable produce that is 
 veryufeful to men: And the lands which are fit 
 for thofe purpofes, are not fit for rice. Even in 
 the rice countries, therefore, the rent of rice 
 lands cannot regulate the rent of the other cul- 
 tivated land which can never be turned to that 
 produce. 
 
 The food produced by a field of potatoes is 
 not inferior in quantity to that produced by a 
 field of rice, and much fuperior to what is pro- 
 duced by a field of wheat. Twelve thoufand 
 weight of potatoes from an acre of land is not a 
 greater produce than two thoufand weight of 
 wheat, The food or folid nourifhment, indeed, 
 which can be drawn from each of thofe two 
 plants, is not altogether in proportion to their 
 weight, on account of the watery nature of po- 
 tatoes. Allowing, however, half the weight of 
 this root to go to water, a very large allowance, 
 fuch an acre of potatoes will ftill produce fix 
 thoufand weight of folid nourifhment, three 
 
 times
 
 25° OF THE RENT OF LAND. 
 
 BOOK times the quantity produced by the acre of 
 wheat. An acre of potatoes is cultivated with 
 lefs expence than an acre of wheat ; the fallow, 
 which generally precedes the fowing of wheat, 
 more than compenfating the hoeing and other 
 extraordinary culture which is always given to 
 potatoes. Should this root ever become in any 
 part of Europe, like rice in fome rice countries, 
 the common and favourite vegetable food of the 
 people, fo as to occupy the fame proportion of 
 the lands in tillage which wheat and other forts 
 of grain for human food do at prefent, the fame 
 quantity of cultivated land would maintain a 
 much greater number of people, and the la- 
 bourers being generally fed with potatoes, a 
 greater furplus would remain after replacing all 
 the flock and maintaining all the labour em- 
 ployed in cultivation. A greater fhare of this 
 furplus too would belong to the landlord. Po- 
 pulation would increafe, and rents would rile 
 much beyond what they are at prefent. 
 
 The land which is fit for potatoes, is fit for 
 almofl every other ufeful vegetable. If they 
 occupied the fame proportion of cultivated land 
 which corn does at prefent, they would regulate, 
 in the fame manner, the rent of the greater part 
 of other cultivated land. 
 
 In fome parts of Lancafhire it is pretended, 
 I have been told, that bread of oatmeal is a 
 heartier food for labouring people than wheaten 
 bread, and I have frequently heard the fame 
 doclxine held in Scotland. I am, however, 
 fomewhat doubtful of the truth of it. The com- 
 mon
 
 XI. 
 
 OF THE RENT OF LAND. 25 1 
 
 mon people in Scotland, who are fed with oat- chap. 
 meal, are in general neither fo ftrong nor fo 
 handfome as the fame rank of people in Eng- 
 land who are fed with wh eaten bread. They 
 neither work fo well, nor look fo well ; and as 
 there is not the fame difference between the 
 people of failrion in the two countries, experience 
 would feem to fliow, that the food of the com- 
 mon people in Scotland is not fo fuitable to the 
 human conftitution as that of their neighbours of 
 the fame rank in England. "But it feems to be 
 otherwife with potatoes. The chairmen, porters, 
 and coal-heavers in London, and thofe unfortu- 
 nate women who live by prostitution, the ftrong- 
 efl men and the mofl beautiful women perhaps 
 in the Britifh Dominions, are faid to be, the 
 greater part of them, from the lovveft rank of 
 people in Ireland, who are generally fed with 
 this root. No food can afford a more decisive 
 proof of its nourilhing quality, or of its being 
 peculiarly fuitable to the health of the human 
 conftitution. 
 
 It is difficult to preferve potatoes through the 
 year, and impoffible to ftore them like corn, for 
 two or three years together. The fear of not 
 being able to fell them before they rot, difcou- 
 rages their cultivation, and is, perhaps, the chief 
 obftacle to their ever becoming in any great 
 country, like bread, the principal vegetable food 
 of all the different ranks of the people. 
 
 PART
 
 25 * OF THE RENT OF LAND. 
 
 PART II. 
 
 Of the Produce of Land which fometimes does, and fometimer 
 does not) afford Rent^ 
 
 HUMAN food feems to be the only produce 
 of land which always and neceffarily affords 
 fome rent to the landlord. Other forts of pro- 
 duce fometimes may and fometimes may not, 
 according to different circumftances. 
 
 After food, cloathing and lodging are the two 
 great wants of mankind. 
 
 Land in its original rude (late can afford the 
 materials of cloathing and lodging to a much 
 greater number of people than it can feed. In 
 its improved flate it can fometimes feed a greater 
 number of people than it can fupply with thofe 
 materials ; at lead, in the way in which they 
 require them, and are willing to pay for them. 
 In the one ftate, therefore, there is always a 
 fuperabundance of thofe materials, which are 
 frequently, upon that account, of little or no 
 value. In the other there is often a fcarcity, 
 w T hich neceffarily augments their value. In the 
 one ftate a great part of them is thrown away 
 as ufelefs, and the price of what is ufed is con- 
 fidered as equal 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 more for every part of them than 
 
 what
 
 -Y- 
 
 0F THE HENT OF LAND* £53 
 
 what is fufficient to pay the expence of bringing chap. 
 them to market. Their price, therefore, can ^J^ 
 always afford fome rent to the landlord. 
 
 The fkins of the larger animals were the ori- 
 ginal materials of cloathing. Among nations 
 of hunters and fhepherds, therefore, whofe food 
 confifls chiefly in the flefli of thofe animals, 
 every man, by providing himfelf with food, pro- 
 vides himfelf with the materials of more cloath- 
 ing 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 was dif- 
 covered by the Europeans, with whom they 
 now exchange their furplus peltry, for blankets, 
 fire-arms, and brandy, which gives it fome value. 
 In the prefent commercial Hate of the known 
 world, the moll 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 materials 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 to thofe 
 wealthier neighbours. It affords, therefore, 
 fome rent to the landlord. When the greater 
 part of the highland cattle were confumed on 
 their own hills, the exportation of their hides 
 made the moll confiderable article of the com- 
 merce of that country, and what they were 
 exchanged for afforded fome addition to the 
 
 rent
 
 454 OF THE EENT OF LAND. 
 
 BOOK rent of the highland eftates. The wool of Ert£» 
 L _ t land, which in old times could neither be con* 
 fumed nor wrought up at home, found a market 
 in the then wealthier and more induftrious 
 country of Flanders, and its price afforded 
 fomething to the rent of the land which pro* 
 duced it. In countries not better cultivated 
 than England was then, or than the Highlands 
 of Scotland are now, and which had no foreign 
 commerce, the materials of cloathing would 
 evidently be fo fuperabundant, that a great part 
 of them would be thrown away as ufelefs, and 
 no part could afford any rent to the landlord. 
 
 The materials of lodging cannot always be 
 tranfported to fo great a diflance as thole of 
 cloathing, and do not fo readily become an 
 obje6t of foreign commerce. When they are 
 fuperabundant in the country which produces 
 them, it frequently happens, even in the prefent 
 commercial flate of the world, that they are of 
 no value to the landlord. A good ftone quarry 
 in the neighbourhood of London would afford 
 a confidcrable rent. In many parts of Scotland 
 and Wales it affords none. Barren timber for 
 building is of great value in a populous and 
 well-cultivated country, and the land which 
 produces it affords a coniiderable rent. But in 
 many parts of North America the landlord 
 would be much obliged to anybody who would 
 carry away the greater part of his large trees. 
 In fome parts of the highlands of Scotland the 
 bark is the only part of the wood which, for 
 want of roads and water-carriage, can be fent 
 
 i to
 
 OP THE RENT OF LAND. 255 
 
 to market. The timber is left to rot upon the chap. 
 ground. When the materials of lodging are fo * *' 
 fiiperabundant, the part made ufe of is worth 
 only the labour and expence of fitting it for 
 that ufe. It affords no rent to the landlord, 
 who generally grants the ufe of it to whoever 
 takes the trouble of afking it. The demand of 
 wealthier nations, however, fometimes enables 
 him to get a rent for it. The paving of the 
 ftreets of London has enabled the owners of 
 fome barren rocks on the coafl of Scotland to 
 draw a rent from what never afforded any before. 
 The woods of Norway and of the coafts of the 
 Baltic, find a market in many parts of Great 
 Britain which they could not find at home, and 
 thereby afford fome rent to their proprietors. 
 
 Countries are populous, not in proportion to 
 the number of people whom their produce can 
 cloath and lodge, but in proportion to that of 
 thofe whom it can feed. When food is pro- 
 vided, it is eafy to find the neceffary cloathing 
 and lodging. But though thefe are at hand, it 
 may often be difficult to find food. In fome 
 parts even of the Britifh dominions, what is 
 called a Houfe, may be built by one day's labour 
 of one man. The umpleft fpecies of cloathing,* 
 the fkins of animals, require fomewhat more 
 labour to drefs and prepare them for ufe. They 
 do not, however, require a great deal. Among 
 favage and barbarous nations, a hundredth or 
 little more than a hundredth part of the labour 
 of the whole year, will be fufficient to provide 
 them with fuch cloathing and lodging as fatisfy 
 
 the
 
 256 OP THE RENT OF LAND. 
 
 BOOK the greater part of the people. All the other 
 , ninety-nine parts are frequently no more than 
 enough to provide them with food. 
 
 But when by the improvement and cultiva- 
 tion of land the labour of one family can pro- 
 vide food for two, the labour of half the fociety 
 becomes fufHcient to provide food for the whole. 
 The other half, therefore, or at leaft the greater 
 part of them, can be employed in providing 
 other things, or in fatisfying the other wants 
 and fancies of mankind. Cloathing and lodg- 
 ing, houfhold furniture, and what is called 
 Equipage, are the principal objects of the 
 greater part of thofe wants and fancies. The 
 rich man confumes no more food than his poor 
 neighbour. In quality it may be very different* 
 and to felect and prepare it may require more 
 labour and art ; but in quantity it is very nearly 
 the fame. But compare the fpacious palace 
 and great wardrobe of the one, with the hovel 
 and the few rags of the other, and you will be 
 fenfible that the difference between their cloath- 
 ing, lodging, and houfhold furniture, is almofl 
 as great in quantity as it is in quality. The 
 defire of food is limited in every man by the 
 narrow capacity of the human flomach ; but the 
 defire of the conveniences and ornaments of 
 building, drefs, equipage, and houfhold furni- 
 ture, feems to have no limit or certain boundary. 
 Thofe, therefore, who have the command of 
 more food than they tliemfelves can confume, 
 are always willing to exchange the furplus, or, 
 what is the fame thing, the price of it, for gra- 
 tifications
 
 OF THE RENT OF LAND. 257 
 
 tifications of this other kind. What is over and chap. 
 above fatisfying the limited defire, is given for 
 the amufement of thofe defires which cannot be 
 fatisfied, but feem to be altogether endlefs. The 
 poor, in order to obtain food, exert themfelves 
 to gratify thofe fancies of the rich, and to obtain 
 it more certainly, they vie with one another in 
 the cheapnefs and perfection of their work. The 
 number of workmen increafes with the increas- 
 ing quantity of food, or with the growing im- 
 provement and cultivation of the lands ; and as 
 the nature of their bufinefs admits of the utmofl 
 fubdivifions of labour, the quantity of materials 
 which they can work up, increafes in a much 
 greater proportion than their numbers. Hence 
 arifes a demand for every fort of materials which 
 human invention can employ, either ufefully 
 or ornamentally, in building, drefs, equipage, or 
 houfhold furniture ; for the foffils and minerals 
 contained in the bowels of the earth, the pre- 
 cious metals, and the precious ftones. 
 
 Food is in this manner, not only the original 
 fource of rent, but every other part of the 
 produce of land which afterwards affords rent, 
 derives that part of its value from the improve- 
 ment of the powers of labour in producing food 
 by means of the improvement and cultivation 
 of land. 
 
 Thofe other parts of the produce of land, 
 however, which afterwards afford rent, do not 
 afford it always. Even in improved and cul- 
 tivated countries, the demand for them is not 
 always fuch as to afford a greater price than 
 
 vol. 11. s what
 
 158 OF THE RENT OF LAND. 
 
 book what is fufficient to pay the labour, and replace* 
 together with its ordinary profits, the flock 
 which mufl be employed in bringing them to 
 market. Whether it is or is not fuch, depends 
 upon different circumflances. 
 
 Whether a coal-mine, for example, can afford 
 any rent* depends partly upon its fertility, and 
 partly upon its fituation. 
 
 A mine of any kind may be faid to be 
 either fertile or barren, according as the quan- 
 tity of mineral which can be brought from it 
 by a certain quantity of labour, is greater or lefs 
 than what can be brought by an equal quantity 
 from the greater part of other mines of the 
 fame kind. 
 
 Some coal-mines advantageoufly fituated, can- 
 not be wrought on account of their barrennefs. 
 The produce does not pay the expence. They 
 can afford neither profit nor rent. 
 
 There are fome of which the produce is barely 
 fufficient to pay the labourer, and replace, toge- 
 ther with its ordinary profits, the flock employed 
 in working them. They afford fome profit to 
 the undertaker of the work, but no rent to the 
 landlord. They can be wrought advantageoufly 
 by nobody but the landlord, who being himfelf 
 undertaker of the work, gets the ordinary profit 
 of the capital which lie employs in it. Many 
 coal-mines in Scotland are wrought in this 
 manner, and can be wrought in no other. The 
 landlord will allow nobody elfe to work them 
 without paying fome rent, and nobody can 
 afford to pay any. 
 
 Other
 
 OF THE RENT OF LAND. 1 59 
 
 Other coal-mines in the fame country fuffi- chap. 
 ciently fertile, cannot be wrought on account of 
 their fituation. A quantity of mineral fufficient 
 to defray the expence of working, could' be 
 brought from the mine by the ordinary, or even 
 lefs than the ordinary quantity of labour : But in 
 an inland country, thinly inhabited, and without 
 either good roads Or water-carriage, this quan- 
 tity could not be fold. 
 
 Coals are a lefs agreeable fewel than wood : 
 they are faid too to be lefs wholefome. The ex- 
 pence of coals, therefore, at the place where they 
 are confumed, muft generally be fomevvhat lefs 
 than that of wood. 
 
 The price of wood again varies with the ftate 
 of agriculture, nearly in the fame manner, and 
 exactly for the fame reafon, as the price of cattle. 
 In its rude beginnings the greater part of every 
 country is covered with wood, which is then a 
 mere incumbrance of no value to the landlord, 
 who would gladly give it to any body for the 
 cutting. As agriculture advances, the woods 
 are partly cleared by the progrefs of tillage* and 
 partly go to decay in confequence of the in- 
 creafed number of cattle. Thefe, though they 
 do not increafe in the fame proportion as corn, 
 which is altogether the acquifition of human in- 
 duflry, yet multiply under the care and protec- 
 tion of men ; who ftore up in the feafon of plenty 
 what may maintain them in that of fcarcity, 
 who through the whole year furnifli them with 
 a greater quantity of food than uncultivated 
 nature provides for them, and who, by deflroy- 
 
 s 2 ins:
 
 260 OF THE RENT OF LAND. 
 
 BOOK ing and extirpating their enemies, fecure them 
 in the free enjoyment of all that (he provides. 
 Numerous herds of cattle, when allowed to wan- 
 der through the woods, though they do not de- 
 ftroy the old trees, hinder any young ones from 
 coming up, fo that in the courfe of a century or 
 two the whole foreft goes to ruin. The fcarcity 
 of wood then raifes its price. It affords a good 
 rent, and the landlord fometimes finds that he 
 can fcarce employ his bed lands more advan- 
 tageoufly than in growing barren timber, of 
 which the g eatnefs of the profit often compen- 
 fates the latenefs of the returns. This feems in 
 the prefent times to be nearly the ftate of things 
 in feveral parts of Great Britain, where the pro- 
 fit of planting is found to be equal to that of 
 either corn or paflure. The advantage which 
 the landlord derives from planting, can no- 
 where exceed, at leafl for any confiderable time, 
 the rent which thefe could afford him ; and in 
 an inland country which is highly cultivated, it 
 will frequently not fall much fhort of this rent. 
 Upon the fea-coafl of a well-improved country, 
 indeed, if coals can conveniently be had for 
 fevvel, it may fometimes be cheaper to bring 
 barren timber for building from lefs cultivated 
 foreign countries, than to raife it at home. In 
 the new town of Edinburgh, built within thefe 
 few years, there is not, perhaps, a finglc flick of 
 Scotch timber. 
 
 Whatever may be the price of wood, if that 
 of coals is f u ch that the expence of a coal-fire is 
 nearly equal to that of a wood one, we may be 
 
 allured.
 
 OF THE RENT OF LAND. 26 1 
 
 aflured, that at that place, and in thefe circum- CHAP, 
 fiances, the price of coals is as high as it can be. Vrr _ v L - » 
 It feems to be fo in fome of the inland parts of 
 England, particularly in Oxfordlhire, where it is 
 ufual, even in the fires of the common people, to 
 mix coals and wood together, and where the dif- 
 ference in the expence of thofe two forts of fewel 
 cannot, therefore, be very great. 
 
 Coals, in the coal countries, are every-where 
 much below this higher! price. If they were 
 not, they could not bear the expence of a diflant 
 carriage, either by land or by water. A fmall 
 quantity only could be fold, and the coal maf- 
 ters and coal proprietors find it more for their 
 interefl to fell a great quantity at a price fome- 
 what above the loweft, than a fmall quantity at 
 the higher!. The mofl fertile coal-mine too, re- 
 gulates the price of coals at all the other mines 
 in its neighbourhood. Both the proprietor and 
 the undertaker of the work find, the one that he 
 can get a greater rent, the other that he can get 
 a greater profit, by fomewhat underfelling all 
 their neighbours. Their neighbours are foon 
 obliged to fell at the fame price, though they 
 cannot fo well afford it, and though it always 
 diminifhes, and fometimes takes away altoge- 
 ther both their rent and their profit. Some 
 works are abandoned altogether* ; others can 
 afford no rent, and can be wrought only by the 
 proprietor. 
 
 The lowefl price at which coals can be fold 
 for any considerable time, is, like that of all 
 other commodities, the price which is barely fuf- 
 
 s 3 ficient
 
 262 OF THE RENT OF LAND. 
 
 book ficient to replace, together with its ordinary pro- 
 fits, the (lock which muft be employed in bring- 
 ing them to market. At a coal-mine for which 
 the landlord can get no rent, but which he muft 
 either work himfelf or let it alone altogether, the 
 price of coals muft generally be nearly about 
 this price. 
 
 Rent, even where coals afford one, has gene- 
 rally a fmaller fliare in their price than in that of 
 moft other parts of the rude produce of land. 
 The rent of an eftate above ground, commonly 
 amounts to what is fuppofed to be a third of the 
 grofs produce ; and it is generally a rent certain 
 and independent of the occafional variations in 
 the crop. In coal-mines a fifth of the grofs pro- 
 duce is a very great rent ; a tenth the common 
 rent, and it is feldom a rent certain, but depends 
 upon the occafional variations in the produce. 
 Thefe are fo great, that in a country where 
 thirty years 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. 
 
 The value of a coal-mine to the proprietor fre- 
 quently depends as much upon its fituation as 
 upon its fertility. That of a metallic mine de- 
 pends more upon its fertility, and lefs upon its 
 Situation. The coarfe, and ftill more the pre- 
 cious metals, when feparated from the ore, are 
 fo valuable that they can generally bear the ex- 
 pence of a very long land, and of the moft dif- 
 tant fea carriage. Their market is not confined 
 to the countries in the neighbourhood of the 
 
 mine.
 
 XI. 
 
 OF THE RENT OF LAND. 263 
 
 mine, but extends to the whole world. The chap. 
 
 copper of Japan makes an article of commerce 
 
 in Europe ; 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. 
 
 The price of coals in Weftmorland or Shrop- 
 fhire can have little effect on their price at New- 
 caflle ; and their price in the Lionnois can have 
 none at all. The productions of fuch diftant 
 coal-mines can never be brought into competi- 
 tion with one another. But the productions of 
 the molt diftant metallic mines frequently may, 
 and in fact commonly are. The price, there- 
 fore, of the coarfe, and ftill more that of the 
 precious metals, at the molt fertile mines in the 
 world, mufl neceffarily more or lefs affecl their 
 price at every other in it. The price of copper 
 in Japan mull have fome influence upon its price 
 at the copper mines in Europe, The price of 
 iilver in Peru, or the quantity either of labour or 
 of other goods which it will purchafe there, mult 
 have fome influence on its price, not only at the 
 filver mines of Europe, but at thofe of China. 
 After the difcovery of the mines of Peru, the 
 filver mines of Europe were, the greater part 
 of them, abandoned. The value, of filver was 
 lb much reduced that their produce could no 
 longer pay the expence of working them, or 
 replace, with a profit, the food, cloaths, lodging, 
 and other neceflkries which were confumed in 
 that operation. This was the cafe too with the 
 mines of Cuba and St. Domingo, and even with 
 
 s 4 the
 
 264 OF THE RENT OF LAND. 
 
 book the ancient mines of Peru, after the difcovery 
 L . ofthofeof Potofi. 
 
 The price of every metal at every mine, there- 
 fore, being regulated in fome meafure by its 
 price at the moll fertile mine in the world that 
 is actually wrought, 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 but a fmall 
 fhare in the price of the coarfe, and a Hill fmaller 
 in that of the precious metals. Labour and pro- 
 fit make up the greater part of both. 
 
 A fixth part of the grofs produce may be 
 reckoned the average rent of the tin mines of 
 Cornwall, the moft fertile that are known in the 
 world, as we are told by the Rev. Mr. Bor- 
 Iace, vice-warden of the ftannaries. Some, he 
 lays, afford more, and fome do not afford fo 
 much. A fixth part of the grofs produce is the 
 rent too of feveral very fertile lead mines in 
 Scotland. 
 
 In the filver mines of Peru, we are told by 
 Frezier and Ulloa, the proprietor frequently ex* 
 acts no other acknowledgment from the under- 
 taker of the mine, but that he will grind the ore 
 at his mill, paying him the ordinary multure or 
 price of grinding. Till 1736, indeed, the tax 
 of the King of Spain amounted to one-fifth of 
 the ftandard filver, which till then might be con- 
 fidered as the real rent of the greater part of 
 the filver mines of Peru, the richeft which have 
 been known in the world. If there had been 
 
 no
 
 OF THE RENT OF LAND. 265 
 
 no tax, this fifth would naturally have belonged CHAP, 
 to the landlord, and many mines might have 
 been wrought which could not then be wrought, 
 becaufe they could not afford this tax. The tax 
 of the Duke of Cornwall 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, it would naturally too belong 
 to the proprietor of the mine, if tin was duty 
 free. But if you add one-twentieth to one-fixth, 
 you will find that the whole average rent of the 
 tin mines of Cornwall, was to the whole average 
 rent of the filver mines of Peru, as thirteen to 
 twelve. But the filver mines of Peru are not 
 now able to pay even this low rent, and the tax 
 upon filver was, in 1736, reduced from one-fifth 
 to one-tenth. Even this tax upon filver too 
 gives more temptation to fmuggling than the tax 
 of one-twentieth upon tin ; and fmuggling muft 
 be much eafier in the precious than in the bulky 
 commodity. The tax of the King of Spain ac r 
 cordingly is faid to be very ill paid, and that of 
 the Duke of Cornwall very well. Rent, there- 
 fore, it is probable, makes a greater part of the 
 price of tin at the mofc fertile tin mines, than it 
 does of filver at the moil fertile filver mines in 
 the world. After replacing the flock employed 
 in working thofe different mines, together with 
 its ordinary profits, the refidue which remains to 
 the proprietor, is greater it feems in the coarfe, 
 than in the precious metal. 
 
 Neither are the profits of the undertakers Gf 
 filver mines commonly very great in Peru. The 
 
 fame
 
 266 OF THE RENT OF LAND. 
 
 BOOK fame moft refpeclable and well informed authors 
 acquaint us, that when any perfon undertakes to 
 work a new mine in Peru, he is univerfally 
 looked upon as a man deftined to bankruptcy 
 and ruin, and is upon that account fliunned and 
 avoided by every body. Mining, it feems, is 
 confidered there in the fame light as here, as a 
 lottery, in which the prizes do not compenfate 
 the blanks, though the greatnefs of fome tempts 
 many adventurers to throw away their fortunes 
 in fuch unprofperous projects. 
 
 As the fovereign, however, derives a confider- 
 able part of his revenue from the produce of 
 filver mines, the law in Peru gives every poffible 
 encouragement to the difcovery and working of 
 new ones. Whoever difcovers a new mine, is 
 entitled to meafure off two hundred and forty- 
 fix feet in length, according to what he fup- 
 pofes to be the direction of the vein, and half as 
 much in breadth. He becomes proprietor of 
 this portion of the mine, and can work it with- 
 out paying any acknowledgment to the landlord. 
 The intereft of the Duke of Cornwall has given 
 occafionto a regulation nearly of the fame kind 
 in that ancient dutchy. In wafte and uninclofed 
 lands any perfon who difcovers a tin mine, may 
 mark out its limits to a certain extent, which is 
 called bounding a mine. The bounder becomes 
 the real 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 iinall acknowledgment 
 mull be paid upon working it. In both regula- 
 2 tion
 
 OF THE RENT OF LAND. 267 
 
 tions the facred rights of private property are chap. 
 facrificed to the fuppofe dinterefts of public re- 
 venue. 
 
 The fame encouragement is given in Peru to 
 the difcovery and working of new gold mines ; 
 and in gold the king's tax amounts only to a 
 twentieth part of the (landard metal. It was 
 once a fifth, and afterwards a tenth, as in filver ; 
 but it was found that the work could not bear 
 even the loweft of thefe two taxes. If it is rare, 
 however, fay the fame authors, Frezier and Ulloa, 
 to find a perfon who has made his fortune by a 
 filver, it is ftill much rarer to find one who has 
 done fo by a gold mine. This twentieth part 
 feems to be the whole rent which is paid by the 
 greater part of the gold mines in Chili and Peru. 
 Gold too is much more liable to be fmuggled 
 than even filver ; not only on account of the 
 fuperior value of the metal in proportion to its 
 bulk, but on account of the peculiar way in 
 which nature produces it. Silver is very feldom 
 found virgin, but, like moll other metals, ia 
 generally mineralized with fome other body, 
 from which it is impoffible to feparate it in fuch 
 quantities as will pay for the expence, but by a 
 very laborious and tedious operation, which 
 cannot well be carried on but in workhoufes 
 creeled for the purpofe, and therefore expoled 
 to the infpeclion of the king's officers. Gold, 
 on the contrary, is almoft always found virgin. 
 It is fometimes found in pieces of fome bulk ; 
 and even when mixed in fmall and almoft infen- 
 fible particles with fand, earth, and other extra- 
 neous
 
 268 OF THE RENT OF LAND. 
 
 BOOK neous bodies, it can be feparated from them by 
 
 . *• a very fhort and iimple operation, which can be 
 
 carried on in any private houfe by any body who 
 is poflefled of a finall quantity of mercury. If 
 the king's tax, therefore, is but ill paid upon 
 filver, it is likely to be much worfe paid upon 
 gold ; and rent mull make a much fmaller part 
 of the price of gold, than even of that of filver. 
 The lowefl price at which the precious metals 
 can be fold, or the fmallefl quantity of other 
 goods for which they can be exchanged during 
 any confiderable time, is regulated by the fame 
 principles which fix the lowefl ordinary price of 
 all other goods. The flock which mufl com- 
 monly be employed, the food, cloaths, and lodg- 
 ing which mufl commonly be confumed in bring- 
 ing them from the mine to the market, deter- 
 mine it. It mufl at leafl be fumcient to replace 
 that flock with the ordinary profits. 
 
 Their highefl price, however, feems not to be 
 neceflarily determined by any thing but the 
 a6lual fcarcity or plenty of thofe metals them- 
 felves. It is not determined by that of any 
 other commodity, in the fame manner as the price 
 of coals is by that of wood, beyond which no 
 fcarcity can ever raife it. Increafe the fcarcity 
 of gold to a certain degree, and the fmallefl bit 
 of it may become more precious than a diamond, 
 and exchange for a greater quantity of other 
 goods. 
 
 The demand for thofe metals arifes partly 
 from their utility, and partly from their beauty. 
 If you except iron, they are more ufcful than, 
 perhaps, any other metal. As they are lefs 
 
 liable
 
 OF THE RENT OF LAND. 269 
 
 liable to ruft and impurity, they can more eafily chap. 
 be kept clean ; and the utenlils either of the ^_ ' , 
 table or the kitchen are often upon that account 
 more agreeable when made of them. A filver 
 boiler is more cleanly than a lead, copper, or 
 tin one ; and the fame quality would render a 
 gold boiler Hill better than a lilver one. Their 
 principal merit, however, arifes from their 
 beauty, which renders them peculiarly fit for 
 the ornaments of drefs and furniture. No paint 
 or dye can give ib fplendid colour as gilding. 
 The merit of their beauty is greatly enhanced 
 by their fcarcity. With the greater part of rich 
 people, the chief enjoyment of riches confifts in 
 the parade of riches, which in their eye is never 
 fo complete as when they appear to poffefs thofe 
 decifive marks of opulence which nobody can 
 poffefs but themfelves. In their eyes the merit 
 of an object which is in any degree either ufeful 
 or beautiful, is greatly enhanced by its fcarcity, 
 or by the great labour which it requires to col- 
 lect any confiderable quantity of it, a labour 
 which nobody can afford to pay but themfelves. 
 Such objects they are willing to purchafe at a 
 higher price than things much more beautiful 
 and ufeful, but more common. Thefe qualities 
 of utility, beauty, and fcarcity, are the original 
 foundation of the high price of thofe metals, 
 or of the great quantity of other goods for which 
 they can every-where be exchanged. This 
 value was antecedent to and independent of their 
 being employed as coin, and was the quality 
 which fitted them for that employment. That 
 
 employ-
 
 270 DP THE RENT OF LAND. 
 
 book employment, however, by occafioning a new de- 
 
 5* , mand, and by diminifhing the quantity Which 
 
 could be employed in any other way, may have 
 afterwards contributed to keep up or increafe 
 their value. 
 
 The demand for the precious ftones arifes al- 
 together from their beauty. They are of no ufe, 
 but as ornaments; and the merit of their beauty 
 is greatly enhanced by their lcarcity, or by the 
 difficulty and expence of getting them from the 
 mine. Wages and profit accordingly make up, 
 upon moil occafions, almoft the whole of their 
 high price. Rent comes in but for a very final I 
 fliare ; frequently for no lhare ; and the moll 
 fertile mines only afford any confiderable rent. 
 When Tavernier, a jeweller, vifited the diamond 
 mines of Golconda and Vifiapour, he was in* 
 formed that the fovereign of the country, for 
 whofe benefit they were wrought, had ordered 
 all of them to be flint up, except thofe which 
 yield the largefl and fined ftones. The others, 
 it feems, were to the proprietor not worth the 
 working. 
 
 As the price both of the precious metals and 
 of the precious ftones is regulated all over the 
 world by their price at the molt fertile mine in it, 
 the rent which a mine of either can afford to its 
 proprietor is in proportion, not to its abfolute, 
 but to what may be called its relative fertility, or 
 to its fuperiority over other mines of the fame 
 kind. If new mines were difcovcred as much 
 fuperior to thofe of Potofi as they were fuperior 
 to thofe of Europe, the value of filver might be 
 
 fo
 
 XI. 
 
 OP THE RENT OF LAND. 27 1 
 
 fo much degraded as to render even the mines of c HA P. 
 Potoii not worth the working. Before the dif- 
 covery of the Spanifh Weft Indie3, the mod fer- 
 tile mines in Europe may have afforded as great 
 a rent to their proprietor as the richefl mines in 
 Peru do at prefent. Though the quantity of 
 h'lver was much lefs, it might have exchanged 
 for an equal quantity of other goods, and the 
 proprietor's fhare might have enabled him to 
 purchafe or command an equal quantity either of 
 labour or of commodities. The value both of 
 the produce and of the rent, the real revenue 
 which they afforded both to the public and to the 
 proprietor, might have been the fame. 
 
 The mofl abundant mines either of the pre- 
 cious metals or of the precious ftones could add 
 little to the wealth of the world. A produce of 
 which the value is principally derived from its 
 fcarcity, is neceflarily degraded by its abun- 
 dance. A fervice of plate, and the other frivo- 
 lous ornaments of drefs and furniture, could be 
 purchafed for a fmaller quantity of labour, or 
 for a fmaller quantity of commodities ; and in 
 this would coniiit the fole advantage which the 
 world could derive from that abundance. 
 
 It is otherwife in eflates 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 landlord, it will always give 
 
 him
 
 1J2 OF THE RENT OF LAND. 
 
 him a proportionable command of the labour of 
 thofe people, and of the commodities with which 
 that labour can fupply him. The value of the 
 molt barren lands is not diminifhed by the 
 neighbourhood of the mod fertile. On the con- 
 trary, 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. 
 
 Whatever increafes the fertility of land in pro- 
 ducing food, increafes not only the value of the 
 lands upon which the improvement is bellowed, 
 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 difpofal beyond what 
 they themfelves can confume, is the great caufe 
 of the demand both for the precious metals and 
 the precious Hones, as well as for every other 
 conveniency and ornament of drefs, lodging, 
 houfhold furniture, and equipage. Food not 
 only conflitutes the principal part of the riches 
 of the world, but it is the abundance of food 
 which gives the principal part of their value 
 to many other forts of riches. The poor inha- 
 bitants of Cuba and St. Domingo, when they 
 were firft difcovered by the Spaniards, ufed to 
 wear little bits of gold as ornaments in their hair 
 and other parts of their drefs. They feemed to 
 value them as we would do any little pebbles of 
 3 fomewhat
 
 OF THE RENT OF LAND* 1*]§ 
 
 fomewhat more than ordinary beauty, and to c H A P. 
 confider them as juft worth the picking up, but 
 not worth the refilling to any body who afked 
 them. They gave them to their new guefts at 
 the firfl requeft, without feeming to think that 
 they had made them any very valuable prefent. 
 They were afloniihed to obferve the rage 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 fu- 
 perfluity of food, fo fcanty always among them- 
 felves, 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 under- 
 ftand this, the paffion of the Spaniards would 
 not have furprifed them. 
 
 PART III. 
 
 Of the Variations in the Proportion between the refpeBive 
 Values of that Sort of Produce which always affords Rent, 
 and of that which fometimes does and fometimes does not 
 afford Rent. 
 
 THE in creating abundance of food, in con- 
 fequence of increafing improvement and 
 cultivation, muft neceflarily increafe the demand 
 for every part of the produce of land which is 
 not food, and which can be applied either to ufe 
 or to ornament. In the whole progrefs of im- 
 provement, it might therefore be expected, 
 there mould be only one variation in the com- 
 vol. ir. t parative
 
 274 OF THE RENT OF LAND. 
 
 BOOK parative values of thofe two different forts of 
 produce. The value of that fort which fome- 
 times does and fometimes does not afford rent, 
 fhould conftantly rife in proportion to that which 
 always affords fome rent. As art and induftry 
 advance, the materials of cloathing and lodg- 
 ing, the ufeful fofiils and minerals of the earth, 
 the precious metals and the precious Itones 
 mould 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 become dearer and 
 dearer. This accordingly has been the cafe 
 with mofl of thefe things upon mofl 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 ftill greater proportion 
 than the demand. 
 
 The value of a free-ftone quarry, for exam- 
 ple, will neceffarily increafe with the increafing 
 improvement and population of the country 
 round about it ; efpecially if it mould be the 
 only one in the neighbourhood. But the value 
 ©fa filver mine, even though there fhould not 
 be another within athoufand 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 
 extend more than a few miles round about it, and 
 the demand mult generally be in proportion to 
 the improvement and population of that finall 
 diftricl:. But the market for the produce of a 
 
 filver
 
 OF THE RENT OF LAND. 2J $ 
 
 Giver mine may extend over the whole known chap. 
 world. Unlefs the world in general, therefore, * *' f 
 be advancing in improvement and population, 
 the demand for filver might not be at all in* 
 creafed by the improvement even of a large 
 country in the neighbourhood of the mine. 
 Even though the world in general were improve 
 ing, yet if, in the courfe of its improvement, 
 new mines ihould be difcovered, much more fer- 
 tile than any which had been known before, 
 though the demand for filver would neceflarily 
 increafe, yet the fupply might increafe in ib 
 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 exam- 
 ple, might gradually purchafe or command a 
 fmaller and a fmaller quantity of labour, or ex- 
 change for a fmaller and a fmaller quantity of 
 corn, the principal part of the fubfiftence of the 
 labourer. 
 
 The great market for filver is the commercial 
 and civilized part of the world. 
 
 If, by the general progreis* of improvement, 
 the demand of this market mould 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. 
 
 If, on the contrary, the fupply, by fome acci- 
 dent mould increafe for many years together in a 
 
 t i greater
 
 276 OF THE RENT OF LAND. 
 
 BOOK greater proportion than the demand, that metal 
 . *j , would gradually become cheaper and cheaper ; 
 or, in other words, the average money price of 
 corn would, in fpite of all improvements, gra- 
 dually become dearer and dearer. 
 
 But if, on the other hand, the fupply of the 
 metal mould increafe nearly in the fame propor- 
 tion as the demand, it would continue to pur- 
 chafe 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. 
 
 Thefe three feem to exhaufl all the poflible 
 combinations of events which can happen in the 
 progrefs of improvement ; and during the courfe 
 of the four centuries preceding the prefent, if we 
 may judge by what has happened both in France 
 and Great Britain, each of thofe three different 
 combinations feem to have taken place in the 
 European market, and nearly in the fame order 
 too in which I have here fet them down. 
 
 Digrejfion concerning the Variations in the Value of Silver 
 during the Courfe of the Four lajl Centuries. 
 
 FIRST PERIOD. 
 
 In 1350, and for fome time before, the aver- 
 age price of the quarter of wheat in England 
 feems not to have been ellimated lower than four 
 ounces of filver, Tower-weight, equal to about 
 twenty {hillings of our prefent money. From 
 1 ' this
 
 OF VARIATIONS IN THE VALUE OF SILVER. 1JJ 
 
 this price it feems to have fallen gradually to 
 two ounces of filver, equal to about ten fhillings 
 of our prefent money, the price at which we find 
 it eftimated in the beginning of the fixteenth 
 century, and at which it feems to have conti* 
 nued to be eftimated till about 1570. 
 
 In i35o,beingthe 25th of Edward III.,was en- 
 acted what is called, The Statute of Labourers. 
 In the preamble it complains much of the info- 
 lence of fervants, who endeavoured to raife their 
 wages upon their mailers. It therefore ordains, 
 that all fervants and labourers mould for the fu- 
 ture be contented with the fame wages and live* 
 ries (liveries in thofe times fignified, not only 
 cloaths, but provifions) which they had been ac- 
 cuftomed to receive in the 20th year of the King, 
 and the four preceding years ; that upon this 
 account their livery wheat fhould no-where be 
 eftimated higher than ten-pence a bulhel, and 
 that it fhould always be in the option of the 
 mafter to deliver them either the wheat or the 
 money. Ten-pence a bufhel, therefore, had, in 
 the 25th of Edward III., been reckoned a very 
 moderate price of wheat, fince it required a par- 
 ticular ftatute to oblige fervants to accept of it 
 in exchange for their ufual livery of provifions ; 
 and it had been reckoned a reafonable price ten 
 years before that, or in the 16th year of the King, 
 the term to which the ftatute refers. But in the 
 1 6th year of Edward III., ten-pence contained 
 about half an ounce of filver, Tower-weight, and 
 was nearly equal to half a crown of our prefent 
 money. Four ounces of filver, Tower-weight, 
 
 t 3 therefore,
 
 278 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 book therefore, equal to fix (hillings and eight-pence 
 of the money of thofe times, and to near twenty 
 millings of that of the prefent, mud have been 
 reckoned a moderate price for the quarter of 
 eight bum els. 
 
 This flatute is furely a better evidence of 
 what w r as reckoned in thofe times a moderate 
 price of grain, than the prices of fome particular 
 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 judg- 
 ment concerning what may have been the ordi- 
 nary price. There are, befides, other reafons 
 for believing that in the beginning of the four- 
 teenth century, and for fome time before, the 
 common price of wheat was not lefs than four 
 ounces of filver the quarter, and that of other 
 grain in proportion. 
 
 In 1309, Ralph de Born, Prior of St. Auguf- 
 tine's, Canterbury, gave a feail upon his inftalla- 
 tion-day, of which William Thorn has preferved, 
 not only the bill of fare, but the prices of many 
 particulars. In that feafl were confumed, ift, 
 Fifty-three quarters of wheat, which coil nine- 
 teen pounds, or feven millings and two-pence 
 a quarter, equal to about one-and-twenty mil- 
 lings and fix-pence of our prefent money; 
 2dly, Fifty-eight quarters of malt, which cofl 
 feventeen pounds ten millings, or fix (hillings a 
 quarter, equal to about eighteen (hillings of our 
 prefent money ; 3dly, Twenty quarters of oats, 
 which coil four pounds, or four (hillings a quar- 
 ter,
 
 OF VARIATIONS IN THE VALUE OF SILVER. 279 
 
 ter, equal to about twelve millings of our prefent chap. 
 money. The prices of malt and oats feem here 
 to be higher than their ordinary proportion to 
 the price of wheat. 
 
 Thefe prices are not recorded on account of 
 their extraordinary dearnefs or cheapnefs, but 
 are mentioned accidentally as the prices actually 
 paid for large quantities of grain confumed at a 
 feafl which was famous for its magnificence. 
 
 In 1262, being the 51ft of Henry III, was re- 
 vived an ancient flatute called, The Afjize of 
 Bread and Ale, which, the King fays in the pre- 
 amble, had been made in the times of his pro- 
 genitors, fometime kings of England. It is pro- 
 bably, therefore, as old at leafl as the time of his 
 grandfather Henry II., and may have been as old 
 as the conqueft. It regulates the price of bread 
 according as the prices of wheat may happen to 
 be, from one milling to twenty millings the 
 quarter of the money of thofe times. But fla- 
 tutes of this kind are generally prefumed to pro- 
 vide with equal care for all deviations from the 
 middle price, for thofe below it as well as for 
 thofe above it. Ten millings, therefore, con- 
 taining fix ounces of filver, Tower-weight, and 
 equal to about thirty {hillings ^of our prefent 
 money, muft, upon this fuppofition, hav§. boen 
 reckoned the middle price of the quarter of 
 wheat when this flatute was firft enacted, and 
 muft have continued to be fo in the 51ft of 
 Henry III. We cannot therefore be very wrong 
 in fuppofing that the middle price was not lefs 
 than one-third of the higher! price at which this 
 
 t 4 flatute
 
 280 OF VARIATIONS IN THE VALUE OF SILVEH. 
 
 BOOK ftatute regulates the price of bread, or than fix 
 fhillings and eight-pence of the money of thofe 
 times, containing four ounces of filver, Tower- 
 weight. 
 
 From thefe different facts, therefore, we feem 
 to have fome reafon to conclude, that about the 
 middle of the fourteenth century, and for a con- 
 iiderable time before, the average or ordinary 
 price of the quarter of wheat was not fuppofed to 
 be lefsthan four ounces of filver, Tower-weight. 
 
 From about the middle of the fourteenth to 
 the beginning of the fixteenth century, what was 
 reckoned the reafonable and moderate, that is, 
 the ordinary or average price of wheat, feems to 
 have funk gradually to about one-half of this 
 price ; fo as at lafl to have fallen to about two 
 ounces of filver, Tower- weight, equal to about 
 ten fhillings of our prefent money. It continued 
 to be eftimated at this price till about 1570. 
 
 In the houfhold book of Henry, the fifth Earl 
 of Northumberland, drawn up in 1 5 1 2, there are 
 two different eftimations of wheat. In one of 
 them it is computed at fix fhillings and eight- 
 pence the quarter, in the other at five fhillings 
 and eight-pence only. In 151 2, fix fhillings and 
 eight-pence contained only two ounces of filver, 
 Tower- weight, and were equal to about ten fhil- 
 lings of our prefent money. 
 
 From the 25th of Edward III. to the begin- 
 ning of the reign of Elizabeth, during the fpace 
 of more than two hundred years, fix fhillings and 
 eight-pence, it appears from fevcral different 
 ftatutes, had continued to be confidered as what 
 
 is
 
 OF VARIATIONS IN THE VALUE OF SILVER. 28 1 
 
 is called the moderate and reafonable, that is the chap. 
 ordinary or average price of wheat. The quan- XI - 
 tity of filver, however, contained in that nominal 
 fum was, during the courfe of this period, con- 
 tinually diminifhing, in confequence of fome al- 
 terations which were made in the coin. But the 
 increafe of the value of lilver had, it feems, fo far 
 compenfated the diminution of the quantity of 
 it contained in the fame nominal fum, that the 
 legiflature did not think it worth while to attend 
 to this circumftance. 
 
 Thus in 1 436 it was enacted, that wheat might 
 be exported without a licence when the price was 
 fo low as fix millings and eight-pence : And in 
 1463 it was enacted, that no wheat mould be 
 imported if the price was not above fix millings 
 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 importation. Six millings and eight- 
 pence, therefore, containing about the fame 
 quantity of filver as thirteen millings 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 consi- 
 dered as what is called the moderate and reafon- 
 able price of wheat. 
 
 In 1554, by the 1 ft and 2d of Philip and 
 Mary; and in 1558, by the ifl of Elizabeth, the 
 exportation of wheat was in the fame manner 
 prohibited, whenever the price of the quarter 
 mould exceed fix millings and eight-pence, 
 
 which
 
 28 2 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK which did not then contain two-penny worth 
 L , more filver than the lame nominal fiim does at 
 prefent. But it had ibon been found that to re- 
 ftrain the exportation of wheat till the price was 
 fo 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 cer- 
 tain ports whenever the price of the quarter 
 mould 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 eflimation of the North- 
 umberland book in 1512. / 
 
 That in France the average price of grain was, 
 in the fame manner, much lower in the end of 
 the fifteenth and beginning of the fixteenth cen- 
 tury, than in the two centuries preceding, has 
 been obferved both by Mr. Dupre de St. Maur, 
 and by the elegant author of the Efiay on the 
 Police of Grain. Its price, during the fame pe- 
 riod, had probably funk in the fame manner 
 through the greater part of Europe. 
 
 This rife in the value of filver, in proportion 
 to that of corn, may either have been owing al- 
 together to the increafe of the demand for that 
 metal, in confcquence of incrcafing improve- 
 ment and cultivation, the fupply in the mean 
 time continuing the fame as before : Or, the de- 
 mand 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
 
 OF VARIATIONS IN THE VALUE OF SILVER. 283 
 
 which were then known in the world, being chap. 
 much exhaufted, and confequently the cxpence 
 of working them much increafed : Or it may 
 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 fif- 
 teenth 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 na- 
 turally increafe induflry and improvement ; and 
 the demand for the precious metals, as well as 
 for every other luxury and ornament, would na- 
 turally increafe with the increafe of riches. A 
 greater annual produce would require a greater 
 quantity of coin to circulate it ; and a greater 
 number of rich people would require a greater 
 quantity of plate and other ornaments of filver. 
 It is natural to fuppofe too, that the greater part 
 of the mines which then fupplied the European 
 market with filver, might be a good deal ex- 
 haufted, and have become more expenfive in the 
 working. They had been wrought many of 
 them from the time of the Romans. 
 
 It has been the opinion, however, of the 
 greater part of thofe who have written upon the 
 prices of commodities in ancient times, that, 
 from the Conquefl, perhaps from the invafion of 
 Julius Caefar, till the difcovery of the mines of 
 America, the value of filver was continually 
 diminifnmg. This opinion they feem to have 
 been led into, partly by the obfervations which 
 they had occafion to make upon the prices both 
 
 of
 
 284 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK of corn and of fome other parts of the rude pro- 
 _, duce of land ; and partly by the popular notion, 
 that as the quantity of filver naturally increafes 
 in every country with the increafe of wealth, fo 
 its value diminiihes as its quantity increafes. 
 
 In their obfervations upon the prices of corn, 
 three different circumftances i'eem frequently to 
 have mined them. 
 
 Firfl, In ancient times almoft all rents were 
 paid in kind ; in a certain quantity of corn, 
 cattle, poultry, &c. It fometimes happened, 
 however, that the landlord would ftipulate, that 
 he mould be at liberty to demand of the tenant, 
 either the annual payment in kind, or a certain 
 fum of money inftead of it. The price at which 
 the payment in kind was in this manner ex- 
 changed for a certain fum of money, is in Scot- 
 land called the converfion price. As the option 
 is always in the landlord to take either the fub- 
 ftance or the price, it is neceffary for the fafety 
 of the tenant, that the converlion price iliould 
 rather be below than above the average market 
 price. In many places, accordingly, it is not 
 much above one-half of this price. Through 
 the greater part of Scotland this cuftom flill 
 continues with regard to poultry, and in fome 
 places with regard to cattle. It might probably 
 have continued to take place too with regard to 
 corn, had not the inflitution of the public fiars 
 put an end to it. Thefe are annual valuations, 
 according to the judgment of an affize, of the 
 average price of all the different forts of grain, 
 and of all the different qualities of each, accord-
 
 OF VARIATIONS IN THE VALUE OF SILVER. 285 
 
 ing to the actual market price in every different chap. 
 county. This inflitution rendered it iufficiently 
 fafe for the tenant, and much more convenient 
 for the landlord, to convert, as they call it, the 
 corn rent, rather at what mould happen to be 
 the price of the fiars of each year, than at any 
 certain fixed price. But the writers who have 
 collected the prices of corn in ancient times, 
 feem frequently to have miflaken what is called 
 in Scotland the converfion price for the actual 
 market price. Fleetwood acknowledges, upon 
 one occafion, that he had made this miflake. 
 As he wrote his book, however, for a particular 
 purpofe, he does not think proper to make this 
 acknowledgment till after tranfcribing this con- 
 verfion price fifteen times. The price is eight 
 millings the quarter of wheat. This fum in 
 1423, the year at which he begins with it, con- 
 tained the fame quantity of filver as fixteen mil- 
 lings of our prefent money. But in 1562, the 
 year at which he ends with it, it contained no 
 more than the fame nominal fum does at pre- 
 fent. 
 
 Secondly, They have been milled by the flo- 
 venly manner in which fome ancient flatutes of 
 affize had been fometimes tranfcribed by lazy 
 copiers ; and fometimes perhaps actually com- 
 pofed by the legiflature. 
 
 The ancient flatutes of affize feem to have be- 
 gun always with determining what ought to be 
 the price of bread and ale when the price of 
 wheat and barley were at the loweft, and to have 
 proceeded gradually to determine what it ought 
 
 to
 
 286 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOKto be, according as the prices of thofe two forts 
 }'_ , of grain flionld gradually rife above this loweft 
 price. But the tranfcribers of thofe ftatutes feem 
 frequently to have thought it fufficient to copy 
 the regulation as far as the three or four firft and 
 lowed prices ; faving in this manner their own 
 labour, and judging, I fuppofe, that this was 
 enough to mow what proportion ought to be ob- 
 ferved in all higher prices. 
 
 Thus, in the aifize of bread and ale of the 51ft 
 of Henry III., the price of bread was regulated 
 according to the different prices of wheat, from 
 one milling to twenty millings the quarter of 
 the money of thofe times. But in the manu- 
 fcripts from which all the different editions of 
 the ftatutes, preceding that of Mr. Ruff head, 
 were printed, the copiers had never tranfcribed 
 this regulation beyond the price of twelve mil- 
 lings. Several writers, therefore, being milled 
 by this faulty tranfcription, very naturally con- 
 cluded that the middle price, or fix millings the 
 quarter, equal to about eighteen millings of our 
 prefent money, was the ordinary or average price 
 of wheat at that time. 
 
 In the ftatute of Tumbrel and Pillory, enacted 
 nearly about the fame time, the price of ale is 
 regulated according to every fixpenee rife in the 
 price of barley, from two Ihillings to four mil- 
 lings the quarter. That four fliillings, 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
 
 OF VARIATIONS IN THE VALUE OF SILVER. 287 
 
 all other prices, whether higher or lower, we may chap. 
 infer from the lad words of the ftatute ; " et lie . '_ , 
 " deinceps crefcetur vel diminuetur per fex de- 
 " narios. ,, The expreffion is very flovenly, but 
 the meaning is plain enough ; " That the price 
 " of ale is in this manner to be increafed or di- 
 " minifhed according to every fixpence rife or 
 " fall in the price of barley." In the compofi- 
 tion of this ftatute the legiflature itfelf feems to 
 have been as negligent as the copiers were in the 
 tranfeription of the other. 
 
 In an ancient manufcript of the Regiam Ma- 
 
 jeflatem, an old Scotch law book, there is a 
 
 ftatute of affize, in which the price of bread is 
 
 regulated according to all the different prices of 
 
 wheat, from ten-pence to three millings the 
 
 Scotch boll, equal to about half an Englilh 
 
 quarter. Three millings Scotch, at the time 
 
 when this affize is fuppofed to have been enacled, 
 
 were equal to about nine millings fterling of 
 
 our preient money. Mr. Ruddiman feems * to 
 
 conclude from this, that three millings was the 
 
 higheft price to which wheat ever rofe in thofe 
 
 times, and that ten-pence, a milling, or at moil 
 
 two fliiilings, were the ordinary prices. Upon 
 
 confulting 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 refpeclive prices of wheat 
 
 and bread. The lad words of the ftatute are, 
 
 " reliqua judicabis fecundum praefcripta ha- 
 
 " bendo refpectum ad pretium bladi." " You 
 
 * See his preface to Anderfon's Diplomats Scotia;. 
 
 3 4C fliall
 
 288 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 ihall judge of the remaining cafes according 
 
 to what is above written, having a reipect to 
 
 the price of corn." 
 
 Thirdly, They feem to have been milled too 
 by the very low price at which wheat was fome- 
 times fold in very ancient times ; and to have 
 imagined, that as its lowefl price was then much 
 lower than in later times* its ordinary price 
 mult likewife have been much lower. They 
 might have found, however, that in thofe ancient 
 times, its highelt price was fully as much above, 
 as its lowell price was below any thing that had 
 ever been known in later times. Thus, in 1270, 
 Fleetwood gives us two prices of the quarter of 
 wheat. The one is four pounds lixteen Ihillings 
 of the money of thofe times, equal to fourteen 
 pounds eight Ihillings of that of the prefent ; the 
 other is lix pounds eight Ihillings, equal to nine- 
 teen pounds four millings of our prefent money* 
 No price can be found in the end of the fifteenth* 
 or beginning of the lixteenth century, which ap- 
 proaches to the extravagance of thefe. The 
 price of corn, though at all times liable to varia- 
 tion, varies moll in thofe turbulent and dif- 
 orderly focieties, in which the interruption of all 
 commerce and communication hinders the plen- 
 ty of one part of the country from relieving the 
 fcarcity of another. In the diforderly ftate of 
 England under the Plantagenets, who governed 
 it from about the middle of the twelfth, till to- 
 wards the end of the fifteenth century, one 
 diftrict might be in plenty, while another at no 
 great diftance, by having its crop deflroyed 
 
 either
 
 OF VARIATIONS IN THE VALUE OF SILVER. 289 
 
 either by fome accident of the feafons, or by the CHAP, 
 incurfion of fome neighbouring baron, might be 
 fuffering all the horrors of a famine ; and yet if 
 the lands of fome hoftile lord were interpofed 
 between them, the one might not be able to 
 give the lead am* fiance to the other. Under the 
 vigorous administration of the Tudors, who go- 
 verned England during the latter part of the fif- 
 teenth, and through the whole of the fixteenth 
 century, no baron was powerful enough to dare 
 to difturb the public fecurity. 
 
 The reader will find at the end of this chapter 
 all the prices of wheat which have been collected 
 ,by Fleetwood from 1202 to 1597, both inclufive, 
 reduced to the money of the prefent times, and 
 digefted according to the order of time, into 
 feven divifions of twelve years each. At the 
 end of each divifion too, he will find the average 
 price of the twelve years of which it confifls. In 
 that long period of time, Fleetwood has been 
 able to collect the prices of no more than eighty 
 years, fo that four years are wanting to make out 
 the laft twelve years. I have added, therefore, 
 from the accounts of Eton College, the prices of 
 1598, 1599, 1600, and 1 60 1. It is the only ad- 
 dition which I have made. The reader will fee, 
 that from the beginning of the thirteenth, till 
 after the middle of the fixteenth century, the 
 average price of each twelve years grows gradu- 
 ally lower and lower ; and that towards the end 
 of the fixteenth century it begins to rife again. 
 The prices, indeed, wKich Fleetwood has been 
 able to collect, feem to have been thofe chiefly 
 
 vol. 1. r which
 
 2QO OF VARIATIONS IX THE VALUE OF SILVER* 
 
 BOOK which were remarkable for extraordinary dear. 
 
 . *•_ , nefs or cheapnefs ; and I do not pretend that any 
 very certain conclufion can be drawn from them. 
 So far, however, as they prove any thing at all, 
 they confirm the account which I have been en- 
 deavouring to give. Fleetwood himfelf, however, 
 feems, with moil other writers, to have believed, 
 that during all this period the value of iilver, in 
 confequence of its increafing abundance, was 
 continually diminifliing. The prices of corn 
 which he himfelf has collected, certainly do not 
 agree with this opinion. They agree perfectly 
 with that of Mr. Dupre de St. Maur, and with 
 that which I have been endeavouring to explain. 
 Bifhop Fleetwood and Mr. Dupre de St. Maur 
 are the two authors who feem to have collected, 
 with the greater! diligence and fidelity, the prices 
 of things in ancient times. It is fomewhat curi- 
 ous that, though their opinions are fo very dif- 
 ferent, their facts, fo far as they relate to the price 
 of corn at lead, fhould coincide fo very exactly. 
 
 It is not, however, fo much from the low price 
 of corn, as from that of fome other parts of the 
 rude produce of land, that the mod judicious 
 writers have inferred the great value of filver | 
 in thole very ancient times. Corn, it has been f 
 faid, being a fort of manufacture, was, in thofej 
 rude ages, much dearer in proportion than the- 
 greater part of other commodities ; it is meant, 
 I fuppofe, than the greater part of unmanufac- 
 tured commodities ; fuch as cattle, poultry, 
 game of all kinds, &c. That in thofe times of 
 poverty and barbarifm thefe were proportion- 
 ably
 
 01» VARIATIONS IN THE VALUE OF SILVER. 29 1 
 
 ably much cheaper than corn, is undoubtedly CHA p. 
 true. But this cheapnefs was not the effect of 
 the high value of filver, but of the low value of 
 thofe commodities. It was not becaufe filver 
 would in fuch times purchafe or reprefent a 
 greater quantity of labour, but becaufe fuch 
 commodities would purchafe or reprefent a much 
 fmaller quantity than in times of more opulence 
 and improvement. Silver mull certainly be 
 cheaper in Spanifli America than in Europe ; in 
 the country where it is produced, than in the 
 country 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 Ulloa, was, not many years ago, at Buenos 
 Ayres, the price of an ox chofen from a herd of 
 three or four hundred. Sixteen millings fterling, 
 we are told by Mr. Byron, was the price of a 
 good horfe in the capital of Chili. In a country 
 naturally fertile, but of which the far greater 
 part is altogether uncultivated, cattle, poultry, 
 game of all kinds, &c. as they can be acquired 
 with a very fmall quantity of labour, fo they will 
 purchafe or command but a very fmall quantity. 
 The low money price for which they may be 
 fold, is no proof that the real value of filver is 
 there very high, but that the real value of thofe 
 commodities is very low. 
 
 Labour, it mufl always be remembered, and 
 not any particular commodity or let of commo- 
 dities, is the real meafure of the value both of 
 filver and of all other commodities. 
 
 v 2 But
 
 292 OP VARIATIONS IN THE VALUE OF SILVER. 
 
 But in countries almoft wade, or but thinly 
 inhabited, cattle, poultry, game of all kinds, 
 &c. as they are the fpontaneous productions of 
 nature, fo (he frequently produces them in much 
 greater quantities than the confumption of the 
 inhabitants requires. In fuch a Hate of things 
 the fupply commonly exceeds the demand. In 
 different ftates of fociety, in different ftages of 
 improvement, therefore, fuch commodities will 
 reprefent, or be equivalent to, very different 
 quantities of labour. 
 
 In every (late of fociety, in every ftage of im- 
 provement, corn is the production of human in- 
 dustry. But the average produce of every fort 
 of induftry is always fuited, more or lefs exactly, 
 to the average confumption ; the average fupply 
 to the average demand. In every different ftage 
 of improvement, befides, the raifing of equal 
 quantities of corn in the fame foil and climate, 
 will, at an average, require nearly equal quan- 
 tities of labour ; or what comes, to the fame 
 thing, the price of nearly equal quantities. ; the 
 continual increafe of the productive powers of 
 labour in an improved ftate of cultivation, 
 being more or lefs counterbalanced by the con- 
 tinually increafing price of cattle, the principal 
 inftruments of agriculture. Upon all thefe ac- 
 counts, therefore, we may reft allured, that equal 
 quantities of corn will, in every flate of fociety, 
 in every flage of improvement, more nearly re- 
 prefent, or be equivalent to, equal quantities of 
 labour, than equal quantities of any other part of 
 the rude produce of land. Corn, accordingly, 
 3 ^
 
 OF VARIATIONS IN THE VALUE OF SILVER. 2,93 
 
 it has already been obferved, is, in all the dif- 
 ferent flages of wealth and improvement, a more 
 accurate meafure of value than any other com- 
 modity or fet of commodities. In all thofe dif- 
 ferent flages, therefore, we can judge better of 
 the real value of filver, by comparing it with 
 corn, than by comparing it with any other com- 
 modity, or fet of commodities. 
 
 Corn, befides, or whatever elfe is the com- 
 mon and favourite vegetable food of the people, 
 conflitutes, in every civilized country, the prin- 
 cipal part of the fubfiflence of the labourer. In 
 confequence of the extenlion of agriculture, the 
 land of every country produces a much greater 
 quantity of vegetable than of animal food, and 
 the labourer every-where lives chiefly upon the 
 wholefome food that is cheaper! and mod abun- 
 dant. Butcher's meat, except in the moil thriv- 
 ing countries, or where labour is moll highly 
 rewarded, makes but an infigniflcant part of his 
 fubfiflence ; poultry makes a Hill fmaller part of 
 it, and game no part of it. In France, and even 
 in Scotland, where labour is fomewhat better 
 rewarded than in France, the labouring poor fel- 
 dom eat butcher's-meat, except upon holidays, 
 and other extraordinary occafions. The money 
 price of labour, therefore, depends much more 
 upon the average money price of corn, the fub- 
 fiflence of the labourer, than upon that of but- 
 cher's meat, or of any other part of the rude 
 produce of land. The real value of gold and fil- 
 ver, therefore, the real quantity of labour which 
 they can purchafe or command, depends much 
 more upon the quantity of corn which they can 
 
 u 3 purchafe
 
 294 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 book purchafe or command, than upon that of but- 
 cher's-meat, or any other part of the rude pro- 
 duce of land. 
 
 . Such flight obfervations, however, upon the 
 prices either of corn or of other commodities, 
 would not probably have milled fo many intelli- 
 gent authors, had they not been influenced, at 
 the fame time, by the popular notion, that as the 
 quantity of filver naturally increafes in every 
 country with the increafe of wealth, fo its value 
 .diminishes as its quantity increafes. This notion, 
 however, feems to be altogether groundlefs. 
 
 The quantity of the precious metals may in- 
 creafe in any country from two different caufes : 
 either, firft, from the increafed abundance of the 
 mines which fupply it ; or, fecondly, from the 
 increafed wealth of the people, from the in- 
 creafed produce of their annual labour. The 
 flrfl of thefe caufes is no doubt neceflarily con- 
 nected with the diminution of the value of the 
 precious metals ; but the fecond is not. 
 
 When more abundant mines are difcovered, a 
 greater quantity of the precious metals is brought 
 to market, and the quantity of the neceflaries 
 and conveniencies of life for which they mufl be 
 exchanged being the fame as before, equal quan- 
 tities of the metals mull be exchanged for fmaller 
 quantities of commodities. So far, therefore, as 
 the increafe of the quantity of the precious me- 
 tals in any country arifes from the increafed 
 abundance of the mines, it is neceflarily con- 
 nected with fome diminution of their value. 
 
 When, on the contrary, the wealth of any 
 country increafes, when the annual produce of 
 
 its
 
 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 its labour becomes gradually greater and greater, 
 a greater quantity of coin becomes neceflary in 
 order to circulate a greater quantity of commo- 
 dities : 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 quan- 
 tity of plate. The quantity of their coin will 
 increafe from neceflity; the quantity of their 
 plate from vanity and often tation, or from the 
 fame reafon that the quantity of fine flatues, pic- 
 tures, and of every other luxury and curiofity, is 
 likely to increafe among them. But as flatuaries 
 and painters are not likely to be worfe rewarded 
 in times of wealth and profperity, than in times 
 of poverty and depreffion, fo gold and filver are 
 not likely to be worfe paid for. 
 
 The price of gold and filver, when the acci- 
 dental difcovery of more abundant mines does 
 not keep it down, as it naturally rifes with the 
 wealth of every country, fo, whatever be the flate 
 of the mines, it is at all times naturally higher 
 in a rich than in a poor country. Gold and fil- 
 ver, like all other commodities, naturally feek the 
 market where the befl price is given for them, 
 and the beft price is commonly given for every 
 thing in the country which can befl afford it. 
 Labour, it muft be remembered, is the ultimate 
 price which is paid for every thing, and in coun- 
 tries where labour is equally well rewarded, the 
 money price of labour will be in proportion to 
 that of the fubfiflence of the labourer. But 
 gold and filver will naturally exchange for a 
 greater quantity of fubfiflence in a rich than in a 
 
 u 4 poor
 
 2^6 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK poor country, in a country which abounds with 
 L _^ J lubfiftence, than in one which is but indiffer- 
 ently fupplied with it, If the two countries are 
 at a great diflance, the difference may be very 
 great ; becauie though the metals naturally fly 
 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 difference will be 
 fmaller, and may fometimes be fcarce percep- 
 tible ; becaufe in this cafe the tranfportation 
 will be eafy. China is a much richer country 
 than any part of Europe, and the difference be- 
 tween the price of fubh'ftence in China and in 
 Europe is very great. Rice in China is much 
 cheaper, than wheat is any-where in Europe. 
 England is a much richer country than Scot- 
 land ; but the difference between the money- 
 price of corn in thofe two countries is much 
 fmaller, and is but juft perceptible. In propor- 
 tion to the quantity or meafure, Scotch corn 
 generally appears to be a good deal cheaper than 
 Englifh ; but in proportion to its quality, it is 
 certainly fomewhat dearer. Scotland receives 
 almoft every year very large fupplies from Eng- 
 land, and every commodity mult commonly be 
 fomewhat dearer in the country to which it is 
 brought than in that from which it comes. Eng- 
 lifh corn, therefore, mufl be dearer in Scot- 
 land than in England, and yet in proportion to 
 its quality, or to the quantity and goodnefs of 
 the flour or meal which can be made from it, it 
 cannot commonly be fold higher there than the 
 
 Scotch
 
 OF VARIATIONS IN THE VALUE OF SILVER. 497 
 
 Scotch corn, which comes to market in compe- CHAP. 
 
 XI 
 
 tition with it. , 1 
 
 The difference between the money price of 
 labour in China and in Europe, is ftill greater 
 than that between the money price of fubfift- 
 ence ; becaufe the real recompence of labour is 
 higher in Europe than in China, the greater 
 part of Europe being in an improving ftate, 
 while China feems to be Handing ftill. The 
 money price of labour is lower in Scotland than 
 in England, becaufe the real recompence of la- 
 bour is much lower ; Scotland, though advanc- 
 ing to greater wealth, advancing much more 
 flowly than England. The frequency of emi- 
 gration from Scotland, and the rarity of it from 
 England, fufficiently prove that the demand for 
 labour is very different in the two countries. 
 The proportion between the real recompence of 
 labour in different countries, it mull be remem- 
 bered, is naturally regulated, not by their actual 
 w r ealth or poverty, but by their advancing, fta- 
 tionary, or declining condition. 
 
 Gold and lilver, as they are naturally of the 
 greatefl value among the richefl, fo they are na- 
 turally of the leaft value among the poorer! na- 
 tions. Among favages, the pooreft of all na- 
 tions, they are of fcarce any value. 
 
 In great towns corn is always dearer than in 
 remote parts of the country. This, however, is 
 the effect, not of the real cheapnefs of filver, but 
 of the real dearnefs of corn. It does not coft 
 lets labour to bring lilver to the great town than 
 to the remote parts of the country ; but it colls 
 a great deal more to bring corn. 
 
 In
 
 298 OF VARIATIONS IN THE VALUE 01 SILVER. 
 
 In fbme very rich and commercial countries, 
 fuch as Holland and the territory of Genoa, corn 
 is dear for the lame reafon that it is dear in great 
 towns. They do not produce enough to main- 
 tain their inhabitants. They are rich in the in- 
 duflry and (kill of their artificers and manufac- 
 turers; in every fort of machinery which can 
 facilitate and abridge labour ; in (hipping, and 
 in all the other inflruments and means of car- 
 riage and commerce : but they are poor in corn, 
 which, as it mufl be brought to them from dis- 
 tant countries, mull, by an addition to its price, 
 pay for the carriage from thole countries. It 
 does not cod lefs labour to bring (ilver to Am- 
 fterdam than to Dantzick ; but it colls a great 
 deal more to bring corn. The real coil of lilver 
 mull be nearly the fame in both places ; but 
 that of corn mull be very different. Diminifh 
 the real opulence either of Holland or of the 
 territory of Genoa, while the number of their 
 inhabitants remains the fame : diminifh their 
 power of fupplying themfelves from diflant coun- 
 tries ; and the price of corn, inflead of finking 
 with that diminution in the quantity of their lil- 
 ver, which mufl neceflarily accompany this de- 
 clenfion either as its caufe or as its effect, will 
 rife to the price of a famine. When we are in 
 want of necefl'aries we mufl part with all fuper- 
 fluities, of which the value, as it rifcs in times of 
 opulence and profperity, fo it finks in times of 
 poverty and diftrefs. It is otherwife with necef- 
 iaries. Their real price, the quantity of labour 
 which they can purchafe or command, rifes in 
 
 time*
 
 OF VARIATIONS IN THE VALUE OF SILVER. 299 
 
 times of poverty and diftrefs, and finks in times chap. 
 of opulence and profperity, which are always XI - 
 times of great abundance ; for they could not 
 otherwife be times of opulence and profperity. 
 Corn is a necefiary, filver is only a fuperfluity. 
 
 Whatever, therefore, may have been the in- 
 creafe in the quantity of the precious metals, 
 which, during the period between the middle of 
 the fourteenth and that of the lixteenth century, 
 arofe from the increafe of wealth and improve- 
 ment, it could have no tendency to diminifh 
 their value either in Great Britain, or in any 
 other part of Europe. If thofe who have col- 
 lected the prices of things in ancient times, 
 therefore, had, during this period, no reafon to 
 infer the diminution of the value of filver, from 
 any obfervations which they had made upon the 
 prices either of corn or of other commodities, 
 they had flill lefs reafon to infer it from any fup- 
 pofed increafe of wealth and improvement. 
 
 SECOND PERIOD. 
 
 But how various foever may have been the 
 opinions of the learned concerning the progrefs 
 of the value of filver during this rirft period, 
 they are unanimous concerning it during the 
 fecond. 
 
 From about 1570 to about 1640, during a 
 period of about feventy years, the variation in 
 the proportion between the value of filver and 
 that of corn, held a quite oppolite courfe. Sil- 
 ver
 
 JOO OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK ver funk in its real value, or would exchange 
 L for a fmaller quantity of labour than before ; 
 and corn rofe in its nominal price, and inftead of 
 being commonly fold for about two ounces of 
 filver the quarter, or about ten millings of our 
 prefent money, came to be fold for fix and eight 
 ounces of filver the quarter, or about thirty and 
 forty millings of our prefent money. 
 
 The difcovery of the abundant mines of Ame- 
 rica, feems to have been the fole caufe of this 
 diminution in the value of filver in proportion to 
 ihat of corn. It is accounted for accordingly in 
 the fame manner by every body ; and there ne- 
 ver has been any difpute either about the facl;, 
 or about the caufe of it. The greater part of 
 Europe was, during this period, advancing in 
 induflry and improvement, and the demand for 
 filver mufl confequently have been increafing. 
 But the increafe of the fupply had, it feems, fo 
 far exceeded that of the demand, that the value 
 of that metal funk confiderably. The difcovery 
 of the mines of America, it is to be obferved, 
 does not feem to have had any very fenfible 
 effect upon the prices of things in England till 
 after 1570 j though even the mines of Potofi 
 had been difcovered more than twenty years 
 before. 
 
 From 1595 to 1620, both inclufive, the ave- 
 rage price of the quarter of nine bufhels of the 
 befl wheat at Windfor market, appears from 
 the accounts of Eton College, to have been 
 a/, is. 6^ T d. From which ftim, neglecting 
 the fraction, and deducting a ninth, or 45. yld. 
 
 the
 
 OF VARIATIONS IN THE VALUE OF SILVER. 30I 
 
 the price of the quarter of eight bufhels comes c H A P. 
 out to have been i/. 165. 10^. And from this M * 
 fum, neglecting likewife the fraction, and de- 
 ducting a ninth, or 45. i^d., for the difference 
 between the price of the bed wheat and that of 
 the middle wheat, the price of the middle wheat 
 comes out to have been about 1/.125. 8|tf., or 
 about fix ounces and one-third of an ounre of 
 filver. 
 
 From 1 62 1 to 1636, both inclufive, the ave- 
 rage price of the fame meafure of the beft wheat 
 at the fame market, appears, from the fame ac- 
 counts, to have been al. 10s. ; from which, 
 making the like deductions as in the foregoing 
 cafe, the average price of the quarter of eight 
 bufhels of middle wheat comes out to have been 
 il. 19s. 6d., or about feven ounces and two- 
 thirds of an ounce of filver. 
 
 THIRD PERIOD. 
 
 Between 1630 and 1640, or about 1636, 
 the effect of the difcovery of the mines of 
 America in reducing the value of filver, appears 
 to have been completed, and the value of that 
 metal feems never to have funk lower in propor- 
 tion 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 fo even fome time before the end of the laft. 
 
 From 1637 to 1700, both inclufive, being the 
 fixty-four lafl years of the laft century, the ave« 
 
 rage
 
 302 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 book rage price of the quarter of nine bufliels of the 
 bed wheat at Windfor market, appears, from the 
 fame accounts, to have been 2I. us. o^d. ; 
 which is only is. o\d. dearer than it had been 
 during the iixteen years before. But in the 
 courfe of thefe fixty-four years there happened 
 two events which muft have produced a much 
 greater fcarcity of corn than what the courfe of 
 the feafons would otherwife have occafioned, and 
 which, therefore, without fuppofing any further 
 reduction in the value of filver, will much more 
 than account for this very fmall enhancement of 
 price. 
 
 The firft of thefe events was the civil war, 
 which, by difcouraging tillage and interrupting 
 commerce, mud have raifed the price of corn 
 much above what the courfe of the feafons 
 would otherwife have occaiioned. It muft have 
 had this efie6t more or lefs at all the different 
 markets in the kingdom, but particularly at 
 thofe in the neighbourhood of London, which 
 require to be fupplied from the greatelt diflance. 
 In 1648, accordingly, the price of the befl wheat 
 at Windfor market, appears, from the fame ac- 
 counts, to have been 4/. 55. and in 1649 *° have 
 been 4/. the quarter of nine bufliels. The ex- 
 cefs of thofe two years above ll. 10s. (the ave- 
 rage price of the fixteen years preceding 1637) 
 is 3/. 55. ; which divided among the fixty-four 
 lad years of the laft century, will alone very 
 nearly account for that fmall enhancement of 
 price which fcems to have taken place in them. 
 Thefe, however, though the higheft, are by no 
 
 means
 
 OF VARIATIONS IN THE VALUE OF SILVER. 303 
 
 means the only high prices which feem to have chap. 
 been occafioned by the civil wars. X I - 
 
 The fecond event was the bounty upon the 
 exportation of corn, granted in 1688. The 
 bounty, it has been thought by many people, 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. How far the bounty could 
 produce this effe6t at any time, J fhall examine 
 hereafter ; I mall only obferve at prefent, that 
 between 1688 and 1700, it had not time to pro- 
 duce any fuch effecT;. During this fhort period 
 its only efte6l mull have been, by encouraging 
 the exportation of the furplus produce of every 
 year, and thereby hindering the abundance of 
 one year from compenfating the fcarcity of an- 
 other, to raife the price in the home-market. 
 The fcarcity which prevailed in England from 
 1693 t° 1699, both inclufive, though no doubt 
 principally owing to the badnefs of the feafons, 
 and, therefore, extending through a confiderable 
 part of Europe, mull have been fomewhat en- 
 hanced by the bounty. In 1699, accordingly, 
 the further exportation of corn was prohibited 
 for nine months. 
 
 There was a third event which occurred in 
 the courfe of 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 ne- 
 ceflarilv have occafioned fome augmentation in 
 2 the
 
 304 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK the nominal fum. This event was the great de- 
 bafement of the filver coin, by clipping and 
 wearing. This evil had begun in the reign of 
 Charles II. and had gone on continually increas- 
 ing till 1695 ; at which time, as we 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 nominal fum 
 which conflitutes the market-price of every com- 
 modity is neceflarily regulated, not fo much by 
 the quantity of iilver, which, according to the 
 ftandard, ought to be contained in it, as by that 
 which, it is found by experience, actually is con- 
 tained in it. This nominal fum, therefore, is 
 neceflarily higher when the coin is much debafed 
 by clipping and wearing, than when near to its 
 ftandard value. 
 
 In the courfe of the prefent century, the filver 
 coin has not 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 for which it is ex- 
 changed. For though before the late re-coinage, 
 the gold coin was a good deal defaced too, it 
 was lefs fo than the Iilver. In 1695, on the con- 
 trary, the value of the Iilver coin was not kept up 
 by the gold coin ; a guinea then commonly ex- 
 changing for thirty fhillings of the worn and dipt 
 filver. Before the late re-coinage of the gold, 
 the price of filver bullion was feldom higher than 
 five fhillings and feven-pence an ounce, which is 
 but five-pence above the mint price. But in 1 695, 
 the common price of filver bullion was fix fhil- 
 lings
 
 OF VARIATIONS IN THE VALUE OP SILVER* ^OC 
 
 lings and five-pence an ounce*, which is fifteen- 
 pence above the mint price. Even before the 
 late re-coinage of the gold, therefore, the coin, 
 gold and filver together, when compared with 
 iilver bullion, was not fuppofed to be more than 
 eight per cent, below its flandard value. In 
 1695, on the contrary, it had been fuppofed to 
 be near five-and-twenty per cent, below that 
 value. But in the beginning of the prefent cen- 
 tury, that is, immediately after the great re- 
 coinage in King William's time, the greater part 
 of the current filver coin mufl have been flill 
 nearer to its flandard weight than it is at prefent. 
 In the courfe of the prefent century too there has 
 been no great public calamity, fuch as the civil 
 war, which could either difcourage tillage, or in- 
 terrupt the interior commerce of the country. 
 And though the bounty which has taken place 
 through the greater part of this century, mufl 
 always raife the price of corn fomewhat higher 
 than it otherwife would be in the actual flate of 
 tillage ; yet as, in the courfe of this century, the 
 bounty has had full time to produce all the good 
 effects commonly imputed to it, to encourage 
 tillage, and thereby to increafe the quantity of 
 corn in the home market, it may, upon the prin- 
 ciples of a fyftem which I fhall explain and ex- 
 amine hereafter, be fuppofed to have done fome- 
 thing to lower the price of that commodity the 
 one way, as well as to raife it the other. It is 
 by many people fuppofed to have done more, 
 
 * 'Lowndes' j Eflay on the Silver Coin, p. 68. 
 
 VOL. 11. x In
 
 306 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 book In the fixty-four years of the prefent century 
 *• accordingly, the average price of the quarter 
 of nine bufhels of the bed wheat at Windfor 
 market, appears, by the accounts of Eton Col- 
 lege, to have been ih os. 644*/., which is 
 about ten millings and fixpence, or more than 
 five-and-twenty per cent, cheaper than it had 
 been during the fixty-four lad years of the lad 
 century ; and about nine millings and fixpence 
 cheaper than it had been during the fixteen 
 years preceding 1636, when the difcovery of the 
 abundant mines of America may be fuppofed to 
 have produced its full effect ; and about one 
 milling cheaper than it had been in the twenty- 
 fix years preceding 1620, before that difcovery 
 can well be fuppofed to have produced its full 
 erFe6t. According to this account, the average 
 price of middle wheat, during thefe fixty-four 
 firfl years of the prefent century, comes out to 
 have been about thirty-two millings the quarter 
 of eight bufhels. 
 
 The value of filver, therefore, feems to have 
 rifen fomewhat in proportion to that of corn 
 during the courfe of the prefent century, and it 
 had probably begun to do fo even fome time be- 
 fore the end of the laft. 
 
 In 1687, the price of the quarter of nine 
 bufhels of the beft wheat at Windfor market was 
 1 /. 55. 2d. the lowefl price at which it had ever 
 been from 1595. 
 
 In 1688, Mr. Gregory King, a man famous 
 for his knowledge in matters of this kind, efli- 
 mated the average price of wheat in years of 
 
 moderate
 
 OF VARIATIONS IN THE VALUE OF SILVER. 307 
 
 moderate plenty to be to the grower 35. 6d. the chap. 
 bufliel, or eight-and-twenty lhillings the quar- 
 ter. The grower's price I underftand to be the 
 fame with what is fometimes called the contract 
 price, or the price at which a farmer contracts 
 for a certain number of years to deliver a certain 
 quantity of corn to a dealer. As a contract of 
 this kind faves the farmer the 1 expence and 
 trouble of marketing, the contract price is gene- 
 rally lower than what is fuppofed to be the ave- 
 rage market price. Mr. King had judged eight- 
 and-twenty millings the quarter to be at that 
 time the ordinary contract price in years of mo- 
 derate plenty. Before the fcarcity occafioned 
 by the late extraordinary courfe of bad feafons, 
 it was, I have been afiured, the ordinary con- 
 tract price in all common years. 
 
 In 1688 was granted the parliamentary bounty 
 upon the exportation of corn. The country 
 gentlemen, who then compofed a Hill greater 
 proportion of the legiflature than they do at pre- 
 fent, had felt that the money price of corn was 
 falling. The bounty was an expedient to raife 
 it artificially to the high price at which it had 
 frequently been fold in the times of Charles I. 
 and II. It was to take place, therefore, till 
 wheat was fo high as forty-eight ihillings the 
 quarter ; that is twenty lhillings, or -fths dearer 
 than Mr. King had in that very year eftimated 
 the grower's price to be in times of moderate 
 plenty. If his calculations deferve any part of 
 the reputation which they have obtained very 
 univerfally, eight-and-forty lhillings the quarter 
 
 x 2 was
 
 308 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK was a price which, without fome fuch expedient 
 as the bounty, could not at that time be expect- 
 ed, except in years of extraordinary fcarcity. 
 But the government of King William was not 
 then fully fettled. It was in no condition to re- 
 fufe any thing to the country gentlemen, from 
 whom it was at that very time ibliciting the firft 
 eftablifhment of the annual land-tax. 
 
 The value of filver, therefore, in proportion 
 to that of corn, had probably rifen fomewhat be- 
 fore the end of the laft century ; and it feems to 
 have continued to do fo during the courfe of the 
 greater part of the prefent ; though the neceflary 
 operation of the bounty muft have hindered that 
 rife from being fo fenfible as it otherwife would 
 have been in the actual date of tillage. 
 
 In plentiful years the bounty, by occafioning 
 an extraordinary exportation, neceflarily raifes 
 the price of corn above what it otherwife would 
 be in thofe years. To encourage tillage, by 
 keeping up the price of corn even in the moft 
 plentiful years, was the avowed end of the infti- 
 tution. 
 
 In years of great fcarcity, indeed, the bounty 
 has generally been fufpended. It muft, however, 
 have had fome effect upon the prices of many of 
 thofe years. By the extraordinary exportation 
 which it occafions in years of plenty, it muft 
 frequently hinder the plenty of one year from 
 compeniating the fcarcity of another. 
 
 Both in years of plenty and in years of fcar- 
 city, therefore, the bounty raifes the price of 
 corn above what it naturally would be in the 
 
 actual
 
 XI. 
 
 OF VARIATIONS IN THE VALUE OF SILVER. 309 
 
 actual flate of tillage. If, during the fixty-four chap. 
 ft'rft years of the prefent century, therefore, the 
 average price has been lower than during the 
 iixty-four laft years of the laft century, it muff, 
 in the fame Hate of tillage, have been much 
 more fo, had it not been for this operation of 
 the bounty. 
 
 But without the bounty, it may be faid, the 
 Hate of tillage would not have been the fame. 
 'What may have been the effects of this inftitu- 
 tion upon the agriculture of the country, I mall 
 endeavour to explain hereafter, when I come to 
 treat particularly of bounties. I fhall only ob- 
 ferve at prefent, that this rife in the value of 
 filver, in proportion to that of corn, has not 
 been peculiar to England. It has been obferved 
 to have taken place in France during the fame 
 period, and nearly in the fame proportion too, 
 by three very faithful, diligent, and laborious 
 collectors of the prices oT corn, Mr. Dupre de 
 St. Maur, Mr. Meffance, and the author of the 
 EfTay on the Police of Grain. But in France, 
 till 1764, the exportation of grain was bylaw 
 prohibited ; and it is fomewhat difficult to fup. 
 pofe, that nearly the fame diminution of price 
 which took place in one country, notwithftand- 
 ing this prohibition, mould in another be owing 
 to the extraordinary encouragement given to 
 exportation. 
 
 It would be more proper, perhaps, to eonfider 
 
 this variation in the average money price of corn 
 
 as the effect rather of fome gradual rife in the 
 
 real value of lilver in the European market, 
 
 x 3 than
 
 310 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK than of any fall in the real average value of corn. 
 Corn, it has already been obferved, is at diftant 
 periods of time a more accurate meafure of value 
 than either filver, or perhaps any other commo- 
 dity. When, after the difcovery of the abundant 
 mines of America, corn rofe to three and four 
 times its former money price, this change was 
 univerfally afcribed, not to any rife in the real 
 value of corn, but to a fall in the real value of 
 filver. If during the fixty-four firfl 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 lad cen- 
 tury, we Ihould in the fame manner impute this 
 change, not to any fall in the real value of corn, 
 but to fome rife in the real value of filver in the 
 European market. 
 
 The high price of corn during thefe ten or 
 twelve years pall, indeed, has occafioned a fuf- 
 picion that the real value of filver dill continues 
 to fall in the European market. This high price 
 of corn, however, feems evidently to have been 
 the effect of the extraordinary unfavourablenefs 
 of the feafons, and ought therefore to be regard- 
 ed, not as a permanent, but as a tranfitory and 
 occafional event. The feafons for thcfe ten or 
 twelve years pafl have been unfavourable through 
 the greater part of Europe ; and the diforders 
 of Poland have very much increafc J 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 lingular one; and whoever 
 
 has
 
 OF VARIATIONS IN THE VALUE OF SILVER. 3 1 1 
 
 has enquired much into the hiflory of the prices c 
 of corn in former times, will be at no lofs to re- 
 collecl; feveral other examples of the fame kind. 
 Ten years of extraordinary fcarcity, befides, are 
 not more wonderful than ten years of extraordi- 
 nary plenty. The low price of corn from 1741 
 to 1750, both inclufive, may very well be fet in 
 oppofition to its high price during thefe laft 
 eight or ten years. From 1741 to 1750, the 
 average price of the quarter of nine bulhels of 
 the befl wheat at Windfor market, it appears 
 from the accounts of Eton College, was only 
 il. 135. gtd. 9 which is nearly 6s. 3d. below the 
 average price of the fixty-four firft years of the 
 prefent century. The average price of the 
 quarter of eight bufhels of middle wheat, comes 
 out, according to this account, to have been, 
 during thefe ten years, only il. 6s. Sd. 
 
 Between 1741 and 1750, however, the bounty 
 mull have hindered the price of corn from fall- 
 ing fo low in the home market as it naturally 
 would have done. During thefe ten years the 
 quantity of all forts of grain exported, it appears 
 from the cuflom-houfe books, amounted to no 
 lefs than eight millions twenty-nine thoufand one 
 hundred and fifty-fix quarters one biuTicl. The 
 bounty paid for this amounted to 1,514,962/. 
 175. 4|c/. In 1749 accordingly, Mr. Pelham, 
 at that time prime minifler, obferved to the 
 Houfe of Commons, that for the three years 
 preceding, a very extraordinary fum had been 
 paid as bounty for the exportation of corn. 
 x 4. He
 
 311 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK He had good reafon to make this obfervation, 
 and in the following year he might have had (till 
 better. In that Angle year the bounty paid 
 amounted to no lefs than 314, 176/. 10s. 6d.* 
 It is unneceflary to obferve how much this 
 forced exportation muft have raifed the price of 
 corn above what it otherwife would have been in 
 the home market. 
 
 At the end of the accounts annexed to this 
 chapter the reader will find the particular ac- 
 count of thofe ten years feparated from the reft. 
 He will find there too the particular account of 
 the preceding ten years, of which the average is 
 likewife below, though not fo much below, the 
 general average of the fixty-four h'rft years of the 
 century. The year 1 740, however, was a year of 
 extraordinary fcarcity. Thefe twenty years pre- 
 ceding 1750, may very well be fet in oppofition 
 to the twenty preceding 1770. As the former 
 were a good deal below the general average of 
 the century, notwithftanding the intervention 
 of one or two dear years ; fo the latter have been 
 a good deal above it, notwithftanding the in- 
 tervention of one or two cheap ones, of 1759, 
 for example. If the former have not been as 
 much below the general average, as the latter 
 have been above it, we ought probably to im- 
 pute it to the bounty. The change has evidently 
 been too fudden to be afcribed to any change in 
 the value of filver, which is always (low and 
 gradual. The fuddennefs of the effecl can be 
 
 * See Traces on the Corn Trade ; Tra<5l 3d, 
 
 accounted
 
 OF VARIATIONS IN THE VALUE OF SILVER. 3 1 3 
 
 accounted for only by a caufe which can operate chap. 
 fuddenly, the accidental variation of the feafons. 
 The money price of labour in Great Britain 
 has, indeed, rifen during the courfe of the prefent 
 century. This, however, feems to be the effect, 
 not fo much of any diminution in the value of 
 filver in the European market, as of an increafe 
 in the demand for labour in Great Britain, arifing 
 from the great, and almoft univerfal profperity 
 of the country. In France, a country not alto- 
 gether fo profperous, the money price of labour 
 has, fince the middle of the laft century, been ob- 
 ferved to fink gradually with the average money 
 price of corn. Both in the laft century and in 
 the prefent, the day wages of common labour are 
 there faid to have been pretty uniformly about 
 the twentieth part of the average price of the 
 feptier of wheat, a meafure wdiich contains a 
 little more than four Winchefter bufhels. In 
 Great Britain the real recompence of labour, it 
 has already been fhown, the real quantities of 
 the neceflaries and conveniences of life which 
 are given to the labourer, has increafed conn*-, 
 derably during the courfe of the prefent cen^ 
 tury. The rife in its money price feems to, 
 have been the effect, not of any diminution of 
 the value of filver in the general market of 
 Europe, but of a rife in the real price of labour 
 in the particular market of Great Britain, owing 
 to the peculiarly happy circumflances of the 
 country. 
 
 For fome time after the firfl difcovery of 
 America, filver w r ould continue to fell at its. 
 
 former,
 
 314 <> F VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK former, or not much below its former price. 
 *»_ The profits of mining would for fome time be 
 very great, and much above their natural rate. 
 Thofe who imported that metal into Europe, 
 however, would foon find that the whole annual 
 importation could not be difpofed of at this 
 high price. Silver would gradually exchange 
 for a fmaller and a fmaller quantity of goods. 
 Its price would fink gradually lower and lower, 
 till it fell to its natural price ; or to what was 
 juft fufficient to pay, according to their natural 
 rates, the wages of the labour, the profits of the 
 flock, and the rent of the land, which mud be 
 paid in order to bring it from the mine to the 
 market. In the greater part of the filver mines 
 of Peru, the tax of the King of Spain, amounting 
 to a tenth of the grofs produce, cats up, it has 
 already been obferved, the whole rent of the 
 land. This tax was originally a half; it foon 
 afterwards fell to a third, then to a fifth, and at 
 lafl to a tenth, at which rate it flill continues. 
 In the greater part of the filver mines of Peru, 
 this, it feems, is all that remains, after replacing 
 the flock of the undertaker of the work, to- 
 gether with its ordinary profits ; and it feems 
 to be univcrfally acknowledged that thefe profits, 
 which were once very high, are now as low as 
 they can well be, confidently with carrying on 
 their works. 
 
 The tax of the King of Spain Mas reduced to a 
 fifth part of the rcgiflered filver in 1504*, one- 
 
 * Solorzano, vol. ii. 
 
 ^ and-
 
 OF VARIATIONS IN THE VALUE OF SILVER. 3I5 
 
 and-forty years before 1545, the date of the dif- chap. 
 covery of the mines of Potofi. In the courfe of X I ^ 
 ninety years, or before 1636, thefe mines, the 
 mofl fertile in all America, had time fufficient 
 to produce their full effect, or to reduce the 
 value of filver in the European market as low as 
 it could well fall, while it continued to pay this 
 tax to the King of Spain. Ninety years is time 
 fufficient to reduce any commodity, of which 
 there is no monopoly, to its natural price, or to 
 the loweft price at which, while it pays a parti- 
 cular tax, it can continue to be fold for any con- 
 fiderable time together. 
 
 The price of filver in the European market 
 might perhaps have fallen Hill lower, and it 
 might have become neceffary either to reduce 
 the tax upon it, not only to one-tenth, as in 1736, 
 but to one-twentieth, in the fame manner as that 
 upon gold, or to give up working the greater 
 part 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 produce of the filver mines of 
 America, is probably the caufe which has pre- 
 vented this from happening, and which has not 
 only kept up the value of filver in the European 
 market, but has perhaps even raifed it fome- 
 what higher than it was about the middle of the 
 laft century. * 
 
 Since the firfl difcovery of America, the 
 market for the produce of its filver mines has 
 been growing gradually more and more exten- 
 sive. 
 
 Firfl,
 
 3l6 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 Firft, The market of Europe has become gra- 
 dually more and more extenfive. Since the 
 difcovery of America, the greater part of Eu- 
 rope has been much improved. England, Hol- 
 land, France and Germany ; even Sweden, 
 Denmark, and Ruflia, have all advanced confide- 
 rably, both in agriculture and in manufactures. 
 Italy feems not to have gone backwards. The 
 fall of Italy preceded the conqueft of Peru. Since 
 that time it feems rather to have recovered a lit- 
 tle. Spain and Portugal, indeed, are fuppofed 
 to have gone backwards. Portugal, however, is 
 but a very fmall part of Europe, and the decleiir ' 
 lion of Spain is not, perhaps, fo great as is com- 
 monly imagined. In the beginning of the fix- 
 tecnth century, Spain was a very poor country, 
 even in comparifon with France, which has been 
 fo much improved h'nce that time. It was the 
 well-known remark of the Emperor Charles V., 
 who had travelled fo frequently through both 
 countries, that every thing abounded in France, 
 but that every thing was wanting in Spain. The 
 increafing produce of the agriculture and manu- 
 factures of Europe mull neceffarily have required 
 a gradual increafe in the quantity of filver coin 
 to circulate it ; and the increafing number of 
 wealthy individuals mull have required the like 
 increafe in the quantity of their plate and other 
 ornaments of lilver. 
 
 Secondly, America is itfelf a new market for 
 the produce of its own filver mines ; and as its 
 advances in agriculture, induflry, and popula- 
 tion, are much more rapid than thofe of the mod 
 
 thriving
 
 OF VARIATIONS IN THE VALUE OF SILVER. 3 1 7 
 
 thriving countries in Europe, its demand mufl CHAP, 
 increafe much more rapidly. The Englifh co- 
 lonies are altogether a new market, which partly 
 for coin and partly for plate, requires a conti- 
 nually augmenting fupply of filver through a 
 great continent where there never was any de* 
 mand before. The greater part too of the Spanifh 
 and Portuguefe colonies are altogether new 
 markets. New Granada, the Yucatan, Para- 
 guay, and the Brazils were, before difcovered by 
 the Europeans, inhabited by favage nations, who 
 had neither arts nor agriculture. A confidcrable 
 degree of both has now been introduced into all 
 of them. Even Mexico and Peru, though they 
 cannot be confidered as altogether new markets, 
 are certainly much more extenfive ones than 
 they ever were before. After all the wonderful 
 tales which have been publifhed concerning 
 the fplendid flate of thofe countries in ancient 
 times, whoever reads, with any degree of fober 
 judgment, the hiflory of their firft difcovery and 
 conquefl, will evidently difcern that, in arts, 
 agriculture, and commerce, their inhabitants 
 were much more ignorant than the Tartars of 
 the Ukraine are at prefent. Even the Peru- 
 vians, the more civilized nation of the two, 
 though they made ufe of gold and filver as orna- 
 ments, had no coined money of any kind. Their 
 whole commerce was carried on by barter, and 
 there was accordingly fcarce any divifion of 
 labour among them. Thofe who cultivated the 
 ground were obliged to build their own houfes, 
 to make their own houfhold furniture, their own 
 
 2 clothes,
 
 3 1 8 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK clothes, flioes, and inftruments of agriculture. 
 L . The few artificers among them are faid to have 
 been all maintained by the fovereign, the nobles, 
 and the priefts, and were probably their fervants 
 or flaves. All the ancient arts of Mexico and 
 Peru have never furniihed one fingle manufac- 
 ture to Europe. The Spanifh armies, though they 
 fcarce ever exceeded five hundred men, and fre- 
 quently did not amount to half that number, 
 found almofl every-where great difficulty in pro- 
 curing fubfiflence. The famines which they are 
 faid to have occafioned almofl wherever they 
 went, in countries too, which at the fame time 
 are reprefented as very populous and well culti- 
 vated, fufficiently demonflrate that the flory of 
 this populoufnefs and high cultivation is in a 
 great meafure fabulous. The Spanifh colonies are 
 under a government in many refpecls lefs fa- 
 vourable to agriculture, improvement, and po- 
 pulation, than that of the Englifh colonies. They 
 feem, however, to be advancing in all thefe much 
 more rapidly than any country in Europe. In a 
 fertile foil and happy climate, the great abun- 
 dance and cheapnefs of land, a circumflance 
 common to all new colonies, is, it feems, fo great 
 an advantage, as to compenfate many defects 
 in civil government. Frezier, who vifited Peru 
 in 17 13, reprefents Lima as containing between 
 twenty-five and twenty-eight thoufand inha- 
 bitants. Ulloa, who refided in the fame 
 country between 1740 and 1746, reprefents it 
 as containing more than fifty thoufand. The 
 difference in their accounts of the populouf- 
 nefs
 
 OF VARIATIONS IN THE VALUE OF SILVER. 319 
 
 nefs of feveral other principal towns in Chili and chap. 
 Peru is nearly the fame ; and as there feems to 
 be no reafon to doubt of the good information of 
 either, it marks an increafe which is fcarce infe- 
 rior to that of the Englifh colonies. America, 
 therefore, is a new market for the produce of its 
 own lilver mines, of which the demand mult in- 
 creafe much more rapidly than that of the moll 
 thriving country in Europe. 
 
 Thirdly, The Ealt Indies is another market for 
 the produce of the lilver mines of America, and 
 a market which, from the time of the firfl difco- 
 very of thofe mines, has been continually taking 
 off a greater and a greater quantity of lilver. 
 Since that time, the direct trade between Ame- 
 rica and the Ealt Indies, which is carried on by 
 means of the Acapulco lhips, has been conti- 
 nually augmenting, and the indirect intercourfe 
 by the way of Europe has been augmenting in 
 a Hill greater proportion. During the lixteenth 
 century, the Portuguefe were the only Euro- 
 pean nation who carried on any regular trade 
 to the Ealt Indies. In the lafl years of that cen- 
 tury the Dutch began to encroach upon this mo- 
 nopoly, and in a few years expelled them from 
 their principal fettlements in India. During the 
 greater part of the lalt century thofe two nations 
 divided the molt conliderable part of the Ealt 
 India trade between them ; the trade of the 
 Dutch continually augmenting in a ltill greater 
 proportion than that of the Portuguefe declined. 
 The Englilh and French carried on fome trade 
 
 with
 
 310 OP VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK with India in the lad 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 Mufcovites now trade regularly with 
 China by a fort of caravans which go over land 
 through Siberia and Tartary to Pekin. The Eafl 
 India trade of all thefe nations, if we except that 
 of the French, which the laft war had well nigh 
 annihilated, has been almoft continually aug- 
 menting. The increafing confumption of Eafl 
 India goods in Europe is, it feems, fo great, as to 
 afford a gradual increafe of employment to them 
 all. Tea, for example, was a drug very little 
 ufedin Europe before the middle of the laft cen- 
 tury. At prefent die value of the tea annually 
 imported by the Englifh Eaft India Company, 
 for the ufe of their own countrymen, amounts 
 to more than a million and a half a year j and 
 even this is not enough ; a great deal more be- 
 ing conftantly fmuggled into the country from 
 the ports of Holland, from Gottenburg in 
 Sweden, and from the coaft of France too, as 
 long as the French Eaft India Company was in 
 profperity. The confumption of the porcelain 
 of China, of thefpiceries of the Moluccas, of the 
 piece goods of Bengal, and of the innumerable 
 other articles, has increafed very nearly in a 
 like proportion. The tonnage accordingly of all 
 the European (hipping employed in the Eaft 
 India trade, at any one time during the laft 
 century, was not, perhaps, much greater than 
 
 that
 
 OF VARIATIONS IN THE VALUE OF SILVER. 3*1 
 
 that of the Englifh Eaft India Company before chap. 
 the late reduction of their lhipping. 
 
 But in the Eaft 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 ; 
 and it ftill continues to be fo. In rice countries, 
 which generally yield two, fometimes three crops 
 in the year, each of them more plentiful 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 accord- 
 ingly much more populous. In them too the 
 rich, having a greater fuper-abundance of food 
 to difpofe of beyond what they themfelves 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 fubjeets in Europe. ,The fame faper- 
 abundance of food, of which they have the dif- 
 pofal, enables them to give a greater quantity 
 of it for all thofe lingular and rare productions 
 which nature furnifhes but in very fmall quan- 
 tities ; fuch as the precious metals and the pre- 
 cious ftones, the great objects of the competi- 
 tion of the rich. Though the mines, therefore, 
 which fupplied the Indian market had been as 
 abundant as thofe which fupplied the European, 
 fuch commodities would naturally exchange for 
 a greater quantity of food in India than in Eu- 
 rope. But the mines which fupplied the Indian 
 
 vol. ii. y market
 
 I. 
 
 V 
 
 -J 
 
 322 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK market with the precious metals feem to have 
 been a good deal lefs abundant, and thofe which 
 fupplied it with the precious ftones a good deal 
 more fo, than the mines which fupplied the 
 European. The precious metals, therefore, 
 would naturally exchange in India for fomewhat 
 a greater quantity of the precious (tones, and for 
 a much greater quantity of food than in Europe. 
 The money price of diamonds, the greateft of all 
 fuperfluities, would be fomewhat lower, and that 
 of food, the firft of all neceflaries, a great deal 
 lower in the one country than in the other. But 
 the real price of labour, the real quantity of the 
 neceflaries of life which is given to the labourer, 
 it has already been obferved, is lower both in 
 China and Indoftan, the two great markets of 
 India, than it is through the greater part of 
 Europe. The wages of the labourer will there 
 purchafe a fmaller quantity of food ; and as the 
 money price of food is much lower in India than 
 in Europe, the money price of labour is there 
 lower upon a double account ; upon account 
 both of the fin all quantity of food which it will 
 purchafe, and of the low price of that food. But 
 in countries of equal art and induftry, the money 
 price of the greater part of manufactures will be 
 in proportion to the money price of labour ; and 
 in manufacturing art and induftry, China and 
 Indoftan, though inferior, feem not to be much 
 inferior to any part of Europe. The money 
 price of the greater part of manufactures, there- 
 fore, will naturally be much lower in thofe great 
 empires than it is any- where in Europe. Through 
 
 the
 
 OF VARIATIONS IN THE VALUE OF SILVER. 323 
 
 the greater part of Europe too the expence of c H A P. 
 land-carriage increafes very much both the real 
 and nominal price of moll manufactures. It 
 cofts more labour, and therefore more money, to 
 bring firft the materials, and afterwards the com- 
 plete manufacture to market. In China and In- 
 doflan the extent and variety of inland naviga- 
 tions fave the greater part of this labour, and 
 confequently of this money, and thereby reduce 
 ftill lower both the real and the nominal price of 
 the greater part of their manufactures. Upon 
 all thefe accounts, the precious metals are a com- 
 modity which it always has been, and ftill con- 
 tinues to be, extremely advantageous to carry 
 from Europe to India. There is fcarce any 
 commodity which brings a better price there ; 
 or which, in proportion to the quantity of la- 
 bour and commodities which it coils in Europe, 
 will purchafe or command a greater quantity of 
 labour and commodities in India. It is more 
 advantageous too to carry lilver thither than 
 gold; becaufe in China, and the greater part of 
 the other markets of India, the proportion be- 
 tween fine filver and fine gold is but as ten, or 
 at mofl as twelve, to one ; whereas in Europe it 
 is as fourteen or fifteen to one. In China, and the 
 greater part of the other markets of India, ten, or 
 at mofl twelve, ounces of filver will purchafe an 
 ounce of gold: in Europe it requires from four- 
 teen to fifteen ounces. In the cargoes, therefore, 
 of the greater part of European fhips w T hich fail 
 to India, filver has generally been one of the mofl 
 valuable articles. It is the mofl valuable article 
 
 y 2 in
 
 3 2 4 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK in the Acapulco (hips which fail to Manilla. The 
 filver of the new continent feems in this manner 
 to be one of the principal commodities by which 
 the commerce between the two extremities of the 
 old one is carried on, and it is by means of it, in 
 a great meafure, that thofe diftant parts of the 
 world are connected with one another. 
 
 In order to fupply fo very widely extended a 
 market, the quantity of filver annually brought 
 from the mines muft not only be fufficient to 
 fupport that continual increafe both of coin and 
 of plate which is required in all thriving coun- 
 tries ; but to repair that continual wade and con- 
 fumption of filver which takes place in all coun- 
 tries where that metal is ufed. 
 
 The continual confumption of the precious 
 metals in coin by wearing, and in plate both by 
 wearing and cleaning, is very fenfible ; and in 
 commodities of which the ufe is fo very widely 
 extended, would alone require a very great an- 
 nual fupply. The confumption of thofe metals 
 in fome particular manufactures, 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 ma- 
 nufactures of Birmingham alone, the quantity of 
 gold and filver annually employed in gilding and 
 plating, and thereby difqualified from ever after- 
 wards appearing in the fhape of thofe metals, is 
 faid to amount to more than fifty thoufand 
 pounds flerling. We may from thence form 
 fome notion how great mufl be the annual con- 
 fumption in all the different parts of the world, 
 
 4 either
 
 OF VARIATIONS IN THE VALUE OF SILVER. 325 
 
 either in manufactures of the fame kind with chap* 
 thofe of Birmingham, or in laces, embroideries, *** 
 gold and filver fluffs, the gilding of books, fur- 
 niture, &c. A confiderable quantity too rault 
 be annually loft in tranfporting thofe metals from 
 one place to another both by fea and by land. 
 In the greater part of the governments of Afia, 
 befides, the almofl univerfal cuftom of con- 
 cealing treafures in the bowels of the earth, of 
 which the knowledge frequently dies with the 
 perfon who makes the concealment, mud occa- 
 fion the lofs of a dill greater quantity. 
 
 The quantity of gold and filver imported at 
 both Cadiz and Lifbon (including not only what 
 comes under regifler, but what may be fuppofed 
 to be fmuggled) amounts, according to the befl 
 accounts, to about fix millions fterling a year. 
 
 According to Mr. Meggens * the annual im- 
 portation of the precious metals into Spain, at an 
 average of fix years; viz. from 1748 to 1753, 
 both inclufive ; and into Portugal, at an average ' 
 of feven years; viz. from 1747 to 1753, both 
 inclufive; amounted in filver to 1,101,107 
 pounds weight ; and in gold to 49,940 pounds 
 weight. The filver at fixty-two millings the 
 pound Troy, amounts to 3,413,431/. 105. fter- 
 ling. The gold, at forty-four guineas and a 
 
 * Poftfeript to the Univerfal Merchant, p. 15 and 16. This Poft- 
 fcript was not printed till 1756, three years after the publication of 
 the book, which has never had a fecond edition. The poftfeript is, 
 therefore, to be found in few copies : It corrects feveral errors in the 
 book. 
 
 y 3 half
 
 3*6 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK half the pound Troy, amounts to 2,333,446/. 14s, 
 flerling. Both together amount to 5,746,878/. 45. 
 fterling. The account of what was imported 
 under regifter, he allures us is exacl;. He gives 
 us the detail of the particular places from which 
 the gold and filver were brought, and of the par- 
 ticular quantity of each metal, 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 fmug- 
 gled. The great experience of this judicious 
 merchant renders his opinion of confiderable 
 weight. 
 
 According to the eloquent and, fometimes, 
 well-informed author of the Philofophical 
 and Political Hiflory of the Eflablifhment of 
 the Europeans in the two Indies, the annual 
 importation of regiflered gold and filver into 
 Spain, at an average of eleven years ; viz. from 
 1754 to 1764, both inclufive ; amounted to 
 13,984,1 85! piaflres of ten reals. On account 
 of what may have been fmuggled, however, 
 the whole annual importation, he fuppofes, may 
 have amounted to feventeen millions of pi- 
 aflres ; which, at 45. 6d. the piaflre, is equal 
 to 3,825,000/. flerling. He gives the detail too 
 of the particular places from which the gold and 
 filver were brought, and of the particular quan- 
 tities of each metal which, according to the re- 
 ffifter, each of them afforded. He informs 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 
 
 Kintr
 
 OF VARIATIONS IN THE VALUE OF SILVER. 327 
 
 King of Portugal, which it feems is one-fifth of c H A P# 
 the flandard metal, we might value it at eighteen XL 
 millions of cruzadoes, or forty-five millions of 
 French livres, equal to about two millions fler- 
 ling. On account of what may have been fmug- 
 gled, however, we may fafely, he fays, add to 
 this fum an eighth more, or 250,000/. flerling, 
 fo that the whole will amount to 2,250,000/. 
 flerling. According to this account, therefore, 
 the whole annual importation of the precious 
 metals into both Spain and Portugal, amounts 
 to about 6,075,000/. flerling. 
 
 Several other very well authenticated, though 
 manufcript, accounts, I have been affured, agree, 
 in making this whole annual importation amount 
 at an average to about fix millions flerling; 
 lometimes a little more, fometimes a little lefs. 
 
 The annual importation of the precious metals 
 into Cadiz and Lifbon, indeed, is not equal to 
 the whole annual produce of the mines of Ame- 
 rica. Some part is fent annually by the Aca- 
 pulco fhips to Manilla ; fome part is employed 
 in the contraband trade which the Spanifh colo- 
 nies carry on with thofe of other European na- 
 tions ; and fome part, no doubt, remains in the 
 country. The mines of America, befides, are 
 by no means the only gold and filver mines in 
 the world. They are, however, by far the mod 
 abundant. Hie produce of all the other mines 
 which are known, is infigniricant, it is acknow- 
 ledged, in comparifon with theirs ; and the far 
 greater part of their produce, it is likewife ac- 
 knowledged, is annually imported into Cadiz 
 
 y 4 and
 
 3^8 OF VARIATIONS IN THE VALUE OP SILVER. 
 
 BOOK and Lifbon. But the confumption of Binning- 
 '• ham alone, at the rate of fifty thoufand pounds a 
 year, is equal to the hundred-and-twentieth part 
 of this annual importation at the rate of (ix mil- 
 lions a year. The whole annual confumption of 
 gold and filver, therefore, in all the different 
 countries of the world where thofe metals are 
 ufed, may perhaps be nearly equal to the whole 
 annual produce. The remainder may be no 
 more than fufficient to fupply the increafing de- 
 mand of all thriving countries. It may even have 
 fallen fo far fhort of this demand as fomewhat to 
 raife the price of thofe metals in the European 
 market. 
 
 The quantity of brafs and iron annually 
 brought from the mine to the market is out of 
 all proportion greater than that of gold and fil- 
 ver. We do not, however, upon this account, 
 imagine that thofe coarfe metals are likely to 
 multiply beyond the demand, or to become 
 gradually cheaper and cheaper. Why mould we 
 imagine that the precious metals are likely to do 
 fo ? The coarfe metals, indeed, though harder, 
 are put to much harder ufes, and, as they are of 
 lefs value, lefs care is employed in their preferv- 
 ation. The precious metals, however, are not 
 neceflarily immortal any more than they, but are 
 liable too to be loft, wafted, and confumed in a 
 great variety of ways. 
 
 The price of all metals, though liable to flow 
 and gradual variations, varies lefs from year to 
 year than that of almoft any other part of the 
 rude produce of land ; and the price of the pre- 
 cious
 
 OP VARIATIONS IN THE VALUE OF SILVER. 329 
 
 cious metals is even lefs liable to fudden vari- c H A P. 
 ations than that of the coarfe ones. The dura- , XL 
 blenefs of metals is the foundation of this extraor- 
 dinary fteadinefs of price. The corn which was 
 brought to market lad year, will be all or almoft 
 all confumed long before the end of this year. 
 But fome part of the iron which was brought 
 from the mine two or three hundred years ago, 
 may be ftill in ufe, and perhaps fome part of the 
 gold which was brought from it two or three 
 thoufand years ago. The different manes of 
 corn which in different years muff fupply the 
 confumption of the world, will always be nearly 
 in proportion to the refpeetive produce of thofe 
 different years. But the proportion between the 
 different maffes of iron which may be in ufe in 
 two different years, will be very little affected by 
 any accidental difference in the produce of the 
 iron mines of thofe two years ; and the propor- 
 tion betwen the maffes 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 metallic mines, therefore, varies, 
 perhaps, ftill more from year to year than that of 
 the greater part of corn-fields, thofe variations 
 have not the fame effect upon the price of the one 
 fpecies of commodities, as upon that of the other. 
 
 Variations
 
 33° Of VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK 
 I. 
 
 Variations in the Proportion betnvctn the refpcBive Values of 
 Gold and Silver. 
 
 Before the difcovery of the mines of Ame- 
 rica, the value of tine gold to fine filver was 
 regulated in the different mints of Europe, be- 
 tween the proportions of one to ten and one 
 to twelve ; that is, an ounce of hue gold was 
 fuppofed to be worth from ten to twelve ounces 
 of fine filver. About the middle of the lalt cen- 
 tury it came to be regulated, between the pro- 
 portions 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 filver. Gold rofe in its nominal value, or 
 in the quantity of filver which was given for it. 
 Both metals funk in their real value, or in the 
 quantity of labour which they could purchafe ; 
 but filver funk more than gold. Though both 
 the gold and filver mines of America exceeded 
 in fertility all thofe which had ever been known 
 before, the fertility of the filver mines had, it 
 feems, been proportionably ftill greater than that 
 of the gold ones. 
 
 The great quantities of filver 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 Calcutta, an ounce of fine gold is fuppofed to 
 be worth fifteen ounces of tine 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 
 
 2 market
 
 OF VARIATIONS IN THE VALUE OF SILVER. 33 1 
 
 market of Bengal. In China, the proportion of chap. 
 gold to filver ftill continues as one to ten, or one t XL , 
 to twelve. In Japan, it is faid to be as one 
 to eight. 
 
 The proportion between the quantities of gold 
 and filver annually imported into Europe, ac- 
 cording 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 Eaft Indies, reduces, he fup- 
 pofes, the quantities of thofe metals which re- 
 main in Europe to the proportion of one to four- 
 teen or fifteen, the proportion of their values. 
 The proportion between their values, he feems 
 to think, mull neceifarily 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 re- 
 fpe&ive values of two commodities is not necef- 
 farily the fame as that between the quantities 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 
 35. 6d. It would be abfurd, however, to infer 
 from thence, that there are commonly in the mar- 
 ket threefcore lambs 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. 
 
 The
 
 33* OF VARIATIONS IN THE VALUE OF SILVER. 
 
 The quantity of filver commonly in the mar- 
 ket, it is probable, is much greater in propor- 
 tion to that of gold, than the value of a cer- 
 tain quantity of gold is to that of an equal 
 quantity of filver. The whole quantity of a 
 cheap commodity brought to market, is com- 
 monly not only greater, but of greater 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 
 poultry, 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 greater value, can 
 commonly be difpofed of. The whole quantity, 
 therefore, of the cheap commodity muft com- 
 monly be greater in proportion to the whole 
 quantity of the dear one, than the value of a cer- 
 tain quantity of the dear one, is to the value of 
 an equal quantity of the cheap one. When we 
 compare the precious metals with one another, 
 filver is a cheap, and gold a dear commodity. 
 We ought naturally to expect, therefore, that 
 there mould always be in the market, not only a 
 greater quantity, but a greater value of filver 
 than of gold. Let any man, who has a little of 
 both, compare his own filver with his gold plate, 
 and he will probably find, that, not only the 
 quantity, but the value of the former greatly ex- 
 ceeds that of the latter. Many people, befides, 
 
 have
 
 OF VARIATIONS IN THE VALUE OF SILVER. 333 
 
 have a good deal of filver who have no gold chap. 
 plate, which, even with thofe who have it, is ge- XI ' 
 n orally confined to watch-cafes, fnuff-boxes, and 
 fuch like trinkets, of which the whole amount is 
 feldom of great value. In the Britifn coin, in- 
 deed, the value of the gold preponderates greatly, 
 but it is not fo in that of all countries. In the 
 coin of fome countries the value of the two 
 metals is nearly equal. In the Scotch coin, be- 
 fore the union with England, the gold prepon- 
 derated 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 largefl fums are commonly paid 
 in that metal, and it is there difficult to get more 
 gold than what is neceflary to carry about in 
 your pocket. The fuperior value, however, of 
 the filver 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 filver, which takes place only in fome 
 countries. 
 
 Though, in one fenfe' of the word, filver al- 
 ways has been, and probably always will be, 
 much cheaper than gold ; yet in another fenfe, 
 gold may, perhaps, in the prefent ftate of the 
 Spanifh market, be faid to be fomewhat cheaper 
 than filver. A commodity may be faid to be 
 dear or cheap, not only according to the abfo- 
 lute greatnefs or fmallnefs of its ufual price, but 
 
 * See Ruddiman's Preface to Anderfon's Dip!omata> &c. 
 Scotise. 
 
 according
 
 334 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 book according as that price is more or lefs above the 
 lowed for which it is poflible to bring it to mar- 
 ket for any confiderable time together. This 
 lowed price is that which barely replaces, with a 
 moderate profit, the dock which mud be em- 
 ployed in bringing the commodity thither. It 
 is the price which affords nothing to the land- 
 lord, of which rent makes not any component 
 part, but which refolves itfelf altogether into 
 wages and profit. But, in the prefent date of 
 the Spanifh market, gold is certainly fomewhat 
 nearer to this lowed price than filver. The tax 
 of the King of Spain upon gold is only one- 
 twentieth part of the dandard metal, or five per 
 cent.; whereas his tax upon filver amounts to 
 one-tenth part of it, or to ten per cent. In 
 thefe taxes too, it has already been obferved, 
 confifls the whole rent of the greater part of the 
 gold and filver mines of Spanifh America ; and 
 that upon gold is dill worfe paid than that upon 
 filver. The profits of the undertakers of gold 
 mines too, as they more rarely make a for- 
 tune, mud, in general, be dill more moderate 
 than thofe of the undertakers of filver mines. 
 The price of Spanifh gold, therefore, as it af- 
 fords both lefs rent and lefs profit, mud, in the 
 Spanifh market, be fomewhat dearer to the 
 lowed price for which it is poflible to bring it 
 thither, than the price of Spanifh filver. When 
 all expences are computed, the whole quantity 
 of the one metal, it would feem, cannot, in the 
 Spanifh market, be difpofed of fo advantageoufly 
 as the whole quantity of the other. The tax, 
 
 indeed,
 
 OF VARIATIONS IN THE VALUE OF SILVER. 335 
 
 indeed, of the King of Portgual upon the gold chap. 
 of the Brazils, is the fame with the ancient tax L _^_ 
 of the King of Spain upon the filver of Mexico 
 and Peru ; or onc-h'fth part of the flandard me- 
 tal. It may, therefore, be uncertain whether to 
 the general market of Europe the whole mafs of 
 American gold comes at a price nearer to the 
 lowefl for which it is poffible to bring it thither, 
 than the whole mafs of American filver. 
 
 The price of diamonds and other precious 
 itones may, perhaps, be flill nearer to the lowefl 
 price at which it is poffible to bring them to mar- 
 ket, than even the price of gold. 
 
 Though it is not very probable, that any part 
 of a tax which is not only impofed upon one of 
 the moil proper fubjecls of taxation, a mere lux- 
 ury and fuperfluity, but which affords fo very 
 important a revenue, as the tax upon filver, will 
 ever be given up as long as it is poffible to pay 
 it; yet the fame impoffibility of paying it, which 
 in 1736 made it neceflary to reduce it from one- 
 fifth to one-tenth, may in time make it neceffary 
 to reduce it flill further; in the fame manner as 
 it made it neceflary to reduce the tax upon gold 
 to one-twentieth. That the filver mines of 
 Spanilh America, like all other mines, become 
 gradually more expenfive in the working, on ac- 
 count of the greater depths at which it is necef- 
 fary to carry on the works, and of the greater 
 expence of drawing out the water and of fap- 
 plying them with frefh air at thofe depths, is 
 acknowledged by every body who has enquired 
 into the flate of thofe mines. 
 
 Thefe
 
 33^ OF VARIATIONS IN THE VALUE OF SILVER. 
 
 Thefe caufes, which are equivalent to a grow- 
 ing fcarcity of filver (for a commodity may be 
 faid to grow (career when it becomes more diffi- 
 cult and expenfive to collect a certain quantity 
 of it), mud, in time, produce one or other of the 
 three following events. The increafe of the ex- 
 pence mufl either, firft be compenfated altoge- 
 ther by a proportionable increafe in the price of 
 the metal ; or, fecondly, it mutt be compenfated 
 altogether by a proportionable diminution of the 
 tax upon filver ; or, thirdly, it mud be com- 
 penfated 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, notwithstanding a great di- 
 minution of the tax upon gold ; fo filver might 
 rife in its price in proportion to labour and com- 
 modities, notwithstanding an equal diminution 
 of the tax upon filver. 
 
 Such fuccefiive reductions of the tax, how- 
 ever, though they may not prevent altogether, 
 mufl certainly retard, more or lefs, the rife of the 
 value of filver in the European market. In con- 
 fequence of fuch reductions, many mines may be 
 wrought which could not be wrought before, 
 becaufe they could not afford to pay the old tax ; 
 and the quantity of filver annually brought to 
 market muft always be fomewhat greater, and, 
 therefore, the value of any given quantity fome- 
 what lefs, than it otherwife would have been. 
 In confequence of the reduction in 1736, the 
 value of filver in the European market, though 
 it may not at this day be lower than before that 
 
 reduction,
 
 OF VARIATIONS IN THE VALUE OF SILVER. $?>7 
 
 reduction, is, probably, at lead ten per cent. chap. 
 lower than it would have been, had the Court of 
 Spain continued to exact the old tax. 
 
 That, notwithstanding this reduction, the 
 value of filver has, during the courfe of the pre- 
 fent century, begun to rife fomewhat in the Eu- 
 ropean market, the facts and arguments which 
 have been alleged above, difpofe me to believe, 
 or more properly to fufpect and conjecture ; for 
 the bell opinion which I can form upon this fub- 
 ject fcarce, perhaps, deferves the name of belief. 
 The rife, indeed, fuppofmg there has been any, 
 has hitherto been fo very fmall, that after all that 
 has been faid, it may, perhaps, appear to many 
 people uncertain, not only whether this event has 
 actually taken place ; but whether the contrary 
 may not have taken place, or whether the value 
 of filver may not Hill continue to fall in the Eu- 
 ropean market. 
 
 It muft be obferved, however, that whatever 
 may be the fuppofed annual importation of gold 
 and lilver, there muft be a certain period, at 
 which the annual confumption of thofe metals 
 will be equal to that annual importation. Their 
 confumption mull increafe as their mafs in- 
 creafes, or rather in a much greater proportion. 
 As their mafs increafes, their value diminifhes. 
 They are more ufed, and lefs cared for, and 
 their confumption confequ entry increafes in a 
 greater proportion than their mafs. After a cer- 
 tain period, therefore, the annual confumption of 
 thofe metals muft, in this manner, become equal 
 to their annual importation, provided that im- 
 
 vol. ii. z portation
 
 338 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 BOOK portation is not continually increafing; which 
 __j in the prefent times, is not fuppofed to be the 
 cafe. 
 
 If, when the annual confumption has become 
 equal to the annual importation, the annual im- 
 portation mould gradually diminifli, the annual 
 confumption may, for fome time, exceed the 
 annual importation. The mafs of thofe metals 
 may gradually and infenfibly diminifli, and 
 their value gradually and infenfibly rife, till the 
 annual importation becoming again ftationary, 
 the annual confumption will gradually and in- 
 fenfibly accommodate itfelf to what that annual 
 importation can maintain. 
 
 Grounds of the Sufpicion that the Value of Silver JIM 
 continues to decreafe. 
 
 THE increafe of the wealth of Europe, and 
 the popular notion that, as the quantity of 
 the precious metals naturally increafes with the 
 increafe of wealth, fo their value diminifhes as 
 their quantity increafes, may, perhaps, difpofe 
 many people to believe that their value flill con- 
 tinues to fall in the European market ; and the 
 flill gradually increafing price of many parts of 
 the rude produce of land may confirm them flill 
 further in this opinion. 
 
 That that increafe in the quantity of the pre* 
 cious metals, which arifes in any country from 
 the increafe of wealth, has no tendency to di- 
 minifh their value, I have endeavoured to fhow 
 already. Gold and filver naturally refort to a 
 
 rich
 
 XI. 
 
 ■v— 
 
 -J 
 
 OF VARIATIONS IN THE VALUE OF SILVER. 339 
 
 rich country, for the fame reafon that all forts of c H A p. 
 luxuries and curiofities refort to it ; not becaufe 
 they are cheaper there than in poorer countries, 
 but becaufe 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 altogether by human induftry, that 
 all other forts of rude produce, cattle, poultry, 
 game of all kinds, the ufeful foffils and minerals 
 of the earth, &c. naturally grow dearer as the 
 fociety advances in wealth and improvement, I 
 have endeavoured to mow already. Though fuch 
 commodities, therefore, cSme to exchange for 
 a greater quantity of lilver than before, it will 
 not from thence follow that iilver has become 
 really cheaper, or will purchafe lefs labour than 
 before, but that fuch commodities have become 
 really dearer, or will purchafe more labour than 
 before. It is not their nominal price only, but 
 their real price which rifes in the progrefs of 
 improvement. The rife of their nominal price 
 is the effect, not of any degradation of the value 
 of filver, but of the. rife in their real price. 
 
 Different EffeEls of the Progrefs of Improvement upon three 
 different Sorts of rude Produce. 
 
 THESE different forts of rude produce may 
 be divided into three claffes. The firft 
 comprehends thofe which it is fcarce in the 
 z 2 power
 
 340 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK power of human induftry to multiply at all. The 
 J m _ , fecond, thofe which it can multiply in propor-* 
 tion to the demand. The third, thofe in which 
 the efficacy of induftry is either limited or un- 
 certain. In the progrefs of wealth and improve- 
 ment, the real price of the firft 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, how- 
 ever, a certain boundary beyond which it cannot 
 well pafs for any conliderable time together. 
 That of the third, though its natural tendency is 
 to rife in the progrefs of improvement, yet in 
 the fame degree of improvement it may fome- 
 times happen even to fall, fometimes to continue 
 the fame, and fometimes to rife more or lefs, ac- 
 cording as different accidents render the efforts of 
 human induftry, in multiplying this fort of rude 
 produce, more or lefs fuccefsful. 
 
 Firji Sort. 
 
 The firft fort of rude produce of which the 
 price rifes in the progrefs of improvement, is 
 that which it is fcarce in the power of human 
 induftry to multiply at all. It confifts in thofe 
 things which nature produces only in certain 
 quantities, and which being of a very perifhable 
 nature, it is impoffible to accumulate together 
 the produce of many different feafons. Such are 
 the greater part of rare and lingular birds and 
 fifhes, many different forts of game, almoft all 
 wild fowl, all birds of paflage in particular, as 
 well as many other things. When wealth and 
 i the
 
 UPON THREE SORTS OF PRODUCE. 34! 
 
 the luxury which accompanies it increafe, the c H A P. 
 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 quan- 
 tity of fuch commodities, therefore, remaining 
 the fame, or nearly the fame, while the competi- 
 tion to purchafe them is continually increafing, 
 their price may rife to any degree of extrava- 
 gance, and feems not to be limited by any cer- 
 tain boundary. If woodcocks fhould 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 prefient. The high price . 
 paid by the Romans, in the time of their greatefl 
 grandeur, for rare birds and fifties, may in this 
 manner eafily be accounted for. Thefe prices 
 were not the effects of the low value of lilver in 
 thofe times, but of the high value of fuch rarities 
 and curiofities as human induftry could not mul- 
 tiply 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 fixpence iterling, was the price 
 which the republic paid for the modius or peck 
 of the tithe wheat of Sicily. This price, how- 
 ever, was probably below the average market 
 price, the obligation to deliver their wheat at 
 this rate being considered as a tax upon the 
 Sicilian farmers. When the Romans, therefore, 
 had occafion to order more corn than the tithe of 
 z 3 wheat
 
 34* EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 book wheat amounted to, they were bound by capi- 
 L tulation 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 reafonable, that is, the ordinary or average 
 contract price of thofe times; it is equal to about 
 one-and-twenty millings the quarter. Eight- 
 and-twenty millings the quarter was, before the 
 late years of fcarcity, the ordinary contract price 
 of Englifh wheat, which in quality is inferior to 
 the Sicilian, and generally fells for a lower price 
 in the European market. The value of filver, 
 therefore, in thofe ancient 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 which four ounces will do at 
 prefent. When we read in Pliny, therefore, that 
 Seius * bought a white nightingale, as a prefent 
 for the Emprefs Agrippina, at the price of fix 
 thoufand feftertii, equal to about fifty pounds 
 of our prefent money ; and that Afinius Celer t 
 purchafed a furmullet at the price of eight thou* 
 fand feftertii, equal to about fixty-fix pounds 
 thirteen millings 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, tho 
 quantity of labour and fubfiflence which was 
 given away for them, was about one-third more 
 than their nominal price is apt to exprefs to us 
 
 * Lib. x. c. 29, f Lib.ix. c. 17, 
 
 in
 
 UPON THREE SORTS OF PRODUCE. 343 
 
 in the prefent times. Seius gave for the nightin- CHAP, 
 gale the command of a quantity of labour and 
 fubfiftence equal to what 661. 135. ^d. would 
 purchafe in the prefent times ; and Afinius Celer 
 gave for the furmullet the command of a quantity 
 equal to what 88/. 175. g^d., would purchafe. 
 What occafioned the extravagance of thofe high 
 prices was, not fomuch the abundance of filver, 
 as the abundance of labour and fubfiftence, of 
 which thofe Romans had the dilpofal, beyond 
 what was necelfary for their own ufe. The quan- 
 tity of filver, of which they had the difpofal, 
 was a good deal lefs than what the command 
 of the fame quantity of labour and fubfiftence 
 would have procured to them in the prefent times. 
 
 Second Sort. 
 
 The fecond fort of rude produce of which 
 the price rifes in the progrefs of improvement, 
 is that which human induftry can multiply in 
 proportion to the demand. It confifts in thofe 
 ufeful plants and animals, which, in unculti- 
 vated countries, nature produces with fuch 
 profufe abundance, that they are of little or no 
 value, and which, as cultivation advances, are 
 therefore forced to give place to fome more 
 profitable produce. During a long period in the 
 progrefs of improvement, the quantity of thefe 
 is continually diminifliing, while at the fame 
 time the demand for them is continually in- 
 creafing. Their real value, therefore, the real 
 quantity of labour which they will purchafe or 
 command, gradually rifes, till at laft it gets fo 
 z 4 high
 
 344 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 book high as to render them as profitable a produce 
 as any thing elfe which human induftry can raife 
 upon the mod fertile and bell cultivated land. 
 When it has got fo high it cannot well go higher. 
 If it did, more land and more induftry 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 extenlion of tillage, by dimi- 
 nishing the quantity of wild paflure, diminifhes 
 the quantity of butcher's-meat which the country 
 naturally produces without labour or cultiva- 
 tion, and by increafing the number of thofe 
 who have either corn, or, what comes to the 
 fame thing, the price of corn, to give in ex- 
 change for it, increafes the demand. The price 
 of butcher's-meat, therefore, and confequently 
 of cattle, mud gradually rife till it gets fo high, 
 that it becomes as profitable to employ the mod 
 fertile and beft cultivated lands in railing food 
 for them as in railing corn. But it mull 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 mull be continually rifing. There 
 are, perhaps, fome parts of Europe in which 
 the price of cattle has not yet got to this height. 
 It had not got to this height in any part of Scot- 
 land before the union. Had the Scotch cattle 
 
 been
 
 UPON THREE SORTS OF PRODUCE. 345 
 
 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 the 
 feeding of cattle, is fo great in proportion to 
 what can be applied to other purpofes, it is 
 fcarce poflible, perhaps, that their price could 
 ever have rifen fo high as to render it profitable 
 to cultivate land for the fake of feeding 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 lait 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 fubftances, however, which 
 . compofe this fecond fort of mole produce, cattle 
 is, perhaps, that of which the price, in the pro- 
 grefs of improvement, firfl rifes to this height. 
 
 Till the price of cattle, indeed, has got to 
 this height, it feems fcarce poflible that the 
 greater part, even of thofe lands which are 
 capable of the highefl cultivation, can be com- 
 pletely cultivated. In all farms too diflant from 
 any town to carry manure from it, that is, in 
 the far greater part of thofe of every extenfive 
 country, the quantity of well-cultivated land 
 mud be in proportion to the quantity of manure 
 which the farm itfelf produces ; and this again 
 mufl be in proportion to the flock of cattle 
 which are maintained upon it. The land is, 
 manured either by pafturing the cattle upon it, 
 or by feeding them in the liable, and from 
 
 thence
 
 346 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK thence carrying out their dung to it. But unlets 
 
 *• ( the price of the cattle be fufficient to pay both 
 
 the rent and profit of cultivated land, the farmer 
 cannot afford to paflure them upon it ; and he 
 can Hill lefs afford to feed them in the liable. 
 It is with the produce of improved and culti- 
 vated land only, that cattle can be fed in the 
 liable ; becaufe to collect the fcanty and fcattered 
 produce of wafle and unimproved lands would 
 require too much labour and be too expenfive. 
 If the price of the cattle, therefore, is not fuffi- 
 cient to pay for the produce of improved and 
 cultivated land, when they are allowed to paflure 
 it, that price will be flill lefs fufficient to pay 
 for that produce when it mufl be collected with 
 a good deal of additional labour, and brought 
 into the liable to ^hem. In thefe circumftances, 
 therefore, no more cattle can, with profit, be 
 fed in the liable than what are neceffary for 
 tillage. But thefe can never afford manure 
 enough for keeping conflantly in good condition, 
 all the lands which they are capable of cultu 
 vating. What they afford being infufficient for 
 the whole farm, will naturally be referved for the 
 lands to which it can be mofl advantageoufly or 
 conveniently applied ; the mofl fertile, or thofe, 
 perhaps, in the neighbourhood of the farm-yard. 
 Thefe, therefore, will be kept conflantly in good 
 condition and i\t for tillage. The reft will, the 
 greater part of them, be allowed to lie wafte, 
 producing fcarce any thing but fome miferable 
 paflure, juft fufficient to keep alive a few 
 ftraggling, half-flarved cattle j the farm, though 
 
 much
 
 UPON THREE SORTS OF PRODUCE. 347 
 
 much underftocked in proportion to what would c H A P. 
 be neceffary for its complete cultivation, being ^^ 
 very frequently overftocked in proportion to its 
 actual produce. A portion of this wafle land, 
 however, after having been paflured in this 
 wretched 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 ex- 
 haufted, it mull be relied and paflured again 
 as before, and another portion ploughed up to 
 be in the fame manner exhaufted and relied 
 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 conftantly well manured 
 and in good condition, feldom exceeded a third 
 or a fourth part of the whole farm, and fome- 
 times did not amount to a fifth or a fixth part of 
 it. The reft were never manured, but a certain 
 portion of them was in its turn, notwithstanding, 
 regularly cultivated and exhaufted. Under this 
 fyftem of management, it is evident, even that 
 part of the lands of Scotland which is capable of 
 good cultivation, could produce but little in 
 comparifon of what it. may be capable of pro- 
 ducing. But how difadvantageous foever this 
 fyftem may appear, yet before the union the low 
 price of cattle feems to have rendered it almoft 
 unavoidable. If, notwithstanding a great rife in 
 their price, it ftill continues to prevail through a 
 confiderable part of the country, it is owing, in 
 many places, no doubt, to ignorance and attach. 
 4 ment
 
 1- 
 
 348 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK mcnt to old cufloms, but in mod places to the 
 I- unavoidable obflructions which the natural courfe 
 of things oppofes to the immediate or fpeedy 
 eflablifhent of a better fyftem : firft, to the po- 
 verty of the tenants, to their not having yet had 
 time to acquire a flock of cattle fufficient to cul- 
 tivate their lands more completely, the fame rife 
 of price which would render it advantageous for 
 them to maintain a greater flock, rendering it 
 more difficult for them to acquire it ; and, fe- 
 condly, to their not having yet had time to put 
 their lands in condition to maintain this greater 
 ilock properly, fuppofing they were capable of 
 acquiring it. The increafe of flock and the im- 
 provement of land are two events which mud go 
 hand in hand, and of which the one can no- where 
 much out-run the other. Without fome increafe 
 of, flock, there can be fcarce any improvement of 
 land, but there can be no confiderable increafe 
 of flock but in confequence of a confiderable 
 improvement of land ; becaufe otherwife the 
 land could not maintain it. Thefe natural ob- 
 flruc~lions to the eflablifhment of a better fyflem, 
 cannot be removed but by a long courfe of fru- 
 gality and induflry ; and hall' a century or a 
 century more, perhaps, mufl pais away before the 
 old fyftem, which is wearing out gradually, can 
 be completely abolifhed through all the different 
 parts of the country. Of all the commercial 
 advantages, however, which Scotland has de- 
 rived from the union with England, this rife in 
 the price of cattle is, perhaps, the greatefl. It 
 has not only raifed the value of all highland 
 
 eflates,
 
 UPON THREE SORTS OF PRODUCE. .._ 
 
 eftates, but it has, perhaps, been the principal chap. 
 caufe of the improvement of the low country. 
 
 In all new colonies the great quantity of wafte 
 land, which can for many years be applied to no 
 other purpofe but the feeding of cattle, foon 
 renders them extremely abundant, and in every 
 thing great cheapnefs is the neceffary confe- 
 quence of great abundance. Though all the 
 cattle of the European colonies in America were 
 originally carried from Europe, they foon multi- 
 plied fo much there, and became of fo little 
 value* that even horfes were allowed to run wild 
 in the woods without any % owner thinking it 
 worth while to claim them. It mull be a long 
 time after the firft eflablifhment of fuch colonies, 
 before it can become profitable to feed cattle 
 upon the produce of cultivated land. The fame 
 caufes, therefore, the want of manure, and the 
 difproportion between the flock employed in cul- 
 tivation, and the land which it is deflined to 
 cultivate, are likely to introduce there a fyflem 
 of hufbandry not unlike that which flill continues 
 to take place in fo many parts of Scotland. Mr. 
 Kalm, the Swedifh traveller, when he gives an 
 account of the hufbandry offome of the Englifh 
 colonies in North America, as he found it in 
 1749, obferves, accordingly, that he can with 
 difficulty difcover there the character of the. 
 Englifh nation, fo well fkilled in all the different 
 branches of agriculture. They make fcarce any. 
 manure for their corn fields, he fays; but when 
 one piece of ground has been exhaufted by con- 
 tinual cropping, they clear and cultivate another 
 
 piece
 
 350 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK piece of frefh land ; and when that is exhaufted, 
 }\ , proceed to a third. Their cattle are allowed to 
 wander through the woods and other- unculti- 
 vated ground*, where they are half-ftarved ; 
 having long ago extirpated almoft all the annual 
 grafles by cropping them too early in the fpring, 
 before they had time to form their flowers, or 
 to fhed their feeds *. The annual grafles were, 
 it Teems, the befl natural grafles in that part of 
 North America; and when the Europeans firft 
 fettled there, they ufed to grow very thick, and 
 to rife three or four feet high. A piece of 
 ground which, when he wrote, could not main- 
 tain one cow, would in former times, he was 
 afliired, have maintained four, each of which 
 would have given four times the quantity of 
 milk which that one was capable of giving. 
 The poornefs of the paflure had, in his opinion, 
 occafioned the degradation of their cattle, which 
 degenerated fenlibly from one generation to an- 
 other. They were probably not unlike that 
 Hunted breed which was common all over Scot- 
 land thirty or forty years ago, and which is now 
 ib much mended through the greater part of the 
 low country, not fo much by a change of the 
 breed, though that expedient has been employed 
 in fome places, as by a more plentiful method of 
 feeding them. 
 
 Though it is late, therefore, in the progrefs of 
 improvement before cattle can bring fuch a price 
 as to render it profitable to cultivate land for the 
 
 * Kalm's Travels, voL i. p. 343, 344. 
 
 fake
 
 XI. 
 
 — v" 
 
 — I 
 
 UPON THREE SORTS OF PRODUCE. 35 1 
 
 fake of feeding them ; yet of all the different parts c HA P. 
 which compote this fecond fort of rude produce, ^ 
 they are perhaps the firft which bring this price ; 
 becaufe till they bring it, it feems impoffible that 
 improvement can be brought near even to that 
 degree of perfection to which it has arrived in 
 many parts of Europe. 
 
 As cattle are among the firft, fo perhaps veni- 
 fon is among the laft parts of this fort of rude 
 produce which bring this price. The price of 
 venifon in Great Britain, how extravagant foever 
 it may appear, is not near fufficient to compen- 
 fate the expence of a deer park, as is well known 
 to all thofe who have had any experience in the 
 feeding of deer. If it was otherwife, the feed- 
 ing of deer would foon become an article of 
 common farming ; in the fame manner as the 
 feeding of thofe fmall birds called Turdi was 
 among the ancient Romans. Varro and Colu- 
 mella affure us that it was a molt profitable ar- 
 ticle. The fattening of ortolans, birds of paf- 
 fage which arrive lean in the country, is faid to 
 be fo in fome parts of France. If venifon con- 
 tinues in fafhion, and the wealth and luxury of 
 Great Britain increafe as they have done for fome 
 time paft, its price may very probably rife ftill 
 higher than it is at prefent. 
 
 Between that period in the progrefs of im- 
 provement which brings to its height the price 
 of fo neceflary an article as cattle, and that 
 which brings to it the price of fuch a fuperfluity 
 as venifon, there is a very long interval, in the 
 courfe of which many other forts of rude produce 
 
 gradually
 
 35^ EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 Book gradually arrive at their highefl price, fome 
 * t fooner and fome later, according to different cir- 
 cumftances, . 
 
 Thus in every farm the offals of the barn and 
 (tables will maintain a certain number of poul- 
 try. Thefe, as they are fed with what would 
 otherwife be loft, are a mere fave-all ; and as 
 they coft the farmer fcarce any thing, fo he can 
 afford to fell them for very little. Almoft all 
 that he gets is pure gain, and their price can 
 fcarce be fo low as to difcourage him from feed- 
 ing this number. But in countries ill culti- 
 vated, and, therefore, but thinly inhabited, the 
 poultry, which are thus raifed without expence, 
 are often fully fufticient to fupply the whole de- 
 mand. In this ftate of things, therefore, they 
 are often as cheap as butcher's-meat, or any 
 other fort of animal food. But the whole quan- 
 tity of poultry, which the farm in this manner 
 produces without expence, mull always be much 
 finaller than the whole quantity of butcher's- 
 meat which is reared upon it ; and in times of 
 wealth and luxury what is rare, with only nearly 
 equal merit, is always preferred to what is com- 
 mon. As wealth and luxury increafe, therefore, 
 in confequence of improvement and cultivation, 
 the price of poultry gradually riles above that of 
 butcher's-meat, till at laft it gets fo high that it 
 becomes profitable to cultivate land for the fake 
 of feeding them. When it has got to this height 
 it cannot well go higher. If it did, more land 
 would foon be turned to this purpofe. In feve- 
 ral provinces of France, the feeding of poultryis 
 
 confidered
 
 UPON THREE SORTS OF PRODUCE. 353 
 
 confidered as a very important article in rural chap. 
 ceconomy, and fufficiently profitable to encou- 
 rage the farmer to raife a confiderable quantity 
 of Indian corn and buck-wheat for this purpofe. 
 A middling farmer will there fometimes have 
 four hundred fowls in his yard. The feeding of 
 poultry feems fcarce yet to be generally con- 
 fidered as a matter of fo much importance in 
 England. They are certainly, however, dearer 
 in England than in France, as England receives 
 confiderable fupplies from France. In the pro- 
 grefs of improvement, the period at which every 
 particular fort of animal food is dearefl, mufl 
 naturally be that which immediately precedes 
 the general practice of cultivating land for the 
 fake of railing it. For fome time before this 
 practice becomes general, the fcarcity mull ne- 
 ceffarily raife the price. After it has become 
 general, new methods of feeding are commonly 
 fallen upon, which enable the farmer to raife 
 upon the fame quantity of ground a much 
 greater quantity of that particular fort of animal 
 food. The plenty not only obliges him to fell 
 cheaper, but in confequence of thefe improve- 
 ments he can afford to fell cheaper ; for if he 
 could not afford it, the plenty would not be of 
 long continuance. It has been probably in this 
 manner that the introduction of clover, turnips, 
 carrots, cabbages, &c. has contributed to fink 
 the common price of butcher's-meat in the Lon- 
 don market fomewhat below what it was about 
 the beginning of the lafl century. 
 
 vol. ii. a a The
 
 354 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 The hog, that finds his food among ordure, 
 and greedily devours many things rejected by 
 every other ufeful animal, is, like poultry, ori- 
 ginally kept as a fave-all. As long as the num- 
 ber of fuch animals, which can thus be reared at 
 little or no expence, is fully fufficient to fupply 
 the demand, this fort of butcher's-meat comes 
 to market at a much lower pxice than any other. 
 But when the demand rifes beyond what this 
 quantity can fupply, when it becomes neceffary 
 to raife food on purpofe for feeding and fatten- 
 ing hogs, in the fame manner as for feeding and 
 fattening other cattle, the price necefiarily rifes, 
 and becomes proportionably either higher or 
 lower than that of other butcher's-meat, accord- 
 ing as the nature of the country, and the ftate of 
 its agriculture, happen to render the feeding of 
 hogs more or lefs expeniive than that of other 
 cattle. In France, according to Mr. Buffon, the 
 price of pork is nearly equal to that of beef. In 
 molt parts of Great Britain it is at prefent fome- 
 what higher. 
 
 The great rife in the price both of hogs and 
 poultry has in Great Britain been frequently im- 
 puted to the diminution of the number of cot- 
 tagers and other fmall occupiers of land ; an 
 event which has in every part of Europe been the 
 immediate forerunner of improvement and bet- 
 ter cultivation, but which at the fame time may 
 have contributed to raife the price of thofe arti- 
 cles, both fomewhat fooner and fomewhat fafter 
 than it would otherwife have rifen. As the 
 
 poordt
 
 UPON THREE SORTS OF PRODUCE; 355 
 
 pooreft family can often maintain a cat or a dog, chap. 
 without any expence, fo the pooreft occupiers of 
 land can commonly maintain a few poultry, or a 
 low and a few pigs, at very little. The little 
 offals of their own table, their whey, fkimmed 
 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 diminifhing the num- 
 ber of thofe fmall occupiers, therefore, the quan- 
 tity of this fort of provifions which is thus pro- 
 duced at little or no expence, muft certainly have 
 been a good deal diminifhed, and their price muft 
 confequently have been railed both fooner and 
 fafter than it would otherwife have rifen. Sooner 
 or later, however, in the progrefs of improve- 
 ment, it muft at any rate have rifen to the utmoft 
 height to which it is capable of rifing ; or to 
 the price which pays the labour and expence 
 of cultivating the land which furnifhes them with 
 food as well as thefe are paid upon the greater 
 part of other cultivated land. 
 
 The bufinefs 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 
 of their own young, or the confumption of the 
 farmer's family requires; and they produce moft 
 at one particular feafon. But of all the produc- 
 tions of land, milk is perhaps the moft perifh- 
 able. In the warm feafon, when it is moft 
 abundant, it will fcarce keep four-and-twenty 
 hours. The farmer, by making it into frefh 
 a a 2 butter.
 
 35^ EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK butter, ftores a fmall part of it for a week : by 
 making it into fait butter, for a year : and by 
 making it into cheefe, he ftores a much greater 
 part of it for feveral years. Part of all thefe is 
 referred for the ufe of his own family. The reft 
 goes to market, in order to find the bell price 
 which is to be had, and which can fcarce be fo 
 low as to dilcourage him from fending thither 
 whatever is over and above the ufe of his own 
 family. If it is very low, indeed, he will be 
 likely to manage his dairy in a very flovenly and 
 dirty manner, and will fcarce perhaps think it 
 worth while to have a particular room or build- 
 ing on purpofe for it, but will firffer the bulineis 
 to be carried on amidft the fmoke, filth, and 
 naftinefs of his own kitchen ; as was the cafe of 
 almoft all the farmers' dairies in Scotland thirtv 
 or forty years ago, and as is the cafe of many of 
 them ftill. The fame caufes which gradually 
 raife the price of butcher's-meat, the increafe of 
 the demand, and, in confequence of the im- 
 provement 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 con- 
 nects with that of butcher's-meat, or with the 
 expence of feeding cattle. The increafe of 
 price pays for more labour, care, and cleanli- 
 nefs. The dairy becomes more worthy of the 
 farmer's attention, and the quality of its pro- 
 duce gradually improves. The price at laft gets 
 fo high that it becomes worth while to employ 
 fome of the moft fertile and bed cultivated 
 
 lands
 
 UPON THREE SORTS OF PRODUCE. 2>57 
 
 lands in feeding cattle merely for the purpofe of C H A p. 
 the dairy ; and when it has got to this height, it 
 cannot well go higher. If it did, more land 
 would foon be turned to this purpofe. It feems 
 to have got to this height through the greater 
 part of England, where much good land is com- 
 monly employed in this manner. If you except 
 the neighbourhood of a few confiderable towns, 
 it feems not yet to have got to this height any- 
 where in Scotland, where common farmers fel- 
 dom employ much good land in railing food for 
 cattle merely for the purpofe of the dairy. The 
 price of the produce, though it has rifen very 
 confiderably within thefe few years, is probably 
 Hill too low to admit of it. The inferiority of 
 the quality, indeed, compared with that of the 
 produce of Englifh 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 caufe of 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 neceffary for producing a much bet- 
 ter quality. Through the greater part of Eng- 
 land, notwithstanding the fuperiority of price, 
 the dairy is not reckoned a more profitable em- 
 ployment of land than the railing of corn, or the 
 fattening of cattle, the two great objects of agri- 
 culture. Through the greater part of Scotland, 
 therefore, it cannot yet be even fo profitable. 
 
 a a 3 The
 
 358 EFFECTS OF TITE PROGRESS OF IMPROVEMENT 
 
 The lands of no country, it is evident, can 
 ever be completely cultivated and improved, till 
 once the price of every produce, which human 
 induflry is obliged to raife upon them, has got 
 fo high as to pay for the expence of complete 
 improvement and cultivation. In order to do 
 this, the price of each particular produce mull 
 be fufficient, firft, to pay the rent of good corn 
 land, as it is that which regulates the rent of the 
 greater part of other cultivated land ; and fe- 
 condly, to pay the labour and expence of the 
 farmer as well as they are commonly paid upon 
 good corn land ; or, in other words, to replace 
 with the ordinary profits the flock which he em- 
 ploys about it. This rife in the price of each 
 particular produce, mud evidently be previous 
 to the improvement and cultivation of the land 
 which is deflined for raifmg it. Gain is the end 
 of all improvement, and nothing could deferve 
 that name of which lofs was to be the neceffary 
 confequence. But lofs mud be the neceffary 
 confequence of improving land for the fake of a 
 produce of which the price could never bring 
 back the expence. If the complete improve- 
 ment and cultivation of the country be, as it 
 mofl certainly is, the greatefl of all public ad- 
 vantages, this rife in the price of all thofe differ- 
 ent forts of rude produce, inflead of being con- 
 fidered as a public calamity, ought to be re- 
 garded as the neceffary forerunner and attend- 
 ant of the greatefl of all public advantages. 
 
 This rife too in the nominal or money-price 
 of all thofe different forts of rude produce has 
 
 been
 
 UPON THREE SORTS OF PRODUCE. 359 
 
 been the effect, not of any degradation in the chap. 
 value of lilver, but of a rife in their real price. t ^L 
 They have become worth, not only a greater 
 quantity of lilver, but a greater quantity of la- 
 bour and fubliflence than before. As it cofts a 
 greater quantity of labour and fubliflence to 
 bring them to market, fo when they are brought 
 thither, they reprefent or are equivalent to a 
 greater quantity. 
 
 Third Sort. 
 
 The third and lafl fort of rude produce, of 
 which the price naturally rifes in the progrels of 
 improvement, is that in which the efficacy of 
 human induliry, in augmenting the quantity, is 
 either limited or uncertain. Though the real 
 price of this fort of rude produce, therefore, na- 
 turally tends to rife in the progrefs of improver 
 ment, yet, according as different accidents hap- 
 pen to render the efforts of human indultry more 
 or lefs fuccefsful in augmenting the quantity, it 
 may happen fometimes even to fall, fometimes 
 to continue the fame in very different periods of 
 improvement, and fometimes to rife more or lefs 
 in the fame period. 
 
 There are fome forts of rude produce which 
 nature has rendered a kind of appendages to 
 other forts; fo that the quantity of the one 
 which any country can afford, is neceffarily li- 
 mited by that of the other. The quantity of 
 wool or of raw hides, for example, which any 
 a a 4 country
 
 360 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK country can afford, is neceflarily limited by the 
 
 * ( number of great and fmall cattle that are kept 
 
 in it. The ftate of its improvement, and the 
 nature of its agriculture, again neceflarily deter- 
 mine this number. 
 
 The feme caufes, which, in the progrefs of 
 improvement, gradually raife the price of but- 
 cher's-meat, fhould have the fame effect, it may 
 be thought, upon the prices of wool and raw 
 hides, and raife them too nearly in the fame pro- 
 portion. It probably would be fo, if in the rude 
 beginnings of improvement the market for the 
 latter commodities was confined within as nar- 
 row bounds as that for the former. But the 
 extent of their respective markets is commonly 
 extremely different. 
 
 The market for butcher's-meat is almoft 
 every-where confined to the country which pro- 
 duces it. Ireland, and fome part of Britifh 
 America indeed, carry on a confiderable trade in 
 fait provifions ; but they are, I believe, the only 
 countries in the commercial world which do fo, 
 or which export to other countries any confider- 
 able part of their butcher's-meat. 
 
 The market for wool and raw hides, on the 
 contrary, is in the rude beginnings of improve- 
 ment very feldom confined to the country which 
 produces them. They can eafily be tranfported 
 to diftant countries, wool without any prepara- 
 tion, and raw hides with very little : and as they 
 are the materials of many manufactures, the in- 
 duftry of other countries may occafion a demand 
 
 for
 
 UPON THREE SORTS OF PRODUCE. 36 1 
 
 for them, though that of the country which pro- chap. 
 duces them might not occafion any. 
 
 In countries ill cultivated, and therefore but 
 thinly inhabited, the price of the wool and the 
 hide bears always a much greater proportion to 
 that of the whole beafl, than in countries where, 
 improvement and population being further ad- 
 vanced, there is more demand for butcher's- 
 meat. Mr. Hume obferves, that in the Saxon 
 times, the fleece was eflimated at two-fifths of 
 the value of the whole iheep, and that this was 
 much above the proportion of its prefent eflima- 
 tion. In fome provinces of Spain, I have been 
 affured, the Iheep is frequently killed merely for 
 the fake of the fleece and the tallow. The car- 
 cafe is often left to rot upon the ground, or to 
 be devoured by beafts and birds of prey. If this 
 fometimes happens even in Spain, it happens al- 
 mofl conflantly in Chili, at Buenos Ayres, and 
 in many other parts of Spanifh America, where 
 the horned cattle are almofl conflantly killed 
 merely for the fake of the hide and the tallow. 
 This too ufed to happen almoft conflantly in 
 Hifpaniola, while it was infefled by the Buc- 
 caneers, and before the fettlement, improve- 
 ment, and populoufnefs of the French planta- 
 tions (which now extend round the coafl of al- 
 mofl the whole weflern half of the ifland) had 
 given fome value to the cattle of the Spaniards, 
 who flill continue to poffefs, not only the eaflern 
 part of the coafl, but the whole inland and 
 mountainous part of the country. 
 
 Though
 
 3^2 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 Though in the progrefs of improvement and 
 population, the price of the whole bead neceil'a- 
 rily rifes, yet the price of the carcafe is likely to 
 be much more affected by this rife than that of 
 the wool and the hide, The market for the car- 
 cafe, being in the rude (late of fociety confined 
 always to the country which produces it, mull 
 neceflarily be extended in proportion to the im- 
 provement 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 leldom be en- 
 larged in the fame proportion. The Hate of the 
 whole commercial world can feldom be much 
 affected by the improvement of any particular 
 country ; and the market for fuch commodities 
 may remain the fame, or very nearly the fame, 
 after fuch improvements, as before. It mould, 
 however, in the natural courfe of things, rather 
 upon the whole be fomewhat extended in confe- 
 quence of them. If the manufactures, efpe- 
 cially, of which thofe commodities are the mate- 
 rials, mould ever come to flourim in the country, 
 the market, though it might not be much en- 
 larged, would at leafl be brought much nearer 
 to the place of growth than before ; and the 
 price of thofe materials might at lead be in- 
 creafed 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
 
 UPON THREE SORTS OF PRODUCE. 363 
 
 In England, however, notwithftanding the chap. 
 flourifhing ftate of its woollen manufacture, the 
 price of Englifh wool has fallen very confiderably 
 fince the time of Edward III. There are many 
 authentic records which demonftrate that during 
 the reign of that prince (towards the middle of 
 the fourteenth century, or about 1339) what was 
 reckoned the moderate and reafonable price of 
 the tod or twenty-eight pounds of Englifh wool, 
 was not lefs than ten millings 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 Ihillings of our 
 prefent money. In the prefent times, one-and- 
 twenty millings the tod may be reckoned a good 
 price for very good Englifh wool. The money- 
 price of wool, therefore, in the time of Ed- 
 ward III., was to its money-price in the prefent 
 times as ten to feven. The fuperiority of its 
 real price was flill greater. At the rate of fix 
 ihillings and eight-pence the quarter, ten ihil- 
 lings was in thofe ancient times the price of 
 twelve bufhels of wheat. At the rate of twenty- 
 eight ihillings the quarter, one-and-twenty ihil- 
 lings is in the prefent times the price of fix 
 buihels only. The proportion between the real 
 prices of ancient and modern times, therefore, 
 is as twelve to fix, or as two to one. In thofe 
 ancient times a tod of wool would have pur- 
 chafed twice the quantity of fubfiftence which it 
 will purchafe at prefent ; and confequently twice 
 
 * See Smith's Memoirs of Wool, vol. i. c. 5, 6j and 7 ; alio, 
 vol. ii. c. 176. 
 
 the
 
 364 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK the quantity of labour, if the real recompence of 
 labour had been the fame in both periods. 
 
 This degradation both in the real and nomi- 
 nal value of wool could never have happened 
 in confequence of the natural courfe of things. 
 It has accordingly been the effect of violence and 
 artifice : Firfl, of the abfolute prohibition of 
 exporting wool from England ; Secondly, of the 
 permiffion of importing it from Spain duty free ; 
 Thirdly, of the prohibition of exporting it from 
 Ireland to any other country but England. In 
 confequence of thefe regulations, the market for 
 Englifh wool, inflead of being fomewhat ex- 
 tended in confequence of the improvement of 
 England, has been confined to the home market, 
 where the wool of feveral other countries is 
 allowed to come into competition with it, and 
 where that of Ireland is forced into competition 
 with it. As the woollen manufactures too of 
 Ireland are fully as much difcouraged as is con- 
 fiftent with juflice and fair dealing, the Irilh 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 not been able to find any fuch authentic 
 records concerning the price of raw hides in an- 
 cient times. Wool was commonly paid as a 
 fubfidy to the king, and its valuation in that fub^ 
 fidy afcertains, at leaft in fome degree, what was 
 its ordinary price. But this feems not to have 
 been the cafe with raw hides. Fleetwood, how- 
 ever, from an account in 1425, between the prior 
 4 of
 
 UPON THREE SORTS OF PRODUCE. 365 
 
 of Burcefter Oxford and one of his canons, gives chap. 
 us their price, at leaft as it was ftated, upon that 
 particular occafion, viz. five ox hides at twelve 
 fhillings ; five cow hides at feven {hillings and 
 three-pence ; thirty-fix fheep fkins of two years 
 old at nine Ihillings ; fixteen calves fkins at two 
 fhillings. In 1425, twelve fhillings contained 
 about the fame quantity of filver as four-and- 
 twenty fhillings of our prefent money. An ox 
 hide, therefore, was in this account valued at the 
 fame quantity of filver as 45. 4-ths of our pre- 
 fent money. Its nominal price was a good deal 
 lower than at prefent. But at the rate of fix 
 fhillings and eight-pence the quarter, twelve 
 fhillings would in thofe times have purchafed 
 fourteen bufhels and four-fifths of a bufhel of 
 wheat, which, at three and fix-pence the bufhel, 
 would in the prefent times cofl 515. 4^. An ox 
 hide, therefore, would in thofe times have pur- 
 chafed as much corn as ten fhillings and three- 
 pence would purchafe at prefent. Its real value 
 was equal to ten fhillings and three-pence of our 
 prefent money. In thofe ancient times, when the 
 cattle were half ftarved during the greater part 
 of the winter, we cannot fuppofe that they were 
 of a very large fize. An ox hide, which weighs 
 four ftone of fixteen pounds avoirdupois, is not 
 in the prefent times reckoned a bad one; and in 
 thofe ancient times would probably have been 
 reckoned a very good one. But at half a crown 
 the flone, which at this moment (February 
 1773) I underftand to be the common price, 
 fuch a hide would at prefent coft only ten 
 
 fhillings.
 
 $66 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK (hillings. Though its nominal price, therefore, is 
 higher in the prefent than it was in thofe ancient 
 times, its real price* the real quantity of fubliit- 
 ence which it will purchafe or command, is ra- 
 ther fomewhat lower. The price of cow hides, as 
 ftated in the above account, is nearly in the com- 
 mon proportion to that of ox hides. That of 
 iheep ikins is a good deal above it. They had 
 probably been fold witli the wool. That of calves 
 Ikins, 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 flock, are generally 
 killed very young; as was the cafe in Scotland 
 twenty or thirty years ago. It faves the milk, 
 which their price would not pay for. Their Ikins, 
 therefore, are commonly good for little. 
 
 The price of raw hides is a good deal lower at 
 prefent than it was a few years ago ; owing pro- 
 bably to the taking off the duty upon .leal ikins, 
 and to the allowing, for a limited time, the im- 
 portation 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 the commodity renders 
 it not quite fo proper for being tranlported to 
 diftant markets as wool. It luffcrs move by 
 keeping. A (kited hide is reckoned inferior to 
 a frefli one, and fells for a lower price. Tin's 
 circumflance mult necefiarily have fome ten- 
 dency to fink the price of raw hides produced 
 
 m
 
 UPON THREE SORTS OF PRODUCE; 367 
 
 in a country which does not manufacture them, c ha P. 
 but is obliged to export them ; and comparatively 
 to raife that ofthofe produced in a country which 
 does manufacture them. It mult have lome 
 tendency to fink their price in a barbarous, and 
 to raife it in an improved and manufacturing 
 country. It mufl have had fome tendency, there- 
 fore, to fink it in ancient, and to raife it in mo- 
 dern times. Our tanners, befides, have not been 
 quite fo fuccefsful as our clothiers, in convincing 
 the wifdom of the nation, that the fafety of the 
 commonwealth depends upon the profperity of 
 their particular manufacture. They have ac- 
 cordingly been much lefs favoured. The exporta- 
 tion of raw hides has, indeed, been prohibited, 
 and declared a nuifance : but their importation 
 from foreign countries has been fubjected to a 
 duty ; and though this duty has been taken off 
 from thofe of Ireland and the plantations (for 
 the limited time of five years only), yet Ireland 
 has not been confined to the market of Great 
 Britain for the fale of its furplus hides, or ofthofe 
 which are not manufactured at home. The hides 
 of common cattle have but within thefe few years 
 been put among the enumerated commodities 
 which the plantations can fend no where but to 
 the mother country ; neither has the commerce 
 of Ireland been in this cafe oppreffed hitherto, 
 in order to fupport the manufactures of Great 
 Britain. 
 
 Whatever regulations tend to fink the price 
 
 either of wool or raw hides below what it 
 
 naturally would be, mufl, in an improved and 
 
 1 cultivated
 
 368 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK cultivated country, have fome tendency to raife 
 the price of butcher's meat. The price both of 
 the great and fmall cattle, which are fed on im- 
 proved and cultivated land, mull be fufficient to 
 pay the rent which the landlord, and the profit 
 which the farmer, has reafon to expedt from im- 
 proved and cultivated land. If it is not, they will 
 foon ceafe to feed them. Whatever part of this 
 price, therefore, is not paid by the wool and the 
 hide, muft be paid by the carcafe. The lefs 
 there is paid for the one, the more mull be paid 
 for the other. In what manner this price is to be 
 divided upon the different parts of the bead, is 
 indifferent to the landlords and farmers, pro- 
 vided it is all paid to them. In an improved and 
 cultivated country, therefore, their interefl as 
 landlords and farmers cannot be much affected 
 by fuch regulations, though their interefl as con- 
 fumers may, by the rife in the price of provi- 
 fions. It would be quite otherwife, however, in 
 an unimproved and uncultivated country, where 
 the greater part of the lands could be applied to 
 no other purpofe but the feeding of cattle, and 
 where the wool and the hide made the principal 
 part of the value of thofe cattle. Their interefl 
 as landlords and farmers would in this cafe be 
 very deeply affected by fuch regulations, and 
 their interefl as confumers very little. The fall 
 in the price of wool and the hide, would 
 not in this cafe raife the price of the carcafe ; 
 becaufe the greater part of the lands of the 
 country being applicable to no other purpofe but 
 the feeding of cattle, the fame number would 
 
 ftill
 
 UPON THREE SORTS OF PRODUCE. 369 
 
 itill continue to be fed. The fame quantity of c hap. 
 butcher's-meat would dill come to market. The XI - 
 demand for it would be no greater than before. 
 Its price, therefore, would be the fame as be- 
 fore. The whole price of cattle would fall, and 
 along with it both the rent and the profit of all 
 thofe lands of which cattle was the principal 
 produce, that is, of the greater part of the lands 
 of the country. The perpetual prohibition of 
 the exportation of wool, which is commonly, but 
 very falfely, afcribed to Edward III., would, 
 in the then circumftances of the country, have 
 been the moll definitive regulation which could 
 well have been thought of. It would not only 
 have reduced the actual value of the greater part 
 of the lands of the kingdom, but by reducing the 
 price of the moll important fpecies of fmall cattle, 
 it would have retarded very much its fubfequent 
 improvement. 
 
 The wool of Scotland fell very confiderably 
 in its price in confequence of the union with 
 England, by which' it was excluded from the 
 great market of Europe, and confined to the 
 narrow one of Great Britain. The value of the 
 greater part of the lands in the fouthern counties 
 of Scotland, which are chiefly a fheep country, 
 would have been very deeply affected by this 
 event, had not the rife in the price of butcher's- 
 meat fully compenfated the fall in the price of 
 wool. 
 
 As the efficacy of human induftry, in in- 
 creasing the quantity either of wool or of raw 
 hides, is limited, fo far as it depends upon the 
 vol. it. b B produce
 
 370 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 book produce of the country where it is exerted \ fo it 
 is uncertain fo far as it depends upon the pro- 
 duce of other countries. It fo far depends,, not 
 fo much upon the quantity which they produce, 
 as upon that which they do not manufacture ; 
 and upon the reflraints which they may or may 
 not think proper to impofe upon the exportation 
 of this fort of rude produce. Thefe circum- 
 stances, as they are altogether independent of 
 domeflic 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. 
 
 In multiplying another very important fort of 
 rude produce, the quantity of fifh that is brought 
 to market, it is likewife both limited and un- 
 certain. It is limited by the local fituation of 
 the country, by the proximity or diflance of its 
 different provinces from the lea, by the number 
 of its lakes and rivers, and by what may be 
 called the fertility or barrennefs of thofe feas, 
 lakes and rivers, as to this fort of rude produce. 
 As population increaies, as the annual produce 
 of the land and labour of the country grows 
 greater and greater, there come to be more 
 buyers of fifh, and thofe buyers too have a 
 greater quantity and variety of other goods, or, 
 what is the fame thing, the price of a greater 
 quantity and variety of other goods, to buy with. 
 But it will generally be impotable to fupply the 
 great and extended market without employing a 
 quantity of labour greater than in proportion to 
 
 what
 
 UPON THREE SORTS OF PRODUCE. 371 
 
 what had been requilite for fupplying the narrow CHAP, 
 and confined one. A market which, from re- t ^ 
 quiring only one thoufand, comes to require 
 annually ten thoufand ton of fifti, can feldom be 
 fupplied without employing more than ten times 
 the quantity of labour which had before been 
 fufficient to fupply it. The fifh mull generally 
 be fought for at a greater diftance, larger vefiels 
 muft be employed, and more extenfive machi- 
 nery of every kind made ufe of. The real price 
 of this commodity, therefore, naturally riles in 
 the progrefs of improvement. It has accord- 
 ingly done fo, I believe, more or lefs in every 
 country. 
 
 Though the fuccefs of a particular day's fifh- 
 ing may be a very uncertain matter, yet, the 
 local fituation of the country being fuppofed, 
 the general efficacy of induftry in bringing a 
 certain quantity of fifli to market, taking the 
 courfe of a year, or of feveral years together, it 
 may perhaps be thought, is certain enough ; and 
 it, no doubt, is fo. As it depends more, how- 
 ever, 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 improve- 
 ment, and very different in the fame period ; its 
 connection with the ftate of improvement is un- 
 certain, and it is of this fort of uncertainty that I 
 am here fpeaking. 
 
 In increafing the quantity of the different mi- 
 nerals and metals which are drawn from the 
 bowels of the earth, that of the more precious 
 b b 2 ones
 
 I. 
 
 372 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK ones particularly, the efficacy of human induftry 
 feems not to be limited, but to be altogether un- 
 certain. 
 
 The quantity of the precious 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 pofiefs no 
 mines. Their quantity in every particular coun- 
 try feems to depend upon two different circum- 
 ftances ; firft, upon its power of purchafing, upon 
 the ftate of its induftry, upon the annual produce 
 of its land and labour, in confequence of which 
 it can afford to employ a greater or a fmaller quan- 
 tity of labour and fubfiftence in bringing or pur- 
 chafing fuch fuperfluities as gold and filver, either 
 from its own mines or from thofe of other coun- 
 tries ; and, fecondly, upon the fertility or bar- 
 rennefs of the mines which may happen at any 
 particular time to fupply the commercial world 
 with thofe metals. The quantity of thofe metals 
 in the countries moll remote from the mines, 
 mud be more or lefs affected by this fertility or 
 barrennefs, on account of the eafy and cheap 
 tranfportation t>f thofe metals, of their fmall bulk 
 and great value. Their quantity in China and 
 Indoflan muft have been more or lefs affected by 
 the abundance of the mines of America. 
 
 So far as their quantity in any particular coun- 
 try depends upon the former of thofe two cir- 
 cumftances (the power of purchafing), their real 
 price, like that of all other luxuries and fuper- 
 fluities, is likely to rife with the wealth and im- 
 provement
 
 UPON THREE SORTS OF TRODUCE. 373 
 
 provement of the country, and to fall with its c H A P. 
 poverty and depreffion. Countries which have a t **' 
 great quantity of labour and fubfiilence to fpare, 
 can afford to purchafe any particular quantity of 
 thofe metals at the expence of a greater quantity 
 of labour and fubfiilence, than countries which 
 have lefs to fpare. 
 
 So far as their quantity in any particular coun- 
 try depends upon the latter of thofe two circum- 
 ftances (the fertility or barrenrtiefs of the mines 
 which happen to fupply the commercial world), 
 their real price, the real quantity of labour and 
 fubfiilence which they will purchafe or exchange 
 for, will, no doubt, link more or lefs in propor- 
 tion to the fertility, and rife in proportion to the 
 barrennefs, of thofe mines. 
 
 The fertility or barrennefs of the mines, how- 
 ever, which may happen at any particular time 
 to fupply the commercial world, is a circum- 
 ilance which, it is evident, may have no fort of 
 connection with the ftate of induflry in a parti- 
 cular country. It feems even to have no .very 
 neceffary connection with that of the world in 
 general. As arts and commerce, indeed, gra- 
 dually fpread themfelves over a greater and a 
 greater part of the earth, the fearch 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 gradually exhaufted, 
 is a matter of the greateil uncertainty, and fuch 
 as no human fkill or induflry can enfure. All 
 B b 3 indi*
 
 374 EFFECTS OF THE PROGRESS, &C. 
 
 BOOK indications, it is acknowledged, are doubtful, 
 and the actual difcovery and fuccefsful working 
 of a new mine can alone afcertain the reality of 
 its value, or even of its exiftence. In this fearch 
 there feem to be no certain limits either to the 
 poflible fuccefs, or to the poffible difappoint- 
 ment of human induftry. In the courfe of a 
 century or two, it is poflible that new mines may 
 be difcovered more fertile than any that have 
 ever yet been known ; and it is juft equally pof- 
 lible that the mod fertile mine then known may 
 be more barren than any that was wrought 
 before the difcovery 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 profperity of the 
 world, to the real value of the annual produce 
 of the land and labour of mankind. Its no- 
 minal value, the quantity of gold and filver by 
 which this annual produce could be exprefled or 
 reprefented, would, no doubt, be very different ; 
 but its real value, the real quantity of labour 
 which it could purchafe or command, would be 
 precifely the fame. A milling might in the one 
 cafe reprefent no more labour than a penny does 
 at prefent ; and a penny in the other might re- 
 prefent as much as a milling does now. But in 
 the one cafe he who had a milling 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 be juft as rich as he who has a milling 
 now. The cheapnefs and abundance of gold 
 and filver plate, would be the fole advantage 
 
 which
 
 XI. 
 
 OF VARIATIONS IN THE VALUE OF SILVER. 375 
 
 which the world could derive from the one event, c HA P. 
 and the dearnefs and fcarcity of thofe trifling fu- 
 perfluities the only inconveniency it could funer 
 from the other. 
 
 Conclufion of the Digre/Jion concerning the Variations in the 
 Value of Silver. 
 
 THE greater part of the writers who have col- 
 lected the money prices of things in ancient 
 times, feem to have coniidered the low money 
 price of corn, and of goods in general, or, in 
 other words, the high value of gold and lilver, 
 as a proof, not only of the fcarcity of thofe metals, 
 but of the poverty and barbarifm of the country 
 at the time when it took place. This notion is 
 connected with the fyflem of political ccconomy 
 which reprefents national wealth as confiding in 
 the abundance, and national poverty in the 
 fcarcity, of gold and lilver; a fyftem which I fliall 
 endeavour to explain and examine at great length 
 in the fourth book of this enquiry. I fliall only 
 obferve at prefent, that the high value of the 
 precious metals can be no proof of the poverty 
 or barbarifm of any particular country at the 
 time when it took place. It is a proof only of 
 the barrennefs of the mines 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 ; and the value of thofe 
 metals, therefore, is not likely to be higher in 
 the former than in the latter. In China, a coun- 
 
 B b 4 try
 
 $j6 OF VAIIIATIONS IN THE VALUE OF SILVER. 
 
 BOOK try much richer than any part of Europe, the 
 value of the precious metals is much higher than 
 in any part of Europe. As the wealth of Europe, 
 indeed, has increafed greatly fince the difcovery 
 of the mines of America, fo the value of gold 
 and filver has gradually diminished. This di- 
 minution of their value, however, has not been 
 owing to the increafe of the real wealth of Eu- 
 rope, of the annual produce of its land and la- 
 bour, but to the accidental difcovery of more 
 abundant mines than any that were known be- 
 fore. The increafe of the quantity of gold and 
 lilver in Europe, and the increafe of its manu- 
 factures and agriculture, are two events which, 
 though they have happened nearly about the 
 fame time, yet have arifen from very different 
 caufes, and have fcarce any natural connection 
 with one another. The one has arifen from a 
 mere accident, in which neither prudence nor 
 policy either had or could have any fhare : The 
 other from the fall of the feudal fyftem, and from 
 the eftablifhment of a government which afforded 
 to induftry the only encouragement which it 
 requires, fome tolerable fecurity that it fhall 
 enjoy the fruits of its own labour. Poland, 
 where the feudal fyftem ftill continues to take 
 place, is at this day as beggarly a country as it 
 was before the difcovery of America. The 
 money price of corn, however, has rifen ; the 
 real value of the precious metals has fallen in 
 Poland, in the fame manner as in other parts of 
 Europe. Their quantity, therefore, mult have 
 increafed there as in other places, and nearly in 
 
 the
 
 OF VARIATIONS IN THE VALUE OF SILVER. 377 
 
 the fame proportion to the annual produce of its chap. 
 
 land and labour. This increafe of the quantity ( ^ 
 
 of thofe metals, however, has not, it feems, in- 
 creafed that annual produce, has neither im- 
 proved the manufactures and agriculture of the 
 country, nor mended the circumflances of its in- 
 habitants. Spain and Portugal, the countries 
 which poffefs the mines, are, after Poland, per- 
 haps, the two moil beggarly countries in Europe. 
 The value of the precious metals, however, mull 
 be lower in Spain and Portugal than in any other 
 part of Europe ; as they come from thofe coun- 
 tries 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 fubjected to a duty. 
 In proportion to the annual produce of the land 
 and labour, therefore, their quantity mull be 
 greater in thofe countries than in any other part 
 of Europe: Thofe countries, however, are poorer 
 than the greater part of Europe. Though the 
 feudal fyftem has been abolifhed in Spain and 
 Portugal, it has not been fucceeded by a much 
 better. 
 
 As the low value of gold and filver, therefore, 
 is no proof of the wealth and flouriming Hate of 
 the country where it takes place ; fo neither is 
 their high value, or the low money price either of 
 goods in general, or of corn in particular, any 
 proof of its poverty and barbarifm. 
 
 But though the low money price either of 
 goods in 'general, or of corn in particular, be no 
 proof of the poverty or barbarifm of the times, 
 
 4 the
 
 37** OF VARIATIONS IN THE VALUE OF SILVER. 
 
 book the low money price of fome particular forts of 
 goods, fuch as cattle, poultry, game of all kinds, 
 &c. in proportion to that of corn, is a moll de- 
 cifive one. It clearly demonftrates, nrft, their 
 great abundance in proportion to that of corn, 
 and confequently the great extent of the land 
 which they occupied in proportion to what was 
 occupied by corn ; and, fecondly, the low value 
 of this land in proportion to that of corn land, 
 and confequently the uncultivated and unim- 
 proved Hate of the far greater part of the lands 
 of the country. It clearly demonftrates that the 
 ftock and population of the country did not bear 
 the fame proportion to the extent of its territory, 
 which they commonly do in civilized countries, 
 and that fociety was at that time, and in that 
 country, but in, its infancy. From the high or 
 low money price either of 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 fer- 
 tile or barren, not that the country was rich or 
 poor. But from the high or low money price of 
 fome forts of goods in proportion to that of others, 
 we can infer, with a degree of probability that 
 approaches almoft to certainty, that it was rich 
 or poor, that the greater part of its lands were 
 improved or unimproved, and that it was either 
 in a more or left barbarous ftate, or in a more or 
 lefs civilized one. 
 
 Any rife in the money price of goods which 
 proceeded altogether from the degradation of the 
 value of filver, would affect all forts of goods 
 
 3 equally,
 
 OF VARIATIONS IN THE VALUE OF SILVER. 379 
 
 equally, and raife their price univerfally a third, CHAP. 
 or a fourth, or a fifth part higher, according as 
 filver happened to lofe a third, or a fourth, or a 
 fifth part of its former value. But the rife in the 
 price of provilions, which has been the fubject of 
 1b much reafoning and converfation, does not 
 affect all forts of provilions equally. Taking 
 the courfe of the prefent century at an average, 
 the price of corn, it is acknowledged, even by 
 thofe who account for this rife by the degrada- 
 tion of the value of lilver, has rifen much lefs 
 than that of fome other forts of provilions. The 
 rife in the price of thofe other forts of provilions, 
 therefore, cannot be owing altogether to the 
 degradation of the value of filver. Some other 
 caufes mufl be taken into the account, and thofe 
 which have been above affigned, will, perhaps, 
 without having recourfe to the fuppofed degra- 
 dation of the value of filver, fufficiently ex- 
 plain this rife in thofe particular forts of provi- 
 fions of which the price has actually rifen in pro- 
 portion to that of corn. 
 
 As to the price of corn itfelf, it has, during 
 the fixty-four firfl years of the prefent century, 
 and before the late extraordinary courfe of bad 
 feafons, been fomewhat lower than it was during 
 the fixty-four lafl years of the preceding century. 
 This fact is attefled, not only by the accounts of 
 Windfor market, but by the public fiars of all 
 the different counties of Scotland, and by the 
 accounts of feveral different markets in France, 
 which have been collected with great diligence 
 and fidelity by Mr. Meffance, and by Mr. Dupre 
 
 de
 
 380 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 B o o K de St. Maur. The evidence is more complete 
 than could well have been expected in a matter 
 which is naturally fo very difficult to be afcer- 
 tained. 
 
 As to the high price of corn during thefe lad 
 ten or twelve years, it can be fufficiently ac- 
 counted for from the badnefs of the feafons, 
 without fuppofing any degradation in the value 
 of filver. 
 
 The opinion, therefore, that filver is con- 
 tinually finking in its value, feems not to be 
 founded upon any good obfervations, either 
 upon the prices of corn, or upon thofe of other 
 provifions. 
 
 The fame quantity of filver, it may, perhaps, 
 be "faid, will in the prefent times, even accord- 
 ing to the account which has been here given, 
 purchafe a much fmaller quantity of feveral forts 
 of provifions than it would have done during 
 fome part of the lad century ; and to afcertain 
 whether this change be owing to a rife in the 
 value of thole goods, or to a fall in the value of 
 filver, is only to eftablifh a vain and ufelefs dis- 
 tinction, which can be of no fort of fervice to 
 the man who has only a certain quantity of filver 
 to go to market with, or a certain fixed revenue 
 in money. I certainly do not pretend that the 
 knowledge of this diflin&ion will enable him to 
 buy cheaper. It may not, however, upon that 
 account be altogether ufelefs. 
 
 It may be of fome ufe to the public by afford- 
 ing an eafy proof of the profperous condition of 
 the country. If the rife in the price of fome 
 
 forts
 
 OF VARIATIONS IN THE VALUE OF SILVER. 38 1 
 
 forts of provifions be owing altogether to a fall 
 in the value of filver, it is owing to a circum- 
 ftance from which nothing can be inferred but 
 the fertility of the American mines. The real 
 wealth of the country, the annual produce of its 
 land and labour, may, notwithflanding this cir- 
 cumftance, be either gradually declining, as in 
 Portugal and Poland ; or gradually advancing, as 
 in mofl other parts of Europe. But if this rife 
 in the price of fome forts of provifions be owing 
 to a rife in the real value of the land which pro- 
 duces them, to its increafed fertility; or, in 
 confequence of more extended improvement and 
 good cultivation, to its having been rendered fit 
 for producing corn ; it is owing to a circum- 
 itance which indicates in the clearefl manner the 
 profperous and advancing ftate of the country. 
 The land conflitutes by far the greatefl, the mofl 
 important, and the mofl durable part of the 
 wealth of every extenfive country. It may furely 
 be of fome ufe, or, at leafl, it may give fome 
 fatisfa6lion to the Public, to have fo decifive a 
 proof of the increafing value of by far the great- 
 eft, the mofl important, and the mofl durable 
 part of its wealth. 
 
 It may too be of fome ufe to the Public in 
 regulating the pecuniary reward of fome of its 
 inferior fervants. If this rife in the price of 
 fome forts of provifions be owing to a fall in the 
 value of filver, their pecuniary reward, provided 
 it was not too large before, ought certainly to 
 be augmented in proportion to the extent of 
 this fall. If it is not augmented, their real re- 
 
 compence
 
 382 OF VARIATIONS IN THE VALUE OF SILVER. 
 
 compence will evidently be fo much diminifhed. 
 But if this rife of price is owing to the increafed 
 value, in confequence of the improved fertility 
 of the land which produces fuch provifions, it 
 becomes a much nicer matter to judge either in 
 what proportion any pecuniary reward ought to 
 be augmented, or whether it ought to be aug- 
 mented at all. The extenfion of improvement 
 and cultivation, as it neceflarily raifes more or 
 lefs, in proportion to the price of corn, that of 
 every fort of animal food, fo it as neceflarily 
 lowers that of, I believe, every fort of vegetable 
 food. It raifes the price of animal food ; be- 
 caufe a great part of the land which produces it, 
 being rendered fit for producing corn, mult af- 
 ford to the landlord and farmer the rent and 
 profit of corn land. It lowers the price of vege- 
 table food ; becaufe, by increafing the fertility of 
 the 1 land, it increafes its abundance. The im- 
 provements of agriculture too introduce many 
 ibrts of vegetable food, which, requiring lefs 
 land and not more labour than corn, come much 
 cheaper to market. Such are potatoes and maize, 
 or what is called Indian corn, the two moft im- 
 portant improvements which the agriculture of 
 Europe, perhaps, which Eu rope itfelf, has received 
 from the great extenfion of its commerce and na- 
 vigation. Many forts of vegetable food, befides, 
 which in the rude flate of agriculture are con- 
 fined to the kitchen-garden, and railed only by 
 the fpade, come in its improved ftate to be in- 
 troduced into common fields, and to be raifed 
 by the plough : fuch as turnips, carrots, cab- 
 bages,
 
 OF VARIATIONS IN THE VALUE OF SILVER. 383 
 
 bages, &c. If in the progrefs of improve- c 
 merit, therefore, the real price of one fpecies of 
 food neceflarily rifes, that of another as neceffa- 
 rily falls, and it becomes a matter of more 
 nicety to judge how far the rife in the one may 
 be compenfated by the fall in the other. When 
 the real price of butcher's-meat has once got to 
 its height (which, with regard to every fort, 
 except, perhaps, that of hog's flefli, it feems to 
 have done through a great part of England 
 more than a century ago), any rife which can af- 
 terwards happen in that of any other fort of ani- 
 mal food, cannot much affect the circumflances 
 of the inferior ranks of people. The circum- 
 flances of the poor through a great part of Eng- 
 land cannot furely be fo much diflreffed by any 
 rife in the price of poultry, fifh, wild-fowl, or 
 venifon, as they mufl be relieved by the fall in 
 that of potatoes. 
 
 In the prefent feafon of fcarcity the high price 
 of corn no doubt diftrefTes the poor. But in 
 times of moderate plenty, when corn is at its or- 
 dinary or average price, the natural rife in the 
 price of any other fort of rude produce cannot 
 much affect them. They fuffer more, perhaps, 
 by the artificial rife which has been occafioned by 
 taxes in the price of fome manufactured commo- 
 dities ; as of fait, foap, leather, candles, malt, 
 beer, and ale, &c. 
 
 EjfeSts
 
 384 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 Effects of the Progrefs of Improvement upon the recti Price of 
 Manufactures. 
 
 f T is the natural effect of improvement, how- 
 ■* ver, to diminifti gradually the real price of 
 almofl all manufactures. That of the manufac- 
 turing workmanfhip diminifhes, perhaps, in all 
 of them without exception. In confequence of 
 better machinery, of greater dexterity, and of a 
 more proper divifion and diftribution of work, 
 all of which are the natural effects of improve- 
 ment, a much fmaller quantity of labour be- 
 comes requifite for executing any particular 
 piece of work ; and though, in confequence of 
 the flouriftiing circumflances of the fociety, the 
 real price of labour mould rife very confiderably, 
 yet the great diminution of the quantity will ge- 
 nerally much more than compenfate the greateft 
 rife which can happen in the price. 
 
 There are, indeed, a few manufactures, in 
 which the neceffary rife in the real price. of the 
 rude materials will more than compenfate all the 
 advantages which improvement can introduce 
 into the execution of the work. In carpenters 
 and joiners work, and in the coarfer fort of cabi- 
 net work, the neceflary rife in the real price of 
 barren timber, in confequence of the improve- 
 ment of land, will more than compenfate all the 
 advantages which can be derived from the bed 
 machinery, the greateft dexterity, and the mofl 
 proper divifion and diftribution of work. 
 
 But
 
 UPON THE PRICE OF MANUFACTURES. 385 
 
 But in all cafes in which the real price of the chap. 
 rude materials either does not rife at all, or does k *& 
 not rife very much, that of the manufactured 
 commodity finks very confiderably. 
 
 This diminution of price has, in the courfe of 
 the prefent and preceding century, been moll 
 remarkable in thofe manufactures of which the 
 materials are the coarfer metals. A better move- 
 ment of a watch, than about the middle of the 
 laft century could have been bought for twenty 
 pounds, may now perhaps be had for twenty 
 ihillings. In the work of cutlers and lockfmiths, 
 in all the toys which are made of the coarfer 
 metals, and in all thofe goods which are conU 
 monly known by the name of Birmingham and 
 Sheffield ware, there has been, during the fame 
 period, a very great reduction of price, though 
 not altogether fo great as in watch-work. It 
 has, however, been fufficient to altonifh the 
 workmen of every other part of Europe, who in 
 many cafes acknowledge that they can produce 
 no work of equal goodnefs for double, or even 
 for triple the price. There are perhaps no ma- 
 nufactures in which the divifion of labour can be 
 carried further, or in which the machinery em- 
 ployed admits of a greater variety of improve- 
 ments, than thofe of which the materials are the 
 coarfer metals. 
 
 In the clothing manufacture there has, during 
 the fame period, been no fuch fenlible reduction 
 of price. The price of fuperrine cloth, I have 
 been anured, on the contrary, has, within thefe 
 five-and-twenty or thirty years, rifen fomewhat 
 
 vol. 11. c c in
 
 386 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 B O O K in proportion to its quality ; owing, it was faid, 
 *• to a confiderable rife in the price of the mate* 
 rial, which confifls altogether of Spanifli wool. 
 That of the Yorkfhire cloth, which is made al- 
 together of Englifh wool, is faid indeed, during 
 the courfe of the prefent century, to have fallen 
 a good deal in proportion to its quality. Qua- 
 lity, however* is fo very difputable a matter, 
 that I look upon all information of this kind as 
 fomewhat uncertain. In the clothing manu- 
 facture, the divifion of labour is nearly the fame 
 now as it was a century ago, and the machinery 
 employed is not very different. There may, 
 aowever, have been fome fmall improvements in 
 both, which may have occafioned fome reduction 
 of price. 
 
 But the reduction will appear much more fen- 
 fible and undeniable, if we compare the price of 
 this manufacture in the prefent times with what 
 it was in a much remoter period, towards the 
 end of the fifteenth century, when the labour 
 was probably much lefs fubdivided, and the ma- 
 chinery employed much more imperfect, than it 
 is at prefent. 
 
 In 1487, being the 4th of Henry VIL, it was 
 enacted, that " whofoever mall fell by retail a 
 " broad yard of the fineft fcarlet grained, or of 
 " other grained cloth of the fineft making, 
 " above fixteen fhillings, fhall forfeit forty fhil- 
 " lings for every yard fo fold." Sixteen fhil- 
 lings, therefore, containing about the fame 
 quantity of filver as four-and-twenty fhillings of 
 our prefent money, was, at that time, reckoned 
 
 2 not
 
 UPON THE PRICE OF MANUFACTURES. 38? 
 
 not an unreafonable price for a yard of the fined CHAP, 
 cloth ; and as this is a fumptuary law, fuch 
 cloth, it is probable, had ufually been fold 
 fomewhat dearer. A guinea may be reckoned 
 the highefl price in the prefent times. Even 
 though the quality of the cloths, therefore* 
 mould be fuppofed equal, and that of the prefent 
 times is moll probably much fuperior, yet, even 
 upon this fuppofition, the money price of the 
 finell cloth appears to have been considerably re- 
 duced fince the end of the fifteenth century. But 
 its real price has been much more reduced. Six 
 (hillings and eight-pence was then, and long 
 afterwards, reckoned the average price of a quar- 
 ter of wheat. Sixteen millings, therefore, was 
 the price of two quarters and more than three 
 bufhels of wheat* Valuing a quarter of wheat 
 in the prefent times at eight-and-twenty millings, 
 the real price of a yard of tine cloth muft, in 
 thofe times, have been equal to at leafl three 
 pounds fix millings and fixpence of our prefent 
 money. The man who bought it muft have 
 parted with the command of a quantity of labour 
 and fubfiftence equal to what that fum would 
 purchafe in the prefent times. 
 
 The reduction in the real price of the coarfe 
 manufacture, though confiderable, has not been 
 fo great as in that of the fine. 
 
 In 1463, being the 3d of Edward IV., it was 
 enacted, that " no fervant in hufbandry, nor 
 " common labourer, nor fervant to any artificer 
 •* inhabiting out of a city or burgh, mall ufe or 
 " wear in their clothing any cloth above two 
 c c 2 " millings
 
 388 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK" fhillings the broad yard." In the 3d of 
 L }' , Edward IV. two fhillings contained very near- 
 ly the lame quantity of filver as four of ouf 
 prefent money. But the Yorkfhire cloth which 
 is now fold at four millings the yard, is probably 
 much fuperior to any that was then made for 
 the wearing of the very pooreft order of common 
 fervants. Even the money price of their cloth- 
 ing, therefore, may, in proportion to the qua- 
 lity, be fomewhat cheaper in the prefent than it 
 was in thofe ancient 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 
 fhillings, therefore, w T as the price of two bufhels 
 and near two pecks of wheat, which in the 
 prefent times, at three fhillings and fixpence 
 the bufhel, would be worth eight fhillings and 
 nine-pence. For a yard of this cloth the poor 
 fervant mufl have parted with the power of pur- 
 chafing a quantity of fubfiftence equal to what 
 eight fhillings and nine-pence would purchafe in 
 the prefent times. This is a fumptuary law too, 
 reftraining the luxury and extravagance of the 
 poor. Their clothing, therefore, had commonly 
 been much more expenfive. • 
 
 The fame order of people are, by the fame 
 law, prohibited from wearing hofe, of which the 
 price mould exceed fourteen-pence the pair, 
 equal to about eight-and-twenty pence of our 
 prefent money. But fourteen-pence was in thofe 
 times the price of a bufliel and near two pecks of 
 wheat j which, in the prefent times, at three and 
 
 fixpence
 
 UPON THE PRICE OF MANUFACTURES. 389 
 
 fixpence the bulhel, would coll five fhillings and chap. 
 three-pence. We lhould in the prefent times 
 confider this as a very high price for a pair of 
 (lockings to a fervant of the poorefl and lowefl 
 order. He mull, however, in thofe times have 
 paid what was really equivalent to this price for 
 them. 
 
 In the time of Edward IV. the art of knitting 
 ftockings was probably not known in any part of 
 Europe, Their hofe were made of common cloth, 
 which may have been one of the caufes of their 
 dearnefs. The firll perfon that wore ftockings 
 in England is faid to have been Queen Elizabeth. 
 She received them as a prefent from the Spanilh 
 ambaffador. 
 
 Both in the coarfe and in the fine woollen 
 manufacture, the machinery employed was much 
 more imperfect in thofe ancient, than it is in the 
 prefent times. It has lince received three very 
 capital improvements, befides, probably, many 
 fmaller ones of which it may be difficult to 
 afcertain either the number or the importance. 
 The three capital improvements are : firll, The 
 exchange of the rock and fpindle for the fpin- 
 ning- wheel, which, with the fame quantity of 
 labour, will perform more than double the quan- 
 tity of work. Secondly, the ufe of feveral 
 very ingenious machines which facilitate and 
 abridge in a Hill greater proportion the winding 
 of the worfted and woollen yarn, or the proper 
 arrangement of the warp and woof before they 
 are put into the loom ; an operation which, pre- 
 C c 3 vious
 
 39<3 EFFECTS OF THE PROGRESS OF IMPROVEMENT 
 
 BOOK vious to the invention of thofe machines, mud 
 have been extremely tedious and troublefome. 
 Thirdly, The employment of the fulling mill 
 for thickening the cloth, inftead of treading it 
 in water. Neither wind nor water mills of any 
 kind were known in England fo early as the 
 beginning of the fixteenth. century, nor, fo far 
 as I know, in any other part of Europe north of 
 the Alps. They had been introduced into Italy 
 fome time before. 
 
 The confideration of thefe circumftances may, 
 perhaps, in fome meafure explain to us why the 
 real price hoth of the coarfe and of the fine ma- 
 nufacture, was fo much higher in thofe ancient, 
 than it is in the prefent times, It cod a greater 
 quantity of labour to bring the goods to market. 
 When they were brought thither, therefore, 
 they mud have purchafed or exchanged for the 
 price of a greater quantity. 
 
 The coarfe manufacture probably was, in 
 thofe ancient times, carried on in England, in 
 the fame manner as it always has been in coun- 
 tries where arts and manufactures are in their in- 
 fancy. It was probably a houfhold manufacture, 
 in which every different part of the work was 
 occafionally performed by all the different mem- 
 bers of almofl every private family ; but fo as to 
 be their work only when they had nothing elfe 
 to do, and not to be the principal bufinefs from 
 which any of them derived the greater part of 
 their fubfiftence. The work which is performed 
 ^n this manner, it has already been obferved, 
 
 comes
 
 UPON THE PRICE OF MANUFACTURES. 391 
 
 comes always much cheaper to market than that chap. 
 which is the principal or fole fund of the work- 
 man's fubfiflence. The fine manufacture, on 
 the other hand, was not in thofe times carried 
 on in England, but in the rich and commercial 
 country of Flanders ; and it was probably con- 
 ducted then, in the fame manner as now, by 
 people who derived the whole, or the principal 
 part of their fubfiflence from it. It was befides 
 a foreign manufacture, and mull have paid fame 
 duty, the ancient cuflom of tonnage and pound, 
 age at leafl, to the King. This duty, indeed, 
 would not probably be very great. It was not 
 then the policy of Europe to reflrain, by high 
 duties, the importation of foreign manufactures, 
 but rather to encourage it, in order that mer- 
 chants might be enabled to fupply, at as eafy a 
 rate as poffible, the great men with the conve- 
 niencies and luxuries which they wanted, and 
 which the induflry of their own country could 
 not afford them. 
 
 The confideration of thefe circumflances may 
 perhaps in fome meafure explain to us why, in 
 thofe ancient times, the real price of the coarfe 
 manufacture was, in proportion to that of the 
 line, fo much lower than in the prefent times. 
 
 c c 4 CON*
 
 39 2 OF THE RENT OF LAND* 
 
 CONCLUSION OF THE CHAPTER. 
 
 I SHALL conclude this very long chapter with 
 obferving, that every improvement in the cir- 
 cumflances of the fociety tends either directly 
 or indirectly to raife the real rent of land, toin- 
 creafe the real wealth of the landlord, his power 
 of purchafing the labour, or the produce of the 
 labour of other people. 
 
 The extenfion of improvement and cultivation 
 tends to raife it directly. The landlord's (hare 
 of the produce neceflarily increafes with the in- 
 creafe of the produce. 
 
 That rife in the real price of thofe parts of 
 the rude produce of land, which isfirft the effect 
 of extended improvement and cultivation, and 
 afterwards the caufe of their being flill further 
 extended, the rife in the price of cattle, for ex- 
 ample, tends too to raife the rent of land di- 
 rectly, and in a ftill greater proportion. The 
 real value of the landlord's fhare, his real com- 
 mand of the labour of other people, not only 
 rifes with the real value of the produce, but the 
 proportion of his fhare to the whole produce 
 rifes with it. That produce, after the rife in its 
 real price, requires no more labour to collect it 
 than before. A fmaller proportion of it will, 
 therefore, be fufficient to replace, with the ordi- 
 nary profit, the flock which employs that labour. 
 A greater proportion of it muft, confecjiiently, 
 belong to the landlord. 
 
 All
 
 OF THE RENT OF LAND. 393 
 
 All thofe improvements in the productive chap. 
 powers of labour, which tend directly to reduce X I - 
 the real price of manufactures, tend indirectly to 
 raife the real rent of land. The landlord ex- 
 changes that part 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 re- 
 duces 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 j and the landlord is enabled to 
 purchafe a greater quantity of the conveniencies, 
 ornaments, or luxuries, which he has occafion 
 for. 
 
 Every increafe in the real wealth of the fo- 
 ciety, every increafe in the quantity of ufeful 
 labour employed within it, tends indirectly to 
 raife the real rent of land. A certain propor- 
 tion of this labour naturally goes to the land. 
 A greater number of men and cattle are em- 
 ployed in its cultivation, the produce increafes 
 with the increafe of the flock which is thus em- 
 ployed in railing it, and the rent increafes with 
 the produce. 
 
 The contrary circumftances, the neglect of 
 cultivation and improvement, the fall in the real 
 price of any part of the rude produce of land, 
 the rife in the real price of manufactures from 
 the decay of manufacturing art and induflry, the 
 declenfion of the real wealth of the fociety, all 
 tend, on the other hand, to lower the real rent 
 
 • of
 
 394 OF THE RENT OF LAND. 
 
 BOOK of land, to reduce the real wealth of the land- 
 ^ _~* , lord, to diminifh his power of purchafing either 
 the labour, or the produce of the labour of other 
 people. 
 
 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 pro- 
 duce, naturally divides itfelf, it has already been 
 obferved, into three parts ; the rent of land, the 
 wages of labour, and the profits of ftock ; and 
 conftitutesa 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 confti- 
 tuent orders of every civilized fociety, from 
 whole revenue that of every other prder is ulti, 
 mately derived. 
 
 The intereft of the firft of thofe three great 
 orders, it appears from what has been juft now 
 faid, is ftri&ly and infeparably connected with 
 the general intereft of the fociety. Whatever 
 either promotes or obftru6ls the one, neceffarily 
 promotes or obftru6ls the other. When the 
 public deliberates concerning any regulation 
 of commerce or police, the proprietors of land 
 never can miflead it, with a view to promote the 
 intereft of their own particular order ; at lead, if 
 they have any tolerable knowledge of that in- 
 tereft. They are, indeed, too often defective 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
 
 OF THE RENT OF LAND. 395 
 
 it were, of its own accord, and independent of c H A P. 
 
 any plan or project of their own. That indo- ( ^ 
 
 lence, which is the natural effect of the eafe 
 and fecurity of their fltuation, renders them too 
 often, not only ignorant, but incapable of that 
 application of mind which is neceffary in order 
 to forefee and underftand the confequences of 
 any public regulation. 
 
 The intereft of the fecond order, that of thofe 
 who live by wages, is as ftrictly connected with 
 the intereft of the fociety as that of the firft. The 
 wages of the labourer, it has already been fliewn, 
 are never fo high as when the demand for labour 
 is continually riling, or when the quantity em- 
 ployed 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 fa- 
 mily, 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 ftrictly conne6ted 
 with that of the fociety, he is incapable either oj 
 comprehending that intereft, or of underftand- 
 ing its connexion with his own. His condition 
 leaves him no time to receive the neceffary in- 
 formation, and his education and habits are 
 commonly fuch as to render him unfit to judge 
 pven though he was fully informed. In the
 
 396 OF THE RENT OF LAND. 
 
 BOOK public deliberations, therefore, his voice is little 
 L Iteard and lefs regarded, except upon fome par- 
 ticular occafions, when his clamour is animated, 
 fet on, and fupported by his employers, not for 
 his, but their own particular purpofes. 
 
 His employers conflitute the third order, that 
 of thofe who live by profit. It is the flock that 
 is employed for the fake of profit, which puts 
 into motion the greater part of the ufeful labour 
 of every fociety. The plans and projects of the 
 employers of flock regulate ancl direct all the 
 mofl important operations of labour, and profit 
 is the end propofed by all thofe plans and pro- 
 jects. But the rate of profit does not, like rent 
 and wages, rife with the profperity, and fall 
 with the declenfion, of the fociety. On the con- 
 trary, it is naturally low in rich, and high in 
 poor countries, and it is always highefl in the 
 countries which are going faflefl to ruin. The 
 interefl of this third order, therefore, has not the 
 fame connexion with the general interefl of the 
 fociety as that of the other two. Merchants and 
 mafler manufacturers are, in this order, the two 
 clafTes of people who commonly employ the 
 largefl capitals, and who by their wealth draw to 
 themfelves the greatefl fliare of the public con- 
 fideration. As during their whole lives they are 
 engaged in plans and projects, they have fre- 
 quently more acutenefs of underflanding than 
 the greater part of country gentlemen. As their 
 thoughts, however, are commonly exercifed rather 
 about the interefl of their own particular branch 
 
 of
 
 OF THE RENT OF LAND. 397 
 
 of bufinefs, than about that of the fociety, their chap. 
 judgment, even when given with the greateft 
 candour (which it has not been upon every oc- 
 cafion), is much more to be depended upon with 
 regard to the former of thofe two objects, than 
 with regard to the latter. Their fuperiority over 
 the country gentleman is, not fo much in their 
 knowledge of the public interefl, as in their 
 having a better knowledge of their own interell 
 than he has of his. It is by this fuperior know- 
 ledge of their own interefl that they have fre- 
 quently impofed upon his generality, and per- 
 fuaded him to give up both his own interell and 
 that of the public, from a very fimple but 
 .honeft conviction, that their interell, and not 
 his, was the interell of the public. The interell 
 of the dealers, however, in any particular branch 
 of trade or manufactures, is always in fome re- 
 fpe6ts different from, and even oppofite to, that 
 of the public. To widen the market and to 
 narrow the competition, is always the interefl of 
 the dealers. To widen the market may fre- 
 quently be agreeable enough to the interefl of 
 the public ; but to narrow the competition mufl 
 always be againfl it, and can ferve only to enable 
 the dealers, by railing their profits above what 
 they naturally would be, to levy, for their own 
 benefit, an abfurd tax upon the reft of their 
 fellow-citizens. The propofal of any new law 
 or regulation of commerce which comes from 
 this order, ought always to be liflened to with 
 great precaution, and ought never to be adopted 
 i till
 
 39^ OT THE RENT OF LAND. 
 
 BOOK till after having been long and carefully examined, 
 not only with the molt fcrupulous, but with the 
 molt fufpicious attention. It comes from an order 
 of men, whofe intereft is never exactly the fame 
 with that of the public, who have generally an 
 intereft to deceive and even to opprefs the public, 
 and who accordingly have, upon many occafions, 
 both deceived and oppreffed it. 
 
 Years 
 XII 
 
 Price of the Quarter ot 
 Wheat each Year, 
 
 Average ot the dif- 
 ferent Prices of the 
 fame Year. 
 
 1'he average Price of 
 each Year in Mones 
 of the prefent Time* 
 
 1202 
 
 1205 
 
 1223 
 I237 
 
 1243 
 I244 
 
 I246 
 
 I247 
 
 12 57 
 
 1258 
 
 1270 
 1286 
 
 £. s. d. 
 
 {= I :} 
 
 — 12 — 
 
 — 3 4 
 
 — . 16 — 
 
 — 13 4 
 
 1 
 
 (- 16 
 
 I 4 16 
 
 \ 6 S 
 
 {=,1 
 
 4 — 
 
 = 
 
 s 
 
 £. s. d. 
 
 — l 3 5 
 
 5 12 — 
 — 9 4 
 
 £. s. d. 
 1 16 — 
 
 2 —3 
 
 I 16 — 
 
 — 10 — 
 
 — 6 — 
 
 28 — 
 3 12 — - 
 211 — 
 
 16 16 — 
 1 8 — 
 
 Total, 35 9 3 
 
 Average Price, 2 19 i|
 
 OF THE RENT OF LAND. 
 
 399 
 
 'Years 
 XII. 
 
 Price of the Quarter of 
 Wheat each Year. 
 
 Average of the dif- 
 ferent Prices of the 
 fame Year. 
 
 12&J 
 
 12! 
 
 1289 
 
 1290 
 1294 
 1302 
 1309 
 
 1316 
 
 *3 l 7 
 
 *33 6 
 *33 8 
 
 __f 
 
 £. s. d. 
 
 3 — i 
 
 10 
 
 I'he Average ^nce of 
 each Year in Money 
 of the prelVnt Times 
 
 C HA A 
 XI. 
 
 1 10 
 
 1 19 
 
 £. s. d. 
 
 — 10 — 
 
 - 9-H 
 
 1 10 4* 
 
 28 — 
 28 — 
 
 — J2 
 
 i i 6 
 4 ii 6 
 
 5 18 6 
 — 10 — 
 
 Total, 23 4 1 1 5 
 
 Average Price, 118 8
 
 40o 
 
 OF THE RENT OF LAND. 
 
 BOOK 
 I. 
 
 Years 
 XH. 
 
 Price of the Quarter of 
 Wheat each Year. 
 
 Average of the dif- 
 ferent Prices of the 
 
 The average 1'rice ot 
 each Year in Money 
 
 
 
 
 
 fame Year. 
 
 of the prefent Times. 
 
 
 
 £. 
 
 s. d. 
 
 £. s. d. 
 
 £. s, d. 
 
 
 >339 
 
 — 
 
 9 — 
 
 
 
 1 7 — 
 
 
 !349 
 
 — 
 
 2 
 
 
 
 '— 5 2 
 
 
 J 359 
 
 I 
 
 6 8 
 
 
 
 322 
 
 
 1361 
 
 — 
 
 2 
 
 
 
 - 4 8 
 
 
 *3 6 3 
 
 — 
 
 J 5 — 
 
 
 
 1 15 — 
 
 
 1369 
 
 {; 
 
 -=} 
 
 1 2 — 
 
 294 
 
 
 x 379 
 
 — 
 
 4 — 
 
 
 
 — 9 4 
 
 
 1387 
 
 {- 
 
 2 — 
 
 13 4) 
 
 14 — ^ 
 
 16 —J 
 
 " ' ■"•■" — i 
 
 — 4 8 
 
 
 1390 
 
 \- 
 
 — 14 5 
 
 1 l 3 7 
 
 
 
 (— 
 
 
 
 
 1 40 1 
 
 
 16 — 
 
 
 
 i 17 4 
 
 1 
 
 1407 
 
 {= 
 
 4 4ll 
 
 3 4 > 
 
 — 3 10 
 
 — 8 11. 
 
 i 
 
 1416 
 
 — 
 
 16 — 
 
 Total. 
 
 1 12 — 
 
 
 
 l 5 9 4 
 
 
 
 
 Average Price, 
 
 1 5 9t 
 
 
 
 £. 
 
 .9. f/. 
 
 £. s. d. 
 
 a£. s. tf. 
 
 
 1423 
 
 — 
 
 8 — - 
 
 __ ___ 
 
 — 16 — 
 
 i 
 
 1425 
 
 — 
 
 4 — 
 
 — — . — 
 
 — 8 — 
 
 
 1434 J 
 
 6 8 
 
 — — __. 
 
 2 13 4 
 
 
 1435 
 
 — 
 
 
 
 — 10 8 
 
 
 S 1 
 
 I439 |i * 
 
 6 8V 
 
 1 3 4 
 
 1 6 8 
 
 
 1 4401 1 
 
 4 — 
 
 
 
 2 8 — 
 
 
 1444 
 
 {- 
 
 4 4) 
 
 4 — V 
 
 — 42 
 
 — 8 4 
 
 
 1445 
 
 ' — 
 
 4 6 
 
 — — __. 
 
 — 9 — 
 
 
 1447 
 
 
 8 — 
 
 
 
 — 16 — 
 
 
 1448 
 
 
 6 8 
 
 
 
 — 13 4 
 
 
 1449 
 
 __ 
 
 5 — 
 
 — — — 
 
 — 10 — 
 
 
 1451 
 
 1 
 
 8 — 
 
 Total, 
 Average Price. 
 
 — 16 — 
 
 
 
 12 15 4 
 
 
 
 
 1 1 3i
 
 OF THE RENT OF LAND. 
 
 40I 
 
 Years 
 
 XII. 
 
 Price of the Quarter ot 
 Wheat each Year. 
 
 Average of the differ 
 ent Prices of th, 
 lame Year.' 
 
 The average Price of 
 each Year in Money 
 cf the preient Times 
 
 
 £. 
 
 S. 
 
 d. 
 
 £. s. d. 
 
 £. s. d. 
 
 M53 
 
 — 
 
 5 
 
 4 
 
 
 
 — 10 8 
 
 l 455 
 
 — 
 
 1 
 
 2 
 
 — — — 
 
 — 2 4 
 
 l 457 
 
 — 
 
 7 
 
 8 
 
 
 
 — 15 4 
 
 J1459 — 
 
 5 
 
 — 
 
 — — — 
 
 — 10 — 
 
 i 1460! — 
 
 8 
 
 — 
 
 
 
 — ■ 16 — 
 
 ; I463 {- 
 
 2 
 1 
 
 — } 
 8 I 
 
 — 1 10 
 
 - 3 8 
 
 I1464. — 
 
 6 
 
 8 
 
 
 
 — 10 — 
 
 i486 1 
 
 4 
 
 — 
 
 
 
 1 17 — 
 
 JI491 — 
 
 14 
 
 8 
 
 -^ 
 
 1 2 — 
 
 1494 — 
 
 4 
 
 — 
 
 — , 
 
 — 6 — 
 
 *495 — 
 
 
 ^ 
 
 4 
 
 — — — 
 
 — 5 ~~* 
 
 I 497| l 
 
 
 
 Total 
 Average Price 
 
 1 11 — 
 
 > 8 9 — 
 
 , — 14 1 
 
 ; 
 
 £. 
 
 5. 
 
 rf. 
 
 £. s. d. 
 
 £. s. d. 
 
 1499 
 
 — 
 
 4 
 
 — 
 
 
 
 — 6 — 
 
 >i5°4 
 
 — 
 
 5 
 
 8 
 
 
 
 — 86 
 
 1521 
 
 1 
 
 — 
 
 — 
 
 — 
 
 1 10 — 
 
 i^s 1 
 
 — 
 
 8 
 
 — 
 
 — — — 
 
 — 2 — 
 
 ^553 
 
 — 
 
 8 
 
 — 
 
 
 
 — 8 — 
 
 1*554 
 
 — 
 
 8 
 
 — 
 
 
 
 
 : i 555 
 
 — 
 
 8 
 
 — 
 
 — — __ 
 
 — 8 — 
 
 :i556 
 
 — 
 
 8 
 
 — 
 
 — 
 
 — 8 — 
 
 ! 
 
 r- 
 
 4 
 
 — l 
 
 
 
 *557 
 
 ^Z 
 
 5 
 8 
 
 1 
 
 ^^ j 
 
 — 17 8; 
 
 — 17 8< 
 
 
 "3 
 
 4j 
 
 
 
 1553 
 
 — 
 
 8 
 
 
 
 — — — 
 
 — 8 — 
 
 *559 
 
 — 
 
 8 
 
 
 
 — 
 
 — 8 — 
 
 1560 
 
 
 8 
 
 
 Total, 
 Average Price, 
 
 _ 8 — 
 
 
 6 O 2 T 
 
 
 
 — IP t\ 
 
 HAP. 
 XI. 
 
 VOL. II. 
 
 D D
 
 402 
 
 OF THE KENT OF LAND. 
 
 Years 
 XII. 
 
 I'rice of the Quarter of 
 Wheat each Year. 
 
 Average of the differ- 
 ent Prices of the 
 •fame Year. 
 
 £. s. d. 
 
 1 561 
 1562 
 
 1574 
 
 1587 
 1594 
 1595 
 1596 
 
 '597 
 1598 
 
 1 S99 
 
 1600 
 
 1601 
 
 — 8 — 
 
 4 — 
 16 — 
 
 *3 — 
 
 { ! 1 =} 
 
 16 8 
 19 2 
 
 17 8 
 14 10 
 
 The average Price of 
 each Year in Money 
 of the jncfent Times 
 
 £. s. d. 
 
 4 12 
 
 £. s. d. 
 
 3 4 — 
 2 16 — 
 % 13 — 
 
 4 12 — 
 
 2 16 8 
 
 1 19 2 
 
 1 17 8 
 
 1 14 10 
 
 Total, 28 9 4 
 
 Average Price, 2 7 54.
 
 OF THE RENT OF LAND. 
 
 Prices of the Quarter of nine Bu/hels of the befi 
 or higheji priced Wheat at Windfor Market, 
 on Lady -Day and Michaelmas, from 1595 to 
 1764, both inclujive ; the Price of each Year 
 being the Medium between the higheji Prices of 
 thofe Two Market-days. 
 
 Years. 
 
 l 59S 
 
 l 59& 
 
 r 597 
 1598 
 
 1599 
 1600 
 
 1601 
 
 1602 
 
 1603 
 
 1604 
 
 1605 
 
 1606 
 
 1607 
 
 1608 
 
 1609 
 
 1610 
 
 1611 
 
 1612 
 
 1613 
 
 1614 
 
 1615 
 
 1616 
 
 1617 
 
 1618 
 
 1619 
 
 1620 
 
 
 £. 
 
 s. 
 
 d. 
 
 — 
 
 2 
 
 
 
 
 
 — 
 
 2 
 
 8 
 
 
 
 1 
 
 3 
 
 2 
 
 9 
 16 
 
 6 
 8 
 
 — 
 
 i 
 
 19 
 
 2 
 
 — 
 
 1 
 
 J 7 
 
 8 
 
 — 
 
 1 
 
 14 
 
 10 
 
 — 
 
 1 
 
 9 
 
 4 
 
 ' 
 
 1 
 
 1 
 
 *5 
 
 10 
 
 4 
 8 
 
 — 
 
 1 
 
 *5 
 
 10 
 
 -— 
 
 1 
 1 
 
 I 3 
 16 
 
 
 8 
 
 — 
 
 2 
 
 16 
 
 8 
 
 — 
 
 2 
 
 10 
 
 
 
 — 
 
 1 
 
 M 
 
 10 
 
 — 
 
 1 
 
 18 
 
 8 
 
 — . 
 
 2 
 
 2 
 
 4 
 
 — 
 
 2 
 
 8 
 
 8 
 
 — 
 
 2 
 1 
 
 1 
 
 18 
 
 84 
 8 
 
 — 
 
 2 
 
 
 
 4 
 
 — 
 
 2 
 
 8 
 
 8 
 
 — 
 
 2 
 
 6 
 
 8 
 
 — 
 
 1 
 
 *5 
 
 4 
 
 — 
 
 1 
 
 10 
 
 4 
 
 26) 
 
 54 
 
 
 
 6k 
 
 
 2 
 
 1 
 
 6' T 
 
 Years. 
 
 1621, 
 
 1622, 
 
 1623, 
 
 1624, 
 
 1625, 
 
 1626, 
 
 1627, 
 
 1628, 
 
 1629, 
 
 1630, 
 
 1631, 
 
 1632,' 
 
 l6 33> 
 1634, 
 
 l6 35> 
 1636, 
 
 <£. s. d. 
 
 1 10 4 
 
 18 8 
 12 
 
 16) 40 
 
 12 
 
 9 
 16 
 
 2 
 
 J 5 
 8 
 
 J 3 
 
 18 
 
 16 
 16 
 16 
 
 2 10 
 
 D D 2
 
 OF THE RENT OF LAND. 
 
 
 Wheat r>'-T Qtuiter. 
 
 
 Wheat per Quarter 
 
 Years. 
 
 
 ab» 3 m 
 
 d. Years. 
 
 
 £. s. d. 
 
 
 
 
 
 Broughtover,79 14 10 
 
 1637, 
 
 — 
 
 2 13 
 
 0:1671, 
 
 — 
 
 220 
 
 1638, 
 
 — 
 
 2 17 
 
 41672, 
 
 
 
 210 
 
 1639* 
 
 — 
 
 2 4 
 
 101673, 
 
 — 
 
 268 
 
 1640, 
 
 
 
 2 4 
 
 8 
 
 ,^74, 
 
 
 
 3 8 8 
 
 1641, 
 
 
 
 2 8 
 
 
 
 i°>5> 
 
 
 
 3 4 8 
 
 1642,-) 
 
 c « 1 a, 
 jc js 5- 
 "H<2 ■£ 
 
 O O 
 
 
 
 1676, 
 
 — 
 
 1 18 
 
 1643J 
 
 
 -go O 
 
 
 
 1677, 
 
 
 
 2 2 , 
 
 1644, [ 
 
 C 2 H-T3 
 
 
 
 BO 
 
 
 
 1678, 
 
 
 
 2 19 
 
 i645> J 
 
 ^s||o O 
 
 
 
 1679, 
 
 
 
 300 
 
 1646, 
 
 — 
 
 2 8 
 
 
 
 1680, 
 
 
 
 250 
 
 1647, 
 
 — 
 
 3 *3 
 
 8 
 
 1681, 
 
 
 
 268 
 
 1648, 
 
 — 
 
 4 5 
 
 
 
 1682, 
 
 
 
 240 
 
 1649, 
 
 — 
 
 4 
 
 
 
 1683, 
 
 
 
 200 
 
 1650, 
 
 — 
 
 3 16 
 
 8 
 
 1684, 
 
 
 
 240 
 
 1651, 
 
 — 
 
 3 *3 
 
 4 
 
 1685, 
 
 
 
 268 
 
 1652, 
 
 — 
 
 2 9 
 
 6 
 
 1686, 
 
 
 
 1 14 
 
 l6 53> 
 
 — 
 
 1 J 5 
 
 6 
 
 1687, 
 
 
 
 1 5 2 
 
 1654, 
 
 — 
 
 1 6 
 
 0J1688, 
 
 
 
 260 
 
 l6 5$, 
 
 — 
 
 1 13 
 
 41689, 
 
 
 
 1 10 
 
 1656, 
 
 — 
 
 2 3 
 
 1690, 
 
 
 
 1 14 8 
 
 16S7, 
 
 — 
 
 2 6 
 
 81691, 
 
 
 
 1 14 
 
 1658, 
 
 — 
 
 3 5 
 
 1692, 
 
 
 
 268 
 
 1659, 
 
 — 
 
 3 6 
 
 
 
 l6 93> 
 
 
 
 3 7 8 
 
 1660, 
 
 — 
 
 2 16 
 
 6 
 
 1694, 
 
 
 
 3 4 
 
 1661, 
 
 — 
 
 3 I0 
 
 
 
 ^95» 
 
 
 
 2 13 
 
 1662, 
 
 -— 
 
 3 *4 
 
 
 
 1696, 
 
 
 
 3 11 
 
 1663, 
 
 — 
 
 2 17 
 
 
 
 1697, 
 
 
 
 300 
 
 1664, 
 
 — 
 
 2 
 
 6 
 
 1698, 
 
 
 
 384 
 
 1665, 
 
 — 
 
 2 9 
 
 4 
 
 1699, 
 
 
 
 3 4o 
 
 1666, 
 
 — 
 
 1 16 
 
 
 
 1700, 
 
 
 
 200 
 
 1667, 
 
 — 
 
 1 16 
 
 
 
 
 
 
 
 1668, 
 
 — 
 
 2 
 
 
 
 
 60) 
 
 l 53 > 8 
 
 1669, 
 
 — 
 
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 OF THE NATURE, &C. 407 
 
 BOOK ir. 
 
 OF THE NATURE, ACCUMULATION, AND EMPLOY- 
 MENT OF STOCK. 
 
 INTRODUCTION. 
 
 IN that rude ftate of fociety in which there is intradud. 
 no divifion of labour, in which exchanges are 
 feldom made, and in which every man provides 
 every thing for himfelf, it is not necefTary that any 
 flock mould be accumulated or flored up before- 
 hand, in order to carry on the bufinefs of the 
 fociety. Every man endeavours to fupply by 
 his own induflry his own occafional wants as they 
 occur. When he is hungry, he goes to the foreft 
 to hunt; when his coat is worn out, he clothes 
 himfelf with the fkin of the firft 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 neareftit. 
 
 But when the divifion of labour has once 
 been thoroughly introduced, the produce of a 
 man's own labour can fupply but a very finall 
 part of his occafional wants. The far greater 
 part of them are fupplied by the produce of other 
 men's labour, which he purchafes with the pro- 
 duce, or, what is the fame thing, with the price 
 of the produce of his own. But this purchafe 
 d d 4 cannot
 
 406 OF THE NATURE, ACCUMULATION, 
 
 book cannot be made till fuch time as the produce of 
 _^;__ his own labour has not only been completed, 
 but fold. A flock of goods of different kinds, 
 therefore, muil be ftored up fomewhere fufficient 
 to maintain him, and to fupply him with the 
 materials and tools of his work, till fuch time, at 
 leail, as both thefe events can be brought about. 
 A weaver cannot apply himfelf entirely to his pe- 
 culiar bufinefs, unlefs there is beforehand ftored 
 up fomewhere, either in his own pofTeffion or in 
 that of fome other perfon, a flock fufficient to 
 maintain him, and to fupply him with the ma- 
 terials and tools of his work, till he has not only 
 completed, but fold his web. This accumulation 
 mufl, evidently, be previous to his applying his 
 induflry for fo long a time to fuch a peculiar 
 bufinefs. 
 
 As the accumulation of flock mufl, in the na- 
 ture of things, be previous to the divifion of la- 
 bour, fo labour can be more and more fubdivided 
 in proportion only as flock is previoufly more 
 and more accumulated. The quantity of ma- 
 terials which the fame number of people can 
 work up, increafes in a great proportion as "la- 
 bour comes to be more and more fubdivided ; and 
 as the operations of each workman are gradually 
 reduced to a greater degree of fimplicity, a va- 
 riety of new machines come to be invented for 
 facilitating and abridging thofe operations. As 
 the divifion of labour advances, therefore, in 
 order to give conflant employment to an equal 
 number of workmen, an equal flock of provi- 
 fions, and a greater flock of materials and tools 
 
 than
 
 AND EMPLOYMENT OF STOCK. 409 
 
 than what would have been neceffary in a ruder introdurt. 
 flate of things, mufl be accumulated before- ' " ' 
 hand. But the number of workmen in every 
 branch of bufinefs generally increafes with the di- 
 vifion of labour in that branch, or rather it is the 
 increafe of their number which enables them to 
 clafs and fubdivide themfelves in this manner. 
 
 As the accumulation of Hock is previoufly 
 neceflary for carrying on this great improve- 
 ment in the productive powers of labour, fo that 
 accumulation naturally leads to this improve- 
 ment. The perfon who employs his flock in 
 maintaining labour, neceflkrily wifhes to employ 
 it in fuch a manner as to produce as great a 
 quantity of work as poflible. He endeavours, 
 therefore, both to make among his workmen the 
 moll proper diflribution of employment, and to 
 furnifh them with the bell machines which he 
 can either invent or afford to purchafe. His 
 abilities in both thefe refpects are generally in 
 proportion to the extent of his flock, or to the 
 number of people whom it can employ. The 
 quantity of induflry, therefore, not only increafes 
 in every country with the increafe of the flock 
 which employs it, but, in confequence of that 
 increafe, the fame quantity of induflry produces 
 a much greater quantity of work. 
 
 Such are in general the effects of the increafe 
 of flock upon induflry and its productive powers. 
 
 In the following book I have endeavoured 
 to explain the nature of flock, the effects of its 
 accumulation into capitals of different kinds, 
 and the effects of the different employments of 
 
 thofe
 
 4* OF THE DIVISION OF STOCK. 1 
 
 BOOK thofe capitals. This book is divided into five 
 chapters. In the firfl chapter, I have endea^ 
 voured to ihow what are the different parts or 
 branches into which the flock, either of an indi- 
 vidual, or of a great fociety, naturally divides 
 itfelf. In the fecond, I have endeavoured to ex- 
 plain the nature and operation of money con- 
 fidered as a particular branch of the general 
 flock of the fociety. The flock which is accu-. 
 mulated into a capital, may either 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 lad chapter treats of 
 the different effecls which the different employ- 
 ments of capital immediately produce upon the 
 quantity both of national induflry, and of the 
 annual produce of land and labour. 
 
 CHAP. I. 
 
 Of the Divijion of Stock. 
 
 WHEN the flock which a man poffefTes i s 
 no more than fuflicient 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 confumcd altogether. His 
 3 revenue
 
 OF THE DIVISION OF STOCK. 411 
 
 revenue is, in this cafe, derived from his labour CHAP, 
 only. This is the ftate of the greater part of the 
 labouring poor in all countries. 
 
 But when he pofleffes Hock fufficient to main- 
 tain him for months or years, he naturally endea- 
 vours to derive a revenue from the greater part 
 of it ; referving only fo much for his immediate 
 confumption as may maintain him till this re- 
 venue begins to come in. His whole Hock, 
 therefore, is diflinguifhed into two parts. That 
 part which, he expects, is to afford him this re- 
 venue, is called his capital. The other is that 
 which fupplies his immediate confumption ; and 
 which confifts either, firft, in that portion of his 
 whole flock which was originally referved for 
 this purpofe ; or, fecondly, in his revenue, from 
 whatever fource derived, as it gradually comes 
 in ; or, thirdly, in fuch things as had been pur- 
 chafed by either of thefe in former years, and 
 which are not yet entirely confumed ; fuch as a 
 ilock of clothes, houfehold furniture, and the 
 like. In one, or other, or all of thefe three 
 articles, confifts the flock which men commonly 
 referve for their own immediate confumption. 
 
 There are two different ways in which a capi- 
 tal may be employed fo as to yield a revenue or 
 profit to its employer. 
 
 Firft, it may be employed in railing, manu- 
 facturing, or purchafing 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 pofTeffion, 
 or continues in the fame fhape. The goods of the 
 
 merchant
 
 4*2. OF THE DIVISION OF STOCK. 
 
 BOOK 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 
 fhape, 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 im- 
 provement of land, in the purchafe of ufeful 
 machines and inftruments of trade, or in fuch- 
 like things as yield a revenue or profit without 
 changing matters, or circulating any further. 
 Such capitals, therefore, may very properly be 
 called fixed capitals. 
 
 Different occupations require very different 
 proportions between the fixed and circulating 
 capitals employed in them. 
 
 The capital of a merchant, for example, is 
 altogether a circulating capital. He has occa- 
 fion for no machines or inftruments of trade, un- 
 lefs his fhop, or warehoufe, be confidered as fuch. 
 
 Some part of the capital of every mafter arti- 
 ficer or manufacturer muft be fixed in the inftru- 
 ments of his trade. This part, however, is very 
 fmall in fome, and very great in others. A 
 mafter taylor requires no other inftruments of 
 trade but a parcel of needles. Thofe of the 
 mafter fhoemaker are a little, though but a very 
 little, more expenfive. Thofe of the weaver rife 
 a good deal above thofe of the fhoemaker. The 
 far greater part of the capital of all fuch mafter 
 
 artificers,
 
 OF THE DIVISION OF STOCK. 4I3 
 
 artificers, however, is circulated, either in the c ha p. 
 wages of their workmen, or in the price of their 
 materials, and repaid with a profit by the price 
 of the work. 
 
 In other works a much greater fixed capital is 
 required. In a great iron-work, for example, 
 the furnace for melting the ore, the forge, the 
 ilitt-mill, are inftruments of trade which cannot 
 be erected without a very great expence. In 
 coal-works, and mines of every kind, the ma- 
 chinery neceffaiy both for drawing out the water 
 and for other purpofes, is frequently ftill more 
 expenfive. 
 
 That part of the capital of the farmer which 
 is employed in the inftruments of agriculture is 
 a fixed ; that which is employed in the wages 
 and maintenance of his labouring fervants, is a 
 circulating capital. He makes a profit of the 
 one by keeping it in his own poffeffion, 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 inftruments of huf- 
 bandry : Their maintenance is a circulating ca- 
 pital in the fame manner as that of the labour- 
 ing 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 bought 
 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 fheep 
 or a herd of cattle that, in a breeding country, 
 is bought in, neither for labour, nor for fale, 
 
 but
 
 4H OF THE DIVISION OF STOCK, 
 
 BOOK but in order to make a profit by their wool, by 
 Jj*_ , their milk, and by their increafe, is a fixed capital. 
 The profit is made by keeping them. Their main- 
 tenance is a circulating capital. The profit is 
 made by parting with it ; and it comes 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. Though it 
 goes backwards and forwards between the ground 
 and the granary, it never changes matters, and 
 therefore does not properly circulate. The farmer 
 makes his profit, not by its fale, but by its increafe. 
 
 The general flock of any country or fociety is 
 the fame with that of all its inhabitants or mem- 
 bers, and therefore naturally divides itfelf into 
 the fame three portions, each of which has a dif- 
 tin6l function or office. 
 
 The Firft, is that portion which is referved 
 for immediate confumption, and of which the 
 characleriflic is, that it affords no revenue or 
 profit. It confifts in the flock of food, clothes, 
 houfehold furniture, &c. which have been pur- 
 chafed by their proper confumers, but which are 
 not yet entirely confumed. The whole flock of 
 mere dwelling-houfes too fubfifling at any one 
 time in the country, make a part of this firft por- 
 tion. The flock that is laid out in a houfe, if 
 it is to be the dwelling-houfe of the proprietor, 
 ceafes from that moment to ferve in the function 
 of a capital, or to afford any revenue to its owner. 
 A dwelling-houfe, as fuch, contributes nothing 
 to the revenue of its inhabitant j and though it 
 
 is,
 
 OF THE DIVISION OF STOCK. 415 
 
 is, no doubt, extremely ufeful to him, it is as his c H A P. 
 clothes and houfehold furniture are ufeful to him, 
 which, however, make a part of his expence, and 
 not of his revenue. If it is to be let to a tenant 
 for rent, as the houfe itfelf can produce nothing, 
 the tenant mull always pay the rent out of fomc 
 other revenue which he derives either from la- 
 bour, or flock, or land. Though a houfe, there- 
 fore, may yield a revenue to its proprietor, and 
 thereby ferve in the function of a capital to 
 him, it cannot yield any to the public, nor 
 ferve in the function of a capital to it, and the 
 revenue of the whole body of the people can 
 never be in the fmallefl degree increafed by it. 
 Clothes, and houfehold furniture, in the lame 
 manner, fometimes yield a revenue, and thereby 
 ferve in the function of a capital to particular 
 perfons. In countries where mafquerades are 
 common, it is a trade to let out mafquerade 
 drefles for a night. Upholflerers frequently let 
 furniture by the month or by the year. Under- 
 takers let the furniture for funerals by the day 
 and by the week. Many people let furnifhed 
 houfes, and get a rent, not only for the ufe of 
 the houfe, but for that of the furniture. The 
 revenue, however, which is derived from fuch 
 things, mufl always be ultimately drawn from 
 fome other fource of revenue. Of all parts of 
 the flock either of an individual, or of a fociety, 
 referved for immediate confumption, what is 
 laid out in houfes is mofl flowly confumed. A 
 flock of clothes may lafl feveral years : a flock 
 of furniture half a century or a century : but a 
 
 flock
 
 4*6 OF THE DIVISION OF STOCK. 
 
 book ftock of houfes, well built and properly taken care 
 of may lafl many centuries. Though the period 
 of their total confumption, however, is more dis- 
 tant, they are ftill as really a ftock referved for 
 immediate confumption as either clothes or 
 houfehold furniture. 
 
 The Second of the three portions into which 
 the general ftock of the fociety divides itfelf, is 
 the fixed capital ; of which the characleriftic is, 
 that it affords a revenue or profit without circulat- 
 ing or changing mafters. It confifts chiefly of the 
 four following articles : 
 
 Firft, 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 lets them for a rent, 
 but to the perfon who poffeffes them and pays that 
 rent for them ; fuch as fhops, warehoufes, work- 
 houfes, farmhoufes, with all their necefiary build- 
 ings ; ftables, granaries, &c. Thefe are very 
 different from mere dwelling houfes. They are a 
 fort of inftruments of trade, and may be confi- 
 dered in the fame light : 
 
 Thirdly, of the improvements of land, of 
 what has been profitably laid out in clearing, 
 draining, enclofing, manuring, and reducing it 
 into the condition moft proper for tillage and 
 culture. An improved farm may very juftly be 
 regarded in the fame light as thofe ufeful ma- 
 chines which facilitate and abridge labour, and 
 by means of which, an equal circulating capital 
 can afford a much greater revenue to its em- 
 4 ployer.
 
 OF THE DIVISION OF STOCK. 417 
 
 ployer. An improved farm is equally advan- C 
 tageous and more durable than any of thofe 
 machines, frequently requiring no other repairs 
 than the moil profitable application of the 
 farmer's capital employed in cultivating it : 
 
 Fourthly, of the acquired and ufeful abilities 
 of all the inhabitants or members of the fociety. 
 The acquifition of fuch talents, by the main- 
 tenance of the acquirer during his education, 
 fludy, or apprenticeship, always coils 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 fociety to which he belongs. 
 The improved dexterity of a workman may be 
 confidered in the fame light as a machine or 
 inilrument of trade which facilitates and abridges 
 labour, and which, though it coils a certain 
 expence, repays that expence with a profit. 
 
 The third and laft of the three portions into 
 which the general flock of the fociety naturally 
 divides itfelf, is the circulating capital ; of which 
 the chara6leriflic is, that it affords a revenue only 
 by circulating or changing maflers. It is com- 
 pofed likewife of four parts : 
 
 Firfl, of the money by means of which all 
 the other three are circulated and diflributed to 
 their proper confumers : 
 
 Secondly, of the flock of provifions which 
 are in the poffefTion of the butcher, the grazier, 
 the farmer, the corn-merchant, the brewer, &c. 
 and from the fale of which they expeel to derive 
 a profit : 
 
 vol. 11. e e Thirdly 9
 
 41 8 OF THE DIVISION OF STOCK. 
 
 BOOK Thirdly, of the materials, whether altogether 
 rude, or more or lefs manufa&ured, of clothes, 
 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 manu- 
 facturers, the mercers, and drapers, the timber- 
 merchants, the carpenters and joiners, the 
 brick-makers, &c. 
 
 Fourthly, and laflly, of the work which is 
 made up and completed, but which is Hill in 
 the hands of the merchant or manufacturer, and 
 not yet difpofed of or diflributed to the proper 
 confumers ; fuch as the finifhed work which we 
 frequently rind ready-made in the fliops of the 
 fmith, the cabinet-maker, the goldfmith, the 
 jeweller, the china-merchant, &c. The circu- 
 lating capital confifts in this manner,* of the 
 provifions, materials, and finifhed work of all 
 kinds that are in the hands of their refpeclive 
 dealers, and of the money that is necelTary for 
 circulating and diilributing them to thofe who 
 are finally to ufe, or to coniume them. 
 
 Of thefe four parts three, provifions, materials, 
 and finifhed work, are, either annually, or in a 
 longer or fhorter period, regularly withdrawn 
 from it, and placed either in the fixed capital 
 or in the flock referred for immediate confump- 
 tion. 
 
 Every fixed capital is botli originally derived 
 from, and requires to be continually fupported 
 by a circulating capital. All ufeful machines 
 and inflruments of trade are originally derived 
 from a circulating capital, which furnifhes the 
 
 materials
 
 OF THE DIVISION OF STOCK. 4 1 9 
 
 materials of which they are made, and the main- chap. 
 tenance of the workmen who make them. They *• 
 require too a capital of the fame kind to keep 
 them in conflant repair. 
 
 No fixed capital can yield any revenue but by 
 means of a circulating capital. The molt ufeful 
 machines and inflruments 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 the labourers who cultivate 
 and collecl its produce. 
 
 To maintain and augment the flock which 
 may be referved for immediate confumption, is 
 the fole end and purpofe both of the fixed and 
 circulating capitals. It is this flock which 
 feeds, clothes, and lodges the people. Their 
 riches or poverty depends upon the abundant 
 or fparing fupplies which thofe two capitals can 
 afford to the flock referved for immediate 
 confumption. 
 
 So great a part of the circulating capital 
 being continually withdrawn from it, in order 
 to be placed in the other two branches of the 
 general flock of the fociety ; it mufl in its turn 
 require continual fupplies, without which it 
 would foon ceafe to exifl. Thefe fupplies are 
 principally drawn from three fources, the pro- 
 duce of land, of mines, and of fifheries. Thefe 
 afford continual fupplies of provifions and 
 materials, of which part is afterwards wrought 
 e e 2 up
 
 420 OF THE DIVISION OF STOCK. 
 
 BOOK up into finifhed work, and by which are replaced 
 i 1 !^ i tne P rov ifi° ns J materials, and ftnifhed work con- 
 tinually withdrawn from the circulating capital. 
 From mines too is drawn what is necefiary for 
 maintaining and augmenting that part of it which 
 confifts in money. For though, in the ordinary 
 courfe of bufinefs, this part is not, like the other 
 three, necelTarily withdrawn from it, in order 
 to be placed in the other two branches of the 
 general flock 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 con- 
 tinual, though, no doubt, much fmaller fup- 
 plies. 
 
 Land, mines, and fimeries, require all both a 
 fixed and a circulating capital to cultivate them : 
 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 manufacturer the provifions which he had 
 confumed and the materials which he had 
 wrought up the year before j and the manufac- 
 turer 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 manufactured produce of the other, 
 are directly 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 
 fame perfon of whom he chufes to purchafe the 
 
 clothes,
 
 OF THE DIVISION OF STOCK. 4 21 
 
 clothes, furniture, and inftrumentsof trade which chap. 
 
 he wants. He fells, therefore, his rude produce , J^ 
 
 for money, with which he can purchafe, where- 
 ever it is to be had, the manufactured produce 
 he has occafion for. Land even replaces, in part 
 at leafl, the capitals with which fifheries and 
 mines are cultivated. It is the produce of land 
 which draws the filh 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 fifheries, 
 when their natural fertility is equal, is in propor- 
 tion to the extent and proper application of the 
 capitals employed about them. When the 
 capitals are equal and equally well applied, it 
 is in proportion to their natural fertility. 
 
 In all countries where there is tolerable fecu- 
 rity, every man of common underllanding will 
 endeavour to employ whatever flock he can com- 
 mand, in procuring either prefent enjoyment or 
 future profit. If it is employed in procuring 
 prefent enjoyment, it is a flock refer ved for 
 immediate confumption. If it is employed in 
 procuring future profit, it mufl 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 
 perfectly crazy who, where there is tolerable 
 fecurity, does not employ all the flock which he 
 commands, whether it be his own or borrowed 
 of other people, in fome one or other of thofe 
 three ways. 
 
 ee 3 In
 
 422 OF THE DIVISION OF STOCK. 
 
 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 them to fome place 
 of fafety, in cafe of their being threatened with 
 any of thofe difaflers to which they confider 
 themfelves as at all times expofed. This is faid 
 to be a common practice in Turkey, in Indoflan, 
 and, I believe, in mod other governments of 
 Afia. It feems to have been a common practice 
 among our anceflors during the violence of the 
 feudal government. Treafure-trove was in thofe 
 times confidered as no contemptible part of the 
 revenue of the greatefl fovereigns in Europe. 
 It confifted in fuch treafure as was found con- 
 cealed in the earth, and to which no particular 
 perfon could prove any right. This was regarded 
 in thofe times as fo important an object, that it 
 was always confidered as belonging to the 
 fovereign, and neither to the finder nor to the 
 proprietor of the land, unlefs the right to it had 
 been conveyed to the latter by an exprefs claufe 
 in his charter. It was put upon the fame footing 
 with gold and filver mines, which, without a 
 fpecial 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 fmaljer confequence. 
 
 CHAP.
 
 OS MONEY CONSIDERED, MC. 423 
 
 CHAP. II. 
 
 Of Money conjidered as a particular Branch of the 
 general Stock of the Society, or of the Expence 
 of maintaining the National Capital, 
 
 IT has been fhewn in the firft Book, that the c H A P. 
 price of the greater part of commodities re- IL 
 folves itfelf into three parts, of which one pays 
 the wages of the labour, another the profits of 
 the flock, and a third the rent of the land which 
 had been employed in producing 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 flock : and a very few in which it 
 confifls 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 fomebody. 
 
 Since this is the cafe, it has been obferved, 
 with regard to every particular commodity, 
 taken feparately ; it mufl be fo with regard to 
 all the commodities which compofe the whole 
 annual produce of the land and labour of every 
 country, taken complexly. The whole price or 
 exchangeable value of that annual produce, mufl 
 refolve itfelf into the fame three parts, and be . 
 parcelled out among the different inhabitants of 
 
 e e 4 the
 
 4^4 OF MONEY CONSIDERED AS 
 
 BOOK the country, either as the wages of their labour, 
 the profits of their flock, or the rent of their 
 land. 
 
 But though the whole value of the annual 
 produce of the land and labour of every country 
 is thus divided among and conflitutes a revenue 
 to its different inhabitants; yet as in the rent of 
 a private eflate we diftinguifh between the grofs 
 rent and the neat rent, fo may we likewife in 
 the revenue of all the inhabitants of a great 
 country. 
 
 The grofs rent of a private eftate compre- 
 hends whatever is paid by the farmer ; the neat 
 rent, what remains free to the landlord, after de- 
 ducting the expence of management, of repairs, 
 and all other neceffary charges ; or what, with- 
 out hurting his eflate, he can afford to place in 
 his flock referved for immediate confumption, or 
 to fpend upon his table, equipage, the orna- 
 ments of his houfe and furniture, his private en- 
 joyments and amufements. His real wealth is 
 in proportion, not to his grofs, but to his neat 
 rent. 
 
 The grofs revenue of all the inhabitants of a 
 great country, comprehends the whole annual 
 produce of their land and labour; the neat re- 
 venue, what remains free to them after deducting 
 the expence of maintaining ; firfl, their fixed ; 
 and, fecondly, their circulating capital ; or what, 
 without encroaching upon their capital, they can 
 place in their flock referved for immediate con- 
 fumption, or fpend upon their fubfiflence, con- 
 venieocies, and amufements. Their real wealth 
 
 too
 
 A BRANCH OF THE GENERAL STOCK. 425 
 
 too is in proportion, not to their grofs, but to c H A P. 
 their neat revenue. 
 
 The whole expence of maintaining the fixed 
 capital, muft evidently be excluded from the 
 neat revenue of the fociety. Neither the mate- 
 rials neceflary for fupporting their ufeful ma- 
 chines and inftruments of trade, their profitable 
 buildings, &c. nor the produce of the labour 
 neceffary for fafhioning 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 may place the whole 
 value of their wages in their Hock referved for 
 immediate confumption. But in other forts of 
 labour, both the price and the produce go to 
 this flock, the price to that of the workmen, the 
 produce to that of other people, whofe fubfif- 
 tence, conveniencies, and amufements are aug- 
 mented by the labour of thofe workmen. 
 
 The intention of the fixed capital is to in- 
 creafe the productive 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 mofl perfect 
 good order, the fame number of labourers and 
 labouring cattle will raife a much greater pro- 
 duce, than in one of equal extent and equally 
 good ground, but not furnifhed with equal con- 
 veniencies. In manufactures the fame number 
 of hands, aflifted with the beft machinery, will 
 work up a much greater quantity of goods than 
 with more imperfect inftruments of trade. The 
 
 expence
 
 426 OF MONEY CONSIDERED AS 
 
 BOOK expence which is properly laid out upon a fixed 
 capital of any kind, is always repaid with great 
 profit, and increafes the annual produce by a 
 much greater value than that of the fupport 
 which fuch improvements require. This fup- 
 port, however, dill 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, clothing and 
 lodging, the fubfiftence and conveniences of the 
 fociety, are thus diverted to another employ- 
 ment, highly advantageous indeed, but dill, dif- 
 ferent from this one. It is upon this account 
 that all fuch improvements in mechanics, as 
 enable the fame number of workmen to perform 
 an equal quantity of work with cheaper and 
 Ampler 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 of workmen, 
 which had before been employed in fupporting 
 a more complex and expenfive machinery, can 
 afterwards be applied to augment the quantity 
 of work which that or any other machinery is 
 ufeful only for performing. The undertaker of 
 fome great manufactory who employs a thoufand 
 a-year in the maintenance of his machinery, if he 
 can reduce this expence to five hundred, will na- 
 turally employ the other five hundred in pur- 
 chafing an additional quantity of materials to be 
 wrought up by an additional number of work- 
 men. The quantity of that work, therefore, 
 
 which
 
 A BRANCH OF THE GENERAL STOCK. 427 
 
 which his machinery was ufeful only for per- c 
 forming, 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 neceffary for fupport- 
 ing the produce of the eftate, and confequently 
 both the grofs and the neat rent of the landlord. 
 When by a more proper direction, however, it 
 can be diminifhed without occafioning any dimi- 
 nution of produce, the grofs rent remains at leafl 
 the fame as before, and the neat rent is necef- 
 farily augmented. 
 
 But though the whole expence of maintaining 
 the fixed capital is thus neceffarily excluded from 
 the neat revenue of the fociety, it is not the fame 
 cafe with that of maintaining the circulating capi- 
 tal. Of the four parts of which this latter capital is 
 compofed, money, provifions, materials, andfinifh- 
 ed work, the three laft, it has already been ob- 
 ferved, are regularly withdrawn from it, and 
 placed either in the fixed capital of the fociety, or 
 in their flock refervedfor immediate confumption. 
 Whatever portion of thofe confumable goods is 
 not employed in maintaining the former, goes all 
 to the latter, and makes a partof the neat revenue 
 of the fociety. The maintenance of thofe three 
 parts of the circulating capital, therefore, with- 
 draws no portion of the annual produce from the 
 neat revenue of the fociety, befidos what is ne- 
 ceffary for maintaining the fixed capital. 
 
 The
 
 428 OF MONEY CONSIDERED AS 
 
 BOOK The circulating capital of a fociety is in this 
 J 1 ^ j refpect different from that of an individual. 
 That of an individual is totally excluded from 
 making any part of his neat revenue, which mull 
 confifl 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 
 mull by no means be placed in his own ftock 
 referved for immediate confumption, they may 
 in that of other people, who, from a revenue de- 
 rived from other funds, may regularly replace 
 their value to him, together with its profits, 
 without occafioning any diminution either of his 
 capital or of theirs. 
 
 Money, therefore, is the only part of the cir- 
 culating capital of a fociety, of which the main- 
 tenance can occafion any diminution in their 
 neat revenue. 
 
 The fixed capital, and that part of the circu- 
 lating capital which confifts in money, fo far as 
 they affect the revenue of the fociety, bear a very 
 great refemblance to one another. 
 
 Firft, as thofe machines and inflruments of 
 trade, &c. require a certain expence, firfl to erect 
 them, and afterwards to fupport them, both 
 which expences, though they make a part of the 
 grofs, are deductions from the neat revenue of 
 the fociety \ fo the ftock of money which circu- 
 lates in any country muft require a certain ex- 
 pence, firft to collect it, and afterwards to fup- 
 port
 
 A BRANCH OF THE GENERAL STOCK. 4*9 
 
 port it, both which expences, though they make chap. 
 a part of the grofs, are, in the fame manner, de- 
 ductions from the neat revenue of the fociety. 
 A certain quantity of very valuable materials, 
 gold and filver, and of very curious labour, in- 
 ftead of augmenting the flock referved for im- 
 mediate confumption, the fubfiflence, conveni- 
 ences, and amufements of individuals, is em- 
 ployed in fupporting that great but expenfive 
 inftrument of commerce, by means of which 
 every individual in the fociety has his fubfift- 
 ence, conveniences, and amufements, regularly 
 diftributed to him in their proper proportion. 
 
 Secondly, as the machines and inftruments 
 of trade, &c. which compofe the fixed capital 
 either of an individual or of a fociety, make no 
 part either of the grofs or of the neat revenue of 
 either ; fo money, by means of which the whole 
 revenue of the fociety is regularly diltributed 
 among all its different members, makes itfelf no 
 part of that revenue. The great wheel of cir- 
 culation is altogether different from the goods 
 which are circulated by means of it. The re- 
 venue of the fociety confifts 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 mufl always, 
 from their whole annual circulation of money 
 and goods, deduct the whole value of the money, 
 of which not a fingle farthing can ever make any 
 part of either. 
 
 It is the ambiguity of language only which 
 
 can make this propofition appear either doubtful 
 
 2 or
 
 43° OF MONEY CONSIDERED AS 
 
 BOOK or paradoxical. When properly explained and 
 underftood, it is almofl felf-evident. 
 
 When we talk of any particular fum of money, 
 wefonietimesmean nothing but the metal pieces of 
 which it is compofed ; and fometimes we include 
 in our meaning fomeobfcure reference to the goods 
 which can be had in exchange for it, or to the power 
 of purchafing which the poireflion 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 fuppofed to circulate in that country. 
 But when we fay that a man is worth fifty or a hun- 
 dred pounds a-y ear, we mean commonly to exprefs 
 not only the amount of the metal pieces which are 
 annually paid to him, but the value of the goods 
 which he can annually purchafe or confume. We 
 mean commonly to afcertain what is or ought to 
 be his way of living, or the quantity and quality of 
 the necefiaries and conveniences of life in which 
 he can with propriety indulge hiinfelf. 
 
 When, by any particular fum of money, we 
 mean not only to exprefs the amount of the 
 metal pieces of which it is compofed, but to in- 
 clude in its fignification fome obfcure reference 
 to the goods which can be had in exchange for 
 them, the wealth or revenue which it in this cafe 
 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 pro- 
 perly than to the former, to the money's worth 
 more properly than to the money. 
 
 Thus
 
 A BRANCH OF THE GENERAL STOCK. 43 1 
 
 Thus if a guinea be the weekly pennon of a 
 particular perfon, he can in the courfe of the 
 week purchafe with it a certain quantity of fub- 
 fiftence, conveniences, and amufements. In 
 proportion as this quantity is great or fmall, fo 
 are his real riches, his real weekly revenue. His 
 weekly revenue is certainly not equal both to 
 the guinea, and to what can be purchafed with 
 it, but only to one or other of thofe two equal 
 values ; and to the latter more properly than to 
 the former, to the guinea's worth rather than to 
 the guinea. 
 
 If the pennon of fuch a perfon was paid to 
 him, not in gold, but in a weekly bill for a 
 guinea, his revenue furely would not fo properly 
 confift in the piece of paper, as in what he could 
 get for it. A guinea may be confidered as a bill 
 for a certain quantity of necelTaries and conve- 
 niencies upon all the tradefmen in the neigh- 
 bourhood. The revenue of the perfon to whom 
 it is paid, does not fo properly confift 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 would, like a bill upon a 
 bankrupt, be of no more value than the molt 
 uielefs piece of paper. 
 
 Though the weekly or yearly revenue of all 
 the different inhabitants 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 taken together, mult always be great or 
 fmall in proportion to the quantity of cori- 
 4 fumable
 
 43 » °F MONEY CONSIDERED AS 
 
 BOOK fumable goods which they can all of them pur- 
 
 3 j chafe 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 thofe two values, and to 
 the latter more properly than to the former. 
 
 Though we frequently, therefore, exprefs a 
 perfon's revenue by the metal pieces which are 
 annually paid to him, it is becaufe the amount 
 of thofe pieces regulates the extentof his power of 
 purchafing, or the value of the goods which he can 
 annually afford to confume. We Hill confider his 
 revenue as confiding in this power of purchafing or 
 confuming, and not in the pieces which convey it 
 
 But if this is fufficiently evident even with 
 regard to an individual, it is ftill more Co with 
 regard to a fociety. The amount of the metal 
 pieces which are annually paid to an individual, 
 is often precifely equal to his revenue, and is 
 upon that account the fhortefl and bed expref- 
 fion of its value. But the amount of the metal 
 pieces which circulate in a fociety, can never be 
 equal to the revenue of all its members. As the 
 fame guinea which pays the weekly penfion of 
 one man to-day, may pay that of another to- 
 morrow, and that of a third the day thereafter, 
 the amount of the metal pieces which annually 
 circulate in any country, mufl always be of 
 much lefs value than the whole money penfions 
 annually paid with them. But the power of 
 purchafing, or the goods which can fucceflively 
 be bought with the whole of thole money pen- 
 fions as they are fuccefiively paid, mud always 
 
 be
 
 A BRANCH OF THE GENERAL STOCK. 433 
 
 be precifely of the fame value with thofe pen- chap. 
 
 fions; as muft likewife be the revenue of- the , J£ 
 
 different perfons to whom they are paid. That 
 revenue, therefore, cannot confift in thofe metal 
 pieces, of which the amount is fo much inferior 
 to its value, but in the power of purchafing, in 
 the goods which can fucceffively be bought with 
 them as they circulate from hand to hand. 
 
 Money, therefore, the great wheel of circula- 
 tion, 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, diltribute to every man the 
 revenue which properly belongs to him, they 
 make themfelves no part of that revenue. 
 
 Thirdly, and laflly, the machines and inftru- 
 ments of trade, &c. which compofe the fixed ca- 
 pital, bear this further refemblance to that part 
 of the circulating capital which confifts in 
 money ; that as every faving in the expence of 
 erecting and fupporting thofe machines, which 
 does not diminifh the productive powers of 
 labour, is an improvement of the neat revenue of 
 the fociety ; fo every faving in the expence of 
 collecting and fupporting that pail of the circu- 
 lating capital which confifts in money, is an im- 
 provement of 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 fupporting the fixed 
 
 vol. ir. f f capital
 
 434 OF MONEY CONSIDERED AS 
 
 BOOK capital is an improvement of the neat revenue 
 of the fociety. The whole capital of the under- 
 taker of every work is neceflarily divided be- 
 tween his fixed and his circulating capital. 
 While his whole capital remains the fame, the 
 fmaller the one part, the greater muft neceflarily 
 be the other. It is the circulating capital which 
 furnifhes the materials and wages of labour, and 
 puts induftry into motion. Every faving, there- 
 fore, in the expence of maintaining the fixed ca- 
 pital, which does not diminifh the productive 
 powers of labour, muft increafe the fund which 
 puts induftry into motion, and consequently the 
 annual produce of land and labour, the real re- 
 venue of every fociety. 
 
 The fubftitution of paper in the room of gold 
 and filver money, replaces a very expenfive in- 
 ftrument of commerce with one much lefs coftly, 
 and fometimes equally convenient. Circulation 
 comes to be carried on by a new wheel, which it 
 cofts lefs both to erect and to maintain than the 
 old one. But in what manner this operation is 
 performed, and in what manner it tends to in- 
 creafe 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 mo- 
 ney ; but the circulating notes of banks and 
 bankers are the fpecies which is beft known, and 
 which feems beft adapted for this purpofe. 
 
 When the people of any particular country 
 have fuch confidence in the fortune, probity, 
 and prudence of a particular banker, as to be- 
 lieve
 
 A BRANCH OF THE GENERAL STOCK. 435 
 
 lieve that he is always ready to pay upon demand 
 iuch.of his promiffory notes as are likely to be 
 at any time prefented to him ; thole notes come 
 to have the fame currency as gold and lilver 
 money, from the confidence that fuch money 
 can at any time be had for them. 
 
 A particular banker lends among his cuflo- 
 mers his own promhTory notes, to the extent, we 
 fhall fuppofe, of a hundred thoufand pounds. As 
 thole notes ferve all the purpofes of money, his 
 debtors pay him the fame intereil as if he had 
 lent them fo much money. This intereil is the 
 fource of his gain. Though fome of thole notes 
 are continually coming back upon him for pay- 
 ment, part of them continue to circulate for 
 months and years together. Though he has ge- 
 nerally in circulation, therefore, notes to the 
 extent of a hundred thoufand pounds, twenty 
 thoufand pounds in gold and filver may, fre- 
 quently, be a fufficient provilion for anfwering 
 occalional demands. By this operation, therefore, 
 twenty thoufand pounds in gold and filver per- 
 form all the functions which a hundred thoufand 
 could otherwife have performed. The fame ex- 
 changes may be made, the fame quantity of con- 
 fumable goods may be circulated and diftributed 
 to their proper confumers, by means of his pro- 
 miffory 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 
 f f 2 ftiould,
 
 43 & OF MONEY CONSIDERED AS 
 
 book ffiould, at the fame time, be carried on by many 
 different banks and bankers, the whole circula- 
 tion may thus be conducted with a fifth part only 
 of the gold and filver which would otherwife 
 have been requifite. 
 
 Let us fuppofe, for example, that the whole 
 circulating money of fome particular country 
 amounted, at a particular time, to one million 
 fterling, thatfum being then fufficient for circu- 
 lating the whole annual produce of their land and 
 labour. Let us fuppofe too, that fome time 
 thereafter, different banks and bankers iffued 
 promiffory notes, payable to the bearer, to the 
 extent of one million, refervingin their different 
 coffers two hundred thoufand pounds for an- 
 fwering occafional demands. There would re- 
 main, therefore, in circulation, , eight hundred 
 thoufand pounds in gold and filver, and a mil- 
 lion of bank notes, or eighteen hundred thoufand 
 pounds of paper and money together. But the 
 annual produce of the land and labour of the 
 country had before required only one million to 
 circulate and diftribute it to its proper confumers, 
 and that annual produce cannot be immediately 
 augmented by thofe operations of banking. 
 One million, therefore, will be fufficient to cir- 
 culate 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 
 expreffion, will remain precifely the fame as be- 
 fore. One million we have fuppofed fufficient 
 
 to
 
 A BRANCH OF THE GENERAL STOCK. 437 
 
 to fill that channel. Whatever, therefore, is c H A P. 
 poured into it beyond this fum, cannot run in it, 
 but muft overflow. One million eight hundred 
 thoufand pounds are poured into it. Eight hun- 
 dred thoufand pounds, therefore, muft overflow, 
 that fum being over and above what can be em- 
 ployed in the circulation of the country. But 
 though this fum cannot be employed at home, it 
 is too valuable to be allowed to lie idle. It 
 will, therefore, be fent abroad, in order to feek 
 that profitable employment which it cannot find 
 at home. But the paper cannot go abroad ; be- 
 caufe at a diftance from the banks which iffue it, 
 and from the country in which payment of it 
 can be exacted by law, it will not be received in 
 common payments. Gold and filver, therefore, 
 to the amount of eight hundred thoufand pounds 
 will be fent abroad, and the channel of home 
 circulation will remain filled with a million of 
 paper, inftead of the million of thofe metals 
 which filled it before. 
 
 But though fo great a quantity of gold and 
 filver is thus fent abroad, we muft not imagine 
 that it is fent abroad for nothing, or that its 
 proprietors make a prefent of it to foreign na- 
 tions. They will exchange it for foreign goods 
 of fome kind or another, in order to fupply the 
 confumption either of fome other foreign coun- 
 try, or of their own. 
 
 If they employ it in purchafmg goods in one 
 foreign country in order to fupply the confump- 
 tion of another, or in w r 3iat is called the carrying 
 trade, whatever profit they make wili be an ad- 
 ; f f 3 ditioa
 
 43& °F MONEY CONSIDERED AS 
 
 BOO K dition to the neat revenue of their own country. 
 m J mmmJ It is like a new fund, created for carrying on a 
 new trade ; domeftic bufinefs being now tranf- 
 acted by paper, and the gold and iilver being 
 converted into a fund for this new trade. 
 
 If they employ it in purchafing foreign goods 
 for home confumption, they may either, firft, 
 purchafe fuch goods as are likely to be confumed 
 by idle people who produce nothing, fuch as fo- 
 reign wines, foreign filks, &c. ; or, fecondly, they 
 may purchafe an additional flock of materials, 
 tools, and provifions, in order to maintain and 
 employ an additional number of induflrious peo- 
 ple, who re-produce, with a profit, the value of 
 their annual confumption. 
 
 So far as it is employed in the firft way, it pro- 
 motes prodigality, increafes expence and con- 
 fumption without increafing production, or 
 eftablifhing any permanent fund for fupporting 
 that expence, and is in every refpeel hurtful 
 to the fociety. 
 
 So far as it is employed in the fecond way, it 
 promotes induftry ; and though it increafes the 
 confumption of the fociety, it provides a perma- 
 nent fund for fupporting that confumption, the 
 people who confume re-producing, with a profit, 
 the whole value of their annual confumption. 
 The grofs revenue of the fociety, the annual pro- 
 duce of their land and labour, is increafed by the 
 whole value which the labour of thofe workmen 
 adds to the materials upon which they are 
 employed; and their neat revenue by what re- 
 mains of this value, after deducting what is ne- 
 
 ceflary
 
 A BRANCH OF THE GENERAL STOCK. 439 
 
 ceflary for fupporting the tools and inftruments chap. 
 of their trade. 
 
 That the greater part of the gold and filver 
 which, being forced abroad by thofe operations of 
 banking, is employed in purchafing foreign goods 
 for home confumption, is and mult be employed 
 in purchafing thofe of this fecond kind, feems 
 not only probable, but almoft unavoidable. 
 Though fome particular men may fometimes in- 
 creafe their expence very confiderably, though 
 their revenue does not increafe at all, we maybe 
 allured that no clafs or order of men ever does 
 fo ; becaufe, though the principles of common 
 prudence do not always govern the conduct of 
 every individual, they always influence that of 
 the majority of every clafs or order. But the re- 
 venue of idle people, confidered as a clafs or 
 order, cannot, in the fmalleft degree, be increafed 
 by thofe operations of banking. Their expence 
 in general, therefore, cannot be much increafed 
 by them, though that of a few individuals 
 among them may, and in reality fometimes is. 
 The demand of idle people, therefore, for fo- 
 reign goods, being the lame, or very 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 to be em- 
 ployed in purchafing thofe for their ufe. The 
 greater part of it will naturally be deftined for 
 the employment of induftry, and not for the 
 maintenance of idlenefs. 
 
 f f 4 When
 
 440 OF MONEY CONSIDERED AS 
 
 When wc compute the quantity of induftry 
 which the circulating capital of any fociety can 
 employ, we mull always have regard to thofe 
 parts of it only which confift in provisions, ma- 
 terials, and finiftied work ; the other, which con- 
 fids in money, and which ferves only to circu- 
 late thofe three, mufl always be deducted. In 
 order to put induftry into motion, three things 
 are requifite ; materials to work upon, tools to 
 work with, and the wages or recompence for the 
 fake of which the work is done. Money is nei- 
 ther a material to work upon, nor a tool to 
 work with ; and though the wages of the work- 
 man 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 purchafing the materials and tools of the 
 work, as well as the maintenance of the work- 
 men. But the quantity of induftry which the 
 whole capital can employ, is certainly not equal 
 both to the money which purchafes, and to the 
 materials, tools, and maintenance, which are pur- 
 chafed with it ; but only to one or other of thofe 
 two values, and to the latter more properly than 
 to the former. 
 
 When
 
 A BRANCH OF THE GENERAL STOCK, 44 1 
 
 When paper is fubflituted in the room of gold c HAP. 
 and filver money, the quantity of the materials, 
 tools, and maintenance, which the whole circu- 
 lating capital can fupply, may be increafed by 
 the whole value of gold and filver which ufed to 
 be employed in purchafing them. The whole 
 value of the great wheel of circulation and dis- 
 tribution, is added to the goods which are circu- 
 lated and diflributed by means of it. The ope- 
 ration, in fome meafure, refembles that of the un- 
 dertaker of fome great work, who, in confequence 
 of lbme improvement in mechanics, takes down 
 his old machinery, and adds the difference be- 
 tween its price and that of the new to his circu- 
 lating capital, to the fund from which he fur- 
 nifhes materials and wages to his workmen. 
 
 What is the proportion which 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 fifth, at a 
 tenth, at a twentieth, and at a thirtieth part of 
 that value. Buthowfmallfoever the proportion 
 which the circulating money may bear to the 
 whole value of the annual produce, as but a part, 
 and frequently but a fmall part, of that produce, is 
 ever deftined for the maintenance of induftry, it 
 mull always bear a very considerable proportion 
 to that part. When, therefore, by the fubftitu- 
 tion of paper, the gold and filver neceffary for 
 circulation is reduced to, perhaps, a fifth part of 
 the former quantity, if the value of only the 
 greater part of the other four-fifths be added to 
 
 the
 
 442 OF MONEY CONSIDERED AS 
 
 BOOK the funds which are deflined for the maintenance 
 of induflry, it mufl make a very confiderable 
 addition to the quantity of that induflry, and, 
 confequently, to the value of the annual produce 
 of land and labour. 
 
 An operation of this kind has, within thefe 
 five-and-twenty or thirty years, been performed 
 in Scotland, by the erection of new banking com- 
 panies in almoft every confiderable town, and 
 even in fome country villages. The effects of it 
 have been precifely thofe above defcribed. The 
 bufinefs of the country is almofl entirely carried 
 on by means of the paper of thofe different bank- 
 ing companies, with which purchafes and pay- 
 ments of all kinds are commonly made. Silver 
 very feldom appears, except in the change of a 
 twenty-fhillings bank note, and gold ftill fel- 
 domer. But though the conduct of all thofe differ- 
 ent companies has not been unexceptionable, and 
 has accordingly required an act of parliament to 
 regulate it ; the country, notwithftanding, has 
 evidently derived great benefit from their trade. 
 I have heard it aflerted, that the trade of the 
 city of Glafgow doubled in about fifteen years 
 after the firft erection of the banks there ; 
 and that the trade of Scotland has more than 
 quadrupled fince the firft erection of the two 
 public banks at Edinburgh, of which the one, 
 called The Bank of Scotland, was eflablifhed 
 by act of parliament in 1695; the other, 
 called The Royal Bank, by royal charter in 
 1727. Whether the trade, either of Scotland in 
 general, or of the city of Glafgow in particular, 
 
 has
 
 A BRANCH OF THE GENERAL STOCK. 443 
 
 has really increafed in fo great a proportion, dur- c 
 ing fo fhort a period, I do not pretend to know. 
 If either of them has increafed in this proportion, 
 it feems to be an efFe6l too great to be accounted 
 for by the fole operation of this caufe. That 
 the trade and induftry of Scotland, however, 
 have increafed very confiderably during this pe- 
 riod, and that the banks have contributed a good 
 deal to this increafe, cannot be doubted. 
 
 The value of the filver money which circu- 
 lated in Scotland before the Union, in 1707, and 
 which, immediately after it, was brought into 
 the bank of Scotland in order to be re-coined, 
 amounted to 411,117/. 105. gd. fterling. No 
 account has been got of the gold coin ; but it 
 appears from the ancient accounts of the mint 
 of Scotland, that the value of the gold annually 
 coined fomewhat exceeded that of the filver*. 
 There were a good many people too upon this 
 occafion, who, from a diffidence of repayment, 
 did not bring their filver into the bank of Scot- 
 Ian : and there was, befides, fome Englifh coin, 
 which was not called in. The whole value of 
 the gold and filver, therefore, which circulated in 
 Scotland before the Union, cannot be eftimated 
 at lefs than a million fterling. It feems to have 
 conftituted almoft the whole circulation of that 
 country ; for though the circulation of the bank 
 of Scotland, which had then no rival, was consi- 
 derable, it feems to have made but a very fmall 
 part of the whole. In the prefent times the 
 
 * See Ruddiman's Preface to Anderfon's Diplomata, &c. Scotia. 
 
 whole
 
 444 or MONEY CONSIDERED AS 
 
 BOOK whole circulation of Scotland cannot be eflimatcd 
 ^ at lefs than two millions, of which that part 
 which confifls in gold and filver, mod probably, 
 does not amount to half a million. But though 
 the circulating gold and filver of Scotland have 
 fuffered fo great a diminution during this period, 
 its real riches and profperity do not appear to 
 have fuffered any. Its agriculture, manufactures, 
 and trade, on the contrary, the annual produce 
 of its land and labour, have evidently been aug- 
 mented. 
 
 It is chiefly by difcounting bills of exchange, 
 that is, by advancing money upon them before 
 they are due, that the greater part of banks and 
 bankers iflue their promiffory notes. They de- 
 duct always, upon whatever fum they advance, 
 the legal interefl till the bill mall become due. 
 The payment of the bill, when it becomes due, re- 
 places to the bank the value of what had been ad- 
 vanced, together with a clear profit of the interefl. 
 The banker who advances to the merchant whofe 
 bill he difcounts, not gold and filver, but his 
 own promiffory notes, has the advantage of being 
 able to difcount to a greater amount by the 
 whole value of his promiffory notes, which he 
 finds by experience, are commonly in circulation. 
 He is thereby enabled to make his clear gain of 
 interefl on fo much a larger fum. 
 
 The commerce of Scotland, which at prefent 
 is not very great, was flill more inconfiderablc 
 when the two firfl banking companies were efta- 
 blifhed ; and thofe companies would have had 
 Dut little trade, had they confined their bufincft 
 
 to
 
 A BRANCH OF THE GENERAL STOCK. 445 
 
 to the difcounting of bills of exchange. They chap. 
 invented, therefore, another method of iftuing l _J^_ 
 their promiffoiy notes ; by granting, what they 
 called, cam accounts, that is by giving credit to 
 the extent of a certain fum (two or three thou- 
 fand pounds, for example), to any individual 
 who could procure two perfons of undoubted 
 credit and good landed eftate to become furety 
 for him, that whatever money mould be ad- 
 vanced to him, within the fum for which the 
 credit had been given, mould be repaid upon de- 
 mand, together with the legal intereft. Credits 
 of this kind are, I believe, commonly granted 
 by banks and bankers in all different parts of 
 the world. But the eafy terms upon which the 
 Scotch banking companies accept of re-payment 
 are, fo far as I know, peculiar to them, and have, 
 perhaps, been the principal caufe, both of the 
 great trade of thofe companies, and of the bene- 
 fit which the country has received from it. 
 
 Whoever has a credit of this kind with one 
 of thofe companies, and borrows a thoufand 
 pounds upon it, for example, may repay this 
 fum piece-meal, by twenty and thirty pounds at 
 a time, the company difcounting a proportion* 
 able part of the intereft of the great fum from 
 the day on which each of thofe fmall fums is 
 paid in, till the whole be in this manner repaid. 
 All merchants, therefore, and almoit all men of 
 bufinefs, find it convenient to keep fuch cafh 
 accounts with them, and are thereby interefted 
 to promote the trade of thofe companies, by 
 readily receiving their notes in all payments, 
 
 and
 
 446 
 
 OF MONEY CONSIDERED AS 
 
 book and by encouraging all thofe with whom they 
 have any influence to do the fame. The banks, 
 when their cuftomers apply to them for money, 
 generally advance it to them in their own pro- 
 miflbry notes. Thefe the merchants pay away 
 to the manufacturers for goods, the manufac- 
 turers to the farmers for materials and provi- 
 fions, the fanners to their landlords for rent, 
 the landlords repay them to the merchants for 
 the conyeniencies and luxuries with which they 
 fupply them, and the merchants again return 
 them to the banks in order to balance their 
 cafh accounts, or to replace what they may have 
 borrowed of them ; and thus almoft the whole 
 money bufinefs of the country is tranfacted by 
 means of them. Hence the great trade of thofe 
 companies. 
 
 By means of thofe cam accounts every mer- 
 chant can, without imprudence, carry on a 
 greater trade than he otherwife could do. If 
 there are two merchants, one in London, and 
 the other in Edinburgh, who employ equal flocks 
 in the fame branch of trade, the Edinburgh 
 merchant can, without imprudence, carry on a 
 greater trade, and give employment to a greater 
 number of people than the London merchant. 
 The London merchant mufl always keep by him 
 a confiderable fum of money, either in his own 
 coffers, or in thofe of his banker, who gives him 
 no intereft for it, in order toanfwer the demands 
 continually coming upon him for payment of 
 the goods which he purchafes upon credit. Let 
 the ordinary amount of this fum be fuppofed five 
 i hundred
 
 A BRANCH OF THE GENERAL STOCK. 447 
 
 hundred pounds. The value of the goods in chap. 
 his warehoufe mull always be lefs by five hun- 
 dred pounds than it would have been, had he 
 not been obliged to keep fuch a fum unem- 
 ployed. Let us fuppofe that he generally dii- 
 pofes of his whole itock upon hand, or of goods 
 to the value of his whole flock upon hand, once 
 in the year. By being obliged to keep fo great 
 a fum unemployed, he mull fell in a year five 
 hundred pounds worth lefs goods than he might 
 otherwife have done. His annual profits muft 
 be lefs by all that he could have made by the 
 fale of five hundred pounds worth more goods ; 
 and the number of people employed in prepar- 
 ing his goods for the market, mufl be lefs by all 
 thofe that five hundred pounds more flock could 
 have employed. The merchant in Edinburgh, 
 on the other hand, keeps no money unemployed 
 for anfwering fuch occafional demands. When 
 they actually come upon him, he fatisfies them 
 from his cafli account w r ith the bank, and gra- 
 dually replaces the fum borrowed with the mo- 
 ney or paper w r hich comes in from the occa- 
 fional fales of his goods. With the fame flock, 
 therefore, he can, without imprudence, have at 
 all times in his w r arehoufe a larger quantity of 
 goods than the London merchant ; and can 
 thereby both make a greater profit himfelf, and 
 give conftant employment to a greater number 
 of induflrious people who prepare thofe goods 
 for the market. Hence the great benefit which 
 the country has derived from this trade. 
 
 The
 
 448 OF MONEY CONSIDERED AS 
 
 The facility of difcounting bills of exchange, 
 it may be thought indeed, gives the Engliih mer- 
 chants a conveniency equivalent to the calh ac- 
 counts of the Scotch merchants. But the Scotch 
 merchants, it muft be remembered, can difcount 
 their bills of exchange as eafily as. the Englifli 
 merchants ; and have, befides, the additional 
 conveniency of their calh accounts. 
 
 The whole paper money of every kind which 
 can eafily circulate. in any country never can 
 exceed the value of the gold and filver, of which 
 it fupplies the place, or which (the commerce 
 being fuppofed the lame) would circulate there, 
 if there was no paper money. If twenty (hilling 
 notes, for example, are the lowed paper money 
 current in Scotland, the whole of that currency 
 which can eafily circulate there cannot exceed 
 the fum of gold and (ilver which would be ne- 
 ceflary for tranfacting the annual exchanges of 
 twenty (hillings value and upwards ufually trans- 
 acted within that country. Should the circu- 
 lating paper at any time exceed that fum, as the 
 excefs could neither be fent abroad nor be em- 
 ployed in the circulation of the country, it muft 
 immediately return upon the banks to be ex- 
 changed for gold and lilver. Many people would 
 immediately perceive that they had more of this 
 paper than was neccflary for tranfacting their 
 bufinefs at home, and as they could not fend it 
 abroad, they would immediately demand pay- 
 ment of it from the banks. When this fuper- 
 fluous paper was converted into gold and filvcr, 
 they could eafily find a ufe for it by fending it 
 
 3 abroad ;
 
 A BRANCH OF THE GENERAL STOCK, 
 
 abroad ; but they could find none while it re- 
 mained in the ihape of paper. There would im- 
 mediately, therefore, be a run upon the banks to 
 the whole extent of this fuperfluous paper, and, 
 if they fhewed any difficulty or backwardnefs in 
 payment, to a much greater extent ; the alarm, 
 which this would occafion, necefTarily increafing 
 the run. 
 
 Over and above the expences which are com- 
 mon to every branch of trade ; fuch as the ex* 
 pence of houfe-rent, the wages of fervants, 
 clerks, accountants, &c. ; the expences peculiar 
 to a bank confift chiefly in two articles : Firft, 
 in the expence of keeping at all times in its cof- 
 fers, for anfwering the occafional demands of the 
 holders of its notes, a large fum of money, of 
 which it lofes the interefl: And, fecondly, in 
 the expence of replenifhing thofe coffers as fall 
 as they are emptied by anfwering fuch occafional 
 demands. 
 
 A banking company, which iffues more paper 
 than can be employed in the circulation of the 
 country, and of which the excefs is continually 
 returning upon them for payment, ought to in- 
 creafe the quantity of gold and filver, which they 
 keep at all times in their coffers, not only in 
 proportion to this exceffive increafe of their cir- 
 culation, but in a much greater proportion ; 
 their notes returning upon them much falter 
 than in proportion to the excefs of their quan- 
 tity. Such a company, therefore, ought to in- 
 creafe the firft article of their expence, not only 
 
 VOL. II. g g in 
 
 449
 
 45 * OF MONEY CONSIDERED AS 
 
 B o O K in proportion to this forced increafe of their 
 bufinefs, but in a much greater proportion. 
 
 The coffers of fuch a company too, though 
 they ought to be filled much fuller, yet mufl 
 empty themfelves much fader than if their bufi- 
 nefs was confined within more reafonable bounds, 
 and mufl require, not only a more violent, but a 
 more conflant and uninterrupted exertion of ex- 
 pence in order to replenifh them. The coin 
 too, which is thus continually drawn in fuch 
 large quantities from their coffers, cannot be 
 employed in the circulation of the country. It 
 comes in place of a paper which is over and 
 above what can be employed in that circula- 
 tion, and is therefore over and above what can 
 be employed in it too. But as that coin will 
 not be allowed to lie idle, it mufl,, in one fhape 
 or another, be lent abroad, in order to find that 
 profitable employment which it cannot find at 
 home ; and this continual exportation of gold 
 and filver, by enhancing the difficulty, mufl ne- 
 cefTarily enhance flill further the expence of the 
 bank, in finding new gold and filver in order to 
 replenifh thofe coffers, which empty themfelves 
 fo very rapidly. Such a company, therefore, 
 mufl, in proportion to this forced increafe of 
 their bufinefs, increafe the fecond article of their 
 expence flill more than the firft. 
 
 Let us fuppofe that all the paper of a parti- 
 cular bank, which the circulation of the country 
 can eafily abforb and employ, amounts exacily 
 to forty thoufand pounds j and that for anfwering 
 
 occafional
 
 A BRANCH OF THE GENERAL STOCK. 45 1 
 
 occafional demands, this bank is obliged to keep chap. 
 at all times in its coffers ten thoufand pounds in 
 gold and filver. Should this bank attempt to 
 circulate forty-four thoufand pounds, the four 
 thoufand pounds which are over and above what 
 the circulation can eafily abforb and employ, 
 will return upon it almofl as faft as they are 
 iffued. For anfwering occafional demands, there- 
 fore, this bank ought to keep at all times in 
 its coffers, not eleven thoufand pounds only, but 
 fourteen thoufand pounds. It will thus gain no- 
 thing by the intereft of the four thoufand pounds 
 exceffive circulation ; and it will lofe the whole 
 expence of continually collecting four thoufand 
 pounds in gold and filver, which will be conti- 
 nually going out of its coffers as fafl as they are 
 brought into them. 
 
 Had every particular banking company al- 
 ways underftood and attended to its own parti- 
 cular intereft, the circulation never could have 
 been overftocked with paper money. But every 
 particular banking company has not always un- 
 derftood or attended to its own particular intereft, 
 and the circulation has frequently been over- 
 ftocked with paper money. 
 
 By iffuing too great a quantity of paper, of 
 which the excefs 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 ; or at an average, about eight hundred 
 and fifty thoufand pounds. For this great coin- 
 g g i age
 
 AS 2 OF MONEY CONSIDERED AS 
 
 BOOK age the bank (in confequence of the worn and 
 degraded flate into which the gold coin had 
 fallen a few years ago) was frequently obliged 
 to purchafe gold bullion at the high price of 
 four pounds an ounce, which it foon after ifiued 
 in coin at 3/. 175. \o{d. an ounce, lofing in this 
 manner between two and a half and three per 
 cent, upon the coinage of fo very large a 
 fum. Though the bank therefore paid no 
 feignorage, though the government was pro- 
 perly at the expence of the coinage, tins 
 liberality of government did not prevent alto- 
 gether the expence of the bank. 
 
 The Scotch banks, in confequence of an 
 excefs of the fame kind, were all obliged to 
 employ conftantly agents at London to collect 
 money fftr them, at an expence which was fel- 
 dom below one and a half or two per cent. This 
 money was fent down by the waggon, and in- 
 fured by the carriers at an additional expence of 
 three quarters per cent, or fifteen millings on 
 the hundred pounds. Thofe agents were not 
 always able to replenifli the coffers of their em- 
 ployers fo faft as they were emptied. In this 
 cafe the refouree of the banks was, to draw upon 
 their correfpondents in London bills of exchange 
 to the extent of the fum which they wanted. 
 When thole correfpondents afterwards drew 
 upon them for the payment of this fum, together 
 with the interefl and a commiifion, fome of thofe 
 banks, from the diflrels into which their excef- 
 five circulation had thrown them, had fometimes 
 no other means of fatisfying this draught but by 
 
 drawing
 
 A BRANCH OF THE GENERAL STOCK. 453 
 
 drawing a fecond fet of bills either upon the chap. 
 fame, or upon fome other correfpondents in IL 
 London ; and the lame fum, or rather bills for 
 the fame fum, would in this manner make fome- 
 times more than two or three journies : the 
 debtor bank, paying always the intereft and 
 commiffion upon the whole accumulated fum. 
 Even thofe Scotch banks which never diftin- 
 guifhed themfelves by their extreme 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 in 
 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 an ounce. It was 
 the neweft, the heavier!, 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 remain in the fhape 
 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, notwithftand- 
 ins their great annual coinage, found to their 
 aftonifhment, that there was every year the fame 
 fcarcity of coin as there had been the year be- 
 g g 3 fore j
 
 454 OF MONEY CONSIDERED AS 
 
 book fore ; and that notwithftanding the great quan. 
 tity of good and new coin which was every year 
 ifliied from the bank, the Hate of the coin, in- 
 ilead of growing better and better, became every 
 year worfe and worfe. Every year they found 
 themfelves under the neceffity of coining nearly 
 the fame quantity of gold as they had coined 
 the year before, and from the continual 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 indirectly 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 Englifh paper money, whatever 
 vacuities this exceflive circulation occafioned in 
 the neceffary 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 almofl all the Scotch banks. 
 
 The over-trading of fome bold projectors in 
 both parts of the united kingdom, was the ori- 
 ginal caufe of this exceflive circulation of paper 
 money. 
 
 What a bank can with propriety advance to 
 & merchant or undertaker of any Jdnd, is not 
 
 either
 
 A BRANCH OF THE GENERAL STOCK. 455 
 
 either the whole capital with which he trades, or c H A P. 
 even any confiderable part of that capital ; but , , 
 
 that part of it only, which he would otherwife be 
 obliged to keep by him unemployed, and in 
 ready money for anfwering occaiional demands. 
 If the paper money which the bank advances 
 never exceeds this value, it can never exceed the 
 value of the gold and filver, which would necef- 
 farily circulate in the country if there was no 
 paper money ; it can never exceed the quantity 
 which the circulation of the country can ealily 
 abforb and employ. 
 
 When a bank difcounts to a merchant a real 
 bill of exchange drawn by a real creditor upon a 
 real debtor, and which, as foon as it becomes 
 due, is really paid by that debtor ; it only ad- 
 vances to him a part of the value which he 
 would otherwife be obliged to keep by him un- 
 employed and in ready money for anfwering oc- 
 caiional demands. The payment of the bill, 
 when it becomes due, replaces to the bank the 
 value of what it had advanced, together with the 
 intereft. The coffers of the bank, fo far as its 
 dealings are confined to fuch cuflomers, refera- 
 ble a water pond, from which, though a ftream 
 is continually running out, yet another is con- 
 tinually running in, fully equal to that which 
 runs out ; fo that, without any further care or 
 attention, the pond keeps always equally, or 
 very near equally full. Little or no expence can 
 ever be neceffary for replenishing the coffers of 
 fuch a bank. 
 
 g g 4 A mer*
 
 4$6 OF MONEY CONSIDERED AS 
 
 A merchant, without over-trading, may fre- 
 quently have occafion for a fum of ready money, 
 even when he has no bills to difcount. When a 
 bank, befides difcounting his bills, advances him 
 likewife upon fuch occafions, fuch fums upon his 
 cafh account, and accepts of a piece-meal repay- 
 ment as the money comes in from the occafional 
 fale of his goods, upon the eafy terms of the 
 banking companies of Scotland ; it difpenfes 
 him entirely from the neceflity of keeping any 
 part of his flock by him unemployed and in 
 ready money for anfwering occafional demands. 
 When fuch demands actually come upon him, 
 he can anfwer them fufficiently from his cafh 
 account. The bank, however, in dealing with 
 fuch cuflomers, ought to obferve with great at- 
 tention, whether in the courfe of fome fhort 
 period (of four, five, fix, or eight months, for 
 example) the fum of the repayments which it 
 commonly receives from them, is, or is not, 
 fully equal to that of the advances which it com- 
 monly makes to them. If within the courfe of 
 fuch fhort periods, the fum of the repayments 
 from certain cuflomers is, upon mofl occafions, 
 fully equal to. that of the advances, it may fafely 
 continue to deal with fuch cuflomers. Though 
 the flream which is in this cafe continually run- 
 ning out from its coffers may be very large, that 
 which is continually running into them mufl be 
 at leafl equally large ; fo that without any further 
 care or attention thofe coffers are likely to be 
 always equally or very near equally full j and 
 
 fcarcQ
 
 II. 
 
 A BRANCH OF THE GENERAL STOCK, 457 
 
 fcarce ever to require any extraordinary expence CHAP, 
 to replenifh them. If, on the contrary, the fum 
 of the repayments from certain other cuflomers 
 falls commonly very much fhort of the ad- 
 vances which it makes to them, it cannot with 
 any fafety continue to deal with fuch cuflomers, 
 at lead if they -continue to deal with it in this 
 manner. The fir earn which is in this cafe con- 
 tinually running out from its coffers is necefTa- 
 rily much larger than that which is continually 
 running in ; fo that, unlefs they are replenifhed 
 by fome great and continual effort of expence, 
 thofe coffers mufl foon be exhaufled altoge- 
 ther. 
 
 The banking companies of Scotland, accord- 
 ingly, were for a long time very careful to re- 
 quire frequent and regular repayments from all 
 their cuflomers, and did not care to deal with 
 any perfon, whatever might be his fortune or 
 credit, who did not make, what they called, fre- 
 quent and regular operations with them. By 
 this attention, befides faving almofl entirely the 
 extraordinary expence of replenishing their cof- 
 fers, they gained two other very confiderable ad- 
 vantages. 
 
 Firfl, by this attention they w T ere enabled to 
 make fome tolerable judgment concerning the 
 thriving or declining circumflances of their 
 debtors, without being obliged to look out for 
 any other evidence befides what their own books 
 afforded them ; men being for the mofl part 
 either regular or irregular in their payments, 
 according as their circumflances are either thriv- 
 ing
 
 45 & OF MONEY CONSIDERED AS 
 
 BOOK ing or declining. A private man who lends out 
 I L , his money to perhaps half a dozen or a dozen of 
 debtors, may, either by himfelf or his agents, 
 obferve and enquire both conflantly and care- 
 fully into the conduct and fituation 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 objects of a very different kind, can have 
 no regular information concerning the conduct 
 and circumftances of the greater part of its 
 debtors beyond what its own books afford it. In 
 requiring frequent and regular repayments from 
 all their cuflomers, the banking companies of 
 Scotland had probably this advantage in view. 
 
 Secondly, by this attention they fecured 
 themfelves from the poffibility of iffuing more 
 paper money than what the circulation of the 
 country could eafily abforb and employ. When 
 they obferved, that within moderate periods of 
 time the repayments of a particular cuftomer 
 were upon moil occafions fully equal to the ad- 
 vances which they had made to him, they might 
 be allured 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 occasional demands ; and that, con- 
 fequently, the paper money, which they had cir- 
 culated by his means, had not at any time ex- 
 ceeded the quantity of gold and filver which 
 would have circulated in the country, had there 
 been no paper money. The frequency, regular 
 
 rity
 
 A BRANCH OF THE GENERAL STOCK. 459 
 
 rity and amount of his repayments would fuffi- chap. 
 
 ciently demonflrate that the amount of their ad- 
 
 vances had at no time exceeded that part of his 
 capital which he would otlierwife 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 ca- 
 pital in conflant employment. It is this part of 
 his capital only which, within moderate periods 
 of time, is continually returning to every dealer 
 in the fhapc of money, whether paper or coin, 
 and continually going from him in the fame 
 fhape. If the advances of the bank had com- 
 monly exceeded this part of his capital, the or- 
 dinary amount of his repayments could not, 
 within moderate periods of time, have equalled 
 the ordinary amount of its advances. The flream 
 which, by means of his dealings, was continually 
 running into the coffers of the bank, could 
 not have been equal to the flream which, by 
 means of the fame dealings, was continually 
 running out. The advances of the bank paper, 
 by exceeding the quantity of gold and filver 
 which, had there been no fuch advances, he 
 would have been obliged to keep by him for an- 
 fwering 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 country had there 
 been no paper money ; and confequently to ex- 
 ceed the quantity which the circulation of the 
 country could eafily abforb and employ ; and the 
 excefs of this paper money would immediately 
 
 have
 
 460 OF MONEY CONSIDERED AS 
 
 BOOK have returned upon the bank in order to be ex- 
 **• changed for gold and filver. This fecond advan- 
 tage, though equally real, was not perhaps fo 
 well underltood by all the different banking com- 
 panies of Scotland as the firft. 
 
 When, partly by the conveniency of difcount- 
 ing bills, and partly by that of cam accounts, 
 the creditable traders of any country can be dif- 
 penfed from the neceffity of keeping any part of 
 their (lock by them unemployed and in ready 
 money for anfwering occahonal demands, they 
 can reafonably expect no farther afliitance from 
 banks and bankers, who, when they have gone 
 thus far, cannot, confiftently with their own in* 
 tereft and fafety, go farther. A bank cannot, 
 confiftently with its own intereft, advance to a 
 trader, the whole or even the greater part of the 
 circulating capital with which he trades ; be* 
 caufe, though that capital is continually return- 
 ing to him in the fhape of money, and going 
 from him in the fame lhape, yet the whole of the 
 returns is too diftant from the whole* of the out- 
 goings, and the fum of his repayments could not 
 equal the fum of its advances within fuch mo- 
 derate periods of time as fuit the conveniency of 
 a bank. Still lefs could a bank afford to ad- 
 vance him any confiderable part of his fixed 
 capital ; of the capital which the undertaker of 
 an iron forge, for example, employs in erecting 
 his forge and fmelting-houfe, his work-houfes 
 and warehoufes, the dwelling-houies of his work- 
 men, &c. ; of the capital which the undertaker 
 pf a mine employs in finking his fhafts, in erect* 
 
 ins
 
 A BRANCH OF THE GENERAL STOCK. 46I 
 
 ing engines for drawing out the water', in making chap. 
 roads and waggon-ways, &c. ; of the capital **• 
 which the peribn who undertakes to improve 
 land employs in clearing, draining, enclofing, 
 manuring and ploughing wafte and uncultivated 
 fields, in building farm-houfes, with all their 
 neceffary appendages of flables, granaries, Sec, 
 The returns of the fixed capital are in almoft all 
 cafes much flower than thofe of the circulating 
 capital ; and fuch expences, even when laid out 
 with the greater! prudence and judgment, very 
 feldom return to the undertaker till after a pe- 
 riod of many years, a period by far too diflant to 
 fuit the conveniency of a bank. Traders and 
 other undertakers may, no doubt, with great 
 propriety, carry on a very confiderable part of 
 their projects with borrowed money. In juftice 
 to their creditors, however, their own capital 
 ought, in this cafe, to be fufficient to enfure, if I 
 may fay fo, the capital of thofe creditors ; or to 
 render it extremely improbable that thofe credi- 
 tors mould incur any lofs, even though the fuc- 
 cefs of the project mould fall very much fhort of 
 the expectation of the projectors. Even with 
 this precaution too, the money which is bor- 
 rowed, and which it is meant ihould not be re- 
 paid till after a period of feveral years, ought not 
 to be borrowed of a bank, but ought to be bor- 
 rowed upon bond or mortgage, of fuch private 
 people as propofe to live upon the intereft of 
 their money, without taking the trouble them- 
 felves to employ the capital ; and who are upon 
 that account willing to lend that capital to fuch 
 
 people
 
 4^2 OF MONEY CONSIDERED AS 
 
 book people of good credit as are likely to keep it for 
 feveral years. A bank, indeed, which lends it* 
 money without the expence of ftampt paper, or 
 of attorn ies fees for drawing bonds and mort- 
 gages, and which accepts of repayment upon the 
 eafy terms of the banking companies of Scotland ; - 
 would, no doubt, be a very convenient creditor to 
 fuch traders and undertakers. But fuch traders 
 and undertakers would, furely, be mod incon- 
 venient debtors to fuch a bank. 
 
 It is now more than five-and-twenty years 
 iince the paper money iflued by the different 
 banking companies of Scotland was fully equal, 
 or rather was fomewhat more than fully equal, 
 to what the circulation of the country could 
 eafily abforb and employ. Thofe companies, 
 therefore, had fo long ago given all the afiiftance 
 to the traders and other undertakers of Scotland 
 which it is pofRble for banks and bankers con- 
 fidently with their own intereft, to give. They 
 had even done fomewhat more. They had over- 
 traded a little, and had brought upon themfelves 
 that lofs, or at leaft that diminution of profit, 
 which in this particular bufinefs never fails to 
 attend the fmallefl degree of over-trading. Thofe 
 traders and other undertakers, having got fb 
 much affiflance from banks and bankers, wifhed 
 to get flill more. The banks, they feem to have 
 thought, could extend their credits to whatever 
 fum might 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 the directors of thofe 
 4 bunks,
 
 A BRANCH OF THE GENERAL STOCK. 463 
 
 •banks, which did not, they faid, extend their chap. 
 .credits in proportion to the extcnfion of the trade 
 of the country ; 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 
 ufual way of bond or mortgage. 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, however, were of a dif- 
 ferent opinion, and upon their refilling to extend 
 their credits, fome of thofe traders had recourfe 
 to an expedient which, for a time, ferved their 
 purpofe, though at a much greater expence, yet 
 as effectually as the utmofl extenfion of bank 
 credits could have done. This expedient was 
 no other than the well-known ihift of drawing 
 and re-drawing ; the Ihift to which unfortunate 
 traders have fometimes recourfe when they are 
 upon the brink of bankruptcy. The practice of 
 railing money in this manner had been long 
 known in England, and during the courfe of the 
 late war, when the high profits of trade afforded 
 a great temptation to over-trading, is faid to 
 have been carried on to a very great extent. 
 From England it was brought into Scotland, 
 where, in proportion to the very limited com- 
 merce, and to the very moderate capital of 
 the country, it was foon carried on to a much 
 greater extent than it ever had been in England. 
 
 The
 
 464 OF MONEY CONSIDERED AS 
 
 BOOK The practice of drawing and re-drawing is fo 
 n * well known to all men of bufinefs, that it may 
 perhaps be thought unneceflary to give ,an 
 account of it. But as this book may come 
 into the hands of many people who are not men 
 of bufinefs, and as the effects of this practice 
 upon the banking trade are not perhaps generally 
 underftood even by men of bufinefs themfelves, 
 I {hall endeavour to explain it as diftinclly as 
 I can. 
 
 The cuftoms of merchants, which were efta- 
 blifhed when the barbarous laws of Europe did 
 not enforce the performance of their contracts, 
 and which during the courfe of the two lad cen- 
 turies have been adopted into the laws of all 
 European nations, have given fuch extraordinary 
 privileges to bills of exchange, that money is 
 more readily advanced upon them, than upon 
 any other fpecies of obligation ; efpecially when 
 they are made payable within fo fhort a period 
 as two or three months after their date. If, when 
 the bill becomes due, the acceptor does not pay 
 it as foon as it is prefented, he becomes from that 
 moment a bankrupt. The bill is protefted, and 
 returns upon the drawer, who, if he does not 
 immediately pay it, becomes likewffe a bank- 
 rupt. If, before it came to the perfon who pre* 
 fents it to the acceptor for payment, it had paffed 
 through the hands of feveral other perfons, who 
 had fuccefiively advanced to one another the 
 contents of it, either in money or goods, and who 
 to exprefs that each of them had in- his turn 
 2 received
 
 A BRANCH OF THE GENERAL STOCK. 465 
 
 received thofe contents, had all of them in their CHAP, 
 order endorfed, that is, written their names upon , ]~_ , 
 the back of the bill ; each endorfer becomes in 
 his turn liable to the owner of the bill for thofe 
 contents, and, if he fails to pay, he becomes too 
 from that moment a bankrupt. Though the 
 drawer, acceptor, and endorfers of the bill 
 fhould, all of them, be perfons of doubtful 
 credit ; yet flill the fhortnefs of the date gives 
 fome fecurity to the owner of the bill. Though 
 all of them may be very likely to become 
 bankrupts ; it is a chance if they all become 
 fo in fo fliort a time. The houfe is crazy, fays 
 a weary traveller to himfelf, and will not ftand 
 very long ; but it is a chance if it falls to-night, 
 and I will venture, therefore, to fleep in it 
 to-night. 
 
 The trader A in Edinburgh, we mall fuppofe, 
 draws a bill upon B in London, payable two 
 months after date. In reality B in London 
 owes nothing to A in Edinburgh ; but he 
 agrees to accept of A's bill, upon condition 
 that before the term of payment he fliall re- 
 draw upon A in Edinburgh for the fame fum, 
 together with the intereft and a commiffion, 
 another bill, payable likewife two months after 
 date. B accordingly, before the expiration of 
 the firfl two months, re-draws this bill upon A 
 in Edinburgh ; who again, before the expiration 
 of the fecond two months, draws a fecond bill 
 upon B in London, payable likewife two months 
 after date ; and before the expiration of the 
 
 vol. 11. h h third
 
 4^6 OF MONEY CONSIDERED AS 
 
 book third two months, B in London re-draws upon 
 A in Edinburgh another bill, payable alfo two 
 months after date. This practice has fome- 
 times gone on, not only for feveral months, 
 but for feveral years together, the bill always 
 returning upon ,A in Edinburgh, with the 
 accumulated interefl and commiflion of all the 
 former bills. The interefl was five per cent, 
 in the year, and the commiflion was never lefs 
 than one half per cent, on each draught. This 
 commiflion being repeated more than fix times 
 in the year, whatever money A might raife by 
 this expedient mufl neceflarily have coll him 
 fomething more than eight per cent, in the 
 year, and fometimes a great deal more ; when 
 either the price of the commiflion happened to 
 rife, or when he was obliged to pay compound 
 interefl upon the interefl and commiflion of 
 former bills. This practice was called raifing 
 money by circulation. 
 
 In a country where the ordinary profits of 
 ftock in the greater part of mercantile projects 
 are fuppofed to run between fix and ten per 
 cent., it mufl have been a very fortunate fpecu- 
 lation of which the returns could not only repay 
 the enormous expence at which the money was 
 thus borrowed for carrying it on ; but afford, 
 befides, a good furplus profit to the projector. 
 Many vafl and extenfive projects, however, were 
 undertaken, and for feveral years carried on 
 without any other fund to fupport them befides 
 what was raifed at this enormous expence. The 
 
 pro-
 
 A BRANCH OF THE GENERAL STOCK. 467 
 
 projectors, no doubt, had in their golden dreams chap. 
 the moll diflincl; vifion of this great profit. 
 Upon their awaking, however, either at the end 
 of their projects, or when they were no longer 
 able to carry them on, they very feldom, I be- 
 lieve, had the good fortune to find it *. 
 
 * The method defcribed in the text was by no means either 
 the moft common or the moft expenfive one in which thofe adven- 
 turers fometimes raifed money by circulation. It frequently hap- 
 pened that A in Edinburgh would enable B in London to pay the 
 firft bill of Exchange by drawing, a few days before it became due, 
 a fecond bill at three months date upon the fame B in London. 
 This bill, being payable to his own order, A fold in Edinburgh at 
 par; and with its contents purchafed bills upon London payable 
 at fight to the order of B, to whom he fent them by the poll. 
 Towards the end of the late war, the exchange between Edinburgh 
 and London was frequently three per cent, againft Edinburgh, and 
 thofe bills at fight muft frequently have coft A that premium. 
 This tranfaction therefore being repeated at leaft four times in the 
 year, and being loaded with a commiffion of at leaft one half per 
 cent, upon each repetition, muft at that period have coft A at leaft 
 fourteen per cent, in the year. At other times A would enable B to 
 difcharge the firft bill of exchange by drawing, a few days before it 
 became due, a fecond bill at two months date ; not upon B, but upon 
 feme third perfon, C, for example, in London. This other bill was 
 made payable to the order of B, who, upon its being accepted by C, 
 difcounted it with fome banker in London ; and A enabled C to dif- 
 charge it by drawing, a few days before it became due, a third bill, 
 likewife at two months date, fometimes upon his firft correfpondent 
 B, and fometimes upon fome fourth or fifth perfon, D or E, for 
 example. This third bill was made payable to the order of C; 
 who, as foon as it was accepted, difcounted it in the fame manner 
 with fome banker in London. Such operations being repeated at 
 leaft fix times in the year, and being loaded with a commiffion of at 
 leaft one-half per cent, upon each repetition, together with the legal 
 intereft of five per cent., this method of raifing money, in the fame 
 manner as that defcribed in the text, muft have coft A fomething 
 more than eight per cent. By faving, however, the exchange be- 
 tween Edinburgh and London, it was lefs expenfive than that men- 
 tioned in the foregoing part of this note ; but then it required an 
 eftablifhed credit with more houfes than one in London, an advantage 
 which many of thefe adventurers could not always find it eafy to 
 procure. , 
 
 11 h 2 The
 
 468 OF MONEY CONSIDERED AS 
 
 BOOK The bills which A in Edinburgh drew upon B 
 , _ n * in London, he regularly difcounted two months 
 before they were due with fome bank or banker 
 in Edinburgh; and the bills which B in London 
 re-drew upon A in Edinburgh, he as regularly 
 difcounted either with the bank of England, or 
 with fome other bankers in London. "Whatever 
 was advanced upon fuch circulating bills, was, in 
 Edinburgh, advanced in the paper of the Scotch 
 banks, and in London, when they were dif- 
 counted 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 re- 
 paid in their turn as foon as they became due ; 
 yet the value which had been really advanced 
 upon the firft bill, was never really returned to 
 the banks which advanced it ; becaufe, before 
 each bill became due, another bill was always 
 drawn to fomewhat a greater amount than the 
 bill which was foon to be paid; and the dif- 
 counting of this other bill was effentially necef- 
 fary towards the payment of that which was foon 
 to be due. This payment, therefore, was alto- 
 gether fictitious. The flream, 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 jby any ftream which 
 really run into them. 
 
 The paper which was ifTued upon thofe cir- 
 culating bills of exchange, amounted, upon many 
 occafions, to the whole fund deftined for carry- 
 ing on fome vafl and extenfive project of agri- 
 culture,
 
 A BRANCH OF THE GENERAL STOCK. 469 
 
 culture, commerce, or manufactures ; and not chap. 
 
 » 11 
 
 merely to that part of it which, had there been 
 
 no paper money, the projector would have been 
 obliged to keep by him, unemployed and in 
 ready money for anfwering occasional demands. 
 The greater part of this paper was, confequently, 
 over and above the value of the gold and filver 
 which would have circulated in the country, had 
 there been no paper money. It was over and 
 above, therefore, what the circulation of the 
 country could eafily abforb and employ, and 
 upon that account immediately returned upon 
 the banks in order to be exchanged for gold and 
 filver, which they were to find as they could. 
 It was a capital which thofe projectors had very 
 artfully contrived to draw from thofe banks, not 
 only without their knowledge or deliberate con- 
 fent, but for fome time, perhaps, without their 
 having the moll diftant fufpicion that they had 
 really advanced it. 
 
 When two people, who are continually draw- 
 ing and re-drawing upon one another, difcount 
 their bills always with the fame banker, he mull 
 immediately difcove, what they are about, and 
 fee clearly that they are trading, not with any 
 capital of their own, but with the capital which 
 he advances to them. But this difcovery is not 
 altogether fo eafy when they difcount their bills 
 fometimes with one banker, and fometimes with 
 another, and when the fame two perfons do not 
 conflantly draw and re-draw upon one another, 
 but occafionally run the round of a great circle 
 h h 3 of
 
 47° 0F MONEY CONSIDERED AS 
 
 B o o K f projectors, who find it for their interefl to 
 affifl one another in this method of raifing money, 
 and to render it, upon that account, as difficult 
 as poffible 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 
 the bank which difcounted it ; nor any real 
 debtor but the projector who made ufe of the 
 money. When a banker had even made this 
 difcovery, he might fometimes make it too late, 
 and might find that he had already difcounted 
 the bills of thofe projectors to fo great an extent 
 that, by refufing to difcount any more, he would 
 neceffarily make them all bankrupts, and thus, 
 by ruining them, might perhaps ruin himfelf. 
 For his own interefl and fafety, therefore, he 
 might find it neceffary, in this very perilous fitu- 
 ation, 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 
 thofe projectors by degrees to have recourfe, 
 either to other bankers, or £p other methods of 
 raifing money ; fo as that he himfelf might, as 
 foon as poffible, get out of the circle. The dif- 
 ficulties, accordingly, which the bank of Eng- 
 land, which the principal bankers in London, 
 and which even the more prudent Scotch banks 
 began, after a certain time, and when all of them 
 had already gone too far, to make about dif- 
 counting, not only alarmed, but enraged in the 
 
 higheft
 
 A BRANCH OF THE GENERAL STOCK. 47 1 
 
 highefl degree thofe projectors. Their own dif- c 
 trefs, of which this prudent and neceffary rcfcrve 
 of the banks was, no doubt, the immediate oc- 
 cafion, they called the diflrefs of the country ; 
 and this diflrefs of the country, they faid, was 
 altogether owing to the ignorance, pufillanimity, 
 and bad conducl of the banks, which did not 
 give a fufficiently liberal aid to the fpirited un- 
 dertakings of thofe who exerted themfelves in 
 order to beautify, improve, and enrich the coun- 
 try. It was the duty of the banks, they feemed 
 to think, to lend for as long a time, and to as 
 great an extent as they might wifh to borrow. 
 The banks, however, by refufing in this manner 
 to give more credit to thofe, to whom they had 
 already given a great deal too much, took the 
 only method by which it was now pofnble to fave 
 either their own credit, or the public credit of 
 the country. 
 
 In the midfl of this clamour and diflrefs, a 
 new bank was eflablifhed in Scotland for the 
 exprefs purpofe of relieving the diflrefs of the 
 country. The defign was generous ; but the 
 execution was imprudent, and the nature and 
 caufes of the diflrefs which it meant to relieve, 
 were not, perhaps, well understood. This bank 
 was more liberal than any other had ever been, 
 both in granting cafli accounts, and in difcount- 
 ing bills of exchange. With regard to the latter, 
 it feems to have made fcarce any diflinction be- 
 tween real and circulating bills, but to have dis- 
 counted all equally. It was the avowed principle 
 11 H 4 of
 
 47 2 OF MONEY CONSIDERED AS 
 
 BOOK of this bank to advance, upon any reafonable 
 fecurity, the whole capital which was to be em- 
 ployed in thofe improvements of which the re- 
 turns are the moll flow and diflant, fuch as the 
 improvements of land. To promote fuch im- 
 provements was even faid to be the chief of the 
 public fpirited purpofes for which it was infli- 
 tuted. By its liberality in granting cafh ac« 
 counts, and in difcounting bills of exchange, it, 
 no doubt, iffued great quantities of its bank 
 notes. But thofe bank notes being, the greater 
 part of them, over and above what the circula- 
 tion of the country could eafily abforb and em- 
 ploy, returned upon it, in order to be exchange^ 
 for gold and filver, as faft as they were iffued. Its 
 coffers were never well filled. The capital which 
 had been fubfcribed to this bank at two different 
 fubfcriptions, amounted to one hundred and fixty 
 thoufand pounds, of which eighty per cent, only 
 was paid up. This fum ought to have been paid 
 in at feveral different inflalments, A great part 
 of the proprietors, when they paid in their firfl 
 inflalment, opened a cafh account with the bank; 
 and the directors thinking themfelves obliged 
 to treat their own proprietors with the fame 
 liberality with which they treated all other men, 
 allowed many of them to borrow upon this cafh 
 account what they paid in upon all their fubfe- 
 quent inflalments. Such payments, therefore, 
 only put into one coffer, what had the moment 
 before been taken out of another. But had 
 the coffers of this bank been filled ever fo well, 
 
 its
 
 A BRANCH OF THE GENERAL STOCK. 47; 
 
 its exceffive circulation muft have emptied them c 
 falter than they could have been replenimed by 
 any other expedient but the ruinous one of draw- 
 ing upon London, and when the bill became 
 due, paying it, together with intereft and com- 
 miffion, by another draught upon the fame place. 
 Its coffers having been filled fo very ill, it is 
 faid to have been driven to this refource within 
 a very few months after it began to do bufinefs. 
 The eftates of the proprietors of this bank were 
 worth feveral millions, and by their fubfcription 
 to the original bond or contract of the bank, 
 were really pledged for anfwering all its engage- 
 ments. By means of the great credit which fo 
 great a pledge neceifarily gave it, it was, not- 
 withstanding its too liberal conduct, enabled to 
 carry on bufinefs for more than two years. 
 When it was obliged to flop, it had in the circu- 
 lation about two hundred thoufand pounds in 
 bank notes. In order to fupport the circulation 
 of thofe notes, which were continually returning 
 upon it as fad as they were hTued, it had been 
 conftantly in the practice of drawing bills of ex- 
 change upon London, of which the number and 
 value were continually increasing, and, when 
 it ftopt, amounted to upwards of fix hundred 
 thoufand pounds. This bank, therefore, had, 
 in little more than the courfe of two years, ad- 
 vanced to different people upwards of eight 
 hundred thoufand pounds at five per cent. 
 Upon the two hundred thoufand pounds which 
 it circulated in bank notes, this five per cent, 
 might, perhaps, be confidered as clear gain, 
 
 without
 
 474 0F MONEY CONSIDERED AS 
 
 book without any other deduction befides the expence 
 of management. But upon upwards of fix hun- 
 dred thoufand pounds, for which it was conti- 
 nually drawing bills of exchange upon London, 
 it was paying, in the way of intereft and com- 
 miflion, upwards of eight per cent, and was 
 confequently lofing more than three per cent, 
 upon more than three-fourths of all its deal- 
 ings. 
 
 The operations of this bank feem to have pro- 
 duced effects quite oppofite to thofe which were 
 intended by the particular perfons who planned 
 and directed it. They feem to have intended to 
 fupport the fpirited undertakings, for as fuch 
 they confidered them, which were at that time 
 carrying on in different parts of the country ; 
 and at the fame time, by drawing the whole 
 banking bufinefs to themfelves, to fupplant all 
 the other Scotch banks ; particularly thofe efta- 
 blifhed at Edinburgh, whofe backwardnefs in 
 difcounting bills of exchange had given fome 
 offence. This bank, no doubt, gave fome tem- 
 porary relief to thofe projectors, and enabled 
 them to carry on their projects for about two 
 years longer than they could otherwife have done. 
 But it thereby only enabled them to get fo much 
 deeper into debt, fo that when Vuin came, it fell 
 ib much the heavier both upon them and upon 
 their creditors. The operations of this bank, 
 therefore, inflead of relieving, in reality aggra- 
 vated in the long-run the diflrefs which thofe 
 projectors had brought both upon themfelves 
 and upon their country. It would have been 
 3 much
 
 A BRANCH OF THE GENERAL STOCK. 475 
 
 much better for thcmfelves, their creditors and CHAP. 
 their country, had the greater part of them been ll ^_ 
 obliged to flop two years f'ooner than they 
 actually did. The temporary relief, however, 
 which this bank afforded to thofe projectors, 
 proved a real and permanent relief to the other 
 Scotch banks. All the dealers in circulating 
 bills of exchange, which thofe other banks had 
 become fo backward in difcounting, had recourfe 
 to this new bank, where they were received with 
 open arms. Thofe other banks, therefore, were 
 enabled to get very eafily out of that fatal circle, 
 from which they could not otherwife have dif- 
 eno-aged themfelves without incurring a confider- 
 able iofs, and perhaps too even fome degree of 
 difcredit. 
 
 In the long-run, therefore, the operations of 
 this bank increafed the real diflrefs of the coun- 
 try which it meant to relieve ; and effectually re- 
 lieved from a very great diflrefs thofe rivals whom 
 it meant to fupplant. 
 
 At the firft letting out of this bank, it was the 
 opinion of fome people, that how fall foever 
 its coffers might be emptied, it might eafily re- 
 plenifh them by raifing money upon the fecuri- 
 ties of thofe to whom it had advanced its paper. 
 Experience, I believe, foon convinced them that 
 this method of raifing money was by much too 
 flow to anfwer their purpofe j and that coffers 
 which originally were fo ill filled, and which 
 .emptied themfelves fo very fail, could be re- 
 plenifhed by no other expedient but the ruinous 
 one of drawing bills upon London, and when 
 
 they
 
 47^ OF MONEY CONSIDERED AS 
 
 BOOK they became due, paying them by other draughts 
 upon the fame place with accumulated intereft 
 and commiffion. But though they had been 
 able by this method to raife money as fait as 
 they wanted it ; yet, inftcad of making a profit, 
 they mud have fufFered a lofs by every fuch ope- 
 ration ; fo that in the long run they mud have 
 ruined themfelves as a mercantile company, 
 though, perhaps, not fo foon as by the more 
 expenfive practice of drawing and re-drawing. 
 They could ftill have made nothing by the in- 
 tereft of the paper, which, being over and above 
 what the circulation of the country could abforb 
 and employ, returned upon them, in order to be 
 exchanged for gold and filver, as faft as they 
 ifTued it ; and for the payment of which they 
 were themfelves continually obliged to borrow 
 money. On the contrary, the whole expence of 
 this borrowing, of employing agents to look out 
 for people who had money to lend, or negociat- 
 ing with thofe people, and of drawing the proper 
 bond or aflignment, mult have fallen upon them, 
 and have been fo much clear lofs upon the ba- 
 lance of their accounts. The project of replenifh- 
 ing their coffers in this manner may be com- 
 pared to that of a man who had a water-pond 
 from which a ftream was continually running 
 out, and into which no ftream was continually 
 running, but who propofed to keep it always 
 equally full by employing a number of people 
 to go continually with buckets to a well at 
 fome miles diftance in order to bring water to 
 replenifh it. 
 
 4 But
 
 A BRANCH OF TI1E GENERAL STOCK. ^77 
 
 But though this operation had proved, not CHAP. 
 only practicable, but profitable to the bank as a 
 mercantile company; yet the country could have 
 derived no benefit from it ; but, on the con- 
 trary, mult have fuffered a very confiderable lofs 
 by it. This operation could not augment in the 
 fmallefl degree the quantity of money to be lent. 
 It could only have erected this bank into a fort 
 of general loan office for the whole country. 
 Thofe who wanted to borrow, mufl have applied 
 to this bank, inflead of applying to the private 
 perfons who had lent it their money. But a 
 bankwhich lendsmoney, perhaps, to five hundred 
 different people, the greater part of whom its 
 directors can know very little about, is not likely 
 to be more judicious in the choice of its debtors, 
 than a private perfon who lends out his money 
 among a few people whom he knows, and in 
 whofe fober and frugal conduct he thinks he has 
 good reafon to confide. The debtors of fuch a 
 bank, as that whofe conduct I have been giving 
 fome account of, were likely, the greater part of 
 them, to be chimerical projectors, the drawers 
 and re-drawers of circulating bills of exchange, 
 who would employ the money in extravagant 
 undertakings, which, with all the affiflance that 
 could be given them, they would probably never 
 be able to complete, and which, if they fhould 
 be completed, would never repay the expence 
 which they had really cofl, would never afford a 
 fund capable of maintaining a quantity of labour 
 equal to that which had been employed about 
 them. The fober and frugal debtors of pri- 
 vate
 
 478 OF MONEY CONSIDERED AS 
 
 BOOK vate perfons, on the contrary, would be more 
 11. likely to employ the money borrowed in fober 
 undertakings which were proportioned to their 
 capitals, and which, though they might have 
 lefs of the grand and the marvellous, would have 
 more of the folid and the profitable, which 
 would repay with a large profit whatever had 
 been laid out upon them, and which would thus 
 afford a fund capable of maintaining a much 
 greater quantity of labour than that which had 
 been employed about them. The fuccefs of this 
 operation, therefore, without increafing in the 
 lmalleft degree the capital of the country, would 
 only have transferred a great part of it from pru- 
 -dentand profitable, to imprudent and unprofitable 
 undertakings. 
 
 That the induflry of Scotland languifhed for 
 want of money to employ it, was the opinion of 
 the famous Mr. Law. By eflablifhing a bank of 
 a particular kind, which he feems to have ima- 
 gined might iffue paper to the amount of the 
 whole value of all the lands in the country, he 
 propofed to remedy this want of money. The 
 parliament of Scotland, when he firft propofed 
 his proje6l, did not think proper to adopt it. It 
 was afterwards adopted, with fome variations, 
 by the Duke of Orleans, at that time regent of 
 France. The idea of the pofTibility of multi- 
 plying paper money to almofl any extent, was 
 the real foundation of what is called the Mif- 
 fiffippi fcheme, the mofl extravagant projeel 
 both of banking and flock-jobbing that, perhaps, 
 the world ever faw. The different operations 
 
 of
 
 A BRANCH OF THE GENERAL STOCK. 479 
 
 of this fcheme are explained fo fully, fo clearly, chap. 
 and with fo much order and diftinetnefs, by IL 
 Mr. Du Verney, in his Examination of the 
 Political Reflections upon Commerce and Fi- 
 nances of Mr. Du Tot, that I mall not give any 
 account of them. The principles upon which it 
 was founded are explained by Mr. Law himfelf, 
 in a difcourfe concerning money and trade, 
 which he publifhed in Scotland when he firfl 
 propofed his project. The fplendid, but vifion- 
 ary ideas which are fet forth in that and fome 
 other works upon the fame principles, Hill con- 
 tinue to make an impreflion upon many people, 
 and have, perhaps, in part, contributed to that 
 excefs of banking, which has of late been com- 
 plained of both in Scotland and in other places. 
 
 The bank of England is the greater! bank of 
 circulation in Europe. It was incorporated, in 
 purfuance of an act of parliament, by a charter, 
 under the great feal, dated the 27th of July, 
 1694. It at that time advanced to government 
 the fum of one million two hundred thoufand 
 pounds, for an annuity of one hundred thoufand 
 pounds : or for 96,000/. a year intereft, at the 
 rate of eight per cent., and 4,000/. a year for the 
 expence of management. The credit of the new 
 government, eftablifhed by the Revolution, we 
 may believe, muft have been very low, when it 
 was obliged to borrow at fo high an intereft. 
 
 In 1 697 the bank was allowed to enlarge its ca- 
 pital flock by an ingraftment of 1,001,171/. 105. 
 Its whole capital ltock, therefore, amounted 
 at this^time to 2,201,171/. 10s. This en- 
 
 graftment
 
 480 OF MONET CONSIDERED AS 
 
 book graftment is faid to have been for the fupport 
 of public credit. In 1696, tallies 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 dis- 
 continue the payment of its notes, which necef- 
 farily occafioned their difcredit. 
 
 In purfuance of the 7th Anne, c. vii. the bank 
 advanced and paid into the exchequer, the fumof 
 400,000/. ; making in all the fum of 1 ,600,000/. 
 which it had advancedupon its original annuity of 
 96,000/. interefl and 4,000/. for expence of ma- 
 nagement. In 1 708, therefore, the credit of go- 
 vernment was as good as that of private perfons, 
 fmce it could borrow at fix per cent, interefl, the 
 common legal and market rate of thofe times. In 
 purfuance of the fame acl, the bank cancelled ex- 
 chequerbillstotheamountofi ,775,027/. 1 75.10^. 
 at fix per cent, interefl, and was at the fame time 
 allowed to take in fubfcriptions for doubling 
 its capital. In 1708, therefore, the capital of 
 the bank amounted to 4,402,343/. ; and it 
 had advanced to government the fum of 
 
 By a call of fifteen per cent, in 1709, there 
 was paid in and made (lock 656,204/. is. gd.' t 
 and by another of ten per cent, in 17 10, 
 501,448/. 125. nd. In confequence of thofe 
 two calls, therefore, the bank capital amounted 
 t0 5>559>995'- *4*. 8tf. 
 
 * James Polilethwaite's Hiftory of the Public Revenue, 
 page 301. 
 
 In
 
 A BRANCH OF THE GENERAL STOCK. 48 1 
 
 In purfuance of the 3d George I. c. 8. the chap. 
 bank delivered up two millions of Exchequer ._ '_, 
 bills to be cancelled. Ithad at this time, therefore* 
 advanced to government 5,375,027/. 175. iorfi 
 In purfuance of the 8th George I. c. 21. the 
 bank purehafed of the South Sea Company, flock 
 to the amount of 4,000,000/, ; and in 1722, in 
 confequence of the fubfcriptions which it had 
 taken in for enabling it to make this purchafe, its 
 capital (lock was increafed by 3,400,000/. At 
 this time, therefore, the Bank had advanced to 
 the public 9,375,027/. 175. iofc?; and its capital 
 itock amounted only to 8,959,995/. I 4 S - 8^« It 
 was upon this occafion that the fum which the 
 Bank had advanced to the public, and for which 
 it received intereft, began firft to exceed its ca- 
 pital flock, or the fum for which it paid a divi- 
 dend to the proprietors of bank flock ; or, in other 
 words, that the bank began to have an undi- 
 vided capital, over and above its divided one. It 
 has continued to have an undivided capital of the 
 fame kind ever fince. In 1746, the Bank had, 
 upon different occafions, advanced to the public 
 11,686,800/. and its divided capital had been 
 raifed by different calls and fubfcriptions to 
 10,780,000/. The flate of thofe two fums has 
 continued to be the fame ever fmce. In pur- 
 fuance of the 4th of George III. c.25. the Bank 
 agreed to pay to government for the renewal of 
 its charter 110,000/. without intereft or repay- 
 ment. This fum, therefore, did not increafe 
 either of thofe two other fums. 
 
 vol. ir. 1 1 The
 
 II. 
 
 482 OF MONEY CONSIDERED AS 
 
 BOOK The dividend of the bank has varied accord- 
 . ing to the variations in the rate of the intereft 
 which it has, at different times, received for the 
 money it had advanced to the public, as well as 
 according to other circumftances. This rate of 
 intereft has gradually been reduced from eight 
 to three per cent. For fbme years pad the 
 Bank dividend has been at five and a half per 
 cent. 
 
 The liability of the Bank of England is equal 
 to that of the Britifh government. All that it has 
 advanced to the public mull be loft before its cre- 
 ditors can fuftain any lofs. No other banking 
 company in England can be eftablifhed by acl of 
 parliament, or can confift of more than fix mem- 
 bers. It acts, not only as 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 public, it circulates Ex- 
 chequer bills, and it advances to government the 
 annual amount of the land and malt taxes, which 
 are frequently not paid up till fome years there- 
 after. In thofe different operations, its duty to 
 the public may fometimes have obliged it, with- 
 out any fault of its directors, to overftock the 
 circulation with paper money. It likewife dis- 
 counts merchants bills, and has, upon feveral dif- 
 ferent occafions, fupported the credit of the prin- 
 cipal houfes, not only of England, but of Ham- 
 burgh and Holland. Upon one occafion, in 1763, 
 it is faid to have advanced for this purpofe, in 
 one week, about 1,600,000/. ; a great part of it 
 
 in
 
 A BRANCH OP THE GENERAL 8T0CK; 483 
 
 in bullion. I do not, however, pretend to war- c 
 rant either the greatnefs of the l'um, or the fhort- 
 nefs of the time. Upon other occafions, this 
 great company has been reduced to the neceffity 
 of paying in fixpences* 
 
 It is not by augmenting the capital of the 
 country, but by rendering a greater part of that 
 capital a6live and productive than would other- 
 wife be fo, that the moll judicious operations of 
 banking can increafe the induftry of the country. 
 That part of his capital which a dealer is obliged 
 to keep by him unemployed, and in ready mo- 
 ney, for anfwering occafional demands, is ib 
 much dead flock, which, fo long as it remains 
 in this fituation, produces nothing either to him 
 or to his country. The judicious operations of 
 banking enable him to convert this dead flock 
 into aclive and productive flock ; into materials 
 to Work upon, into tools to work with, and into 
 provifions and fubfiflence to work for ; into 
 flock which produces fomething both to himfelf 
 and to his country. The gold and filver money 
 which circulates in any country, and by means 
 of which the produce of its land and labour is 
 annually circulated and diflributed to the pro- 
 per confumers, is, in the fame manner as the 
 ready money of the dealer, all dead flock. It is 
 a very valuable part of the capital of the coun- 
 try, which produces nothing to the country. 
 The judicious operations of banking, by fubfli- 
 tuting paper in the room of a great part of this 
 gold and filver, enables the country to convert a 
 112 great
 
 484 0F MONEY CONSIDERED AS 
 
 book great part of this dead flock into active and pro- 
 ductive flock ; into flock which produces forrie- 
 thing to the country. The gold and filver mo- 
 ney which circulates in any country may very 
 properly be compared to a highway, which, while 
 it circulates and carries to market all the grafs 
 and corn of the country, produces itfelf not a 
 fingle pile of either. The judicious operations of 
 banking, by providing, if I may be allowed fo 
 violent a metaphor, a fort of waggon-way through 
 the air, enable the country to convert, as it were, 
 a great part of its highways into good paflures 
 and corn fields, and thereby to increafe very 
 confiderably the annual produce of its land and 
 labour. The commerce and induflry of the coun- 
 try, however, it mufl be acknowledged, though 
 they may be fomewhat augmented, cannot be 
 altogether fo fecure, when they are thus, as it 
 were, fufpended upon the Dasdalian wings of 
 paper money, as when they travel about upon 
 the folid ground of gold and filver. Over and 
 above the accidents to which they are expofed 
 from the unikilfulnefs of the conductors of this 
 paper money, they are liable to feveral others, 
 from which no prudence or fkill of thofe con-* 
 ductors can guard them* 
 
 • An unfuccefsful war, for example, in which the 
 enemy got porTeflion of the capital, and confe- 
 quently of that treafure which fupported the cre- 
 dit of the paper money, would occafion a 
 much greater confufion in a country where the 
 whole circulation was carried on by paper, than 
 
 in
 
 A BRANCH OF THE GENERAL STOCK. 485 
 
 in one where the greater part of it was carried c H A P. 
 on by gold and filver. The ufual inflrument of ^__ 
 commerce having loll its value, no exchanges 
 could be made but either by barter or upon cre- 
 dit. All taxes having been ufually paid in pa- 
 per money, the prince would not have where- 
 withal either to pay his troops, or to f urnifh his 
 magazines ; and the Hate of the country would 
 be much more irretrievable than if t\]e greater 
 part of its circulation had confifled in gold and 
 filver. A prince, anxious to maintain his domi- 
 nions at all times in the Hate in which he can 
 molt eafily defend them, ought, upon this ac- 
 count, to guard, not only againfl that exceffive 
 multiplication of paper money which ruins the 
 very banks which ifiue it ; but ever! againfl that 
 multiplication of it, which enables them to fill 
 the greater part of the circulation of the country 
 with it. 
 
 The circulation of every country may be con- 
 fidered as divided into two different branches ; 
 the circulation of the dealers with one another, 
 and the circulation between the dealers and the 
 confumers. Though the fame pieces of money, 
 whether paper or metal, may be employed fome- 
 times in the one circulation and fometimes in the 
 other ; yet as both are conflantly going on at the 
 fame time, each requires a certain flock of money 
 of one kind or another, to carry it on. The va- 
 lue of the goods circulated between the different 
 dealers, never can exceed the value of thole cir- 
 culated between the dealers and the confumers ; 
 113 whatever
 
 486 OF MONEY CONSIDERED AS 
 
 BOOK whatever is bought by the dealers, being ulti* 
 _P*_ . mately deftined to be fold to the confumers. 
 The circulation between the dealers, as it is car- 
 ried on by wholefale, requires generally a pretty 
 large fum for every particular tranfaction. That 
 between the dealers and the confumers, on the 
 contrary, as it is generally carried on by retail, 
 frequently requires butvery fmall ones, a (hilling, 
 or even a halfpenny, being often fufficient. But 
 fmall funis circulate much fafter than large ones. 
 A milling changes mailers more frequently than 
 a guinea, und a halfpenny more frequently than 
 a milling. Though the annual purchafes of all 
 the confumers, therefore, are at lead equal in 
 value to thofe of all the dealers, they can gene- 
 rally be tranfacied with a much fmaller quan- 
 tity of money ; the fame pieces, by a more 
 rapid circulation, ferving as the inftrument of 
 many more purchafes of the one kind than of 
 the other. 
 
 Paper money may be fo regulated, as either to 
 confine itfelf very much to the circulation be- 
 tween the different dealers, or to extend itfelf 
 likewife to a great part of that between the deal- 
 ers and the confumers. Where no bank notes are 
 circulated under ten pounds value, as in London, 
 paper money confines itfelf very much to the 
 circulation between the dealers. When a ten 
 pound bank note comes into the hands of a con- 
 sumer, he is generally obliged to change it at 
 the firft fhop where he has occafion to purchafe 
 five millings worth of goods j fo that it often re- 
 turns
 
 A BRANCH OF THE GENERAL STOCK. 487 
 
 turns into the hands of a dealer, before the con-C HAP. 
 iiimer has fpent the fortieth part of the money. 
 Where bank notes are iffued for fo fmall funis as 
 twenty millings, as in Scotland, paper money 
 extends itfelf to a confiderable part of the circu- 
 lation between dealers and confumers. Before 
 the a6t of parliament, which put a Hop to the 
 circulation often and five milling notes, it filled 
 a ftill greater part of that circulation. In the cur- 
 rencies of North America, paper was commonly 
 iffued for fo fmall a fum as a milling, and filled 
 almofl the whole of that circulation. In fome 
 paper currencies of Yorkshire, it was iffued even 
 for fo fmall a fum as a fixpence. 
 
 Where the iffuing of bank notes for fuch very 
 fmall fums is allowed and commonly pra6lifed, 
 many mean people are both enabled and encou- 
 raged to become bankers. A perfon whofe pro- 
 miffory note for five pounds, or even for twenty 
 millings, would be rejected by every body, will 
 get it to be received without fcruple when it is 
 iffued for fo fmall a fum as a fixpence. But the 
 frequent bankruptcies to which fuch beggarly 
 bankers mufl be liable, may occafion a very con- 
 fiderable inconveniency, and fometimes even a 
 very great calamity, to many poor people who 
 had received their notes in payment. 
 
 It were better, perhaps, that no bank notes 
 were iflued in any part of the kingdom for a 
 fmaller fum than five pounds. Paper money 
 would then, probably, confine itfelf, in every part 
 ©f the kingdom, to the circulation between 
 1 1 4 the
 
 488 OF MONEY CONSIDERED AS 
 
 BOOK the different dealers, as much as it does at pre- 
 
 TT 
 
 fent in London, where no bank notes are iflued 
 under ten pounds value ; five pounds being, 
 in mod parts of the kingdom, a fum which, 
 though it will purchafe, perhaps, little more 
 than half the quantity of goods, is as much cen- 
 to* dered, and is as feldom fpent all at once, as ten 
 pounds are amidft the profufe expence of 
 London. 
 
 Where paper money, it is to be obferved, is 
 pretty much confined to the circulation between 
 dealers and dealers, as at London, there is always 
 plenty of gold and filver. Where it extends it- 
 felf to a confiderable part of the circulation be- 
 tween dealers and confumers, as in Scotland, and 
 Hill more in North America, it baniflies gold and 
 filver almoft entirely from the country ; almoft 
 all the ordinary tranfaclions of its interior com- 
 merce being thus carried on by paper. The fup- 
 preffion of ten and five milling bank notes, fome- 
 what relieved the fcarcity of gold and filver in 
 Scotland ; and the fupprellion of twenty (hilling 
 notes would probably relieve it ftill more. 
 Thofe metals are faid to have become more 
 abundant in America, fince the fupprefiion of 
 fome of their paper currencies. They are faid, 
 likewife, to have been more abundant before the 
 inftitution of thofe currencies. 
 
 Though paper money mould be pretty much 
 confined to the circulation between dealers and 
 dealers, yet banks and bankers might iliil be able 
 to give nearly the fame alliflance to the in- 
 
 duftry
 
 A BRANCH OF THE GENERAL STOCK. 489 
 
 duflry and commerce of the country, as they had CHAP, 
 done when paper money filled almoft the whole ,_ ' j 
 circulation. The ready money which a dealer is 
 obliged to keep by him, for anfwering occafional 
 demands, is deftined altogether for the circula- 
 tion 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 cuflomers, and 
 who bring ready money to him, inftead of tak- 
 ing any from him. Though no paper money, 
 therefore, was allowed to be ifuied, 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 calh accounts, banks and 
 bankers might flill be able to relieve the greater 
 part of thofe dealers from the neceffity of keep- 
 ing any confiderable part of their flock by them, 
 unemployed and in ready money, for anfwering 
 occafional demands. They might flill be able 
 to give the utmofl affiflance which banks and 
 bankers can, with propriety, give to traders of 
 every kind. « 
 
 To reflrain private people, it may be faid, 
 from receiving in payment the promiffory notes 
 of a banker, for any fum whether great or fmall, 
 when they themfelves are willing to receive 
 them ; or, to reflrain a banker from iffuing fuch 
 notes, when all his neighbours are willing to 
 accept of them, is a manifefl violation of that 
 natural liberty which it is the proper bufinefs of 
 
 law,
 
 490 OF MONEY CONSIDERED AS 
 
 BOOK law, not to infringe, but to fupport. Such re- 
 JLi i g lI ' at i° ns ma y, no doubt, be contidered as in 
 fome refpect a violation of natural liberty. But 
 thofe exertions of the natural liberty of a few in- 
 dividuals, which might endanger the fecurity of 
 the whole fociety, are, and ought to be, re- 
 ftrained by the laws of all governments ; of the 
 moll free, as well as of the mod defpotical. 
 The obligation of building party walls, in order 
 to prevent the communication of fire, is a viola- 
 tion of natural liberty, exactly of the fame kind 
 with the regulations of the banking trade which 
 are here propofed. 
 
 A paper money confiding in bank notes, hTued 
 by people of undoubted credit, payable upon 
 demand without any condition, and in fact al- 
 ways readily paid as foon as prefented, is, in 
 every refpect, equal in value to gold and iilver 
 money ; fince gold and filver money can at any 
 time be had for it. Whatever is either bought 
 or fold for fuch paper, muft necefiarily be bought 
 or fold as cheap as it could have been for gold 
 and filver. 
 
 The increafe of paper money, it has been faid, 
 by augmenting the quantity, and confequently 
 diminifhing the value of the whole currency, 
 necefiarily augments the money price of com- 
 modities. But as the quantity of gold and filver, 
 which is taken from the currency, is always 
 equal to the quantity of paper which is added to 
 it, paper money does not necefiarily increafe the 
 quantity of the whole currency. From the be- 
 2 ginning;
 
 A BRANCH OF THE GENERAL STOCK. 49 1 
 
 ginning of the laft century to the prefent time, chap. 
 provifions never were cheaper in Scotland than 
 in 1759, though, from the circulation of ten 
 and five milling bank notes, there was then 
 more paper money in the country than at pre- 
 fent. The proportion between the price of pro- 
 vifions in Scotland and that in England, is the 
 fame now as before the great multiplication 
 of banking companies in Scotland. Corn is, 
 upon mod occafions, 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 
 publifhed his Political Difcourfes, and foon after 
 the great multiplication of paper money in Scot- 
 land, there was a very fenfible rife in the price 
 of provifions, owing, probably, to the badnefs 
 of the feafons, and not to the multiplication of 
 paper money. 
 
 It would be otherwife, indeed, with a paper 
 money confifting in promifibry notes, of which 
 the immediate payment depended, in any re- 
 fpe6t, either upon the good will of thofe who 
 iflued them ; or upon a condition which the 
 holder of the notes might not always have it in 
 his power to fulfil ; or of which the payment was 
 not exigible till after a certain number of years, 
 and which in the mean time bore no interefl. 
 Such a paper money would, no doubt, fall more 
 or lefs below the value of gold and filver, ac* 
 cording as the difficulty or uncertainty of ob- 
 taining immediate payment was fuppofed to be 
 
 greater
 
 492 OF MONEY CONSIDERED AS 
 
 book greater or lefs ; or according to the greater or 
 * lefs diftance of time at which payment was exi- 
 gible* 
 
 Some years ago the different banking com, 
 panics of Scotland were in the practice of infert- 
 ing into their bank notes, what they called an 
 Optional Claufe, by which they promifed pay* 
 ment to the bearer, either as foon as the note 
 fhould be prefented, or, in the option of the 
 directors, fix months after fuch prefentment, to- 
 gether with the legal interefl for the laid fix 
 months. The directors of fome of thofe banks 
 fometimes took advantage of this optional claufe, 
 and fometimes threatened thofe who demanded 
 gold and filver in exchange for a confiderable 
 number of their notes, that they would take ad- 
 vantage of it, unlefs fuch demanders would con* 
 tent themfelves with a part of what they de- 
 manded. The promiffory notes of thofe banking 
 companies conflituted at that time the far greater 
 part of the currency of Scotland, which this un- 
 certainty of payment neceffarily degraded below 
 the value of gold and filver money. During the 
 continuance of this abufe (which prevailed 
 chiefly in 1762, 1763, and 1764), while the ex- 
 change between London and Carlifle was at par, 
 that between London and Dumfries would fome- 
 times be four per cent, againfl Dumfries, though 
 this town is not thirty miles diflant from Carlifle. 
 But at Carlifle, bills were paid in gold and fil- 
 ver ; whereas at Dumfries they were paid in 
 Scotch bank notes, and the uncertainty of get- 
 ting
 
 A BRANCH OF THE GENERAL STOCK. 493 
 
 ting thofe bank notes exchanged for gold and CHAP, 
 filver coin had thus degraded them four per cent, 
 below the value of that coin. The fame act of 
 parliament which fuppreffed ten and five fhilling 
 bank notes, fuppreffed likewife this optional 
 claufe, and thereby reltored the exchange be- 
 tween 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 Yorkfhire, the 
 payment of fo fmall a fum as a fixpence fome* 
 times depended upon the condition that the 
 holder of the note fhould bring the change of a 
 guinea to the perfon who iffued 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 ael of parliament, 
 accordingly, declared all fuch claufes unlawful, 
 and fuppreffed, in the fame manner as in Scot- 
 land, all promiffory notes, payable to the bearer, 
 under twenty fhillings value. 
 
 The paper currencies of North America con- 
 iifted, not in bank notes payable to the bearer on 
 demand, but in a government paper, of which 
 the payment was not exigible till feveral years 
 after it was iffued : And though the colony go- 
 vernments paid no intereil to the holders of this 
 paper, they declared it to be, and in fact ren- 
 dered it, a legal tender of payment for the full 
 value for which it was iffued. But allowing the 
 colony fecurity to be perfectly good, a hundred 
 
 pounds
 
 494 OP MONEY CONSIDERED AS 
 
 BOOK pounds payable fifteen years hence, for example, 
 in a country where intereft is at fix per cent, is 
 worth little more than forty pounds ready money* 
 To oblige a creditor, therefore, to accept of this 
 as full payment of a debt for a hundred pounds 
 actually paid down in ready money, was an a<5l 
 of fuch violent injuflice, 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 honed and downright Do6lor Douglas 
 afTures us it was, a fcheme of fraudulent debtors 
 to cheat their creditors. The government of 
 Penfylvania, indeed, pretended, upon their firft 
 emifiion of paper money, in 1722, to render 
 their paper of equal value with gold and filver, 
 by enacting penalties againfl all thofe 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 effectual than 
 that which it was meant to fupport. A politive 
 law may render a {lulling a legal tender for a 
 guinea ; becaufe it may dire6l the courts of juf- 
 tice 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 (hilling 
 as equivalent to a guinea in the price of them. 
 Notwithstanding any regulation of this kind, it 
 appeared by the courfe of exchange with Great 
 Britain, that a hundred pounds flerling was oc- 
 
 cafionally
 
 A BRANCH OF THE GENERAL STOCK. 495 
 
 cafionally confidered as equivalent, in fome of c H A P. 
 
 the colonies, to a hundred and thirty pounds, ( [^ 
 
 and in others to fo great a fum as eleven hun- 
 dred pounds currency ; this difference in the 
 value arifing from the difference in the quantity 
 of paper -emitted in the different colonies, and in 
 the diftance and probability of the term of its 
 final difcharge and redemption. 
 
 No law, therefore, could be more equitable 
 than the ae~l of parliament, fo unjuflly com- 
 plained of in the colonies, which declared 
 that no paper currency to be emitted there in 
 time coming, mould be a legal tender of pay- 
 ment. 
 
 Penfylvania w r as always more moderate in its 
 emiffions 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 emillion of its paper money. Before that 
 emiffion, the colony had raifed the denomination 
 of its coin, and had, by act of affembly, ordered 
 five millings flerling to pafs in the colony for 
 iix and three-pence, and afterwards for fix and 
 eight-pence. A pound colony currency, there- 
 fore, even when that currency was gold and 
 filver, was more than thirty per cent, below the 
 value of a pound flerling, and when that cur- 
 rency was turned into paper, it was feldom much 
 more than thirty per cent, below that value. 
 The pretence for railing the denomination of 
 the coin, was to prevent the exportation of 
 
 gold
 
 49^ OF MONEY CONSIDERED AS 
 
 BOOK gold and filver, by making equal quantities of 
 IL thofe metals pafs for greater fums in the co- 
 lony than they did in the mother country. It 
 was found, however, that the price of all goods 
 from the mother country rofe exactly in propor- 
 tion as they raifed the denomination of their 
 coin, fo that their gold and filver were exported 
 as fad as ever. 
 
 The paper of each colony being received in 
 the payment of the provincial taxes, for the full 
 value for w r hich it had been ifTued, it necefTarily 
 derived from this life 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 w T as greater or lefs, according as the quan- 
 tity of paper ifTued was more or lefs above what 
 could be employed in the payment of the taxes 
 of the particular colony which ifTued it. It was 
 in all the colonies very much above what could 
 be employed in this manner. 
 
 A prince, who fhould enacl that a certain 
 proportion of his taxes fhould 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 
 mould depend altogether upon the will of the 
 prince. If the bank which ifTued this paper 
 was careful to keep the quantity of it always 
 fomewhat below what could eafilv be employed 
 in this manner, the demand for it might be Inch 
 as to make it even bear a premium, or fell for 
 1 fomewhat
 
 A BRANCH OF THE GENERAL STOCK. 497 
 
 ibmewhat more in the market than the quan- 
 tity of gold or filver currency for which it was 
 iffued. Some people account in this manner for 
 what is called the Agio of the Bank of Amfler- 
 dam, or for the fuperiority 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 mull be paid in bank 
 money, that is, by a transfer in the books of the 
 bank ; and the directors of the bank, they al- 
 lege, are careful to keep the whole quantity 
 of bank money always below what this ufe 
 occafions a demand for. , It is upon this ac- 
 count, 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 Amflerdam, however, it will 
 appear hereafter, is, in a great meafure, chi- 
 merical. 
 
 A paper currency which falls below the value 
 of gold and filver coin, does not thereby fink 
 the value of thofe metals, or occafion equal 
 quantities of them to exchange for a fmaller 
 quantity of goods of any other kind. The pro- 
 portion 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 richnefs 
 or poverty of the mines, which happen at any 
 
 vol. 11. k k particular
 
 49& OF MONEY CONSIDERED AS 
 
 BOOK particular time to fupply the great market of 
 n * . the commercial world with thofe metals. It de- 
 pends upon the proportion between the quantity 
 of labour which is neceflary in order to bring 
 a certain quantity of gold and filver to market, 
 and that which is neceflary, in order to bring 
 thither a certain quantity of any other fort of 
 goods. 
 
 If bankers are reftrained from iffuing any cir- 
 culating bank notes, or notes payable to the 
 bearer, for lefs than a certain fum ; and if they 
 are fubje6led to the obligation of an immediate 
 and unconditional payment of fuch bank notes as 
 foon as prefented, their trade may, with fafety 
 to the public, be rendered in all other refpects 
 perfectly free. The late multiplication of bank- 
 ing companies in both parts of the United King- 
 dom, an event by which many people have been 
 much alarmed, inflead of diminifliing, increafes 
 the fecurity of the public. It obliges all of 
 them to be more circumfpecl; in their conduct, 
 and, by not extending their currency beyond 
 its due proportion to their cafli, to guard them- 
 felves againfl thofe malicious runs, which the 
 rivalfliip of fo many competitors is always ready 
 to bring upon them. It reftrains the circula- 
 tion of each particular company within a nar- 
 rower circle, and reduces their circulating notes 
 to a fmaller number. By dividing the whole 
 circulation into a greater number of parts, 
 the failure of any one company, an accident 
 which, in the courfe of things, mufl fometimes 
 
 happen,
 
 A BRANCH OF THE GENERAL STOCK. 499 
 
 Jiappen, becomes of lefs confequence to the CHAP, 
 public. This free competition too obliges all 
 bankers to be more liberal in their dealings with 
 their cuftomers, left their rivals mould carry 
 them away. In general, if any branch of trade, 
 or any divifion of labour, be advantageous to 
 the public, the freer and more general the 
 competition, it will always be the more fo. 
 
 END OF THE SECOND VOLUME. 
 
 Strahan and Prefton, 
 printers-Street, London.
 
 5 4 4 1 8 ' *
 
 UNIVERSITY OF CALIFORNIA AT LOS ANGELES 
 
 THE UNIVERSITY LIBRARY 
 
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