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 A 
 COMPLETE ANALYSIS, 
 
 O R 
 ABRIDGMENT 
 
 O F 
 
 DR. ADAM SMITH'S 
 
 INQUIRY INTO THE 
 
 NATURE AND CAUSES 
 
 OF TIIZ 
 
 WEALTH OF NATIONS. 
 
 BY JEREMIAH JOYCE. 
 
 exhaustos itcrare labores. 
 
 THE SECOND EDITION. 
 
 Cambrttige ; 
 
 PRINTED BY AND FOR B. FLOWER: 
 
 SOLD BY J. DEIGIITON, AXD J. NICHOLSON J AKD BY 
 
 T4 CONDEll, BUCKLERSBURY, AND W. BUTTON, 
 
 PATEHNOSTER ROW, LONDON. 
 
 1804.

 
 To 
 
 PHILIP HENRY VISCOUNT MAHON, 
 
 THIS ANALYSIS 
 
 IS AFFECTIONATELY INSCRIBED 
 
 BY THE 
 
 EDITOR. 
 
 1318599
 
 ADVERTISEMENT. 
 
 THE Editor conceives that it is unnecessary to offer 
 any apology for laying before the public an Analysis or 
 Abridgment of a work so^universally and justly celebra- 
 ted as " The Inquiry into the nature and causes of the 
 " Wealth of Nations." 
 
 Without attempting to justify every principle contain- 
 ed in the " Inquiry," it certainly merits the follow- 
 ing eulogium passed upon it by one of Dr. ADAM 
 SMITH'S biographers : " The variety, importance and 
 " novelty of the information which it contains ; the skill 
 tc and comprehensiveness of mind displayed in the ar- 
 <e rangement ; the admirable illustrations with which 
 " it abounds ; together with the plainness and perspi- 
 " cuity which make it intelligible to all render it un- 
 t( questionably the most perfect work which has yet ap- 
 " peared on the general principles of any branch of legis- 
 
 To those, then, who are engaged in the pursuit of po- 
 litical science, this compendium, if properly executed, 
 cannot fail of being highly useful. It will also be found 
 convenient as a text book in those institutions of liberal 
 education, in which the " Wealth of Nations" makes 
 on essential branch of their lectures. 
 
 CHEVFNING/ June 20, 1797.
 
 INTRODUCTION 
 
 AND 
 
 PLAN OF THE WORK. 
 
 HE labour of every nation is the fund which ori- 
 ginally supplies it with all the necessaries and conveni- 
 encies which it consumes ; and which consist either in 
 the immediate product of that labour, or in what is pur- 
 chased with that produce from other nations. P. 1. 
 
 The nation will be supplied with its necessaries, ac- 
 cording to the proportion which this produce bears to 
 the number of its inhabitants ; which proportion is re- 
 gulated ; (1.) By the skill and judgment with which its 
 labour is applied. (2.) By the proportion between the 
 number of those who are employed in useful labour, 
 and of those who are not so employed. P. 2. 
 
 Upon the former of these, the abundance, or scanti- 
 ness of this supply seems principally to depend. For 
 among savage nations of hunters and fishers, where all 
 labour, there is the greatest want ; whereas in civili- 
 sed states, though multitudes do not labour, all are oftea 
 abundantly supplied. 
 
 The cause of this improvement in the productive 
 powers of labour, and the order according to which its
 
 produce is distributed, make the subject of the first book 
 of this inquiry; and it will appear that the number of 
 useful labourers, is, every where in proportion to the 
 quantity of capital stock employed insetting them to 
 work, and to the manner in which it is so employed. 
 
 The second book treats of the nature of capital stock ; 
 of the manner in which it is accumulated ; and of the 
 quantity of labour which it pats into motion. 
 
 Different nations have followed different plans in the 
 direction of labour, of which all have not been equally, 
 favourable to the greatness of its produce. P. 3. 
 
 Some have encouraged the industry of the country ; 
 others that of towns. 
 
 The policy of Europe has leaned to commerce and 
 manufactures, more than to agriculture. The circum- 
 stances which seem to have introduced, and established 
 this policy, are explained in the third book. This 
 policy has given occasion to very different theoiies of 
 political ceconomy, which, with their effects, will be 
 explained in the fourth book. 
 
 Fromtheseybwr books it will appear, in what has con- 
 sisted the revenue of the great body of the people. The 
 jifth will treat of the revenue of the sovereign or com- 
 monwealth. In which will be seen; (1.) What are the 
 necessary expences of the sovereign, and how they 
 ought to be defrayed. (2.) The methods by which the 
 tchoh society may be made to defray them : and, (3.) 
 The reason and causes which have induced all modern 
 governments to contract debts. P. 4.
 
 AN 
 
 INQUIRY INTO THE NATURE AND CAUSES 
 
 OF THE 
 
 WEALTH OF NATIONS. 
 
 i 
 BOOK. I. Ki / & 4 A3 
 
 .. 
 
 Of the causes of improvement in the productive powers 
 of labour, and of the order according to which its pro- 
 duce is naturally distributed among the different ranks 
 of the people. 
 
 CHAP. I. 
 
 Of the division of labour. 
 
 JL HE greatest improvement in the productive powers 
 of labour, and the greater part of the skill with which 
 it is any where directed, or applied, seem to have been 
 the effects of the division of labour ; which effects, in 
 the business of society, will be better understood by con- 
 sidering how it operates in some particular manufac- 
 tures. P. 5,, 
 
 It is commonly supposed that the division of labouf 
 is carried/arftesf in some trifling manufactures, which
 
 ( 8 ) 
 
 is probably an error founded upon this circumstance ; 
 that the number of workmen, in every branch of these 
 manufactures, being small, may be collected in the 
 same work-house, and placed at once under the view of 
 the spectator ; whereas in those manufactures destined 
 to supply the great wants of the people, we can seldom 
 see at 'once, more than those employed in one single 
 branch. Therefore the division may be greater, and yet 
 Hot so obvious. P. 6. 
 
 Example. A person unacquainted with the busi- 
 ness of pin-making, could scarcely make a single pin 
 a day ; but by dividing the business into various 
 branches, which are now distinct trades, each per- 
 son may be considered as making 4800 pins in a day. 
 P. 7. 8. 
 
 In every other manufacture the effects of the division 
 of labour sue similar to what they are in this, though 
 they may not be reducible to so great simplicity : hence 
 the increase of the productive powers of labour ; the 
 advantages of which, have caused the separation of 
 different employments. This separation is carried 
 farthest in countries most improved : what is the work 
 of one man in a rude state of society, being, generally, 
 that of several in an improved one. Hence the dif- 
 ferent trades in the woollen and linen manufactures, 
 from the growers of the wool or flax, to the dressers of 
 the cloth. P. 9. 
 
 Agriculture does not admit of so many subdivisions of 
 labour as manufactures ; the different sorts of labour, 
 in the former relprning with the seasons, no man can 
 be constantly employed in any one of them ; hence its 
 unimproved state, in all countries, compared with 
 manufactures, Ja agriculture, the labour of the
 
 t 9 ) 
 
 rich country, is not always much more productive, 
 than that of the poor. The corn of Poland is gene- 
 rally as good, and as cheap, as that of England, not- 
 withstanding the improved state of the latter. But in 
 manufactures, Poland can pretend ; to no such compe- 
 tition. P, 11. 
 
 The increase in the quantity of work, which, in con- 
 sequence of the division of labour, the same number of 
 people are capable of performing, is owing to three 
 different circumstances. 
 
 (1.) To the inprease of dexterity in every particular 
 workman ; by reducing every man's business to one 
 simple operation, and by making this operation the sole 
 employment of hislife. A common smith, unaccustom- 
 ed to making of nails, cannot mal>:e more than two or 
 three hundred nails a day; whereas lads, under twenty 
 years of age, who never exercised any other trade but 
 that of making nails, can make 2300 nails in a day. 
 Neither is this one of the simplest operations, and of 
 course not one where the dexterity of the workman is 
 the greatest. P. 13. 
 
 (2.) To the saving of the time which is commonly 
 lost in passing from one species of work to another. It 
 is impossible to pass very quickly from one kind of work 
 to another. A country weaver, who cultivates a small 
 farm, must lose a deal of time in passing from the loom 
 to the field. A man commonly saunters a little in 
 turning his hand from one employment to another j 
 and when he Jlr&t begins the new work, it is seldom 
 with spirit; hence the habit of indolent care less appli- 
 cation acquired by every country workman, who is 
 obliged to change his tools, and work every h^lf liour, 
 P. 13.
 
 C 10 ) 
 
 (3.) Labour is much abridged by die application of 
 proper machinery. The invention of those machines, 
 by which labour is so much facilitated, and abridged, 
 seems to have been owing to the division of labour : 
 for men are likely to discover the readier methods of 
 attaining any object, when their whole attention is 
 directed towards that single object. It is natural also, 
 that out of many workmen employed in each branch 
 of labour, some one op other should find the readiest 
 method of performing their own particular work. It 
 is a fact, that a great part of the machines, used in 
 those manufactures, in which labour is most sub- 
 divided, were the inventions of common workmen. 
 In steam engines, one of the greatest improvements 
 was discovered by a boy who wanted to save his la- 
 bour. P. 14. 
 
 Many improvements, in machinery have been made 
 by the ingenuity of the makers of machines ; and not a 
 few by philosophers, or men of speculation ; whose 
 trade is not to do any tki'ng, but to observe every thing. 
 Philosophy, like other employments, is not only a trade, 
 but is subdivided into several classes, which, as iu 
 every other business, improves dexterity, and saves 
 time. P. 15. 
 
 It is the great multiplication of the productions of the 
 different arts, in consequence of the division of labour, 
 which occasions, in a well regulated society, that uni- 
 versal opulence which extends itself to the lowest ranks 
 of the people. P. 16. 
 
 Observe the accommodation of the artificer, or day 
 labourer in a civilized and thriving state, and you will 
 perceive that the number of people employed in pro- 
 curing him accommodation, exceeds all computa-
 
 ( 11 ) 
 
 tion. What a variety of labour is necessary to pro- 
 duce the tools of the meanest workmen, the shears, for 
 instance, with which the shepherd clips the wool ! 
 We might examine also his dress ; or furniture ; 
 reflect on the different hands employed in preparing 
 his bread, and his beer, the glass, the window which 
 lets in the light, and keeps out the wind and the rain ; 
 and it will appear, that without the assistance of 
 many thousands, the very meanest person in a civi- 
 lized .country, could not be accommodated, in what 
 isfaisely called an easy and simple manner. P, 17 19. 
 
 CHAP. II. 
 
 Of the principle which gives occasion to the division of 
 labour. 
 
 THIS division of labour from which so many advan- 
 tages are derived is not the effect of human wisdom, but 
 of a propensity in human nature to truck, barter, and 
 exchange one thing for another. It is common to all 
 men, and to be found in no other race of animals. 
 When an animal wants to obtain any thing of man, it 
 is by means of engaging his attention. Man some- 
 times uses the same arts, bnt he has not time to do this 
 on every occasion. In civilized society, he stands in 
 need of the assistance of multitudes, at all times, while 
 his whole life is scarce sufficient to gain the friend- 
 ship of a few persons. Among other animals, each in- 
 dividual is independent ; and, in a natural state, has 
 occasion for the assistance of no other living creature.
 
 But man has constant occasion for the help of his 1 
 thren, and it is in vain to expect it from their bencTo- 
 lence ; he must interest their self love. The case of a 
 common beggar, is hot altogether an exception to this 
 rule. P. 1922. 
 
 This trucking disposition gives occasion to the divi- 
 sion of labour. Among hunters, one person can make 
 bows and arrows with more dexterity than others, 
 which from interest, he exchaftgesfor cattle or venison. 
 Hence he becomes a sort of armourer. Another excels 
 in making hats, for which he is rewarded by his neigh- 
 bours, and he finds it worth his while to dedicate his 
 whole time to this employment. In like manner a third 
 becomes a smith ; and a fourth a tanner. The certain- 
 ty of being able to exchange the produce of his labour, 
 encourages every man to apply himself to a particular 
 occupation. P. 22. 
 
 The difference of natural talents in different men, is 
 Jess than we suppose, and is not so much the cause, as 
 the effect of the division of labour; it seems to arise 
 not so much from nature, as from habit, and education. 
 Without this disposition to barter, all must have had 
 the same duties to' perform, and there would have been 
 no room for the exertion uf different talents. This dis- 
 position forms the difference of talents, aud renders the 
 difference use ful. P. 23. 
 
 Many tribes of animals, of the same species, derive 
 from nature, a much more remarkable distinction of 
 genius, than what takes place among men, and yet 
 they are of no use to one another, for want of this 
 disposition to barter or exchange. Among men the 
 most dissimilar geniuses are of use to one another ; the 
 different produce of their respective talents, by ex-
 
 ( 13 ) 
 
 change, being brought into common stock, where 
 every man may purchase whatever part of the pro- 
 duce of other men's talents for which he has occasi- 
 on. P. 25. 
 
 CHAP. III. 
 
 That the division of labour is limited by the extent of 
 the market. 
 
 IT is the power of exchanging that gives occasion to 
 the division of labour ; therefore the extent of this di- 
 vision must always be limited by the extent of the mar- 
 ket. P. 26. 
 
 Some sorts of industry 'can be carried on no where 
 but in large towns. A porter for example. In small 
 villages every fanner must be his own butcher, baker, 
 and brewer. In such situations country workmen 
 must apply themselves to many different brandies 
 of industry ; a carpenter deals in every sort of work 
 made of wood ; a smith, in whatever is made of 
 
 iron. P. 27. 
 
 Water carriage is more favourable to industry than 
 land carriage ; the difference is very great in the dis- 
 tance between London and Edinburgh. But without 
 the convenience of water carriage, it would be next to 
 impossible to carry on any trade between very distant 
 parts, as London and Calcutta. P. 28. 
 
 Hence then the first improvements in industry would 
 be made where this conveniency opens the whole world 
 
 B
 
 for a market. The inland parts of a country can for * 
 longtime have no other market than the country that 
 lies round them ; the extent of their market therefore 
 must be in proportion to the riches and populousness of 
 that country. In North America the plantations have 
 constantly followed the sea coast, or the banks of navi- 
 gable rivers. The nations first civilized were those round 
 the Mediterranean sea, which is remarkable for the 
 smoothness of its surface, and the number of its islands. 
 It was long before the navigators attempted to pass the 
 straits of Gibraltar. Of these nations Egypt seems to 
 have been the first place cultivated and improved to a 
 considerable degree, owing to the advantages of the 
 Nile. P. 29 31* 
 
 Improvements in Bengal and China are of great an- 
 tiquity ; in the former are the Ganges, and several other 
 great rivers, and in the Eastern provinces of China 
 there are a vast number of canafe communicating with 
 each other. Neither the Egyptians., Indians, nor Chi- 
 nese encourage foreign commerce; their opulence waa 
 derived from inland navigation. P. 31. 
 
 All the inland parts of Africa, the antient Scythia, 
 and the modern Siberia have always been in a barba- 
 rous state, probably for want of navigation. Commerce 
 cannot be carried on to any great extent by means of 
 a river which runs into another territory before it 
 reaches the sea; hence the small importance of the 
 Danube to the states of Bavaria, Austria, and Hungary. 
 P. 32.
 
 ( 15 > 
 
 CHAP. IV. 
 
 Of the origin of money. 
 
 THE division of labour being established, only a 
 small part of a man's wants can be supplied by himself; 
 the greater part are supplied by exchanging the surplus 
 part of the produce of his own labour, for the produce 
 of oth^r men's labour ; thus every man becomes a mer- 
 chant. At first this power of exchanging must have 
 been clogged in its operations, for want of a proper me- 
 fdium of exchange. P. 33. 
 
 Many different commodities have been employed for 
 the purpose, as oxen among the Greeks ; salt in Abys- 
 sinia ; shells in India ; dried cod in Newfoundland ; 
 tobacco in Virginia; sugar in some of our West India 
 colonies ; and in a village in Scotland nails are made 
 Vse of. P. 34. 
 
 Metals have at length been preferred almost every 
 where ; they are less perishable ftian other commodi- 
 ties ^ and can be divided into a number of parts, and re- 
 united again without loss. P. 35, Iron was the common 
 instrument of commerce among the Spartans ; copper 
 among the Romans ; gold and silver among all rich 
 and commercial nations, At first they were used in bars 
 without any stamp, or coinage ; hence the trouble of 
 weighing and assaying, which in gold are operations of 
 great nicety. To facilitate exchanges, and to prevent 
 abuses, improved countries have affixed a stamp upon 
 certain quantities of particular metals ; hence the origin 
 of coined money, and of public mints. P. 36. 
 
 The first public stamps were to ascertain the fineness 
 of the metal, as the present s^rftng marks. P. 38.
 
 ( 16 ) 
 
 In England, the Saxon kings were paid in provisions, 
 not in money. William the Conqueror introduced the 
 custom of paying money, which was for a long time re- 
 ceived by weight; the difficulty of which, gave occasion 
 to coins stamped on both sides, and likewise on the 
 edges. The denomination of these coins originally ex- 
 pressed the weight. The English pound contained a 
 pound, Tower weight, of silver, of a known fineness; 
 TheFrench livre,contained in the time of Charlemagne, 
 
 . O J 
 
 a pound of silver Troyes weight; the Scots money pound 
 contained, from Alexander the first, to Robert Bruce, a 
 pound of silver of the same weight and fineness with 
 the English pound. English, French, and Scotspennies 
 contained a real penny weight of silver, viz. the 
 twentieth part of an ounce. P. 39- The proportion be- 
 tween the shilling and the penny, or the pound was not 
 so constant as between the pound and the penny. P.4O. 
 In France, the sous, or shilling, appears to have con- 
 tained at different times, 5, 12; 2O, and 40 pennies. 
 From the time of Charlemagne, in France, and from 
 that of William the Conqueror in England, the propor- 
 tion between the pound, shilling, and penny, seems to 
 have been uniform, though the value has been different, 
 owing to the rapacity and injustice of sovereign princes. 
 The English pound, and penny contain at present about 
 a third only ; the Scots about l-36th, and the French 
 about l-66th part of their original value ; by these 
 means princes have been enabled to fulfil their engage- 
 ments with a smaller quantity of silver than would 
 other, ise have been requiste ; their creditors however 
 have been defrauded. In this way money is ao universal 
 instrument of commerce. P. 41. 
 
 The word ralue expresses sometimes the utility of 
 some particular object, and sometimes the power of
 
 purchasing other goods which the possession of thatob? 
 ject conveys ; the one may be called -value in use, the 
 other valut in exchange. Some things of the greatest 
 value in use, have scarcely any in exchange, as water. 
 The value of others is only in exchange, as a diamond. 
 I shall then, 1st. Consider the real measure of this ex- 
 changeable value. 2diy. The component parts of the 
 price of commodities ; and, 3dly . The natural and mar- 
 ket price of commodities, P. 42. 
 
 CHAP. V. 
 
 Of the real and nominalprice of commodities, or of thai- 
 price in labour, and their price in money. 
 
 EVERY man is rich or poor according to the degree 
 in which he can afford to enjoy the necessaries of life ; 
 only a small part of which can be' supplied by a man's 
 own labour; the greater part must be derived from the 
 labour of other people, and which he must purchase. 
 P. 43. 
 
 The realprice of every thing, is the toil and trouble 
 of acquiring it. What is bought with money, is purr 
 chased by labour, as much as what we acquire by the 
 toil of our own body. The money saves us the toil, an(J 
 contains the value of a certain quantity of labour. 
 Labour was the first price, the original purchase money, 
 that was paid for all things : by it all the wealth of the 
 world was purr-hased, and its value is equal to the 
 quantity of labour which it can command. P. 44. 
 
 Wealth is power, i. e. it may afford a man the means 
 of acquiring power, by giving him the command of other
 
 ( 18 ) 
 
 men's labour; and his fortune is greater or less accord- 
 ing to the quantity of other men's labour, which it en- 
 ables him to command. P. 45. 
 
 Though labour be the real measure of the exchange- 
 able value of all commodities, it is not that by which 
 this value is estimated; owing to the difficulty of ascer- 
 taining the proportion between different quantities of 
 labour, both as to the time spent, the hardship endured, 
 and the ingenuity exercised. P. 45. 
 
 Every commodity therefore is compared and estimated 
 with other commodities, rather than by labour ; being 
 better suited to the comprehension of the people ; the 
 one being a plain object, the other an abstract notion. 
 But when barter ceases, ami money becomes an instru- 
 ment of commerce, commodities are more frequently 
 exchanged for money, than for other commodities. P.4(). 
 
 Gold and silver, however, vary in their value, accor- 
 ding to the fertility or barrenness of the mines which are 
 known at the time. The discovery of the mines of 
 America, reduced, in the ifjth century, the value of 
 gold and silver in Europe, l-3d of what it had been be- 
 fore, as it cost less labour to bring them to market ; but 
 as gold is itself continually varying in its value, it can- 
 not be an accurate measure of the value of- other com- 
 modities. 
 
 Equal quantities of labour, at all times, and in all 
 places, may be said to be of equal value to the labourer. 
 As he must always lay down the same portion of his 
 ase, his liberty and happiness. The price he pays must 
 therefore be the same, whatever commodities he receives 
 jn return. Of these, his labour may sometimes purchase 
 a greater, and sometimes a smaller quantity, but it is 
 their value which varies, not that of the labour which 
 purchases them. At all times and places, that is dear
 
 ( 19 ) 
 
 which is difficult to come at,or which it costs much la- 
 bour to acquire, and that cheap which is to be had 
 easily, or with very little labour. Labour therefore 
 never varying in its value, is alone the ultimate and 
 real standard by which the value of all commodities 
 can, at all times, and places, be estimated. It is their 
 real price; money is their nominal price only .P. 47. 48. 
 To the employer labour seems to vary like other things, 
 but in reality it is the goods which, are dear or cheap, 
 and not the labour. In this popular sense, therefore, 
 labour may be said to have a real and a nominal price, 
 the former consisting in the quantity of the necessaries 
 andconvenienciesoflife which are given for it, and the 
 latter in the quantity of money. The labourer is rich, or 
 poor> in proportion to the real, not to the nomz'na/price 
 of his labour. This distinction is of much importance. 
 The same real price is always of the same value ; but 
 the same nominal price is sometimes of very different 
 values. When an estate is sold, subject to a perpetual 
 rent of the same value, it must not consist in a particular 
 sum of money, which will vary ; 1st. As the quantity of 
 metal varies in coins of the same denomination ; and, 
 2dly. According to the different values of equal quanti- 
 ties of gold and silver at different times. The quantity 
 of pure metal in coins, has, among all nations, been 
 continually diminishing, which tends to diminish the 
 value of money coin. The discovery of the coins in Ame- 
 rica, also diminished the value of gold and silver in 
 Europe. Therefore money-rent is likely to diminish in 
 value, though it be paid in bullion of a certain standard. 
 Kents reserved in corn have preserved their value bet- 
 ter. Since the 18th of Elizabeth, money-rents have 
 almost sunk to a fourth of their value ; though since 
 the reign of Philip and Mary, the denomination of 
 -English coin has undergone little or no alteration. P.5 1 .
 
 ( 20 ) 
 
 Equal quantities of labour will, at distant times, be 
 purchased more nearly with equal quantities of corn, 
 than of gold and silver, or any other commodity; there-' 
 fore at distant times corn will be more nearly of the 
 same real value, but not exactly so. The real price of 
 labour is more liberal in a society advancing to opu- 
 lence> than in One standing still, and in 6ne that is 
 standing still, than in one going backwards. Rent re- 
 served in cotn is liable only to the variations in the 
 quantity of labour which a certain quantity of corn can 
 purchase ; but a rent reserved in any other commodity, 
 is liable not only to the variations in the quantity of 
 labour which any particular quantity of corn can pur- 
 chase, but to the variations in the quantity of corn 
 which can be purchased by any particular quantity of 
 that commodity. P. .52. 
 
 Though the real value of corn rent varies much less 
 from century to Century, than that of a money rent, it 
 varies much more from ye ar toy ear. The money price 
 of labour seems accommodated to the average, price of 
 corn, which is regulated by the value of silver ; and 
 which seldom varies much from year to year. Labour 
 then appears to be the only universal standard by which 
 we can compare ihe values of different commodities at 
 all times and in all places. P. 53. 
 
 At distant places, there is no regular proportion be- 
 tween the real, and the money price of commodities ; 
 yet the merchant considers nothing but the money 
 price, or the difference of the quantity of silver for 
 which he buys, and for which he is likely to sell again. 
 At Canton, in China, half an ounce of silver nu>y com- 
 mand a greater quantity of the necessaries of life, than 
 an ounce >in London; a commodity therefore which 
 sells for half an ounce of silver in Canton, may be
 
 ( 21 ) 
 
 dearer than a commodity which sells for an ounce in 
 London. If a London merchant can buy at Canton 
 for half an ounce of silver, a commodity which he can 
 siell in London for an ounce, he gains one hundred per 
 cent, by the bargain ; and this is what he wants. P. 55. 
 As it is the nominal, 6r money price of goods which . 
 regulates almost the whole business of common life 
 where price is concerned, we cannot wonder that it 
 should have been more attended to than the real price. 
 In comparing the different real values of a particular 
 commodity, at different times and places, we, must con* 
 sider, not the quantities of sliver for which it was sold, 
 but ihe labour which those quantities of silver could 
 have purchased. The current prices of labour at dis- 
 tant times can scarcely ever be known; we must content 
 ourselves with those of corn, which are more noticed 
 by historians. P 56. 
 
 Commercial nations have found it convenient to coiil 
 metals into money, as gold, silver, and copper, one of 
 which is considered as the pec ulfat measure of value ; 
 and this preference has been generally given to the 
 metal first in use. The Romans had nothing but copper 
 money till within* five years of the first Punic war ; 
 copper therefore appears to -have been always the mea- 
 sure of value in that republic. P. 57. The Northern 
 nations seem to have had silver from the beginning of 
 their settlements. In England there were silver coins 
 in the time of the Saxons ; but little gold coined till the 
 time of Edward III. nor any copper till that of James I. 
 Hence our accounts are kept in pounds sterling (sjlver) 
 not in guineas. P. 58. 
 
 Originally, in all countries, a legal tender could be 
 made only in the coin of that metal which was consi- 
 
 C
 
 ( 22 ) 
 
 dered as the measure of value. In England, gold was 
 not considered as a legal tender for a long time after it 
 was coined into money, and the proportion between the 
 yalues of gold and silver money, was left to be settled 
 by the market ; and copper at present is not a legal ten- 
 der, except in the change for the smaller silver coins. 
 P. 59. 
 
 The proportion between their respective values, at 
 for example, between a guinea and 21 shillings is now 
 settled by law ; hence the distinction between the me- 
 tal which is standard, and that which is not the stan- 
 dard, becomes little more than a nominal distinction. 
 In consequence of any change in this regulated pro* 
 portion, this distinction becomes something more than 
 nominal. If the value of a guinea were reduced to 
 shillings, or raised to 22 shillings, payments might still 
 be made for debts, in silver as before, but would re- 
 quire different quantities of gold. Silver would appear 
 to measure the value of gold, but gold would not appear 
 to measure the value of silver. This difference would be 
 owing to the custom of keeping accounts, and of ex- 
 pressing the amount of all great and small sums rather 
 in silver, than in gold money. A note for 50 guineas 
 would be payable with 50 guineas ; and if the custom, 
 of keeping accounts, and of expressing promissory 
 notes in this manner, should become general, gold, and 
 not silver, would be the metal peculiarly the measure 
 of value. P. 60. 
 
 In reality the value of the most precious metal regu- 
 lates the value of the whole coin. Twelve copper pence, 
 which, before it is coined, is worth but seven-pence iq 
 silver, will in the market fetch one shilling ; and 21 
 defaced shillings are equivalent to a guinea. P. 6l. 
 In the English mint a pound weight of gold is coined
 
 ( 23 ) 
 
 into 44| guineas. An ounce of such gold is therefore 
 worth 31. 17s. lOfd. Before the reformation of the 
 gold coin, the price of standard gold bullion had been 
 from 31. 18s. to 41. an ounce ; since that time the mar- 
 ket price seldom exceeds 31. 17s. 7d. an ounce. The 
 Jate reformation of the gold coin has therefore raised the 
 value of gold and silver coin. 
 
 In the English mint a pound weight of standard sil- 
 ver is coined into 62 shillings. Five shillings and two- 
 pence an ounce is the mint price of silver. Before the 
 reformation of the gold coin, the market price for stan- 
 dard silver was from 5s. 4d. to 5s. 8d. per ounce ; but 
 iince it has been from 5s. 3d. to 5s. 5d. an ounce, 
 silver bullion has not fallen so low as the mint price. 
 P. 62. 3. 
 
 In English coins, copper is rated very much above 
 its real value, and silver is rated somewhat below it. In 
 the market of Europe, in the French and Dutch coin, 
 an ounce of fine gold exchanges for about 14 ounces of 
 fine silver. In the English coin ft exchanges for about 
 15 ounces, that is for more silver than it is worth, ac- 
 cording to the common estimation of Europe. But as*, 
 the price of copper in bars, even in England, is not 
 raised by the high price of copper coin, so the price of 
 silver in bullion is not sunk by the low rate of silver in 
 English coin. P. 64- 
 
 Upon the reformation of the silver coin in the reign 
 of William III. the price of silver bullion continued to 
 be somewhat above the mint price, (occasioned, as Mr. 
 Locke thought, by the permission granted of exporting 
 silver bullion, but not coin), which would probably be 
 the case now, were silver coin brought as near its 
 standard weight as gold. In which case there would 
 
 C 2
 
 ( 24 ) 
 
 be a profit in melting it down; an inconvenience \vhicl| 
 would require some remedy. P. 64. 5. 
 
 The ineonveniency would be less, if silver werq 
 rated in the coin as much above its proper proportion 
 to gold, as it is at present below it; provided that sil- 
 ver should not be a, legal tender for more than thq 
 change of a guinea. No creditor would in that case 
 be cheated in consequence of the high valuation of 
 silver in coin. Bankers only would suffer by this regu- 
 lation, and to their creditors it would be a considerable 
 security. It may be thought that 3l. 17s. iO|d. con- 
 taining only an ounce, should not purchase more than 
 one ounce of bullion. But coin is more convenient 
 than bullion ; and the time it lakes in coining is equi- 
 valent to a small duty, which renders coin more valu- 
 able, than bullion. P. 66. 
 
 A small duty upon coinage might increase the supe- 
 riority of the metals in coinage, above an equal quan- 
 tity of them in bullion, which would prevent the melt- 
 ing down the coin, and would discourage its exporta- 
 tion ; and what was exported would return of its own 
 Accord. This is the case in France, where 8 percent. 
 is charged on coinage. P. 67. 
 
 The occasional fluctuations in the market price of 
 gold and silver bullion arise from the same causes as the 
 like fluctuations in that of all other commodities. From 
 tbe loss of these metals by land and sea ; from the 
 continual waste of them and from the wear and tear 
 of trie coin, a continual importation is required, which 
 merchant importers will endeavour to make a good ac- 
 count of. P. 68. 
 
 Money is more or less an accurate measure ofyalut, 
 according as the current coin is more or less exactly 
 Agreeable to its standard. In England 44 j guineas are.
 
 ( 25 ) 
 
 contained in "a pound of standard go.ld, that is in H 
 ounces of pure gold, and one of alloy. But if by wear 
 they contain less than a Ib. weight of standard gold, 
 the measure of value becomes liable to the same sort of 
 uncertainty to. which other weights, and measures are 
 exposed. The merchant will therefore adjust the 
 price of his goods, not to what those weights and mea- 
 sures ought to be, but to what, he finds by experience 
 they actually are, By the money price of goods, is to 
 be understood the quantity of pure gold or silver for 
 which they are sold without regard to the denomination 
 of coin. Jn the time of Edward I. 6s. 8d. was con- 
 sidered as the same money price with a pound sterling 
 pi present, because it contained the same quantity of 
 pure silver. P. 69. 
 
 CHAP. VI. 
 
 Of the component parts of the price of commodities. 
 
 IN the early state of society, the proportion between 
 the quantities of labour, necessary for acquiring diffe- 
 rent objects, seems to be the only circumstance which 
 can afford any rule for exchanging them for one ano- 
 ther. Among hunters, if it requires twice the labour 
 to kill a beaver, which it does to kill a deer, one beater 
 ?hould be worth two. deer. What is the produce of two 
 days labour will be worth double the 'produce of one 
 day's labour. But allowance must be made for that 
 species of labour which is more severe than another ; 
 foi for that which requires an uncommon degree of
 
 X $6 ) 
 
 dexterity and ingenuity, because the talents necessary 
 to the performance of the latter, cannot be acquired 
 ifithout great application. P. 70. 
 
 In this state pf things, the whole produce of Ia<- 
 bour, belongs to the labourer, and the quantity of 
 labour em ployed in acquiring any commodity must re- 
 gulate the quantity of labour which it ought to pur- 
 phase. P. 71. 
 
 When stock has accumulated in the hands of parti- 
 calar persons, some will naturally employ it in setting 
 fo work industrious people, in order to make a profit 
 foy their work. In exchanging the complete manufac- 
 ture, over and above the price of the materials, and the 
 wages of the workmen, there must be the profits to 
 the undertaker of the work, who hazards his stock in 
 this adventure. The value added by the workmen tq 
 the materials, is, first, the wages, and secondly, the 
 profits of the employer, which must be in proportion to 
 the extent pf his stock. P. 72. 
 
 The profits of stock cannot be resolved into the wages 
 pf the la,bour t of inspection and Direction ; since this 
 labour may be nearly equal in a manufactory whose 
 annual stock does not amount to 10001. per annum, as 
 in another where 70001. is employed ; the profit of the 
 former at 101. per cent being 1001. and th,at of the 
 other 7001. In great works, the labour of inspection 
 is committed to some principal clerk ; his wages, ex- 
 press the value of this labour, although regard is 
 commonly had to the trust reposed in ft im, as well as 
 to his labour and skill : but this never bears any propor- 
 tion to the capital, of which he has the management j 
 and the owner though discharged of all the labour, ex- 
 pects that his profits should bear a regular proportion tQ
 
 ( 27 ) 
 
 his capital. In the price of commodities, therefore,the 
 profits of stock constitute a component part,- different 
 from the wages of labour, and regulated by different 
 principles. P. 73. 
 
 In this state of things the whale produce of labour 
 does not belong to the labourer ; he must share it with 
 the owner of the stock which employs him. 
 
 As soon as the land in any country becomes private 
 property, the landlords demand a price for its natural 
 produce; consequently > what formerly cost the labourer 
 only the trouble of gathering, has a price fixed on it, 
 and he must give his landlord a portion of what his la- 
 bour collects or produces, which constitutes the rent of 
 land, and is a third component part. P. 74. 
 
 The real value of all the different component parte 
 of price, is measured by the quantity of labour which 
 they can command. Labour measures the value, not 
 only of that part of price which resolves itself into 
 labour y but of that which resolves itself into rent, 
 and of that which resolves itself into profit. The 
 price of every commodity finally resolves itself into 
 some or ail of those three parts. In the price of corn, 
 one part pays the wages and maintenance of labourers 
 and cattle, another pays the rent to the landlord, and 
 a third pays the profit of the farmer. A fourth part, 
 it may be thought, perhaps, is necessary for replacing 
 the .stock : but this is made up of the same three 
 parts : as the price of a horse for instance, consists in 
 the rent of the land upon which he is reared, the la- 
 bour of rearing him, and the profits upon the rent, and 
 labour. P. 75. 
 
 Jn the price of flour, there must be added to the price 
 of corn, the profits of the miller, and the wages of his
 
 *el-vants ; in that of the baker, his profits and the wages 
 of his servants ; and in the price of both, the labour of 
 carriage from the farmer to the miller, and from him to 
 the baker. P. 76. 
 
 The price of flax resolves itself into the same three 
 parts as that of corn ; in the price of linen, we must 
 add the wages' of the flax-dresser, spinner, weaver/ 
 &c. with the profits of their employers : consequently 
 in the progress of the manufactures, that part of 
 price which resolves itself into wages and pro/its comes 
 to be greater in proportion, to that which resolves 
 itself into rent. Not only the number of profits in- 
 Crease> but every subsequent profit is greater than the 
 former, because the capital employed must be grea-* 
 ter. P. 7& 
 
 The price of some commodities resolves itself in to 
 two parts, as that of sea-fish ; one part pays the labour 
 of the fisherman, and the other the profits of the capi-* 
 tal. Rent seldom makes a part, but in salmon fishery 
 it does. Some persons make atrade in gathering Scotch 
 pebbles, the price of which is altogether the wages of 
 their labour. P. 77. 
 
 As the price of every particular commodity, taken 
 teparately, resolves itself into some, oral! of those three 
 parts, so does that of allihe commodities which com- 
 pose the annual labour of every country. Wages, 
 profit, and rent are the three original sources of all 
 revenue, as well as of all exchangeable value. Who- 
 ever derives a revenue from a fund which is his own, 
 must draw it from his labour> from his stock, or from 
 his land. That derived from labour is called wages ; 
 that derived from stock is called profit, if he employs it 
 himself $ if Jeut to another it is called interest, in this
 
 { 29 ) 
 
 case part of the profit must go to the borrower, who 
 takes the risk and labour, and part to the lender, who 
 affords him the opportunity of making this profit. 
 The revenue which proceeds from land is called rent. 
 All taxes, salaries, and pensions, are derived from 
 some of these three original sources of revenue. 
 P. 78. 9- 
 
 When these three sources of revenue belong to one 
 man, they are sometimes confounded. A gentleman 
 farmer, should, after paying the expences of cultiva- 
 tion, gain the rent of the landlord, and the profit 
 of the farmer ; he is apt to denominate the whole, 
 gain. Most of the West Indian planters are in this 
 situation. P. 80. 
 
 Common fanners seldom employ any overseer ; and 
 even do much of the labour themselves : besides then 
 the common profits, they should receive wages as 
 labourers, and overseers ; in this c,ase, wages are often 
 confounded with profit. The same may be said of an 
 independent manufacturer, and of a gardener, who cul- 
 tivates his own garden with his own hands. P. 80. 
 
 As in every civilized country, the value of few com- 
 modities arises from labour only, rent and projit con-, 
 tribute largely to most of them, so the annual produce 
 of its labour will be always sufficient to purchase a 
 greater quantity of labour than what was employed in, 
 bringing that produce to market. If the society was to 
 employ all the labour which it can annually purchase, 
 the produce of every succeeding year would be of vastly 
 greater value than that of the foregoing. But no coun- 
 try employs all its annual produce in maintaining the 
 industrious. The idle every where consume a great 
 
 D
 
 ( 30 ) 
 
 part of it, and according to the proportion in which 
 it is divided between those two orders, its average value 
 must increase, or diminish, or continue the same from 
 one year to another. P. 8 1 . 
 
 CHAP. VII. 
 
 Of the natural) and market price of commodities* 
 
 THERE is in every society an average rate of wages f. 
 andprofit in every different employment of labour and 
 stock ; which is regulated by the circumstances of the 
 society; viz. their advancing, stationary or declining 
 state ; or by the nature of the employment. There 
 is also an average rate of rent, regulated by the cir- 
 cumstances of the society, or by the fertility of the 
 land. These may be called the natural rates of wages, 
 profit, and rent. 
 
 When the price of a commodity is neither more nor 
 less than what is sufficient to pay the rent of the land, 
 the wages of labour, and the profits of stock, it may be 
 called the natural price ; it is then sold for precisely 
 its worth, or what it really cost the person who brings 
 k to market. If he sells it at a price which does not 
 allow him the average rate of profit in his neighbour- 
 hood, he is a loser by the trade ; since by employing 
 his stock some other way he might have made that 
 profit. His profit besides, is his revenue ; unless there- 
 fore his goods yield him this profit, they do not repay 
 him what they cost him. Though the price which 
 leaves this profit is not always the lowest for which he
 
 ( 31 ) 
 
 cou Id sell, yet it is the lowest at which he is likely to sell 
 for any considerable time. P. 82. 3. 
 
 The actual price of any commodity is called its war- 
 ket price, and may be above or below its natural price. 
 The market price of a commodity is regulated by the 
 quantity actually brought to market and the demand 
 of those who are willing to pay the natural price, which 
 demand may be called the effectual demand, and is 
 different from the absolute demand. When the quan- 
 tity falls short of the effectual demand, a competition 
 must take place, which will be more, or less eager, ac- 
 cording as the commodity is of t more or less impor- 
 tance. When the quantity exceeds the effectual de- 
 mand, it cannot all be sold to those willing to pay the 
 natural price ; which must reduce the price of the 
 whole, in proportion to the excess of the commodity, 
 or as it is more or less important to get immediately rid 
 of it. But when the quantity is just sufficient to supply 
 the effectual demand, then the market price is the same 
 as the natural price. P. 84.5. 
 
 The quantity of every commodity suits itself to the 
 effectual demand. It is the interest of (he sellers, that 
 it should not exceed this : and of the people at large, 
 that it should never fall short of that demand. And 
 if at any time it exceeds, or fall short of the effectual 
 demand, by the exertions, of landlords, labourers, or 
 those who employ them, it will soon be brought to its 
 natural price, which may be termed its central price, 
 to which the prices of all commodities are gravitating. 
 P. 86. 
 
 The whole quantity of industry annually employed, 
 aims at supplying the effectual demand. But in some 
 
 D 2
 
 ( 32 ) 
 
 employments, the same quantity of industry will in dif- 
 ferent years produce different quantities of commodi- 
 ties, as in the case of corn, wine, hops, 8cc. But the 
 same number of spinners and weavers will produce 
 equal quantities of cloth. In the one species of in- 
 dustry, the average produce must be suited to the ef- 
 fectual demand, consequently the market price will be 
 subject to great fluctuations. In the other species of 
 industry the produce can always be suited to the effec- 
 tual demand ; the price of this species of commodity 
 varies only with the variations of the demand ; but 
 that of the other, with the variations of the demand 
 and the quantity brought to market. Temporary fluc- 
 tuations in the market price fall chiefly upon those parts 
 of price which resolve themselves into wages and profit, 
 not that part which resolves itself into rent; because 
 that is generally adjusted accordingto the average price 
 of the produce. Such fluctuations affect the value 
 either of zcages or profit, according as the market is 
 over or under stocked with commodities or labour. A 
 public mourning raises the price of black cloth, but 
 not the wages of the weavers. It raises the wages of 
 journeymen taylors, but sinks the price of coloured 
 cloths, and the wages of the people employed in prepar- 
 ing them. P. 87 9. 
 
 When by an increase in the effectual demand, the 
 market price is a good deal above the natural price t 
 those interested in this change are careful to conceal it, 
 to prevent new rivals employing their stocks in the 
 same way. Secrets of this kind can seldom be long kept, 
 nor the extraordinary profits be long retained after the 
 secret is known. 
 
 Secrets in manufactures may be longer kept than
 
 ( S3 ) 
 
 those in trade. A' dyer may find materials to produce 
 a particular colour at half the price of those commonly 
 made use of ; with care he may keep it as long as he 
 lives, and leave it to his posterity. His extraordinary 
 gains arise from the high price of his labour ; and may 
 be called extraordinary profits. P. 90. 
 
 Some natural productions require a particular soil, so 
 that all the land in the country may not produce suffi- 
 cient to supply the effectual demand, consequently 
 it will be sold above its natural price, and that part 
 of it which resolves itself into rent will be paid above 
 its natural rate ; such are some of the vineyards in 
 France. Enhancements of the market price depend- 
 ing upon natural causes, may operate for ever. P. 91. 
 
 A MONOPOLY has the same effect as a secret in 
 trade. The monopolists by never supplying the ef- 
 fectual demand, sell their commodities above the natur 
 ral price, and raise their emoluments both in wages 
 and profit above their natural rate. The price of 
 monopoly is the highest which can be got ; the natural 
 price is the lowest which, on an average can be taken. 
 P. 92. 
 
 The exclusive privileges of corporations, statutes of 
 apprenticeship, and all those laws which restrain, in 
 particular employments, the competition to a smaller 
 number than might, otherwise, go into them, have 
 the same tendency. They are a sort of monopoly* 
 which may for ages, keep up the market price of com- 
 modities, above the natural price. Though the mar- 
 ket price of any commodity may continue long above, 
 it cannot continue long below its natural price ; as the 
 losing party would immediately withdraw either so 
 much land, labour^ or stock, from being employed about
 
 ( 34 ) 
 
 it, that the quantity brought to market should be only 
 sufficient to supply the effectual demand. 
 
 The statutes of apprenticeship, and corporation 
 laws, enable the workman sometimes to raise his wages 
 above their natural rate ; at other times oblige him to 
 let them down below it. As they exclude many peo- 
 ple from his employment, they also exclude him from 
 many other employments. The effect in raising the 
 wages may endure for centuries ; but that of lowering 
 them can only last the lives of some of the workmen 
 bred to the business during its prosperity ; when they 
 are gone, the number, if there be no restraint, will suit 
 itself to the effectual demand. P. 93 4- 
 
 The natural price of a commodity, varies with the 
 natural rate of its component parts ; which varies ac- 
 according to, the riches or poverty of the society. The 
 causes of these variations will be explained in the four 
 following chapters. P. 93. 
 
 CHAP. VIII. 
 
 Of the wages of labour. 
 
 The produce of labour, constitutes its natural wages. 
 In the original state of things, the whole produce be- 
 longs to the labourer. He has neither landlord, nor 
 master. Had this state continued, the wages would 
 have increased, with all the improvements to which the 
 division of labour gives occasion, and all things would 
 have become cheaper, in proportion as they were pro- 
 duced by smaller quantities of labour. P. 96. 
 
 Though all things would have become cheaper in re~ 
 in appearance many things might have become
 
 ( 35 ) 
 
 dearer than before, or have been exchanged for a grea- 
 ter quantity of goods. If, for example, in the greater 
 part of employments, the productive powers of labour 
 had been improved ten-fold, and in some other only 
 two-fold, it is evident that ten times the quantity of 
 work in the former, must be given for only double 
 the original quantity in the latter ; which would make it 
 appear five times dearer than before, though in reality 
 it would be twice as cheap. P. 97. 
 
 The state of things in which the labourer enjoyed the 
 whole produce of his own labour, could not last beyond 
 the first appropriation of land, and the accumulation 
 of stock* When land becomes private property, the 
 landlord demands his share of the produce, as rent. 
 The maintenance of the labourer is also advanced out 
 of the stock of the farmer, whose profit makes a se- 
 cond deduction from the produce of the labourer 
 which is employed upon land. The produce of almost 
 all other labour is liable to like deductions of profit. 
 In manufactures, workmen stand in need of a mas- 
 ter to advance them materials, and wages, who shares 
 in the produce of their labour. It sometimes happens 
 that a workman is so far independent as to purchase 
 materials, and maintain himself till it is completed ; 
 he then enjoys the whole produce of his labour, in- 
 cluding the profits of stock, and wages of labour. P. 98. 
 
 The common wages of labour, depend upon the 
 agreement made between the parties, whose interests 
 are not the same. The workmen desire to get as much 
 as possible ; the masters to give as little as possible ; the 
 former are disposed to combine in order to raise ; the 
 latter in order to lower, the wages of labour. P. 99
 
 ( S6 ) 
 
 The masters being fewer in number, more easily 
 combine ; the law does not forbid their combinations 
 while it prohibits those of the workmen. Besides, the 
 masters can hold out the longest ; though the workman 
 may be as necessary to the master, as his master is to 
 him, the necessity is not so immediate. P. 100. 
 
 The combinations of masters though rarely heard of, 
 are not less frequent than those of workmen. There is 
 almost every where a tacit combination among them 
 not to raise the wages of labour, and because it is usual 
 nobody hears of it. And sometimes they combine to 
 sink the wages of labour, which is done with the utmost 
 secrecy ; and when the workmen yield without resist- 
 ance, it is not known to other people. The combina- 
 tions of workmen whether under the pretence of the 
 high price of provisions, or of the great profits made by 
 their masters, are attended with clamour and violence ; 
 against which, the assistance of the magistrate is de- 
 manded. The workmen accordingly seldom derive 
 any advantage from those combinations ; being ob- 
 liged, either from the power of the magistrate, the 
 steadiness of the masters, or their own indigence, to 
 submit. P* 101. There is a rate however, below which, 
 it seems impossible to reduce the ordinary wages of 
 labour. 
 
 A man must live by his labour. His wages must do 
 more ; they must enable him to bring up two children. 
 But as half the children born,die before the age of man- 
 hood, the wages of the labourer must be sufficient to 
 enable him to attempt to rear four children, the main- 
 tenance of which may be equal to that of one man. 
 P. 102. 
 
 Circumstances, sometimes, enable the labourer to
 
 ( 37 ) 
 
 raise his wages above this rate, which is the lowest con- 
 sistent with humanity. When the demand for those 
 who live by wages is increasing, there will be a compe- 
 tition among the masters to get workmen. This de- 
 mand will be in proportion to the funds destined for the 
 payment of wages, which are of two kinds. (I.) The 
 revenue which is more than necessary for the mainte- 
 nance; and, (2.) The stock, which is more than neces- 
 sary for the employment of their masters. A mam 
 who has more revenue than sufficient to maintain hi$ 
 family, employs the surplus in maintaining one or more 
 menial servants. Thus also an independent workman 
 will with his surplus stock, employ journeymen, in 
 order to make a profit by their work. The demand 
 therefore for those who live by wages, increases with 
 the increase of the revenue and stock of everjr country, 
 or with the increase of national wealth. P. 103. 4. 
 
 It is not in the richest countries, but in the most 
 -thriving, that the wages of labour are highest. Eng- 
 land is richer than America, but the wages of labour are 
 higher in the latter than in the former. The price of 
 provisions is much lower in America than in England.* 
 A dearth has never been known there. The money 
 price being higher there than here, the real price ,must 
 be higher in a still greater proportion. Though Eng- 
 land therefore be the richer, America is the most thri- 
 ving. P. 105. 
 
 The most decisive mark of the prosperity of any coun- 
 try is the increase of the number of its inhabitants. 
 In Europe they are not doubled in 500 years, but in 
 America they double in 25 years : and this increase 
 
 * This was written in 1771* 
 
 B
 
 ( 38 ) 
 
 is found to be principally owing to the great ratilti- 
 plication of the species. A numerous family is a 
 source of opulence to the parents ; the labour of each 
 child is computed to be worth a hundred pounds clear 
 gain to them. A young widow with four or five children 
 is frequently courted as a sort of fortune. This value of 
 children is the greatest of all encouragements to early 
 inarriage ; the increase occasioned by such early mar- 
 riages is not sufficient to supply the continual increasing 
 demand for labourers. P. 10(5. 
 
 When the wealth of a country has been longsfafr'ow- 
 ary, the wages of labour will not be high. The reve- 
 nue and stock may be of the greatest extent; but if they 
 have been long so, an increase of labourers would not 
 be wanted ; the number would even multiply beyond 
 their employment, and the wages be reduced to the 
 lowest rate which is consistent with humanity. CHINA, 
 the richest country in the world, is perhaps the worst 
 for a labourer to bring up afamily in. He is contented 
 with a small quantity of rice for the labour of a whole 
 day. The artificer there, runs through the streets beg- 
 ging employment ; and many thousand families live 
 in little fishing boats, whose subsistence is the refuse 
 thrown from the European ships. Marriage in China 
 is encouraged not by the value of children, but by the 
 liberty of destroying them. Yet China does not seem 
 to go backwards either in its number of inhabitants, or 
 in the cultivation of its lands ; consequently the an- 
 nual labour, and the funds destined to maintain it, must 
 be nearly the same. P. 107. 
 
 But in a country where the funds destined for the 
 maintenance of labour were sensibly decaying, the de- 
 mand for servants and labourers would be less every 
 .year. Many iii the superior classes, would be glad of
 
 ( 39 ) 
 
 employment in thelowest, which mustreduce the wage* 
 of labour to the most miserable subsistence of tfie la- 
 bourer, and multitudes must either starve, or gain a 
 subsistence by begging, or by the perpetration of en- 
 ormities. Famine and mortality would eventually re- 
 duce the inhabitants to that number which could be 
 maintained by the revenue and stock left, and which 
 had escaped the tyranny or calamity which had de- 
 stroy the rest. Such is the present state of Bengal, 
 and other English settlements in the East Indies. 
 P. 109. 
 
 The liberal reward of labour is the effect, and also 
 the natural symptom of increasing national wealth. 
 The scanty maintenance of the labouring poor is the 
 natural symptom that things are a.t a stand ; and their 
 starving condition, that they are going backwards. 
 P. 111. 
 
 In Great Britain the wages of labour seem to be more 
 than what is precisely necessary to enable the labourer 
 to bring up a family. For, (1.) There is a distinction 
 between summer and winter wages. Summer wages 
 being highest ; but the expences of a family are grea- 
 test in winter* Wages, therefore, seem to he regulated 
 by the quantity qf work done, and not by the necessities 
 of the workmen. (2.) The wages of labour do not fluc- 
 tuate with the price of provisions, which must be the 
 case if they were no more than necessary to the main- 
 tenance of the labourer. (3.) As the price of provi- 
 sions varies more from year to year than the wageg of 
 labour, so the wages of labour vary more from place to 
 place than the price of provision. Things sold by re- 
 tail are as cheap in towns,as the country, but the wages 
 of labour are l-4th or 1-oth higher in a great town than 
 
 Q
 
 ( 40 ) 
 
 at a few miles distance. This difference of prices is not 
 sufficient to transport a man from one place to another, 
 though it would the most bulky commodities, from one 
 end of the kingdom to the other, so as to reduce them 
 to a level. (4.) The variations in the price of labour 
 not only do not correspond either in place or time with 
 those in the price of provisions, but they are frequently 
 quite opposite. Grain, the food of the common peo- 
 ple, is dearer in Scotland than in England ; but tjie 
 price of labour is dearer in England than in $cutlaqd. 
 If then the labouring poor can maintain their families 
 in one part of the kingdom, they must live in affluence 
 in the other. During the last century, grain was clear- 
 er both in Great Britain and France than during the 
 present ; but labour was much cheaper, owing to the 
 greater demand for labourers, occasioned by the im- 
 provements in agriculture and manufactures. Lord 
 Hales, in the reign of Charles II. computes the neces- 
 wryexpences of a labouring family of six personsat261. 
 a year, which, if they cannot earn, they must make up 
 by begging or stealing : and Mr. King, in l688,agrees 
 very nearly with Lord Hales : since which, both the 
 income and expences of such families have consider- 
 ably increased ; but to what amount it is not easy to de- 
 termine, unless where wages are regulated by laws ; and 
 experience shews that the law never regulates them pro* 
 perly. P. 111117. 
 
 The real recompence of labour has during the pre- 
 sent century, increased in a greater proportion than its 
 money price. For not only grain is become somewhat 
 cheaper, but potatoes dp not cost half the price they 
 did sixty years ago; the same may be said of garden 
 stnff in general. Formerly apples and onions were 
 imported from Flanders. Clothing and furniture are
 
 ( 41 ) 
 
 also cheaper. Soap,, salt, candles, leather, and liquors 
 are much dearer, owing to the taxes laid upon them j 
 but the increase of price in these does not compensate 
 for the diminution of the price in other articles. The 
 luxury also which extends itself to the lower ranks,may 
 convince us that the real recompence for labour has 
 augmented. P. 118. 
 
 This improvement in the circumstances of the lower 
 ranks of the people is certainly an advantage to the 
 whole j since they make up the greater part of every 
 society ; and no society can be happy, of which the 
 greater part of the members are poor and miserable. 
 Besides, equity requires, that they who maintain the 
 whole body of the people, should be themselves tolera- 
 bly well maintained. P. 119. ' 
 
 Poverty discourages marriage, but seems favourable 
 to generation. Barrenness is very rare among those of 
 inferior station. Luxury inflames the passions, while 
 it weakens the powers of generation. Poverty is ex- 
 tremely unfavourable to the rearing of children. In 
 the Highlands of Scotland, mothers of twenty children 
 frequently have not two alive. Arnong the poor in 
 some places, one half the children born,die before they 
 are four years of age, and in almost all places, before 
 they are nine or ten ; and in parish charities the mortal- 
 ity is still greater. P. 119- 20. 
 
 Every species of animals naturally multiplies in pro- 
 portion to the means of subsistence. The scantiness of 
 subsistence among the inferior ranks of people, sets li- 
 mits to the multiplication of the human species, by de- 
 stroying part of their children. The liberal reward of 
 labour extends those limits in the proportion which the 
 demand for labour requires. If this demand be conti- 
 nually increasing, marriage is encouraged. Thun
 
 ( 42 ) 
 
 the demand for men regulate the production of men ; 
 in America it renders it rapidly progressive ; in Europe 
 it is slow and gradual, and in China it is altogether sta- 
 tionary. P. 121. 
 
 The wear and tear of a servant, being at the master's 
 expence, the wages paid to journeymen must he such 
 as may enable them to continue the race, according as 
 the circumstances of the society require. The wear and 
 tear of a free servant is less expence to the master, than 
 that of a slave. The fund destined for replacing the 
 latter is managed by an overseer ; who is likely to fall 
 in with the luxury qf the rich ; that destined for the 
 office with regard to the free man, is managed by the 
 free man himself, who, will use if with strict frugality. 
 Experience also teaches, that the work performed by 
 freemen comes cheaper than that performed by slaves. 
 The liberal reward of labour, therefore, is the effect 
 pf increasing wealth, and the cause of increasing po- 
 pulation. The condition of the labouring poor seems 
 the happiest in the progressive state ; it is hard in the 
 stationary, and miserable in the declining state, 
 P. 122. 3. 
 
 The liberal reward of labour increases industry, A 
 plentiful subsistence increases bodily strength, and the 
 hope of bettering his condition animates the labourer 
 to exert that strength to the utmost. Where wages 
 are high, the workmen are more diligent than where 
 they are low ; in some cases they are apt to over-work 
 themselves. Soldiers (by no means the most industri- 
 ous set of people) when liberally paid for their labour 
 often hurt their health by excessive work. Exces- 
 sive application is frequently the cause of idleness. 
 Relaxation from great labour is the call of nature, 
 which, if not complied with, is attended with dangerous
 
 ( 43 ) 
 
 consequences. Masters, therefore, have frequently oc- 
 casion rather to moderate, than to animate the appli- 
 cation of their men ; perhaps also the man who works 
 moderately, but constantly, executes the greatest quan- 
 tity. P. 124. 5. 
 
 In cheap years, it is pretended, that workmen are 
 more idle; in dear ones more industrious, than ordinary. 
 This is not generally the case ; besides years of dearth, 
 are to the common people, years of sickness and morta- 
 lity. In years of plenty, servants frequently trust to 
 their industly for subsistence. Masters are also encou- 
 raged by the increase of their funds to employ a grea- 
 ter number of workmen, which raises the price of la- 
 bour in cheap years. In years of scarcity people are 
 eager to return to service ; bui the high price of provi- 
 sions disposes masters rather to diminish, than increase 
 the number of their servants. In such times, poor in- 
 dependent workmen frequently are obliged to become 
 journeymen for subsistence ; hence wages sink in dear 
 years. Masters, therefore, make better bargains with 
 their servants, and find them more humble and depen- 
 dent in times of scarcity than of plenty ; hence they 
 commend the former as more favourable to industry : 
 moreover the profits of masters are greater in dear, than 
 in cheap years. P. 127. 
 
 A French Author of great knowledge has shewn, 
 that, in the Woollen, Silk, and Linen manufactures, 
 more work is done in cheap than in dear years. It does 
 not appear that there is any sensible difference in these 
 respects in the Scotch Linen, or Yorkshire Woollen 
 manufactures. The produce of all manufactures de- 
 pends upon,. the demand in the countries where they 
 are consumed ; upon peace and war; and upon rival 
 manufactures. A great part of the extraordinary work
 
 ( 44 ) 
 
 of cheap years never enters the public registers. The 
 men who leave their masters become independentwork- 
 men. The women return to their parents and spin and 
 make cloaths for themselves and families ; and the 
 produce of their Jabour makes no figure in the public 
 registers. P. 129; 
 
 The money price of labour is regulated, by the de- 
 mand for labour ; and by the price of the necessaries 
 and conveniencies of life. The demand for labour de- 
 termines the quantity of the necessaries of life which 
 must be given to the labourer ; and the money price 
 is determined by what is requisite for purchasing this 
 quantity. Though the money price of labour is some- 
 times high where the price of provisions is low, it 
 would be still higher if the price of provisions was high. 
 P. 130. 
 
 The increase in the wages of labour, increases the 
 price of many commodities, by increasing that part of 
 it which resolves itself into wages, and thus tends to 
 diminish their consumption both at home and abroad. 
 The same cause which raises the wages of labour, tends 
 to increase its productive powers. The owner of stock 
 endeavours to make such a division of employment as 
 shall produce the greatest quantity of work. For the 
 same reason he supplies his workmen with machinery : 
 and what takes place in a particular work-shop, takea 
 place in society. The greater the number of labourers, 
 the more they divide themselves into different classes 
 of employment. Hence commodities are produced by 
 so much less labour, that the increase of its price is 
 more than compensated by the dirainutioa of its quan- 
 tity. P. 132.
 
 ( 45 ) 
 CHAP. IX. 
 
 Of the Profits of Stock. 
 
 The rise and fall in the profits of stock depend like- 
 wise upon the increasing or declining state of wealih of 
 the society. An increase of stock raises wages, but 
 tends to lower profit. The stocks of several persons 
 being turned into the same trade, produce competition, 
 which tends to sink the profit ; the same holds in society 
 at large. P. 133. 
 
 Profit is so fluctuating, and depends upon so many 
 circumstances as to make it very difficult, almost im- 
 possible^io ascertain its rate even for a single year. The 
 best notion of the profits of stocks may be formed from 
 the interest of money. Where! much can be made by 
 money, much will be given for the use of it. P. 134. 
 
 In the reigns of Henry VIII. and Elizabeth, 10. pet 
 cent, was legal interest; By the 21 oi James I. it was re- 
 stricted to 8 per cent. After the restoration it was re* 
 duced to 6 per cent; and by the 12 of Anne to 5 per 
 cent. These regulationsyb//offi>o? the market rate of in- 
 terest. Since which, interest has been 3|> 4, and 4f> 
 per cent. From the time of Henry VI f I. the wealth of 
 the country has been advancing, the wages of labour 
 increasing, and the profits of stock diminishing. P. 135. 
 
 Trade in a large town requires more stock, than in a 
 village; but owing to the number of competitors, the 
 profits are less, and wages of labour higher. P. 136. 
 
 In Scotland, though the legal rate of interest is the 
 same as in England, the market rate is higher. Trade 
 Can be carried on with smaller stock, and the wages o_f 
 
 F
 
 labour are lower ; the rate of profit therefore must be 
 greater. The country is not only poorer, but is not ad- 
 vancing so fast to a better condition. P. 137. 
 
 The market rate of interest is higher in France than 
 in England ; the profits of trade are greater there, than 
 here, the wages of labour lower, and the condition of 
 the lower people much worse. P. 139- 
 
 Holland in proportion to its extent is a richer coun- 
 try than England; the rate of interest is much lower, 
 the wages of labour higher, and they trade upon lower 
 profits than any people in Europe. The diminution of 
 profits is the natural effect of prosperity, or of a greater 
 stock being employed. The great property which the 
 Dutch possess in the French and English Funds, the 
 sums they lend to private people in countries where in- 
 terest is higher, denote that their stock has increased 
 beyond what they can profitably employ in trade.P. 139- 
 
 In America the wages of labour, the interest of mo- 
 ney, and the profits of stock are higher than in En- 
 gland. High wages, and great profits seldom go toge- 
 ther, except in new colonies. In a new colony there la 
 more land than stock. The most fertile only is cultiva- 
 ted, and that is often purchased at a price below the va- 
 lue of its natural produce; stock thus employed will 
 yield a large profit, afford to pay a large interest, and 
 enable the planter to reward his labourers liberally. 
 P. 140. 
 
 As the colony increases, the profits diminish. Infe- 
 rior parts come under cultivation, which yield less pro- 
 fit; but the demand for labour, consequently the wages 
 increase, with the increase of stock. A great stock with 
 email profits, increases faster than the small stock with 
 great profits. Money makes money. P. 141.
 
 ( 47 ) 
 
 The acquisition of new territory, or of new branches 
 of trade, may raise the profits of stock, and with them 
 the interest of money, even in a country fast advancing 
 to riches. The accession of territory and trade to this 
 country caused the rate of interest to be raised nearly 
 1 per cent, the old stock not being sufficient to cany oa 
 the new business. P. 142, 
 
 The diminution of the capital stock of the society, 
 lowers the wages of labour, but raises the profits, and 
 interest of money. In the East Indies the wages of la- 
 bour are low, while the profits are immense; 40, 50, and 
 even 60 per cent, is frequently given for money there. 
 Such was the case in the provinces belonging to Rome, 
 before the fall of the republic. Brutfus is said to have re- 
 ceived 48 per cent, interest in Cypius. P. 143. 
 
 In a country which had acquired its full complement 
 of riches, wages and profits would be low. For being 
 fully peopled, there would be no competition for labour- 
 ers : and being stocked in full proportion to the busi- 
 ness, the competition would be as great, consequently 
 the profits as Ipw as possible. 
 
 China seems to have been long stationary, owing 
 more to its peculiar laws, than to the nature of its cli~ 
 mate and situation. There the rich only enjoy protec- 
 tion, while the poor have no security. Hence the rich 
 have a monopoly of trade, make large profits, and are 
 said to give 12 per cent, interest. P. 144. 
 
 A defect in the law may sometimes raise the rate of 
 interest. As when the law does not inforce the perfor- 
 mance of contracts, the lender will require interest pro* 
 portional to the risque of losing the principal : or when 
 the law prohibits interest,its rate must be suitable to liie
 
 ( 48 ) 
 
 danger of evading the law. Hence the high rate of in- 
 terest a nong the Mahometants. P. 145. 
 
 The lowest rate of profit, must be more than sufficient 
 to compensate the losses to which the employment of 
 stock is exposed. The lowest rate of interest must more 
 than compensate the occasional losses to which lending 
 is exposed. P. 146. 
 
 In a country where there was accumulated the great- 
 est quantity of stock that could be employed, interest 
 must be so low, that none but very rich persons could 
 live on it. Hence almost every man musi engage in 
 business. Holland is approaching to this state. P. 147. 
 
 The highest ordinary rate of profit, may be only suf- 
 ficient to pay the labour of preparing and bringing to 
 market; for the workman must be supported while he 
 is about his work, but the landlord may not always be 
 paid; such may be the tate of things in Bengal. P. 147. 
 
 The market rate of interest ought to vary, as profit 
 varies. In Great Britain double interest is reckoned 
 good profit among merchants. Where the usual clear 
 profit is 8 or 10 per cent, one half may go for interest of 
 money ; but if it was much lower, one half could not be 
 afforded; and if the profits were much higher, more 
 might be allowed for interest. P. 148. 
 
 In countries advancing to riches, the low rate of pro- 
 fit may compensate the high wages of labour. High 
 profits tend more to raise the price of work, than high 
 wages. In the former case the price is advanced in geo~ 
 metrical proportion, but in the latter only in arithine,* 
 tical proportion.
 
 ( 49 > 
 
 CHAP. X. 
 
 Of the wages and profit in the different employments of 
 Labour and -Stock. 
 
 THE advantages and disadvantages of different em- 
 ployments, in the same neighbourhood, must be equal, 
 pr tending to equality; for if there were any employ- 
 ment more qr less advantageous than the rest, so many 
 people would croud into it in the one ease, and so many 
 would desert it in the otfyei, as would soon bring it to 
 the level of other employments. This must be the case 
 in a society where things are left to follow their natural 
 course. 
 
 Pecuniary wages and profits are, in Europe, different 
 in different employments ; which arises partly from cer- 
 tain circumstances in the employments ; and partly 
 from the policy of Europe, which no where leaves 
 tilings at perfect liberty. P. 151. 
 
 PART I f 
 
 Inequalities arising from the nature of the employment 
 themselves. 
 
 I. The wages of labour vary with the agreeablenesi 
 pr disagreeableness of the employments themselves. A 
 journeyman taylor earns less then a collier. His work 
 is not so dirty, is less dangerous, is carried on in day- 
 light and above ground. Honour makes a great part of 
 the reward of all honourable professions : Disgrace has 
 the contrary effect. In the advanced state of
 
 < 50 ) 
 
 none but very poor people follow, as a trade, what 
 others pursue as a pastime. This may be illustrated in 
 the case of fishermen, and poachers; and where nopoa* 
 chers exist, the licensed hunter is not in a much better 
 condition. The natural taste for those employments 
 makes more people follow theraf than can live comfort- 
 ably by them. The same circumstances affect the^ro- 
 fas of stock : Inn-keeping is neither agreealle,. nor very 
 creditable; but few common trades are so profitable. 
 P. 152. 
 
 II. The wages of labour vary with the ease, or diffi- 
 culty of learning the business The work which a man 
 learns to perform must, besides the wages of labour, re- 
 place the expences of his education ; and this too in a 
 reasonable time. Hence the difference in the wages of 
 mechanics, and country labourers : the labour of the 
 former is supposed to be of a more delicate nature than 
 that of the latter. The exercise of the one must be 
 through an expensive apprenticeship ; the other is open 
 to every body, and the labourer besides is able to main- 
 tain himself through all the stages of his employment. 
 Perhaps however the superiority of the mechanic is not 
 greater than what will compensate the superiorexpence 
 of his education. In the arts, and liberal professions, 
 education is still more expensive; the recompence ought 
 therefore to be more liberal. In this case the projits of 
 stock are very little affected, because all the different 
 ways of employing stock seem equally $ asy to learn. 
 P. 154. 
 
 III. The wages of labour vary with the constancy or 
 inconstancy of employment. 
 
 In manufactures, a journeyman may generally de- 
 pend on constant employment. The bricklayer is fre- 
 quently without any, and liable to interruptions by bad
 
 ( 51 ) 
 
 Weather. He must on that account earn sufficient to 
 maintain him while he is idle, as well as when he works. 
 Accordingly in most places his wages are better than 
 those of manufacturers ; yet no labour seems more easy 
 to learn. 
 
 When inconstancy of employment is combined with 
 hardship, disagreeableness, and dirtiness of work, it 
 raises the wages of common labour above those of the 
 most skilful artificers. A collier at Newcastle will earn 
 double or three times the wages of common labour, 
 though his employment may be constant But the bu- 
 siness of a coal heaver being necessarily inconstant, he 
 will earn much more. The constancy of employment 
 does not affect the profits of stocks The employment 
 of stock depends not upon the trade but the trader. 
 P. 1579- 
 
 t V. The wages of labour vary according to the trust 
 reposed in the workmen. 
 
 The wages of goldsmiths and jewellers, are superior 
 to those of other trades requiring more ingenuity. Con- 
 fidence cannot be reposed in people of very mean con- 
 dition. Their reward must therefore be in proportion 
 to the rank they hold in society. When a person em- 
 ploys his own stock in trade there is no trust, conse- 
 quently the rates ot profit do not arise from the degree 
 t>f trust reposed in the trader. P. 160. 
 
 V. The wages of labour vary according to the proba- 
 bility of success. 
 
 The degrees of probability of success, are different, 
 in different employments. In mechanic trades, success 
 is almost certain ; but ver> uncertain in the liberal pro- 
 fessions. In the studv of the law, it is twenty to one if 
 a youth succeeds so as to live by his business. The one 
 which does succeed, ought therefore to gain ail that the
 
 ( 52 ) 
 
 unsuccessful twenty should have gained. Counsellors 
 fees never equal this. Compute in any place the an- 
 nual gainings and spendings of a common trade, the for- 
 mer will be found to exceed the latter ; but make the 
 same computation with regard to counsellors and 
 students of the law, and you will find, that the gains 
 bear but a small proportion to the expences. These pro- 
 fessions keep their level, from (1) the desire of reputa- 
 tion which attends upon superior excellence : and 
 (2) from the confidence which men have in their own 
 abilities, and good fortune. To those who excel in any 
 profession, public admiration makes a part of their re- 
 ward; in the profession of physic it makes a part ; a 
 greater in that of law ; and almost the whole, in poetry 
 and philosophy. P. l6l. 3. 
 
 The exercise of some agreeable talents, for gam, is 
 reckoned discreditable ; the recompence in this case 
 must be in proportion to the discredit which attaches to 
 the employment. Hence, the rewards of players, opera 
 singers, &c. Should the public opinion alter, with re- 
 gard to the occupations, the recompence would dimi- 
 nish, as numbers would apply to them, and the compe- 
 tition would reduce the price of their labour. P. 163. 
 
 The conceit which men have of their own abilities, 
 is not greater than their presumption in their own good 
 fortune. To this may be ascribed the universal success 
 of lotteries. A small sum is paid in hopes ot gaining a 
 great prize ; though that small sum is perhaps thirty or 
 forty percent, more than the chance is worth. In all 
 lotteries, the more tickets you adventure upon, the more 
 likely you are to be a loser. P. 164. 
 
 That the chance of loss is under-valued, may be learnt 
 from the small profits of insurers, either from fire, or 
 .sea-risk, few of whom have made great fortunes. Mo-
 
 ( 53 ) 
 
 derate as the premium of insurance is, few people, in 
 comparison, care to pay it. P. 165. 
 
 This presumption in good fortune, is strongest in 
 young persons; hence the readiness of the common peo- 
 ple to enlist for the army and navy. Romantic hopes 
 make the price of their blood, their pay being less than 
 that of common labourers, and their fatigues, in ac- 
 tual service/ much greater. The lottery of the sea is 
 really more advantageous, than that of -the army ; but 
 less so in common estimation. Where the great prizes 
 are less, the smaller ones must be more numerous. Sail- 
 ors accordingly have better chances of some fortune 
 and preferment than soldiers. Their gains, notwith- 
 standing the hardships and dangers-to which they are 
 exposed, are, all things considered, but little more than 
 equal to the wages of common labour. Danger, instead 
 of disheartening, frequently recommends the trade to 
 young people. Hazard, from which we may extricate 
 ourselves by courage, does not raise the wages of labour. 
 Tt is otherwise in unwholesome trades, in which cou- 
 rage and address can be of no avail. P. 166 9. 
 
 The rate of profits on stock varies according to the 
 certainty of the returns. These are more certain in 
 inland than in foreign trade. The rate of profit must 
 vary with the risk, though seldom in proportion to it. 
 Bankruptcies are most frequent, in hazardous trades; 
 which would not be the case, if the profit were pro- 
 portional to the hazard. P. 169. 
 
 Of the five circumstances which vary the wages of 
 labour, only the first and last affect the profits of stock. 
 Hence, the average rate of profit is more nearly on a 
 level, than the pecuniary wages of labour. The appa- 
 rent difference, in the profits of different trades is ge- 
 
 G
 
 ( 54 > 
 
 nerally a deception, for want of distinguishing between 
 wages and profit. The extravagant profit (as it is call- 
 ed) of an apothecary is frequently no more than the 
 reasonable wages of his labour. His reward must be 
 proportional to his skill and his trust ; though it arises 
 from the sale of his drugs. P. 170. 1. 
 
 A little grocer may make fifty per cent, on a small 
 stock, while a considerable merchant in the same town, 
 cannot make ten per cent. The trade of the former is 
 necessary for the place, and he must live by his trade, 
 and suitably to the qualifications it requires, which, in 
 fact, are little inferior to those necessary for the mer- 
 chant ; his profits, therefore, are really wages of labour, 
 aud not unreasonable. P. 172. 
 
 The difference between the profit of retail and whole- 
 sale trade, is less in large towns than in villages. Hence, 
 goods sold by retail are as cheap, or cheaper in the 
 capital, than in villages ; for when the prime cost is 
 the same, goods will be cheapest, where the least, profit 
 is charged on them. Though the profits of stock are 
 less in the capital than in the country, yet large for- 
 tunes are often acquired in the former, and very seldom 
 in the latter. In villages, trade cannot be extended as 
 stock extends; but this can always be done in the capi- 
 tal ; and the credit of a frugal, thriving man, extends 
 jaster than his stock. Great fortunes are the result of 
 a long life of industry. Sudden fortunes are sometimes 
 made by speculation, a trade which can be carried on 
 only in large towns. P. 173 5. 
 
 In order that thefive circumstances above mentioned, 
 may not occasion any inequalities in the rchole advan- 
 tages, or disadvantages of different employments., three 
 things are requisite.
 
 ( 55 > 
 
 I. The employments must have been long established: 
 for wages are higher in new than in old trades to in- 
 duce workmen to leave their original employments. 
 The former depends more upon fashion and fancy, than 
 the latter, and therefore the wages are likely to be 
 higher. New manufactures are speculations,which are 
 as likely to fail, as to succeed ; therefore where they 
 are successful, the profits are at first high ; but when 
 thoroughly established they come to the level of other 
 trades. P. 17 5 7. 
 
 II. This equality can take place only in the natural 
 state of employments. 
 
 The demand for labour, is sometimes greater and some- 
 times less than usual. In the one case", the advantages 
 rise above, and in the otfyer they fall below, the common 
 level : as in the time of war, merchants pay double, for 
 their sailors than in time of peace. On the contrary, in 
 a decaying manufacture, workmen are contented with 
 smaller wages than usual. The profits of stock vary 
 with the price of the commodities in which it is em- 
 ployed. The quantity of industry employed in produ- 
 cing commodities is regulated by the demand. In some 
 employments, the same quantity of industry will pro- 
 duce the same quantity of commodities ; as in the linen 
 and woollen manufactories. In them the variation of 
 price must be accidental. In other employments, as 
 the culture of corn, hops, &c. the same industry will, 
 in different years, produce different quantities of com- 
 modities; the price must, in such commodities, vary with 
 the demand, and also with the crop produced. 175 9. 
 
 III. This equality can take place only, in such as 
 are the principal employments of those who occupy 
 
 til GUI. 
 
 G 2
 
 A person subsisting by one employment, may be wil- 
 ling to dedicate his leisure to another, for less than is 
 suitable to the nature of the employment. The cotta- 
 gers in Scotland, are out servants to their landlords j 
 for whom they occasionally labour at very low wages. 
 The produce of such labour comes to market cheaper 
 than is suitable to its nature. Thus stockings are knit, 
 and linen spun, by labourers whose principal subsis- 
 tence depends on some other employment. Instances 
 pf this sort are to be found chiefly in poor countries. 
 An exception, perhaps, is the letting of ready furnished 
 lodgings in London, where a tradesman is obliged to 
 hire a whole house, and endeavours to pay part of the 
 rent by letting the two middle stories, expecting to 
 maintain Ills family by his trade. P. 179 83. 
 
 PART II. 
 
 Inequalities occasioned by the policy of Europe. 
 
 I. THE policy of Europe, renders the advantages of 
 different employments unequal, by restraining compe- 
 tition. This is effected by the privileges of corpora- 
 tions, which confine the trade to those who are free of 
 them. The bye laws of a corporation, regulate the 
 term of apprenticeship, and the number of apprentices 
 any master is allowed to have at one time. The lat- 
 ter restrains the competition directly, the former 2/1- 
 directly, by increasing the expence of education. 
 J. 1834. 
 
 Seven years seem to have been the usual term of ap? 
 prenticeship all over Europe. Incorporations and Unit
 
 ( 57 > 
 
 yersities were synonimous terms. The term of years, 
 which it was necessary to study to obtain a degree 
 of Master of Arts, appears to have been copied from 
 the term of apprenticeship in common trades. Seven 
 years were necessary to become a master or teache? 
 in both. 
 
 By the 5th of Elizabeth no person can exercise a 
 trade, unless he has previously served seven years ap- 
 prenticeship to it. This restriction has been construed 
 not to extend o villages. This statute affects only 
 those trades which were established in England before 
 the 5th of Elizabeth. The business of a coach -maker, 
 and the manufactures of Manchester, Birmingham, 
 and Wolverhampton^ are not within this statute. 
 P. 1846. 
 
 In Paris, a man must serve five years as an appren- 
 tice, and five years as a journeyman to be qualified to, 
 exercise a trade. In Scotland the term is very different, 
 indifferent corporations; three years is a common term 
 even in nice trades ; but in Scotland, the corporation 
 laws are less oppressive than in any part of Europe. 
 P. 187- 
 
 Every man's labour is his property; and this is the 
 most sacred of ajl property. To hinder a man from 
 working at what he thinks proper, or others from em- 
 ploying him, is a manifest encroachment on liberty. 
 The affected anxiety of the lawgiver is as impertinent 
 as it is oppressive. Long apprenticeships cannot pre- 
 vent bad work from being offered to sale. The ster- 
 ling mark pn plate is a much better security. P. 188. 
 
 I*ong apprenticeships are inimical to industry. The 
 sweets of labour consist in the recompence of labour ; 
 but this the apprentice does not enjoy. P. 18Q.
 
 ( 58 ) 
 
 Apprenticeships were unknown to the ancients;ther 
 is no Greek or Latin word that will convey the idea 
 which we annex to the term. P. 190. 
 
 Long apprenticeships are unnecessary. The arts of 
 a trade do not require a long course of instruction ; 
 the lessons of a few weeks, in most cases, may be suffi- 
 cient. Dexterily must be acquired by practice ; but a 
 youth would be more attentive if he were paid for his 
 labour, and were required to pay for the materials which 
 he spoiled. By this method, whether the master or ap- 
 prentice were in the end gainers, the public certainly 
 would reap the benefit. Corporations have prevented 
 that free competition which is so necessary to the re- 
 duction of the profits of traders. P. ipo. 1. 
 
 The government of towns corporate was in the hands 
 of traders, whose interest kept the market understocked, 
 which was of great advantage to them in their dealings 
 with the country. Every town draws its subsistence, 
 and the materials of its industry from, the country, 
 which it pays for : 
 
 I. By sending back part of the materials manufac- 
 tured : 
 
 II. By sending it part of the produce of other coun- 
 tries. In the gain on the first, consists the advantage 
 of its manufactures. In that of the second, the advan- 
 tage of its foreign trade. Wages and profits make up 
 the gain upon both : whatever regulations therefore 
 tend to increase these, give a manifest superiority to the 
 town over the county. P. 192 4. 
 
 That the industry oftowm is more advantageou?,than 
 that of the country, is evident from the many fortunes 
 acquired in towns, to one in the country. The inhabi- 
 tants of a town can easily combine, and prevent a free 
 competition even where there is no corporation. Trades
 
 which employ but a small number of hands, can do this 
 most easily. The inhabitants of the country are dis- 
 persed ; and an apprenticeship is not necessary toqua- 
 lify for husbandry, though few trades require more ex- 
 perience and knowledge; hence the many volumes writ- 
 ten on agriculture, whereas a mechanic trade may be 
 fully explained in a few pages. 
 
 The instruments of the mechanic are always the same, 
 while those of the farmer, such as horses, oxen, and ' 
 soil are different on different occasions. Agriculture 
 seems to require a greater variety of knowledge which 
 in general, renders the lower ranks in the country su- 
 perior to those of towns. P. 194 7. " 
 
 The high duties on foreign manufactures are also an 
 advantage to the industry of towns, where the inhabi- 
 tants can raise the price of their goods without dread of 
 competition. The enhancement of price in both, is fi- 
 nally paid by landlords, farmers and labourers, who 
 have seldom either opposed monopolies, or entered into 
 combinations themselves. P. 198. 
 
 In Great Britain the superiority of the industry of 
 Towns over that of the country was greater formerly 
 than now ; owing to the accumulation of more stock 
 in Towns than can be employed with advantage. The 
 surplus stock being brought into the country has created 
 a new demand for labour, and consequently raised its 
 wages. Improvements in agriculture have been owing 
 to the overflowings of stock accnmulated in Towns. 
 
 P. 199- 
 
 People of the same trade seldom meet together, even 
 for diversion, without contriving to raise prices/Though 
 the law cannot prevent such meetings, it ought not to 
 facilitate them. Public registers have this effect : so 
 also have regulations which enable the same trade to tax
 
 themselves in order to provide for the poor, sick, 8tc. 
 An incorporation makes the act of the majority hind- 
 ing on the whole ; whereas, in a fret trade, an effec- 
 tual combination requires the consent of every trader. 
 P. 200. 
 
 Corporations are not riecessary to the good govern- 
 ment of a trade. They often have a contrary effect; 
 hence in many incorporated towns good workmen are 
 not to be found. 
 
 II. The policy of Europe, renders the advantages 
 of d/fferent trades unequal, by increasing the competi- 
 tion in some employments beyond what it would na- 
 turally be. 
 
 In Christian countries the greater part of the clergy 
 are educated by public funds ; henee the church is 
 crowded with people, who, to get employment, ac- 
 cept of a smaller recorflpence than is suitable to their 
 education. The pay of a curate is of the same nature 
 as the wages of a journeyman. In the fourteenth cen- 
 tury 101. was the usual pay of a parish priest. But the 
 pay of a master mason was much ^superior, being a 
 shilling a day, and that of a journeyman ninepence. 
 Forty pounds a year, is reckoned at present good pay 
 fora curate ; many have less than 20l. There are few 
 industrious workmen who do not earn more. The law 
 has often attempted to longer the wages of zcorkmen ; 
 and to raise those of curates, but without effect. 
 P. l 2024. 
 
 Great benefices, and dignities ; and the respect 
 paid to the profession, make compensation for the mean- 
 ness of their pecuniary recompence. In professions in, 
 which there are no benefices, such as law and physic, 
 if an equal proportion of people were educated at the 
 public expence, the competition would be so great, ae
 
 to make'it worth no man's while to educate his son to 
 either of those professions at his own expence, since 
 practitioners imistbe contented with a miserable recom- 
 pence. Such is the situation of that race of men called 
 men of letters. P. 205. 
 
 Before the art of printing, a man of letters could 
 only benefit, by his talents, as a public or private teach- 
 er. The qualifications necessary for a teacher of the 
 sciences, are, at least, equal to those requisite for a law- 
 yer or physician, but his reward bears no proportion 
 to theirs. Before the invention of printing, licences 
 were granted to scholars lo beg. In^antient times be- 
 fore any charities had been established for the educa- 
 tion of indigent people, the rewards of teachers were 
 much more considerable. Isocrates appears to have 
 had upwards of SOOOl. for each course of lectures. 
 Gorgias, Plato, Aristotle and others, acquired great 
 wealth, by public and private teaching. This inequa- 
 lity may degrade the profession of a public teacher,but 
 the cheapness of literary education must be of advan- 
 tage to the public. P. 206 9. 
 
 III. The policy of Europe occasions inequalities in. 
 different trades by obstructing the free circulation of 
 labour und slock, both from employment to employ- 
 ment, and from place to place. 
 
 These are affected by the statute of apprenticeship, 
 
 and by the privileges of corporations. Whatever 
 
 obstructs the free chculation of labour from one em- 
 ployment to another, obstructs that of stock likewise. 
 Corporation laws are less injurious to the free circulation 
 of stock, than to that of laboui. P. 209 11. 
 
 The obstructions occasioned by corporation laws are 
 common to all Europe. Those occasioned by the poor 
 
 H
 
 ( 62 ) 
 
 laws are peculiar to England. They consist ih the 
 difficulty which a poor man finds in being allowed 
 to exercise his industry in any parish but his own. 
 P. 211. 
 
 6y the destruction of monasteries^ every parish be- 
 came bound by the 43d of Elizabeth, to provide for its 
 own poor. Hence a question arose who were to be 
 considered as the poor of each parish; this was deter- 
 mined by the 14th of Charles II. when it was enacted 
 that 40 days undisturbed residence should gain a per- 
 son a settlement in any parish ; during which time he 
 was liable to be removed by the magistrate. By the 
 1st of James II. this forty days was only accounted 
 fromthetime such person should deliver notice in wri- 
 ting of the place of his abode, and the number of his fa- 
 mily to a parish officer : and by the 3d of William III. 
 this notice was lobe published at church after divine 
 service. The design of these 1 acts was evidently to pre- 
 vent persons gaining settlements by the forty days no- 
 tice. P. 212. 13. 
 
 There are four other methodsof gaining a settlement: 
 (1.) By paying parish rates , (9.) By serving in a pa- 
 rish office for a year ; <,3.) By apprenticeship in the 
 parish; and (4.) By being hired for, and serving du- 
 ring a whole year in the parish. 
 
 The consent of the parish is necessary to obtain i 
 settlement by the two first ways ; and no married man 
 can well gain one by the two last. An apprentice is 
 seldom married ; and by law an hired married servant 
 gains no settlement. 
 
 A workman carry ing his industry to a new parish, is 
 liable to be removed, unless he rents a tenement to 
 the value of 101. per annum; or can give a security 

 
 ( 63 ) 
 
 of not less than SQl. for the discharge of the parish; 
 P. 214. 15. 
 
 By the 9th of Willliam III. .Certificates were fallen 
 upon : by these a person is not removeable only upon 
 his actually becoming chargeable ; and then the parish 
 granting the certificate must pay the expences of main- 
 tenance and removal. Hence it should seem that, 
 parishes will not grant certificates in ordinary cases ; 
 and a. poor man may, however inconvenient to him, be 
 compelled to remain all his life in the parish where he 
 has got a settlement. P. 216 18. 
 
 The unequal price of labour in places at no great 
 distance from each other js probably-owing to this law 
 of settlements. For the scarcity of hands in one parish 
 cannot be relieved by the super-abundance in another, 
 as it is iq other countries where there is no difficulty of 
 settlement. P. 218. 
 
 To remqve a man, who has committed no misdemea- 
 nor, from the parish where he chuses to live, is a viola- 
 tion of natural liberty and justice. Nevertheless this 
 grievance has never been the object of popular clamour, 
 though there are few poor people of 40 years of age 
 wljp have not suffered by it. P. 21Q. 
 
 Antiently, wages were rated by general laws, or by 
 particular orders of the Justices of peace : these prac- 
 tices, with good reason, are now laid aside. Particular 
 acts of parliament still regulate the wages of some trades, 
 as the taylprs. Whenever the legislature attempts to 
 regulate the differences between masters and their work- 
 men, its counsellors are the masters. When the regu- 
 lation is in favour of the workman it is always just ; but 
 sometimes otherwise when in favour of the masters. The 
 law which obliges masters to pay their workmen, in 
 
 H 2
 
 ( 64 ) 
 
 money, and not in goods is just. This is in favour of 
 the workmen. 
 
 Masters can combine to lower the rate of wages ; but 
 were workmen to enter into a contrary combination of 
 the same kind, the law would punish them severely ,,an4 
 if it dealt impartially it would treat the masters in the 
 same manner. P. 220. 1. 
 
 In ancient times, the price of provisions and other 
 goods was rated. The assize of bread is the last remnant 
 of this usage. Except in exclusive corporations, com- 
 petition will regulate this article better than any assize. 
 The want of- an assize occasioned no inconveniency in 
 Scotland. And the establishment of one has produced 
 no advantage. P. 222. 
 
 CHAP. XL 
 
 Of the rent of land. 
 
 RENT, is naturally the h-ighest which the tenant cafi( 
 afford to pay. Sometimes the liberality, or ignorance 
 of the landlord makes him accept less ; and sometimes 
 the ignorance of the tenant makes him undertake to 
 pay more ; or to content himself with less than the or- 
 dinary profits of farming stock in the neighbourhood. 
 P. 223. 
 
 The rent of land is frequently no more than a reason- 
 able profit for the stock, laid out by the landlord upon 
 its improvement. Improvements are often made by the 
 tenant, and, at the renewal of a lease, the landlord de- 
 mands the same augmentation of rent, as if they had
 
 ( 65 ) 
 
 been all his own. Rent, is sometimes demanded for 
 what is incapable of improvement ; of this kind are es- 
 tates bounded by kelp shores : and others in the Shet- 
 land islands, where part of the rent is paid in sea-fish. 
 The rent of land, is therefore, proportioned to what the 
 fanner can afford to give. P. 224. 
 
 The produce of land to be brought to market, must 
 be sufficient to replace the stock, together with its pro- 
 fits. If the price be more than this, the surplus will 
 go tp the rent of the land ; but if it is not more, it can . 
 afford no rent ; this depends on the demand. P. 22.5. 
 
 High and low wages, are the causes of the high and 
 low price of commodities, but rent is the effect of it. 
 P. 226 
 
 ' 
 
 PART I. 
 
 Of the produce, of land wfyich always ajfords Rent. 
 
 A S men multiply in proportion to the means of their 
 subsistence, food is always in demand, and can 
 always purchase such a quantity of labour, as it can, 
 maintain at a certain rate ; but land, in general, pro- 
 duces more food than is sufficient to maintain all the la- 
 bour to bring it to market; and to replace the stock with 
 its profits. Something therefore remains for rent. Such 
 are even the desart moors in Scotland. The rent in- 
 creases with the goodness of the pasture, as the same 
 extent will feed a greater number of cattle, and requires 
 less labour to tend them. P. 227- 8. 
 
 The rent of land varies with its fertility, and also with 
 its situation : that near a great town pays more than
 
 fliat in a distant country; owing to the expence of car- 
 riage, and the greater rate of profits in the country. 
 Good roads and canals, bring the remote parts of the 
 country more nearly to a level with those of the neigh- 
 bourhood of a town. P. 228. 
 
 A corn field produces more foqd for man, than the 
 best pasture. Its cultivation requires more labour, but 
 not in proportion to its produce. The relative values of 
 tread and meat, vary in the different periods of agri- 
 culture. In the early periods, unimproved lands are all 
 abandoned to cattle; there, meat is cheaper than bread: 
 the former cost little more than the labour of catch- 
 ing; but corn cannot be raised without much labour. 
 In cultivated countries, butchers' meat is dearer than 
 bread. In this state of society, cattle are bred upon 
 cultivated pastures, which raise not only t|ie price qf 
 those cattle, but of others bred upon uncultivated moors^ 
 which in proportion to their weight are equally good, 
 Thus the rent and profit of unimproved pasture, is regu- 
 lated in some measure by the r,ent and profit of what is 
 improved, and this by the rent and profit upon corn. 
 Corn is an annual crop ; butchers.' meat the growth of 
 of several years : the inferiority of the quantity, must 
 be compensated by the price, There are, however, si- 
 tuations where the ren,t and profits of grass aie. superior 
 to what can be made of corn, owing to. the great de- 
 mand for milk, hay,and butchers^ meat, as in the neigh- 
 bourhood of a great town. Whole districts, may, by 
 their population, be thus circumstanced, a* Holland is 
 at present, and antient Italy was in its prosperity. Ik 
 may also be the case of a well enclosed piece of grass in 
 a country, whose principal produce is corn. P.229 34. 
 But where there is no local advantage, the rent and 
 piofit of corn, the common vegetable food of the peo-
 
 ( 67 j 
 
 pie, must regulate the rent and profit of pasture. The 
 use of turnips, &c. in feeding of cattle, seems to have 
 reduced the price of butchers' meat in proportion to 
 the price of bread, since the beginningof the last cen- 
 tury. In 1612 it appears, that the choice pieces of 
 keef were sold at 4 or 5d. per Ib. But in 1764 there 
 was a parliamentary enquiry into the reasons of the 
 high piiceofmeat, when itwas given in evidence that 
 the best pieces of beef were 4d. and 4|d. per Ib. being 
 one halfpenny dearer than had been the usual price. 
 Now in the twelve first years of the last century, wheat 
 WasTl. IBs. 3*d. the quarter ; and in the twelve years 
 preceding, 1764, it was 2l. ls.9|d.the'quarter. P. 235. 6. 
 
 The greater part of cultivated lands is employed in 
 producing food for men or cattle. The rent and profit 
 of these, regulate the rent and profit of other cultivated 
 land. In gardens of hops or fruit, the rent and profits 
 are greater than in a grass or corn field ; but they re- 
 quire more expence and skill to bring them into condi- 
 tion. The crop in the hop or fruit garden, is more pre- 
 carious; the price therefore must afford the profit of in- 
 iurance. In antient husbandry, the vineyard was rec- 
 koned the'most profitable, and next to that, a well wa- 
 tered kitchen garden. Democritus, thought the latter 
 would not pay the expence of a wall ; and Columella, 
 on that account, recommends a hedge of briars. In 
 northern countries, a wall is indispensably necessary 
 for the finer fruits. Their price must be sufficient to pay 
 the expences of* the wall. I*. 237 $. 
 
 Writers on agriculture now, as well as the antients, 
 consider the vineyard as the most profitable part of a 
 farm. The disputes on the subject prove, that the su- 
 periority is not very great. In 173 1, the planting of 
 vineyards was prohibited in France, under thejprc-
 
 tenet of a scarcity of corn, and the superabundant of 
 wine. If the superabundance had been real, a reduc- 
 tion on the profits won Id have made the prohibition use- 
 less. That vineyards have not occasioned any scarcity 
 of corn, is certain, from the care with which corn is 
 cultivated in the wine provinces. P. 239 41. 
 
 Sometimes the quantity of land fitted for some parti- 
 cular produce, is too small to supply the effectual de- 
 mand. In this case, the profits will bear no proportion 
 to those of corn, the excess of which naturally goes to 
 yent. The vine is more affected by the difference of 
 foil, than any other fruit tree ; from Some it derives a 
 flavour which no culture can equal upon any other. 
 This flavour is sometimes peculiar to a few vineyards, 
 and sometimes to a whole district. The quantity of 
 such wine falls short of the effectual demand, and com- 
 petition for it raises the price above common wines. 
 P. 242.3. 
 
 The produce of the sugar colonies in the West Indies 
 falls short of the effectual demand of Europe. In Co- 
 chin-china the finest white sugar is sold for about eight 
 shillings the Cwt. There the greater part of the land is 
 employed in producing corn, and rice, the food of the 
 people ; consequently the prices of corn, rice, and su- 
 gar, are in the natural proportion : but in our sugar 
 colonies, the price of sugar bears no such proportion to 
 that of the produce of a corn field in Europe. The su- 
 gar planter h is said expects the rum and molasses to 
 defray the expence of cultivation, and that the sugar 
 should be clear profit. P. 244. 
 
 In Virginia and Maryland the cultivation of tobacco 
 is preferred to that of corn. The cultivation of tobacco 
 being absurdly prohibited in Europe, a sort of mono- 
 poly is given to the countries where it is allowed.
 
 ( 69 ) 
 
 Though the Cultivation of tobacco does hot seem so ad- 
 vantageous as that of sugar, yet from the preference 
 given to the cultivation of tobacco, to that of corn, the 
 tfftctudl demand of Europe does not seem to be com- 
 pletely supplied. From the restrictions laid upon the 
 planters, and from other methods taken to keep up the 
 price, the superior advantage of its culture over that 
 of corn will not probably be of long continuance^ 
 P. 245. 6. 
 
 Thus the rent of the cultivated land, the produce of 
 which is human food, regulates the rent of the other 
 cultivated land. The rent of corn land regulates in Eu- 
 rope that of all other cultivated land. P. 247. 
 
 If in any country the common vegetable food of the 
 people should be drawn from a plant, of which common 
 land with the same culture, would produce a greater 
 quantity than the most fertile does of corn, the real 
 rent of the landlord would be greater. 
 
 A rice field produces more food than a corn field, so 
 that even in Carolina, where rice is not the common 
 vegetable food of the people, and where their fields 
 produce but one crop in a year, it is reckoned more pro- 
 fitable than corn. A good rice field is a bog, unfit for 
 other vegetable produce useful to men ; therefore the 
 rent of rice lands cannot regulate the rent of the other 
 cultivated land. P. 248. 
 
 The food produced by a field of potatoes, is not infe- 
 rior in quantity to that produced by a field of rice, and 
 much superior to what is produced by a field of wheat ; 
 for after allowing for the watery nature of potatoes, the 
 produce of potatoes will be three times that of wheat. 
 They are cultivated with less expence. Should they 
 ever become the common vegetable food of the people,
 
 ( 70 ) 
 
 the same quantity of cultivated land would maintain * 
 greater number of people, and a great share of the sur- 
 plus profit would go to the landlord. Land fit for pota- 
 toes, is fit for other useful vegetables ; if they occupied 
 the same proportion of land which corn does, they would 
 regulate the rent of the rest. No food seems more 
 nourishing than potatoes. The difficulty of preserving 
 them discourages their cultivation. P. 24951, 
 
 PART II. 
 
 Of the produce of land which sometimes does, and>sotn 
 times does not, afford rent. 
 
 HUMAN food is the only produce of land which al* 
 ways affords some rent to the landlord. After food, 
 clothing and lodging are the two great wants of man- 
 kind. Land in its rude state can afford the materials of 
 clothing and lodging to a much greater number of peo- 
 ple than it can feed. In its improved state, the case is 
 of ter reversed. P. 252. 
 
 The skins of animals were the original materials of 
 clothing ; consequently among shepherds and hunter* 
 every man provided himself clothing by providing 
 food. Withoutybreigw commerce the greater part of 
 the skins would be thrown away. Every nation, among 
 whom land property is established, has some foreign 
 commerce of this kind, which affords some rent to the 
 landlord. This is the case of the highland estates. la 
 old times the surplus wool of England found a market 
 in Flanders. P. 253.
 
 ( 71 ) 
 
 The materials of lodging cannot always be transports 
 ed to so great a distance as those of clothing, hence it 
 frequently happens that they are of no use to the land- 
 lord. A stqne quarry near London would afford consi- 
 derable rent, In many parls of Scotland and Wales it 
 affords none. Timber in a populous well cultivated 
 country affords considerable rent: in some parts of 
 North America the landlord would be obliged to any 
 body who would carry away the greater part of his large 
 trees : and in several parts of Scotland, the bark only 
 can be sent to market for want of roads and water car- 
 riage. In such cases the land affords not rent to the 
 landlord; unless by the demand of wealthier nations. 
 Paving the streets of London enables the owners of 
 some barren rocks of Scotland to draw a rent from what 
 afforded none before. The woods of Norway find a 
 market in Great Britain. P. 254. 
 
 Countries are populous only in proportion to the 
 number of people whom their produce can feed. When 
 food is provided it is easy to find clothing and lodging. 
 A house may be built in one day by one man. Clo- 
 thing requires but little more. But when by cultivation 
 of land, the labour of one family can provide food for 
 two, the labour of half the society becomes sufficient to 
 provide food for the whole* The rest may be employ- 
 ed in providing clothing, lodging, furniture, and equi- 
 page. The difference of the food of a rich man and 
 his poor neighbour, consists in the quality, not in the 
 quantity. But the difference between their clothing, 
 lodging, and furniture is as great in quantity, as it is in 
 quality. The desire of food is limited by the capacity 
 of the stomach ; but the desires of building, dress, equi- 
 page, #c. have no limit. The poor, to obtain food, 
 
 I 2
 
 exert themselves to-gratify the fancies of the rich. The 
 number of workmen increases with the increasing quan? 
 tity of food ; and the quantity of materials which they 
 Can work up increases in a greater proportion. Hence 
 Arises the demand for every sprt of material which hu 
 man invention can employ ; for fossils, minerals, pre 
 SJous metals, and precious stones. P. 255 7. 
 
 Food is, in this manner, the original source of rentv 
 There are other parts of the produce of land which 
 sometimes afford rent, but not always. Whether a coal~ 
 mine, can afford rent, depends upon its fertility, and 
 upon its situation. Some, well situated, cannot be wrought, 
 On, account of their barrenness. They afford neither 
 profit nor rent. Others would afford profit to thje under- 
 taker, but no rent ; these can be wrought only by the 
 landlord. Some sufficiently fertile cannot be wrought 
 for want of roads, or water carriage. P. 257 8. 
 :* s The expence of coals, must be somewhat less than 
 tthat of wood. The price of wood, like that of cattle, 
 varies with the state of agriculture. In the rude begin- 
 nings, wood is a mere incumbrance. As agriculture 
 advances, woods are partly cleared by tillage ; and part- 
 ly destroyed by cattle. The scarcity of wood affords to 
 the landlord, a rent, in some cases, equal to what can 
 be derived from corn or pasture. Upon the sea-coast, 
 where coals are easily obtained, it is sometimes cheaper 
 to bring timber from a foreign country than to raise it,, 
 Wherever the expence of a coal fire is nearly equal to 
 hat of a wood one, there the price of coals is as high 
 as it can be. Coals, in the coal countries, are much 
 "below this, or they would not bear the expence of car- 
 riage. The most fertile coal-mine, regulates the price 
 of coals, at all other mines in the neighbourhood. 
 P. 25961.
 
 73 >, 
 
 Rent, has generally a smaller share in the price of 
 coals, than in that of most other parts of the rude pro- 
 duce of land. The rent of an estate above ground, is 
 generally a third of its produce ; in coal mines, afifth is 
 great rent. Thirty years purchase is a moderate price 
 .of a landed estate j but ten years purchase is regarded 
 as a good price of a coal-mine. The value of a coal- 
 mine depends as much on its situation, as upon its ferti- 
 lity. That of a metallic mine depends more upon its 
 fertility, and less upon its situation ; metals separated 
 from the ore can bear the expence of long carriage. 
 Their market extends to the whole world. P, 262. 
 
 The productions of distant coal-mines, cannot be 
 brought in competition with one another ; but the pro- 
 ductions of the most distant metallic mines may ; conse- 
 quently the price of metals at the most fertile mines in 
 the world affect their price at every other. After the 
 discovery of the mines of Peru, the silver rnine&of Eu- 
 rope would not pay the expence of working. This was 
 the case of the mines of Peru, after the discovery of 
 those of Potosi. Hence, the greater part of mines can 
 afford little rent to the landlord. P. 263. 
 
 A sixth part of the produce, is the average rent of 
 the tin mines of Cornwall, and of the lead mines of 
 Scotland. In the silver mines of Peru, the proprietor 
 exacts only^ that the undertaker shall grind the ore 
 at his mill, paying the price of grinding. Till 1736, 
 the tax of the K' n S f Spain amounted to one fifth 
 which might be considered as the rent ; many mines 
 could not afford this tax. The tax upon cornish-tin is 
 l-20th ; this would be rent if tin was duty free. When 
 l-20th is added to l-6th, it will be found that the rent 
 pf the tin mines to that of silver, was as thirteen to 
 twelve. In 1736, the tax on silver was reduced to
 
 ( 74 ) 
 
 1-lOth; even this encourages smuggling, and the tax i* 
 ill paid, while that on tin being l-20th only,is well paid. 
 Kent, it seems is greater in the coarse, than in the pre- 
 cious metal. P. 264. 5. 
 
 The profit of the undertaker of the silver mines in 
 Peru, is very precarious. Mining is a lottery in which 
 the prizes do not compensate the blanks. By law, 
 every encouragement is given to the discovery and 
 working of new mines. To the supposed interests of 
 public revenue, the sacred rights of private property are 
 sacrificed, P. 266. 
 
 Similar encouragement is given to the discovery and 
 working of gold mines ; few persons are enriched by the 
 business. One twentieth is the whole rent paid by the 
 gold mines of Chili and Peru. Gold is more easily 
 smuggled than silver, both on account of its value, and 
 on account of the way in which nature produces it, 
 P. 267. 
 
 The lowest price at which the precious metals can be 
 told, must at least be sufficient tore-place the stock with 
 the ordinary profits. Their highest price, is determined 
 by the scarcity or plenty of those metals themselves, 
 and not by that of any other commoditj'; as the price of 
 coals, is by that of wood. P. 268. 
 
 The demand for those metals arises partly from their 
 utility, and partly from their beauty. Excepting iron, 
 they are more useful than any other metal. They are 
 the most cleanly of all metals. They are fit for orna- 
 ments of dress and furniture. Their beauty is enhanced 
 by their scarcity, especially by the rich, whose chief 
 enjoyment of riches consists in the parade of riches. 
 These qualities of utility, beauty, and scarcity, are the 
 original foundation of the high price of metals. This 
 ?alue was antecedent to their being employed as coin,
 
 ( 75 ) 
 
 and fitted them for that employment ; which employ- 
 ment has contributed to keep up and increase their 
 Value. P. 269. 
 
 The demand for precious stones arises altogether 
 frorri their beauty, which is greatly enhanced by their 
 Cdrcity. Wages and profit make up, almost the whole 
 of their high price ; orily the most fertile mines afford 
 rent. Since the price of precious metals and stones' is 
 regulated by their price at the most fertile mine, the 
 rent of a mine is in proportion to its relative fertility ,or 
 to its superiority over other mines. The discovery of 
 new mines might make those of Potosi not worth work- 
 ing. The most abundant mines of precious metals 
 could add little wealth to the world ; their value, being 
 derived from their scarcity, is degraded by abundance. 
 It is otherwise in estates above 'ground. The value of 
 their produce and rent, is in proportion to their abso* 
 lute fertility. The value of barren land is generally 
 increased by being in the neighbourhood of the most 
 fertile, as the great number of people maintained by 
 the fertile lands afford a market to the produce of the 
 barren. 
 
 Whatever increases the fertility of land in producing 
 food, increases not only its own value, but that of other 
 lands, by creating a new demand for their produce. 
 That abundance of food in consequence of the improve- 
 ment of land, is the great cause of the demand of pre- 
 cious metals &c. Food constitutes the principal part 
 of the riches of the world, and gives a value to many 
 other sorts of riches. P. 270 3.
 
 ( 76 y 
 
 PART III. 
 
 Of the variations in the proportion between the values 
 of that sort of produce which always affords Rent, and 
 of that rchich sometimes does, and sometimes docs not 
 afford Rent. 
 
 The increasing abundance of food,in consequence of 
 cultivation, increases the demand for the produce of 
 land which is not food. Itmignt therefore be expec- 
 ted, that there should be only one variation in the com- 
 parative values of those two different sorts of produce. 
 The value of that sort which sometimes does, and some- 
 times does not afford rent, should rise in proportion to 
 that which always afford* rent ; and this has generally 
 been the case. P. 273. 
 
 The value of a free-stone quarry increases, with the 
 improvement and population of the neigbourhood. 
 This is not necessafily the case with a silver mine. The 
 market for the one can extend but a few miles ; that 
 of the other extends over the whole known world. The 
 world in general must be advancing in improvement 
 and population to raise the value of silver ; and even in 
 that case a discovery of new mines may make the sup- 
 ply greater than the demand, and consequently the 
 value of the metal must fall. P. 274. 
 
 The great market for silver is the commercial and ci- 
 vilized world. (1.) If the demand should increase fas- 
 ter than the supply, the value of silver must rise in pro- 
 portion to that of corn. (2.) But if the supply of silver 
 be greater than the demand, the mouey price of corn 
 must become dearer. (3.) When the supply and de- 
 mand increases in the same proportion, the money price
 
 ( 77 ) 
 
 of corn must continue nearly the same. These three 
 exhaust all combinations of events which can happen 
 in the progress of improvement ; and during the four 
 centuries preceding the present, each has taken plaqe 
 in the European market. P. 275. 
 
 . 
 
 Digression concerning the variations in the value yf 
 silver, during the course of the four last centuries. 
 
 FIRST PERIOD. 
 
 ABOUT the year 1350, the average price of a quar- 
 ter of wheat was four ounces of silver, equal to about 
 twenty shillings of our money. By a statute of Edward 
 III. it appears, that the moderate price of a bushel of 
 wheat was half an ounce of silver. In 1309, it appears, 
 from an account given of a feast at Canterbury, that 
 wheat was twenty-one shillings and six-pence per quar- 
 ter. In 1262, a statute was revived, called the assize of 
 bread and ale, from which it should seem that wheat 
 was about the same price of twenty shillings per quar- 
 ter. P. 27680. 
 
 From the middle of the 14th century to the begin- 
 ning of the 16th, the price of wheat gradually sunk to 
 about 2 oz of silver or 10s. of our money ; for though 
 the nominal price continued, during this period, nearly 
 the same, yet the quantity of silver was continually di- 
 minishing. P. 280. 
 
 It was enacted in 143(5 that wheat might be exported 
 when the price was as low as 6s. 8d. and iu 1463 it was 
 
 K
 
 ( 78 ) 
 
 enacted that it should not be imported if the price was 
 not above 6s. 8d. the quarter, equal to about 13s. 4d. of 
 our money. By the 5th of Elizabeth the exportation, 
 of wheat was allowed only when wheat was higher than 
 10s. per Quarter. This, therefore, was probably the 
 moderate price of wheat in the beginning of Elizabeth's 
 reign. In France also, and probably in the greater 
 part of Europe, the average price of grain was less in 
 the beginning of the l6thCentury than in the two pre- 
 ceding centuries. P. 181. 
 
 This rise of silver, in proportion to that of corn, was 
 owing either to the increasing demand of the uietal j 
 or to the diminution of the supply. P. 282. 
 
 Some writers have supposed, that the value of silver 
 was continually diminishing from the conquest until 
 the discovery of the mines of America. In their ob- 
 servations upon the prices of corn, three circumstances 
 seem to have misled them. (1.) In antient times rent 
 was paid in kind, though at the option of the landlord 
 to receive it in kind, or money. The payment in kind, 
 exchanged for money was called the conversion price t 
 which the safety of the tenant required to be much be- 
 low the market price.(2.)They have been misled by the 
 tlownly manner in which antient statutes of assize had 
 been composed or transcribed; and (3.) By the very low 
 price at which wheat was occasionally sold in antient 
 tiines, supposing that if its lowest price was much 
 lower than in later times, its ordinary price must like- 
 wise have been lower : though it appears that in 1270 
 the quarter of wheat was sold for 19l.4s. of our money. 
 No price in the 15th and beginningof the 16th century 
 can be found approaching to this. P. 284 8. 
 
 Fleetwood collected the prices of wheat from 1202 
 le 1597, and reduced them to the money of the ^resent
 
 ( 79 ) 
 
 times. He was able to collect the prices of 80 yeart 
 From these it appears that the average price 
 
 The average prices of wheat inferted by Dr. Smith at the end of 
 the chapter will be introduced here. P. 398 406. 
 
 The average price of the 1202. 1205. 1223.} 
 quarter of wheat, in money j) 1 237. 1243. 1244.^ L. t. J. 
 of the prefent times for the j 1246. 1247. 1257. Q a 19 i$ 
 (1258. 1270. 1286.) 
 
 (1287. 1288. 1289.} 
 for the years 5*' \*94- JJoaY , lg f 
 
 (>3'7- 1336. 1338.) 
 
 (339. 1349- '359-) 
 for the years I 1 * 6 '- ****' 1369. C , , ^ 
 
 (1401. 1407. 1416.} 
 (1423. 1425. 1434.) 
 
 for the years J'W- J 9- W-C , , ,4 
 
 }i444- 1445- ^447- C 
 C'448- 1449. 145I.J 
 
 for the ytais ^W g- W-t .,. , 
 
 ^1464. 1486. 1491.^ 
 
 CM94- '495- J497-) 
 
 ^1498. 1504. 1521.^ 
 ftr the years 3j** i; J55|- 554-C I0 | 
 
 Ci5$8. I5S9- iS 60 -^ 
 
 rr$6i. 1562. 1574.) 
 for th. years >gj' J^; J^K ,. ,. rf 
 
 (1599.. t6cx3. 1601..^ 
 
 Average prices of the quarter of 9 bushels of the best wheat at 
 Windfor market from 15.95 to 1764. 
 
 Average Price 
 From afi years from 1595 to i$.2O. ...... 2169-1$ 
 
 For 1 6 years from 1621 to 1686 * . . z 10 o 
 
 For 60 years from 1637 to 1700,") 
 
 (the account of the years 1642- > a n oi 
 
 3-4-j being omitted.) ) 
 
 For 64 years from 1701 to 1764 j , o 6^9-32 
 
 For 10 years from 17-31 to 1740 I 17 3 1-5 
 
 for loyear^froru 1741 to J7jo. ...,.. i 13 9 4-5 
 
 K 2
 
 ( 80 ) 
 
 efeach 12 years, from the beginning of the 13th till th 
 middle of the Ifith century,grows lower and lower; and 
 that towards the end of the iGth century it begins to 
 rise again. P. 289. 
 
 Writers have not inferred the great value of silver so 
 much from the cheapnessof corn, as of cattle, poultry, 
 game, &c. This cheapness was not the effect of the 
 high value of silver, but of the low value of those com- 
 modities. Silver is cheaper in Spanish America than 
 in Europe ; yet but a few years since, choice oxen werq 
 sold there for 21 pence each, and good horses for about 
 16s. sterling. P. 290. 1. 
 
 Labour, it must be remembered is the real measure of 
 the value of silver, and of all other commodities. In 
 countries thirfly inhabited, the supply of cattle is great- 
 er than the demand. 
 
 In different states of society such commodities will 
 be equivalent to very different quantities of labour ; but 
 corn, the produce of human industry, is always suited 
 to the consumption. Equal quantities of corn, will re- 
 quire equal labour to produce them. Corn, therefore, 
 will more nearly represent equal quantities of labour 
 than cattle ; and consequently will be a better measure 
 of the value of silver. Farther, since corn is the chief 
 sustenance of the labourer, it must be a better measure 
 of the value of labour, consequently of silver, than cat- 
 tle or butcher's meat. P. 292. 3. 
 
 Writers seem also to have been misled, by the popu- 
 lar, but groundless notion, that silver increases witli 
 the increase of wealth, \*ncj that its value diminishes 
 as its quantity increases. The quantity of precious 
 metals mav increase : (1.) From the increased abun- 
 dance of the mines. (2.) From the increased wealth of 
 the people, owing to the increased produce of their aa-
 
 t . ) 
 
 nual labour. The first cause is certainly connected 
 with the diminution of their value. But npt so in the 
 other case, since a greater quantity of coin becomes ne T 
 eessary to carry on trade ; and more plate is generally 
 required through mere ostentation. The price of gold 
 and silver is higher in a rich, than in a poor country, 
 and like every thing else it will seek the best market; 
 that is, where it is best paid for; which will always be in 
 proportion to the sustenance of the labourer. China 
 is richer than Europe, and sustenance much cheaper* 
 but the difference of the money price of labour is still 
 greater, because the real recompence of labour is high- 
 er in Europe than in China. The money price of la- 
 bour is lower in Scotland than in England, for the 
 same reason ; henoe, the emigrations from Scotland. 
 P. 2947. 
 
 Gold and silver are of little value in- poor countries. 
 Among savages they are of scarce any valae. In great 
 towns, corn is dearer than in rerqote parts of the 
 country, not because silver is cheaper, but because 
 corn is dearer, from the expence of carriage : thig 
 happens to some rich commercial countries, as Hol- 
 land and Genoa ; diminish the opulence of those 
 countries ; diminish their power of supplying them- 
 selves from distant countries; while the number of \n^ 
 habitants continues the same, and corn- will be still dear, 
 though silver should sink in its value. The want of 
 necessaries, makes people part with their .superfluities. 
 The increase of the quantities of the precious metals, 
 for the middle of the 14th, to the middle of the Ifth 
 ceniury, arose from the increase of wealth and improve- 
 ment, and had no tendency to diminish their value in 
 Europe. P. 2979.
 
 ( 82 ) 
 
 ; 
 
 SECOND PERIOD. 
 
 IT is certain that from 1570, to 1640, silver sunk in 
 its real value, and corn rose in its nominal price, being 
 sold for six and eight ounces of silver the quarter, in- 
 stead of two Qimces. The sole cause of this diminution 
 of value, seems to have been the discovery of the mine* 
 of America, the effect of which was not perceived till 
 after 1570, though the mines of Potosi had been dis- 
 Covered twenty years before. J*. 299 301* 
 
 THIRD PERIOD. 
 
 THE value of silver seems never to have sunk lower 
 in proportion to that of corn, than it was about the 
 year 1636. It has been somewhat higher in the pre- 
 sent century, and perhaps for some time before the 
 end of the last. From 1 637, to 1700, the average price 
 of nine bushels of corn was 2l. 1 Is. 0|d. only one shil- 
 ling dearer than during the sixteen years before. This 
 small rise may be easily accounted for, (without sup- 
 posing any reduction in the value of silver,) either (1.) 
 By the civil war, or (2.) By the bounty granted in 
 1688, upon the exportation of corn. A third event 
 must have increased the nominal price of corn, viz. the 
 debasement of the silver coin. This evil had begun in 
 the reign of Charles H, and had gone on increasing 
 till 1690, at which time, the current silver coin was 
 twenty-five per cent, below its standard value. At 
 present, the silver coin is very much defaced, yet its 
 value is kept up by the gold coin ; but in l6g5, agui-
 
 ( 83 ) 
 
 nea exchanged for thirty shillings of the worn silver. 
 P. 301^5. 
 
 In the sixty-four years of the present century, the 
 average price of nine bushels of wheat, was two pounds 
 and six-pence, about twenty-five per cent, cheaper 
 than it had been during the last sixty-four years of 
 the last century. Hence, the value of silver seems to 
 have risen in proportion to that of corn during the pre- 
 sent century. In 1688, the average price of wheat to 
 the grower was estimated, by Mr. Gregory King, to be 
 three shillings and six-pence the bushel. The growers' 
 price, is the same with what is called the contract price, 
 made by a farmer with a dealer, for a certain number/ 
 of years, which, as it saves trouble and expence, must 
 be somewhat lower than the market price. In this same 
 year, the bounty on exportation was granted, the 
 avowed object of which was, the encouragement of til- 
 lage, though in reality it was an expedient of the coun- 
 try gentlemen in parliament, to raise corn to the high 
 price which it had frequently been sold at in the times 
 of Charles I. and II. This bounty was to take place, 
 till wheat was so high as forty-eightshillings the quarter, 
 that is, twenty shillings dearer than what was then ac- 
 counted the average growers' price. 
 
 In years of great scarcity, the bounty has generally 
 been suspended ; it must however have hindered the 
 plenty of one year, from compensating the scarcity of 
 another. Perhaps without the bounty, the state of til- 
 lage would not have been the same. This rise in the 
 value of silver, to that of corn, has taken place in. 
 France, during the same period. But in France, 
 the exportation of grain was prohibited till 1764. 
 P. 3069. 
 
 This variation in the average money price of corn*
 
 ( 84 ) 
 
 is perhaps^ the effect of some gradual rise in the real 
 talue of silver in the European market. The high 
 price of corn during these ten or twelve years past, has 
 occasioned a. suspicion, that the real value of silver con- 
 tinues to foil. It ought rather to be imputed to unfa- 
 vourable seasons, and the disorders of Poland which 
 Ijave increased the scarcity in those countries, which 
 used to be supplied from that market. The low price 
 of corn from 1741, to 1750, may be set in opposition to 
 the high price during these last ten years.* The ope- 
 ration of the bounty which amounted in this period, to 
 1,514,9021. 17s. 4d|. must have hindered the price of 
 corn from falling sojowas it naturally would have done. 
 P. 30912. 
 
 The money price of labour, id Gre?t Britain, has 
 risen during the course of the present century ; but 
 this is the effect of the increasing demand for labour, 
 and not of any diminution of the value of silver. 
 P. 313. 
 
 For some time after the discovery of America, silver 
 would coptiijue to sell at its former price, and the pro- 
 fits would be very great. But it would soon be found 
 that the annual importation could not be disposed of ?t 
 this rate, consequently its price would gradually sink to 
 its 7i0/#ra price. The profits of the mines of Peru,are 
 DQW <js Ipw as they well caij be, consistently with carry- 
 jng on the works. The tax was originally y, then l-3d, 
 afterwards it fell to l-5th, and at last to 1 10th : it was 
 reduced tp l-5th, forty ,o#e years before 1545, the date 
 discovery of the mines of Jpotosj. Jn ninety 
 
 * The reader is referred to P. 71. where the account of thefie 
 ten years is separated from the rest. He will find also, that the 
 average of the ten preceding years is it/aw the general average of 
 *h sixty-tour first years pf the century.
 
 ( 85 ) 
 
 years, or before 1 73(), these mines had produced thek 
 full effect, in reducing the value of silver in Europe, as 
 low as it could fall. This price might have fallen lower* 
 and it might have been necessary to reduce the tax to 
 l-20th, or to give up working the greater part of the 
 mines. But since the discovery of America, the mar- 
 ket for silver has been growing more extensive. P. 014. 
 (1.) The market of Europe has become more exten- 
 sive. The whole of Europe, except Spain and Portu- 
 gal, has advanced considerably in agriculture and ma- 
 nufactures ; the increasing produce of which, must 
 have required an increase in the quantity of silver coin; 
 and the increasing number of wealthy individuals must 
 have required the like increase in the quantity of their 
 plate. P. 316. (2.) America is itself a new market 
 for the produce of its own silver mines ; and as its ad- 
 vances in agriculture, industry, and population, are 
 extremely rapid ; its demand for silver must also in- 
 crease rapidly. The United Stales of North America, 
 the English, Spanish, and Portuguese colonies, are al- 
 together new markets. Even Mexico and Peru, 
 though not new markets,are much more extensive than 
 they ever were before. P. 310 18. (3.) The East 
 Indies is another, and an increasing market for the pro- 
 duce of the silver mines of America. During the 16th 
 century, the Portuguese were the only European na- 
 tion, who traded to the East Indies. In the last cen- 
 tury, the trade was principally divided between that 
 nation, and the Dutch. The English and French 
 carried on some trade with India in the last century, 
 but it has been greatly augmented in the course of the 
 present ; and now the Swedes, Danes, and even Mus- 
 covites, trade thither. In the East Indies, the value of
 
 ( 86 ) 
 
 the precious metals, was, and still is, higher than in u- 
 rope. The abundance df food is much greater in India, 
 than in Europe ; and accordingly much more popu- 
 Jous. Their superabundance of food enables them to 
 give a greater quantity of it, for the precious metals, 
 and precious stones. The mines which supplied the 
 Indian market with the former, have been less abun- 
 dant, and those which supplied it with the latter more 
 so, than the mines which supplied the European. The 
 precious metals, therefore, would exchange for a grea- 
 ter quantity of the precious stones, and a much greater 
 quantity of food than in Europe. Both the rtal, 
 and the money price of labour, are lower in India than 
 in Europe. But the money price of manufactures, will 
 be in proportion to the money price of labour; there- 
 fore manufactures will be lower in India than inEurope. 
 The extent of the inland navigation in India, tends far- 
 ther to reduce the price of their manufactures. Hence, 
 it appears, that the precious metals are extremely ad- 
 vantageous, to carry from Europe to India. Silver is 
 more advantageous than gold ; since the proportion 
 between them in India, is only as ten or twelve to one ; 
 whereas in Europe, it is as fourteen or fifteen to one. 
 P. 31903. 
 
 The silver brought from the mines, must not only be 
 sufficient to support the increase of coin and of plate ; 
 but to repair the waste and consumption which takes 
 place in all countries where that metal is used. The 
 consumption in coin by wearing, and in plate by wear- 
 ing and cleaning, is very sensible. In some manufac- 
 tures, it is also considerable ; in those of Birmingham, 
 the quantity of gold and silver, used in plating and 
 gilding, is said to amount to 50,0001. annually. A 
 great deal must be lost, in transporting those metals 
 from one place to another ; and in arbitrary govern-
 
 ( 87 ) 
 
 ments, much is lost by concealing it in the earth. 
 P. 324. 
 
 The quantity of gold and silver imported into Spain 
 and Portugal, is about six millions sterling a year ; but 
 this, is not equal to the whole annual produce of the 
 mines of America ; some part is sent to Manilla, and 
 som,e part is employed in a contraband trade. The 
 greater part of their produce is annually imported into 
 Cadiz and Lisbon ; the consumption of Birmingham 
 alone is equal to l-120lh part of this annual importa- 
 tion. Perhaps, therefore, the whole annual consump- 
 tion in all the countries pf the world, may be nearly 
 equal to the whole annual produce. The remainder 
 may be no more, or even less than sufficient to supply 
 the increasing demand of thriving countries; which 
 may have occasioned a small rise in the price of these 
 metals in the European market. P. 325 8. 
 
 The price of all metals varies less from year to year, 
 than any other part of the rude produce of land, and 
 this is owing to their durableness. Corn is soon con- 
 sumed, but iron may last two or three hundred years, 
 and silver or gold as many thousands. Different masses 
 of corn will be in proportion to the produce of different 
 years ; but the proportion between the masses of gold in 
 two different years, will not be much affected by any 
 difference in the produce of the gold mines. P. 328. 9. 
 
 Variations in the proportions between the respective 
 ^ values of gold and silver. 
 
 BEFORE the discovery of the mines of America, the 
 value of gold to silver, was about one to ten or twelve. 
 
 L 2
 
 ( 88 ) 
 
 About the middle of the last century, the proportions 
 were one to fourteen, or fifteen. Gold rose in hs nomi- 
 nal value, and both metals sunk in their real value. 
 The proportion between the quantities of gold and sil- 
 ver, annually imported into Europe, is as one, to twen- 
 ty-two nearly. The exportation of silver to the East 
 Indies, reduces the quantities which remain, to the pro- 
 portion of one to fourteen or fifteen, the proportion of 
 their values. Mr. Meggens supposes that the proportion 
 between their values, must be the same as between their 
 quantities. This is not necessarily the case with respect 
 to other commodities. The whole quantity of a cheap 
 commodity brought to market, is not only greater, but 
 of greater value than the whole quantity of a dear one. 
 This is the case with brtad, compared with butchers' 
 meat ; or butchers' meat, compared with poultry. In 
 comparing the precious metals, silver is a cheap, and 
 gold a dear commodity; therefore the whole quantity 
 of silver in the market, should be of greater value than 
 the whole quantity of gold. A person possessing a little 
 of both, will find the value of his silver plate exceed 
 that of his gold ; and in most countries, except Great 
 Britain, the value of the silver coin exceeds that of the 
 gold. P. 3303. 
 
 In one' sense, perhaps gold is the cheaper metal, as it 
 seems nearer than silver to its Idicest price, for which it 
 can be brought to market. The tax of the former, is 
 only l-20th, and that of the latter is l-10th ; in these 
 taxes consist the rent. The profits on gold mines, are 
 less than those upon silver mines. Gold, therefore, af- 
 fording less profit, and less rent, is probably nearer to 
 its lowest price than silver. The price of diamonds, and 
 other precious stones, may -be still nearer to the lopvest 
 price. P. 333 3.
 
 ( 89 ) 
 
 The working of silver mines becomes gradually more 
 expensive,on account of the depths at which the works 
 are carried on, the accumulated expence of drawing 
 out the water, and of supplying them with air. These 
 causes must; in time, (l.)lncrease the price of the me- 
 tal ; or (2-)The tax upon silver mu%t be diminished ; 
 or (3.)The increased expence must be compensated,part- 
 lyiby the one,and partly by the other of theseexpedients. 
 Such reductions of the tax retard the rise of the value of 
 silver, since many mines may be wrought, which could 
 not be wrought beforehand consequently the market will 
 be better supplied. Notwithstanding this reduction, the 
 value of silver seemsto have risen a little in the course of 
 the present century; though some persons think the con- 
 trary. There must, however, be a period when the an* 
 nual consumption of those metals will be equal to the 
 annual importation. If then the importation gradually 
 diminish, the consumption may exceed the importation, 
 and their value rises. P. 335 8 f 
 
 Grounds of the suspicion that the value of silver still 
 continues to decrease. 
 
 (1.) The nation, that as the quantity of the precious 
 metals increases, wilh the increase of wealth, so their 
 value diminishes, may dispose many people to suppose 
 their value continues to fall in the European market. 
 And (2.)The increasing price of many parts of the rude 
 produce of land, confirms them in this opinion : but 
 gold and silver, like other luxuries, resort to the rich 
 country, not because they are cheaper there thanin poor
 
 ( 90 ) 
 
 countries, but because they are dearer. The same may 
 be said of cattle, game, poultry, &c. They naturally 
 grow dearer, as the society advances in wealth and im- 
 provement. It is not their nominal price only, but their 
 real price which rises in the progress of improvement. 
 T. 3389. 
 
 Different effects of the progress of improvement , vpon 
 three different sorts of rude produce. 
 
 FIRST SQRT. 
 
 THE first sort of rude produce of which the price 
 rises in the progress of improvement, is that which it is 
 scarcely in the power of human industry to multiply at 
 all. It consists in things which nature produces in cer- 
 tain quantities ; which are perishable; and which it is 
 impossible to accumulate for many seasons. Such are 
 rare birds, and fishes; most sorts of game, wild fowl, 
 and many other things. An increase of wealth and 
 luxury may, by increasing the demand, raise the price 
 of these things to any extent, but no human power 
 can increase the supply. Hence, the price paid by the 
 Romans in their greatest grandeur, for rare birds and 
 fishes.This was not the effect of the cheapness of silver, 
 but of the deafness of the rarities. P. 339 42. 
 
 SECOND SORT. 
 
 THE second sort of the rude produce, of which the 
 price rises in the progress of improvement, is that which
 
 ( 91 ) 
 
 hurnau industry can multiply in proportion to the de- 
 mand. It consists in those useful animals and plants 
 which, in uncultivated countries^ nature produces in 
 abundance. In the progress of improvement the quan- 
 tity diminishes, while the demand for them increases. 
 The real value gradually rises, till it gets so high as to 
 render them as profitable a produce as any thing else 
 raised by human industry. It cannot go higher. The 
 price of butchers' meat, consequently of cattle, must 
 rise till it is at this height, which happened in the neigh- 
 bourhood of London, about the beginning of the last 
 century. P. 3436. 
 
 Land cannot be completely cultivated before cattle 
 arrive at this price. In faims too distant from any town, 
 to carry manure from it, the quantity of well cultivated 
 land must be in proportion to the quantity of manure, 
 which will be in proportion to the stock of cattle main- 
 tained on it. Unless therefore the price of cattle be 
 sufficient to pay rent, and profit, of well cultivated 
 land, the farmer cannot afford to pasture them upon it, 
 much less can he afford to feed them in the stable. In 
 such circumstances he can feed no more cattle than what 
 are necessary for tillage ; but these will not afford ma- 
 nure sufficient for all the land they are capable of culti- 
 vating ; consequently a great part of the land must lie 
 almost waste. Such was the state of Scotland till the 
 union, in consequence of the low price of their cattle; 
 and in many parts of that country it now continues to 
 be so : owing (l.)To the poverty of the tenants,and their 
 not having had time to acquire stock : and (2.) To their 
 having not had time to put their lands in condition fit 
 to maintain a greater stock. Hence, the increase of 
 stock and the improvement of land, must go hand in 
 hand, P. 346 8.
 
 ( 92 ) 
 
 In all new colonies, the great quantities of waste land 
 applied to feeding cattle, soon renders them abundant 
 and cheap. But it must (for want of manure) be very 
 Jong before cattle can be fed on the produce of cultiva- 
 ted land. P. 349 50. 
 
 Of all the parts of this second sort of rude produce 
 cattle are ihejirst, which bring such a price as to render 
 it profitable to feed them on cultivated land ; for till 
 they bring it, land cannot be perfectly cultivated. Ven- 
 ison perhaps is the last, otherwise feeding of deer 
 would become an article of farming. Between that pe- 
 riod in the progress of improvement, which brings to 
 its height the price of cattle, and that which brings to 
 it the price of venison, there is a long interval, in the 
 course of which, many other sorts of rude produce will 
 arrive at their highest price : as poultry, which, at pre- 
 sent, are kept on the offals of the barn, and consequently 
 often as cheap as butchers' meat. As luxury increases, 
 the price of poultry rises above that of butchers' meat, 
 till it becomes profitable to cultivate land for the sake 
 of feeding them. P. 3513. 
 
 The hog, like poultry, is kept as a save-all. The rise 
 in the high price of hogs and poultry, has been im- 
 puted, and perhaps with justice, to the diminution of 
 the number of cottages ; an event, which has been the 
 forerunner of improvement and better cultivation.P.354. 
 
 The business of the dairy was also originally carried 
 on as a save-all. The cattle produce more milk than 
 can be consumed by their young, and by the farmer's 
 family. This is the most perishable of all the produc- 
 tions of land ; part of it is made into butter, which may 
 be stored for a year ; and part into cheese, which may 
 be kept for several years. Part of these the farmer re- 
 serves for his own family; the rest is sent to market. If
 
 ( 93 ) 
 
 the market price be very low, the business of the dairy 
 is performed in a slovenly manner The same causes 
 which raise the price of butchers' meat, raise that of 
 the produce of the dairy ; this increase of price will pay 
 for more labour and more cleanliness. At last, the price 
 gets so high, that it becomes worth while to employ 
 the best cultivated lands for the purposes of the dairy. 
 To this height it has got, in most parts of England, and 
 in some few parts of Scotland. P. 355 7. 
 
 Lands cannot be completely improved, till the price 
 of eve ry produce raised upon them, has got so high as 
 to pay for the expence of complete cultivation : that is, 
 (1 .) To pay the rent of good corn land : and (2.) To re- 
 place the stock imployed, with the ordinary profits. 
 This rise in the price of each produce, must be previ- 
 ous to the improvement of the land destined for raising 
 them. Gain is the end of improvement. If therefore 
 the improvement of a country be of public advantage, 
 th. j rise in the price of the different sorts of rude pro- 
 duce, must be a national benefit, instead of a public 
 Calamity. This rise too, in the money price of those 
 different sorts of rude produce, has not been the effect! 
 ef an} degradation in the value of silver, but of a rise in 
 their real price. P. 358. 
 
 THIRD SORT. 
 
 THE third and last sort of rude produce, of which 
 the price naturally rises in the progress oi improvement, 
 is that in which the cilicacyof human industry iu aug- 
 
 M
 
 ( 94 ) 
 
 meriting the quantity, is either limited or uncertain 1 * 
 There are some sorts of rude produce, which nature 
 has rendered a kind of appendages to other sorts, ag 
 wool and raw hides. The quantity of these is limited 
 by the number of great and small cattle ; these again 
 are determined by the state and nature of agriculture. 
 The same causes which raise the price of butchers' 
 meat, would also raise the price of wool and hides, if 
 in the rude beginnings- of improvement, the market for 
 the latter was confined within as narrow bounds as the 
 former. In most cases, the market for butchers' meat 
 is confined to the country which produces k^ This is 
 not the case with wool and raw hides. They can easily 
 be transported to a country which may have a demand 
 for them. In countries ill cultivated, the price of the 
 wool and the hide, bears a great proportion to that of 
 the whole beast. In Spanish America, horned cattle are 
 almost constantly killed for the sake of the hide and the 
 tallow. Therefore, though in- the progress of popula- 
 tion, the price of the whole beast rises, yet the price of 
 the carcase is likely to be much- more affected by this 
 rise, than that of the wool or the hide ; these however 
 ought to rise somewhat; they ought certainly not to fulL 
 P. 35962. 
 
 English wool has, however, fallen Very considerably 
 since the time of Edward III. The money price theiv 
 was to the money price now, as ten to seven : the supe- 
 riority of the real price was still greater. P. 363. 
 
 This degradation in the value of wool has been occa- 
 sioned : (1.) By the prohibition of exporting wool from 
 England : (2.) By the permission of importing it from 
 Spain duty free : (3.) By the prohibition of exporting 
 it from Ireland to any other country, but England. 
 P. 364. From the only account we have of the value
 
 ( 95 ) 
 
 of hides in antient times, it appears, that the real va- 
 lue of ox hides in 1425, were somewhat higher than 
 they are now. The price of raw hides is a good deal 
 lower at present, than it was a few years ago. The 
 average price of the present century being taken, the 
 real price has probably been somewhat higher than it 
 was in those antient times. P. 365. 6. 
 
 Whatever regulations tend to sink the price of wool, 
 or of raw hides, below what it naturally would be, must 
 in an improved and cultivated country, have some ten- 
 dency to raise the price of butchers' meat. The price 
 of cattle must be sufficient to pay the rent ; therefore, 
 whatever is not paid by the wool and the hides,mustbe 
 paid by the carcase. In unimproved and uncultivated 
 countries, it would be quite otherwise. The fall in the 
 price of the wool and the hide, must reduce the rent and 
 the profit; under such circumstances, the perpetual 
 prohibition of wool, would have been the most destruc- 
 tive regulation that could have been thoughtof.P.367 9 
 
 As the efficacy of human industry, in increasing the 
 quantity either of wool or hides, is limited so far as it 
 depends upon the produce of the country where it is 
 exerted, so it is uncertain, so far as it depends upon the 
 produce of other countries, and also upon what they do 
 not manufacture themselves. P. 369. 
 
 The quantity of fish, another sort of rude produce, 
 brought to market, is likewise limited and uncertain. 
 Jt is limited by the situation of the country ; its distance 
 from the sea ; and by the barrenness or fertility of those 
 seas, as to the sort of rude produce. Besides, as popu- 
 lation increases, the demand will become greater ; but 
 it will generally be impossible to supply an extended 
 market,, without employing a quantity of labout, greater 
 
 M 8
 
 ( 96 ) 
 
 than in proportion to what had been requisite for sup- 
 plying the confined one. The real price of thiscommo- 
 dity, rises in the progress or' improvement. Its uncer- 
 tainty depends also on the local situation of the coun- 
 try. P. 370. 1. 
 
 In increasing the quantity of minerals and metals, 
 which are drawn from the bowels of the earth, the effi- 
 cacy of human industry seems not to be limited, but to 
 be altogether uncertain. The quantity of precious me- 
 tals in any particular country, depends (1) upon the 
 power of purchasing ; and ^Q) upon the fertility of the 
 mines, which at that time supply the commercial world 
 with those metals. So far as their quantity depends on 
 the former, their real price is likely to rise with the 
 wealth and improvement of the country, and to fall 
 with its poverty and oppression. So far as their quantity 
 depends on the latter, their real price will sink in pro- 
 portion to the fertility, or rise in proportion to the bar- 
 renness of those mines. The state of the mines have no 
 connection with the industry of a country. No skill or 
 industry can insure the discovery of new mines. In the 
 search, there are no ceYtain limits either to the success, 
 or to the disappointment of human industry, It is of no 
 importance to the real wealth of the world, whether 
 new and fertile mines be discovered or not: the only 
 difference will be in the nominal value; the real value 
 of the annual produce of the land and labour, will be the 
 lame. P. 372 5.
 
 D7 ) 
 
 Conclusion of the digression concerning the variations in 
 the value of silver, 
 
 WRITERS have considered the low money price of 
 corn, or, in other words, the high value of gold and 
 silver in a country, as a proof of its poverty and barba* 
 rism. It is, however, only a proof of the barrenness of 
 the mines which happened at that time to supply the 
 world. A poor country cannot afford to pay dearer for 
 gold and silver than a rich one. In China, the value of 
 the precious metals is higher than in Europe ; yet 
 China is the richer country. The increase of gold and 
 silver in Europe, and the increase of its manufactures, 
 and agriculture,happened about the same time; the/or- 
 mer from the accidental discovery of new mines ; the 
 latter from the fall of the feudal system. Poland, where 
 the feudal system still continues, is as poor as it was be- 
 fore the discovery of America. The real value of the 
 precious metals has fallen in Poland, as in the richest 
 parts of Europe. Spain and Portugal, the countries 
 which possess the mines, and where these metals must 
 be the cheapest, are, after Poland, the two most beg- 
 garly countries in Europe. P. 375 7- 
 
 As the low value of gold and silver is no proof of the 
 Wealth of a country ; so neither is their high value any 
 proof of its poverty. Though the low money price of 
 corn be no proof of the poverty of the times, the low 
 money price of poultry, game, &c. in proportion to 
 that of corn, is a most decisive one. It shews : (l.)Their 
 great abundance in proportion to that of corn : and 
 (2.) The uncultivated state of the greater part of the 
 lauds of the country. P. 377 . 8.
 
 ( 08 ) 
 
 Any rise in the money price of goods, which pro- 
 Deeded from the degradation of the value of silver ,would 
 affect all sorts of goods equally. But the rise in the 
 price of provisions/loes not affect all sorts of provisions, 
 therefore it cannot be altogether owing to the degrada- 
 tion of the value of silver. The price of corn during 
 the sixty-four first years of this century, has been lower 
 than it was during the sixty r four last years of the pre- 
 ceding century. P. 379- 
 
 The rise in the price of some sorts of provisions,may 
 be owing, not to any degradation in the value of silver, 
 but to a rise in the real value of the land which pro-? 
 duces them, to its increased fertility, or in consequence 
 of extended cultivation, which indicates the advancing 
 state of the country. P. 3813. 
 
 Effects of the progress of improvement, upon the real 
 price of manufactures. 
 
 IMPPvOVpMENT diminishes the real price of al- 
 most all manufactures. That of the workmanship di- 
 minishes in all of them, in consequence of better ma- 
 chinery, of greater dexterity, and of a more proper 
 division of work ; all of which are the effects of improve- 
 ment. In some new manufactures, the rise in the real 
 price of the rude materials, will more than compensate 
 all the advantages which improvement can introduce 
 into ihe execution of the work. The diminution of 
 price in those manufactures, of which, the materials 
 are the coarser metals, has been remarkable. A move- 
 ment of a watch can be now had for twenty shillings,
 
 ( 99 ) 
 
 "which in the middle of the last century could hot have 
 been bought for twenty pounds. The same may be 
 said of the Sheffield and Birmingham ware. P. 3#4. 5. . 
 Fine woollen cloth is three or four times as cheap as 
 it was towards the end of the 15th century: and the 
 coarse is more than twice as cheap; The same will 
 hold true in the prices of stockings. The woollen ma- 
 nufacture has received three capital improvements : 
 (1.) The spinning wheel. (3.) Machines for the wind- 
 ing of worsted and woollen yarn. (3.) The fulling 
 mill for thickening cloth. Neither wind nor water mills -sy 
 were known in England so early as the beginning of 
 the l6th century; in Italy they had been justintrodu- 
 ced. P.SSCMXX^^ ^^^& 
 
 ^ &~ 
 
 CONCLUSION OF THE CHAPTER. 
 
 EVERY improvement in the circumstances of the 
 society tends either directly, or indirectly to raise the 
 real rent of land. The extension of improvement and 
 cultivation, and the rise in the price of the rude pro- 
 duce of land, tend to raise it directly. All those im- 
 provements in (he productive powers of labour, which 
 reduce the real price of manufactures, and every in- 
 crease in the real wealth of the society, tend indirectly 
 to raise the real rent of land. P. 392. 
 
 Neglect of improvement ; the fall in the real price of 
 rtny part of the rude produce of land ; the rise in the 
 price of manufactures ; and the declension of the real 
 wealth of the society, tend to lower the real rent of 
 land. P. 393.
 
 The whole annual produce of the land and labour of 
 every country, naturally divides itself into ; the rent of 
 land ; the wages of labour ; and the profits of stock. 
 The interest of the first of these orders is inseparably 
 connected with the general interest of the society. If 
 they have any tolerable knowledge of their own inter- 
 est, they will never attempt to mislead the public when 
 it deliberates upon any regulation of commerce or 
 police. The security of their situation renders them 
 too often ignorant and incapable of application. The 
 interest of the second order, is also strictly connected 
 with that of the society. The wages of the labourer 
 never rise so high, as when the demand for labour is 
 continually increasing. His employers constitute the 
 third order, that of those who live by profit. But the 
 rate of profit does not necessarily rise with the prospe- 
 rity, and fall with the declension of the society. The 
 interest of the third order has not, therefore, the same 
 connection with the general interest of the society, as 
 that of the other two ; it is sometimes different from, 
 and even opposite to that of the public. The proposal 
 of any new law or regulation of commerce, which 
 comes from this order, ought not hastily to be adopted. 
 P. 3948.
 
 BOOK II. 
 
 Of the nature, accumulation, and. employment o 
 INTRODUCTION. 
 
 IN the rude state of society, it is not necessary that 
 any stock should be accumulated in order to carry on 
 the business of the society. Every man supplies, by 
 his industry, his wants as they occur. But when the 
 division of labour has been thoroughly introduced, the 
 produce of a man's own labour, can supply but a small 
 part of his wants. The greater part must be supplied 
 by the produce of other men's labour, which he must 
 purchase with the price of the produce of his own. But 
 this purchase cannot be made, till such time as the pro- 
 duce of his own labour has been completed and sold ; 
 during which, a stock of goods of different kinds must 
 be stored somewhere, sufficient to maintain him, and 
 also to supply him with the materials, and tools of his 
 work. The accumulation of stock must be previously 
 to the division of labour ; and the subdivisions of la- 
 bour will increase in proportion only to the increasing 
 accumulation of stock. As the division of labour ad- 
 vances, the same number of people can work up a grea- 
 ter quantity of materials; consequently, an equal quan- 
 tity of provisions, and a greater stock of materials and 
 tools, than would have been necessary in a ruder state 
 of things, must be accumulated before hand. As the 
 accumulation of stock is previously necessary for carry- 
 ing on this great improvement in the productive powers 
 of labour, so that accumulation leads to this improve- 
 
 N
 
 ( 102 > 
 
 wient. The quantity of industry not only increases 
 with the increase of stock, but in consequence of that 
 increase, the same quantity of industry prod uces a grea- 
 ter quantity of work. P. 407 9* 
 
 CHAP. I. 
 
 Of the division of stock. 
 
 THE poor man derives no revenue from his stock- j 
 his revenue is derived from his labour. P. 410. 
 
 When a man possesses much stock, he reserves only 
 a part of it for immediate consumption, from the re- 
 mainder he endeavours to derive a revenue. His stock 
 is therefore distinguished into that which is to afford 
 him this revenue, which is called his capital ; and into 
 that which supplies his immediate consumption j and 
 which consists (1.) In what was originally reserved for 
 this purpose : or (2.) In his revenue, as it comes in : or 
 (3.) In things purchased before, such as a stock of 
 clothes, household-furniture, See. P. 41 1. 
 
 A capital may yield a revenue, FIRST, by being em- 
 ployed in raising, manufacturing, or purchasing 
 goods, and selling them again with a profit. The capi- 
 tal employed in this manner, affords no revenue till 
 the goods are sold, and others purchased with the 
 money; it is only by circulation that it can yield a 
 profit ; it may therefore be called a circulating capital. 
 P. 411. 
 
 SECONDLY, it may be employed in the improvement 
 of land, and in purchasing instruments oftrade,which 
 yield profit without changing masters. Such capitals
 
 ( 103 ) 
 
 may be called fixed capitals. Different occupations 
 require different proportions, between the circulating 
 and fixed capitals employed in them. The capital of 
 a merchant is altogether circulating, unless his ware- 
 house be considered as a fixed capital. Every mas- 
 ter, artificer, or manufacturer must have some fixed 
 capital. A taylor or a shoemaker needs but a small 
 fixed capital ; in iron works and coal mines a large one 
 is necessary. The instruments of agriculture are, to 
 the farmer, his fixe.d capital ; the wages and mainte- 
 nance of his servants, his circulating capital. He 
 makes a profit of the former by keeping them ; and of 
 the latter by parting with them. The price of labour- 
 ing cattle is a fixed, their maintenance a circulating, 
 capital. But both tfye price, and maintenance of cattle 
 bought for sale, are circulating capitals. So also is the 
 value of the seed ; the farmer makes a profit novby its 
 sale, but by its increase. P. 411 13, 
 
 The general sfock of a country is divided into the same 
 three portions, each of which has a distinct office. The 
 first is that portion which is reserved for immediate con- 
 sumption, and which affords no revenue. It consists 
 in a stock of food, clothes, household furniture, and 
 mere dwelling houses. These may in particular instan- 
 ces yield a revenue to the proprietor, but they can a 
 ford none to the public. P. 414. 
 
 The second portion into which the stock of a society 
 divides itself, is the fixed capital which affords a revenue 
 without changing masters. It chiefly consists (1.) In 
 all useful machines and instruments of trade, which 
 abridge labour. (2.) In buildings which are the mean* 
 of procuring a revenue; as-shops,farm houses,granaries, 
 &c. (3.) In the improvements of land. And (4.) la 
 
 N 2
 
 ( '104 > 
 
 
 
 the acquired and useful abilities of all the members of 
 the society. P. 41 6. 
 
 The third portion into which the general stock of 
 the society is divided, is the circulating capital which 
 affords a revenue by changing masters. This is com- 
 posed, (I.) Of the money by means of which the rest 
 are distributed to the consumers. (.2-) Of the stock of 
 provisions which are in the possession of the butcher, 
 farmer, &c. (3.) Of unmanufactured materials. And 
 (4.) Of work made up 'and compleated, but which is 
 still in the hands of the merchant or manufacturer. 
 Of these four parts, provisions, materials, and finished 
 work are either annually, or in a longer, or shorter 
 period withdrawn from it, and placed either in the 
 fixed capital, or in the stock reserved for immediate 
 consumption. P. 4 17- 
 
 Every fixed capital is derived from, and requires to 
 be supported by a circulating capital, and without 
 which, it can yield no revenue. To maintain and in- 
 crease the stock reserved for immediate consumption, is 
 the sole end and purpose both of the fixed and circula- 
 ting capitals. It is this stock which feeds, clothes, and 
 lodges, the people. Their riches or poverty depend on 
 the abundant or sparing supplies, which these two 
 capitals can afford to the stock forimmediate consump- 
 tion. These supplies are principally drawn from the 
 produce of land, the mines, and fisheries ; which af- 
 ford provisionsand materials, of which part is wrought 
 into finished work, and by which are replaced the pro- 
 visions, materials, and finished work continually with- 
 drawn from the circulating capital : from mines too 
 is drawn what is necessary for maintaining and aug- 
 menting that part of it, which consists in money,
 
 and which must in time be wasted and worn out. 
 P. 4189. 
 
 Lands, mines, and fisheries, require a fixed and a 
 circulating capital to cultivate them, and their produce 
 replaces with a profit, not only those capitals, but all 
 others in the society. The fanner annually replaces 
 to the. manufacturer the provisions consumed, and ma- 
 terials wrought up the year before ; and the manufac- 
 turer replaces to the farmer the finished work, which he 
 had worn out in the same time. The produce of land 
 draws the fish from the waters, and extracts mineral* 
 from the bowels of the earth. P. 420. 
 
 The produce of land, mines, and fisheries, is in the 
 compound proportion to their fertility, and the capi- 
 tals employed about them. In all countries where 
 there is tolerable security, every man will endeavour 
 to employ his stock in procuring present enjoyment, or 
 future profit : in the former case, it is a stock reserved 
 for immediate consumption ; in the latter it is errf- 
 ployed in procuring profit as a fixedx>r circulating ca- 
 pital. P. 421. 
 
 CHAP. II. 
 
 Pf 'money considered as a particular branch of the gene- 
 ral stock of the society, or of the. expence of main- 
 taining the national capital. 
 
 IT has been shewn that the price of every particular 
 commodity resolves itself into some one, or other, or all 
 of three parts : viz. The wages of labour ; the profits 
 of stock ; and the rent of land. The same is true with
 
 C 106 ) 
 
 regard to all the commodities which compose tlie 
 whole annual produce of the land and labour of every 
 country. The value of this whole annual produce 
 constitutes a revenue to the inhabitants of every coun- 
 try. As in a private estate we distinguish between the 
 gross, and the neat rent, so we may likewise in the 
 revenue of all the inhabitants of a great country. P.423. 
 
 The gross rent of a private estate comprehends what 
 \s paid by the farmer ; the neat rent, is what remains af- 
 ter deducting the expence of management, repairs, 8tc. 
 or what he can afford to place in his stock reserved for 
 immediate consumption. His rea.1 wealth is in propor- 
 tion to his neat rent. P. 424. 
 
 The gross revenue of all the inhabitants of a great 
 country comprehends the whole ann.ua! produce of their 
 Jand and labour ; the neat revenue what remains free 
 after deducting the expence of maintaining : (1.) 
 Their fixed capital : and (2.) Their circulating capi- 
 tal, or what, without incroaching on their capital, they 
 can place in their stock reserved for immediate con- 
 sumption. Their real wealth too is in proportion to 
 their neat revenue. That the expence of maintaining 
 the fixed capital must be excluded from the neat reve- 
 nue of the society is evident, since the materials neces- 
 sary for machines, instruments of trade,profitahle build- 
 ings &c. can make no part qf it. The intention of the 
 fixed capital is to increase the productive powers of la- 
 bour. The expence properly laid out in the fixed capi- 
 tal is always repaid with great profit, and may be com- 
 pared to that of repairs in a private estate. When bj 
 a proper direction the expence is diminished, the gross 
 rent will be the same as before, and the neat rent is ne- 
 cessarily augmented. P. 425. 6,
 
 ( 107 ) 
 
 Of the four parts which compose the circulating ca- 
 pital, money, provisions, materials, and finished work ; 
 the three last are regularly withdrawn from it, and 
 placed either in the fixed capital of the society, or in 
 their stock reserved for immediate consumption.What- 
 ever part goes to the latter makes a part of the neat re- 
 venue of the society. P. 427. 
 
 The circulating capital of an individual is totally ex- 
 cluded from making any part of his neat revenue,which 
 must consist altogether in his profits. But the circula- 
 ting capital of a society is not excluded from making a 
 part of their neat revenue. The whole goods in a mer- 
 chant's shop cannot he placed in his stock reserved for 
 immediate consumption, hut they may in that of other 
 people, who may replace their value to him without di* 
 minishing his capital or theirs. P. 428. 
 
 MONEY, therefore is the only part of the circulating 
 capital of a society the maintenance of which can oc- 
 casion any diminution in their neat revenue. As it af- 
 fects the revenue of the society it bears a near resem- 
 blance to the fixed capital. For 
 
 I. As machines and instruments of trade, so also mo- 
 ney requires certain expences first to make, and after* 
 wards to support, which expence make a part of the 
 gross revenue, but are deductions from the neat reve- 
 nue of the society. Money, instead of augmenting the 
 stock resesved for immediate consumption, is employed 
 in supporting the expensive instrument of commerce, 
 by means of which every individual has his subsistence 
 distributed to him. P. 428. 
 
 II. As instruments of trade make no part either of 
 the gross or neat revenue, so money, by means of which 
 ihe whole revenue of the society is distributed among 
 all its members, makes no part of that revenue. The
 
 ( 108 ) 
 
 wheel of circulation is different from the goods circula- 
 ted by means of it. The revenue of a society con- 
 sists altogether in those goods, and not in the wheel 
 which circulates them. In computing the revenue of 
 ny society; we must always, from their whole annual 
 circulation of money and goods, deduct the whole value 
 of the money. The followingconsiderationswill make 
 this evident. When we speak of any particular sum 
 of money, we either mean the number of metal pieces 
 of which it is composed, or the quantity of goodswhich 
 it will purchase. Now the wealth which it denotes is 
 equal only to one of these values, and to the latter 
 more properly than the former. Thus a weekly pen- 
 sion of a guinea will purchase for any person, a certain 
 quantity of subsistence. In proportion as this quantity 
 is great or small, so is his real revenue. It does not con- 
 sist in the piece of gold, but in what he can exchange 
 it for. Though the revenue of all the inhabitants of 
 any country may be paid them in money, their real 
 riches must be in proportion to the quantity of con- 
 sumable goods which they can purchase with this mo- 
 ney. The whole revenue of all of them cannot be equal 
 to both the money, and the goods, "but only to one of 
 those values, and to the latter more properly than to the 
 former. The amount of the metal pieces annually paid 
 to an individual may be precisely equal to his revenue ; 
 but the amount of metal pieces which circulate in a 
 society can never be equal to the revenue of all its 
 members. Money, therefore, the great wheel of circu- 
 lation,like all otherinstrumentsof trade,though it makes 
 a part of the capital, makes no part of the revenue of 
 the society to which it belongs. P. 429 33. 
 
 III. As every saving in the expence of the instru- 
 ments of trade, which compose the fixed capital, is an
 
 ( 109 ) 
 
 improvement in the neat revenue of the society, so is 
 every saving in the expence of collecting and support- 
 ing that part of the circulating capital which consists 
 in money. The whole capital of every man must be 
 either fixed; or circulating ; the smaller the one, the 
 greater must be the other. Every saving in the ex- 
 pence of maintaining the fixed capital, must increase 
 the fend which puts industry into motion, and con- 
 sequently must increase the real revenue of the society. 
 P. 433, 
 
 The substitution of paper in the room of gold and sil- 
 ver money, replaces a very expensive instrument of 
 commerce with one less costly. In what manner it 
 tends to increase the revenue of the society requires 
 some explication. There are several sorts of paper 
 money ; the notes of banks and bankers are best known. 
 When the people have such confidence in any banker 
 as to believe that he is always ready to pay upon de- 
 mand such of his notes as are presented to him, these 
 notes come to have the same currency as gold and silver 
 money. P. 434. 
 
 A particular banker lends notes, we shall suppose, to 
 the extent of 100,0001. As those notes serve all the 
 purposes of money, his debtors pay him interest for 
 them, which is the source of his gain. Thougn he 
 has notes to the extent of 100,0001. in circulation ; 
 0,0001. in gold and silver may frequently be sufficient 
 for answering occasional demands. Thus 80,0001. of 
 gold and silver can, in this manner, be spared from the 
 circulation of the country ; and the whole circula- 
 tion may be conducted with a fifth part only of the 
 gold and silver which would otherwise have been requi- 
 site. P. 435. 

 
 ( 110 ) 
 
 Suppose the circulating money of a country to amount 
 to one million sterling, fhat sum being sufficient for 
 circulating the whole annual produce of their land and 
 labour : If then bankers issued notes to the extent of 
 one million, reserving 200,0001. in their coflfers to an- 
 swer occasional demands, there would remain in circu- 
 lation 1,800,0001. of paper and money together : but; 
 one million sterling, is sufficient to circulate the annual 
 produce of the land and labour. The other 800,0001. 
 being the sum over and above what can be employed 
 in the circulation of the country, will seek profitable 
 employment abroad : but the paper cannot go abroad. 
 Gold and silver therefore to the amount of 800,0001. 
 will be sent abroad, and the channel of home circula- 
 tion wiil remain filled with a million of paper, instead 
 of metal which filled it before. The quantity of money 
 sent abroad will be exchanged for foreign goods, to* 
 supply the consumption either of some other foreign- 
 country or their own. 
 
 In the former case, whatever profit is made, will be 
 an addition to the neat revenue of their own country. 
 If they employ it in purchasing foreign goods for home 
 consumption, they may either (1.) Purchase such goods 
 as will be consumed by idle people who produce no- 
 thing; as foreign wines, silks &c. or (2.) They may 
 purchase materials, provisions &c. to employ and 
 maintain an additional number of industrious people. 
 So far as it is employed in the first way, it is- injurious 
 to the society. So far as it is employed in the second 
 way, it promotes industry, and increases the revenue 
 of the society. The greater part of the gold and 
 silver employed in purchasing foreign goods for home 
 consumption, must be employed in purchasing those 
 of the second kind. Since the demand of idle people
 
 ( 111 ) 
 
 for foreign goods, being the same, or nearly the same 
 as before, a very small part of the money forced 
 jabroad by the operations of banking is likely to be em- 
 ployed in purchasing foreign goods for their nse. 
 P. 436-9. 
 
 In computing the quantity of industry which a circu- 
 lating capital can employ, regard must be had only to 
 those parts which consist, in provisions, materials, and 
 finished work. Money, which serves to circulate these, 
 must be deducted. Industry is put into motion by ma- 
 terials to work on ; tools to work with ; and wages. 
 Though the workman is commonly paid with money, 
 his real revenue consists not in the money, but in the 
 money's worth. The quantity of industry which a ca- 
 pital can employ must be equal to the number of work- 
 men whom it can supply with materials, tools.and main- 
 tenance. Money may be necessary to purchase these, 
 but the quantity of industry cannot be equal to the 
 money, and also to the things purchased ; but only to 
 one of those two values, and to the latter more properly 
 than the former. P. 440. 
 
 When paper is substituted in the room of gold and 
 silver, the quantity of materials, tools, and mainte- 
 nance, which a circulating capital can supply maybe 
 increased by the whole value of gold and silver, which 
 used to be employed in purchasing them. The value of 
 the wheel of circulation is added to the goods circulated. 
 The proportion which the circulating money bears to 
 the an nnal produce of any country has been computed 
 at a fifth ,tenth,and even at athirtieth :but whateveritbe, 
 it must bear a considerable proportion to that part desti- 
 ned for the maintenance of industry. When therefore 
 
 O 2
 
 ( 112 ) 
 
 paper supersedes, suppose four fifths of the circulating 
 gold and silver, and the greater part of that four fifths 
 be applied to the maintenance of industry, it must make 
 a considerable addition to the quantity of industry, con- 
 sequently to the annual produce of land and labour. 
 P. 441. 
 
 An operation of this kind took place some years ago 
 in Scotland, by the erection of new banking companies, 
 by means of which, it has been said, that the trade of 
 Glasgow has been doubled, and that of Scotland more 
 than quadrupled. P. 442. 
 
 The value of the gold and silver money which circu- 
 lated in Scotland in 1709, was about a million sterling : 
 this was the whole circulation of that country. It can- 
 not now be less than two millions, of which the amount 
 of gold and silver does nol amount to half a million. 
 The real riches of Scotland have not suffered, by this 
 diminution of the circulating gold and silver. The an- 
 nual produce of their land and labour has evidently been 
 augmented, P. 442. 3. 
 
 The profit of banks, and bankers, principally consists 
 in advancing their own notes, in discounting bills of ex- 
 change, deducting legal interest 'till the bills become 
 due. They have also another method of issuing their 
 own notes; by granting cash accounts to the extent of a 
 certain sum, to any individual, who can give sufficient 
 Security for the repayment when demanded, In Scot- 
 land the sum so borrowed, may be paid by any install- 
 ments, however small. All men of business there* 
 fore, find it convenient to keep such cash accounts, 
 and are thereby interested to promote the trade, and 
 support the credit of those banking companies. By 
 means of these cash accounts, the merchant can carry 
 on a greater trade than he otherwise could ; as he is
 
 able to employ all his own capital in trade, without 
 reserving any part of it in his coffers, for occasional de- 
 mands. P. 444 7- 
 
 The whole paper money of every kind, which can 
 circulate in any country, can never exceed the value. 
 of the gold and silver, of which it sqpplies the place. If 
 at any time it should exceed that sum, the excess will 
 almost immediately return upon the bankers, to be ex- 
 changed for gold and silver, which may be rendered 
 useful abroad, though paper could not. There will 
 therefore be a run upon the banks, to the whole extent 
 of this superfluous paper, and if any difficulty were 
 shewn in payment, the alarm would increase the run, 
 P. 448. 
 
 Over and above common expences, those of a bank 
 consist : (1.) In keeping a large sum of money in their 
 coffers to answer occasional demands, from which they 
 receive no interest ; and (2.) Jn replenishing those 
 coffers as fast as they are emptied. A bank issuing more 
 paper than can be employed in the circulation of the 
 country, ought to increase its quantity of gold and 
 silver, not only in proportion to this excessive increase 
 of their circulation, but in a much greater proportion; 
 which increases the first article of expence. Their 
 coffers too, though they ought to be filled much fuller, 
 yet must empty themselves faster than if their business 
 was confined within more reasonable bounds. The coin 
 drawn from them will not lie idle, but be sent abroad, 
 which will enhance the second article of expence. 
 P. 449- 50. 
 
 By issuing too great a quantity of paper, the Bank of 
 England was, for many years, obliged to coin gold to 
 Jhe extent of 850,0001. a year, at a loss of more than 
 %\ per cent, giving 4l. per ounce for the bullion, and
 
 issuing it in guineas at 31.17s. lOfd the ounce. The 
 Scotch banks by a similar excess have been, frequently 
 at the expence of collecting money at two per cent. and 
 paying^ per cent, for carriage; besides being put to 
 other very considerable inconveniences. The gold 
 coin was paid by the bank in exchange for that part of 
 their paper, which was over and above what could be 
 employed in the circulation of the country; and being 
 above what could be employed in that circulation, it 
 was melted down or sent abroad, and sold again to the 
 bank at 4l.an ounce. Hence, the necessity of the great 
 annual coinage to supply the bank of England. The 
 overtrading of some bold projectors, was the original 
 cause of this excessive circulation of paper money. 
 P. 4514. 
 
 A bank can advance, with propriety, to a merchant, 
 that part of his capital, which he would otherwise be 
 tobliged to keep by him unemployed, and in ready 
 tooney for answering occasional demands. If the pa- 
 per money never exceeds this value, it ci : n never exr 
 ceed the quantity which the circulation of the. coun- 
 try can easily employ. When a bank discounts bills 
 of exchange, drawn by real creditors, upon real 
 debtors, and which are paid when due, little or no ex- 
 pence can' be necessary for the replenishing its coffers. 
 P. 155. 
 
 A merchant, without over-trading, may frequently 
 have occasion fora sum of ready morrey, even when he 
 has no bills to discount. When a bank advances him 
 such sums upon the easy terms of the banking compa- 
 nies of Scotland, it dispenses him entirely from the 
 necessity of keeping any part of his stock unemployed. 
 The bank, however, should carefully observe, whether 
 in thoit periods, the repayments of such customers be
 
 fegulaf, and equal to the advances made to them. If 
 they are, it may safely continue to deul with them, but- 
 Hot otherwise. The banking companies of Scotland, 
 were for a long time careful to require frequent and re- 
 gular repayments from all their customers. By this 
 attention, they not only saved much extraordinary ex- 
 pence of replenishing their coffers, but gained two 
 other advantages. (1.) By this attention, they were 
 enabled to form a tolerable judgment concerning the 
 thriving or declining circumstances of their debtors : 
 and (2.) They secured themselves from the possibility 
 of issuing more paper money, than what the circula- 
 tion of the country could easily employ. P. 456 9. 
 When, by the conveniency of discounting bills, and 
 of cash accounts, creditable traders can be dispensed 
 from the necessity of keeping any part of their stock 
 unemployed, they can reasonably expect no farther 
 assistance from banks and bankers. A bank cannot, 
 consistently with its own interest, advance to a trader 
 the whole or even a great part of the circulating capital 
 with which he trades, since the returns would be too 
 slow to suit the conveniency of a bank : still less could 
 it afford to advance him any considerable part of his 
 fixed capital, for in this, die returns are still slower. 
 Traders may with propriety, carry on a considerable 
 part of their projects with borrowed money, provided 
 their own capital be sufficient to ensure that of their 
 creditors, should the success of their projects fall short I 
 of expectation. Even with this precaution, the money 
 should not be borrowed of a bank, but of private peo- 
 ple who propose to live upon the interest of their mo- 
 ney, without any trouble of employing the capital. 
 P. 460. I.
 
 When the banking companies of Scotland had given 
 all the assistance to traders which they ought to give, 
 or even somewhat more, the traders were not satis- 
 fied : they thought the banks bound to supply their own 
 deficiencies, and to provide whatever capital they 
 wanted to trade with. This the banks reftfsed, and the 
 traders had recourse to the expedient of drawing and 
 re-drawing ; this practice shall bef explained. P.462. 3. 
 
 Money is more readily advanced upon bills of ex- 
 change, than upon any other species of obligation, ow- 
 ing to the privileges attaching to them. If, when a 
 bill becomes due, the acceptor does not pay it, he be- 
 comes from that moment a bankrupt. The same hap- 
 pens to the drawtr, and even to all those who have en- 
 dorsed it, if they fail in payir-ent : this renders bills of 
 exchange the best paper security. A trader A in 
 Edinburgh, we shall suppose, draws a bill upon B in 
 London ,payable two months after date. In reality Bowes 
 nothing to A, but accepts A's bill upon condition, that 
 before the term of payment, he shall re-draw upon A 
 for the same sum together with interest and commission. 
 This practice has sometimes gone on for years, the bill 
 always returning upon A in Edinburgh, with the accu- 
 mulated interest and commission. The interest was five 
 percent, for the year, and the commission never less 
 than \ per cent, on each draught. The commission 
 repeated six times in the year, whatever money A might 
 raise by this expedient, must have cost him at least 
 eight per cent. This practice was called raising money 
 by circulation. The ordinary profits of stock, in the 
 greater part of the mercantile projects, could not sup- 
 port this interest. The bills which A drew upon B, he 
 discounted two months before they became due, with 
 some bank in Edinburgh ; and the bills which B re-
 
 drew upon A, he discounted with the bank at Lon- 
 don. Whatever was advanced upon these bills was ad- 
 vanced in paper. Though the bills upon which this 
 paper had been advanced, were all re-paid when due, 
 yet the value upon the Jirst bill was never really re- 
 turned ; because before each bill was due, another was 
 drawn to a greater amount.. This payment was there- 
 fore fictitious. P. 464. 8. 
 
 The paper which was issued upon those circulating 
 bills of exchange, amounted ojten, to the whole fund 
 destined for carrying on some vast project. The greater 
 part of the paper was, consequently, over and above the 
 value of the gold and silver, which would have been 
 circulated in the country, had there been no paper mo- 
 ney, and upon that account it immediately returned 
 upon the banks, in order to be exchanged for gold. 
 P. 469. 
 
 When two people who are continually drawing and 
 re-drawing, discount their bills with the same banker, 
 he must immediately discover, that they are trading 
 with his capital, not with their own : but when they 
 discount their bills, with different bankers, the discovery 
 is not so easy, more especially when the same two per- 
 sons run the round of a great circle of projectors. When 
 a banker had even made this discovery., it might be toa 
 late; he might find that by refusing to discount more 
 bills of the projectors, he would make them bankrupts, 
 and perhaps ruin himself. He must therefore gradually 
 make the difficulties of discounting greater, in order to 
 get out of the circle, and to force the projectors to have 
 recourse to other bankers. The difficulties, which the 
 bank of England, the bankers of London, and the more
 
 ( 118 ) 
 
 prudent banker* of Scotland began, wben all had gontf 
 too far, to make about discounting bills, enraged the 
 projectors in the highest degree, for whose relief a rit& 
 bank Was expressly established. It was the avowed prin-* 
 ciple of this bank, to advance upon reasonable security 
 the whole capital, which was to be employed in those 
 improvements, of which the returns are most slow. By 
 this means it issued great quantities of its notes, which, 
 being for the most part over and above what the circu- 
 lation of the country could employ, returned to be ex- 
 changed for gold and silver as fast as they were issued. 
 By this method they were, in a few months, driven to 
 the ruinous expedient of drawing upon London, and 
 when the bill came due, payrng it together with interest 
 and commission, by another draught upon the same 
 place : and in about two years they stopt payment,whert 
 they had in circulation 200,0001. in notes, and bills of 
 exchange, to the value of 600,0001. This bank had 
 thus advanced in two years, 800,0001. at five per cent. 
 Interest; for 600,0001. of which they paid upwards of 
 eight per cent, consequently losing three per cent, upoii 
 three fourths of all their dealings. P. 469. 74. 
 
 By means of this bank, projectors had a temporary 
 relief afforded to them ; and the other banks easily got 
 out of the circle. But in the long run, the distress, 
 which this bank meant to relieve, was greatly increas- 
 ed. Had this operation proved practicable, and even 
 profitable to the bank as a mercantile company, the 
 country could have derived no benefit from it. The 
 money to be lent could not have been augmented, 
 P. 4757. 
 
 That the industry of Scotland, languished for want 
 of money to employ it, was the opinion of the famous 
 Mr. Law. By establishing a bank of a particular kind,
 
 lie imagined paper might be issued to the amount of 
 the whole value of all the lands in the country. Scot- 
 land did not adopt his project. : With some variations 
 it was adopted in France. The idea of the possibility 
 of multiplying paper money to almost any extent, was 
 the foundation of the Mississippi scheme, the most ex- 
 travagant project both of banking and stock-jobbing, 
 the world ever sa>v. P. 478. 
 
 The BANK OF ENGLAND, is the greatest bank of cir- 
 pulation in Europe; it was established by Act of Parlia- 
 ment, in 1694,- At that time it advanced to govern- 
 ment, l,2QO,OOQl. at eight per cent, interest, and 40001. 
 a year for the expences of management. In 1697, it 
 ty-a allowed to increase its capital tp 2,201,1711' 10s. 
 fprthe support of public credit: bank-notes having 
 been, in the preceding year, at twenty per cent, dis- 
 pount, and during the great re-coin age of silver, which 
 yras going on at the same time, the bank had stopt the 
 payment of its notes. In pursuance of the 7th of Anne, 
 jhe bank paid into the Exchequer, 400,0001. making 
 id all 1,600,0001. for which it continued to receive only 
 the 96,0001. interest, and 400Q1. for management. By 
 {he same Act, the bank cancelled Exchequer bills, to 
 the amount of 1,775,0271. 17s. 10|d. at six per cent, 
 interest, and was allowed to double its capital. In. 1708, 
 therefore the capital of the bank amounted to 
 4,402,3431. and it had advanced to government, 
 3,375,0271. 17s. 10d. and in 1710, the bank capital 
 amounted to 5,559,9951. 14s. 8d. Ry the 3d, George 
 I. the bank delivered up two millions of Exchequer 
 bills to be cancelled. It had therefore advanced to go- 
 vernment, 5.375,0271. 17s. 10|d. In 1722, the bank 
 
 P 2
 
 ( 120 > 
 
 purchased stock of the south-sea company, to the 
 amount of 4,000,0001. and increased its capital by 
 3,400,0001. At this time the bank had advanced to 
 the public, 9,375,0271. 17s. lO^d. for which it received 
 interest ; and its capital stock, upon which hpaid di- 
 vidends, amounted to 8,959,9951. 14s. 6d. In 1746, the 
 money advanced to the public was 11,686,8001. and its 
 capital was 10,780,0001. And by the 4th of George III. 
 the bank paid 1 10,0001. for the renewal of its charter. 
 The dividend of the hank has varied at different times. 
 The stability of the bank of England, is equal to that 
 of the British government. All that it has advanced 
 to the public must be lost, before its creditors can sus- 
 tain any loss. It acts as a great state engine. It receives 
 and pays a great part of the annuities, which are due to 
 the creditors of the public. It circulates exchequer 
 bills, and it advances to government the annual amount 
 of the land and malt taxes. In these operations it has 
 frequently over-stocked the circulation with paper mo- 
 ney. It discounts bills, and has on many occasions 
 supported the credit of the principal houses of England, 
 Hamburgh, and Holland. Upon other occasions, this 
 great company has been reduced to the necessity of 
 paying their notes in six-pences. P. 479 82. 
 
 It is not by augmenting the capital of the country, 
 but by rendering a greater part of that capital produc- 
 tive, than would otherwise be, that the most judicious 
 operations of banking can increase the industry of the 
 country. The gold and silver money which circulates 
 in a country, is, like the ready money of a dealer, all 
 dead stock. It is a valuable part of the capital of a 
 country, which produces nothing to the country. It 
 may be compared to a highwaj 7 , which carries grass and 
 corn to market, but itself produces neither : and the ju-
 
 dicious operations of banking, by providing a waggoa 
 way through the air, enable the country to convert a 
 great part of these high-ways into good corn and pas- 
 ture lands/and therefore to increase the annual produce 
 of its land and labour. The commerce and industry of 
 a country may be thus augmented, but they are not 
 altogether so secure, as on the solid ground of gold and 
 silver. Besides, they are more liable to several acci- 
 dents, which no prudence can prevent. A successful 
 invasion would occasion much greater confusion in a 
 country, where the circulation was carried on chiefly 
 by paper, than in one where the greater part of it was 
 carried on by means of gold and silver. P. 483 5. 
 
 The, circulation of every country may be considered 
 as divided into two branches ; the circulation of dealers 
 with one another, and that between dealers and their 
 customers. Each requires a certain stock of money. 
 The whole of the goods circulated between the dealers, 
 can never exceed the whole of those circulated between 
 dealers and consumers. The former requires large 
 sums for each transaction; the latter frequently re- 
 quires only small sums : but the small ones circulate 
 much faster than the large ones. Therefore the annual 
 circulation of the consumers may require a smaller 
 quantity of money. P. 485. 6. 
 
 Where there are no bank notes under 101. paper 
 money will confine itself chiefly among the dealers : 
 but where bank notes are issued for 20s. and under, pa- 
 per money extends itself to a considerable part of the 
 circulation between dealers, and consumers. Where 
 paper money is chiefly confined to dealers, there is 
 plenty of gold and silver : but where it makes a consi- 
 derable part of the circulation between dealers and
 
 ( 122 ) 
 
 Consumers, it banishes gold and silver out of the coun-f 
 try. P. 487. 8. 
 
 Though paper money should be principally confined 
 to the circulation between dealers, yet banks might 
 give nearly the same assistance to the industry of a 
 country, by discounting real bills, and by lending on 
 cosh accounts. P. 489. 
 
 Paper money consisting of notes, issued by people of 
 undoubted credit, and payable on deinand, is equal to 
 gold and silver money : nordoes it necessarily increase 
 the money price of commodities; for the quantity of 
 gold and silver taken from the currency, is always equal 
 to the quantity of paper added to it. It would be other- 
 yrise with paper money, consisting of promissory notes, 
 the immediate payment of which was made, in any re- 
 spect, conditional, \yhen it was optional with the 
 bankers of Scotland to pay their notes immediately on 
 demand, or six months after presentment, with legal 
 interest, they were at a discount. P. 492. 
 
 In Yorkshire, the paper currencies were degraded 
 below the value of gold and silver ; for some times the 
 payment even of six-pence, depended upon the condi ? 
 tion that the holder of the note, should bring change 
 for a guinea. P. 493. 
 
 The 'paper currencies of North America, consisted 
 formerly in government paper, which was not exigible 
 till several years after it was issued. But lOQl. payable 
 fifteei> years hence at six per cent, is equal only to, 
 about 40l. ready money. To oblige a creditor to acr 
 cept of this for 1001. was downright fraud. Hence, the 
 equity of the law which declared that no paper c\ir- 
 rency should be deemed a legal tender of payment. 
 The paper money of Petisylvania, never sunk below the 
 value of gold and silver. This colpny however, rais-
 
 ( 321 ) 
 
 ed the denomination of its coin, ordering five shillings 
 Sterling to pass for six shillings and three-pence, under 
 pretence of preventing the exportation of coin. It was 
 found however, that the price of goods imported, rose 
 exactly in proportion as the denomination of coin was 
 raised, which was exported as fast as ever, P. 493 5. 
 
 If a certain proportion of the taxes must be paid in 
 paper, and the bank were careful to keep the quantity 
 of paper somewhat below what could be employed in 
 this manner, the demand for it might be such as to make 
 it bear a premium. P. 496. 
 
 A paper currency which falls below the value of gold 
 and silver coin, does not sink the value of those metals. 
 The proportion between the value of the precious me- 
 tals and that of goods, depends on the richness or po- 
 verty of the mines which happen at any particular time 
 to supply the great market of the commercial world ; 
 and also on the labour necessary to bring the metals, 
 and the goods to market. P. 497. 
 
 The multiplication of bankers, who are restrained 
 from issuing notes under a certain sum, and who are 
 also subjected to the obligation of the immediate and 
 unconditional payment of those notes, increases the se- 
 curity of the public. The competition obliges all to be 
 more circumspect in their conduct ; and the circulation, 
 being divided into a greater number of parts, the failure 
 of any one company becomes of less consequence to 
 the public. P. 498. 9. 
 
 END OF THE FIRST VOLUME.
 
 VOLUME II. 
 
 BOOK II. 
 CHAP. III. 
 
 Of the accumulation of Capital, of of productive and 
 unproductive. Labour. 
 
 'PRODUCTIVE labour as that of the manufacturer, 
 adds to the value of the subject on which it is bestow- 
 ed. Unproductive labour as that of the menial servant, 
 has no such effect. The manufacturer is no expence 
 to his master, his wages being restored with a profit. 
 The maintenance of a menial servant never is restored. 
 The labour of the latter, however, has its value. The 
 labour of the manufacturer realizes itself in some vendi- 
 ble commodity which lasts after the labour is past : 
 that of the menial servant perishes in the very instant 
 of performance. P. 1. 2. 
 
 The labour of some of the most respectable orders in 
 society is like that of menial servants. The sovereign, 
 and all the officers of justice and war, are unproductive 
 labourers. They are servants of the public, and main- 
 tained by the industry of the people. Their service 
 produces nothing for which an equal quantity of service 
 can afterwards be procured. In the same class must be
 
 ( 125 ) 
 
 ranked, churchmen, lawyers, physicians, men of let- 
 ters ; players, buffoons, opera singers, &c. P. 3. 
 
 Productive, and unproductive labourers, and those 
 who do not labour at all, are all maintained by the an- 
 nual produce of the country. This produce has its li- 
 mits, and is the effect of productive labour. The annu- 
 al produce of the land, and labour, of every country 
 divides itself into two parts : one of which is destined 
 for renewing the provisions, materials, and finished 
 zcork, which had been withdrawn from the capital ; the 
 other for constituting a revenue either as profit of stock, 
 or as rent of land. The former is employed to main- 
 tain productive hands only. The latter may maintain 
 either productive or unproductive hands. 
 
 Unproductive labourers, and those who do not labour 
 at all, are all maintained by revenue ; either (1.) by 
 that part of the annual produce originally destined for 
 constituting a revenue to particular persons, as rent of 
 land, or profits of stock ; or (2). by that which though 
 originally destined for replacing a capital, and for main- 
 taining productive labourers only, yet when it comes 
 into their hands, whatever part is above iheir necessary 
 subsistence, may be employed in maintaining either pro- 
 ductive or unproductive hands. Thus the landlord, 
 merchant, and even workmen, may maintain a menial 
 servant, or go to a play, and so contribute towards 
 maintaining one set of unproductive labourers; or he 
 may pay taxes, and thus help to maintain another set 
 equally unproductive. The rent of land, and the pro- 
 fits of stock are tliQrefore the principal sources from 
 which unproductive hands derive their subsistence. 
 P. 4 G. 
 
 Q
 
 ( 126 ) 
 
 The proportion between the productive, arid unpro- 
 ductive hands, depends upon the proportion between 
 that part of the annual produce which is destined for 
 replacing a capital, and that which is destined for con- 
 stituting a revenue. This proportion is very different 
 in rich, and poor countries. At present in the opulent 
 countries of Europe, a very large portion of the pro- 
 duce of the land is destined for replacing the capital of 
 the farmer ; the other for paying his profits, and the 
 rent of the landlord. But antiently, under the feudal 
 government, a very small portion of the produce was* 
 sufficient to replace the capital employed in cultivation; 
 it consisted only in a few wretched cattle, which also 
 generally belonged to the landlord. In the present state 
 of Europe the share of the Landlord seldom exceeds a 
 third, sometimes not a fourth part of the whole pro- 
 duce of the land. P. 7 8. 
 
 Manufactures, now, require great capitals ; formerly 
 very small capitals were sufficient ; but their profits 
 must have been great, as the rate of interest was no 
 where less than 10 per cent. At present ihe rate of in- 
 terest is no where greater than 6 per cent, and in some 
 parts it is as low as 2 per cent. The profit of stock is 
 greater in a rich than in a poor country, because the 
 stock is much greater ; in proportion to the stock, the 
 profits are generally less. That part of the annual pro- 
 duce destined for replacing a capital, is greater in rich 
 than in poor countries, and bears a greater proportion 
 to that which is immediately destined for constituting 
 a revenue either as rent or profit. The proportion be- 
 tween the funds destined for the maintenance of pro- 
 ductive labour, and those which are employed in sup- 
 porting unproductive labour,determines,in every coun- 
 try, the character of the inhabitants, as to industry or
 
 ( 127 ) 
 
 idleness. We are more industrious than our forefathers, 
 because the funds destined for the maintenance of in- 
 dustry, are much greater in proportion to those likely 
 to be employed in the maintenance of idleness, than 
 tl)ey were two or three hundred years ago. In manu- 
 facturing towns the inferior people are in general in- 
 jdustrious ; in towns principally supported by the re- 
 sidence of a court, they are generally idle. In a city 
 where a great revenue is spent, it is difficult to employ 
 a capital with advantage, for any other purpose than 
 supplying the consumption of k that city. The idleness 
 of the greater part of the people corrupts the indus- 
 try of those who ought to be maintained by the em- 
 ployment of capital. The proportion between the ca- 
 pital, and revenue, therefore, seems every where to 
 regulate the proportion between industry and idleness. " 
 
 P." 9 11. 
 
 CAPITALS are increased by parsimony, and dimini- 
 shed by prodigality. Parsimony, and not industry, is 
 the immediate cause of the increase of capital. Parsi- 
 mony, by increasing the fund destined for the mainten- 
 ance of productive hands, tends to. encrease {he num- 
 ber of those hands whose labour adds to the value of the 
 subject on which it is bestowed. This gives an additi- 
 onal value to the annual produce. P. 13. 
 
 What is annually saved is as regularly consumed as 
 what is annually spent, but by a different set of people. 
 What a rich mail spend* is consumed by idle guests,and 
 menial servants. What he saves, being employed as a 
 capital, is consumed by labourers, mani: ; 'acturers, Sec. 
 who produce with a profit, the value of their annual con 
 sumption. P. 14. 
 
 Q<2
 
 ( 123 ) 
 
 By what a frugal man annually saves, lie affords 
 maintenance to an additional number of productive 
 hands, and establishes, as it were, a perpetual fund for 
 the maintenance of an equal number in time to come. 
 The prodigal, by diminishing the funds destined for the 
 employment of productive labour, diminishes the quan- 
 tity of* that labour, and the value of the annual produce 
 of the land and labour of the whole country, the real 
 wealth and revenue of its inhabitants. Though the ex- 
 pence of the prodigal be altogether in home-made com- 
 modities, arid therefore not occasioning any exporta- 
 tion of gold and silver, its effect upon the productive 
 funds of the society would still be the Same. If the 
 quantity of food and clothing consumed by unproduc- 
 tive, had been distributed among productive bands, 
 they would have reproduced, together with a profit, the 
 full value of their consumption. There would have 
 been two values instead of one ; the same quantity of 
 money would have remained in the country, and a re- 
 production of an equal value of consumable goods. 
 P. 1516. 
 
 The same quantity of money cannot remain in any 
 country in which the value of the annual produce di- 
 minishes. The sole use of money is to circulate con- 
 sumable goods ; its quantity must, therefore, be deter- 
 mined by the value of the goods circulated. Their va- 
 lue must diminish as the value of the annual produce 
 of the country diminishes, and along with it the quan- 
 tity of money which can be employed in circulating 
 them. But the money thrown out of domestic employ- 
 ment, will be sent abroad to purchase goods which may 
 be of use at home. P. 17. 
 
 The quantity of money, on the contrary, must in- 
 crease, as the value of die annual produce increases :
 
 for the value of the consumable goods annually circu- 
 lated being greater, will require a greater quantity of 
 money to circulate them. A part of the increased pro- 
 duce, therefore, will naturally be employed in pur- 
 chasing the additional quantity of gold and silver ne- 
 cessary for circulating the rest. Whether, there- 
 fore, the real wealth of a pountry consist in the value 
 of the annual produce of its land and labour ; or, as 
 vulgar prejudices suppose, in the quantity pf the cir- 
 culating precious metals, every prodigal appears to be 
 a public enemy, and and every frugal man a public 
 benefactor. P. 18. 
 
 The effects pf misconduct are often the same as those 
 of prodigality. Unsuccessful projects tend in the same 
 manner to diminish the funds destined for the mainte- 
 nance of productive labour, though the capital is con- 
 sumed by productive hands only, yet they dp not re- 
 produce the full value of their consumption. The cir- 
 cumstances of a great nation cannot be much affected 
 ty the prodigality or misconduct of individuals. The 
 principle which prompts to expence, is the passion for 
 present enjoyment, which in general is but momen- 
 tary, or occasional. But the principle which prompts 
 to save, is the desire of bettering our condition, which 
 never leaves us : accordingly the principle of frugality 
 seems to predominate very greatly. With regard to 
 misconduct, the number of successful undertakings is 
 every where much greater than that of unsuccessful 
 ones. P. 1920. 
 
 Great nations are never impoverished by private, 
 though they sometimes are by public prodigality and 
 misconduct. Almost the whole of the public revenue, 
 in most countries, is employed in maintaining unpro- 
 ductive hands. Suc-h are the persons who compose a
 
 ( 130 ) 
 
 court; an ecclesiastical establishment; fleets and 
 armies. If thcsearemultiplied to an unnecessary num- 
 ber, they may consume so large a share of the annual 
 produce as to encroach on a capital de.stined for the 
 maintainan.ee of productive labour. In most eases, the 
 constant effort of every man to better his-condition.the 
 principle from whence national as well as private opu- 
 lence is derived, is sufficiently powerful to maintain the 
 progress of improvement in spite of the extravagance 
 and errors of government. P. 21 . 
 
 The annual produce of land and labour can be in- 
 creased in its value by no other means, but by increa- 
 sing the number of productive labourers, or the pro- 
 ductive powers of those labourers already employed. 
 The number of labourers cannot be increased, without 
 increasing the funds destined for maintaining them. 
 Nor can the productive powers qf tlie same number 
 be increased without some improvements to abridge 
 labour. In either case an additional capital is almost 
 always required. If then the annual produce of a 
 country is greater atone peri od, than at a former one, 
 it must be in consequence of an increase of its capital, 
 and that more must have been added to it, by the good 
 conduct of some, than has been taken from it either 
 by the misconduct of others, or by the extravagance 
 of government. Such will be found the present state 
 of England, if compared with what it was at the resto- 
 ration, of Charles II. though within that space of time 
 have happened the fire, and the plague of London ; 
 two Dutch wars ; the disorders of the revolution ; 
 the war in Ireland; the four expensive French Wars 
 of 1688, 1702, 1742, 1756 together wilh the two re-
 
 hellions of 17'15 and 1745. In the course of these 
 events the nation cannot have contracted less than 
 200,000,0001. of debt. So great a share of the annual 
 produce, has, since the revolution been employed in 
 maintaining an extraordinary number of unproductive 
 hands. Had riot these wars given this particular direc- 
 tion to so large a capital, the greater part of it would 
 have been employed in maintaining productive hands, 
 the value of the annual produce would have been con- 
 siderably increased every year; and the real wealth and 
 revenue of the country might, by this time, have been 
 raised to a height of which we can have no conception. 
 But though the profusion of government has retarded 
 the progress of England to improvement, still its an- 
 nual produce is greater than it was at the restoration, or 
 at the revolution. The capital must likewise be grea- 
 ter ; which, in the midst of all the exactions of govern- 
 ment, has been accumulated by the frugality of indi- 
 viduals. Hence the impertinence and presumption of 
 sumptuary laws. Kings and ministers are the greatest 
 spendthrifts in the society. If their own extravagance 
 does not ruin a state, that of their subjects never will. 
 P. 227. 
 
 Some modes of expence, seem to contribute more to 
 the growth of public opulence than others. The reve- 
 nue of an individual may be spent, either in things 
 consumed immediately, as in a sumptuous table, in 
 maintaining a great number of servants, horses &c. Or 
 itmay be spent in things more durable, and which may 
 be accumulated, as in buildings, furniture, books, 
 pictures, or in jewels, trinkets, fine clothes, &c. Were 
 two men of equal fortune to spend their revenue, the 
 one chiefly in one way, the other in the other ; the
 
 ( we ) 
 
 magnificence of the person whose expence had been 
 chiefly in durable commodities, would be continually 
 increasing, that of the other would be no greater at the 
 end of the period than at the beginning. The former 
 would be the richer of the two. He would have a stock 
 of goods worth something. As one mode of expence 
 is more favourable than the other to the opulence of an 
 individual, so it is likewise to a nation. The houses, 
 the furniture, the clothing of the rich, in a little time, 
 become useful to the inferior rank* of the people. 
 P. 289 
 
 The expence too which is laid out in durable com- 
 modities, is favourable to frugality as well as accumu- 
 lation. If a person should at any time exceed in it, 
 he can easily reform without exposing himself to cen- 
 sure. P. 30. 
 
 The expence, besides, that is laid out in durable 
 commodities, gives maintenance, commonly, to a 
 greater number of people, than that which is employ- 
 ed in the most profuse hospitality. In the one way, 
 this expence maintains productive, in the other unpro- 
 ductive hands. In the one way, therefore, it increases, 
 in the other, it docs not increase, the exchangeable 
 value of the produce of the land and labour of the coun- 
 try. P. 31.
 
 ( 133 ) 
 
 CHAP. IV. 
 
 Of stock lent at interest. 
 
 THE stock which is lent at interest is considered as 
 a capital by the lender. The borrower may use it either 
 as a capital, or as a stock reserved for immediate con- 
 iumption. If he uses it as a capital, he employs it in 
 the maintenance of productive labourers ; and can re- 
 store the capital and pay the interest without encroach- 
 ing upon any other source of revenue, which he cannot 
 do if he uses it as a stock reserved for immediate con- 
 sumption. P. 33. 
 
 Stock lent at interest is occasionally employed in 
 both these ways, but in the former more frequently 
 than in the latter. A man of common prudence will 
 lend a part of his stock only to those who will employ 
 it profitably. Even among borrowers, the number of 
 the frugal and industrious surpass that of the prodigal 
 and idle. Stock is sometimes lent to country gen- 
 tlemen upon mortgage. What they borrow is com* 
 monly spent before they borrow it. P. 33. 4. 
 
 Loans at interest are made in money, either of paper, 
 or of gold and silver. But what the borrower wants, 
 and what the lender supplies, is not the money, but the 
 goods which it can purchase; the lender assigns to the 
 borrower his right to a certain portion of the produce 
 of the country to be employed as the borrower pleases. 
 The quantity of stock, or, as it is usually expressed, of 
 money which can be lent at interest in any country, is
 
 not regulated by the value of the money, but by the 
 value of that part of the annual produce, which is des- 
 tined not only for replacing a capital, but such a capital 
 as the owner does not care to be at the trouble of em- 
 ploying himself. Such capitals constitute what is called 
 the monied interest. It is distinct from the landed, and 
 also from the trading interests, as in these last the 
 owners themselves employ their own capitals. Even in 
 the monied interest, the money is but the deed of as- 
 signment which conveys from one hand to another, 
 those capitals which the owners do not care to employ 
 themselves. Those capitals may be greater in almost 
 every proportion, than the amount of the money which 
 serves as the instrument of their conveyance ; the same 
 pieces of money successively serving for many diffe- 
 rent loans, as well as for many different purchases 
 P. 35 (i. 
 
 In proportion as that share of the annual produce 
 which is destined for replacing a capital increases in 
 any country, the monied interest increases with it. As 
 stock increases, the quantity of stock to be lent at in- 
 terest grows gradually greater. As the quantity of stock 
 to be lent at interest increases, the interest diminishes. 
 For as capitals increase in any country, the profits di- 
 minish, and it becomes more difficult to find a profit- 
 able method of employing any new capital. Hence the 
 competition between different capitals, which sinks 
 the profits of stock. The demand also for productive 
 labour increases, by the increase of the funds destined 
 for maintaining it. This raises the wages of labour. But 
 "when the profits of a capital aie thus diminished, the 
 rate of interest must be diminished with them. P. 378. 
 Mr. Locke, and other writers suppose, that the in- 
 crease of gold and silver, by the discovery of the Spanish
 
 ( 135 ) 
 
 mines, was the cause of the lowering the rate of interest 
 throughout Europe. Before the discovery of the Spanish 
 West Indies, 10 per cent, was the common rate of in- 
 terest. It has since that time sunk to 6, 5, 4, and 3 per 
 cent. Suppose the value of silver has sunk precisely in 
 the same proportion as the rate of interest, and that in 
 countries where interest has been reduced from 10 to 5 
 per cent, the same quantity of silver can. now purchase 
 half the q.uantity of goods which it could have pur-, 
 chased before : even upon this supposition, it is impos- 
 sible that the lowering the value of silver could have 
 the smallst tendency to lower the rate of interest. 
 
 Whatever causes lowered the value of the capital 
 must have lowered that of interest, and in the same 
 proportion. The proportion between the value of the 
 capital, and that of the interest must have remained 
 the same^ though the rats had never been altered. By 
 altering the rate, the proportion between the two va/- 
 lues is necessarily altered. If 100 pounds now are worth 
 no more than 50 were then j 51. can be worth no more 
 than 21. 10s. By reducing the rate of interest from 10 
 to 5 per cent, we give for the use of a capital equal to 
 half its former value, and interest equal iv r one fourth 
 only of the value of the former Interest. 
 
 Any increase in the quantity of silver, could have no 
 Other effect than, to diminish the value of that metal. 
 The nominal value of goods would be greater, but their 
 real value would be precisely the same as before. The 
 capital of the country would be the same, though a 
 greater number of pieces might be requisite for convey- 
 ing any equal portion of it from one hand to another. 
 The funds for maintaining productive labour being the 
 
 R 2
 
 same: wages, therefore, though nominally greater, 
 would really be the same. The profits of stock, which 
 are not computed by the number of pieces of silver with 
 which they are paid, but by the proportion which those 
 pieces bear to the whoie capital employed, would be 
 the same both nominally and really. So also would the 
 common interest oi money. P. 39 41. 
 
 Any increasein the quantity of commodities annually 
 circulated, while the money remained the same, would 
 produce other effects besides that of raising the value 
 of money. The capital of the country would be aug- 
 mented. The quantity of productive labour which it 
 could main' ;un would be increased. Wages would rise, 
 the profits of stuck would be diminished, as would the 
 interest of money which always keeps pace with tli^ 
 profits of stock. P. 42. 
 
 In some countries the interest of money is prohibited 
 by law. This regulation, instead of preventing, lias 
 increased the evil of usury ; the debtor being obliged to 
 pay for the use of money, and for the risk which his 
 creditor runs by accepting a compensation for that use. 
 In other countries the law fixes the highest rate which 
 can be taken without incurring a penalty. This rate 
 ought always to be somewhat above the lowest market 
 price. If this legal rate be fixed below the lowest mar- 
 ket rate, it will be the same as a prohibition of interest. 
 
 The legal rate ought not to be much above the lowest 
 market rate, If the legal rate of interest in Great Brii 
 tain was fixed at 8 or 10 per cent, the greater part of 
 the money lent, would be lent to prodigals and projec- 
 tors, who alone would be willing to give this high inte- 
 rest. No law can reduce the common rate of interest 
 below the lowest ordinary market rate at the time when 
 the law is made. P. 43 5.
 
 ( 1S7 ) 
 
 The ordinary market price of land, depends upon the 
 ordinary market rate of interest. The superior security 
 of land, disposes a man to be content with a smaller re- 
 venue from land, than what he might have by lending 
 out his money at interest. When interest was at 10 per 
 cent, land was commonly sold for 10 or 12 years pur- 
 chase. As interest sunk to 6 and 4 per cent, the price 
 pf land rose fco 20 and 30 years purchase. J*. 46. 
 
 CHAP. V. 
 
 Of the different employment of Capitals. 
 
 A CAPITAL may be employed four different ways : 
 (1.) In procuring the rude produce annually required 
 for the use and consumption of the society : or (2.) In 
 preparing that rude produce for consumption : or (3.) 
 In transporting rude or manufactured produce from 
 places where they abound, to those where they are 
 wanted : or (4.) In dividing particnlar portions of either 
 into such small parcels as suit the demands of those 
 who want them* Each of these four methods of emr 
 ploying a capital, is necessary to the existence or ex- 
 tension of the other three, or to the general conveni- 
 ence of the society. The capital employed in furnish- 
 ing rude produce is necessary to trade and manufac- 
 turers : ihat employed in manufacturing the rude pro- 
 duce is necessary to supply the demand. Unless a ca- 
 pital was employed in transporting either rude or manu- 
 factured produce from one place to another, no more
 
 could be produced than was necessary for the consump- 
 tion of the neigbourhood. Unless a capital was em- 
 ployed in dividing certain portions of the produce into 
 small parcels, every man would be obliged to purchase 
 a greater quantity of goods than he wanted. P. 46 9. 
 
 The persons whose capitals are employed in any of 
 these four ways are productive labourers. Their labour 
 realizes itself in the vendible commodity on which it is 
 bestowed, and adds to its price the value, at least, of 
 their own. maintenance and consumption. Equal capi- 
 tals employed in each of those four different ways, will 
 put in motion different quantities of productive labour. 
 The capital of the retailer replaces, with its profits, that 
 pf the merchant. The capital of the merchant replaces, 
 with their profits, the capitals of the farmers and manu- 
 facturers. His capital top employs sailors and carriers. 
 Part of the capital of the master manufacturer is em- 
 ployed as a fixed capital in the instruments of his trade, 
 and replaces with its profits, that of the artificer who 
 inakes them : part of his circulating capital purchases 
 materials of the farmer ; but the greater part is distri- 
 buted among workmen. P. 501. 
 
 No equal capital puts into motion a greater quantity 
 of productive labour than that of the Farmer. His cat- 
 tle and servants are productive labourers ; NATURE also 
 labours along with man, at no expence, but its produce 
 has its value. The operations of agriculture seem in- 
 tended to direct, rather than increase the fertility of na- 
 ture. Over and above the capital of the farmer and its 
 profits, there is the reproduction of the rent to the 
 landlord, which sometimes is a third of the whole pro- 
 duce. No equal quantity of productive labour employed 
 in manufactures, can occasion so great a reproduction.
 
 ( 139 ) 
 
 Hence a capital employed in agriculture, is most ad- 
 vantageous to society. P. 523. 
 
 The capitals employed in agriculture and the retail 
 trade must reside within the society ; that of the mer- 
 chant has no fixed residence. The capital of the manu- 
 facturer must reside where the manufacture is carried 
 on, but this may be at a great distance from the place 
 where the materials grow, or the manufactures are con- 
 sumed. Part of the wool of Spain is manufactured in 
 Great Britain, and the cloth sent back to Spain. Whe- 
 ther the merchant whose capital exports the surplus 
 produce of any society, be a native or foreigner, is of 
 no other importance, than the difference of the value 
 of the annual produce of that one man. It is of more 
 consequence that the capital of the manufacturer should 
 reside within the country > as it puts a greater quantity 
 of productive labour into motion. P. 54 5. 
 
 A country, like an individual, may frequently not 
 have sufficient capital to cultivate its lands, and manu- 
 facture its rude produce ; and to transport the surplus 
 part either of the rude or manufactured produce to dis- 
 tant markets. In this situation of things agriculture is to 
 be prefered, and then manufactures. P. 56. 
 
 The country which has not capital sufficient for all 
 those three purposes, has not arrived to that degree of 
 opulence for which it seems naturally destined. To at- 
 tempt, however, with an insufficient capital, to do all 
 three is not the shortest way to acquire a sufficient one. 
 The capital of all the individuals of a nation, is in- 
 creased by adding to it what they save out of their re- 
 venue : it will increase the fastest when it is employed 
 in the way which affords the greatest revenue, which 
 is in proportion to the annual produce of their land 
 and labour. P. 57.
 
 ( 140 ) 
 
 t$y agriculture, America has made rapid progress to- 
 wards wealth and greatness. The course of human pros- 
 perity seems scarce ever to have been of so long conti- 
 iiuarice as to enable any great country to acquire capi* 
 tal sufficient for all three purposes. Thus the capital of 
 any country will put into motion a quantity of produc- 
 tive labour in proportion as it isemployed in agriculture, 
 manufactures and wholesale trade The difference is 
 also very great according to the different sort of whole- 
 sale trade in which any part of it is employed. P.58 9. 
 
 All wholesale trade may be reduced to (1.) The 
 home trade which is employed in purchasing in one 
 part of the same country, and selling in another (2.) 
 The foreign trade of consumption, which is employed 
 in purchasing foreign goods for home consumption. 
 (3.) The carrying trade which is employed in transac- 
 ting the commerce of foreign countries. 
 
 The capital employed in tfaQjfcyf generally replaces 
 two distinct capitals employed in supporting productive 
 labour. The capital which sends Scotch manufactures 
 to London, brings back English corn and English manu- 
 factures. 
 
 The capitals employed in the second, likewise re- 
 place two capitals, but one only of them is employed 
 in supporting domestic industry : consequently the ca- 
 pital employed in it, can give, at most, but one half 
 the encouragement to the industry of the country, as 
 that employed in home trade. Foreign goods for home 
 consumption may be purchased with other foreign 
 goods ; these last, however, must have been purchased 
 with the produce of domestic industry ; the effects, 
 therefore, of a capital employed in such a round about 
 foreign trade, are the same as those of one employed
 
 ( 141 ) 
 
 in the most direct trade, except that the final returns 
 are more distant. Whatever be the foreign commodity 
 with which the foreign goods for home consumption 
 are purchased, it can occasion no essential difference 
 either in the nature of the trade, or in the support it 
 can give to the productive labour of the country from 
 which it is carried on. If they are purchased with 
 gold and silver, these must have been first purchased 
 with the produce of the industry of the country. Ow- 
 ing to the small bulk, and great value of the precious 
 metals, they may have the advantage over other com- 
 modities, in a round about foreign trade. P. 60 4. 
 
 That part of the capital which is employed in the 
 carrying trade of any country, is withdrawn from sup- 
 porting the productive labour of that country, to sup- 
 port that of foreign countries. Though it may replace 
 by every operation two distinct capitals, yet neither 
 belongs to that particular country. If this trade is car- 
 ried on by ships and sailors of that particular country, 
 part of the capital puts in motion a certain number of 
 productive labourers of that country : this is generally 
 the case, but not necessarily so. The carrying trade 
 is supposed to be highly advantageous to Great Britain; 
 though the same capital might be employed in the fo- 
 reign trade of consumption, or even in the coasting 
 trade. The number of sailors and ships do not depend 
 on 'the nature of the trade, the trade from Newcastle 
 to London, employs more shipping than all the carry- 
 ing trade of England. 
 
 The capital, therefore, employed in the home trade 
 gives greater emcouragement to domestic industry, than 
 
 S
 
 (( 142 
 
 that employed in tine foreign trade of consumption ; and 
 the capital employed in this latter trade, has a still 
 greater advantage over an equal capital employed in 
 the carrying trade. Ea,ch, however, is not only ad- 
 vantageous but necessary. Without exportation, a part 
 of the productive labour of the country must cease, 
 and the value of its annual produce diminish. In Great 
 Britain more corn, woollens, and hard ware, are pro- 
 duced than the demand requires. The surplus part must 
 be sent abroad and exchanged for something for which 
 there is a demand at home* If the foreign goods thus 
 purchased, exceed the demand of the home market, 
 $he surplus must be sent abroad again, and exchanged 
 for something more in demand at home. Thus the fo- 
 reign round about trade may be as necessary as the most 
 direct. P. 65 8. 
 
 When the capital stock of any country is increased 
 Jo such a degree, that it cannot be all employed in sup- 
 plying the consumption, and supporting the productive 
 labour of that country, the surplus part disgorges itself 
 
 into the carrying trade. The carrying trade is the 
 
 ffftct of national wealth, and not the natural .cause of 
 it. Holland the richest country in Europe, has the 
 greatest share of the carrying trade. P. 69. 
 
 The extent of the home trade, and of the capital era- 
 ployed in it, is limited by the value of the surplus pro- 
 duce of all those distant places within the country which 
 Exchange their respective productions with one ano- 
 ther. That of the foreign trade of consumption, by the 
 value of the surplus produce of the whole country, and 
 of what can be purchased with it : that of the carrying 
 trade, by the value of the surplus produce of all the dif- 
 ferent countries in the world. Private profits, and not
 
 ( 143 > 
 
 public good determines the owner of a capital to em- 
 ploy it either in agriculture, or in manufactures. 
 Therefore where agriculture is the most profitable of 
 employments, the capitals of individuals will be em- 
 ployed in the manner most advantageous to society. 
 P. 70-3. 
 
 S2
 
 ( M4 ) 
 
 BOOK III. 
 
 OF THE DIFFERENT PROGRESS OF OPULENCE IN DIF- 
 FERENT NATIONS, 
 
 CHAP. I. 
 
 Of the natural Progress of Opuhnce. 
 
 THE great commerce of every civilized society, is 
 that carried on between the inhabitants of the town, and 
 those of the country. The town in which there is no 
 reproduction of substances, gains its whole wealth from 
 the country : but the country is no loser, the gains are 
 reciprocal, and the division of labour is advantageous 
 to all the persons employed. The inhabitants of the 
 country purchase of the town a greater quantity of 
 manufactured goods, with the produce of a smaller 
 quantity of labour, than they must have employed had 
 they prepared them themselves. The town affords a 
 market for the surplus produce of the country. The 
 greater the number and revenue of the inhabitants of 
 the town, the more extensive is the market which it af- 
 fords to those of the country ; the more extensive the 
 market, the more advantageous is it to a great number. 
 The cultivation of the lands in the neighbourhood of a 
 great town shews how much the country is benefited by 
 the commerce of the town. P. 73 4. 
 
 As subsistence is prior to luxury, so the industry 
 which procures the former, must be prior to that which 
 ministers to the latter. Therefore the cultivation of the
 
 country must be prjor to the increase of the town. 
 Towns may derive their subsistence, in part, from dis- 
 tant countries, which occasions considerable variations 
 in the progress of opulence. If human institutions ha4 
 not thwarted the natural inclinations, the towns could 
 no where have increased beyond what the cultivation 
 of the territory in which they were situated could sup- 
 port. Upon equal profits, most men wquld chuse to em- 
 ploy their capitals rather in the cultivation of Jand,than 
 either in manufactures, or in foreign trade. The papital 
 employed in land is more under the command of its 
 owner, and is less liable to accidents, than that of the 
 trader. 
 
 Wjttyqut the assistance of artificers, land caijnof be 
 cultivated, These need the assistance of each otljer, 
 and not being tied down to a precise spot, they form 
 among themselves a small town or village. The inha- 
 bitants of the town, and those of the country are mutu- 
 ally the servants of one another. The town is a conti- 
 nual market, where rude produce is exchanged for that 
 which is manufactured. This commerce supplies the in- 
 Jiabitants, of the tqyvn, with the materials of work, and 
 the means of tj)eir subsistence. The quantity of finished 
 work which they sell to the inhabitants of the country, 
 regulates the quantity of the materials and provisipns 
 which they buy. Their employment and subsistence 
 can augment only in proportion to the demand from the 
 country for finished work ; which demand will be in 
 proportion to the extension of cultivation. In America 
 where land is cheap, manufactures for distant mile have 
 never yet been established in their towns. But in coun- 
 tries where land is dear, every artificer, who has ac- 
 quired more stock than can be employed in, the neigh-
 
 ( 146 ) 
 
 bourhood, endeavours to prepare work for more distant 
 sale. P. 75 8. 
 
 For the same reason, "where profits are nearly equal, 
 manufactures are prefered, for the employment of a 
 capital, to foreign commerce. In every period of so- 
 ciety, the surplus part of the produce must be sent 
 abroad in order to be exchanged for something for 
 which there is a demand at home. If the society has 
 not sufficient capital to cultivate all its lands, and to 
 manufacture all its rude produce, there is an advantage 
 that it should be, exported by a. foreign capital : that the' 
 whole stock may be employed in more useful purposes. 
 P. 79, 
 
 According to the natural order of things, the greater 
 part of the capital of every growing society is, first, di- 
 rected to agriculture, then to manufactures, and last of 
 all to foreign commerce. This natural order of things 
 been inverted in the modern states of Europe. P.80. 
 
 CHAP. 
 
 
 Of the discouragement of Agriculture In the antient states 
 of Europe after the fall of the Roman Empire. 
 
 WHEN the German and Scythian nations over-ran 
 the western provinces of the Roman Erapire,con fusions- 
 were introduced which lasted several centuries, during 
 which the principal leaders of those nations acquired 
 the greater part of the lands of those countries. This 
 original engrossing of the lands introduced the Jaws of
 
 (( 147 ) 
 
 primogeniture, and entails, which prevented them from 
 being divided by succession, or alienation. When land, 
 like moveables, is considered as the means only of sub- 
 sistence and enjoyment, it is divided among all the chil- 
 dren of the family. Such was the law of successiou 
 among the Romans. But when it was considered as the 
 means of power and protection, as in those times when 
 every great landlord was a prince, and his tenants were 
 his subjects, it descended undivided to one. Among the 
 children of the same family there can be no indisputable 
 ^difference, but that of sex, 'and that of age. The male 
 ; isprefered to the female - f and the elder takes place of 
 'the younger. Hence the origin of the right of primoge- 
 niture. In the present state of Europe, the proprietor of 
 a single acre of land is as secure of his possession as the 
 .proprietor of a hundred thousand, nevertheless the right 
 -of primogeniture continues to be respected, though no- 
 thing can be more contrary to the real interest of a nu- 
 jnerous family. ENTAILS are the natural consequence 
 of the law of primogeniture. They were unknown to 
 the Romans; and in the present state of Europe nothing 
 can be more absurd. They are founded on the supposi- 
 tion that every successive generation of men have not 
 an equal right to the earth, and all that it possesses. 
 P. 815. 
 
 Great tracts of uncultivated land were thus engrossed 
 by particular families without a possibility of their be- 
 ing divided. It seldom happened that a great proprietor, 
 was a great improver. In the disorderly times he was 
 sufficiently employed in defending his own territories. 
 When the establishment of law affords him leisure, 
 he of ten wants inclination, and almost always abilities. 
 To improve land with profit requires an exact atten- 
 tion to small savings, of which a man born to a large
 
 ( 148 ) 
 
 fortune is seldom capable. His situation disposes him 
 to attend to ornament rathef than profit ; his revenue 
 is not sufficient to improve his whole estate in this man- 
 ner, consequently a great part will go' unimproved. 
 The present conditfon of large estates will shew how 
 very unfavourable extertsive property is to improve- 
 ment. P. 85 G. 
 
 If little improvement was to be expected from great 
 proprietor's, still less was to be hoped far from the oc- 
 cupiers, who were tenants at will. They were a species 
 of slaves, who were Supposed to belong to the land who 
 could not marry but with the consent of their masters ; 
 and who were incapable of acquiring property. The 
 improvement of the land was at the expence of the 
 proprietor. The seed, the cattle, the instruments of hus- 
 bandry were all his. This species of slavery still sub- 
 sists in Poland, and many parts of Germany. Improve- 
 ments are least of all to be expected when slaves are 
 employed as workmen, who not being able to acquire 
 property, can have no interest but to eat as much, and 
 labour as little as possible. Experience demonstrates 
 that the work done by slaves is the dearest of any. 
 Sugar and tobacco can afford the expence of slave 
 cultivation; the raising of corn cannot. P. 87 9- 
 
 To the slave cultivators of antient times succeeded a 
 species of farmers who were furnished with the whole 
 stock by the proprietor, and with him divided equally 
 the produce. It could not be the interest of these culti- 
 vators to lay out any of their own little stock in the im- 
 provement of land, because the lord who laid out no- 
 thing was to get one half of whatever it produced. The 
 tithe is even found to be a great hindrance to improve- 
 ment. This species of tenants still subsists in Scotland, 
 called steel-bow tenants. P. 90 2.
 
 ( 149 ) 
 
 1*o this species of tenant's succeeded farmers properly 
 so called, who cultivated land with their own stock, 
 paying a certain rent to the landlord. When such far- 
 mers have a lease for a long term of years, it may be 
 tlieif interest to layout a part of their capital in im- 
 provement. The possession of such farmers was, and 
 Still is very precarious in many parrs of Europe, they 
 not having sufficient security against the landlord. By 
 the law of England the security of the tenant is equal 
 to that of the proprietor. In England also most of the 
 yeomanry possess freeholds, which render the whole 
 Order respectable on account of the political considera- 
 tion which these give them. The laws and customs fa- 
 vourable to the yeomanry hare contributed more to die 
 present grandeur of England than all trie boasted regu- 
 lations of commerce taken together. P. 93 4. 
 
 The law which secures the longest leases against suc- 
 cessors of every kind is peculiar ta Great Britain. Its 
 beneficial influence has been obstructed by entails. The 
 proprietors of land were antiently the legislators of 
 every part of Europe. The laws relating to land, there- 
 fore, were all calculated for the supposed interest of 
 the proprietor. The farmers too, besides paying the 
 rent, were antiently bound to perform a number of 
 services to the landlord, which subjected them to many 
 vexations: such as making and repairing high roads; 
 and providing horses, provisions, and carriages for 
 the king's troops when they passed through the coun- 
 try. The public taxes to which they were subject, were 
 as oppressive as the services. The antient lords easily al- 
 lowed the sovereign to tallage their tenants, without 
 foreseeing how it would affect their owu revenue. The
 
 ( 150 ) 
 
 tattle in France may serve as an example of antient tal- 
 lages. It is a tax upon the supposed profits of the far- 
 mer, which they estimate by the stock that he has 
 upon the farm. This tax hinders the accumulation of 
 stock, and is besides looked upon as dishonourable to 
 the persons subject to it. The antient tenths and fifr 
 teenths in England, seem to have been taxes of the 
 same nature of the taille. P. 94 6. 
 
 Under all these diacouragements little improvement 
 could be expected from the occupiers of land, who, with 
 all the security which law can give, must always im- 
 prove under great disadvantages. The farmer is as a 
 merchant who trades with borrowed money, the pro- 
 prietor one who trades with his own. The station of 
 . the former is inferior ti/ that of the proprietor ; and in 
 the greater part of Europe the yeomanry are regarded 
 as inferior even to tradesmen and mechanics. In such 
 a state of things, little stock is likely to go from any 
 other professions to the improvement of land in the way 
 of farming. The antient policy of Europe was farther 
 unfavourable to the improvement; of land. (1.) By the 
 prohibition" of the exportation of corn : and, (2.) By 
 the restraints Jaid upon inland commerce by the absurd 
 laws against engrossers, regraters, and forestallers, ami 
 by the privileges of fairs and markets. P. 97 y.
 
 ( 151 ) 
 
 CHAP. III. 
 
 ffthe rise and progress of cities and towns, after the 
 fall of the Roman Empire. 
 
 THE inhabitants of cities and towns were after the 
 fall of the Roman Empire, not more favoured than 
 those of the country. The proprietors of land gene- 
 rally lived in fortified castles on their own estates, and 
 in the midst of tlieir dependants. The towns were in- 
 habited by tradesmen and mechanics of servile condi- 
 tion, as is evident from the privileges granted to many 
 of them by charter. They seem to have been a poor 
 set of people, resembling the pedlars and hawkers of 
 the present times, subject to certain taxes, known by 
 the names of passage, pontage, fastage, and stallage. 
 Sometimes the king, sometimes a g*eat lord granted to 
 particular persons a genera.1 exemption from these taxes 
 these were called/ree traders. They ip je^um paid an 
 annual poll tax. P. 99101. 
 
 The inhabitants of towns arrived at independency 
 earlier than the occupiers of land in the country. Polf 
 taxes used com,mqnly to be let in farm, sometimes to 
 the sheriff, and sometimes to the burghers themselves, 
 who being answerable for the whole rent, were allowed 
 to collect it their own way. At first the farm of a town 
 was let for a term of years : afterwards it was granted 
 to them in fee, that is for ever, resei > ing a rent certain 
 never to be augmented. The payment becoming per- 
 petual, the exemptions, became perpetual too; the 
 town therefore was called a free-burgh. At the same 
 time they were generally erected into a corporation.
 
 C 
 
 with the privileges of having magistrates, ancl a town- 
 council of their own, and of making bye laws for their 
 own government, of building walls for their own de- 
 fence, tnid of reducing the inhabitants under a sort of 
 military discipline. In England they were exempted 
 from suit to county courts, and other services. It must 
 appear extraordinary, thatspyereigns should thus have 
 erected a sort of independent republic in the heart of 
 their own dominions. But they were not able thein- 
 $elves to protect all their weaker subjects from the op- 
 pressions of the great lords. Those who could not pro- 
 tect themselves sought protection, from some great lord 
 and to obtain it became his vassals. The inhabitants 
 qf cities and burghs, by entering into a league of mu- 
 tual defence, were capable of making resistance. The 
 lords despised the burgijers, and envied their wealth, 
 of which they plundered them on every occasion. The 
 burghers hated, and feared the lords : thq king hated 
 and fearcj them too. Mutual interest, therefore, 
 4}i$pqsd them to support the king, and the king 
 to support thein against trje lords, henve he granted 
 them those privileges which rendered them secure and 
 independent The princes who lived upon the worst 
 terms with, their barons, were the most liberal in grants 
 to their burghs. Such was John of England. Phillip 
 the First of France consulted his bishops, concerning 
 the most proper way of restraining the violence of his. 
 Iprds, who advised, (1.) To establish magistrates and a 
 town-council in every considerable town qfhi-s demesnes; 
 (2.) To form a new militia of the inhabitants of thosed 
 towns. P. lQ2-*7. 
 
 The militia of the cities was not inferior to that of 
 towns, and as they could be more readily assembled, 
 they frequently had the, advantage of tljc lords. In
 
 ( 153 ) 
 
 strong countries, situated at a distance from the scat of 
 government, the sovereign caine to lose ail his autho- 
 jrity, the cities became independent republics, and 
 *k>Jigeei the nobility to pull down, their castles, in the 
 country, and live, like other peaceable inhubkants, 
 in the city. Such is the history of Berne, &c. la 
 Switzerland, and of most of the Italian republics, ta 
 Fiance and England, the authority of the sovereign 
 jras never entirely destroyed. Though the cities could 
 not attain to independence, yet the sovereign could not 
 ^mpose any tax upon them without their consent/They^ 
 therefore, sent deputies to the general assembly of the 
 states of the kingdom, that they might join with the 
 clergy and barons, in granting extraordinary aid to> 
 the king- Hence the qrigin of the representation of 
 burghs in the states general of all the monarchies in 
 Europe. P. 1078. 
 
 Tiius were the liberty and security of individuals 
 established in cities wheu the occupiers of land in the 
 country were exposed to every sort of violence. In 
 the defenceless state, men content themselves with bare 
 subsistence, because to acquire more, might tempt the 
 injustice of their oppressors. The law at that time was 
 so indulgent to the inhabitants of towns, and so desit 
 rous of diminishingthe authority of the lords over thosq 
 of the country, that if a person running away from the 
 country, could conceal himself from his lord in a town, 
 for a year, he was free for ever. Whatever stock accu- 
 mulated in the hands of the industrious inhabitants of 
 the country, took refuge in cities, for the sake of secu- 
 rity. P. 109. 
 
 The inhabitants of a city must ultimately derive their 
 subsistence from the country. But if the city, be oq
 
 ( 154 ) 
 
 the sea coast, they may draw it from the remote cor-. 
 Hers of the world, by exchanging the manufactured 
 produce of their own industry ; or by performing the 
 office of carriers between distant countries. In thii 
 manner a city might attain to splendor and wealth, 
 while the neighbouring country was in poverty and 
 wretchedness. The citie.s of Italy were the first in 
 Europe raised by commerce to opulence. Italy lay in 
 the centre of the pivihzed world. The crusades were 
 favourable to the progress of some Italian cities, by 
 employing their shipping, and encouraging their trade. 
 P. 110. 
 
 The commerce of a great part of Europe, in those 
 times, consisted chiefly in the exchange of their own 
 rude, for the manufactured produce of more civilized 
 nations. The wool of England used to be exchanged 
 for the wines of France, the fine cloths of Flanders,&c. 
 Thus a taste for the finer manufactures was introduced 
 by foreign commerce, into countries where no such 
 works were carried on,. And when the taste became 
 general, manufactures of the same kind were established 
 in their own country. No large country can subsist 
 without manufactures ; even in poor countries the 
 clothing and household furniture are the produce of 
 their own industry. P. 111. 
 
 Manufactures fit for distant sale seem to have been 
 introduced two ways. (1.) They are sometimes the 
 offspring of foreign commerce. Such were the silks 
 and velvets of Lucca, banished from thence by the ty- 
 ranny of Castracani, and established in 1310, with 
 many privileges, at Venice. Such also are the silk ma- 
 nufacturesof Spital-fields. Manufactures thus intro- 
 fhiced are generally employed upon foreign materials,
 
 ( 155 ) 
 
 being inflations of foreign manufactures. (2.) Ma* 
 nufactures for distant countries sometimes grow up na- 
 turally, by the gradual refinement of the coarser ma- 
 nufactures : these are generally employed upon mate- 
 rials which the country produces ; and have been first 
 improved in inland countries. Fertile inland countries 
 produce abundance of provisions, which encourages 
 workmen to settle in the neighbourhood. They give a 
 new value to the surplus part of the rude produce. The 
 cultivators get a better price for their surplus produce, 
 which encourages them to encrease that surplus by the 
 better cultivation of the land. The manufacturers first 
 supply the neighbourhood, and as their work improves 
 more distant markets r for though coarse manufactures 
 would not support the expence of a considerable 
 land carriage, the refined may. In this manner have "\ 
 grown up the manufactures of Leeds, Birmingham/ 
 Sheffield, &c. they are the offspring of agriculture. 
 P. 11216. 
 
 
 CHAP. IV. 
 
 i 
 
 .How tht commerce of the towns contributed to the 
 
 improvement of the country. 
 
 THE encrease and riches of towns contributed to 
 the improvement of countries, (1.) By affording a 
 ready market for the rude pro<Jfcce of the country. ^2.) 
 The wealth acquired in cities was often employed in 
 purchasing lauds. Merchants becoming country geu<-
 
 tlemen, are frequently the best improvers. And", (S.) 
 commerce and manufactures gradually introduced or- 
 der and good government, and with them the liberty 
 and security of individuals. P. 117 19. 
 
 Ill a country which h'as neither foreign commerce, 
 nor finer manufactures/ a great proprietor consumes the 
 greater part of the produce of his lands in rustic hospi- 
 tality. He is surrounded with a multitude of depend- 
 ants, who must ohey him as soldiers obey the prince 
 who pays them. Before the extension of commerce 
 in Europe, the hospitality of th rich arid great esri 
 ceeded every thing which we can irrragine. Westmin- 
 ster-hall was the dining room of William Rufus ; awd 
 the great Earl of Warwick is said to have entertairted 
 every day at his different manors 30,000 people. The 
 occupiers of land were entirely dependent upon the 
 great proprietor ; sach as were tenants at will paid a 
 tent in no respect equivalent to the subsistence which 
 the land afforded them ; a sheep, or a Iamb was, some 
 years ago, in the Highlands of Scotland, a common 
 rent for lands which maintained a family. Upon the 
 authority which the proprietors had, in such a state of 
 things, over their tenants and retainers, was founded 
 the povver of the antient barons. They became judges 
 in peace, and leaders in war. They could maintain 
 order and execute law. The king was little more than, 
 the greatest proprietor iri his dominions, to whom, thte 
 others paid certain respects. He wa^ therefore obliged 
 to abandon, the administration of justice, .through the 
 greater part of the country, to those who were capable 
 of adminisie.ring it ; and, for the same reason, to leave 
 the command of the country militia to those whom 
 that militia would obey. The highest jurisdiction* both 
 civil and criminal j the power of levying troops ;--
 
 of coining money ; of making laws for the govern- 
 ment of their own people, were all rights possessed by 
 the great proprietors, long before feudal law was 
 known in Europe. The authority of the Saxon lords 
 was as great before the conquest as that of any Nor- 
 man lords after it. But the feudal law was not the 
 common law of England till after the conquest. 
 P. 11923. 
 
 The introduction of the feudal law may be regarded 
 as an attempt to moderate the authority of the great 
 allodial lords. It established a regular subordination 
 from the king to the smallest proprietor. During the 
 minority of the proprietor, the rent, and management 
 of his lands, fell into thehands of his immediate supe- 
 rior ; and those of all great proprietors, into the hands 
 of the king, who was charged with the maintenance 
 and education of the pupil, and who had a right of 
 disposing of him in marriage. This institution tended 
 to strengthen the authority of the king, yet he was still 
 incapable of restraining the violence of the great lords. 
 They continued to make war upon each other, and 
 often upon him. Foreign commerce and manufactures 
 brought about what feudal institutions could never 
 Jiave effected. These furnished the great proprietors 
 with something which they could consume themselves, 
 without sharing it with their tenants. " All for our- 
 selves" has been the vile maxim of the masters of the 
 world. As soon, therefore, as they could find a method 
 of consuming the value of their rents themselves, they 
 had no disposition to share them with other persons. 
 For the gratification of vanities they bartered their 
 whole power and authority. P. 124 5. 
 
 U
 
 ( 158 ) 
 
 In a country where there is no foreign commerce, 
 nor any of the finer manufactures, a man of ten thou- 
 sand a year, cannot well employ his revenue in any 
 other way than in maintaining 1000 families, \\hoare 
 all at his command. But in the present state of Europe, 
 a man may spend ten thousand a year without directly 
 maintaining 20 people. Indirectly he maintains, per- 
 haps, a greater number of people than he could have 
 done by the antient method of expellee. He generally 
 contributes, however, but a small proportion towards 
 the maintainance of each. A tradesman or artificer 
 derives his subsistence from the employment of 100 or 
 1000 different customers ; to all of*whom he is obliged, 
 but is dependent upon none of them 1 . The personal ex- 
 pence of the great proprietors having gradually increas- 
 ed, the number of their retainers was diminished ; and 
 their unnecessary tenants dismissed. Farms were en- 
 larged, and the occupiers reduced to the number neces- 
 sary for cultivating the land. Manufactures furnished 
 the proprietor with a method of spending more upon 
 his own person, which- made him desirous of raising his 
 rents above what IHS lands could afford ; this the tenants 
 could not agree to but upon the condition, that they 
 should be seceired in their possession for such a term of 
 years as might pay for the further improvement of the 
 land. Hence the origin of long leases. Even a tenant 
 at will, who pays the full value of the land, is not al- 
 together dependent upon the landlord. The pecuniary 
 advantages are mutual. But if he has along lease he 
 is entirely independent. The tenants having in this 
 manner become independent,the great proprietors were 
 no longer capable of disturbing the peace of the coun- 
 try. An established government was established there 
 sa well as iu the city. 1*. 1C(J 8.
 
 ( 159 ) 
 
 In commercial countries very old families are rare ; 
 but in countries which have little commerce, they are 
 common. In countries where a rich man can spend 
 his revenue only by maintaining as many people as it 
 can maintain, he is not apt to run out. But where he 
 can spend the greatest revenue upon his own person, he 
 knows no bounds to his expence. P. 129- 
 
 A revolution of the greatest importance to the pub- 
 lic happines was in this manner brought about, by 
 those who had no intention to serve the public. Vanity 
 was the motive of the proprietors ; Interest that of the 
 merchants. Neither foresaw the revolution bringing 
 about by the folly of the one, and the industry of the 
 other. Thus the commerce and manufactures of the 
 cities through the greater part of Europe, instead of 
 being the effect, have been the cause of the improve- 
 ment of the country. This order, being contrary to the 
 natural course of things, is slow and uncertain. Com- 
 pare the slow progress of those European countries, of 
 which the wealth depends upon their commerce and 
 manufactures,withthe rapid advances of North America, 
 of which the wealth is founded in agriculture. In Eu- 
 rope the number of inhabitants is not doubled in less 
 than 500 years ; in America it is found to double in '25 
 -years. In Europe the law of primogeniture prevents 
 the division of lands, and thereby hinders the multipli- 
 cation of small proprietors, who are in general the best 
 improvers. This circumstance keeps land up to a mo- 
 nopoly price. The rent never pays the interest of the 
 purchase-money, which prevents a number of capitals 
 from being employed in the improvement of land.
 
 ( 160 ) 
 
 In America tTie purchase and improvement of land is 
 the most profitable employment of a capital.P. 130 2. 
 
 England, on account of the natural fertility of its 
 soil, the extent of the sea-coast, and its conveniency 
 of water carriage, seems fitted for the seat of foreign 
 ^ commerce. From the beginning of the reign of Eliza- 
 belh, the legislature has been peculiarly attentive to the 
 interest of its commerce and manufactures. Commerce 
 and manufactures have accordingly been advancing 
 during all this period, so have the cultivation and im- 
 provement of the country also, though not so rapidly. 
 The greater part of the country was cultivated before 
 the time of Elizabeth ; and a great part still remains un- 
 cultivated, and the cultivation of the greater part is in- 
 ferior to what it might be. The law of England fa- 
 vours agriculture, by encouraging the exportation of 
 corn ; by prohibiting the importation of cattle ; and 
 by rendering the yeomanry secure and independent. 
 P 133 i. 
 
 France had a considerable share of foreign commerce 
 near a century before England. The cultivation of 
 France is inferior to that of England. The foreign 
 commerce of Spain and Portugal is considerable ; but 
 it has never introduced any considerable manufactures 
 for distant sale into either of those countries, and the 
 greater part of both still remains uncultivated. Italy 
 has been improved in every part, by means of foreign 
 commerce and manufactures for distant sale.lt was well 
 cultivated before the invasion of Charles VIII. P.135 6. 
 
 The capital acquired to any country by commerce 
 and manufactures is an uncertain possession till a part 
 of it has been realized in the improvement of lands. A 
 merchant is not the citizen of any country ; a trifling 
 disgust will make him remove his capital from one
 
 country to another. No vestige remains of the wealth 
 of the Hans towns ; it is uncertain where some of 
 them were situated. The civil wars of Planners, and 
 the Spanish government, chased away commerce from 
 Antwerp, Ghent, and Bruges. But Flanders con- 
 tinues to be one of the richest and best cultivated pro- 
 vinces of Europe. Ordinary revolutions dry up the 
 sources of wealth which arise from commerce only. 
 That which arises from agriculture is more durable. 
 P. 1367.
 
 ( 163 ) 
 
 BOOK IV. 
 
 Of systems of political (Economy. 
 INTRODUCTION. 
 
 POLITICAL oeconomy proposes fnpo'distJnct objects: 
 (1.) To provide subsistence for the people ; and, (2.) To 
 supply the state with a revenue sufficient for public 
 services. The different progress to opulence in diffe- 
 rent ages, Jias given occasion to, two systems of politi- 
 cal oeconorny, with regard to enriching the people/The 
 one a system of commerce ,the other that of agriculture. 
 P. 138. 
 
 CHAP. I. 
 
 Of the principle of the commercial or mercantile system. 
 
 THAT wealth consists of gold and silver is a popular 
 notion arising from the double function of money, as 
 the instrument of commerce, and SLS the measure of value. 
 As the instrument of commerce, with money we can 
 obtain what we have occasion for. As the measure of 
 value, we estimate that of all other commodities, by the 
 quantity of money which they will exchange for. P. 139. 
 
 A rich country is supposed to be a country abound- 
 ing in money. The first enquiry of the Spaniards,
 
 when they arrived upon any unknown coast,used to be, 
 if there were gold and silver in the neighbourhood* 
 The object of the Tartars was the same as that of the 
 Spaniards, but their enquires were, if there were plenty 
 of s"heep and oxen in France. They wanted ta know 
 if the country was worth conquering. Mr. Locke con- 
 sidered gold and silver as the most substantial part of 
 the moveable wealth of a nation* Others admit that if 
 a nation could be separated from all the world, it would 
 be of no consequence how much, or how little money 
 circulated in it ; but that it is different with countries 
 \vhich have connections with foreign nations. In con- 
 sequence of these opinions, all the nations of Europe 
 have endeavoured to accumulate money, and have, at 
 different periods, prohibited the exportation of the pre- 
 cious metals. The merchants found this prohibition 
 inconvenient, and remonstrated against it (1.) As 
 tending to diminish, rather than increase the quantity 
 of those metals in the kingdom : (2.) Because the pro- 
 hibition could not prevent the exportation ; but only 
 make it more difficult and expensive : And (3.) That 
 an attention to the balance of trade was the only way 
 to prevent the exportation of gold and silver : for that 
 the exchange was turned against the country which 
 o\y,ed the balance. The two first arguments were solid, 
 but the last was sophistical. -They carried however 
 conviction to the persons, to whom they were addres- 
 sed, and who knew nothing about the matter : and the 
 prohibition of exporting gold and silver was, inFrance 
 and England, confined to the coin of those respec- 
 tive countries : and, in Holland, and some other 
 places, this liberty extended even to the coin of the 
 country. Thus the attention of government was turned 
 away from guarding against the exportation of gold
 
 ( 164 ) 
 
 and silver, to watch over the balance of trade. From 
 one fruitless care, it was turned away to another care 
 more intricate, more embarrassing, and equally fruit- 
 less. P. 1407. 
 
 A country that has no mines of its own must draw its 
 gold and silver from foreign countries in the same man- 
 ner as one that has no vineyards must draw its wines. 
 Like other commodities they are to be bought. All 
 other commodities are the price of those metals. The 
 quantity of every commodity suits itself to the effectual 
 demand, but no commodity regulates itself more easily 
 according to this demand than gold and silver, on ac- 
 count of their small bulk. When the quantity of gold 
 and silver imported into any country exceeds the effec- 
 tual demand, no vigilance can prevent their exporta- 
 tion. It is partly owing to the easy transportation of 
 gold and silver that their price does not fluctuate like 
 that of other commodities. P. 148 50. 
 
 There are more expedients for supplying the place of 
 gold and silver than that of almost any other commo- 
 dity. If materials are wanted, industry must stop. If 
 provisions are wanted the people must starve. But if 
 money is wanted, barter will supply its place. To watch 
 over the preservation of the quantity of money in a 
 country is therefore, unnecessary in Government. No 
 complaint is more common than the scarcity of money. 
 Over-trading is the cause of the complaint ; which is a 
 general error when the profits of trade are greater than 
 ordinary ; not that dealers send more money abroad 
 than usual, but they buy, upon credit, an unusual quan- 
 tity of goods, and the demand for "payment comes be- 
 fore the returns. P. 151 2. 
 
 It is not because wealth consists more in money than 
 in goods, that the merchant finds it easier to buy goods
 
 with money, than to buy money with goods, but 
 because money is the established instrument of 
 commerce. Besides, the greater part of goods are 
 more perishable than money, and he may sustain a 
 loss by keeping them : his profit arises from selling and 
 not from buying ; therefore he is anxious rather to ex- 
 change his goods for money, than his money for 
 goods. Tliongh an individual, with abundance of 
 goods in his warehouse, may be ruined, a nation is not 
 liable to the same accident : it may suffer some incon- 
 veniency, but the annual produce of its land and la- 
 bour will be nearly the same, because the same conJ- 
 sumable capital would be employed in maintaining it* 
 P. 153. 4. 
 
 It is pretended that nothing can be more disadvan- 
 tageous to a country than the trade which consists in the 
 exchange of such lasting commodities as gold and sil- 
 ver, for others which are perishable. But the hard- 
 ware, of England is not a disadvantageous trade, for the 
 number of such utensils is in every country limited by 
 the use which there is for them. Gold and silver whe- 
 ther in the shape of coin, or of plate, are utensils as 
 much as the furniture of the kitchen. Increase the use: 
 for them, and you will increase the quantity ; but if 
 you attempt, by extraordinary means, to increase the 
 quantity, you will diminish the use, and even the quan- 
 tity too. P. 155 6. 
 
 It is not necessary to accumulate gold and silver, irr 
 order to enable a country to carry on foreign wars. 
 Fleets ami armies are maintained with consumable 
 goods: A nation may purchase the pay and provisions 
 of an army three different ways 9 by sending abroad 
 
 X
 
 ( 166 ) 
 
 either, (1.) Some of its accumulated gold and silver ; 
 or, (2). Some of its manufactures :or, (3.) Some 
 part of its rude produce. The gold and silver accumu- 
 lated is distinguished into, (1.) The circulating money; 
 (2.) The plate of private families ; and, (3.) The 
 money laid up in the treasury of the prince : these are 
 but insignificant resources for carrying on a war. The 
 funds which maintained the foreign wars of the present 
 century have had little dependency upon the exporta- 
 tion either of circulating money ; or of the plate of 
 private families ; or of the treasure of the prince ; but 
 upon that of British commodities of some kind or other. 
 J. 15761. 
 
 Besides the three sorts of gold and silver above men- 
 tioned, there is in all countries, a good deal of bullion 
 imported and exported for the purposes of foreign trade* 
 This bullion may be considered as the money of the 
 great mercantile republic, part of which may have been 
 employed in carrying on our wars ; but this must have 
 been purchased with British commodities, which are 
 the ultimate resources of war. The commodities most 
 proper for this purpose seem to be the finer manufac- 
 tures, which can be exported at little expence. The 
 manufacturers, during a war, will have a double de- 
 mand upon them, (1.) To work up goods to be sent 
 abroad for paying bills drawn upon foreign countries 
 for the pay and provisions of the army ; and, (2.) To 
 work up such as are necessary for purchasing the 
 common returns that had been usually consumed in 
 the country. Manufactures may flourish, therefore, 
 amidst the rum of their country. No foreign war of 
 great expence could be carried on by the exportation 
 of the rude produce of the soil. The expence of car- 
 riage would be too great ; besides the rude produce of 
 
 "
 
 ( 167 ) 
 
 few countries is much more than sufficient for the sub- 
 sistence of their own inhabitants. Hence the inability 
 of the antient kings of England to carry on a foreign 
 war of long duration ; which did not arise from the 
 want of money, but of the finer manufactures. Among 
 nations to whom commerce and manufactures are but 
 little known, the sovereign can seldom draw any con- 
 siderable aid from his subjects;he therefore accumulates 
 a treasure as a resource against emergencies. The 
 Saxon kings accumulated treasures,and the first exploit 
 of every new reign, was commonly to seize the treasure 
 of the preceding king, as the most essential measure of 
 ecuring the succession. P. 1626. 
 
 The importation of gold and silver is not the princi- 
 pal benefit which a nation derives from its foreign 
 trade. It carries out that surplus part of the produce of 
 their land and labour, for which there is no demand at 
 home, and brings back something else for which there 
 is a demand. By thus opening a more extensive mar- 
 Itetfor the surplus produce of their labour, it encoura- 
 ges them to improve its productive powers, and there- 
 by to increase the real revenue and wealth of the 
 society. 
 
 It is not by the importation of gold and silver, that 
 the discovery of America has enriched Europe. By 
 the abundance of the mines, those metals have become 
 cheaper, and have been brought to the level of a much 
 greater number of purchasers. But the cheapness ren-. 
 tiers those metals rather less fit for the purposes of mo- 
 ney than they were before. The discovery of America 
 however, by opening a new market for European com- 
 modities, gave occasion to new divisions of labour, and 
 
 X 2
 
 ( tfB ) 
 
 improvements of art, which increased the real revenue 
 and wealth of all the different .countries in Europe. 
 P. 167-9. 
 
 The discovery of a passage to the East Indies by the 
 Cape of Good Hope, ope,ns asMh 1 more extensive range 
 to foreign commerce than even that of America. The 
 inhabitants of America were savages ; those of the East 
 Indies were rich, and advanced in arts and manufac- 
 tures. Europe has derived less advantage from its cqm- 
 loaerce with the latter, than" from that with the former, 
 owing 1,0 the restraints and monopolies with which 
 the East India commerce is beset. By the exporta- 
 tion of silver to the East Indies, ptete is somewhat 
 dearer in Europe than it might otherwise have been, 
 and coined silver probably purchases a larger quantity 
 both of labour and commodities. The former is a small 
 loss, the latter a small advantage. P. 170 2. 
 
 The two principals being .established, viz. that wealth 
 consisted in gold and silver ; and,that those metals could 
 be brought into a country only by the balance of trade; 
 it became the object of political ceconomy to dimi- 
 nis^i the importation of foreign goods, and to increase 
 the exportation of domestic industry. The restraints 
 upon importation were, (1.) Restraints upon the im- 
 portation of such foreign goods, for home consump- 
 tion, as could be produced at home. (2.)Restraints upon 
 the importajtion of goods of almost all kinds from those 
 particular countries with which the balance of trade 
 was supposed to be disadvantageous. Those restraints 
 consisted sometimes in high duties, and sometimes in 
 absolute prohibitions.
 
 , Exportation .was encouraged by draw-backs ;-r-tyf 
 bounties ; by advantageous treaties of cooiniexce ;--. 
 $ud by the establishment of colonies. P. 173 5. 
 
 CHAP. II, 
 
 Of restraints upon the importation from foreign coun- 
 tries of such goods as can be produced at home. 
 
 BY restraining the importation of such goods from 
 foreign countries as can be produced at home, the mo- 
 nopoly of the home market is secured to domestic in- 
 dustry. Thus the prohibition of importing live cattle, 
 or salt provisions secures to the graziers of Great Bri- 
 tain the monopoly of the home market for butchers' 
 meat. This monopoly gives encouragement to particu- 
 lar species of industry, but it is not certain whether it 
 tends to increase the general industry of the society, 
 which can never exceed what the capital of the society 
 can employ. P. 1?C. 7. 
 
 Every individual exerts himself to find out the most 
 advantageous employment for whatever his capital can 
 command. The study of his own advantage neces- 
 sarily leads him to prefer what is most advantageous to 
 the society. 
 
 I. Every individual endeavours to employ his capital 
 as near home as he can, and consequently as much as 
 he can in the support of domestic industry. In the 
 home trade the capital of a merchant is never so long 
 out of his sight as in the foreign trade of consumption;
 
 ( 170 ) 
 
 ke also knows better his customers, and the laws of the 
 country from which he must seek redress. P. 178. & 
 
 II. Every individual who employs his capital in the 
 support of domestic industry, endeavours so to direct 
 that industry, that the produce may be of the greatest 
 possible value. The produce of industry, is what adfls 
 to the materials upon which it is employed. In propor- 
 tion to its valne, will be the profits, for the sake of 
 THrhich a man employs a capital in support of industry. 
 The annual revenue of every society is equal to the ex- 
 changeable value of the whole annual produce of its 
 industry ; every individual, therefore^ by employing his 
 capital in the support of that industry, the produce of 
 vhich is of the greatest possible value, labours to 
 render the annual revenue ot the society as great as he 
 can. P. 180. 1, 
 
 *the best manner of employing his capital must be 
 left to the discretion of each individual. Statesmen 
 and senates are unequeal to direct private people how 
 to employ their capitals. But to give the monopoly of 
 the home-market to the produce of domestic industry, 
 ip any art or manufacture, is to direct private people in 
 tyhat manner they ought to employ their capitals, and 
 must be a useless or a hurtful regulation. If the produce 
 of domestic, can be brought there as cheap as that of 
 fpreign industry, the regulation is useless ; if it cannot 
 it is hurtful. The taylor does not make his own shoes, 
 nor the shoemaker his own clothes. If a foreign coun- 
 try can supply us with a commodity cheaper than we 
 can make it, better buy it with some part of the produce 
 of our own industry employed in a way in which we 
 have some advantage ; otherwise the industry of the 
 country is turned away from a more to a less advanta- 
 geous employment, and the value of the annual pro-
 
 ( 171 > 
 
 duce must be diminished by every such regulation. 
 P. 182. 3. 
 
 By means of such regulations, a particular manu* 
 facture may be acquired 5 but it does not follow, that 
 the industry or revenue of the society will be augmen^ 
 ted, The industry of a society augments only in pro- 
 portion as its capital augments, and its capital can aug- 
 ment only in proportion to what can be gradually saved 
 out of its revenue; but the immediate effect of every 
 uch regulation is to diminish the revenue. P* 184* 
 
 The natural advantages of some countries are so great 
 that it would be in vain to struggle with them. Scot- 
 land at thirty times the expenee,might make good wine, 
 but it would be absurd, on that accoiint, to prohibit the 
 importation of foreign wines* P. 185. 
 
 Merchants and manufactures derive the greatest ad- 
 vantage from the monopoly of the home-market. Ma- 
 nufactures are more easily transported than corn or 
 cattle. In manufactures a small advantage will enable 
 foreigners to undersell our own workmen. If the free 
 importation of foreign manufactures were permitted, 
 several of the home manufactures would go to ruin. But 
 the freest importation of the rude produce of the soil 
 could have no such effect upon the agriculture of the 
 country. The grazing trade of Great Britain would 
 not be much affected by the free importation of foreign 
 cattle, or salt provisions. Even the free importation of 
 corn could very little affect the interest of the farmer. ^^ 
 Country gentlemen and farmers are less subject to the 
 ipiritof monopoly than manufacturers; they seemhow- 
 ever, to have forgotten themselves when they demand- 
 ed the exclusive privilege of supplying their country- 
 men with corn and butchers' meat. To prohibit by a 
 perpetual law the importation of foreign corn and cat"
 
 tie/ is to enact that the population and industry of the 
 country shall at no time exceed what the rude produce 
 of its own soil can maintain. P. 18691. 
 
 It may in two instances be advantageous to lay some 
 burden upon foreign, for the encouragement of domestic 
 industry. First, when some particular sort of industry 
 i&' necessary for the defence of the country. The de- 
 fence of Great Britain depends upon its sailors and 
 shipping. T?he act of navigation* therefore, properly 
 endeavours to give the sailors and shipping the mono* 
 poly of the trade of their own country. P. 192 4. 
 
 The second case is when some tax is imposed at home 
 upon the produce of domestic industry. In this case it 
 seems reasonable, that an equal tax should be imposed 
 upon the produce of foreign industry. This would 
 reave the competition, after the tax;, on the same foot- 
 ing 1 as it was before it:. But according to some people, 
 When the necessaries of life have been taxed, it becomes 
 ilecessary to tax all sorts of foreign goods which can 
 come into competition with any part of the produce of 
 domestic industry. Since etiery commodity which is- the 
 rjroduce of domestic industry becomes dearer, though 
 not immediately taxed itself, in consequence of such 
 taxes, because the labour which produces it becomes soi 
 Admitting this, yet the general enhancement of the 
 price of alf cormnodities> in consequence of that of la* 
 Lour, isa case which diflferS in ^ two respects from that 
 of a particular commodity. (1.) It may be known, how 
 Far the price of such a commodity could be enhanced 
 by such a tax : but how far it might affect the price of 
 labour could never be known- (2.) Taxes on the neces* 
 saries of life have the same effect upon the circumstan- 
 ces of the people as a pbor soil and bad climate. Such 
 taxes, at a certain height, are a curse equal to- the bar-
 
 ( 173 ) 
 
 renness of the earth. Only rich countries could bear 
 them. P. 1958. 
 
 As there are two cases in which it may be advanta- 
 geous to burden foreign, for the encouragement of do- 
 mestic industry, so there are two in which it may be 
 matter of deliberation. 
 
 Thejirst is, how far it is proper to continue the free 
 importation of certain foreign goods, when some foreign 
 nation restrains the importation of our manufactures 
 into their country. Nations seldom fail to retaliate, 
 France has been forward in thus favouring their own 
 manufactures. But the opinion of the most intelligent 
 people there, is, that it has been of no advantage to the 
 country. Retaliations may be good policy, if they tend 
 to procure a repeal of the prohibitions complained of. 
 Tojudge whether they are likely to produce this effect, 
 does not belong so much to the legislator, as to the 
 crafty statesman. When there is no probability of 
 procuring a repeal, it is a bad method of compensa- 
 ting the injury done to some classes of the people, tq 
 do another to almost all the other classes of them. 
 P. 199201. 
 
 The second case is, how far, and in what manner, it 
 is proper to restore the free importation of foreign goods, 
 after it has been interrupted. When any manufactures, 
 by means of prohibitions upon foreign goods, have been 
 so far extended as to employ a multitude of hands, hu- 
 manity may require, that the freedom of trade should 
 be restored with great circumspection ; otherwise it 
 might occasion great disorder ; though less, perhaps, 
 than is commonly imagined, for two reasons : (1.) All 
 those manufactures of which any^part is commonly ex- 
 ported to other European countries, without a bounty, 
 
 Y
 
 ( 174: )> 
 
 could be very little affected by the freest importation of 
 foreign goods. Such are the woollen manufactures, 
 tanned leather, and hardware. (2.) Though by resto- 
 ring the freedom of trade, a great number of people 
 would be thrown out of their ordinary employment, it 
 does not follow that they would be deprived of subsis- 
 tence. At the. end of a war 100,000 soldiers and seamen 
 are sometime disbanded, without even diminishing the 
 price of labour, except in that of seamen in the mer- 
 chant service. But the habits of manufactures do not 
 tend to disqualify them from exercising a new trade, 
 so much as those of soldiers. Soldiers and seamen 
 are at liberty to exercise any trade within any town or 
 place. Grant the same liberty to all people ; that is, 
 break down the privileges of corporations ; repeal the 
 statute of apprenticeship, and that of settlements, and 
 neither the public nor individuals would suffer more 
 rom disbanding'souie particular classes of manufac- 
 turers, than from that of soldiers. P. 202 5. 
 
 Perfect freedom of trade is not to be expected in 
 Great Britain ; public prejudices, and private interests 
 oppose it. Hence the member of parliament who sup- 
 ports monopolies acquires reputation and popularity ; 
 but he who opposes and thwarts them, is liable to in- 
 sults, and danger, from which the greatest public ser* 
 vices cannot.always protect him. A regard to the inte- 
 rest of manufacturers requires that home markets be not 
 suddenly laid open to the competition of foreigners, 
 since they would find it difficult to dispose of that part 
 of their capital, without considerable loss, which con- 
 sists in fixed work-houses, and in the instruments of 
 trade. Hence the legislature should be very careful not 
 to establish new monopolies, nor to extend those al- 
 ready established. P. 2068.
 
 ( 175 ) 
 
 CHAP. III. 
 
 Of the extraordinary restraints upon the importation of 
 goodsj from those countries with which the balance is 
 supposed disadvantageous. 
 
 PART I. 
 
 Of the unreasonableness of those restraints even upon the 
 principles of the commercial system. 
 
 TO lay extraordinary restrainis on the importation 
 of goods, from those countries with which the balance 
 of trade is supposed disadvantageous, is the second ex- 
 pedient to increase the quantity of gold and silver. 
 Thus higher duties are imposed on French goods, 
 than on those of other nations. France has treated our 
 manufactures in the same way. These principles take 
 their origin from national prejudices, and are highly 
 .unreasonable, even according to the commercial sys- 
 tem. For, 
 
 I. Though in the free trade betwixt Great Britain and 
 France, the balance were in favour of France, it would 
 not necessarily follow, that the trade was disadvantage- 
 ous to England. For the goods of France might be 
 cheaper than those of any other foreign country. 
 
 II. A great part of them might be re-exported with.a 
 profit. Though a great part of the goods were bought 
 with gold and silver, the re-exportation of a part of 
 
 Y 2
 
 ]f ( 176 ) 
 
 them might bring back more gold and silver than the 
 prime cost of the whole amounted to. 
 
 III. There is no certain criterion by which we can 
 determine on which side the balance between any two 
 countries lies. Custom-house books, and the course of 
 exchange have been appealed to. The former is an un- 
 certain criterion, on account of the inaccuracy of the 
 valuation of the goods rated in them. The latter, per- 
 haps, is almost equally so. For though the ordinary 
 course of exchange of any two places be a sufficient in- 
 dication of the ordinary state of debt and credit; yet 
 the ordinary state of credit and debt is often regulated 
 by the dealings of either of them, with many other 
 places. Besides, the real course of exchange is often 
 different from the computed one. P. 209 14. 
 
 When for a sum of money paid in England, contain- 
 ing, according to the standard of the English mint, a 
 certain number of ounces of pure silver, you receive a 
 bill for a sum of money to be paid in France, contain- 
 ing according to the French standard, an equal number 
 of ounces of pure silver, exchange is said to be at par 
 between England and France. When you pay more, 
 exchange is said to be against England. When less, ex- 
 change is against France. But, (1.) We cannot always 
 judge of the value of the current rrjpnev of different 
 countries, which must be in proportion to the quantity 
 of pure silver which it actually does contain. (2.) In 
 England the expence of coining is defrayed by the go- 
 vernment ; in France 8 per cent, is charged for coin- 
 age. French money must, therefore, be more valuable 
 than the same quantity of English money j consequent- 
 ly the real exchange might be in favour of England, 
 while the computed was in favour of France. (3.) In 
 some places, as Amsterdam, Hamburgh, &c. foreign
 
 ( 177 ) 
 
 bills of exchange are paid in what they call bank mo- 
 ney, while^m others, as London, Lisbon, &c. they are 
 paid in the currency of the country. Bank money is of 
 more value than currency, and the difference is called 
 the agio of the bank. In two countries, one paying 
 bills of exchange in currency, the other in bank mo- 
 ney, it is evident that the computecTexchsinge may be in 
 favour of that which pays in bank money, though the 
 real exchange should be in favour of that which pay* 
 in currency. P. 215 18. 
 
 Digression concerning Banks of Deposit, particularly 
 concerning that of Amsterdam. 
 
 THE currency of a great state, such as England, ge- 
 nerally consists almost entirely of its own coin. Should 
 this currency be, at any time, degraded below its stan- 
 dard value, the state can, by a reformation of its coin, 
 re-establish its currency. But the currency of a small 
 state, such as Hamburgh, seldom consists altogether 
 in its own coin, but is made up of the coins of all the 
 neighbouring states. Such a state, by reforming its 
 coin, will not always reform its currency. If foreign 
 bills of exchange are paid in this currency, the uncer- 
 tain value of any sum must render the exchange always 
 very much against such a state. In order to remedy this 
 inconvenience, such small states have enacted that fo- 
 reign bills of certain value, should be paid by a trans- 
 fer in the books of a certain bank, which is obliged to 
 pay in good and true standard money. The banks of
 
 Hamburgh, Amsterdam, &c. were established with this 
 view. The money of such banks, being better than 
 the currency, bore an agio. The agio of Hamburgh is 
 about 14 per cent. P. 219- 20. 
 
 Before 1609, the currency of Amsterdam was 9 per 
 cent below fresh money from the mint. The merchants 
 could not always find a sufficient quantity of good mo- 
 ney to pay their bills of exchange, and the value of 
 those bills became uncertain. To remedy this, a bank 
 W!\s established under the guarantee of the city. This 
 bank received all sorts of coin at its intrinsic value, de- 
 ducting the expence of coinage, and of management, 
 and gave a credit for1fit7"m*ifs Books. This credit was 
 called bank money, which was always of the same real 
 yaluej and worth more than the currenqy,. ,It was en- 
 acted that all bills of exchange drawn upon, or negoei- 
 ated at Amsterdam, of the value of 600 guilders and 
 upwards, should be paid in bank money. Consequent- 
 ly every merchant was obliged to' keep an account with 
 the bank in order to pay his bills of exchange, which 
 occasioned a certain demand for bank money. P. 221. 
 
 Bank money has other advantages ; it is secure from 
 accidents, and can be paid away by simple transfer. 
 In consequence of these advantages, it has always borne 
 an agio. The money deposited in the banks is believed 
 to remain -there, nobody caring to demand payment of 
 the bank of a debt which be could sell for a premium. 
 Besides, by being brought from the bank it lost all the 
 advantages of bank money, nor could it be brought from 
 its coffers without payii>g for the keeping. Those depo- 
 sits of coin constituted the original capital of the bank. 
 It now gives credit upon deposits of gold 'and silver bul- 
 lion, at about 5 per cent, below the mint price. It 
 grants a receipt entitling the bearer to takeout the bui-
 
 ( 179 ) 
 
 lion within six months, upon transferring to the bank 
 a quantity of bank money equal to that for which credit 
 had been given, and upon paying i per cent for keep- 
 ing, if the deposit was in silver, and per cent, if it was 
 in gold ; but in default of such payment, and upon the 
 expiration of this term, the deposit should belong to 
 the bank at the price ut which it had been received. 
 P. 222. 3. 
 
 Deposits of bullion are commonly made when the 
 price is lower than ordinary ; and they are taken out 
 when it happens to rise. A person can generally sell 
 his receipt for the difference between the mint price of 
 bullion, and the market price. A receipt for bullion is 
 generally worth something, and it seldom happens, 
 therefore, that any body suffers his receipt to expire, or 
 allows his bullion to fall to the bank, 'at the price at 
 which it had been received. P. 224. 5. 
 
 The person who by making a deposit of bullion ob- 
 tains both a bank credit and a receipt, pays his bills of 
 exchange with his bank credit, and either sells or keeps 
 his receipt, according as he judges that the price of bul- 
 lion is likely to rise or fall. The owners of bank credit, 
 and the holders of receipts, constitute two different sorts 
 of creditors against the bank. The holder of a receipt 
 cannot draw out bullion without re-assigning to the 
 bank,asum of bank money equal to the price at which the 
 bullion had been received. If he has no bank money, 
 he must purchase it. The owner of bank money cannot 
 draw out bullion without a bank receipt for the quantity 
 he wants. The price of the receipts, and the price of 
 the bank money, make up between them the full value 
 of the bullion. P. 226. 
 
 The bank grants receipts and bank credits, upon de- 
 posits of the current coin, but these receipts are fro
 
 ( 180 ) 
 
 quently of no value. The stun of bank money, for 
 which the receipts are expired must be considerable. 
 It must comprehend the whole original capital of the 
 bank. But the proportion which it bears to the whole 
 mass of bank money, is supposed to be very small. No 
 demand can be made on the bank but by means of a re- 
 ceipt. The bank money, for which receipts are expired, 
 is mixed with that for which they are still in force ; so 
 that, though there may be a considerable sum of bank 
 money for which there are no receipts, there is no spe- 
 cific sum, which may not be demanded by one. The 
 owner of bank money cannot demand payment with- 
 out a receipt. In ordinary times he can find no difficulty 
 in getting one to buy at the market price. It might be 
 otherwise during a public calamity, as that of an inva- 
 sion. In such an emergency the bank might, perhaps, 
 pay the owners of bank money who could get no re- 
 ceipts, the value of what they were credited for in their 
 books ; paying 2 or 3 per cent, to such holders of re- 
 ceipts as had no bank money. P. 227 9- 
 
 In ordinary times it is the interest of the holders of 
 receipts to depress the agio, in order to buy bank mo- 
 ney cheaper, or to sell their receipts dearer. It is the 
 interest of the owners of bank money to raise the agio, 
 in order to sell their bank money dearer, or to buy a re- 
 ceipt cheaper. To prevent stock-jobbing, agio now is 
 never more than 5 nor less than 4 per cent. P. 230. 
 
 The bank of Amsterdam professes to lend out no part 
 of what is deposited in it ; and no point of faith is bet- 
 ter established than that of every guilder circulated as 
 bank money, there is a corresponding guilder in gold 
 or silver in the treasure of the bank. In 1672, when the 
 French king was at Utrecht, the bank of Amsterdam
 
 ( 181 ) 
 
 paid so r&pidly as left no doubt of the fidelity with which 
 it had observed its engagements. P. 231. 2. 
 
 The amount of the treasure of the bank Cannot be 
 known, but three millions sterling is probably the ut- 
 most extent, which is quite sufficient to carry on a very 
 extensive circulation. The city of Amsterdam derives 
 considerable revenue from the bank. Beside what may 
 be called warehouse rent, there are fees upon opening 
 every new account, and also for every transfer ; like- 
 wise forfeits from every person who neglects to balance 
 his accounts twice in the year. The bank is supposed 
 to make a profit by the sale of foreign coin or bullion, 
 which sometimes falls to it by expiring receipts. It 
 makes a profit by selling bank money at 5, and buying 
 it at 4, percent. Public utility however, and not reve- 
 nue, was the original object of this institution. The 
 exchange generally appear* to be in favour of the coun- 
 tries which pay in bank money, and against those which 
 pay in currency : for the fonher pay in a species of 
 money of which the intrinsic value is always the same; 
 the latter is a species of money of which the intrinsic 
 value is always varying and generally below the stan- 
 dard. P. G^:J. 4. 
 
 PART. IT. 
 
 Of the unreasonable-ness of those extraordinary restraint* 
 upon other principles. 
 
 NOTHING! can bo more absurd than the whole doc- 
 trine of the balance of trade. When two places traik.
 
 ( 182 ) 
 
 with one another this doctrine supposes, that if the ba- 
 lance be equal, neither of them gains or loses ; but that 
 if it leans te one side, one of them loses and the 
 other gains. Both suppositions are false. A trade which 
 is forced, by means of bounties and monopolies, is 
 commonly disadvantageous to the country in whose fa- 
 vour it is meant to be established. But a trade, which 
 without constraint, is carried on between any two places, 
 is always advantageous, though not equally so, to both. 
 By advantage is understood, not an increase of gold 
 and silver, but that of the exchangeable value of the 
 annual produce of the land and labour of the country. 
 If the balance be equal, and the trade consist in the ex- 
 change of their native commodities, they will, on most 
 occasions, gain equally j each will afford a market for 
 a part of the surplus produce of the other. P. 235. 6. 
 
 If the one export nothing but native commodities, 
 and the returns of the other consisted altogether in fo- 
 reign goods, the balance would be supposed equal, com- 
 modities being paid for with commodities. The inhabi- 
 tants of that country which exported nothing but native 
 commodities would gain most ; since the whole capital 
 annually employed, would be distributed among the 
 people : but in the other, only that part of the capital 
 which was employed in producing commodities, with 
 which the foreign goods were purchased, would be an- 
 nually distributed among the people. The one would 
 carry on a direct foreign trade, ihe other a round about 
 trade. All countries exchange with one another, partly 
 native, and partly foreign goods: that country will be 
 the principal gainer in whose cargoes there is the great- 
 est proportion of native goods. P. 237. 8. 
 
 If England paid for the commodities imported from 
 France, with gold and silver, and not with tobacco and
 
 ( 183 ) 
 
 India goods, the balance would be supposed agains us. 
 The trade would give revenue to both countries, but 
 more to France. If the tobacco which, in England, is 
 worth only 100,0001. when sent to France,will purchase 
 wine, which is in England worth 110,0001. the ex- 
 change will augment the capital of England by 10,0001. 
 The s.ame may be said of a like sum of English gold. 
 It would be more advantageou.3 for England that it 
 could purchase the wines qf France with its own hard- 
 ware, than with the tobacco of Virginia, or the gold 
 and silver of Peru. A country which has no mines, is 
 not more likely to be exhausted of gold and silver, by 
 the exportation of those metals, than one which does 
 not grow tobacco, by the exportation of that plant. 
 P. 239. 40. 
 
 That is thought a losing trade which a workman 
 carries on with the alehouse, and the trade which a ma- 
 nufacturing nation would naturally carry on with a 
 wine country, may be considered of the same nature. 
 The trade with the alehouse is as advantageous and ne- 
 cessary to the workman as any other, though more li- 
 able to be abused. Individuals may ruin their fortunes 
 by an excessive consumption of ferrnented liquors ; but 
 there seems to be no risk that a nation should do so. 
 The cheapness of wine is the cause, not of drunkenness, 
 but of sobriety. The restraints upon the wine trade 
 arc not calculated to, keep people from the alehouse, 
 but to prevent them from going where they can buy the 
 best and cheapest liquor. They favour the wine of Por- 
 tugal, and discourage that of France, because the Por- 
 tuguese, it is said, are better customers for our manu- 
 factures than the French. The arts of underling trades-
 
 ( 184 ) 
 
 men are thus erected into political maxims for the con-, 
 duct of a great empire. By such maxims, nations have 
 been taught that their interest consisted in beggaring 
 all their neighbours. Commerce has become the source 
 of animosity. The ambition of Kings and ministers has 
 not been njorc fatal to the repose of Europe, than the 
 jealousy of merchants and manufacturers. P. <241 3. 
 
 It was the spirit uf monopoly which invented thisdocr 
 trine. It is the interest of the people to buy of those 
 who sell the cheapest. This proposition has been call- 
 ed in question onlv by merchants and manufacturers,, 
 whose interest is opposite to that of the great l>ody of 
 the people. Hence, the. duty on goods imported by 
 alien merchants; the duties and prohibitions on foreign 
 manufactures; and the restraints upon the importation 
 of goods from countries, with which tlie balance of 
 trade is supposed disadvantageous ; that is, from those 
 countries against whom national animosity happens to 
 be most violently inflamed. P. 244. 
 
 The wealth of a neighbouring nation, though dan- 
 gerous in war, is advantageous in trade. A rick man 
 is likely to be a better cusfqmer to the people in his 
 neighbourhood, than a poor man ; so is likewise a rich 
 nation. The manufacturers of a rich nation, may be 
 dangerous rivals to those of their neighbours ; but the 
 competition is advantageous to the great body of the 
 people. Private people who want to make a fortune, 
 resort to the capital ; where much wealth circulates, 
 some share of it may fall to them. Tije same maxims 
 should make a whole nation regard the riches of its 
 neighbours, as an occasion for itself to acquire riches. 
 The modern maxims of foreign commerce, by aiming 
 at the impoverishment of all our neighbours, tend to 
 render that very commerce contemptible. Hence, the
 
 iestraints on the commerce between France and Eng* 
 jancl. . If the real interest of bp th countries were con- 
 sidered, a reciprocal commerce might be most advaiir 
 tageous to each. France is tlie nearest neighbour tQ 
 Great Britain ; the returns might be made four, five, or 
 six times in the year, consequently the same capital 
 would keep in motion four, five, or six times the quart* 
 tity of industry, which an equal capital could do in 
 most other branches of foreign trade. Between the 
 parts of France and Great Britain, the most remote 
 from one another, the returns might be expected once 
 a year; this would make the trade with France three 
 times more advantageous than the trade with North 
 America. France, besides, contains twenty-four mil- 
 lions of inhabitants ; America, but three. France is 
 also the much richer country. Such is the difference 
 between that trade, which the wisdom of both nations 
 has thought proper to discourage, and that which it has 
 favoured the most. P. 24,5 8. 
 
 The same circumstances, which would have render- 
 ed an open and free commerce between the two coun- 
 tries so advantageous to both, have occasioned the 
 principal obstructions to that commerce. Every tow \\ 
 and country, in proportion as they have opened their 
 ports to all nations, have been enriched by the free 
 trade. P. 249- 
 
 There is another balance, which according as it hap- 
 pens to be favourable or unfavourable, occasions the 
 prosperity or decay of every nation. This is the balance 
 of the annual produce and consumption, which is en- 
 tirely different from the balance of trade. It may take 
 place in a nation which has no foreign trade. It may 
 take place in the whole earth, of which the wealth and 
 population may be either increasing or decaying. The
 
 ( 186 ) 
 
 balance of produce and consumption may be in favour 
 of a nation, though the balance of trade be against it. 
 P. 250. 1. 
 
 CHAP. IV. 
 
 Of Drawbacks. 
 
 MERCHANTS and manufacturers, not contented 
 with the monopoly of the home market, have sought 
 certain encouragements to exportation: of these, draw- 
 backs seem to be the most reasonable. To allow the 
 merchant to draw back the whole, or apart of whatever 
 excise or inland duty is imposed upon domestic indus- 
 try, can never occasion the exportation of more goods, 
 than what would have been exported had no duty been 
 imposed. Such encouragements do not tend to turn 
 towards any particular employment, a greater share of 
 the capital of the country than what would go to that 
 employment of its own accord, but only to hinder the 
 duty from driving away any part pf that share to other 
 employments. They tend to preserve the natural divi- 
 sion and distribution of labour in the society. The 
 same thing may be said of the drawbacks upon the re- 
 exportation of foreign goods imported. Formerly the 
 merchant was allowed to drawback half the duty upon 
 exportation, provided the exportation by the English 
 merchant took place within twelve months; by the 
 Alien within nine months: this was afterwards extended 
 to three years. Upon the exportation of tobacco, of 
 which we had the monopoly, the whole duties were 
 drawn back. Sugars caine nearlyunder the same rule.
 
 ( 187 ) 
 
 Some goods are entirely prohibited to be imported for 
 home consumption. If imported for exportation, no 
 part of the duties is drawn back ; such are French cam- 
 brics, printed callicoes, &c. P. 252 4. 
 
 Upon all French commodities,less of the duties were 
 allowed to be drawn back than upon those of other 
 countries. P. 255 7 ' 
 
 DRAWBACKS were, perhaps, granted for the encou- 
 ragement of the cnrryirig trade, which, as the freight 
 of the ships is frequently paid by foreigners, was pecu- 
 liarly fitted for bringing gold and silver into the coun- 
 try. The motive of the institution was foolish, though 
 the institution itself was reasonable. Such drawbacks 
 cannot force into this trade a greater share of the capi- 
 tal of the country, than what would have gone into it 
 of its own accord, had there been no duties on impor- 
 tation. The carrying trade is a resource to those ca- 
 pitals which cannot find employment in the agriculture, 
 or the manufactures of the country. The revenue 
 profits by that part of the duty which is retained. If 
 the whole duties had been retained, the foreign goods 
 could seldom have been exported, nor consequently im- 
 ported, for want of a market. These reasons will justify 
 drawbacks. P. 25860. 
 
 CHAP. V. 
 
 Of Bounties. 
 
 BOUNTIES upon exportation are sometimes gran- 
 ted to the produce of particular branches of domestic
 
 ( 188 ) 
 
 industry. By means of them our merchants, it is pte- 
 tended, will be enabled to sell their goods as cheap, or 
 cheaper, than their rivals in the foreign market. A 
 greater quantity will thus be exported, and the balance! 
 of trade turned more in favour 6f our own country. 
 Bounties ought to be given to those branches of trade 
 only, which cannot be carried on without them, or in 
 which the merchant is obliged to sell his goods for less 
 th;yi they really cost him to send to market. The 
 bounty is given to make up his loss. The trades carried 
 on by means of bounties, are the only ones which can 
 be carried on between two nations, for any considerable 
 time> in such a manner as that one shall regularly lose, 
 or sell its goods for less than it costs to send them to 
 market. But if the bounty did not repay to the mer- 
 chant what he would lose upon his goods, be would 
 soon employ his stock in another way. The effect of 
 bounties can only be to force the trade of a country into 
 a channel, less advantageous than that in which it 
 would run of its own accord. P. 26 1. 2. 
 
 Since the bounty upon the exportation of corn was 
 first established, the price of the corn exported, has ex- 
 ceeded that of the corn imported, by a much greater 
 sum than the amount of the whole bounties which have 
 been paid during that period. This has been thought 
 a proof that the forced corn trade is beneficial to the na- 
 tion,\vithout considering that the bounty is the smallest 
 expence to the society. The capital of the farmer em- 
 ployed in raising it must be taken into the account. 
 Unless the price of corn in the foreign market will pay 
 the bounty, ibis capital, and the profits of stock,the so- 
 ciety is a loser. The bounty supposes the price to be 
 insufficient to do this. P. iiO'J.
 
 ( 189 ) 
 
 The average price of corn has fallen since the estab- 
 lishment of the bounty. This must have happened in 
 spite of the bounty, and is probably owing to the gra- 
 dual rise in the real value of silver. In years of plenty 
 the bounty keeps up the price of corn. In years of 
 scarcity, though the bounty is frequently suspended, 
 yet the great exportation in years of plenty, must hin- 
 der the plenty of one year from relieving the scarcity 
 of another. It has been thought that it encourages til- 
 lage, (1.) By opening a foreign market to the farmer, 
 and, (2.) By securing to him a better price. But it is 
 answered, that the extension of the foreign market by 
 the bounty, must be at the expenceof the home mar- 
 ket. The corn bounty imposes two different taxes 
 upon the people ; (1.) The tax in order to pay the 
 bounty ; and, (2.) That which arises from the advan- 
 ced price of the commodity in the home market. The 
 second is the heavier tax ; and it must either reduce tlje 
 subsistence of the labouring poor, or occasion some 
 augmentation in their pecuniary wages. In the one 
 case it must tend to restrain the population of the coun- 
 try ; in the other, it must tend to restrain the industry 
 of the country. The final tendency of the bounty, 
 therefore, is to diminish, rather than to augment the. 
 market and consumption of corn. This enhancement 
 of the money price of corn, it has been thought, must, 
 encourage its production. But it is not the rtal t but 
 the nominal price of corn, which is affected by the 
 bounty. The effect of the bounty is not so much to 
 raise the real value of corn, as to degrade the real value 
 of silver. For the money price of corn regulates the 
 money price of labour ; and also of all the other parts
 
 < 190 ) 
 
 of the rude produce of land, consequently that of the 
 materials of almost all manufactures. By regulating 
 the money price of labour, it regulates that of manufac- 
 turing art and industry, and consequently that of the 
 complete manufacture. P. 264 8. 
 
 That degradation in the value of silver which is the 
 effect of the fertility of the mines, as it operates equally 
 every where, is a matter of little consequence to any 
 particular country. But that degradation in the value 
 of silver, which, being the effect of the political in- 
 stitutions of a particular country, takes place only in 
 that country, and is a matter of very great consequence, 
 and tends to make every body poorer. P. 269. 70. 
 
 Spain and Portugal are the distributors of gold and 
 silver to all Europe ; they should be somewhat cheaper 
 in those countries than in any other part of Europe. 
 Spain by taxing, and Portugal by prohibiting the ex- 
 portation of gold and silver, load the exportation with 
 the expence of smuggling ; they cannot detain a grea- 
 ter quantity of gold and silver than what they can af- 
 ford to employ in coin, plate, &c. The higher the 
 tax, the higher the penalties with which the prohibi- 
 tion is guarded, the greater must be the difference in 
 the proportion of gold and silver to the annual produce 
 of the land and labour of Spain and Portugal, and to 
 that of other countries. The cheapness of gold and 
 silver discourages the agriculture and manufactures of 
 Spain and Portugal, and enables foreign nations to 
 supply them with many sorts of rude produce, and with 
 almost all sorts of manufactures, for a smaller quan- 
 tity of gold and silver than what they can either raise, 
 or.make them for at home. The tax and prohibition 
 operate in two ways: (1.) They lower the value of 
 the precious metals in Spain and Portugal ; and, (2.)
 
 < 191 ) 
 
 They keep up the price in other countries above what 
 it would otherwise be, and thereby give those countries 
 a double advantage in their commerce with Spain and 
 Portugal. Remove the tax and prohibition, and the 
 value of those metals will soon come to a level in all 
 countries. The loss which Spain and Portugal could 
 sustain would be nominal and imaginary. The nomi- 
 nal value of their goods would fall, but their real value 
 would be the same. The gold and silver which would 
 go abroad would bring back an equal value of goods, 
 the greater part of which would afford employment and 
 maintenance for industrious people ; a part of their 
 dead stock would thus be turned into active stock, and 
 the produce of their land and labour must increase. 
 P. 2714. 
 
 The bounty upon the exportation of corn neces- 
 sarily operates in the same way as this absurd policy of 
 Spain and Portugal. It renders our corn dearer in 
 the home market, and cheaper in the foreign ; and the 
 average price of corn regulates that of all other com- 
 modities ; it lowers the value of silver in the one, and 
 tends to raise it in the other. The bounty as it raises 
 in the home market, not so much the real, as the no- 
 minal price of corn, it discourages our manufactures, 
 without rendering real service to our farmers. P. 275. 
 
 The corn merchants are the only persons who essen- 
 tially profit by this bounty ; as in years of plenty it oc- 
 casions a greater exportation ; and by hindering the 
 plenty of one year from relieving the scarcity of ano- 
 ther, it occasions, in years of scarcity, a greater impor- 
 tation than there would otherwise be, which they can 
 sell with a greater profit. In imposing the high duties 
 
 A a 2
 
 ( 192 ) 
 
 on the importation of foreign coin, and in establishing 
 the bounty,ourcountry gentlemen imitated the conduct 
 of our manufacturers. They did not attend to the es- 
 sential difference which nature has established between 
 corn, and almost every other sort of goods. 
 
 When, by mohopoly, or bounty, woollen or linen 
 manufacturers are enabled to sell their goods for a bet- 
 ter price than they could otherwise get for them, it is 
 the real price which is raised, and they are enabled to 
 live better themselves, and to employ a greater quantity 
 of labour. But when, by like instructions, the money 
 price of corn is raised, the real value is not raised. 
 Nature has stamped a value upon corn, which cannot 
 be altered by altering the money price. That value is, 
 in every place, equal to the quantity of labour which 
 it can maintain, as labour is commonly maintained in 
 that place. Woollen or linen cloth are not the only 
 regulating commodities by which the real value of all 
 other commodities must be determined ; corn is. 
 P. 2768. 
 
 Bounties upon the exportation of any home made 
 commodity are liable, (1.) To the objection of forcing 
 come part of the industry of the country into a channel 
 less advantageous than that in which it would run of 
 its own accord : and, (2.) To the objection of forcing it 
 into a channel that is actually disadvantageous. The 
 "bounty upon the exportation of corn, is liable to this 
 farther objection, that it cannot promote the raising of 
 that commodity of which it was meant to encourage the 
 production. P. 278. 9. 
 
 To encourage the production of any commodity, a 
 bounty upon production would have a more direct ope- 
 ration, than one upon exportation. U would impose 
 .only one tax on the people. It would teud to lower
 
 ( 193 ) 
 
 the price of the commodity in the home market, which 
 would, in part, contribute to repay the tax. Some- 
 thing like a bounty upon production, has been granted 
 upon some occasions. Such are the tonnage bounties 
 given to the white-herring and whale fisheries. They 
 lend to render the goods cheaper in the home market, 
 than they would otherwise be. In other respects their 
 effects are the same as those of bounties upon exporta- 
 tion. The tonnage bounties are thought to contribute 
 to the defence of the country, by augmenting the num- 
 ber of its sailors and shipping. This is said to be done 
 cheaper by these bounties, than by keeping a standing 
 navy. Notwithstanding these favourable allegations, it 
 is not improbable that the legislature has been imposed 
 on in granting, at least, one of these bounties. For, 
 (1.) The herring buss bounty seems too large : every 
 barrel of which costs government nearly 18s. but the 
 price is only about a guinea at an average. (2.) The 
 bounty to the white herring fishery is in proportion to 
 the burden of the ship, not to her success in the 
 fishery. Many vessels have probably been fitted out 
 to catch, not the fish, but the bounty. (3.) The mode 
 of fishing for which this tonnage bounty has been 
 given, is not so well adapted for Scotland, as the boat 
 fishery, which has nearly gone to decay since the estab- 
 lishment of the buss bounty. (4.) In many parts of 
 Scotland, herrings make a great part of the food of the 
 common people. The herring buss bounty has con- 
 tributed rather to raise than lower their price in the 
 home market. 
 
 Notwithstanding the liberal bounties bestowed on the 
 undertakers of fisheries, they do not seem to have been 
 great gainers in the business. The effect of such boun- 
 ties is to encourage rash undertakers to adventure in a
 
 ( 194 ) 
 
 business they do not understand, and what they lose by 
 their own ignorance, more than compensates the libe- 
 rality of government. P. 280 7. 
 
 If any manufacture was necessary for the defence of 
 the society, and could not be otherwise supported at 
 home, it might not be unreasonable that all other 
 branches of industry should be taxed to support it. The 
 bounties upon the exportation of British made sail cloth, 
 and gunpowder, may, perhaps be vindicated on this 
 principle. What is called a bounty, is sometimes no 
 more than a drawback) and consequently is not liable 
 to the same objections as what is properly called a 
 bounty, Such are the bounties upon raw sugar, and 
 upon wrought silk. The bounty also upon gunpowder 
 is a drawback of the duties imposed upon brimstone 
 and saltpetre imported* PREMIUMS given by the public 
 to artists are not liable to the same objections as bounr 
 ties. Their tendency is not to overturn the natural ba*. 
 lance of employment, but to render the work done more 
 perfect. The expence of premiums is small, that on, 
 bounties very great. The bounty on corn has sometimes 
 cost the public, in one year more thari three Ijundrec} 
 thousand pounds. P. 288. 90. 
 
 Digression concerning the Corn Trade and Corn Laws. 
 
 THE praises bestowed upon 'the corn laws of this 
 country are altogether unmerited. The trade of the, 
 corn merchant is composed of four different branches.
 
 These are (1.) The trade of the inland dealer; (2.) That 
 of the importer ; (3.) That of the exporter ; and (4.) That 
 of the carrier. 
 
 I. The interest of the inland dealer, and that of the 
 great body of the people, are, even in years of scarcity, 
 the same. It is his interest to raise the price of corn as 
 high as the real scarcity of the season requires, and no 
 higher. By raising the price he discourages the con- 
 sumption, and makes people ceconomical. But by rais- 
 ing it too high he is liable to great loss, by not being 
 able to sell all his corn. And by not raising it high 
 enough, he loses part of his profit and exposes the peo- 
 ple to famine. It is the interest of the people that their 
 consumption should be proportioned to the supply of 
 the season. This also is the interest of the inland dealer 
 in corn. If one great company of merchants could pos- 
 sess themselves of the whole crop of an extensive coun- 
 try, they might destroy a part, to keep up the price of 
 the rest. But this is scarcely possible with regard to 
 corn : wherever the law leaves the trade free, it is of all 
 commodities the least liable to be monopolized by a few- 
 large capitals. Its value exceeds the capitals of a few 
 private men ; and it is necessarily divided among a 
 greater number of owners, who are scattered through 
 the country. P. 290 4. 
 
 Dearths have never arisen from the combinations of 
 the dealers in corn, but from real scarcity, occasioned 
 by the waste of war, or by the fault of the seasons ; and 
 famines have always been caused by the violence of go- 
 vernment, attemjrting by improper means, to remedy 
 the inconveniences of dearths. In an extensive corn 
 country, in which there is-a free commerce, the scar- 
 city occasioned by the worst seasons can never produce 
 a famine. Tiie seasons most unfavourable to a crop, are
 
 ( 196 ) 
 
 those of excessive drought, or excessive rain. But as 
 corn grows equally on high, and low lands, the season 
 that is hurtful to one part of the conutry is favourable to 
 another. In rice countries, where the crop requires 
 much water, the effects of a drought are more dismal, 
 yet seldom so universal as to occasion a famine if the 
 government would allow a free trade. P. 295. 6. 
 
 When a government, to remedy the inconveniences 
 of a dearth, orders all dealers to sell their corn at what 
 it supposes a reasonable price, it either hinders them 
 from bringing their corn to market, or it enables the 
 people to consume it too fast. The unlimited freedom 
 of the corn trade is the only effectual preventive of a fa- 
 mine, and the best palliative of the inconveniences of a 
 dearth. In years of scarcity, the inferior ranks of the 
 people impute their distresses to the averace of the corn 
 merchant ; though on such occasions he is often the 
 greatest sufferer. It is evident that the profit of the com 
 merchant is no more than sufficient to put his trade on 
 a level with other trades, since great fortunes are not 
 more frequent in this than in other trades. P. 297. 8. 
 
 The ancient policy of Europe encouraged the popu- 
 lar odium against this trade. By a statute of Edward VI. 
 it was made a punishable offence to buy corn with an 
 intent to sell it again. Our ancestors endeavoured to 
 hinder any middle man from coming in between ihe 
 grower and consumer. Hence the restraints on the car- 
 rier of corn. Agriculture was, in this manner, regula- 
 ted, by motives quite different from those established 
 with regard to manufactures. The farmer was, obliged 
 to become a corn merchant ; while the manufacturer 
 was, in many cases, forbidden to sell his goods by re- 
 tail. The one law was intended to make corn cheap ; 
 the gther was intended to encourage the business of.
 
 ( 197 ) 
 
 shopkeepers. The manufacturer cannot undersell the 
 common shopkeeper, for the capital placed in his shop, 
 must be withdrawn from his manufactory ; therefore 
 he must have the profits of the manufacturer on part of 
 his capital, and those of the shopkeeper on the other 
 part. The farmer also, for the same reason, could not 
 afford to sell his corn cheaper than any other corn mer- 
 chant would have been obliged to do in the case of a 
 free competition. P. 299 301. 
 
 The dealer who-employs his whole stock in one 
 branch 'of business has an advantage similar to the 
 workman whose labour is employed in a single opera- 
 tion. The law which prohibited the manufacturer from 
 exercising the trade of a shopkeeper, endeavoured to 
 force this division in the employment of stock to go on 
 faster than it might otherwise have done. The law 
 which obliged the farmer to exercise the trade of a com 
 merchant, endeavoured to hinder it from going on so 
 fast. Both were unjust, but the latter was the most 
 pernicious. It obstructed the improvement and culti- 
 vation of land, by forcing the farmer to divide his ca- 
 pital into two parts, only one of which could be em- 
 ployed in the cultivation of land; it must consequently 
 have tended to raise the price of corn. P. 302. 3. 
 
 After the business of the farmer, that of the corn, 
 merchant, properly protected, will contribute most to 
 the raising of corn. It will support the trade of the 
 farmer, in the same manner as the trade of the whole- 
 sale dealer supports that of the manufacturer. It will 
 enable the farmers to keep their whole capitals con- 
 stantly employed in cultivation, and render them inde- 
 pendent of thg landlord. The statute of Edward VI
 
 ( 198 ) 
 
 therefore endeavoured to annihilate a trade, of which 
 the free exercise is the best preventive of a dearth, as 
 contributing more than any trade except that of the 
 farmer, to the growing of corn. P. 304. 5. 
 
 The rigour of this law was afterwards softened, and 
 by a statute of Charles II. the buying of corn, in order 
 to sell it again is declared lawful, as long as the price of 
 wheat does not exceed 48s. the quarter, to persons not 
 being forestallers, that is, not selling it again in the 
 same market within three months. This statute autho- 
 rises two absurd popular prejudices : (1.) It supposes 
 that when wheat is 48s. the quarter it is likely to be so 
 engrosedasto hurt the people. (2.) It supposes that 
 there is a certain price at which corn is likely to be 
 forestalled so as to injure the public. But if the mer- 
 chant buys corn either going to a market, or at the 
 market, in order to seell it again soon in the same mar- 
 ket, it must be because he judges that the market can- 
 not be so liberally supplied through the whole season, 
 as on that occasion, and that the price must soon rise. 
 If he judges wrong he must be the loser. If he judges 
 right, he renders the people a service : by making them 
 feel the inconveniences of a dearth somewhat earlier, 
 he prevents them from feeling it so severely as they 
 would otherwise do. P. 306 8. 
 
 The popular fear of engrossing and forestalling may 
 be compared to the popular terrors of witchcraft. The 
 law which should restore entire freedom to the inland 
 trade of corn would probably put an end to the fears of 
 engrossing. The statute of Charles II. with all its im- 
 perfections has contributed much to the increase of til- 
 lage, which is more promoted by the inland than by the 
 importatipB or exportation trade. J\ 309. 10.
 
 ( 199 ) 
 
 II. The trade of the merchant importer of foreign 
 corn for home consumption contributes to the imme- 
 diate supply of the home market, and must be bene- 
 ficial to the people. It tends, indeed, to lower the 
 average money price of corn, but not to diminish its 
 real value. When wheat did not exceed 53s. 4d. the 
 quarter, it might be imported subject to a duty of 16s, 
 a quarter ; and to a duty of 8s. whenever the price did 
 not exceed 4l. The distress which in years of scarcity 
 these laws might have brought upon the people, occa- 
 sioned in general temporary statutes which permitted 
 the importation of foreign corn. P. 311 13. 
 
 III. The trade of the merchant exporter of corn for 
 foreign consumption, certainly does not contribute di- 
 rectly to the plentiful supply of the home market. It 
 does so, however, indirectly. 
 
 The supply of the home market can never be plen- 
 tiful unless the surplus, can, in all ordinary cases be 
 exported. The prohibition of exportation limits the 
 improvement and cultivation of the country, to what 
 the supply of its own inhabitants requires. The free- 
 dom of exportation enables it to extend cultivation for 
 the sup ply jpf foreign nations. By the 12th of Charles 
 II. the exportation of corn was permitted ; and by the 
 1st of William and Mary a bounty was granted on ex- 
 portation. By this last statute, corn could be engrossed 
 at any price for exportation, but not for inland trade, 
 jexceptwhen the price was less than 48s. the quarter. 
 The interest of the inland dealer can never be opposite 
 to that of the great body of the people ; that of the ex- 
 porter may. The direct object of these statutes wasun- 
 
 Bh 2
 
 ( coo ) 
 
 t \ 4 *^ * r*yi *FT 
 
 der the pretence of encouraging agriculture, to raise the 
 money price of corn as high as possible. P. 314. 15. 
 
 Were all nations to admit a free exportation and 
 importation, the different states of a great continent 
 would resemble the different provinces of a great em- 
 pire, which would at all times be best supplied by a per- 
 fectly free trade. But the freedom of the corn trade ha's 
 been almost every where restrained, which restraints 
 have been the occasion of many dangers and misfor- 
 tunes. The bad policy of one country, may render the 
 establishment of the best, imprudent or dangerous in 
 another. In large states it will be less dangerous. In 
 some of the Italian states it may, sometimes, be neces- 
 sary to restrain the exportation of corn; but in such 
 countries as France and England, it scarcely ever can. 
 The laws concerning corn, may be compared to those 
 concerning religion ; government, to preserve public 
 tranquility, yields to popular prejudices, and on that 
 account, we seldom find a rational system established. 
 P. 316. 17. 
 
 IV. The trade of the merchant carrier, or of theim-* 
 porter of foreign corn for exportation, contributes to 
 the plentiful supply of the home market ; for he can 
 sell his corn for less money than he might expect in a 
 foreign market. The country which becomes the store- 
 house for the supply of other countries, can seldom be 
 in want itself. The carrying trade has been prohibited 
 In Great Britain. That system of laws connected with 
 Hie establishment of the bounty deserves no praise.The 
 prosperity of Great Britain depends on the security of 
 property ; and upon the effort of every man to better 
 his condition. P. 318. 19. 
 
 Though the system of laws connected with the boun- 
 ty, "has the same tendency with the police of Spain
 
 ( 201 ) 
 
 and Portugal, to lower the value of the precious me 
 tals, yet Great Britain is one of the richest countries 
 in Europe, while Spain and Portugal are among the 
 most beggarly ; which may be thus accounted for : 
 (1.) The tax in Spain, and the prohibition in Portugal, 
 of exporting gold and silver, must operate more forci- 
 bly in reducing the value of those inetals,than the corn 
 laws of England. (2.) In Spain and Portugal, indus- 
 try is neither free, nor secure, and the governments 
 are such as would alone be sufficient to perpetuate their 
 present state oi poverty. 
 
 The 13th of Geo. III. c. 43. has established a newr 
 system with regard to the corn laws, in many respects 
 better than the antient one^ but in pthers not so good. 
 P. 3203 
 
 CHAP. V r l. 
 
 Of Treaties of Commerce. 
 
 WHEN a nation binds itself by treaty, either to per- 
 mit the entry of certain goods from one foreign coun- 
 try, which it prohibits from all others ; or to exempt 
 the goods of one country from duties to which it sub- 
 jects those of ell others, that foreign country must de- 
 rive advantage from the treaty. Such treaties are dis- 
 advantageous to the merchants of the favouring coun- 
 try, and a monopoly is granted against them, to a fo- 
 reign nation. They must frequently buy their foreign 
 goods dearer than if a free competition was admitted^
 
 ( 202 ) 
 
 The exchangeable value of their annual produce is 
 likely to be diminished by every such treaty. This di- 
 minution, however, can scarcely amount to a positive 
 loss, consequently the favouring country will gain by 
 the treaty. Some countries have granted treaties of 
 commerce against themselves, because they expected 
 that in the whole commerce between them, an annual 
 balance of gold and silver would be returned to them. 
 Such was the treaty of commerce betweeen Eng- 
 land and Portugal concluded in 1703, by Mr. 
 Methuen. By this treaty Portugal agreed to admit 
 the woollen manufactures of the British, on condition 
 that Great Britain should admit her wines, upon paying 
 only two-thirds of the duty which is paid for those of 
 France. This treaty, though evidently in favour of 
 Portugal, has been celebrated as the master-piece of 
 the commercial policy of England, as bringing to her 
 a large share of the precious metals. It has been esti- 
 mated, that the Lisbon packet brings 50,0001. in gold 
 and silver every week into England. But if this were 
 true, it does not follow that the trade is more advanta- 
 geous than any other, in which, for the same value sent 
 out, we receive an equal value of consumable goods in 
 return. It is but a small part of this importation which 
 can be employed as an annual addition to the plate, or 
 coin of the kingdom. The rest must be sent abroad 
 and exchanged for consumable goods. But if these 
 consumable goods were purchased directly with the 
 produce of English industry, it would be of more advan- 
 tage to England ; a direct foreign trade being more 
 advantageous than a round about one. Though Great 
 Britain were excluded from the Portugal trade, it 
 would find no difficulty in purchasing its annual sup- 
 plies of gold and silver ; for the annual supplies of gold
 
 { 203 ) 
 
 in Portugal must be sent abroad, where Great Britain 
 might buy it at little more expence than she could at 
 first hand in Portugal. Almost all our gold and silver 
 is said to come from Portugal : with other nations the 
 balance of trade is either against us, or not much in our 
 favour. But the more gold we import from one coun- 
 try, the less we must necessarily import from others. 
 The effectual demand for gold, is limited to a certain 
 quantity. The more gold annually imported from some 
 particular countries, over and above what is requisite 
 for plate and coin, the more must be exported to other 
 countries, and the more the balance of trade will ap- 
 pear to be in our favour with some countries, and the 
 more against us with others. It was upon the silly no- 
 tion that England could not subsist without the trade 
 of Portugal, that France and Spain once combined 
 to exclude British ships .from the ports of Portugal. 
 The loss of this trade would have embarrassed our mer- 
 chants for a year or two ; but we should have been 
 freed from the burden of supporting a very weak 
 ally ; and in this would have consisted all the incon- 
 veniency which England would have suffered from this 
 notable piece of commercial policy. P. 323 3 1 . 
 
 The great annual importation of gold and silver, is 
 neither for the purpose of plate nor of coin, but of fo- 
 reign trade, which can be carried on better by means 
 of these metals, than of almost any other goods. They 
 are the universal instruments of commerce, and are 
 easily conveyed from place to place. In facilitating 
 the round-about foreign trades of consumption which 
 are carried on in Great Britain, consists the principal 
 advantages of thePortugal trade. The new plate made 
 by goldsmiths, is, for the most part, made from other 
 old plate melted down, so that tUe addition made to the
 
 ( 204 ) 
 
 whole plate of the kingdom cannot be very great. It 
 is the same case with the coin. While there is an evi- 
 dent profit in melting new guineas, the operations of 
 the mint will be like the web of Penelope, the work 
 that is done in the day will be undone in the night. 
 But were the people who carry their gold and silver to 
 the mint to pay for the coinage, it would add to the va- 
 lue of the metals. Coined gold would be more valu- 
 able than uncoined. The seignorage, if it was not ex- 
 orbitant, would add to the bullion, the whole value of 
 the duty. But if the duty was exorbitant, it would en- 
 courage false coining. A seignorage will diminish the 
 profit of melting down new coin, which always arises 
 from the difference between the quantity of bullion 
 which the common currency ought to contain, and 
 that which it does really contain. A seignorage is, 
 therefore, the most effectual way to prevent the mel- 
 ting or exporting of coin. The law for the encourage- 
 ment of the coinage, by rendering it duty free, for a 
 limited time, was enacted during the reign of Charles 
 II. In l?69j it was rendered perpetual in complai- 
 sance to the Bank of England, who supposed it their 
 interest, that the coinage should be at the expence of 
 government, rather than at their own ; this may per- 
 haps be found to be a mistake. }f there was a reason- 
 able seignorage, while at the same time the coin con- 
 tained its full standard weight, whatever the bank might 
 lose in seignorage, they would gain upon the price of 
 bullion, and vict versa. P. 330. 9. 
 
 When the tax upon a commodity is so moderate as 
 not to encourage smuggling, the merchant who deal* 
 in it, though he advances, does not properly pay the 
 tax. The tax is finally paid by the consumer. But 
 money is a commodity with regard to which every man
 
 ( 205 ) 
 
 is a merchant. Nobody buys jt but in Order to sell 
 again, and in this there is, properly,no large consumer. 
 When the tax upon coinage, therefore, is so moderate 
 as not to encourage false coining, though everybody 
 advances the tax, nobody finally pays it, because every 
 body gets it back in the advanced value of coin. A 
 moderate seignor'age, therefore, would not augment the 
 expence of the bank, and the want of it does not dimi- 
 nish it. The government, when it defrays the expence 
 of coinage, incurs expence, and loses revenue, and no- 
 body is benefited by this useless piece of public genero^ 
 iity. P. 339-43. 
 
 GHAP. VII. 
 
 - f 
 
 Of Colonies. 
 
 PART I. 
 
 Of the motives for establishing new Colonies 
 
 THE interest which occasioned the first settlement 
 f the European colonies in America, and the West 
 Indies, was not so plain and distinct as that which di- 
 rected the establishment of those of antient Greece and 
 Rome. The states of Greece possessed, each of them, 
 but a small territory, and when the people in any one of 
 them multiplied beyond what that territory could main- 
 tain, a part were sent in quest of a new habitation, in 
 some distant part of the world. The mother city con-
 
 ( 206 ) 
 
 sidered the colony as an emancipated child, over whom 
 she claimed no jurisdiction. P. 343. 
 
 Home was founded upon an Agrarian law. The 
 course of human affairs deranged the original division, 
 and threw the lands of many families into the possession 
 of a single person. Hence the law restricting the 
 quantity of land which any citizen could possess, to 
 about 350 English acres. This law was soon neglected, 
 and the inequality of fortunes went on continually in- 
 creasing. The greater part of the citizens had noland, 
 arid had scared any other means of subsistence, but the 
 bounties of the candidates at the annual elections. 
 Excited by the tribunes, the people became clamorous 
 to get land. To satisfy them, they frequently pro- 
 posed to send out a new colony to some of the con- 
 quered provinces of Italy, where they were subject to 
 the jurisdiction of the mother city. Roman colonies 
 were different from the'Gtek ones. Both institutions 
 derived their origin from necessity, or from evident 
 utility. P. 344 6. 
 
 The establishment of the European colonies in Ame- 
 rica, and the We's'tfcfidies, arose from no necessity ; and. 
 though the utility which has resulted from them has 
 been great, it is not. so evident. The Venetians, 'du- 
 ring the 14th and 15th centuries, Carried on ah advan- 
 tageous commerce Jri East Indiagoods which '{hey pur- 
 chased in Egypt. The profits of the Venetians temp- 
 ted the avidity of the Portuguese. In 14Q7, VaSco de 
 Guma sailed from Lisbon, arifl in ele'ven indriths arrived 
 upon the coast O'f fndostan. Sotne y^ars before this, 
 Columbus, a Genoese pilot, formed the daring project 
 of sailing to the East Indies by the West ; and after a 
 voyage of two or three months, he discovered the 
 Bahama Islands, and the Island of St. Domingo. This
 
 he, at first, mistook for China. In consequence of this 
 mistake of Columbus, the name of Indies has stuck to 
 those countries ever since. These countries were re- 
 presented to the court of Spain as of great conse- 
 quence, though in the animal and vegetable produc- 
 tions of the soil, there was, at that time, nothing 
 which could justify such a representation of them. 
 Columbus turned his view towards their minerals, and 
 he supposed that he had found a full compensation for 
 the insignificancy of those of the other two. He ac- 
 cordingly proposed, that the half of the gold and 
 silver that should be found there, should belong to the 
 crown. But when the natives were stript of their 
 ornaments, and it became necessary to dig for these 
 metals in the mines, there was no possibility of paying 
 this tax, and it was at length reduced to a twentieth 
 part of the gross produce of the gold mines. All 
 the other enterprises of the Spaniards, in the new 
 world, seem to have been prompted by the love of gold. 
 P. 34753. 
 
 No projects are more ruinous than the search after 
 new gold and silver mines. They ought not, there- 
 fore, to meet with any extraordinary encouragements 
 from the prudent lawgiver, who desires to increase the 
 capital of his nation : he should not turn towards them 
 a greater share of that capital than what would go to 
 them of its own accord. Though the judgment of sober 
 reason and experience concerning such projects has 
 been always unfavourable, that of human avidity has 
 been quite otherwise. P. 354. 5. 
 
 A project of commerce to the East Indies gave oc- 
 casion to the first discovery of the West. A project of 
 
 C c 3
 
 ( 208 ) 
 
 conquest gave occasion to all the establishments of the 
 Spaniards in those newly discovered countries. The 
 motive was the gold and silver mines, and a course of 
 accidents rendered the project successful. The first 
 adventurers of all the other nations of Europe, were 
 animated with the same views but were npt equally suc- 
 cessful. P. 35Q. 7. 
 
 
 PART. U. 
 
 Causes of the Prosperity of new Colonies. 
 
 THE colony of a civilized nation advances more 
 rapidly to wealth and greatness than any other human 
 society. The colonists carry out with them a know- 
 ledge of agriculture, and of other useful arts, superior. 
 to what can grow up of its own accord, in the course of 
 many centuries among savage nations. They carry 
 out with them too the habit of subordination ; some 
 notion of tjie government and laws of their own coun- 
 try. Every colonist gets more land than he can culti- 
 vate. He has no rent and few taxes to pay. The ex- 
 tensivenessof his land makes rjim endeavour to collect 
 labourers, and to reward them with the most liberal 
 y ages. These labourers soon become landlords. The 
 liberal reward of labour encourages marriage. Children, 
 during infancy, are well taken care of, ancj when they 
 grow up the value of their labour greatly overpays their 
 jnaiotenance. P. 358. 9- 
 
 In o'ther countries, rent and profit eat up wages, and 
 tlie two superior orders of the people oppress the infe- 
 rior one. But in new colonies the inferior order is 
 treated with huinanitv, if it is not in a state of slavery.
 
 ( 209 ) 
 
 Waste lands of the greatest fertility are to be bad for a 
 trifle. The profit of the proprietor is very great, but 
 this cannot be made without employing the labour of 
 other people. This he is willing to do at any price. 
 High wages encourage population. The plenty of 
 good land encourages improvement. What encoura- 
 ges the progress of population and improvement, en- 
 courages that of real wealth and greatness. 
 
 The progress of many of the Greek colonies towards 
 wealth, seems accordingly to have been very rapid. In 
 a century or two they rivalled their mother cities. The 
 history of the Roman colonies is by no means so bril- 
 liant, on account of the want of land, and liberty to 
 manage their own affairs in the way they judged best. 
 
 In the plenty of good land, the European colonies 
 established in America, resemble those of antientGreece. 
 In their dependency upon the mother states, they re- 
 semble those of antient Rome. But owing to iheir si- 
 tuation, they were left a good deal to pursue their own 
 interest, in their own way; and their progress in wealth, 
 population, and improvement, has been very great. 
 V. 35962. 
 
 The crown of Spain, by its share of the gold and 
 silver, derived some revenue from its colonies, from 
 their first establishment. They accordingly attracted 
 the notice of their mother country, whilst those of the 
 other European nations were for a long time neglected. 
 The former did not, perhaps, thrive the better for this 
 attention, nor the latter the worse in consequence of 
 this neglect. The Spanish colonies are considered as 
 less populous and thriving, than those of almost any 
 other European nation ; nevertheless their progress in 
 improvement, has certainly been very rapid. Before 
 the conquest there were no beasts of burden, either in
 
 ( 310 ) 
 
 Mexico or Peru. The use of iron was not known. They 
 had no coined money, nor any established instrument 
 of commerce. P. 362 4. 
 
 After the settlements of the Spaniards, that of the 
 Portuguese in Brazil, is the oldest of any European na- 
 tion in America. But as for a long time after the first 
 discovery, neither gold nor silver mines were found ia 
 it, and as it afforded but little revenue to the crown, it 
 was in a great measure neglected, during which, it 
 grew up to be a powerful colony : no one in America is 
 supposed. to contain a greater number of people of Eu- 
 ropean extraction. P. 364. o. 
 
 About the end of the 15th, and during the most of 
 the 16th century, Spain and Portugal were the two 
 great naval powers. The Spaniards claimed all Ame- 
 rica as their own, though they could not hinder the 
 Portuguese from settling in Brazil. The -French who 
 attempted to settle in Florida were all murdered by the 
 Spaniards. By the destruction of the invincible Armada 
 they became unable to obstruct the settlements of other 
 European nations. In the course of the l?th century, 
 therefore, the English, French, Dutch, Panes, and 
 Swedes attempted to make settlements in the new 
 world. 
 
 The Swedes established themselves in New Jersey; 
 but they were soon swallowed up by the Dutch colony 
 of New York, which again fell under the dominion of 
 the English. 
 
 The Danes possessed only the small islands of St. 
 Thomas, and Santa Cruz. These settlements were un- 
 der the government of an exclusive company, which is, 
 perhaps, the worst of all governments ; they neverthe- 
 less made some progress in improvement, and since the
 
 company was dissolved, the prosperity of these colonies 
 has been very great. 
 
 The Dutch settlements were originally put under the 
 government of an exclusive company. Their progress 
 has been slow, in comparison with that of the greater 
 part of new colonies. 
 
 The French colony of Canada was, during the 
 greater part of the last century, and some part of the 
 present, under the government of an exclusive com- 
 pany. Its progress was necessarily slow, but it became 
 lapid when the company was dissolved. The colony 
 of St. Domingo was established by pirates, who, fora 
 long time, neither required protection, nor acknow- 
 ledged the authority of France ; and when that race of 
 banditti became so far citizens as to acknowledge this 
 authority, it was, for a long time, necessary to exer- 
 cise it with great gentleness. During this period the 
 population and improvement of the colony increased 
 very fast. P. 3659- 
 
 But there are no colonies of which the progress has 
 been more rapid than those of the English in North 
 America. 'Plenty of good land, and the liberty of ma- 
 naging their own affairs in their own way, were the 
 two great causes o'f their prosperity. Besides the poli- 
 tical institutions of the English colonies have been 
 more favourable to the improvement of this land,thaa 
 those o'f any of the other three nations. 
 
 I. The engrossing of uncultivated land has been more 
 restrained in the English colonies than in any other. 
 
 II. la Pennsylvania there is no right of primogeni- 
 ture. In three of the provinces of New England, the 
 oldest has only a double share. In the others, the 
 right of primogeniture takes place. But the tenure of 
 lands is such as facilitates alienation.
 
 ( 3*3 ) 
 
 III. The taxes of the English colonies are more mo- 
 derate, than those of any other European nations. 
 
 IV. The English colonies have been allowed a more 
 extensive market than those of other countries. Every 
 urope'ari nation has endeavoured more or less to mo- 
 nopolize to itself the commerce of its colonies.But the 
 manner in which this monopoly has been exercised in 
 different nations has been very different. 
 
 Some nations have given up the whole commerce of 
 their colonies to an exclusive company, of whom the 
 colonies were obliged to buy all such European goods 
 as they wantecf, and to whom they were obliged to sell 
 the whole of their own surplus produce. This has been 
 fhe policy of Holland. 
 
 Other nations have confined the whole commerce of 
 their colonies to a particular port of the mother coun- 
 try. The trade which was carried on in this manner, 
 would necessarily be conducted very nearly upon the 
 same principles as that of an exclusive company. 
 
 Other nations leave the trade of their colonies free to 
 all their subjects, who may carry it on from all the dif- 
 ferent ports of the mother country. Under this policy 
 the colonies are enabled both to sell their own produce, 
 and to buy the goods of Europe at a reasonable price. 
 This has been the policy of England. P. S70 7. 
 
 In the exportation of their own suplus produce too, 
 it is only with regard to certain commodities that the 
 colonies of Great Britain are confined to the market-of 
 the mother country. These commodities having been 
 enumerated in the act of navigation, are called enume- 
 rated commodities. The rest are called non -enumerated, 
 and may be exported directly to other countries, pro- 
 vided it is in British or Plantation ships. Among these 
 last ate some of the most important productions of
 
 ( 213 ) 
 
 America and the West Indies ; grain of all sorts, lurti* 
 ber, salt provisions, fish, sugar, and rum. If the whole 
 surplus produce of America in grain, salt provisions, and 
 in fish had been put into enumeration, and thereby 
 forced into the market of Great Britain, it would have 
 interfered too much with the produce of the industry of 
 our own people. The non-enumerated commodities 
 could originally be exported to all parts of the world. 
 Lumber and rice were afterwards confined, as to the 
 European market, to the countries that lie soulh of 
 Cape Finisterre; and by the Cth of Geo. III. c. 52. all 
 non-enumerated commodities were subjected to the like 
 restriction. P. 37881. 
 
 The enumerated commodities are of two sorts: (1.) 
 Such as are either the peculiar produce of America, or 
 as are not produced in the mother country : (2.) Such 
 as are not the peculiar produce of' America, but which 
 are, and may be produced in the mother country, 
 though not in quantities sufficient to supply the de- 
 mand." The largest importation of goods of the first 
 kind could not discourage the growth, or interfere with 
 the sale of any part of the produce of the mother coun- 
 try. The importation of commodities of the second kind 
 might be so managed, it was supposed, as to interfere 
 not with the sale of those of the same kind which were 
 produced at home, but with that of those which were 
 imported from foreign countries. The most perfect 
 freedom of trade is permitted between the British colo- 
 nies, and the West Indies, both in the enumerated, and 
 in the non-enumerated commodities. The liberality of 
 England, however, towards the trade of her colonie^ 
 has been confined chiefly to what concerns the market 
 
 D d
 
 ( 214 ) 
 
 for their produce, either in its rude state, or in the 
 very first stage of manufacture. P. 3827. 
 
 Great Britain too, as she confines to her own market 
 some of the most important productions of the colo- 
 nies, so in compensation she gives to some of them an 
 advantage in that market, sometimes by imposing 
 higher duties upon the like productions when imported 
 from other countries, and sometimes by giving bounties 
 upon their importation from the colonies. 
 
 With regard to the importation of goods from Eu- 
 rope, England has likewise dealt more libearlly with 
 her colonies than any other nations : they are, how- 
 ever, by no means independent foreign countries. 
 P. 3889. 
 
 Of the greater part of the regulations concerning 
 the colony trade, the merchants who carry it on, have 
 been the principal advisers. We must not wonder, 
 therefore, if, in the greater pait of them, their interest 
 lias been more considered than either that of the colo- 
 nies, or that of the mother country. Though tire poli- 
 ey of Great Britain has been dictated by the same mer- 
 cantile spirit as that of other nations, it has been less 
 oppressive than that of any of them. In every thing, 
 except their foreign trade,the liberty of the English co- 
 lonists to manage their own affairs their own way, is 
 complete. P. 3902 
 
 The absolute governments of Spain, Portugal, and 
 France, take place in their colonies. It is hi the pro- 
 gress of the North American colonies, however, that 
 the superiority of the English policy chiefly appears. 
 The progress of the sugar colonies of France has been, 
 perhaps superior to those of England, owing to the li- 
 berty they have of refining their own sugar, and also to 
 ihe better management of their slaves. That the con-
 
 ( 215 ) 
 
 dition of the slaves is better under an arbitrary ,th an un- 
 der a free government, is supported by the history of 
 all ages and nations. The prosperity of the English 
 sugar colonies has been, in a great measure, owing to 
 the great riches of England, of which a part has over- 
 flowed on those colonies. But the prosperity of the 
 sugar colonies of France has been entirely owing to the 
 good conduct of the colonists, which must have !h ad 
 some superiority over that of theEnglish, and in nothing 
 so much as in the good management of their slaves. 
 P. 3967. 
 
 The policy of Enrope, therefore, seems to have little 
 to boast of, either in the original establishment, or so 
 far as concerns their internal government, in the sub- 
 sequent prosperity of the colonies of America. Folly 
 and injustice seem to have been the principles which 
 directed the first project of establishing those colonies. 
 The ad venturers who formed some of the later establish- 
 ments, joined to the chimerical project of finding gold 
 and silver mines, other motives, more reasonable, and 
 more laudable, but even these motives, do very little, 
 honour to the policy of Europe. 
 
 The English Puritans fled for freedom to America, 
 and established the four governments of New Eng- 
 land. The English Catholics, treated with still greater 
 injustice, established that of Maryland. The Quakers 
 that of Pennsylvania. The Portuguese Jews were 
 banished to Brazil. In effectuating some of the most 
 important of these establishments, the governments of 
 Europe had as little merit, as in project! ngthen}. When 
 these establishments were effectuated, and had become 
 so considerable as to attract the attention of the mother 
 country, the first regulations she made was, to confine 
 Dd c
 
 ( 216 ) 
 
 their market, and to enlarge her own at their expence. 
 In one way only has Europe contributed either tq the 
 first establishment, or to the present grandeur of the 
 colonies of America. It bred and formed the men, 
 who were capable of atchieving such great actions, 
 and of laying the foundatipn of sp great an empire. 
 P. 3989. 
 
 PART. III. 
 
 Of the advantages which Europe has derived from the 
 discovery of America, and from that of a passage to 
 the East Indies by the Cape of Good Hope. 
 
 vii 
 
 THE advantages which Europe has derived from the 
 discovery and colonization of America may be divided : 
 
 I. Into the general advantages which Europe, con- 
 sidered as one great country, has derived from those 
 great events ; and, 
 
 II. Into ihe particular advantages which each colo- 
 nizing country has derived from the colonies which be- 
 long to it. 
 
 The general advantages which Europe has derived 
 from America, consist, (1.) In the increase of its enjoy- 
 ments, by being furnished with a variety of commodi- 
 ties, which it would otherwise not have possessed : and, 
 (2.) In the augmentation of its industry, either directly 
 or indirectly. P. 400 3. 
 
 The exclusive trade of the mother countries tends to 
 diminish both the enjoyments, and industry of Europe 
 in general, and of the American colonies in particular. 
 By rendering the colony produce dearer, in all other 
 countries, it lessens its coasumption,and thereby cramps
 
 ( 217 ) 
 
 the industry of the colonies, and both the enjoyments, 
 and the industry of other countries which both enjoy 
 less, when they pay more for what they enjoy, and 
 produce less when they get less for what they produce. 
 By rendering the produce of all other countries dearer 
 m the colonies, it cramps in the same manner, the in- 
 dustry of all other countries, and both the enjoyment 
 and the industry of the colonies. P. 403 4. 
 
 The particular advantages which each colonizing 
 country derives from its own colonies are of two kinds : 
 (1.) Those common advantages which every empire 
 derives from the provinces subject to its dominion, and 
 which consist in the military force which they furnish 
 for its defence; and in the revenue which they furnish 
 for the support of its civil government. The Roman 
 colonies furnished both. Those belonging to Greece 
 only the former. And the European colonies have 
 furnished neither, excepting those belonging to Spain 
 and Portugal, which contributed some revenue. (2.) 
 Those peculiar advantages which are supposed to re- 
 sult from provinces of so very peculiar a nature as the 
 European colonies of America, the source of which is 
 the exclusive trade. This advantage is, however, ra- 
 ther a relative than an absolute advantage. The to- 
 bacco of Maryland, for instance, comes cheaper to 
 England than it can to France ; but had the trade to 
 Maryland been/recto all countries, it might have come 
 cheaper to those countries than it actually does, and 
 likewise to England. In this case, England would not 
 have had any advantage over other countries ; in 
 gaining an absolute, she would have lost a relative ad- 
 vantage. P. 4048. 
 
 To obtain this relative advantage, England has sub- 
 jected herself both to an absolute, and to a relative dis-
 
 advantage in ahnost-every other branch of trade.Whea 
 England assumed to herself the monopoly of the co- 
 lony trade, the foreign capitals were withdrawn from 
 it. The English capital not being sufficient to carry 
 on the whole trade, the goods which it did supply were 
 sold dear. And what it bought, it bought very cheap. 
 The profit of the merchant must, consequently, have 
 J>een very great. The superiority of profit in the co- 
 lony trade, could not fail to draw from other branches 
 of trade a part of the capital which had been employed 
 in them, which must have diminished the competition! 
 in all those branches of trade, and consequently must 
 have raised to profits till they all came to a new level, 
 somewhat higher than they were before. 
 
 This double effect of drawing capital from all other 
 trades, and of raising the rate of profit, w;as not only 
 produced by thismonopoly upon its firetestablishment^ 
 but has continued to be produced by it ever since. 
 P. 40810. 
 
 First, This monopoly has been continually drawing 
 capital from all other trades, to be employed ia 
 that of the colonies. 
 
 The wealth of Great Britain has not increased in the 
 same proportion as thatof the colonies ; but the foreign 
 trade of every country naturally increases in propor- 
 i ion to its wealth. Great Britain having engrossed all 
 the colony trade, and her capital not hnving increased 
 in the same proportion as the extent of the trade, she 
 must have withdrawn some capital from other branches 
 of trade. Since the establishment of the act of navi- 
 gation, the colony trade has increased,and many other 
 branches of foreign trade have been decaying. Our 
 manufactures for foreign sale have been suited to the 
 colonies instead of the European market. Thus has
 
 ( 219 ) 
 
 the trade of Great Britain had a total change in its di- 
 rection. P. 4 10 13. 
 
 Secondly, This monopoly has contributed to keep 
 up the rate of profit in all the branches of British 
 trade higher than it naturally would have been,had 
 all nations been allowed a free trade to the British 
 colonies. 
 
 Whatever raises in any country the ordinary rate of 
 profit, subjects that country both to an absolute, and to 
 a relative disadvantage in every branch of trade of which 
 she has not the monopoly. 
 
 It is in this manner that the capital of Great Britain 
 has been partly drawn, and partly driven from the 
 greater part of the different branches of trade, of which 
 she has not the monopoly. 
 
 The most advantageous employment of any Capital 
 to the country to which it belongs, is that which main- 
 tains there the greatest quantity of productive labour, 
 and increases the most the annual produce of the land 
 and labour of that country, which is in proportion to the 
 frequency of the returns : consequently a foreign trade 
 of consumption carried on \vith a neighbouring, is, in 
 general, more advantageous than one carried on with a 
 distant country ; and a direct foreign trade is more ad* 
 vantageotis than a round-about one. But the mono- 
 poly of the colony trade has, in all cases, forced some 
 part of the capital into a trade whose returns are the 
 most distant. P. 4137. 
 
 First, the monopoly of the colony trade has in all 
 cases forced part of the capital of Great Britain 
 from the foreign trade of consumption carried on 
 with a neighbouring, to one carfied on with at 
 more distant country.
 
 ( 220 ) 
 
 It has forced part of the capital from the trade with 
 Europe, and the countries which lie round the Medi- 
 terranean sea, to that with America and the West 
 Indies. But the returns in the latter trade, are three or 
 four times more distant, than those of the former, and 
 though the profit of the merchant may be as great in 
 one as the other, yet the advantage to the country never 
 can. P. 18819. 
 
 Secondly. The monopoly of the colony trade, fias,in 
 many cases, forced some part of the capital of 
 Great Britain, from a direct foreign trade of con- 
 sumption, into a round-about one. 
 
 Among the enumerated commodities, there are seve-* 
 ral of which, the quantity exceeds the consumption of 
 Great Britain, and of which a part must be exported to 
 other countries. But this cannot be done without for- 
 cinga part of the capital of GreatlBritain intothe round- 
 about foreign trade. If in the direct trade with America 
 the whole capital employed does not come back in less 
 than three or four years ; in the round-about trade it is 
 not likely to come back in less than four or five. If 
 the one can keep in constant employment but a third 
 or a fourth part of the domestic industry, which could 
 be maintained by a capital returned once a year, the 
 other can only keep in constant employ, a fourth, or a 
 fifth part, of that industry. P. 4202. 
 
 The monopoly of the colony trade too, has forced 
 some part of the capital of Great Britain from all fo- 
 reign trade of consumption, into the carrying trade,and 
 consequently, from supporting the industry of Great 
 Britain, to be employed altogether in supporting partly 
 that of the colonies,and partly that of some other coun- 
 tries : it seems also to have broken alto^cther^hat na- 
 tural balance, which would otherwise have taken place
 
 ( 221 ) 
 
 fcmong all the different branches of British industry > 
 which instead of being accommodated to a great num- 
 ber of small markets, has been principally suited to one 
 great market. P. 4228. 
 
 We must carefully distinguish between the effects ot 
 the colony trade, and those of the monopoly of that 
 trade. The former are always beneficial ; the latter 
 are always hurtful. The former are so beneficial, that 
 the colony trade, notwithstanding the effects of mono- 
 poly, is still greatly beneficial on the whole. The ef- 
 fect of the colony trade, in its free state, is to open a 
 great, though distant market for such parts of the pro- 
 duce of British industry as may exceed the demand 
 of the markets nearer home. It tends to increase the 
 quantity of productive labour 4 in Great Britain, with- 
 out altering iri any respect the direction of that which 
 had been employed there before. In the free state of 
 the colony trade, the competition of all other nations 
 will hinder the rate of profit from arising above the 
 common level, either in the new market or in the newr 
 employment. The monopoly of the colony trade on 
 the contrary, raises the rate of profit, in the new mar- 
 ket and in the new employment, and draws produce 
 from the old market, and capital from the old employ- 
 ment. P. 429 31. 
 
 The colony trade opens a new market for the manu- 
 factured produce of Europe. The colonies abound in 
 rude produce, and have a large surplus to export. 
 That the monopoly of the trade of populous and 
 thriving colonies is not sufficient to establish or main- 
 tain manufactures in any country is evident from the 
 experience of Spain and Portugal, hi which countries
 
 the bad effects of the monopoly aggravated by the ir- 
 regular and partial administration of justice, have 
 nearly overbalanced the good effects of the colony 
 trade. P. 4323. 
 
 In England the natural good effects of the colony 
 trade assisted by the general liberty of trade, and the 
 equal administration of justice, have in a great mea- 
 sure conquered the bad effects of monopoly. The mo- 
 nopoly of the colony trade like all other mean expedi- 
 ents of the mercantile system, depresses the industr^ 
 of all other countries, but chiefly that of the colonies, 
 "without increasing that of the countiy in whose favour 
 it is established. It hinders the capital of the country 
 from maintaining so great a quantity 'of productive la- 
 fconr as it would otherwise maintain ; and from afford- 
 ing so great a revenue as it would afford. By raising 
 the rate of mercantile profit, the monopoly discourages 
 the improvement of land, which retards the natural in- 
 crease of another original source of revenue, the rent 
 of land. By raising the rate of profit, the market rate 
 of interest is kept higher ; but the price of land, in pro- 
 portion to the rent, falls as the rate of interest rises. 
 The monopoly, therefore, hurts the interest ofthe land- 
 lord by retarding the increase of rent; andof the price 
 which he would get for his land in proportion to the 
 rent which it affords. P. 434 6. 
 
 The monopoly augments the gain of the merchants, 
 but it renders less abundant the wages of labour; the 
 rentof land, and the profits of stock. It is by raising 
 the rate of profit that monopoly proves advantageous to 
 any particular order of men. But the high rate of pro- 
 fit seems every where to destroy that parsimony natural 
 to the character of the merchant, and to intoduce ha- 
 bits of luxury and disorder into every class of the peo-
 
 ( 223 ) 
 
 pie. Thus the single advantage, which the monopoly 
 procures to a single order of men, is in many different 
 ways hurtful to the general interest of the country. 
 P. 4379- 
 
 The maintenance of this monopoly is perhaps the 
 sole end of the dominion which Great Britain assumes 
 over her colonies. The monopoly is the principal 
 badge, and the sole fruit of their dependence. What- 
 ever expence therefore has been laid out in maintain- 
 ing this dependency, has really been laid out to sup- 
 port this monopoly. Under the present system of ma- 
 nagement, Great Britain derives nothing but loss from 
 the dominion which she assumes over her colonies. 
 J>. 4413.* 
 
 The discovery of America, and that of a passage to 
 the East-Indies by the Cape of Good Hope, are the two 
 greatest events recorded in the history of mankind. 
 Their consequences have already been great, but the 
 whole extent, of them cannot have been known. By 
 uniting the most distant parts of the world ; by ena- 
 bling them to relieve one another's wants ; and to en- 
 crease one another's enjoyments, their tendency would 
 seem beneficial. To the natives, however, of both the 
 West and East-Indies, all commercial benefits have 
 been lost in the dreadful misfortunes which they have 
 occasioned ; which misfortunes, seem to have arisen ra- 
 ther from accident than from any thing in the nature of 
 those events themselves. One of the principal effects 
 
 * The next 15 pages of the original work are devoted to con- 
 jures on the probable iflue of the difpute with the American 
 colonies. They are, therefore, for obvious reafons, omitted in thit 
 Analyfis.-" Ed. 
 
 E e 2
 
 ( 224 ) 
 
 of those discoveries hasbeen,to raise the mercantile sysr 
 tern, to a degree of splendour, which it could never 
 /otherwise have attained to. By these discoveries, the 
 commercial towns of Europe, instead of being the ma- 
 nufacturers and carriers for a part of Europe only,have 
 become manufacturers and carriers for the cultivators 
 of America, and for the different nations of Asia and 
 Africa. P. 4589. 
 
 The countries which possess the colonies of America, 
 and which trade directly to the East Indies, enjoy the 
 whole splendour of this commerce. Other countries 
 frequently enjoy the greater share of the real benefit. 
 Even the regulations by which each nation endeavours 
 to secure to itself the exclusive trade of its own colonies, 
 are frequently more hurtful to the countries in favour 
 of which they are established, than to those against 
 which they are established.Afterall the unjust attempts 
 therefore, of every country to engross the whole advan-r 
 tage of the trade of its own colonies, no country has 
 been able to engross to itself any thing but the expence 
 'of supporting in time of peace,and of defending in time 
 of war, the oppressive authority which it assumes over 
 them. P. 4602. 
 
 The monopoly of the great commerce of America, 
 seems an acquisition of the highest value. The great- 
 ness of the commerce is the quality, which renders the 
 monopoly hurtful, or which makes one employment 
 absorb a greater proportion of tUe capital of the country 
 than what would otherwise have gone to it. The mer- 
 cantile stock of every country seeks the employment 
 most advantageous to that country ; it naturally courts 
 the near, and shuns the distant employment. But if 
 in any distant .employments, the profit should happen 
 ttuisc higher than whatisjsufficieu.ttobalan.ee the na-.
 
 ( 225 ) 
 
 tural preference which is given to neareremployments, 
 this superiority of profit will draw stock from those 
 nearer employments, till the profits return to their pro- 
 per level. This superiority of profit is a proof, that the 
 stock of the society is not distributed in the properest 
 manner among all the different employments carried on 
 in it. It is a proof that something is either bought 
 cheaper, or sold dearer than it ought to be. A distant 
 employment may be as necessary for a society as a near 
 one, the goods which a distant employment deals in, 
 being necessary for carrying on many nearer emplo\> 
 ments. But if the profits of those who deal in such 
 goods are above their proper level, those goods will be 
 sold dearer than they ought to be. The interest, there- 
 fore, of those engaged in the nearer employments, re- 
 quires, that some stock should be withdrawn from the 
 nearer employments, and turned towards the distant 
 one. The public interest requires the same. Without 
 any intervention of law, therefore, the private interests 
 of men lead them to distribute the stock of every society, 
 in the manner most agreeable to the interests of that 
 society. P. 463 6. 
 
 All the different regulations of the mercantile sys- 
 tem, derange the natural distributions of stock. Those 
 which concern the trade to America and. the Cast 
 Indies derange it more than any other. Monopoly is 
 the engine of the mercantile system. In the trade to 
 America every nation endeavours to engross the whole 
 market of its own colonies, which is a monopoly of one 
 kind. The Portuguese endeavoured, formerly, to ma- 
 nage the trade to the East Indies in the same manner. 
 The trade to the East Indies, since the fall of power of 
 Portugal, has in every European country been subject- 
 ed to an exclusive company, which is a monopoly ofe*
 
 
 another kind. Monopolies of this kind are, properly, 
 established against the very nation which erects then). 
 Both kind of monopolies derange the natural distribu- 
 tion of the stock of the society, but they do not always 
 derange it in the same way. Thefirst kind always at- 
 tracts to a particular trade, a greater proportion of the 
 stock of the society, than would go to that trade of its 
 own accord. The second kind, may, sometimes at- 
 tract towards a particular trade, a greater proportion 
 of the stock of the society than what would naturally 
 go to that trade, according as the society is rich or poor. 
 P. 4669. 
 
 Every derangement of the natural distribution of 
 stock is necessarily hurtful to the society in which it 
 takes place. Exclusive companies are not necessary 
 to carry on the East India trade. The Portuguese en- 
 joyed it for more than a century without an exclusive 
 Company. P. 470 2. 
 
 The Europeans have not yet established in Africa, op 
 jn the East Indies such numerous and thriving colo- 
 nies as those in the islands and continent of America, 
 Africa and the East Indies are nevertheless inhabited 
 by barbarous 'nations ; but they were not so weak and 
 defenceless as the Americans, and were much more 
 populous. The genius of exclusive companies, be- 
 sides, is unfavourable to the growth of new colonies. 
 The Dutch settlements at the Cape of Good Hope and 
 at Batavia, are the most considerable colonies which 
 the Europeans have established either in the East 
 Indies, or in Africa ; and both of these are peculiarly 
 fortunate in their situation, the advantages of which, 
 have enabled those two colonies, to surmount all 
 the obstacles, occasioned by an exclusive company. 
 P. 4735.
 
 ( 227 > 
 
 The English and Dutch companies have made con- 
 siderable conquests in the East Indies ; but in the 
 manner in which they govern their new subjects, the 
 natural genius of an exclusive company has shewn 
 itself most distinctly. Nothing, however, can be more 
 contrary to the real interest of those companies as 
 Sovereigns, than the destructive plan which they have 
 pursued. The revenue of the sovereign is drawn front 
 that of the people. The greater the reyenue of the 
 people, the more they can afford to the sovereign ; it is 
 his interest, therefore, to increase as much as possible 
 that revenue ; consequently to open the most exten- 
 sive market for the produce of his country, and to abo- 
 lish all monopolies, and all restraints upon free trade. 
 But a company of merchants are incapable of consi- 
 dering themselves as sovereigns, even after they have 
 become such. Trade they consider as their principal 
 business. Their mercantile habits draw them to pre- 
 fer the transitory profit of the monopolist, to the per- 
 manent revenue of the sovereign. As sovereigns 
 their interest is the same with that of the country 
 they govern. As merchants it is directly opposite. 
 P. 476-9. 
 
 If the genius of such a government, even as to what 
 concerns its direction in Europe, is, in this manner es- 
 sentially faulty, that of its administration in India is 
 atill more so. That administration is composed of A 
 council of merchants, who can command obedience 
 -only by military force. Their proper business is that 
 of merchants. The genius of the administration tends 
 therefore, to make government subservient to the in- 
 terest of monopoly. All the members of the admini- 
 stration, besides, trade more or less upon their own ac- 
 count, and it is in vain to prohibit them from so doing.
 
 ( 228 ) 
 
 They will endeavour to establish the same monopoly 
 in favour of their own private trade, as of the publre 
 trade of the company; but the private trade will ex- 
 tend to the greater variety of articles. They will be 
 more disposed to support with rigorous severity their 
 own interest against that of the country which they go- 
 vern, than their masters can be to support theirs. The 
 country belongs to their masters, who must have some 
 regard for the interest of What belongs to them ; but 
 it does not belong to the servants. The real interest of 
 the masters is the same with that of the country, and it 
 is from ignorance that they oppress it. The regulations 
 accordingly which have been sent out from Europe, 
 though frequently weak,have upon mostoccasions,been 
 well meant. P. 480 4. 
 
 CHAP. VIII. 
 
 Coticlusion of the mercantile Systefn* 
 
 THOUGH the encouragement of exportation, 
 tire discouragement of importation, are the two great 
 engines by which the mercantile system- proposes to eir* 
 rich every country, yet with regard to some commo- 
 dities it discourages exportation and encourages impor- 
 tation. Its ultimate object is always the same, to en- 
 rich the country, by an advantageous balance of trade. 
 It discourages the exportation of the materials of ma- 
 nufacture ; and of the instruments of trade, to give our 
 workmen an advantage. It encourages the importa- 
 tion of the materials of manufacture, that our workmen 
 may be enabled to work them up more cheaply. To
 
 ( 229 ) 
 
 tfh'coufage the importation of the instruments of trad<5 
 tvoiild interfere too much with the interest of our ma- 
 nufactures. Such importation has therefore frequen- 
 tly been prohibited. P. 485. 6. 
 
 The importation of the materials of manufacture ha3 
 sometimes been encouraged by an exemption from 
 duties to which other goods are subject ; and some- 
 times by bounties The importation of sheep's wool; 
 
 cotton wool; undressed flax, and hides; dying 
 drugs ; and iron has been encouraged by an exemp- 
 tion from all duties. These exemptions have sometimes 
 been extended beyond what can be justly called the 
 rude materials of work. P. 487- 8. 
 
 The encouragement given to the importation of the! 
 materials of manufacture by bounties, has been princi- 
 pally confined to such as were imported from our Ame- 
 rican plantations. The first bounties of this kiiid were 
 granted about the beginning of the present century. 
 
 The same commodities upon which we gave boun- 
 ties, when imported from America, were subjected to 
 considerable dutiesvvhen importedfroin any other coun- 
 try. P. 488 93. 
 
 The exportation of the materials of manufacture is 
 sometimes discouraged by absolute prohibitions, and 
 sometimes by high duties. Our woollen manufactur- 
 ers have obtained monopoly against the consumers by 
 a prohibition of importing woollen cloths ; and alsa 
 another monopoly by a prohibition of the exportation 
 of live sheep and wool. By a statute of Elizabeth, the 
 exporter of sheep, was, for the first offence, to forfeit' 
 all his goods ; to suffer a years imprisonment ; and 
 then to have his left huud cut off : and for the second
 
 ( 230 ) 
 
 offence to suffer death. By a statute of Charles IL 
 the exportation of wool was made felony. Thejirst of 
 these statutes was virtually repealed by the 12th of 
 Charles II. which imposes a perialty of 20s. for every 
 sheep exported : and the second was expressly repealed 
 by the 8th of William III. c. 28. The penalties are 
 still sufficiently severe. Besides the forfeiture of the 
 goods, the exporter incurs the penalty of 3s. for every 
 pound of wool exported or attempted to be exported. 
 A person convicted of this offence is disabled from re- 
 quiring any debt belonging tohim : and if he is not able 
 to pay those heavy penalties he is to be transported for 
 seven years. P. 494 6. 
 
 In order to prevent exportation, the whole inland 
 commerce of wool is laid under very oppressive restric- 
 tions. But the restrictions in the counties of Kent and 
 Sussex are more troublesome than those in the rest of 
 the kingdom. The coasting trade is also subject to many 
 restrictions. P. 497- 8. 
 
 Our woollen manufactnrerers, to justify their de- 
 mand of such regulations, asserted that English wool 
 was superior to 1 that of any other country ; and that if 
 the exportation of it could be totally prevented, Eng- 
 land could monopolize the whole woollen trade of the 
 world. This is so false, that English Wool isentirely 
 unfit for rn&kingjine cloth, which is made altogetherof 
 Spanish wool. P. 499- 
 
 It has been shewn that the effect of these regulations 
 has been to depress the price of English wool even be- 
 low what it was in the time of Edward III. The price 
 of Scots wool since the union, is said to have fallert 
 about one half. This reduction of price has not proba- 
 bly, much reduced the quantity of the annual produce, 
 since the trowing of weolis not the chief purpose for
 
 ( 231 ) 
 
 which the sheep farmer employs his industry and stock. 
 Neither does this reduction of price seem to have had 
 any effect upon the quality of wool. The quality of 
 the fleece depends upon the health, growth, and bulk 
 pf the animal; the same attention which is necessary 
 for the improvement of the carcase, is, in some re- 
 spects, sufficient for the fleece. The violence of these 
 regulations, therefore, seems to have affected neither 
 the quantity, nor the quality of the annual produce of 
 wool, so much as it might have been expected to <lo. 
 P. 5003. 
 
 These considerations, however, will not justify the 
 prohibition of the exportation of wool : but they will 
 fully justify the imposition of a considerable tax upon 
 that exportation. The prohibition injures one order of 
 citizens, for the benefit of another, which is unjust. A 
 tax would hurt the interest of the growers of wool, less 
 than the prohibition ; and would afford sufficient ad- 
 vantage to the manufacturer. The prohibition does not 
 prevent the exportation, which is advantageous to no- 
 Jjody but the smuggler. ^V legal exportation, subject 
 to a tax, might prove advantageous to all the subjects 
 of the state. The exportation of fuller's earth and to- 
 fcac co-pipe clay has been laid under the same prohibi- 
 tions and penalties. Even the horns of cattle are pro- 
 hibited to be exported. P. 504 6. 
 
 There are restra ints upon the exportation of divers 
 goods, which are partially, but not completely manufac- 
 tured : such as woollen yarn and worsted ; white 
 cloths (for the benefit of the dyers ;) watch cases, dial 
 plates, &c. By some old statutes the exportation of 
 metals was prohibited. Lead and tin were alone ex^- 
 
 F f 2
 
 ( 232 ) 
 
 pepted, probably on account of the great abundance of 
 those metals. For the encouragement of the mining 
 trade, a statute of William and Mary exempted from 
 this prohibition, iron, copper, and inundic metal made 
 from British ore. Brass manufactures may be expor- 
 ted duty free. P. 507. 
 
 The exportation of the materials of manufacture, 
 where it is not altogether prohibited, is in many cases 
 subjected to considerable duties. P. 508 1 1 . 
 
 Coals may be considered both as a material of manu- 
 facture, and an instrument of trade. Heavy duties ac- 
 cordingly, have been imposed upon their exportation. 
 The exportation, however, of the instruments of trade, 
 properly so called, is commonly restrained by absolute 
 prohibitions. When heavy penalties were imposed 
 upon the exportation of the dead instruments of trade, 
 it could not be expected that the artificer should go 
 free. Accordingly the person convicted of enticin* 
 any artificer to go to foreign parts, in order to practice 
 or teach his trade, is liable to very heavy penalties. So 
 also is the artificer himself, if having gone beyond the 
 seas, he does not return upon notice being given him 
 by his Majesty's secretary of state. Thus is the liberty 
 of the subject sacrificed to the futile interests of our 
 merchants and manufacturers. P. 512 14. 
 
 The motive of all these regulations is to extend our 
 own manufactures, by depressing those of our neigh- 
 bours. Consumption is the sole end of all production 4 
 and the interest of the producer ought to be attended 
 fo, only so far as it may be necessary forpromoting that 
 of the consumer. But in the mercantile system,the in- 
 terest of the consumer is almost constantly sacrificed 
 Jo that of the producer. It is for the benefit of the 
 producer, that restraints ore laid upon the importation
 
 ( 233 ) 
 
 of all foreign commodities : that bounties are granted 
 upon the exportation of some of his productions : an(J 
 that the consumer, by the treaty with Portugal, is pre- 
 vented, by high duties, from purchasing of a neigh- 
 louring country, a commodity which our own climate 
 does not produce. But in our colony trade the interest 
 of the consumer has been more particularly sacrificed 
 to that of the producer. The contrivers of this sys- 
 tem have been the producers, ani not the consumers. 
 . 51518. 
 
 END or THE SECOND VOLUME,
 
 BpOKVTHE FOURTH. 
 
 CHAP. IX, 
 
 Of the Agricultural systems, or of those systems of po- 
 litical Economy , which represent the produce of land 
 as either the sole or the principal source of the revenue 
 and wealth of every country. 
 
 r-r< 
 
 JL HAT system which represents the produce qf 
 land as the sole source of the wealth of every coun- 
 try, has never been adopted hy any nation. It exists 
 in the speculations of some men of learning in France. 
 The following are theoutlines of this ingenious system. 
 M. Colbert, the minister of Lewis XIV. embraced 
 all the prejudices of the mercantile system. The in- 
 dustry and commerce of a great country, he endea- 
 voured to regulate upon the same model as the depart- 
 ments of a public office: he bestowed, upon certain 
 branches of industry, extraordinary privileges, while he 
 laid others under extraordinary restraints. T support 
 the industry of towns, he was willing to depress that
 
 ( 235 ) 
 
 of the country. The French philosophers, by repre- 
 ienting agriculture as the sole source of the revenue 
 and wealth of every country, seem to have undervalued 
 the industry of towns, as M. Colbert certainly over- 
 valued it. They divide the people who have been sup- 
 posed to contribute towards the annual produce of the 
 rand and labour of the country into three classes. The 
 first is the class of the proprietors of land. The second 
 K the class of cultivators, called the productive class. 
 The third is the class of artificers, whom they term the 
 unproductive class. P. 14. 
 
 The class of proprietors contributes to the annual 
 produce by theexpence which they lay out upon the 
 improvement of land, upon buildings, &c. by means of 
 which, the cultivators are enabled with the same capital 
 to raise a greater produce, and consequently to pay a 
 greater rent. Such expences are called ground ex- 
 pences. P. 4. 
 
 The cultivators contribute to the annual produce by 
 what are, in this system, called the original, and annual 
 expences which they lay out upon the cultivation of 
 land. Tine original expences consist in the instrrn 
 ments of husbandry; in the stock of cattle ; in the seed; 
 and in the maintenance of the farmer's family,servants, 
 and cattle, till he can receive some return from the? 
 land. The annual expences consist in the seed ; in the 
 wear and tear of the instruments of husbandry; and in 
 the annual maintenance of the farmer's servants and 
 cattle. That part of the produce of the land, which 1 
 remains to him after paying the rent, ought to be suf- 
 ficient to replace lo him, in a reasonable term, his ori- 
 ginal, and annual expences, together with the ordi- 
 nary profits of stock, or he cannot cany on his em-* 
 ployment upon a level with othei; employments. The
 
 ( 23(5 > 
 
 rent which belongs to the landlord, is no more ' 
 the neat produce which remains after paying all the 
 necessary expences, which must be laid out in order 
 to raise the whole produce. It is because the labour 
 of the cultivators affords a neat produce of this kind, 
 that this class of people are called the productive class. 
 The original and annual expences are called produc- 
 tive experrces : these, together with the ground expen- 
 ces of the landlord, are the only three sorts of expen- 
 ces which, in this system, are considered as productive. 
 P. 57. 
 
 Artificers and manufacturers are, in this system, re- 
 presented as a class of people aJtogether unproductive: 
 Their labour, it is said, replaces only the stock which 
 employs them., together with its ordinary profits. Mer- 
 cantile stock is equally unproductive. It only continues 
 the existence of its own value, without producing any 
 new value. P. 7. 8. 
 
 The labour of artificers and manufacturers, never 
 adds any thing to the value of the wholeannual amount 
 of the rude produce of the land. It adds, indeed, to 
 the value of some particular parts of it. But the con- 
 sumption, which in the mean time,it occasions of other 
 parts, is precisely equal to the value which it adds to 
 those parts. P. 9. 
 
 , Artificers, manufacturers, and merchants, can aug- 
 ment the revenue and wealth of their society by parsi- 
 mony only ; or by depriving themselves of apart of 
 the funds destined for their own subsistence. They 
 annually re-produce nothing but th'ose funds. Far-^ 
 mers and country labourers may enjoy the whole funds 
 destined for their subsistence, and yet augment the 
 wealth of their society. Nations, therefore, whieb 7
 
 C 337 ) 
 
 like Franceor England, consist in a great measure, of 
 proprietors and cultivators, can be enriched by indus- 
 try and enjoyment. Nations, on the contrary, which 
 like Holland and Hamburgh, are composed of mer- 
 chants, can grow rich only by parsimony. As the 
 interest of nations is different, so is likewise the cha- 
 racter of the common people. Those of the former 
 kind are distinguished for liberality and frankness* 
 Those of the latter for narrowness and selfish disposi- 
 tions. P*. 10.- 11. 
 
 The unproductive class is maintained and employed 
 at the expence of the two other classes. They fur- 
 nish it with materials of its work, and with the fund 
 of its subsistence. The unproductive class, however, 
 is greatly useful to the other two classes. By their; 
 means, the proprietors and cultivators can purchase 
 foreign goods, and the manufactured produce of their 
 own country, with the produce of less labour than 
 what they must employ to import the one, or to make 
 the other. By their means, the cultivators are deli- 
 vered from many cares which would otherwise dis- 
 tract their attention from the Cultivation of land. 
 Thus the industry of merchants, manufacturers, &c. 
 though in- its own nature unproductive, contribute* 
 indirtctly to increase the produce of the land. P. 1 1,12. 
 
 It can never be the interest of the proprietors and 
 cultivators, to restrain the industry of merchants and 
 manufacturers. The greater tire liberty which the 
 unproductive class enjoys, the cheaper will the othei 
 classes be supplied with foreign goods, and with the 
 manufactured produce of their own country.
 
 ( 238 ) 
 
 Can it be the interest of the unproductive class to op-- 
 press the other two. The establishment of perfect 
 justice, liberty, and equality, is the secret which se- 
 cures the highest degree of prosperity to all three 
 classes. The same reasonings will apply to mercan- 
 tile and what are called landed nations. According to 
 this liberal system, the most advantageous method in 
 which a landed nation can raise up artificers, manu- 
 facturers, and merchants of its own, is to grant the 
 most perfect freedom of trade to the artificers, manu* 
 facturers, and merchants of other nations. P. 13 16 
 When a landed nation, on the contrary, oppresses 
 the trade of foreign nations, it necessarily hurts its 
 own interest in two different ways^ (1.) By raising 
 the price of foreign goods and manufactures, it sinks 
 the real value of the surplus produce of its own land, 
 with which it purchases those goods and manufac- 
 tures. (2.) By giving a sort of monopoly of the home 
 market, it raises the rate of mercantile profit in pro- 
 portion to that of agricultural profit, and consequently 
 either draws from agriculture a part of the capital 
 which had been employed in it, or hinders from going 
 to it a part of what would otherwise have gone to it. 
 This policy discourages agriculture. (1.) By sinking 
 the real value of its produce, and thereby lowering 
 the rate of its profit : and, (2.) By raising the rate of 
 profit in all other employments, agriculture is ren* 
 dered less advantageous, and trade and manufactures' 
 more advantageous than they would otherwise be ; and 
 every man is tempted to turn his capital and indus- 
 try from the former to the latter employments. 
 Though by this oppressive policy a landed nation 
 should be able to raise up artificers, &c. sooner than by
 
 ( 239 ) 
 
 the freedom of trade, yet it would raise them prematu- 
 rely. It would depress productive labour, by encour- 
 aging too hastily that labour which is unproductive. 
 P. 1720. 
 
 The capital error of this system, however, seems to 
 lie in its representing the class of artificers, manufac- 
 turers, and merchants, as altogether barren and unpro- 
 ductive. For, 
 
 I. This class re-produces annually the value of it's 
 own annual consumption. We should not call a mar- 
 riage barren, though it produced only a son and a 
 daughter. P. 21 . 
 
 II. It seems improper to consider artificers, &c. in 
 the same light as menial servants. The labour of 
 menial servants does not continue the existence of the 
 fund which maintains and employs them ; it perishes 
 in the very instant of performance. The labour of ar 
 tificers, &c. does realize itself in some vendible commo- 
 dity. P. 22. 
 
 III. It seems improper to say, that the labour of artt 
 ficers, &c. does not increase the real revenue of the 
 society. Admitting that the consumption of this class 
 was exactly equal to their production, it would not fol- 
 low, that its labour added nothing to the real value of 
 the annual produce of the land and labour of the so- 
 ciety. P. 23. 4. 
 
 IV. Farmers and country labourers can no more 
 augment, without parsimony, the real revenue, the an- 
 nual produce of the land and labour of their society, 
 than artificers, manufacturers, &c. The annual pro- 
 duce of the land and labour of any society can be aug-
 
 only : (1.) By some improvement in the pre-r 
 ductive powers of useful labour ; or, (2.) By some in- 
 prease in the quantity of that labour. The improve- 
 ment in the productive powers of useful labour depends 
 jir$t, upori the improvement in the ability of the work- 
 man : secoridty, upon that of the machinery with which 
 fie works, In these respects the class of cultivators can 
 have no sort of advantage over that of artificers and ma- 
 nufacturers. The increase in the quantity of useful 
 labour employed within any society, must depend upon, 
 fhe increase of the capital which employed it; and that 
 is equal to the amount of the savings from the revenue. 
 Jf merchants, &c. are more inclined to parsimony than 
 Cultivators, they are more likely to augment the quanr 
 tityqf useful labour employed within tljeir society, 
 J. 2.5. 
 
 . V. Though the revenue of the inhabitants of every 
 .cp.untry was supposed to consist in the quantity of sub- 
 sistence which their industry could procure them, yet 
 .the revenue of a trading and manufacturing country, 
 must, other things being equal, always be much grear 
 ter than that of one without trade or manufactures. 
 By means of trade and manufactures, a greater quanr 
 tity of subsistence can be annually imported into a 
 particular courjtry, than what its own lands could af- 
 ford. A small quantity of manufactured produce purr 
 chases a great quantity of rude produce, A manufac- 
 turing country, therefore, purchases with a small part 
 of its manufactured produce, a great part of the rude 
 produce pf other countries ; while a country without 
 manufactures is obliged to purchase, attheexpenc 
 of a great part of its rude produce, a very small part 
 pf he manufactured produce pf other countries. The
 
 ( 241 > 
 
 inhabitants of the former will enjoy a greater quan* 
 thy of subsistence than what their own lands could 
 afford ; those of the latter must enjoy a smaller quan- 
 tity. P. 26. 7. 
 
 This system, with all its imperfections, is, perhap, 
 the nearest approximation to the truth that has yet 
 been published upon the subject of political reconomv. 
 Though in representing the labour which is employed 
 upon land, as the only productive labour, the notion* 
 xvhich it inculcates are too narrow ; yet in represent 
 ting the wealth of nations as consisting in the consu- 
 mable goods annually re-produced by the labour of the 
 society, and ia representing perfect liberty as the only 
 effectual expedient for rendering this annual re-pro- 
 duction, the greatest possible, its doctrine seems to be 
 as just, as it is generous. The followers of this sys- 
 tem are numerous, and are distinguished in France by 
 the name of The Economists. The admiration of 
 the whole sect for their master, M. Qucsnai, is not 
 inferior to that of any of the autient philosophers, for 
 the founders of their respective systems, ^he Mar- 
 quis de Mirabeau reckons upon three great inventions, 
 which have principally given stability to political 
 society. (1.) The invention of writing: (2.) The in- 
 vention of money: (3.) The economical table, which 
 cooipletes the other two, by perfecting their object. 
 P. 28. 9- 
 
 As the political economy of modern Europe has 
 been more favourable to manufactures and foreign 
 trade than to agriculture, so that of other nations has 
 been more favourable to agriculture than to manufac- 
 tures. The policy of China favours agriculture 'more 
 than other employments ; thq re the condition of the
 
 labourer is superior to that of the artificer. Except 
 ivith Japan, the Chinese carry on little foreign trade. 
 .?. 30. 
 
 Manufactures are, in almost all countries, the sup- 
 port of foreign trade. The perfection of manufacturing 
 industry depends upon the division of labour, which is 
 regulated by the extent of the market. The great ex- 
 tent of China, its vast population,its variety of climate, 
 and its water carriage, render the home market suffici- 
 ent to support very great manufactures. An extensive 
 foreign trade would, however, much increase them, 
 and improve the productive powers of manufacturing 
 industry. P. 31. 2. 
 
 The policy of antient Egypt, and of Indostan have 
 favoured agriculture more than other employments : 
 $he whole body of the people were divided into different 
 casts, each of which was confined, from father to son,to 
 different employments. The cast of the priests held 
 the highest rank ; that of the soldiers the next ; and the 
 cast of the farmer and labourer was superior to that of 
 merchants and manufacturers. The government of 
 both countries was particularly attentive to the interest 
 Of agriculture. P. 33, 
 
 The antient Egyptians were, by a superstitious aver* 
 fion to the sea, prohibited from all distant voyages. 
 They depended on the navigation of other nations 
 for the exportation of their surplus produce ; this de- 
 pendence must have discouraged the increase of this 
 surplus produce. Manufactures require a more ex- 
 tensive market than the most important parts of the 
 rude produce of land. A shoemaker, for instance, 
 can supply fifty families with the produce of his own 
 labour ; but a person employed in agriculture cannot
 
 ( 243 ) 
 
 supply more than four. In gypt and Indostan the 
 Confinement of the market, was, in some measure, 
 compensated by the convenience of inland navigations. 
 P. 34. 5 . 
 
 The sovereigns of China, Egypt> and Indostan^ 
 have derived the most considerable part of their re- 
 venue from some sort of land tax, which consisted in a 
 certain proportion of the produce of the land. It was 
 natural, therefore, that the sovereigns should be atten- 
 tive to the interests of agriculture. The policy of the 
 antient republics of Greece, and that of Rome, seems 
 rather to have encouraged manufactures, than to have 
 given any direct encouragement to agriculture. The 
 employments of artificers and manufacturers were con- 
 sidered as hurtful to the strength and agility of the hu- 
 man body, and such as were fit only for slaves, who, 
 consequently, were the only persons em ployed in them. 
 Slaves are seldom inventive. Improvements in me- 
 chanics have been the discoveries of freemen. In ma- 
 nufactures carried on by slaves, more labour must be 
 employed, than in those carried on by freemen. The 
 work of the former must therefore be dearer than that 
 of the latter. The H ungarian mines wrought by free- 
 men, are more profitable than those of Turkey, in the 
 same neighbourhood, wrought by slaves. The finer 
 sorts of manufactures in the times of the Greeks and 
 Romans were at a very high price. Silk sold for its 
 Weight in gold. Some cloths, dyed in a particular 
 manner, cost 331. 6s. 8d. the pound weight. This high 
 price was probably owing to the dye. The cloths, 
 however, must have been much dearer than at present, 
 or so expensive a dye would not have been bestowed 
 n them. P. atiy.
 
 ( 244 ) 
 
 The greatest and most important branch of thff 
 commerce of every nation is that carried on between 
 the inhabitants of the town, and those of the coun- 
 try : the former draw from the country rude produce,- 
 and pay for this rude pro'duc'e a part of it that is ma- 
 nufactured. The deafer the latter, the cheaper the 
 former ; and whatever tends to raise the price of ma- 
 nufactured produce, tends to lower that of the rude 
 produce of the land, and thereby to discourage agricul- 
 ture. P. 40. 
 
 Those systems, therefore, which, in order t6 pro-r 
 mote agriculture, impose restraints on manufactures 
 and foreign trade, indirectly discourage that very 
 species of industry which they mean to promote. It 
 is thus that every system which endeavours, by extra- 
 ordinary encouragements or restraint?, to change the 
 direction of the capital of a society, is, hi reality, 
 subversive of the great purpose which it means to pro- 
 mote. P. 41. 
 
 All sy steins' of preference or restraint being taken? 
 away, the obvious and simple system of natural liberty 
 establishes itself of its own accord. Every man is left 
 at liberty to pursue his own interest in his own way. 
 The sovereign rs completely discharged from a duty/ 
 to which he cannot be equal, the duty of superintend- 
 ing the industry of private people. According to this 
 system of natural liberty, the sovereign has only three 
 duties to attend to. (1.) The duty of protecting the 
 society from the violence of other independent socie- 
 ties : (2.) The duty of protecting every member of the 
 society from the oppression of every other member of 
 if : and, (3.) The duty of erecting and maintaining 
 certain public works and institutions, which it cannot
 
 ( 249 ) 
 
 t>e the interest of individuals to erect and maintairi. 
 These duties suppose a certain expence ; and this ex- 
 pence requires a certain revenue to support it. In the 
 following book will be explained : (1.) What are the 
 necessary expences of the sovereign, or common- 
 wealth : (.) What are the different methods in which 
 the whole society may be made to contribute towards 
 those expences : and, (3.) What are the reasons and 
 causes which have induced governments to contract 
 debts. P. 42. 3.
 
 ( 246 ) 
 BOOK V. 
 
 Of the Revenue of the Sovereign, or Commonwealth. 
 
 CHAP. I. 
 Ofthe Expences of the Sovereign, or Commonwealth. 
 
 PART. I. 
 Of the Expence of Defence. 
 
 THE first duty of the sovereign, that of protecting 
 the society from the violence of independent societies, 
 can be performed only by military force, the expence 
 of which is different in the different states of society. 
 Among nations of hunters, every man is a warrior as 
 well as a hunter. His society is afrno expence to pre- 
 pare him for the field, or to maintain him while he is 
 in it. P. 44. 
 
 Among nations of shepherds, the way of life is 
 nearly the same, whether they march as an army, or 
 move about as a company of herdsmen. In war they 
 are maintained by their own herds and flocks as in the 
 time of peace. The sovereign is at no expence. An 
 army of hunters can seldom exceed two or three hun- 
 dred men. An army of shepherds may amount to two 
 or three hundred thousand. The former can never be 
 formidable to a civilized nation. The latter may. Eu- 
 rope and Asia could not resist the Scythians united. 
 P. 457. 
 
 In a more advanced state of society, among those na- 
 tions of husbandmen who have little foreign commerce,
 
 ( 247 ) 
 
 and no other manufactures than those coarse ones 
 which every family prepares for its own use, eve ly man 
 becomes a warrior. Those who live by agriculture are 
 prepared, by their usual occupations, for the labours 
 of war, to some of which they bear a strict analogy. 
 Their pastimes are, in the same manner, the images of 
 \var. It seldom costs the sovereign any expence to pre- 
 pare them for the field. 
 
 Agriculture supposes a settlement. The whole peo- 
 ple cannot take the field togther. All men of military 
 age may take the field, which amount to about the 
 fourth part of the whole body of the people. If the 
 campaign should begin after seed time, and end be- 
 fore the harvest, both the husbandman and his labour- 
 ers can be spared from the farm without loss. He is, 
 therefore, willing to serve without pay ; and it fre- 
 quently costs the sovereign as little to prepare him for 
 the campaign. P. 48. Q. 
 
 In a more advanced state of society two causes con- 
 tribute to render it altogether impossible that they who* 
 take the field, should maintain themselves at their own 
 expence. (1.) The progress of manufactures. (2.) The 
 improvement in the art of war. When an artificer takes 
 the field, he must be maintained by the public. When 
 war becomes a science, and each contest lasts for seve- 
 ral years, those who serve the public in war, must be 
 maintained by the public. The number of those who 
 can go to war is necessarily smaller in a civilized, than, 
 in a rude state of society. Not more than a huridredth 
 part of the inhabitants of any country can be employ* 
 ed as soldiers, without ruin to the country. P. 50, 1. 
 
 H h j
 
 { 248 ) 
 
 The expence of preparing an army for the field was 
 not considerable, till after that the maintaining it in 
 the field, devolved entirely on the sovereign, or com- 
 monwealth- In Greece, military exercises were a 
 necessary part of education imposed by the state on 
 every free citizen. In Rome the exercises of the cam- 
 pus martins answed the same purpose. There were in- 
 stitutions of the same nature under the feudal govern- 
 ments. In those times the trade of the soldier was not 
 a separate and distinct trade, 
 
 The art of war in the progress of improvement be- 
 comes one of the' most complicated arts ; and, like 
 other mechanical arts, requires that it should become 
 the principal occupation of a particular class of citizens; 
 and the division of labour is as necessary for the im- 
 provement pf this as of every other art. In other arts, 
 the division, of labour is introduced by the prudence of 
 individuals : but it is the wisdom of the state only 
 which can render the trade of a soldier distinct from all 
 others. P. 52-T-4. 
 
 A shepherd has a great deal of leisure ; a husband- 
 man, in the rude state of society, has some ; an arti- 
 ficer has none at all. The firs: may, without loss, em- 
 ploy a great deal of his time in martial exercises; the 
 second may employ some part of it ; but the last can- 
 ftot employ a single hour in them without loss, and his 
 Own interest leads him to neglect them. Improvements 
 !n husbandry leave the husbandman as little leisure as 
 the artificer. Hence military exercises come to be 
 eglected altogether. In these circumstances, there 
 aiQ but two methods by which the state cap providq for 
 the public defence. (1.) By obliging citizens to join, 
 to their common professipn, that of a soldier : or, (2.) 
 2ty maintaining a certain number of citizens in the
 
 It 
 
 Constant practice of military exercises. In the first 
 case the military force is said to consist in a militia ; in 
 the second, it is said to consist in a standing army. In 
 a militia, the character of a labourer, artificer, &c. 
 predominates o.yer that of the soldier : in a standing 
 army, that of the soldier predominates over every other 
 character: in this distinction consists the essential dif- 
 ference between those two different species of military 
 force. P. 546. 
 
 Before the invention of fire arms, that army was su- 
 perior, in which the soldiers had the greatest skill in 
 the use of their arms. This skill could only be acquired 
 as fencing is at present; each man practising under a 
 master, or with his companion. Since the invention 
 pf fire arms, strength and agility of body, or even ex- 
 traordinary dexterity in the use of arms are of less con- 
 sequence. Regularity, order f and prompt obedience 
 to command are qualities which, in modern armies, 
 are of the greatest importance. The noise of fire arms, 
 the smoke, and the invisible death to which every man 
 is exposed, render it difficult to maintain any consider- 
 able degree of regularity &c. Habits of regularity, or- 
 der, and prompt obedience to command, can be ac- 
 quired only by troops which are exercised in Urge bo- 
 dies. P. 57.$. 
 
 A Militia must be inferior to a well disciplined stan- 
 ding army. The soldiers who are exercised only once 
 a week, or once a month, can never be so expert in 
 the use of arms as those exercised every day. Those 
 who are bound to obey their officers only once a week, 
 can never have the same disposition to ready obedi- 
 ence, with those whose life and conduct are directed
 
 C 250 > 
 
 by him. A militia which has served for several cam-, 
 paigns becomes in every respect a standing army- 
 ?. 59.60. 
 
 One of the first standing armies of which we have- 
 any distinct account, is that of Philip of Macedon. 
 When he was at peace he was careful not to disband 
 his army. It vanquished the militias of Greece and 
 Persia. The fall of the Greek republics, and of the 
 Persian empire, was the effect of the superiority which 
 a standing army has over militias. It is theirs* great 
 revolution in the affairs of mankind of which we have- 
 any account. The fall of Carthage, and the elevation 
 of Rome is the second. All the varieties in the fortune 
 of those two famous republics may be accounted for: 
 from the same cause. P. 6l 4. 
 
 Many different causes contributed to relax the disci- 
 pline of the Roman armies. Its extreme severity was 
 perhaps one of those causes. Jn the days of their 
 grandeur, when no enemy could oppose them, their 
 heavy armour was laid aside, and their exercises neg- 
 lected. The civil came to predominate over the mili- 
 tary character ; and the standing armies of Rome de- 
 genOcated into an undisciplined militia, incapable of 
 Resisting the attacks of the German and Scythian mili- 
 tias which invaded the western empire. The fall of the 
 western empii'S is the third great revolution in the af- 
 fairs of mankind of which antient history has preserved 
 any distinct account. It was brought about by the su- 
 periority which the m;Utia of a nation of shepherd* 
 has over that of a nation of husbandmen, artificers, and 
 manufacturers. The military force of the German and 
 Scythian nations, who established themselves upon 
 the ruins of the western empire, continued for some
 
 time to be of the same kind in their new settlements, as 
 it had been in their original country. As arts and in- 
 dustry advanced, the discipline of the militia went to 
 ruin, and standing armies were introduced to supply 
 the place of it. When the expedient of a standing 
 army had been once adopted by one civilized nation, it 
 became necessary that all its neighbours should follow 
 the example. P. 65.6. 
 
 The soldiers of a standing army, though they may 
 never have seen an "enemy, yet have frequently ap- 
 peared to possess all the courage of veteran troops. la 
 a long peace, the generals may forget their skill ; but, 
 where a well regulated standing army has been kept up, 
 the soldiers seem never to forget their valour. When a 
 civilized nation depends for its defence upon a militia, 
 it is at all times exposed to be conquered by any barba- 
 rous nation which happens to be in its neighbourhood. 
 As it is onJy by means of a well regulated standing army 
 that a civilized country can be defended ; so it is only 
 by means of it that a barbarous country can be civilized* 
 The improvements of Peter the Great resolve them- 
 selves into the establishment of a well regulated stan* 
 ding army. P. 67. 8. 
 
 A standing army may be dangerous to liberty, 
 wherever the interest of .the general, and that of the 
 principal officers are not connected with the support of 
 the constitution of the state. But where the military, 
 force is placed under the command of those who have 
 the greatest interest in the support of the civil govern- 
 ment, a standing army can never be dangerous to li- 
 berty. In some cases it niay be favourable to liberty. 
 JP. 69.
 
 ( G52 ) 
 
 The first duty of the sovereign, therefore, grows 
 more expensive as the society advances in civilization. 
 The great change introduced into the art of war, by 
 the invention of fire arms, has enhanced the expence. 
 In modern war, the great expence of fire arms gives an 
 evident advantage to the nation which can best afford 
 the expence. The invention of fire arms is favourable 
 "both to the permanency and to the extension of civi- 
 lization. P. 70. 1. 
 
 PART II. 
 
 Of the Expence of Justice. 
 
 THE second duty of the sovereign, that of protect 
 ting as far as possible, every member of the society 
 from the injustice of every other member of it, require* 
 two very different degrees of expence in the different 
 periods of society. Among nations of hunters, as there 
 is scarce any property, so there is seldom any regular 
 administration of justice. Men who have no property 
 can injure one another only in their persons or reputa- 
 tions. But they have no great temptation to this, since 
 the gratification is not attended with any permanent 
 advantage. But avarice and ambition in the rich ; iu 
 the poor, the love of present enjoyment, are passions' 
 which prompt to invade property, and are more uni- 
 versal in their influence. Where there is great proper- 
 ty, there is great inequality. It is only under the shel- 
 ter of the civil magistrate that the rich can sleep in safe- 
 ty. The acquisition of property requires the esta- 
 blishment of civil government. P. 72. d*
 
 ( 253 ) 
 
 Civil government supposes a certain subordination 
 which grows up with the growth of property. The 
 causes which introduce subordination seem to he four. 
 (1.) The superiority of personal qualifications; but 
 these must be supported by those of the mind. (2.) Sn- 
 periority of age; which is a palpable quality and ad- 
 mits of no dispute. (3.) Superiority of fortune. This 
 is greatest in the rudest ages of society which admit of 
 any considerable inequality of fortune. The first period 
 of society, that of hunters., admits of none. That of 
 shepherds admits of very great inequalities of fortune, 
 and there is no period in which the superiority of for- 
 tune gives so great authority to those who possess it. 
 (4.) The superiority of birth. This supposes an antient 
 superiority of fortune in the family of the person who 
 claims it. All families are equally antient. Antiquity 
 of family means antiquity of wealth, or of that great- 
 ness which is accompanied with wealth. This distinc- 
 tion of birth can have no place in nations of hunters ; 
 but it always does take place among nations of shep- 
 herds. P. 748. 
 
 Birth and fortune are the two circumstances which 
 principally set one man above another, and are there- 
 fore the principal causes which establish subordination 
 among men. Among nations of shepherds both these 
 Causes operate with their full force. The rich shepherd 
 Can command the united force of a gieat number of 
 people. His military power is great. The weak look 
 to him for protection; hence his judicial authority. It 
 is in the age of shepherds, in the second period of so-* 
 ciety, that the inequality of fortune first begins to take 
 
 I i
 
 ( 254 ) 
 
 place, and introduces a degree of subordination, and 
 authority which could not exist before. It thereby in- 
 troduces some degree of civil government, which is in 
 reality instituted for the defence of the rich against 
 the poor. The judicial authority of such a sovereign, 
 was, for a long time, a source of revenue to him. Those 
 who applied for justice were willing to pay for it. The 
 guilty person was also forced to pay an amercement to 
 the sovereign. Originally both the sovereign, and the 
 inferior chiefs exercised jurisdiction in their own per- 
 sons. It was afterwards delegated to a judge, who was 
 obliged to account to his principal for the profits of the 
 jurisdiction. The judges in the time of Henry II. were 
 a sort of itinerant factors sent round the country for 
 the purpose of levying certain branches of the king's 
 revenue. P. 79 81. 
 
 The scheme of making the administration of justice 
 subservient to the purposes of revenue, was productive 
 of great abuses, for which it was scarcely possible to 
 obtain redress. In all barbarous governments, the ad- 
 ministration of justice appears to have been extremely 
 corrupt. P. 82. 3. 
 
 Among nations of shepherds, the sovereign, being 
 the chief shepherd, is maintained by the increase of 
 his flocks Among nations of husbandmen, just come 
 out of the shepherd state, the sovereign is the greatest 
 landlord, and is maintained by the revenue derived 
 from his estate, called the demesne of the crown. His 
 subjects contribute nothing to his support, except pre- 
 sents, when they need his authority to protect them 
 from the oppressions of their fellow subjects. The cor- 
 ruption of justice, naturally resulting from the arbitrary 
 .and uncertain nature of those presents, scajcely ad-
 
 ( C55 ) 
 
 mittcd of any remedy. When taxes were introduced 
 to defray the expences of the sovereign, and fixed sa- 
 Jaries were appointed to the judges, these presents were 
 abolished, and justice was said to be administered gra- 
 tis. Justice, however, never was, in reality, adminis- 
 tered gratis in any country. Lawyers must be paid. It 
 was not to diminish the expence, but to prevent cor- 
 ruption of justice, that the judges were prohibited from 
 receiving any present from the parties. P. 83 5. 
 
 The office of judges is so honourable, that men are 
 jvilling to accept of it with very small emoluments. 
 The office of a justice of peace, though attended with 
 no emolument, is an object of ambition among the 
 country gentlemen. The whole expence of the admi- 
 nistration of justice makes but a small part of the ex- 
 pences of government. The zohoh expence of justice 
 might be defrayed by the fees of court, without expo- 
 sing the administration of justice to the hazard of cor- 
 ruption, if those fees were precisely ascertained, and 
 paid into the hands of a receiver, to be by him distribu- 
 ted in known proportions among the judges after the 
 process is decided, and according to the attention paid 
 in examining the process. The fees of court were ori- 
 ginally the principal support of the different courts of 
 justice in England. Each court endeavoured to draw 
 to itself as much business as it could. The court of 
 King's bench, instituted for the trial of criminal causes 
 only, took cognisance of civil suits; the plaintift' pre- 
 tending that the defendant in not doing him justice 
 had been guilty of some trespass. The court of Ex- 
 chequer instituted for the levying of the King's reve- 
 
 U*
 
 ( 2.56 ) 
 
 nue, took cognisance of all contracted debts ; the 
 plaintiff alledging that he could not pay the King, her 
 cause the defendant would not pay him. Hence it de- 
 pended upon the parties before what court the}' would 
 have their cause tried, and each court endeavoured by 
 superior dispatch and impartiality, to draw to itself as 
 many causes as it could. The present admirable consti- 
 tution of the courts of justice in England was, perhaps 
 originally, in a great measure, formed by this emula- 
 tion which took place between their respective judges. 
 P. 809. 
 
 A stamp duty upon the law proceedings of each par- 
 ticular court, to be levied by that court, and applied to 
 the maintenance of the judges and other officers, might 
 afford a revenue sufficient for defraying theexpence of 
 the administration of justice. The judges indeed, rni^ht, 
 in this case, be under the temptation of multiplying un- 
 necessarily the proceedings upon every cause. 
 
 The separation of the judicial, from the executive 
 power, arose from the increasing business of the socie- 
 ty, ia consequence of its increasing improvement. 
 When the judicial is united to the executive power, jus- 
 tice is frequently sacrificed to politics. Upon the impar- 
 tial administration of justice depends the liberty of every 
 individual, the sense which he has of his own security. 
 The judicial ought to be rendered independent of the 
 executive power. P. 90 2,
 
 257 ) 
 
 PART III. 
 
 Of the expence of public works and public institutions. 
 
 THE performance of the third duty of the sovereign, 
 of erecting public works, and public institutions, re- 
 quires different degrees of expence, in different periods 
 of society. These institutions are chiefly for facilita- 
 ting commerce, and for promoting the instruction of 
 the people. 
 
 ARTICLE I. Of the public works and institutions for 
 facilitating the commerce of Society. 
 
 of those which are necessary for facilitating 
 commerce in general, such as good roads, bridges, ca- 
 nals, harbours, &c. These must require different de- 
 grees of expence in different periods of society. It does 
 not seem necessary that the expence of those public 
 works should be defrayed from the public revenue ; 
 they may be managed by means of tolls, without bring- 
 ing any burden on the revenue of the society. The 
 coinage, an institution for facilitating commerce, in 
 jnost countries, not only defrays its own expence, but 
 affords a small revenue to the sovereign. The post-of- 
 fice, a considerable one. P. 92 4. 
 
 When carriages, and lighters pay toll in proportion 
 to their weight or their tonnage, they pay for those 
 public works exactly in proportion to the wear and 
 tear which they occasion of them. The toll is finally 
 paid by the consumer ; who, nevertheless is a gainer, 
 since the expence of carriage is much reduced by
 
 ( 258 > 
 
 means of such works. No tax can be more equitable. 
 When the toll upon carriages of luxury is somewhat 
 higher in proportion to their weight, than upon car- 
 riages of necessary use, the vanity of the rich is made 
 to contribute in an easy manner to the relief of the 
 poor. When high roads, bridges, canals, &c. are made 
 and supported by commerce, they can be made only 
 \vherethalcoinmercerequiresthem. P. 95. 6. 
 
 In different parts of Europe the toll upon a canal is 
 the property of private persons, whose interest obliges 
 them to keep up the canal. The tolls for the mainte- 
 nance of a high road cannot, with safety, be made the 
 property of private persons. A high road, though en- 
 tirely neglected, does not become impassable, though 
 a canal does. P. 97. 
 
 In Great Britain the abuses which the trustees have 
 committed in the management of those tolls, have, in 
 many cases, been justly complained of; these are ca- 
 pable of remedy. The money levied at the turnpikes 
 is supposed to exceed so much what is necessary for re- 
 pairing the roads, that the savings have been consi- 
 dered, as a very great resource which might at some 
 time or other be applied to the exigencies of the state.* 
 This plan is liable to several objections. (1.) If the tolls 
 be considered as one of the resources for supplying the 
 ^exigencies of the state, they would be augmented as 
 those exigencies were supposed to require. (2.) A tax 
 upon carriages in proportion to their weight, though 
 
 * Mr. WILLIAM PITT adually proposed, in the session of Par- 
 liament of 1797, to DOUBLE the turnpike tolls throughout the coun- 
 try, and to seize upon one half of them for the exigencies of the state. 
 He followed Adam Smith ia estimating the neat produce to be nearly 
 .half a million. Ed.
 
 < 259 ) 
 
 a very equal tax when applied to the sole purpose of re- 
 pairing the roads, is a very unequal one when applied to 
 any other purpose, 'as the price of goods would be raised 
 according to their weight, andnot according to their va- 
 lue. (3.) If government were to neglect the repair of the 
 roads, it would be difficult to compel the proper applica- 
 tion of any part of the turnpike tolls. Such was the case 
 in France. In China, the executive power charges itself 
 with the reparation of the high roads and canals. These 
 objects are recommended to the governor of each pro- 
 vince, and the judgment formed of his conduct is much 
 regulated by the attention he has paid to them. This 
 branch of public police is, consequently, much atten- 
 ded to in China, where the high roads, and canals, are 
 said to exceed every thing of the same kind which is 
 known in Europe. It is indeed the interest of the so- 
 vereign, whose revenue chiefly depends on a land-tax, 
 or land-rent. But the revenue of the sovereign does 
 not, in any part of Europe, arise chiefly from a land- 
 tax, or land-rent. Therefore though it should be true, 
 that in some parts of Asia, this department of the pub- 
 lic police is properly managed by the excutive power,, 
 there is not the least probability, that, during the pre- 
 sent state of things, it could be tolerably managed by 
 that power in any part of Europe. P. 98 105. 
 
 Those public works, such as lighting and paving the 
 streets of London, which cannot afford any revenue for 
 maintaining themselves, but of which the conveniency 
 is nearly confined to some particular district, are better 
 maintained by a local revenue, under the management 
 of a local administration, than by the general revenue 
 of the state, of which the executive power must always 
 have the management. The abuses which creep into 
 'the local and provincial administration of a local reve- 1
 
 ( 2(50 V 
 
 nue are trifling,in comparison of those which commonly 
 take place in the expenditure of the revenue of a great 
 empire. P. 105. 6. 
 
 Of the public works and institutions which arc neces- 
 sary for facilitating particular branches of [commerce/ 
 those branches of commerce, which are carried on witli 
 barbarous nations require extraordinary protection. 
 An ordinary store-house could give little security to the 
 goods of the merchants who trade to the western coast 
 <>f Africa. To defend them from the natives, it is ne- 
 cessary that the place where they are deposited should 
 be fortified. The disorders in the government of In- 
 dostan have been supposed to renderthe like precaution, 
 necessary there. Hence the forts erected by theFrench 
 and English East-India companies. 
 
 In other nations, where strangers cannot possess any 
 fortified place within their territory, it may be neces- 
 sary to maintain some ambassador, or consul, who may 
 decide the differences arising among bis own country- 
 men ; and in their disputes with the natives, may inter- 
 fere with more authority than they could expect from 
 any private man. It seems not unreasonable, that the 
 extraordinary expence, which the protection of any 
 particular branch of commerce may occasion, should 
 be defrayed by a moderate tax upon that branch. The 
 protection of trade in general from pirates, is said to 
 have given occasion to the institution of the duties of 
 customs. The protection of trade in general has ever 
 been considered as essential to the defence of the com- 
 mon-wealth, and upon that account, a part of the duty 
 of the executive power. The collection and applica- 
 tion of the general duties of customs, therefore have 
 been left to that power. In many commercial states of
 
 ( 261 ) 
 
 fern-ope, particular companies of merchants have pef- 
 suaded the legislature theentrust to them the performance! 
 of this duty as it respected some particular branches of 
 trade. P. 1079- 
 
 These companies have proved universally either bur- 
 densome or useless. When these companies do not 
 trade upon a joint stock, but are obliged to admit any 
 person properly qualified, they are called regulated 
 companies. When they trade upon a joint stock they 
 are ca\\ed joint stock companies. Such companies some- 
 times have^nd sometimes have not exclusive privileges; 
 Regulated companies resemble the corporation of 
 trades, and are enlarged monopolies of the same kind. 1 
 They are theHamburgh company ; theRussia company; 
 the East-land company ; the Turkey company, and the 
 African company. P. 110. 11. 
 
 The terms of admission in the Hamburgh company 
 are now said to be quite easy; The fine for admission 
 into the Russian company was reduced to 51. and that 
 for admission into theEast-land company to 40s. while, 
 at the same time, all the countries on the north side of 
 the Baltic were exempted from this exclusive charter: 
 Though such companies may not be very oppressive, 
 they are certainly useless, which,perhaps is the highest 
 eulogy which can ever be justly bestowed on a well re- 
 gulated company. The terms of admission into the 
 Turkey company are less easy; and the trade, ; though, 
 in some measure, laid open by parliament, is still con- 
 sidered as far from free. This company contributes 
 to maintain ap ambassador, and two or thres consulsy 
 
 K k
 
 who ottght to be maintained by tbe state, and tire tratfe 
 laid open to all his majesty's subjects. P. 112 15. 
 
 Regulated companies, it was observed by Sir Josiah 
 Child, have never maintained any forts or garrisons in 
 the countries to which they traded ; bul joint-stock 
 companies have. The former are in reality much more 
 unfit for this service than the latter. (1.) The direc- 
 tors of a regulated company, have no particular interest 
 in the prosperity of the general trade of the company, 
 for the sake of which such forts and garrisons are kept 
 up. The decay of the general trade may contribute 
 to the advantage of their own private trade : but the 
 directors of a joint stock trade have no private trade 
 of their own. (2.) The directors of a joint stock com- 
 pany have always the management of a large capital, a 
 part of which may be employed in building, repairing 
 and maintaining forts and garrisons : but the direc- 
 tors of a regulated company have no fund to employ 
 in this way. P. ll. 17. 
 
 Long after the time of Sir Josiah Child, the African 
 Company was established, which was charged, at first, 
 with the maintainance of all the British forts and garri- 
 sons, that lie between Cape Blanc and the Cape of 
 Good Hope, and afterwards with that of those only 
 which lie between Cape Rouge and the Cape of Good 
 Hope. The act which establishes this Company, had 
 two distinct objects in view: (1.) To restrain the 
 monopolizing spirit which is natural to the directors of 
 these companies : and (2.) To force them to give an 
 attention, which is not natural to them, towards main- 
 taining forts and garrisons. P, 118 21. 
 Joint stock companies diifef -in, several respects/ not
 
 ( 263 ) 
 
 only from regulated companies, but from private co- 
 partneries. 
 
 I. In a private co-partnery, no partner, without the 
 consent of the company, can transfer his share to ano- 
 ther person, or introduce a new member into the com^ 
 pany. Each member, however, may, upon proper 
 warning, withdraw from the co-partnery, and demand 
 payment from them of his share of the common stock. 
 In ajoint stock company, on the contrary, no member 
 can demand payment of his share from the company ; 
 but each member can, without their consent, transfer 
 his share to another person. 
 
 I[. In a private co-partnery, each partner is bound 
 for the debts contracted by the company to the whole 
 extent of his fortune. In a joint stock company,on the 
 contrary, each partner is bound only to the extent of 
 bis share. P. 122. 
 
 The trade of a joint stock company is always mana- 
 ged by a court of directors. The proprietors give 
 themselves no trouble about it, but contentedly receive 
 their dividend. This exemption from trouble, and 
 from risk beyond a limited sum, encourages many 
 people to become adventurers in the joint stock com- 
 panies, who would not hazard their fortunes in any 
 private co-partnery. Such companies, therefore, draw 
 to themselves very great stocks : that of the South 
 Sea Company at one time amounted to upwards of 
 33,000,0001. The divided capital of the Bank amounts 
 to 10,780,0001. Joint stock companies for foreign trade 
 have seldom been able to maintain the competition, 
 against private adventurers. They have seldom. sue- 
 
 K k -
 
 ( 264 ) 
 
 ceeded without an exclusive privilege, and frequently 
 have not succeeded with one. P. 123. 4. 
 
 The Royal African company had an exclusive char r 
 ter, which not being confirmed by act of parliament, 
 the trade was laid open. Such also was the situaiiorj 
 of the Hudson's-Bay company. The South Sea com- 
 pany, as long as they cpntinueda trading coinpany,had 
 an exclusive privilege, as the )ast India company has 
 at present. The Royal African company, with all its 
 advantages,could not maintain the competition agains.1 
 private adventurers. No private adventurers ever at- 
 tempted to trade in competition with thetfudson's-Bay 
 company. P. 124^7. 
 
 The stockjobbing projects of the South Sea company 
 are well known ; their mercantile projects were not 
 conducted much better. The first trade in which they 
 engaged, was that of supplying the Spanish Westlndies 
 ^with negroes; in this trade they were losers. They un- 
 dertook, in 1724, the whale fishery ; after eight voyages 
 they found their whole loss amounted to upwards of 
 837,0001. In 1748, this company ceased to be a tra- 
 ding company. P. 128 31, 
 
 The old East India company was established in 1660; 
 for the first twelve years they traded as a regulated 
 company. In 1612, they united into a joint stock. 
 Their charter was exclusive, but pot confirmed by act 
 of parliament. In process of time, therefore, interlo- 
 pers multiplied on them, which reduced them to great 
 distress. In 1G98, two millions were offered to govern- 
 ment at 8 per cent, interest, provided the subscribers 
 were erected into a new East India company, with ex- 
 clusive privileges. The old Eastlndia company offered 
 ^00,0001. at 4 per cent, inte**st,on the same conditions.
 
 ( 265 ) 
 
 'The former proposals were accepted, and the new East 
 India company was erected. The old East India com- 
 pany had, however, the right to continue their trade 
 till 1701. Th,e competition of the two companies had 
 Ijearly ruined both, in 1708, the two companies were 
 consolidated into one. The capital of the company 
 was augmented in 171 1, to 3,200,0001. and in 1743,they 
 lent to government another million. From 1711, this 
 company being delivered from all competitors, carried 
 on a successful trade, ancj. ma4e moderate annual o)ivi- 
 dends to the proprietors. 
 
 Paring the French war of 1741, the spirit of war ancl 
 conquestseemsto have taken possession of their servants 
 in India, and never since has left them. In the French 
 war which began in 1755, they acquired the revenues of 
 a,.rich and extensive territory, said to amount to three 
 millions a year. In 1767, administration laid claim to 
 their territorial acquisitions, and the revenue arising 
 therefrom. The company, in compensation for these 
 claims, agreed to pay government 400,0001. a year 
 Before this they had augmented their dividend from 
 6 to 10 per cent, and were attempting to raise it to 12 
 per cent, but were prevented b,y parliament, in order 
 that they might be able, more speedily, to pay their 
 debts. They were allowed, in 1769, gradually to in- 
 prease their dividend to 12i per cent. 
 
 In 1768, it was proved,-that the nett revenue of their 
 territorial acquisitions was 2,048,7481. besides another 
 revenue of 439,0001. arising from lands and established 
 customs ; and the profits of their trade amounted, at 
 least, to 400,0001. Notwithstanding, in 1773, this com- 
 pany was reduced to the greatest distress, and was 
 pbliged to reduce their dividend to 6 per cent, to get a
 
 <r 266 y 
 
 felease from the payment of the annual stipulated 
 400,0001. and to borrow of government 1,400,0001. It 
 appears that the great increase of their fortune, served 
 to furnish their servants with a pretext of greater pro- 
 fusions, and to cover for a greater malversation than in 
 proportion even to the increase of their fortune. India 
 affairs became now the subjects of parliamentry inqui- 
 ry ; in consequence of which, several important altera- 
 tions' t were made in the constitution of theirgovernment, 
 both at home and abroad. In consequence of theser 
 alterations, the courts of proprietors, and directors,were 
 expected to act with more dignity than they had done 
 before ; but these courts are utterly unfit to govern a 
 great empire, because they have too little interest in its 
 prosperity. A man purchases a thousand pound share 
 of India stock to become a proprietor, for the sake of 
 the influence which his vote may give him. It gives 
 bim a share, though not in the plunder, yet in the ap- 
 pointment of the plunderers of India. Provided hecan 
 enjoy this influence for a few years, he frequently cares 
 little about the dividend ; and about the prosperity of 
 the great empire, inthe government of which that vote? 
 gives him a share, he cares not at all, The regulations 
 of 1773,accordingly did not put an end to the disorders 
 of the company's government in India : and in 1784, 
 they were opce more redaced to the necessity of suppli- 
 cating the assistance of government, to prevent an im- 
 mediate bankruptcy. Different plans were proposed 
 by different parties in parliament forthe better manage- 
 ment of their affairs. All these plans agreed in sup- 
 posing the company unfit to govern its territorial pos- 
 sessions.
 
 With the right of possessing forts and garrisons In. 
 distant and barbarous countries, is connected the right 
 of making peace and war in those countries ; how un- 
 justly and cruellyjoint stock companies have commonly 
 exercised this right, is too well known by experience 
 P. 13242. 
 
 When a company of merchants, at their own risk, 
 undertake to establish a new trade with some remote 
 and barbarous nation, it may not be unreasonable to 
 grant them a monopoly of the trade for a certain numV 
 ber of years. But on the expiration of that term, the 
 monopoly ought to determine, and the trade to be laid 
 open to all the subjects of the state. By a perpetual 
 monopoly, all the other subjects are taxed two ways ; 
 (1.) By the high price of goods ; (2.) By their total 
 exclusion from a branch of business which might be 
 profitable for them to carry on. Without a monopoly, 
 however, a joint stock company cannot long carry on 
 any branch of foreign trade. Fifty-five such com- 
 panies have failed since the year 1600, owing tomis-p 
 management. P. 143 '5* 
 
 The only trades which joint stock companies caiv 
 carry on successfully, without exclusive privileges, are 
 those of which all the operation are capable of being 
 reduced to such an uniformity of method as admits of 
 little variation. Of this kind is, (1.) The banking 
 trade. (2.) The trade of insurance from fire, from sea 
 risk, an4 capture in time of war. (3.) The trade of 
 making and maintaining navigable canals. And, (4.) 
 The similar trade of bringing water for the supply of 
 a great city. 
 
 To render the establishment of a joint company per- 
 fectly reasonable, with the circumstance of being re-
 
 ducible to strict method, two other circtimstan'ce^ 
 ought to concur. (1.) It ought to appear that the un- 
 dertaking is of more general utility than the greater 
 part of common trades. (2.) That it requires a greater 
 capital than can be collected into a private co-partnery. 
 In the four trades above-mentioned, both these cir- 
 cumstances concur : but except these, perhaps, there 
 are no other in which all the circumstances concur, to 
 render the establishment of joint stock companies rea- 
 sonable. P. 146 9. 
 
 ARTICLE II. Of the Expence of Institutions for the 
 Education of Youth* 
 
 i '' ' 'It 
 
 THE institutions for the education 6f youth, mayyin 
 the same manner, furnish revenue sufficient for defray- 
 ing their own expences. The fee which the scholar 
 pays to the master, naturally constitutes a revenue of 
 this kind. Through the greater part of Europe, the 
 endowment of schools and colleges makes a consider- 
 able part of their revenue. Have those public endow- 
 ments contributed, in general, to promote the end of 
 their institution ? Have they contributed to encourage 
 the diligence and improve the abilities of the teachers? 
 Have they directed the course of education towards 
 objects more useful than those to which it would natu- 
 rally have gone of its own accord ? 
 
 In every possession necessity is the great motive to 
 ^exertion ; which is the greatest with those whose sub- 
 sistence depends upon the emoluments of their pro- 
 fession. Great objects, which are to be acquired by 
 success, may animate the exertions of men of ambi- 
 tion ; but they are not necessary, and if they are un-
 
 ( 269 ) 
 
 supported by the necessity of application, seldom oc- 
 casion considerable exertion. Kivalsbip renders ex- 
 cellency, even in mean professions, an object of am- 
 bition. The endowments of colleges have diminished 
 the necessity of application -in teachers. In some uni- 
 versities, however, the salary makes but a small part 
 of the emolument of the teacher ; the rest depends on 
 the fees of his pupils. In this case, the necessity of 
 application is not entirely taken away. In others, the 
 teacher is prohibited from receiving any fee from his 
 pupils, and his salary constitutes the whole of his 
 revenue. His interest is thus set in opposition to hia 
 duty. P. 1504. 
 
 Whatever forces a certain number of students to any 
 college, independent of the merit of the teacher, tends 
 to diminish the necessity of that merit. The privileges 
 of graduates which are obtained by mere residence ; 
 and charitable foundations for scholarships, have this 
 tendency. 
 
 The discipline of colleges is, in general, contrived 
 not for the benefit of the students, but for the ease of 
 the master. Its object is to maintain the authority of 
 the master. It presumes perfect virtue and wisdom in 
 the master, and the greatest weakness and folly in the 
 scholar. Where masters^ however, really perform 
 their duty, there is, perhaps, no instance in which the 
 greater part of the students negleet theirs. Discipline 
 is not necessary to force attendance on lectures which 
 are worth attending. Those parts of education, for 
 the teaching of which there are no public institutions, 
 are generally best taught. Of these are the three inos-l 
 
 L 1
 
 ( 270 ) 
 
 essential parts of a literary education, readingjWriting, 
 and arithmetic. In England the public schools are 
 less corrupted than the universities. The rewaidof 
 the schoolmaster depends on the fees of his scholars. 
 Schools, besides, have no exclusive privileges. 
 P. 1559. 
 
 It may be said, that imperfect as the education of the 
 universities is, yet it has been beneficial to individuals, 
 and the public. The present universities were origi- 
 nally ecclesiastical corporations, instituted for the edu- 
 cation of churchmen, founded and protected by the 
 Pope, the members of which were amenable only to 
 ecclesiastical tribunals. What was taught in them was 
 theology, or preparatory to theology. When Christia- 
 nity was established by law, a corrupted latin became 
 the common language of the western parts of Europe. 
 The service of the church was performed in latin, long 
 after the body of the people was ignorant of that lan- 
 guage, Hence two languages were established, the 
 language of the priests, and that of the people ; the 
 sacred, and the profane. The study of the latin lan- 
 guage became an essential part of university education. 
 The greek and hebrew languages did not, for a long 
 , time, make any part of the common course of univer- 
 sity education. The first reformers found the greek-' 
 text of the new, and the hebrew of the old testament, 
 more favourable to their opinions than the vulgate 
 translation. Hence the introduction of those two lan- 
 guages into the universities. P. iGO '2. 
 
 The antient greek philosophy was divided into phi/- 
 tics, or natural philosophy \cthics, or moral philosophy , 
 and logic. 

 
 ( 271 ) 
 
 1 The first philosophers were natural philosophers, 
 who attempted to explain the great phaenomena of 
 nature, which naturally called forth the curiosity of 
 mankind to inquire into their causes. Moral philoso- 
 phy is the science which pretends to investigate and 
 Explain the principles which connect the maxims of 
 human life. Different authors gave different systems 
 both of natural and moral philosophy. The patrons 
 of each endeavoured to expose the weakness of the ar- 
 guments adduced to support the systems which were 
 opposed to their own. Hence the science of logic, 
 which, though in its origin, it was posterior both to 
 physics and ethics, is commonly taught previously to 
 either. P. 1635. 
 
 . This antient division of philosophy into three parts 
 was changed for another into five. Metaphysics or 
 pneumatics were set in opposition to physics, und con- 
 sidered as the more useful science of the two, for the 
 purposes of a particular profession. When these two 
 sciences had been set in opposition to one another, the 
 comparison gave birth to a third, which was called 
 ontology. 
 
 In the antient moral philosophy the duties of human 
 life were treated of as subservient to the happiness and 
 perfection of human life. But when moral as well as 
 natural philosophy came to be taught only as subservi- 
 ent to theology, the duties of human life were treated 
 of as subservient to the happiness of a life to come. In 
 the antient philosophy the perfection of virtue was re- 
 presented as productive of the most perfect happiness 
 t>f this life. In the modern philosophy it was 
 
 9
 
 ( 272 ) 
 
 pented as inconsistent with any degree of happiness in, 
 this life. The common course of education was there- 
 fore, ( 1 .) Logic : (2.) Ontology : (3.) Pncumatology, 
 comprehending the doctrine of the human soul, and 
 the Deity: (4.) A debased system of moral philoso- 
 phy : and, (5.) A superficial course of physics. These 
 alterations were meant for the education of ecclesiastics. 
 This course of philosophy continues to be taught in the 
 greater part of the universities of' Europe. It is not in 
 universities that improvements are first made, or hastily 
 adopted. P. 1669- 
 
 In process of time the universities, originally inten- 
 ded for the education of churchmen only, drew to 
 themselves the education of almost all men of fortune, 
 though what was taught in them does not seem the 
 best preparation for the business of the world. In Eng- 
 land, it becomes the custom to send young people to 
 travel in foreign countries immediately upon leaving 
 school. This absurd practice is, probabty, owing to 
 the discredit which the universities have fallen into. 
 P. 170. 1. 
 
 Different plans of education seem to have been 
 adopted in other ages and nations. In Greece every 
 free citizen was instructed, under the direction of the 
 public magistrate, in gymnastic exercises and in music. 
 The one was intended to prepare the body for war ; 
 the other to humanize the mind, and to dispose it for 
 the social and moral duties of life. In antient Rome, 
 the exercises of the campus martins answered the same 
 purpose as those of the gymnasium in Greece : but 
 there was nothing which answered to the musical edu- 
 cation of the Greeks : yet the morals of the Romans 
 superior to those of the Greeks. The masters who
 
 ( 273 > 
 
 instructed the young people either in music, or in mi- 
 litary exercises, do not seem to have been paid, or even 
 appointed by the state ; it only found a public place 
 for them to exercise in. In the early ages of the Greek 
 and Roman republics, the other parts of education seem 
 to have consisted in learning to read, write, and ac- 
 count, according to the arithmetic of the times. These, 
 however, were left to the care of parents. The state 
 never assumed any direction of them. By the law of 
 Solon, indeed, children were acquitted from maintain- 
 ing those parents, in old age, who had neglected to, in- 
 struct them in some profitable trade. P. 172 4. 
 
 In the progress of refinement, the better sort of peo- 
 ple sent their children to the schools of philosophers, 
 to be taught rhetoric and philosophy. But these 
 schools were not supported by the public. The demand 
 for this sort of knowledge was, for a long time, so small, 
 that the teachers travelled about from place to place, in 
 order to find constant employment. Afterwards> when 
 schools were established, the state did no more than 
 assign them particular places to teach in. To Plato the 
 state assigned the academy ; the Lycaeum to Aristotle ; 
 and the portico to Zeno. P. 175. 6. 
 
 At Rome, the study of the civil law made part of the 
 education of some particular families, but there was no 
 public school to go to. It is worth notice,that in Greece 
 where law never seems to haVe been a science, the con- 
 stitution of the courts of justice were very inferior to 
 that of Rome, where law was very early considered as 
 a science. P. l~(}. 7. 
 
 The abilities of the Greeks and Romans will be rea- 
 dily allowed to have been equal to those of any modern 
 nation. Yet the state was at no pains to form those
 
 ( 274 ) 
 
 abilities. Masters were found for instructing the peo- 
 ple in every necessary art and science. The demand 
 for instruction always produces the talent for giving it ; 
 and emulation appears to have brought that talent to 
 perfection. The antient philosophers seein to have 
 been superior to modern teachers. In modern times 
 the diligenceof public teachers is corrupted by the cir- 
 cumstances which render them independent of their 
 success and reputation in their profession. Their sala- 
 ries too put it out of the power of private teachers to 
 
 m "4 
 
 come in competition with them, Thus the endowments 
 of colleges, have not only corrupted the diligence of 
 public teachers, but have rendered it almost impossible 
 to have any private ones. P. 178. 9 
 
 Were there no public institutions for education, no 
 science would be taught for which there was not some 
 demand. A private teacher could not find his account 
 in teaching either an exploded or antiquated system of 
 science. Such systems can subsist no where but in 
 those incorporated societies for education, whose pros- 
 perity and revenue are in a great measure independent 
 of their reputation and industry. There are no public 
 institutions for the education of women, ^and they are 
 taught nothing but what their parents judge it neces- 
 sary or useful for them to learn. In every part of life a 
 woman feels some advantage from every part of her 
 education. It seldom happens that a man, in any part 
 of his life, derives any advantage from some of the most 
 laborious parts of bis education. P. 180. 
 
 Ought the public, therefore, to give no attention to 
 the education of the people ? In some cases it is not 
 necessary, in others it may be. In the progress of the 
 division of labour, the employment of the great body of
 
 ( 275 ) 
 
 the people comes to be confined to a very few simple 
 operations. The mind is formed by its employment. 
 The man whose life is spent in performing a few simple 
 operations, has no occasion ta exert his understanding, 
 or to exercise his invention. His dexterity at his own 
 trade seems to be acquired at theexpenceof hisinteilec- 
 tual, social, and martial virtues. This is the state of 
 the poor in every improved society, unless government 
 take pains to prevent it. It is otherwise in barbarous 
 societies, as they are called, of hunters, &c. In these, 
 invention is kept alive : every man is a warrior, and, 
 in some measure, a statesmen too. In such a society, 
 indeed, no man can acquire that improved understand- 
 ing, which a few men sometimes possess in a more civi- 
 lized state. Though in a rude society, there is a good 
 deal of variety in the occupations of individuals, there 
 is not a great deal in those of the whole society. In a 
 civilized state, though there is-little variety in the occu- 
 pation of individuals, there is an almost infinite variety 
 in those of the whole society. P. 181 4. 
 
 The education of common people requires, in a civi- 
 lized and commercial society, the attention of the pub- 
 lic more than that of people of some rank and fortune, 
 who have time and opportunity of acquiring every ne- 
 cessary accomplishment ; whose employments are such 
 as exercise the head more than the hands ; and who 
 have leisure to improve their minds. The common 
 people ought to be taught to read, write, and account ; 
 to which might be added, the elementary parts of geo- 
 metry and mechanics. There is scarce a common trade 
 which does not afford some opportunities of applying 
 the principles of geometry and mechanics. The public 
 should facilitate thissortQinstrnctiffn ; by giving smull
 
 ( 276 ) 
 
 premiums to the children who excel in it, and by some! 
 kind of public examinations. In this manner military 
 and gymnastic exercises were acquired by the Greeks 
 and Romans. P. 185^8. 
 
 A martial spirit ought also to be infused into the 
 greal body of the people,upon which the security of the 
 society depends. Where every citizen had the spirit 
 of a soldier, a smaller standingarmy would be requisite: 
 that spirit would, besides, diminish the dangers appre- 
 hended from a standing army. The antienb institutions 
 of Greece and Rome appear to have been more effectual 
 for maintaining the martial spirit of the people, than 
 the establishment of modern militias. They were more 
 simple. Their influence was more universal. A man 
 incapable of defending, or of revenging himself, wants 
 one of the most essential parts of the character of a 
 man. Even though the martial spirit of the people 
 were of no use towards the defence of the society, yet 
 to prevent that sort of mental deformity from spreading 
 among the people, it would deserve the attention of go- 
 vernment. The same thing may be said of gross igno- 
 rance, which, in a civilized society, seems to benumb 
 the understanding of the inferior ranks of the people. 
 P. 18992. 
 
 ARTICLE III. Of the Expence of Institutions for the 
 Intsruction of People of all dges. 
 
 THESE institutions are chiefly those for religious 
 instruction. The teachers of the dot-trine which con- 
 tains this instruction, may either depend wholly for 
 subsistence upon the voluntary contributions of their 
 hearers ; or they may derive it from some other fund to
 
 '< 277 ) 
 
 which the law may entitle them; such as landed estates, 
 tythe, or an established salary. Their exertions are 
 likely to be greater in the former situation than in 
 the latter. In this respect, the teachers of new religions 
 have had the advantage in attacking the antient and 
 established systems of which the clergy, reposing them- 
 selves upon their benefices, were become incapable of 
 any vigorous exertion, in defence even of their own 
 establishment. Upon such an emergency, the clergy 
 have no other resource than to call upon the civil ma- 
 gistrate to persecute their adversaries. Thus the roman 
 catholic clergy, called upon the civil magistrate to per- 
 secute the protestants ; and the church of England, to 
 persecute the dissenters ; and, in general, every sect 
 when it has enjoyed for a century or two the security 
 of legal establishment, has found itself incapable of vi-* 
 gorous defence against any new sect which chose to at- 
 tack its doctrine or discipline. P. 192 4. 
 
 In the church of Rome, the industry of the inferior 
 clergy, is kept more alive by self-interest, than perhaps, 
 any established protestant church. The great dignita- 
 ries of the church are careful to maintain the necessary 
 discipline over their inferiors, but seldom give them- 
 selves any trouble about the instruction of the people. 
 P. 1957. 
 
 The independent provision bestowed on the elergy* 
 has seldom been given, but with a view of gaining them 
 to serve some political party. If politics had never 
 been called to the aid of religion ; nor the tenets of 
 one sect, been adopted in preference to another, there 
 would probably have been a great multitude of religious 
 
 M m
 
 ( 278 ) 
 
 sects, but the influence of each must have been small. 
 The active zeal of religions teachers, can be dangerous 
 only wliere there is but one sect tolerated, or where the 
 whole of a large society is divided into two or three 
 great sects. That zeal must be innocent where the so- 
 ciety is divided into two or three hundred, or as many 
 thousand small sects. The teachers of each sect would 
 be obliged to learn moderation, and to respect those of 
 every other sect ; and the concessions which they 
 would mutually find it convenient to make to one ano- 
 ther, might, in time, reduce the greater part of them 
 to that pure rational religion, free from absurdity, im- 
 posture, and fanaticism, such as wise men would wish 
 to see established ; but such as never has, nor will be, 
 established by positive law. This was the aim of the 
 independents in England, towards the end of the civil 
 War. P. 198201. 
 
 In every civilized society, there have been always 
 two different schemes of morality current at the same 
 time ; the one strict or austere, the other liberal or 
 loose. The former is admired by the common people; 
 the latter is adopted by what are called people of fa- 
 shion. The degree of disapprobation with which we 
 ought to mark the vices of levity, seems to constitute 
 the principal distinction between those two opposite 
 systems. The vices of levity are always ruinous to the 
 common people : hence the hatred of the wiser sort of 
 that class of such excesses. They are tolerated by peo- 
 ple of rank, because to them they are not necessarily 
 attended with ruin. P. 202. 3. 
 
 Almost all religious sects have begun among the 
 common people, from whom they draw their earliest, 
 and most numerous proselytes. The austere system of
 
 ( 279 ) 
 
 morality has generally been adopted by those sects : 
 and the more austere their system the better has it suc- 
 ceeded. 
 
 A man of fortune is, by his station, the distinguished 
 member of a great society, and he is obliged to conform 
 to that system of morals, which the general consent of 
 the society prescribes to persons of his rank. A man of 
 low condition in a great city, is observed by nobody, 
 and is therefore likely to neglect and ruin himself. He 
 never emerges so effectually from this obscurity, as by 
 his becoming the member of a small religious sect. 
 From that moment he acquires a degree of considera- 
 tion which he never had before. In little religious sects, 
 accordingly, the morals of the common people have 
 been remarkably regular, sometimes disagreeably ri- 
 gorous and unsocial. This rigour might be easily cor- 
 rected, (1.) By rendering the study of science and phi- 
 losophy almost universal among the people of middling, 
 or more than middling rank and fortune, which the 
 state might do by instituting some sort of probation in 
 the sciences, to be undergone by every person. (2.) By 
 encouraging the frequency and gaiety of public diver- 
 sions, P. 2046. 
 
 In a country where the law favoured the teachers of 
 no one religion more than those of another, none of 
 them would have any dependency on the executive 
 power. It would have no "concern with them, but to 
 keep peace among them. But where there is an esta- 
 blished religion, the sovereign cannot be secure unless 
 he has the means of influencing the gi eater part of the 
 teachers of that religion. The clergy of every esta- 
 
 Mm 2
 
 ( 280 ) ,. t 
 
 Wished religion constitute a great corporation. Tlicir 
 interest as an incorporated body is never the same with 
 that of the sovereign, and is sometimes directly-oppo- 
 site to it. Articles of faith are not in the proper depart- 
 ment of a temporal sovereign, who, though qualified 
 for protecting, is not so for instructing the people. His 
 authority, therefore, can seldom counterbalance the 
 united authority of the clergy of the established church. 
 But as the public tranquillity, and his own security, of- 
 ten depend upon the doctrines which they propagate; 
 and as he can seldom oppose their decision, it is neces- 
 sary that he should be able to influence it. J*. 207 9. 
 
 In all Christian churches the benefices of the clergy 
 ore a sort of freeholds. If they held them by a more 
 precarious tenure, they could not maintain their autho- 
 rity with the people. But should the sovereign attempt 
 irregularly, and by violence to deprive any number of 
 clergymen of their freeholds, perhaps, on account of 
 their zeal in propagating some doctrine, he would, by 
 persecution, render them and their doctrine ten times 
 more popular, and therefore ten times mpre dangerous 
 than they had been before. FEAR is, in almost all cases, 
 a wretched instrument of government, and ought never 
 4o be employed against any order of men, who have 
 ny pretensions to independency. The French govern- 
 ment- usually employed violence to oblige their parlia- 
 ments to enregister any unpopular edict, but it seldom, 
 succeeded. The princes of the house of Stuart, em- 
 .ployed like means to influence some members of the 
 parliament of England, and they were found intractable. 
 The parliament of England is NOW managed in 
 manner, p. 210. U.
 
 ( 281 } 
 
 Formerly} the bishop of each diocese was elected by 
 the joint votes of the clergy, and of the people of the 
 episcopal city. The people did not long retain their 
 right of election. All church preferments were, in this 
 manner, in the disposal of the church. Each clergyr 
 man was led to pay his court to his own order, rather 
 than to the sovereign. Through the greater part of 
 Europe, the POPE gradually gained the disposal of al- 
 most all church preferment. By this arrangement, the 
 condition of the sovereign was worse than before. The 
 clergy was thus formed into a kind of spiritual army, 
 dispersed in different quarters, but directed by one 
 head, and conducted by one plan. Their arms were 
 the most formidable that can well be imagined. Before 
 the establishment of arts and manufactures, the wealth 
 of the clergy gave them the same sort of influence over 
 the common people, which that of the barons gave 
 them over their tenants, and retainers, but often to a 
 much greater degree. In this state of things, if the 
 sovereign found it difficult to resist the confederacy of 
 Kfew of the great nobility, he found it more so to resist 
 the united force of the clergy of his own dominions, 
 supported by that of the clergy of all the neighbouring 
 states. The privileges of the clergy; their total ex- 
 emption from the secular jurisdiction, for example, 
 what in England was called the benefit of the clergy, 
 were the natural consequences of this state of things. 
 P. 21217. 
 
 From the ninth to the fourteenth centuries, the con- 
 stitution of the church of Rome was the most formi- 
 dable combination, that was ever formed against the 
 authority and security of civil government, as well as 
 Against the liberty, reason, and happiness of mankind.
 
 Had this constitution been attacked by no other ene- 
 mies, but the efforts of human reason, it must have 
 lasted for ever. For though reason might have un- 
 veiled the delusions of superstition, it could not have 
 dissolved the ties of private interest. The same power 
 which destroyed the power of the great barons, de- 
 stroyed the temporal power of the clergy : and in the 
 fourteenth century, the sovereigns in the different 
 states of Europe, endeavoured to recover the influence 
 which they once had in the disposal of the great bene- 
 fices of the church. But the power of the Pope was no 
 where so effectually restrained as in France and Eng- 
 land. P. 21721. 
 
 The authority of the church of Rome was declining 
 when the disputes which gave birth to the reformation, 
 began in Germany, and which soon spread themselves 
 through every part of Europe. The new doctrines were 
 received every where with popular favour. Reason re ! 
 commended them to some, novelty to many ; hatred 
 to the established clergy to a still greater number ; but 
 the zeal with which they were inculcated, recommend- 
 ed them to by far the greatest number. The success of 
 the new doctrines was almost every where so great, that 
 the princes who happened to be on bad terms with the 
 court of Rome, were enabled, in their own dominions, 
 easily to overturn the church. Hence the doctrines of 
 -the reformation were established by the princes of the 
 northern states of Germany : in Sweden by Gustavus 
 Vasa : in Denmark by Frederick of Holstein : and in 
 Berne and Zurich by the magistrates. In this situation 
 the Pope cultivated the friendship of the sovereigns of 
 France and Spain, of whom the latter was, at that 
 time, Emperor of Germany ; with whose assistance
 
 ( 283 ) 
 
 the progress of the reformation was suppressed in their 
 dominions. In England, however, it was begun by 
 Henry VIII. and completed in the reign of his son Ed- 
 ward VI. In Scotland the reformation was strong 
 enough to overturn the church, and the state too> for 
 attempting to support the church. P. 222 4. 
 
 Among the followers of the reformation, there was 
 no general tribunal to settle disputes; the most impor- 
 tant of which related to the government of the church, 
 and the right of conferring ecclesiastical benefice?. 
 These gave birth to the Lutheran and Calvinistic sects; 
 the only sects among them of which the doctrine and 
 discipline have ever been established by law in any part 
 of Europe. The former preserved episcopal govern- 
 ment, and gave the sovereign, as head of the church, 
 the disposal of bishopricks and eonsistorial benefices, 
 without depriving the bishop of the right of collating 
 to the smaller benefices : this system was always fa- 
 vourable to peace and good order, and to submission to 
 the civil sovereign. The latter bestowed upon the peo- 
 ple of each parish the right of electing their own pas- 
 tor ; and established the most perfect equality among 
 the clergy. The former part of this institution, while 
 it remained in vigour, seems to have been productive of 
 disorder and confusion. The latter part seems never to 
 have had any effects but what were perfectly agreeable. 
 P. 22530. 
 
 In countries where church benefices are, the greater 
 part of them, very moderate, a chair in a university is 
 generally a better establishment than a church bene- 
 fice. The universities have, in this case, the chasing 
 of their members from all the churchmen of the coun- 
 try. Where church benefices,, on the contrary, are,
 
 ( 281 ) 
 
 many of them considerable, the church naturally dravfa 
 from the universities the greater part of their eminent 
 men of letters. In the former situation, the universi- 
 ties are filled with the most eminent men of letters in 
 the country. In the latter, few eminent men are 
 likely to be found among them. In Greece and Rome., 
 the far greater part of eminent men of letters, if we ex- 
 cept poets, orators^ and a few historians,appear to have 
 been either public or private teachers. P. 231 3. 
 
 The revenue of every established church, is a branch 
 of the general revenue of the state, which is diverted to 
 a purpose very different from the defence of the state. 
 Tne tythe is a real land tax, which puts it out. of the 
 power of the proprietors of land, to contribute so large- 
 ly towards the defence of the state as they might other- 
 wise be able to do. The rent of land is the principal 
 fund, from which the exigencies of the state must be 
 ultimately supplied. The more of this fund that is given 
 to the church, the less can be spared to the state. Other 
 things being supposed equal, the richer the church, the 
 less able must the state be to defend itself. In several 
 protestant countries, the tythes and church lands have 
 been found nearly sufficient to afford competent sala- 
 ries to the established clergy, and also to defray the 
 other expences of the state. The whole expence of the 
 church of Scotland cannotexcced 83,0001. ayear,which 
 affords a decent subsistence to 944 ministers, besides 
 paying the expences of building and repairing of 
 churches ; yet no church is better conducted, if those 
 of Switzerland are excepted, which, however, are not 
 better endowed. The proper performance of every ser- 
 vice requires, that its reeompence should be propor- 
 tioned to the nature of the service. If any service is
 
 ( 285 > 
 
 tinder-paid, it is apt to suffer by the incapacity of those 
 employed in it. If it is over paid, it will suffer by their 
 negligence and idleness. P. 234 7* 
 
 PART IV. 
 
 Of the Expmce of supporting the Dignity of the 
 Sovereign. 
 
 ABOVE the expences necessary for enabling the so* 
 Vereign to perform his several duties, a certain expence 
 is requisite for the support of his dignity. This expence 
 Varies both with the different periods of improvement, 
 and with the different forms of government. 
 
 CONCLUSION. The expence of defending the society, 
 and that of supporting the dignity of the chief magis- 
 trate, are both laid out for the general benefit of the so- 
 ciety. It is reasonable, therefore, that they should be 
 defrayed by the whole society, all the members contri- 
 buting in proportion to their respective abilities. The 
 expence of the administration of justice, may be de- 
 frayed by the general contributions of the whole socie- 
 ty ; or by the persons immediately concerned, by the 
 fees of court. Local expences ought to be defrayed 
 by a local revenue. The expence of good roads is best 
 defrayed by turnpike tolls which lay it upon those who 
 travel or carry goods from one place to another, and 
 upon those who consume them. The expence of the 
 institutions for education and religious instruction 
 may, with advantage, be defrayed by those who bene- 
 fit from thern,or by voluntary contributions. P.237 40. 
 
 N n
 
 ( 286 ) 
 
 CHAP. If. 
 
 Of the Sources of the general or public Revenue of the 
 Society. 
 
 THE revenue which must defray all the expences of 
 government, may be drawn either, (1.) From some fund 
 which belongs to the sovereign,or common wealth : or, 
 (2.) From the revenue of the people. 
 
 PART. I. 
 
 Of the Funds or Sources of Revenue which may peculiarly 
 
 
 belong to the Sovereign, or Commonwealth. 
 
 THESE funds must consist either in stock, or in 
 land. His revenue is, in the one case, profit, in the 
 other interest. It is only in the rudest state of civil go- 
 vernment that profit has made the principal part of the 
 public revenue of a monarchical state. Small republics 
 have sometimes derived a considerable revenue from the 
 profit of mercantile projects. Hamburgh is said to do 
 so by a wine cellar, and an apothecary's shop. The 
 profit of a public bank has been a source of revenue to 
 more considerable states, such as Venice and Amster- 
 dam. The post-office is properly a mercantile project, 
 and is, perhaps, the only one which has been success- 
 fully managed by every sort of government. Princes, 
 however, have frequently engaged in many mercantile 
 projects, but seldom with success. The profusion with
 
 ( 287 ) 
 
 which their affairs are managed, renders it almost im- 
 possible that they should. No two characters seem more 
 inconsistent than those of trader and sovereign. 
 P. 241 4. 
 
 A state may derive some part of its public revenue 
 from the interest of money. The canton of Berne de- 
 rives a considerable revenue by lending part of its trea- 
 sure to foreign states. The security of this revenue 
 must depend, (1.) Upon the security of the funds in 
 which it is placed : and, (2.) Upon the probability of 
 the continuance of peace with tbe debtor nation. The 
 eity of Hamburgh has established a sort of public pawn- 
 shop, which lends money to the subjects of the state at 
 6 per cent, by which, it is pretended, that the state 
 gains 53,7501. sterling a year. The perishable nature 
 of stock and credit, render them unfit to be trusted to, 
 as the principal funds of that revenue which can give 
 security to government. P. 345 7. 
 
 Land is a fund of a more stable and permanent na- 
 ture, and has been the principal source of public reve- 
 nue of many a great nation ; of the antient republics 
 of Greece and Italy. The rent of the crown lands con- 
 stituted, for a long time, the greater part of the reve- 
 nue of the antient sovereigns of Europe. War, and 
 the preparation for war, occasion the greater part of 
 the necessary expence of all great states. In antient 
 Greece and Italy, every citizen was a soldier at his own 
 expence : and in the antient monarchies of Europe, 
 the body of the people took the fielcj at the expence of 
 their lords, without bringing any new charge upon the 
 (sovereign. The other expenses of government were 
 
 N n 2
 
 ( 288 ) 
 
 moderate, which the rent of a great landed estate 
 might defray. In the present state of Europe, the 
 tent of all the lands in the country, managed us they 
 probably would be if they all belonged to one pro % .:rie 
 tor, would scarce amount to the ordinary revenue laid 
 upon the people even in peaceable times. The ordi- 
 Hary revenue of Great Britain amounts to upwards of 
 ten millions a year.* But the land. tax at four shillings 
 tn the pound falls short of two millions. P. 248 51. 
 
 Tke revenqe which the great body of the people de- 
 fives from land, is in proportion not to the rent, but to 
 lAu& produce of the land. The whole produce, except 
 what is reserved for seed, is either annually consumed, 
 by the people, or exchanged for something that is con~ 
 aumed by them. Whatever keeps down the produce 
 of the land below what it would otherwise rise to,keep$ 
 down the revenue of the great body of the people, still 
 more than it does that- of the proprietors of land, sinca 
 the rentof land isseldom more than the third part of the 
 produce. 
 
 Though there is no civilized state in Europe, which 
 derives the greater part of its public revenue from the 
 rent of lands which are the property of the state, yet in 
 all the great monarchies, there are still large tracts of 
 land which belong to the crown. These are, in gene- 
 ral, mere waste and loss of country, the sale of 
 which would, however, produce a large sum of mo- 
 ney, which might be applied to the payment of fch^ 
 public debts. 
 
 * Since the above was written, the nation has been engaged in? 
 war, which has DOURJ.ED its debts and taxes. After a twelve-month's 
 peace, war is renewed. A considerable part of the fupplies being raifed 
 within the year, the amount of the taxes for the prefeut yeai(l803J is 
 upwards of FORTY MILLIOKS ! ! I
 
 ( 269 ) 
 
 The crown might hnmediatety enjoy the 
 which this pri-ce would redeem' from mortgage. Jn a 
 few years it would enjoy another revenue, arising front 
 the cultivations of these lands. It would, in all eases, 
 be for the interest of the soeiety,to re-place the revenue 
 which the crown enjoys from its lands by some other 
 revenue, and to divide those larnls, by public sale, 
 among the people. Pleasure grounds seem to be the 
 only lands which, in a civilized monarchy, ought to be- 
 long to the crown. P. 252 4. 
 
 PAPvT II. 
 Of Taxes. 
 
 EVERY tax must be finally paid from the private 
 revenue of individuals, which arises ultimately from 
 rent ; profit ; and TO ages. It is necessary to premise 
 thefour following maxims. (l).The subjects of every 
 state ought to contribute to the support of government, 
 in proportion to their respective abilities;that is,in pro- 
 portion to the revenue which they respectively enjoy 
 under the protection of the state. (2.) The tax which 
 each individual is bound to pay, ought to be certain 
 and not arbitrary. (3.) Every tax ought to be levied 
 ut the time, or in the manner, most convenient for the 
 contributor to pay it. (4.) Every tax ought to be so 
 contrived as both to take out, and to keep out, of the 
 pockets of the people as little as possible, over and 
 above what it brings in to the public treasury of the 
 state. A tax may either take out, or keep out of the
 
 ( 290 ) 
 
 pockets of the people a great deal more than it bring* 
 into the public treasury, in four ways. 1. By the num~ 
 Jjer of officers who levy it. 2. By obstructing the indus- 
 try of the people. 3. By penalties incurred in attempt 
 ing to evade the tax. 4. By subjecting the people to 
 the frequent visits and examinations of tax gatherers, 
 The evident justice and utility of the foregoing .maxims 
 have recommended them more or less to the attenti oa 
 of all nations. P. 255 9- 
 
 ARTICLE I. Taxes upon Rent. Taxes upon the Rent 
 of Land. 
 
 A tax upon rhe rent of land may either be imposed 
 according to a certain canon not to be altered;or it may 
 be imposed so as to vary with every variation in the 
 real rent of land. A land tax which, like that of Great 
 Britain, is assessed upon each district according to a 
 certain invariable canon, though equal at the time of 
 establishment, becomes unequal in process of time, ac- 
 cording to the unequal degrees of improvement of the 
 different parts of the country. In England the land 
 tax was unequal at its first establishment. It offends, 
 therefore, against the first maxim. It is agreeable to 
 the other three. 
 
 The advantage which the landlord has derived from 
 the invariable constancy by which the lands are rated 
 to the land tax, has been principally owing to circum- 
 stances extraneous to the tax,. It has been owing in. 
 part to the prosperity of almost every part of the coun- 
 tn r , the rents every where continually rising. The 
 landlords, therefore,have gained the difference between 
 the tax which they would have paid according to ths
 
 ( 291 ) 
 
 present rent of their estates,and that which they actual* 
 ly pay. Had rents been gradually falling, the land- 
 lords would have lost this difference. As this tax is 
 payable in money, so the valuation of the land is ex- 
 pressed in money. Since the establishment of this va- 
 luation, the vaulation of silver has been pretty uniform, 
 and there has been no alteration in the standard of 
 coin. Had silver risen, it would have proved very 
 oppressive to the landlord. Had it fallen, it would, 
 have reduced the revenue of the sovereign. Had any 
 considerable alteration been made in the standardofthe 
 money, it would have hurt the revenue of the proprie- 
 tor, or that of the sovereign. P. 259 62. 
 
 A tax upon the rent of land which varies with every 
 variation of the rentes recommended by the economists 
 of France as the most equitable of all taxes, since all 
 taxes as they say, must ultimately fall upon the rent of 
 land, and therefore ought to be imposed equally 
 Upon the fund which mustjlnally pay them. It will ap>- 
 pear, from the following review, what are the taxe* 
 which fall finally upon the rent of land, and what are 
 those which fall finally upon some other fund, In tha 
 Venetian territory, arable lands, given in lease,are taxed- 
 at 10 per cent, but if the proprietor cultivates his own 
 lands he pays only 8 per cent* of the supposed rent. 
 This is more equal than the land tax of England, and 
 might under a proper administration, and by a public 
 register of leases, be easily carried into effect. Some 
 landlords, instead of raising the rent, take a fine for the 
 renewal of the lease. This is, in most cases, injurious- 
 to the landlord ; frequently hurtful to the tenant ; and 
 always hurtful to the community. Some leases pre-* 
 scribe to the tenant a certain mo<,te of cultivation* This
 
 ( 292 ) 
 
 on'dition ought to be considered as an additional rent,. 
 Some landlords require a rent ia kind, and others a 
 rent in service. Such rents are always more hurtful 
 to the tenant than beneficial to the landlord. When 
 the landlord chose to occupy himself apart of his own 
 lands, the rent should be valued by the farmers and 
 landlords, in the neigh bourhood, and an abatement of 
 the tax might be granted to him, provided the rent of 
 the lands which he occupied did not exceed a certain 
 um. P. 263 Q. 
 
 Such a system of administration might, perhaps, 
 free a tax of this kind from uncertainty. The ex- 
 pence of levying a land tax, which varied with every 
 variation of the rent, would no doubt be somewhat 
 greater than that of levj r ing one which was always rated 
 According to a fixed valuation. The discouragement 
 which a variable land tax of this kind might give to- 
 the improvement of land, seems the principal objec- 
 tion : this might be' obviated by regulations sufficient 
 .not only for the landlord's complete indemnification, 
 but so as to give some encouragement to the improve- 
 toentof land. A tax of this kind would suit all the 
 \ariationsof the society, consequently would be more 
 proper than a tax always to be levied according to a 
 certain valuation. P. 2t>7 9. 
 
 Some states, instead of the simple expedient of the 
 register of leases, have had recourse to the expensive 
 one of an actual survey and valuation of all the lands 
 in the country. Dooms-day book seems to have been 
 the result of a very accurate survey of this kind. In the 
 antient dominions of the King of Prussia, the land tax 
 is assessed according to an actual survey and valuation. 
 According to that valuation^ the lay proprietors pajr
 
 ( 293 ) 
 
 from 20 to 25 per cent. Ecclesiastics from 40 to 45 per 
 cent. P. 270. 1. 
 
 A land tax assessed according to a general survey, 
 how equal soever at first, must become unequal, unless 
 an attention is paid to it which is unsuitable to the na- 
 ture of government. The governments of Prussia, 
 Bohemia, Sardinia,and Milan, actually exert this atten- 
 tion. P. 272. 3. 
 
 Taxes which are proportioned, riot to the Rent, but to 
 the produce of Land* 
 
 Taxes upon Hie produce of land are in reality taxes 
 upon the rent, and are finally paid by the landlord : the 
 farmer always computing the value of all the taxes be- 
 fore he agrees with the landlord for the rent* The 
 tythe, and every other land tax of this kind, are very 
 unequal taxes. Upon the rent of rich lands it may be 
 no more than 4s. whereas upon that of poorer lands, it 
 inay be 10s. The tythe is also a great discouragement 
 both to the improvements of the landlord, and to the 
 Cultivation of the farmer. The Cultivation of Madder 
 was for along time confined by the tythe, to the United 
 Provinces ; and introduced into England, only in con- 
 sequence of the statute which enacted that 5s. an acre 
 should be received in lieu of all manner of tythe upon 
 that article. 
 
 In many parts of* Asia the state is principally suppor- 
 ted by a land tax proportioned to the produce. In China 
 it consists in a tenth part of the produce ; but this tenth 
 is so very moderately estimated, us not to exceed the 
 
 O o
 
 e 
 
 thirtieth part. The laud tax of Egypt amounted to a^ 
 fifth part. In Asia this sort of land tax is said to inte- 
 i;ese the sovereign in the improvement and cultivation 
 of land. But the ty the of the church is divided into; 
 such small portions that no one of the proprietors ca.u 
 have an, interest of this kind. P. 274 7. 
 - Tj^es upon the produce of land may be levied ,,either: 
 in kind ; dr, according to a certain valuation in mo- 
 ney. The parson of a parish may find advantage in 
 receiving Jus. tythe \n k^id ; but a sovereign coujd not 
 from receiving his-t3x.es in ^ind. A tax upon the pro- 
 duce of land which is levied in money, may be levied 
 according to a valuation wlych varies with the market 
 pri.ee ;-7-or according $o sojne fixed valuation. The 
 produce of a tax levied in the former way, will vary; 
 only according to the variations, of ih$ real produce ofi 
 tVe J#acL That levied in ^he latter way will vary, no.t 
 only according to the variations in the produce, but. 
 according to the yalue ; o the precious metals, and the 
 standard of the coin. When ,a certain sum of money 
 istp be paid in full compensation for all iax, and tythe, 
 the tax becomes like the land tax of England. Such is\ 
 the Modus taVeu in lieu of tythes. It neither encour>a- 
 ges npr discourages iuipvovemeut, ^*. S77 ^9. 
 
 xes_ugQn tie Kent of J& 
 
 The rent of a house uiay be distinguished into build* 
 i>tg rent ; and ground r,ent. The former is the interest 
 or, profit of the capital expended in building, and keep- 
 ing the house in constant repair ; which is regulate^ 
 by the ordinary interest of money. Whatever part of 
 the whole rent of a house is over and above this reason-
 
 < '295 ) 
 
 able profit, goes to ground rent> and is paid to the 
 ground owner. Ground rents vary according to the 
 situation : they are highest in the capital, and where 
 the demand for houses happens to be the greatest. 
 P. 280. 1. 
 
 A tax upon house rent, payable by the tenant, and 
 proportioned to the \vhole rent of each house, could not 
 long affect the building rent : it would divide itself par- 
 tly upon the inhabitant of the house, and partly upon 
 the owner of the ground ; in what proportion it is not 
 very easy to ascertain. P. 282. 3 
 
 The rent of houses is, in one respect, essentially drf- 
 ferent from the rent of land. The latter is paid for the 
 use of a. productive subject. Theformer for the use of 
 an unproductive subject. The rent must therefore be 
 drawn from some other source of revenue. A tax tipoft 
 the rent of houses, so far as it falls on the inhabitants> 
 must be drawn from the same source as the rent itself; 
 and is one of those taxes which must fall indifferently 
 upon all the three sources of revenue ; and is, in every 
 respect, of the same nature as a tax upon consumable 
 Commodities. In general, there is no article of expence 
 by which a man's whole expence can be better judged 
 of than by his house rent. A proportional tax upon 
 this article, Would probably be very productive. The 
 rent of houses might be easily ascertained. Uninhabi- 
 ted houses ought to pay no tax. Houses inhabited by 
 the proprietors, ought to be rated according to the rent 
 they would be likely to bring, if leased to a tenant. 
 P. 284. 5. 
 
 Oo fc
 
 ( 296 ) 
 
 Ground rents are a still more proper subject of taxa* 
 tion, than the rent of houses. A tax on ground rent 
 would not raise the rent of houses. It would fall upon 
 the owner of the ground rent. Ground rents, and the 
 ordinary rent of land, are a species of revenue which 
 can best bear a tax. It bejng a revenue enjoyed with- 
 out any attention of the owner ; a tax upon it would 
 occasion no discouragement to industry. Ground 
 rents seem, in this respect, a more proper subject of 
 peculiar taxation than even the ordinary rent of land. 
 There might be some difficulty in ascertaining the pro- 
 portion of the ground rent, to the building rent ; though 
 the difficulty does not seem very great. P. 2868. 
 
 In Holland, every house tenanted or untenanted, is 
 taxed at 2^ per cent, of its value. The contrivers of 
 the taxes imposed upon houses, in England, at different 
 times, seem to have imagined that there was some great 
 difficulty in ascertaining the real rent of every house. 
 Hence, the tax of two shillings upon every hearth. 
 This was abolished soon after the revolution. The next 
 tax of this kind, was upon every dwelling-house inha- 
 bited, according to the number of windows it contained. 
 This tax was repealed, and in its stead was established 
 the window tax. The principal objection to all such 
 taxes is their inequality, as they must frequently fall 
 much heavier upon the poor than upon the rich. A 
 house of 101. rent in the ceuntry, may have more win- 
 flows than a house of 5001. rent in London. Such taxes 
 are, therefore, contrary to the first of the four maxima 
 above-mentioned. J*. 28991.
 
 ( 297 ) 
 
 ARTICLE II. Taxes upon Profit, or upon the Revenue 
 arising from Stock. 
 
 The revenue arising from stock divides itself into 
 two parts : (1.) That which pays interest: and (2.) That 
 which is over and above what is necessary for paying 
 the interesl.The latter part of profit is a subject not tax-r 
 able directly. It is a compensation, for the risk and 
 trouble of employing the stock. The employer must 
 have this compensation, otherwise he cannot continue 
 the employment. If he was taxed directly in propor- 
 tion to the whole profit, he must either raise the rate of 
 profit, or pay less interest. In the former case, the 
 tax would be finally paid by thelandlord,or by the con- 
 sumer according to the way in which he employed his 
 slock. In the latter case, the tax would fall upon the 
 interest of money. P. 292. 3. 
 
 The interest of money seems, at first sight, a subject 
 as fit to be taxed directly, as the rent of land. Two 
 circumstances, however, render it less proper. (1.) 
 The quantity and value of the land which any man pos- 
 sesses, can never be a secret : but the whole amount 
 of his capital cannot be exactly ascertained. It is lia- 
 ble, besides, to continual variations. (2.) Land is a 
 subject which cannot be removed ; whereas stock easily 
 may. A tax, therefore, which tended to drive away 
 stock from any country, would tend to dry up every 
 source of revenue. The profits of stock ; the rent of 
 land ; and the wages of labour would be diminished 
 by the removal. Hence, the loose manner in which 
 stock is estimated by those nations, who have attemp- 
 ted to tax the revenue arising from it. If the lands
 
 ( 298 ) 
 
 of England are not rated to the land-tax at half their 
 value, the stock of England (assessed upon liduses) 
 is scarce rated at the fiftieth part of its actual value. 
 P. 294 7. 
 
 In all countries a severe inquisition into the circum- 
 stances of private persons, has been carefully avoided. 
 At Hamburgh, every inhabitant pays to the state one 
 fourth per cent, of all he possesses : this is a tax upon 
 stock. Every man assesses himself upon oath before a 
 magistrate. This tax is paid with great fidelity. Nor 
 Is it peculiar to Hamburgh. Similar instances are to 
 be found at Underwald, in Switzerland ; Zurich ; and 
 Bazil. And once a tax of the fiftieth penny was impo- 
 sed upon every citizen in Holland, assessed in the same 
 manner as at Hamburgh. P. 298300. 
 
 Taxes upon the profit of particular employrtients. 
 
 IN some countries taxes are imposed on the profits of 
 Stock ; sometimes when employed in particular bran- 
 ches of trade ; and sometimes when employed in agri- 
 culture. Of the former kind are, in England, the tax 
 upon hawkers and pedlars; that upon hackney coaches 
 &c. A Tax upon the profits of stock must always finally 
 fall upon the consumers/and if it is proportioned to the 
 trade of the dealer occasions no oppression to him. 
 P. 3013. 
 
 What in France is called the personal taille is, per- 
 haps, the most important tax upon the profits of stock 
 employed in agriculture, that is levied in a'ny part of 
 Europe. During the feudal government in Europe,the 
 sovereign was obliged to content himself with taxing
 
 those who were too weak to refuse to pay taxes. The 
 great lords constantly refused to subject themselves to 
 any constant tax. But they were willing that the sove- 
 reign should tax the other occupiers of land, held by 
 ignoble tenure. Sometimes the tax was laid upon the 
 supposed profits of those who held in farm or lease lands 
 belonging to other people ; and in this case the taille 
 was said to be personal. It was the occasion of much 
 oppression and injustice- P. 304^-6. 
 
 When a tax is imposed upon the profits of stock in a 
 particular branch of trade, the traders are careful that 
 the tax should fall upon the consumer. But when a 
 taxis imposed upon the profits of stock employed in 
 agriculture, it must fall finally upon the landlord. In 
 countries where the personal taille takes place, the 
 farmer is commonly assessed in proportion to the stock 
 which he appears to employ in cultivation. He there- 
 fore wishes to appear scarce able to pay any thing, for 
 fear of being obliged to pay too much. Hence the cul- 
 tivation is degraded, by which, the public, the farmer^ 
 and the landlord all suffer. P. 307. 8. 
 
 What are called poll taxes in America, annual taxes, 
 of so much ahead upon every negroe, are properly taxes 
 upon the profits of a species of stock employed in agri- 
 culture. The tax falls upon the planter as landlord. 
 Taxes of so much a head upon the bondmen employed 
 in cultivation seem antientty to have been common all 
 over Europe. Hence poll-taxes of all kinds are repre- 
 sented as badges of slavery. Every tax is, to the per- 
 son who pays it, a badge of liberty. It denotes that he 
 has some property, and therefore cannot himself be the 
 property of a master. A poll tax on slaves is altogether 
 different from, a poll-tax upon freemen* The ta,xesi
 
 ( 300 ) 
 
 up'ori servants are not taxes upon stock, but upon ex-' 
 pence. Taxes upon the profit of stock in particular 
 employments, never affect the interest of money. No- 
 body will lend his money for less interest to those who 
 exercise thetaxed,than those who exercise the untaxed 
 employment. 
 
 Taxes upon the revenue arising from stock, in all 
 employments will sometimes fall upon the interest of 
 money. P. 309. 10. 
 
 APPENDIX to ARTICLES I. and II. Taxes upon the ca- 
 pital value of Land, Houses, and Stock. 
 
 While property remains in the possession of the same 
 person, the permanent taxes imposed upon it have 
 never been intended to diminish its capital value, but 
 only part of the revenue arising from it. But when 
 property changes hands, such taxes have frequently 
 been imposed upon it as necessarily take away some 
 part of its capital value. The transference of all sorts 
 of property from the dead to the living, and that of 
 immoveable property from the living to the living, are 
 transactions which cannot be concealed. Such trans-- 
 actions may be traced directly. The transference of 
 moveable property from the living to the living may be 
 taxed indirectly : (1.) By requiring that the deed,con- 
 taining the obligation to repay, should be written upon 
 paper, or parchment which has paid a stamp duty: 
 (2.) That it should be recorded in some public or pri- 
 vate register, and by imposing duties on registration. 
 The Vicesima Hereditatum imposed by Augustus upon 
 the Romans was a tax upon the transference of pro- 
 perty from the dead to the living. Of the same kintt
 
 ( 301 ) 
 
 is the Dutch and English tax upon successions. 
 P. 31113. 
 
 The casualties of the feudal law, were taxes upon the 
 transference of land, both from the dead to the living, 
 and from the living to the living. The heir of every 
 immediate vassal of the crown paid a certain duty, ge- 
 nerally a year's rent, upon receiving the investiture of 
 the estate. By the feudal law, the vassal could not 
 alienate without the consent of his superior, who ex- 
 torted a fine for granting it. Taxes upon the sale of 
 lands, or of lands held by certain tenures, take place in 
 many countries, and make a branch of the revenue of 
 the sovereign. Such transactions may be taxed indi- 
 rectly by means of stamp duties, or of duties upon re- 
 gistration ; and those duties may, or may not be propor- 
 tioned to the value of the subject transferred. Those 
 modes of taxation are of very modern invention. In 
 about a century, however, stamp duties have in Europe 
 become almost universal, and duties upon registration 
 extremely common. There is no art which one go- 
 vernment sooner learns of another, than that of drain- 
 ing money from the pockets of the people. Taxes, 
 upon the transference of property from the dead to the 
 living, fall upon the person to whom the property is- 
 transferred. Taxes upon the sale of land fall altogether 
 upon the seller; the seller being almost always obli- 
 ged to sell ; but the bu ver is scarce ever under the ne- 
 cessity of buying. 
 
 Taxes upon the sale of new built houses, where the 
 building is sold without the ground, fall generally upon 
 the buyer. Taxes upon the sale of old houses, and
 
 ( 302 ) 
 
 ground rents, fall upon the seller. Stamp-duties for 
 borrowed money fall upon the borrower. 
 
 AH taxes upon the transference of property, so far 
 us they diminish the capital value of property, tend to 
 diminish the funds destined for the maintenance of pro- 
 ductive labour. Such taxes are always unequal ; the 
 frequency of transference not being equal, in property 
 of equal value. 
 
 The registration of mortgages is advantageous to the 
 public. Deeds of other kinds are inconvenient to in- 
 dividuals, without any advantage to the public. 
 
 Stamp duties on cards, dice, news-papers, &c. are 
 taxes upon consumption,andare paid by the consumer. 
 P. 31421. 
 
 ARTICLE III. Taxes upon the Wages of Labour. 
 
 The wages of the inferior classes of workmen, are 
 regulated by the demand for labour ; and by the aver- 
 age price of provisions. These remaining the same, a 
 direct tax upon the wages of labour, must raise them 
 somewhat higher than the tax. Jf the tax was one 
 fifth, the price of labour must rise one fourth. A direct 
 tax, therefore, upon the wages of labour, would be ad- 
 vanced by the employer ; but it would finally be paid, 
 together with the additional profit, by the consumer. 
 The rise which such a tax might occasion in the wages 
 of country labour, would full upon the landlord. If 
 direct taxes upon the wages of labour have not always 
 occasioned a proportionable rise in those wages, it is 
 because they have generally occasioned a considerable 
 fall in the demand for labour. The declension of in- 
 dustry, the decrease ot eropJoywent for the poor, and 1
 
 ( 303 ) 
 
 the diminution of the annual produce of the land and 
 labour of the country, have been the effects of such 
 taxes. Absurd and destructive as such taxes are, how- 
 ever, they take place in many countries. In Bohemia, 
 artificers are divided into four classes ; the highest pay 
 about 91. 7s. 6d. a year; the second 61. 10s. the third 
 4l. 13s. 9d. and the fourth 2l. 7s. a year. A tax upon 
 the recompence of artists, and men of liberal profes- 
 sions, must raise that recompence higher than in pro- 
 portion to the tax. The emoluments of offices are not 
 regulated by the free competition of the market;and be-f 
 ing in general higher than the nature of the employ- 
 ment requires, can well bear to be taxed. P. 321 6. 
 
 ARTICLE IV. Taxes which, it is intended, should fall 
 indifferently upon every different Species of 
 Revenue. 
 
 These are capitation taxes, and taxes upon consu- 
 mable commodities, which must be paid indifferently 
 from whatever revenue the contributors may possess. 
 
 Capitation Taxes, if proportioned to the revenue of 
 the contributor, become arbitrary. The state of a 
 man's fortune varies from day to day ; the assessment 
 must, therefore, depend upon the humour of the asses- 
 sors. If they are proportioned to the rank of the con- 
 tributor, they become unequal ; the degrees of fortune 
 ^eing frequently unequal in the same degree of rank. 
 Such were the poll-taxes in England, during the reigu 
 of William III. and those in France from thebeginuing 
 pf the present century. The poll-taxes iu England 
 
 p 2
 
 ( 304 ) 
 
 never produced the sum expected. Those in France 
 did. Capitation taxes, so far as they are levied upon, 
 the lower ranks of the people, are direct taxes upon the 
 wages of labour ; they are levied atlittleexpencc,and 
 where they are rigorously exacted, afford a sure reve- 
 nue to the state. P. 32730. 
 
 Taxes upon consumable Commodities ; which are 
 either necessaries, or luxuries. By the former must be 
 understood, whatever the custom of the country renders 
 it indecent for creditable people to be without. Such, 
 in England, are a linen shirt, and leather shoes, which 
 cannot be strictly called necessary for the support of 
 life. Ale, wine, &-c. are luxuries which a man may ab- 
 stain from without any reproach. A tax upon the ne- 
 cessaries of life operates exactly in the same manner as 
 a direct tax upon the wages of labour. It is otherwise 
 with taxes upon luxuries. They will not necessarily 
 occasion any rise in the wages of labour. The high 
 price of luxuries, such as tobacco, lea, sugar, spiri- 
 tuous liquors, 8cc. do not diminish the ability of the 
 Inferior ranks of people to bring up their families. 
 Upon the industrious poor, taxes upon such commo- 
 dities act as sumptuary laws, and thus frequently in- 
 crease their ability to bring up their families. P.331 5. 
 
 Any rise in the average price of necessaries, unless 
 it is compensated by a proportional rise in the wages of 
 'labour, must diminish the ability of the poor to bring 
 up numerous families, and consequently to supply the 
 demand for useful labour. 
 
 Taxes upon luxuries have no tendency to raise the 
 price of any other commodities,except the commodities 
 taxed. Taxes upon necessaries, by raising the price of 
 Jabour, raise the price of all manufacturcs,and diminish
 
 ( 305 ) 
 
 their consumption. Taxes upon luxuries are paid by 
 the consumers of the commodities taxed : those upon 
 necessaries arc partly paid by the landlord, and partly 
 by the consumers, in the advanced price of manufac- 
 tured goods. They fall heaviest upon the landlords, 
 P, 336. 7. 
 
 In Great Britain, the principal taxes upon the neces- 
 saries of life are those upon salt, leather, soap, and can-* 
 dies ; all of which are very heavily taxed. Fuel is, du- 
 ring the winter, a necessary of life ; coals are the 
 cheapest of all fuel, and absolutely necessary to the ma- 
 nufactures; if a bounty could be in any case reasonable, 
 it might be so upon the transportation of coals ; but in- 
 stead of a bounty, the legislature has imposed a tax of 
 3s. 3d. upon each ton carried coastways. Where they 
 are cheap, they are consumed duty free ; where they 
 are dear,they arc loaded with a heavy duty. Such taxes 
 afford a considerable revenue to government, which, 
 it might not be easy to find in any other way. 
 P. 338. 9, 
 
 Taxes upon the necessaries of life are much higher 
 in many countries than in Great Britain. Duties upon 
 flour and bread take place in some countries. Taxes 
 upon butcher's meat are still more common than those 
 upon bread. It may be doubted whether butcher's 
 meat is a necessary of life. P. 340. l f 
 
 Consumable commodities may be taxed in two ways. 
 (1.) The consumer may either pay an annual sum on 
 account of his using or consuming goods of a certain 
 kind :' or, (2.) The goods may be taxed while they re- 
 main in the hands of the dealer. Consumable goods 
 which last a considerable time, are most properly taxed 
 in one way : those for immediate or, speedy consump*
 
 ( 306 ) 
 
 tion tn the other. The coach tax and plate tax are ex- 
 amples of the former method : the duties of excise and 
 customs of the latter. Sir Matthew Decker proposed, 
 that all commodities should be tax-ed, by the consumer 
 paying a certain sum for the licence to consume certain 
 goods. His scheme was to promote the foreign, and 
 tarrying trade. It seems liable to the four following 
 objections : (1.) The tax would be more unequal than 
 one upon consumption : (2.) It would diminish one of 
 the principal conveniencies of taxes upon goods of 
 speedy consumption; the piece-meal payment: (3.) 
 JSuch taxes would operate less as sumptuary laws : (4.)If 
 a workman were to pay all at once, a tax equal to the 
 whole of what he at present pays, the sum might dis- 
 tress him very much. P. 342 4. 
 
 The duties of excise fall upon luxuries, excepting 
 those upon salt, soap, leather, candles, and green glass. 
 The duties of customs are more antient than those of 
 excise. They appear to have been originally considered 
 as taxes upon the profits of merchants : they were di- 
 vided into those upon wool, and woollen cloths; those 
 upon wine, being imposed so much a ton, were called 
 tonnage ; and those upon other goods, at so much a 
 pound of their supposed value, were called poundage. 
 The duties of tonnage and poundage, were generally 
 granted to the king by the same act of parliament, and 
 were called the subsidy of tonnage and poundage. The 
 first subsidy was a duty of six-pence in the pound, in 
 the reign of Edward IILIt-was afterwards raised to one 
 shilling, and is called the old subsidy. The new sub- 
 sidy imposed by the 9th of William III. was an addi- 
 tional 5 per cent. Since which there have been three 
 others, besides a great variety of duties upon particular
 
 ( 307 ) 
 
 goods. The old subsidy was imposed upon exportation 
 as well as importation. The other four have been laid 
 altogether upon importation. P. 345* 8. 
 
 The mercantile system seems not to have been very 
 favourable to the revenue of the sovereign ; so far, at 
 least, as that revenue depends upon the duties of cus- 
 toms. In consequence of that system, the importation, 
 of several sortjs of goods has been prohibited altogther. 
 The high duties imposed upon the importation of some 
 foreign goods have encouraged smuggling. Bounties 
 upon the re-exportation of foreign goods, have given 
 occasion to many frauds upon the revenue. Heavy 
 duties being imposed upon almost all goods imported, 
 the importers make entry of as little as they can : the 
 exporters make entry of more than they export. Hence, 
 the exports appear upon the custom-house books, 
 greatly to overbalance the imports. P. 349 51. 
 
 In order that the greater part of the members of any 
 society, should contribute to the public revenue in pro- 
 portion to their respective expence, it is not necessary 
 that every single article of that expence should be tax- 
 ed. The duties of excise are imposed upon a few arti- 
 cles only of the most general use. Those of customs 
 might likewise, without loss to the revenue be confined 
 to a few articles only. The foreign articles of the most 
 general use in Great Britain seem to consist in wines, 
 brandies, sugar, rum, tobacco, cocoa-nuts, tea, coffee, 
 china, piece-goods, and spiceries of all kinds. These 
 afford the greater part of the revenue which is drawn 
 from the duties of customs. The taxes upon other fo- 
 reign manufactures, have been imposed more for the 
 purpose of monopoly than revenue. High taxes by di- 
 minishing the consumption, or by encouraging suing-
 
 ( 308 ) 
 
 gling, frequently afford a smaller revenue to govern- 
 ment, than what might be drawn from more moderate 
 taxes. The excise laws are found to embarrass the 
 smuggler move than those of the customs. By introdu- 
 cing into the customs a system similar to that of the ex- 
 cise, the difficulty of smuggling would be very much 
 increased. If smuggling, to any considerable extent 
 could be prevented, and taxation was always employed 
 as an instrument of revenue, and never of monopoly, 
 it is probable that a revenue, equal to the present neat 
 revenue of the customs, might be drawn from duties 
 upon the importation of only afezo sorts of goods of the 
 most general consumption. If by such a change of sys- 
 tem the public revenue suffered no loss, the trade and 
 manufactures of the country would certainly gain a 
 very considerable advantage. The trade in the com- 
 modities not taxed would be perfectly free, and might 
 be carried on with all parts of the world with the great- 
 est advantage. Even the trade in the commodities* 
 taxed would be carried on with much more advantage 
 than at present. It was the object of Sir Robert Wai- 
 pole's excise scheme to establish a system not very un- 
 like this. P. 3328. 
 
 The duties upon foreign luxuries, imported for home 
 consumption, fall principally upon people of middling, 
 or more than middling fortune : those upon the cheaper 
 luxuries of home produce, destined for home consump- 
 tion, fall pretty equally upon people of all ranks in 
 proportion to their respective expence. 
 
 The whole expence of the inferior, is much greater 
 than that of the superior ranks : for (1.) Almost the 
 whole capital of every country, is annually distributed 
 amongst the inferior ranks of people,, as wages of pro*
 
 ( 309 ) 
 
 tiuctive labour : (2.) A great part of the revenue arising 
 from the rent of land, is annually distributed among 
 the same rank, in the wages and maintenance of un- 
 productive labourers : (3.) Some part of the profits of 
 stock belongs to the same rank, as the revenue ari- 
 sing from the employment of their small capitals : (4.) 
 Some part even of the rent of land belongs to the same 
 rank. Hence, the taxes upon expence which fall 
 chiefly upon that of the superior ranks of the people 
 are likely to be less productive than those which fall in- 
 differently upon the expence of all ranks. 
 
 The luxurious, and not the necessary expence of the 
 inferior ranks, ought ever to be taxed. The final pay- 
 ment of any tax upon the necessary expence would fall 
 upon the superior ranks of people ; upon the smaller 
 portion of the annual produce. Such a tax must either 
 raise the wages of labour, or lessen the demand for it. 
 P. 35961. 
 
 Fermented liquors brewed, and spirituous liquors 
 distilled for private use, are not in Great Britain liable 
 to any duties of excise. The exception occasions the 
 burden of those duties to fall lighter by nine or ten 
 shillings the barrel of strong beer upon the rich who 
 can brew, than upon the poor who cannot. It is not 
 common to distil for private use. Malt, in the same 
 manner, that is made for- the use of a private family, is 
 not liable to the examination of the tax-gatherer;but in 
 this case, the family must compound at seven shillings 
 and six-pence ahead for the tax. There is no reason 
 why those who brew or distil, should not be subject to 
 a composition of the same kind. A greater revenue 
 
 Q q
 
 ( 310 ) 
 
 than what is at present drawn from all the heavy taxes 
 upon malt and beer, might be drawn by tripling the 
 malt tax, and repealing the others, owing to the frauds 
 in a brewery, and the exemption from duties of those 
 who brew for private use. It appears from the ave- 
 rage of four years, viz. from 1772, to ] 775, that this plan 
 would have added to the annual revenue upwards of 
 280,0001. But since malt is consumed in the manu- 
 factures of low wines and spirits, it would be necessary, 
 if this malt tax was to take place, that some abatement 
 should be made in the excises imposed upon those low 
 wines and spirits. Spirituous liquors might remain as 
 dear as ever, that the price of beer might be reduced, 
 which vyould encourage the sale of beer in conformity 
 to the policy of Great Britain. P. 362 6. 
 
 Dr. Davenarit, objects to this alteration, on account 
 of the injury it would occasion to the maltster; and also 
 because so heavy a tax upon malt might reduce the rent 
 and profit of barley land. But no tax can ever reduce, 
 for any considerable time, the rate of profit in any par- 
 ticular trade, which must keep its level with other 
 trades in the neighbourhood. The present duties upon 
 malt and beer, do not affect the profits of the dealers in 
 those commodities : but the consumption of malt is in 
 malt liquors : and it would not be more difficult for the 
 maltster to get back eighteen shillings in the advanced 
 price of his malt, than it is at present for the brewer to 
 get back twenty-four shillings, or thirty shillings in that 
 of his liquor. The only iucouveniency which could 
 arise to the maltster, might be remedied by granting a 
 iew months longer credit, than is at present given to 
 the brewer. Nothing could reduce the rent of barley 
 land, which did not reduce the demand for barley:
 
 ( 311 ) 
 
 but a change of system which reduced the duties upon 
 a quarter of malt, from twenty-four shillings to eigh- 
 teen, would be more likely to increase than diminish 
 that demand. Besides the rent and profit of barley 
 land, must be always nearly equal to those of other 
 equally fertile and equally well cultivated land. The 
 only people that would suffer by the change of system, 
 here proposed, are those who brew for their own pri- 
 vate use. But the exemption which they enjoy is un- 
 just, and ought to be taken away. P. 36770. 
 
 Besides such duties as those of customs and excise, 
 there are others which affect the price of goods more 
 unequally and indirectly. Such are turnpike tolls, or 
 the tolls upon canals. These duties are most properly 
 imposed according to the bulk or weight of goods. 
 Where the sovereign has assumed the administration of 
 those duties, he has generally enhanced the duty, and 
 neglected the application. 
 
 In some states there are transit duties ; the most im- 
 portant of which is that levied by the king of Den- 
 mark, upon all merchant ships which pass through the 
 Sound. Such taxes upon luxuries, as the greater part 
 of the duties of customs and excise, though they fall 
 upon every species of revenue, and are finally paid 
 by the consumer, yet they do not fall proportionally 
 upon the revenue of every individual. Theprofuse con- 
 tribute more, the parsimonious less than their proper 
 proportion. During the minority of a man of great for- 
 tune, he contributes little towards the support of that 
 state, from whose protection he derives a great revenue. 
 Those who live in another country, contribute nothing 
 
 Q q 2
 
 ( 31-2 ) 
 
 by their consumption towards the support of the go- 
 vernment of that country, in which is situated the 
 source of their revenue. Hence, the justice and popu- 
 larity of a tax on absentees. P. 371 4 
 
 Taxes upon luxuries are, perhaps, as agreeable to 
 the tbreejirst general maxims concerning taxation, as 
 any other. They offend against the fourth, in all the 
 four different ways in which it is possible to do it. (1.) 
 The levying of such taxes, requires a great number of 
 custom-house and excise officers, whose salaries are a 
 tax upon the people, which brings nothing into the 
 treasury of the state. (2.) Such taxes necessarily occa- 
 sion some obstruction to certain branches of industry. 
 As they raise the price of the commodity taxed, they 
 so far discourage its consumption, and consequently its 
 production. (3.) The hope of evading such taxes by 
 smuggling, frequently occasions forfeitures and penal- 
 ties whjch ruin the smuggler, a person, who is fre- 
 quently incapable of violating the laws of natural jus- 
 tice, and would have been an excellent citizen, had 
 not the laws of his country made that a crime, which 
 nature never meant to be so. (4.) Such taxes, by sub- 
 jecting the dealers to the frequent visits and odious ex- 
 aminations of the tax gatherer, expose them sometimes 
 lo oppression, and always to trouble and vexation, from 
 which a man would be willing, at a certain expence, to 
 j-edeem himself. P. 375 80. 
 
 Inconsequence of the notion, that duties upon con- 
 sumable goods we re taxed upon the profits of merchants, 
 those duties, in some countries, have been repeated 
 upon every successive sale of the goods. The alcavala 
 f Spain was at first a tax of 10 per cent, afterwards of 
 J4.j>er cent, and is at present of only 6 per cent, upon
 
 the sale of property, whether moveable or immoveable, 
 and it is repeated every time the property is sold. In 
 the kingdom of Naples, there is a similar tax of three 
 per cent. P. 381. 2. 
 
 The taxation which takes place in Great Britain 
 leaves the interior commerce of the country, the in- 
 land and coasting trade, almost entirely free. Goods 
 carried coast-wise, and coals are exceptions. To this 
 freedom of interior commerce, perhaps, the prosperity 
 of the country is chiefly owing. If the same freedom 
 could be extended to Ireland, and the plantations, the 
 prosperity would probably be still greater. In France 
 too, the provinces most famous for wines, are those in 
 which the trade in that article is subject to the fewest 
 restraints,arising from the com plicated system of French 
 revenue laws. Complicated revenue laws are not pe- 
 culiar to France ; they exist in Milan and Parma to 
 such a degree, that nothing but the great fertility of 
 the soil, and the happiness of the climate could pre- 
 serve such countries from relapsing into the lowest state 
 of poverty. P. 383 5. 
 
 Taxes upon consumable commodities may be either 
 levied by government itself, or they may be let in farm 
 for a certain rent, the farmer being allowed to appoint 
 his own officers to levy the tax. The best and most 
 frugal way of levying a tax, can never be by farm ; 
 since the farmer must always draw from the produce of 
 the tax, besides the stipulated rent, and ex pence of ad- 
 ministration^ profit proportioned to the advance which 
 he makes ; to the risk which he runs ; to the trouble 
 which he is at ; and to the knowledge and skill which 
 it requires to manage so complicated a concern. To 
 farm any considerable brunch of the revenue, requires
 
 ( 314 ) 
 
 either a great capital, or great credit, circumstances 
 which of themselves restrain the competition to a very 
 small number of people, who often combine together 
 to offer no rent, but what is below the real value. 
 Hence farmers of the public revenue are generally very 
 rich. They have no compassion for the contributors, 
 but demand greater severity in the revenue laws, which 
 are always most sanguinary in countries where the 
 greater part of the public revenue is in farm. P. 386. 7. 
 A tax is sometimes farmed, and the farmer has, be- 
 sides, the monopoly of the commodity taxed. In such 
 cases the farmer instead of one, levies two exorbitant 
 profits upon the people. In France the duties upon to- 
 bacco and salt are levied in this manner. The tempta- 
 tion of smuggling these articles is, to many people, ir- 
 resistible ; and smuggling them, sends every year se- 
 veral hundred people to the gallies, besides a consider- 
 able number whom it sends to the gibbet. Those who 
 consider the blood of the people as nothing, in compa- 
 rison of the revenue of the prince, may perhaps approve 
 of this method of laying taxes.* P. 386 8. 
 
 CHAP. IH. 
 
 Of public Debts. 
 
 -It has been shewn in the third bookof this inquiry, 
 that in the rude state of society, the person who possesses 
 y, large revenue, can enjoy that revenue in no other 
 
 * The remaining fix pagesof this chapter, refer entirely to the par- 
 ticular modes of taxation in France and Holland ; which, by the revolu- 
 tions in thofe countries, have been superseded by others, in some mea- 
 sure, lefs oppreflive. It is not neceflary to take any notice_of them 
 in this place. Ed,
 
 ( 315 ) 
 
 way, than by maintaining nearly as many people as It 
 can maintain. A hospitality in which there is no lux- 
 ury, and a liberality in which there is no ostentation, 
 occasion the principal expences of the rich and great: 
 but these are expences by which people are not apt to 
 ruin themselves. Some of their wool and raw hides, 
 our feudal ancestors were able to sell for money, some 
 part of which they spent in objects of vanity, and some 
 part they seem to have hoarded. In those times of vio- 
 lence, it was convenient to have a hoard of money at 
 hand ; and it was equally convenient to conceal that 
 hoard. The frequency of treasure trove demonstrates 
 the frequency, in those times, both of hoarding and of 
 concealing the hoard. P. 3Q4 6. 
 
 The same disposition to save and to hoard prevailed 
 in the sovereign, as well as in the subjects. Among 
 nations, to whom commerce and manufactures are little 
 known, the sovereign,it has been observed in the fourth 
 book, is in a situation which naturally disposes him to 
 the parsimony requisite for accumulation. All the an- 
 tient sovereigns of Europe, accordingly, had treasures. 
 In a commercial country ,the sovereign naturally spends 
 u great part of his revenue in purchasing luxuries. His 
 ordinary expence becomes equal to his ordinary reve- 
 nue, and it is well if it does not frequently exceed it. 
 When extraordinary exigencies require extraordinary 
 expences, he must call upon his subjects for an extraor- 
 dinary aid. The want of parsimony in time of peace, 
 imposes the necessity of contracting debt in the time 
 of war. The same commercial state of society which 
 brings government, in this manner, into the necessity of 
 borrowing, produces in the' subjects both an ability and 
 an inclination to lend. 1*. 097400.
 
 ( 310 ) 
 
 Commerce and manufactures can seldom flourish 
 long in any state, which does not enjoy a regular admi- 
 nistration of justice ; and in which the people have not 
 a certain degree of confidence in the justice of govern- 
 ment. The same confidence which disposes merchants, 
 upon ordinary occasions, to trust their property to the 
 protection of a particular government, disposes them 
 upon extraordinary occasions to trust that government 
 with the use of their property. The merchant makes 
 money by lending money to government. The go- 
 vernment of such a state is apt to depend on its subjects 
 for money on extraordinary occasions, and therefore 
 dispenses itself from the duty of saving. In the rude 
 state of society few people would be able, and nobody 
 would be willing, to lend their money to government on 
 extraordinary exigencies. P. 401. 2. 
 
 The progress of the enormous debts which oppress, 
 and which will probably ruin, all the great nations of 
 Europe, has been pretty uniform. Nations, like pri- 
 vate men, have generally begun to borrow upon perso- 
 nal credit,vvithout assigning any fund for the payment 
 of the debt ; and when this resource has failed them, 
 they have gone on to borrow upon assignments of par- 
 ticular fnnds. What is called the unfunded debt of 
 Great Britain, is contracted in the former of these'two 
 ways. It consists partly in a debt which bears no in- 
 terest, and partly in a debt which bears interest. The 
 debts due for extraordinary services ; part of the extra- 
 ordinaries of the army, navy, ordnance, &c. usually con- 
 stitute a debt of the Jirst kind. Navy and Exchequer 
 bills constitute a debt of the second kind. The Bank 
 of England, by agreeing to circulate Exchequer bills, 
 that is to receive them at par, paying the interest due
 
 upon them, keeps up their value, and thereby enables 
 government to contract a large debt of this kind.When 
 this resource is exhausted, and it becomes necessary to 
 assign some branch of the revenue for the payment of 
 the debt, government has, upon different occasions, 
 done this in two different ways. Sometimes it has made 
 this assignment for a short perio d only ; and sometimes 
 . for perpetuity. When money was raised in the one 
 way, it was said to be raised by anticipation ; when in 
 the other, by funding. In Great Britain the annual 
 land and malt taxes are regularly anticipated every year. 
 P. 40 4. 
 
 In the reign of King William, and during a great 
 part of that of Queen Anne, most of the new taxes 
 were imposed but for a short period, and a great part of 
 the grants of every year, consisted in loans upon anti- 
 cipation of the produce of those taxes. The produce 
 being frequently insufficient for paying within the limi- 
 ted term, the principal and interest of the money bor- 
 rowed, deficiencies arose, to make good which, it be- 
 came necessary to prolong the term. The next step 
 was to make them perpetual. P. 405 7. 
 
 In 1715, the different taxes which had been mortga- 
 ged for paying the bank annuity, with several others, 
 which were rendered perpetual, were accumulated, into 
 one common fund, called the aggregate fund. In 
 17 17, several other taxes were rendered perpetual, and 
 accumulated into another fund, called the general fund. 
 Hence, the greater part of the taxes were rendered 
 perpetual, as a fund for paying the interest only of the 
 money borrowed by different anticipations. During
 
 ( 318 ) t 
 
 the reign of Queen Anne, five per cent, was declared to 
 be the highest rate which could lawfully be taken for 
 'money borrowed upon private security. Soon after the 
 greater part of the temporary taxes had been rendered 
 perpetual, the creditors of the public were induced to 
 accept of five per cent, for the interest of their money ; 
 which occasioned a saving of one sixth of the greater 
 part of the annuities, which were paid out of the funds 
 above-mentioned. This saving left a considerable sur- 
 plus and laid the foundation of what has since been 
 called the sinking fund. In 17 17, it amounted to up- 
 wards of 323,0001. In 1727, the interest of the greater 
 part of the public debts, was still farther reduced to 
 four per cent, and in 1753, and 1757, to three and an 
 half, and three per cent, which reductions still farther 
 augmented the sinking fund. A sinking fund, though 
 eustituted for the payment of old, facilitates very much 
 the contracting of were? debts. P. 40710. 
 
 Besides these two methods of borrowing, there are 
 two others; that of borrowing upon annuities for 
 terms of years ; and that of borrowing upon annuities 
 for lives. During the reigns of William and Anne, 
 large sums were frequently borrowed upon annuities for 
 terms of years, which were sometimes longer and some- 
 times shorter ; but all were on terms very advantageous 
 to the lender. During the two wars which began in 
 1739, and in 1755, little money was borrowed either 
 upon annuities for terms of years,or upon those for lives. 
 P.411. 12. 
 
 Annuities for lives have occasionally been granted in 
 two different ways; either upon separate lives, or upon 
 lots of lives, which are called tontines, from the name 
 of their inventor. When annuities are granted upon
 
 ( 319 ) 
 
 separate lives, the death of every individual annuitant 
 disburthens the public revenue. When annuities are 
 granted upon tontines, the liberation of the public re- 
 venue does not commence till the death of all the an- 
 nuitants comprehended in onelot,the last survivor suc- 
 ceeding to the annuities of the whole lot. Upon the 
 same revenue more money can always be raised by ton- 
 tines, than by annuities for separate lives. In France 
 a much greater proportion of the public debts consists 
 in annuities for lives, than in England. This arises al- 
 together from the different views and interests of the 
 lenders. P.413 16. 
 
 The ordinary expence of the greater part of modern 
 governments, in time of peace, being equal, or nearly 
 equal to their ordinary revenue, when war comes, they 
 are both unwilling and unable to increase their revenue 
 in proportion to the increase of their expence. By 
 means of borrowing, they are enabled, with a moderate 
 increase of taxes, to raise money sufficient to carry on 
 the war ; and by the practice of perpetual funding, they 
 are enabled,withthe smallest possible increase of taxes, 
 lo raise annually the largest possible sum of money. 
 The return of peace seldom relieves the people from 
 the greater part of the taxes imposed during the war. 
 If, over and above paying the interest of the debt, and 
 defraying the ordinary expence of government, the 
 old revenue, together with the new taxes, produce 
 some surplus revenue, it may, perhaps, be converted 
 into a. sink ing fund for paying off the debt. But, (1.) 
 This sinking fund is generally inadequate for paying,in, 
 peace, the whole debt contracted during the war : and, 
 
 K r 2
 
 ( 320 ) 
 
 (2.) This fund is almost always applied to other pur- 
 poses. During the mostprofound peace,various events 
 occur, which require extraordinary expence, and go- 
 vernment finds it always more convenient to defray this 
 cxpence by misapplying the sinking fund, than by im- 
 posing a new tax. P. 417 19. 
 
 In Great Britain, from the time that we had first re- 
 course to the ruinous expedient of perpetual funding, 
 the reduction of the public debt in time of peace, has 
 never borne any proportion to its accumulation in time 
 of war. The foundation of the present debt was laid in 
 the war which began in 1688. At the end of l697,the 
 debt amounted to 21,515,7421. 13s. 8|d. By four years 
 peace, it was reduced to 16,394,7011. Is. 7|d. In 1722, 
 it amounted to 55,282,9781. Is. 3d. and the reduction 
 went on till 1739, when" the capital of the public debt 
 amounted to 47 millions nearly. The war of 1739> in- 
 creased it to more than 78 millions. Before the break- 
 ing out of the war in 1755, it was reduced to little more 
 than 72| millions. But at the conclusion of the peace 
 in 1763, the funded debt amounted to more than 122f 
 millions ; and in 1764, the whole debt was 139| mil- 
 lions. In 1775, the debt was reduced to about 129 mil- 
 lions ; and by the American war,it was increased to up-, 
 wards of 230 millions.* P. 4204. 
 
 The public funds of England have been represented 
 as the accumulation of a great capital superadded to 
 the other capital of the country, by means of which its 
 trade and manufactures have been extended, much be- 
 yond what they could have been by means of that 
 other capital only. But the capital advanced to goi 
 
 The late war DOUBLID the national debt and taxe.
 
 ( 321 ) 
 
 vernment was a certain portion of the annual produce, 
 turned away from serving in the function of a capital, 
 to serve in that of revenue ; from maintaining produc- 
 tive labourers, to maintain unproductive ones, and to be 
 wasted without the hope of reproduction. In return 
 for the capital advanced, an annuity was obtained, for 
 which a new capital might be replaced ; but this new 
 capital must have existed in the country before, and 
 must have been employed, as all capitals are, in main- 
 taining productive labour. 
 
 When for defraying the expence of government, a 
 revenue is raised within the year, from the produce of 
 free, or unmortgaged taxes, a certain portion of the 
 revenue of private people is onlv turned away from 
 maintaining one species of unproductive labour, to- 
 wards maintaining another. Public expence defrayed 
 in this manner, hinders the accumulation of new capi- 
 tal ; but it does not necessarily occasion the destruc- 
 tion of any actually existing capital, which is always 
 the case when the public expence is defrayed by fun- 
 ding. If the method of funding destroys more old ca- 
 pital, it at the same time hinders less the accumulation, 
 of new capital, than that of defraying the expence by 
 a revenue raised within the year. This advantage can 
 only exist during the continuance of a war. Were the 
 expences of a war, to be defrayed by a revenue raised 
 within the year, the taxes from which that extraordi- 
 nary revenue was drawn would last no longer than the 
 War. The ability of people to accumulate, though less 
 during the war would have been greater during the 
 peace, than under the system of funding. Wars would 
 be more speedily concluded, and less wantonly under- 
 taken. When funding, besides, has made a certain
 
 ( 322 ) 
 
 progress, the multiplication of taxes impairs as much 
 the ability of private persons to accumulate in time ol 
 peace, as the other system does in time of war. In the 
 payment of the interest of the public debt, it has been 
 said, it is the right hand which pays the left. This apo- 
 logy is founded on the sophistry of the mercantile sys- 
 tem : it supposes, besides, that the whole debt is owing 
 to the inhabitants of the country, which is not true; 
 but if it were, it would not, on that account, be less 
 pernicious. P. 424 9. 
 
 Land and capital stock are the two original sources 
 of all revenue, both private and public. Capital stock 
 pays the wages of productive labour, whether employ- 
 ed in agriculture, manufactures, or commerce. The 
 management of those sources of revenue belongs to two 
 different sets of people, the proprietors of land, and the 
 employers of capital stock. The proprietor of land is 
 interested, for the sake of his own revenue, to keep his- 
 estate by buildings, drains, inclosures, &c. in as good 
 condition as he can. But by different land-taxes, hi* 
 revenue may be so diminished, and by different duties 
 upon the necessaries and conveniencies of life, t/iat di- 
 minished revenue may be rendered of so little real va- 
 lue, that he may find i( impossible to maintain those 
 expensive improvements. As the distress of the land- 
 lord increases, the agriculture of the country must de- 
 cline. When, by taxes upou the necessaries and con- 
 veniencies of life, the owners of capital stock find, that 
 whatever revenue they derive from it will not, in a par- 
 ticular country, purchase the same quantity of those 
 necessaries and conveniencies, which an equal revenue 
 would in almost any other, they will be disposed to re- 
 move to some other ; aud when, in order to raise these
 
 taxes, the greater psrt of merchants and manufacturers 
 are exposed to the vexatious visits of tax-gatherers,this 
 disposition to remove, will soon be changed into an ac- 
 tual removal. The industry of the country will fall 
 with the removal of the capital that supported it, and 
 the ruin of trade and manufactures will follow the de- 
 clension of agriculture. To transfer from the owners 
 of those two great sources of revenue, to the public 
 creditors, the greater part of the revenue arising from 
 either, must occasion in the long run, the neglect of 
 the land, and the waste or removal of capital stock. 
 The practice of funding has gradually enfeebled every 
 state which has adopted it; the Italian republics, 
 Spain, France, and the United provinces, all bear wit- 
 ness to this truth. Is it likely that in Great Britain 
 alone, a practice which has brought desolation into 
 every other country, should prove altogether innocent ? 
 P. 42933. 
 
 When national debts have once been accumulated to 
 a certain degree, there is scarce an instance of their 
 having been fairly and compleatly paid. The libera- 
 tion of the public revenue has always been brought 
 about by a bankruptcy ; sometimes by an avowed one, 
 but always a real one, though frequently by a preten- 
 ded payment. The raising of the denomination of the 
 coin has been the most usual expedient by which a 
 real public bankruptcy has been disguised under the 
 appearance of a pretended payment. When it becomes 
 necessary for a state to declare itself bankrupt, a fair, 
 open, and avowed bankruptcy is always least disho- 
 honourable to the debtor, and least hurtful to the cre- 
 ditor. Almost all states, when reduced to this necessity, 
 have played this juggling trick. The Uouians, at the
 
 ( 324 ) 
 
 end of the first Punic war, raised the denomination of 
 their coin from two to twelve. In this manner they 
 were enabled to pay their debts with the sixth part of 
 what they owed ; and it does not appear to have -occa- 
 sioned a very violent clamour. In the course of the 
 second Punic war, the denomination of the coin was 
 raised so high, that they were enabled to pay their 
 debts with one twenty-fourth part of their real value. 
 In this way indeed 400 millions might be paid with 
 somewhat more than 164 millions. By means of such 
 expedients, the coin of all nations has been gradually 
 reduced more and more below its original value,and the 
 same nominal sum has been gradually brought to con- 
 tain a smaller and smaller quantity of silver. P. 4348. 
 Nations have sometimes, for the same purpose, 
 adulterated the standard oftheir coin; this has the same 
 effect with what the French call an augmentation, or a 
 direct raising of the denomination of the coin. An 
 augmentation is always an open and avowed operation ; 
 but the adulteration of the standard has generally been 
 a concealed operation. Both are unjust, but the latter, 
 when discovered, has always excited much greater ia- 
 tlignatkm than the former P. 438. 9- 
 
 * IiTthe concluding part of this work, the Author fuggefts fome 
 hints for difcharging the national debt ; depending much on increafed 
 taxation in America and Ireland. The revolution in the former, and 
 the unfettled itate of the latter, render his arguments inapplicable. The 
 abridgment therefore ot the remainder ot the work is unneceflary. 
 
 FINIS. 
 
 [Printed by E. Flow, Cambridge.]
 
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